HOLMDEL, N.J., May 07, 2020 (GLOBE NEWSWIRE) -- Vonage Holdings Corp. (Nasdaq: VG), a global business cloud communications leader, today announced results for the quarter ended March 31, 2020.

“We had a strong first quarter, highlighting the power of our programmable platform strategy,” said Alan Masarek, Chief Executive Officer. “In today’s environment, Vonage’s cloud-based communications services are ever more critical to support the world’s new-normal, requiring remotely-delivered services and remote work environments.”

“Vonage is prepared to navigate these uncertain times given the mission-critical nature of our offerings. While we expect some short-term financial impacts from COVID-19, this is a defining moment for Vonage. We believe COVID will accelerate the digital transformation of the global economy, and Vonage is well-positioned to aid in that transition.”

Masarek continued, “I'm proud of our team’s response to the crisis, and I want to thank our employees for their commitment during these unprecedented times. Our business continuity plans were enacted virtually overnight, and our own technology seamlessly enabled more than 2,400 Vonage remote offices across the globe, keeping Vonage’s business functioning smoothly so our employees could focus on helping our customers.”

First Quarter 2020 Business Segment Highlights

• Service Revenues from Enterprise Applications customers (those with greater than $120,000 of ARR) grew 21% in the first quarter of 2020.
• Service Revenues from Mid-market plus Enterprise Applications customers (those with greater than $12,000 of ARR) grew 14% in the first quarter of 2020.
• Bookings from Midmarket plus Enterprise Applications customers represented 64% of total bookings in the first quarter of 2020 versus 62% in the previous quarter.
• High-Value API revenues grew at nearly 70% in the first quarter of 2020, driven by strength in programmable video.
• Business Service Revenue per Customer was $475 per month, up 16% from the year-ago quarter.
• Business Service Revenue Churn was 0.8%, down from 1.2% in the year-ago quarter.

First Quarter 2020 Consumer Segment Results

• Consumer Revenues were $87 million, down 13% compared to the year-ago quarter.
• Customer churn was 1.8%, 0.1% better than the year-ago quarter.
• Average revenue per line ("ARPU") was $27.35, up $0.92 compared to the year-ago quarter.
• Ended the quarter with approximately 1 million Consumer subscriber lines.
• 92% of these customers are tenured over two years and 74% are tenured over five years.

Consolidated Income and Balance Sheet
For the first quarter of 2020, Vonage reported consolidated revenues of $297 million, up from $280 million in the year-ago quarter. GAAP net loss was $4 million, or ($0.02) per share, versus a loss of $1 million in the prior-year period, or ($0.00) per share. First-quarter adjusted net income⁽¹⁾ was $12 million or $0.05 per share, a decrease from $15 million or $0.06 per share in the prior-year period.

For the first quarter, the Company generated Adjusted EBITDA⁽²⁾ of $39 million, and Adjusted EBITDA minus Capex⁽²⁾ of $26 million. Net Cash from Operations was $3 million and Free Cash Flow⁽³⁾ was negative $11 million for the quarter as annual bonuses and equity tax settlement payments are made in this quarter. As of March 31, 2020 the Company had a Net Debt to Last Twelve Months Adjusted EBITDA ratio of 3.4 times.

Update on Strategic Review of Consumer Segment
As announced in February, the Company initiated a strategic review of its Consumer Segment, including the feasibility of its divestiture, to further the Company’s goal of becoming a pure-play Business SaaS company. This review is underway and the Company will provide updates as appropriate.

Updated 2020 and Second Quarter Outlook
The Company is updating its 2020 guidance to reflect the estimated impact of the COVID-19 crisis based on information available today. The Company is seeing positive catalysts as evidenced by surging video API usage and lower Applications churn. However, in the short term, these positive catalysts are being offset by elevated levels of payment deferrals and credits, some install delays, and demand declines in hospitality- and travel-related sectors. While some customers are accelerating their move to the cloud for business continuity, others are putting that decision on hold to focus on their business operations.

For the full year 2020, Vonage now expects the following, (based on constant currency as of May 2020):

• Consolidated revenues in the range of $1.180 billion to $1.205 billion
• Total Business Segment Revenues in the range of $855 million to $880 million (which includes approximately $17 million of USF revenues)
• Total Consumer Segment Revenues in the $325 million area (which includes approximately $34 million of USF revenues)
• Consolidated Adjusted EBITDA of between $150 to $155 million
• Capex in the $60 million area

For the second quarter of 2020, Vonage expects the following:

• Consolidated Revenues in the range of $295 million to $298 million
• Total Business Segment Revenues in the range of $213 million to $216 million (which includes approximately $4 million of USF revenues)
• Total Consumer Revenues in the $82 million area (which includes approximately $8 million of USF revenues)
• Consolidated Adjusted EBITDA in the $36 million area.

About Vonage

Vonage (Nasdaq:VG) is redefining business communications once again. We're making communications more flexible, intelligent, and personal, to help enterprises the world over, stay ahead. We provide unified communications, contact centers and programmable communications APIs, built on the world's most flexible cloud communications platform. True to our roots as a technology disruptor, our flexible approach helps us to better serve the growing collaboration, communications, and customer experience needs of companies, across all communications channels.

Vonage Holdings Corp. is headquartered in New Jersey, with offices throughout the United States, Europe, Israel, Australia and Asia. To follow Vonage on Twitter, please visit www.twitter.com/vonage. To become a fan on Facebook, go to facebook.com/vonage. To subscribe on YouTube, visit youtube.com/vonage.