HOLMDEL, N.J., Feb. 18, 2021 (GLOBE NEWSWIRE) -- Vonage Holdings Corp. (Nasdaq: VG), a global leader in cloud communications helping businesses accelerate their digital transformation, today announced results for the quarter and full year ended December 31, 2020.

“We took decisive action over the past six months to improve operational efficiency and strategically invest in areas where our solutions best fit the needs of our customers. We continued to execute well in the fourth quarter and delivered solid results,” said Rory Read, Vonage Chief Executive Officer. “Vonage Communications Platform service revenues grew 17% year over year. Within this, API revenues grew 33% highlighted by high-value APIs, which grew 130% as customers continue to expand usage on our platform. And, our Unified Communications and Contact Center Applications service revenue grew 4%.”

“Our improved focus and operational execution enabled investments in our product innovation, our tailored go-to-market strategy, and our cross-sell capabilities to drive future growth. And, we are starting to see the initial benefits of these efforts. We are well-positioned with a diverse global customer set across multiple industries, and a world-class senior leadership team to drive our next phase of execution.”

Update on Strategic Review of Consumer Segment
The Company has completed a comprehensive nine-month strategic review of the Consumer business with the assistance of financial, accounting, and legal advisors. Based on this review, which included a detailed analysis of the Consumer business’ financials, profitability and potential valuation, the Company has determined that it is in the best interests of the Company and its shareholders to terminate the sale process and retain the Consumer business. This decision ensures a strong balance sheet and financial flexibility to invest in VCP capabilities and potential M&A.

“As we committed, we have completed a thorough review of the Consumer business and we have decided to retain this business,” Read said. “Our decision was driven by valuation, the $600 million of cash generation we expect from Consumer over the next five years, and what is best for our company and shareholders. This business is run efficiently and without distraction.”

Fourth Quarter 2020 Vonage Communication Platform Segment Results (compared to the year-ago quarter)

• Vonage Communication Platform revenues of $245 million, representing 12% growth.
• Vonage Communication Platform service revenues of $230 million, a 17% increase.
• API Platform Revenues (which are all Service revenues) grew 33%.
  • High-Value API revenues grew 130%, driven by strength in programmable video, voice and IP messaging.
• Unified Communications and Contact Center service revenues grew 4%.
• Vonage Communication Platform Service Revenue per Customer was $552 per month, up 16%.
• Vonage Communication Platform Service Revenue Churn was 1.3% compared to 1.2%.
• Vonage Communications Platform gross margin was 46%.
• Vonage Communications Platform adjusted EBITDA was ($4) million compared to ($18) million.

Full Year 2020 Vonage Communication Platform Segment Results

• Vonage Communication Platform revenues were $915 million, representing 14% growth.
• Vonage Communication Platform Service Revenues were $856 million, a 19% increase.
• API Platform Revenues (which are all service revenues) grew 35%.
• Unified Communications and Contact Center Service Revenues grew 7%.
• Vonage Communications Platform gross margin was 48%.
• Vonage Communications Platform adjusted EBITDA was ($57) million compared to ($103) million in the prior year.

Fourth Quarter 2019 Consumer Segment Results (compared to the year-ago quarter)

• Consumer Revenues were $79 million, down 15%.
• Customer churn was 1.7%, flat to the prior year.
• Average revenue per line ("ARPU") was $28.13, up $0.56.
• Ended the quarter with approximately 900 thousand Consumer subscriber lines. More than 94% of these customers are tenured, defined as customers for more than two years.
• Consumer gross margin was 76%, down 200 basis points.
• Consumer adjusted EBITDA was $52 million, a 17% decrease.

Full Year 2019 Consumer Segment Results

• Consumer Revenues were $333 million, down 14% from the prior year.
• Customer churn was 1.7%, compared to 1.8% in the prior year.
• Average revenue per line ("ARPU") was $27.77, up $0.73 from the prior year.

Consolidated Income and Balance Sheet
For the fourth quarter of 2020, Vonage reported consolidated revenues of $323 million, up from $310 million in the year-ago quarter. Income from operations was $4 million, flat from $4 million in the prior year quarter. GAAP net loss was $14 million, or ($0.06) per share, a decrease from a loss of $2 million in the prior year period, or ($0.01) per share. Fourth quarter adjusted net income⁽¹⁾ was $5 million or $0.02 per share, down from $15 million or $0.06 per share in the prior year period.

For the full year 2020, Vonage reported consolidated revenues of $1.25 billion, up from $1.19 billion in the prior year. Loss from operations was $0.1 million, down from income from operations of $7 million in the prior year. GAAP net loss was $36 million, or ($0.15) per share, for the full year 2020, compared with a net loss of $19 million, or ($0.08) per share, in 2019. Full-year 2020 adjusted net income⁽¹⁾ was $44 million or $0.18 per share, down from $46 million or $0.19 per share in the prior year.

For the fourth quarter, the Company generated Adjusted EBITDA⁽²⁾ of $48 million, and Adjusted EBITDA minus Capex⁽²⁾ of $34 million. Net Cash from Operations was $32 million and Free Cash Flow⁽³⁾ was $18 million for the quarter. Net debt decreased $20 million sequentially to
$517 million, resulting in a net debt to Last Twelve Months Adjusted EBITDA ratio of 3.0 times, as of December 31, 2020.

For the full year, Adjusted EBITDA⁽²⁾ was $170 million and Adjusted EBITDA minus Capex⁽²⁾ was $117 million. Net Cash from Operations was $84 million and Free Cash Flow⁽³⁾ was $31 million for the year.

2021 Outlook

For the first quarter of 2021, Vonage expects the following:

• Vonage Communication Platform revenues in the range of $240 million to $244 million
  • Vonage Communication Platform service revenues are expected to grow 16% to 18%.
• Consumer revenues in the $75 million range.
• Consolidated revenues in the range of $314 million to $318 million.
• Vonage Communication Platform adjusted EBITDA in the ($7) million to ($3) million range.
• Consumer adjusted EBITDA in the $49 million range.
• Consolidated Adjusted EBITDA in the range of $42 to $46 million.
• Capex in the $15 million range.

For the full year 2021, Vonage expects the following

• Vonage Communication Platform segment revenues in the range of $1.038 billion to $1.054 billion; within this:
  • Vonage Communication Platform service revenues are expected to grow 15% to 17%.
• Consumer revenues in the $285 million range.
• Consolidated revenues in the range of $1.323 billion to $1.339 billion.
• Vonage Communications Platform adjusted EBITDA in the range of $5 million to $9 million.
• Consumer adjusted EBITDA in the range of $185 million to $189 million.
• Consolidated adjusted EBITDA in the range of $190 million to $200 million.
• Capex in the $60 million range.

About Vonage

Vonage (Nasdaq:VG), a global cloud communications leader, helps businesses accelerate their digital transformation. Vonage's Communications Platform is fully programmable and allows for the integration of Video, Voice, Chat, Messaging and Verification into existing products, workflows and systems. Vonage's fully programmable unified communications and contact center applications are built from the Vonage platform and enable companies to transform how they communicate and operate from the office or anywhere, providing enormous flexibility and ensuring business continuity.

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