Vonage Holdings Corp. (NYSE: VG), a global business cloud communications leader, today announced results for the quarter ended September 30, 2019.

"The OneVonage platform and strategy is resonating with customers and partners. This single platform approach, combined with ownership of the core components, enables us to innovate faster and deliver unique unified communications, contact center and API solutions to help companies transform the way they engage with their customers and employees," said Alan Masarek, Chief Executive Officer.

Mr. Masarek continued, "Vonage remains a leader in programmable communications. Revenues from our API platform grew 48% on an adjusted, constant currency basis. In Applications, we are executing on a comprehensive plan to drive up-market. We've made a lot of progress on our strategy and continue to invest in the right areas. Market demand continues to grow, and Vonage is well-positioned for long-term success."

Third Quarter Business Segment Results

• Vonage Business Revenues were $207 million, representing 34% GAAP growth.
• Business Service Revenues were $184 million, a 37% GAAP increase.
  • Adjusted to include acquisitions for all periods and other one-time items, Vonage Business Service Revenues(1) increased 21% year-over-year or 23% in constant currency.
  • API Platform Revenues (which are all service revenues) grew 46% GAAP and 44% adjusted or 48% adjusted, constant currency.
  • Applications Service Revenues grew 32% GAAP or 8% on both an adjusted and adjusted, constant currency basis.
• Business Service Revenue Per Customer was $451, up 25% from the year-ago quarter.
• Business Service Revenue Churn was 1.0%, improving from 1.1% in the year-ago quarter.

Third Quarter Consumer Segment Results

• Consumer Revenues were $96 million, down 11% year-over-year.
• Customer churn was 1.8%, flat compared to the year-ago quarter.
• Average revenue per line ("ARPU") was $27.56, up $1.26 compared to the year-ago quarter.
• Ended the quarter with approximately 1.1 million Consumer subscriber lines.

Consolidated Income and Balance Sheet

For the third quarter of 2019, Vonage reported consolidated revenues of $303 million, up from $262 million in the year-ago quarter.

The Company generated income from operations of $6 million, Adjusted Operating Income Before Depreciation and Amortization ("Adjusted OIBDA")(2) of $45 million, and Adjusted OIBDA minus Capex(2) of $31 million. Net Cash from Operations was $32 million and Free Cash Flow(3) was $18 million for the quarter.

As of September 30, 2019, the Company had a net debt to Last Twelve Months Adjusted OIBDA ratio of 3.6 times.

Guidance

For the fourth quarter of 2019, Vonage expects the following:

• Vonage Business Revenues in the range of $214 million to $216 million.
• Consumer Revenues in the area of $90 million to $91 million.
• Consolidated Adjusted OIBDA in the range of $43 million to $46 million. Accordingly, 2019 Adjusted OIBDA is now expected to be in the $157 million to $160 million range. This change primarily reflects the increased lag in revenue recognition due to higher Deferred Revenues driven by larger new contact center customer bookings.

About Vonage

Vonage 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 www.facebook.com/vonage. To subscribe on YouTube, visit www.youtube.com/vonage.