Vonage Mobile, free calls and messages, apps on Android and iPhone

Vonage today announced its first quarter financials ended March 31, 2015, marking the first full quarter that Telesphere, a company acquired by Vonage on December 15, appeared in the numbers. 

For the period, Vonage reported revenue of $220 million compared to $221 million in the year ago quarter. Adjusted earnings before interest, taxes, depreciation and amortization1 (“adjusted EBITDA”) for the first quarter were $38 million, the highest in 13 quarters. GAAP net income was $7 million or $0.04 per share, up from $5 million or $0.02 per share in the year ago quarter.  Adjusted net income2 was$20 million or $0.10 per share, up from $13 million or $0.06 per share in the year ago quarter.

Some highlights of the period for both business and consumer sides of the business include:

  • On April 1, 2015, Vonage completed the acquisition of Simple Signal Inc. SimpleSignal is highly complementary to Vonage’s existing UCaaS business. The acquisition enhances the Company’s channel sales and broadens Vonage’s range of product offerings with new technologies that extend MPLS-like quality to “bring-your-own-broadband” customers.
  • Vonage Business results include Vonage Business Solutions (“VBS”) and Telesphere, and will include SimpleSignal in the second quarter.
  • Revenue at Vonage Business was $42 million in the first quarter, a year-over-year increase of 49% on a pro-forma basis, as if the Company had owned Telesphere for all periods.
  • Customer churn was 2.2%, an increase from 1.6% in the year ago period.
  • Ending seats were 338,000, up from 196,000 seats at the end of the first quarter of 2014, reflecting strong organic growth and the addition of Telesphere.
  • Vonage’s Consumer business reported revenue of $178 million in the first quarter of 2015 compared to $202 million in the prior year period.
  • Vonage’s Consumer business had 2.1 million subscriber lines at the end of the first quarter. This was down approximately 177,000 lines from 2.4 million in the prior year’s quarter, when taking into account the adjustment of approximately 79,000 second line Extensions, and was due to the Company’s continued strategic approach to improving the quality of customers it acquires to drive lower churn and increased profitability, and to shift investment to the UCaaS market.
  • Consumer customer churn improved to 2.4% in the first quarter of 2015, down from 2.6% in the first quarter of 2014.
  • Average revenue per line (“ARPU”) was $27.97, down from $28.54 in the year ago period.

Vonage also took the opportunity today to announce that it has signed a definitive agreement to acquire gUnify LLC,  a cloud-based technology company whose middleware solution integrates the Company’s cloud communications platform with today’s most widely used SaaS business applications, including Google for Work, Zendesk, Salesforce’s Sales Cloud, Clio, and other CRM solutions.

Vonage says that it hopes to “better address the needs of larger SMBs” with this acquisition by allowing them to integrate unified communications into business applications. Exact terms of the acquisition were not disclosed.

Vonage has also been working on expanding its patent portfolio, gaining seven new patents during Q1 2015 and bringing the total number of U.S.-based patents to 83 U.S., with nearly 250 U.S. patent applications pending, along with numerous foreign patents and pending applications in jurisdictions worldwide.

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By Josh Robert Nay

Josh Robert Nay is the founder and Editor-in-Chief of TruTower. He has worked in the telecommunications industry since 2003 and specializes in GSM based technology. He also uses (too many) VoIP apps and is a long-time user of BlackBerry, Android, and Windows Phone. He adores anything having to do with space exploration and writing. In addition to the links below, he can be found on LinkedIn and can also be found on his website at http://www.joshrobertnay.com.