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Jake Mitchell
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Micro cap investor interested in value stocks. I prefer to research and write about emerging growth companies that I believe have paradigm shifting technologies or potential near-term catalysts. I tend to avoid Biotech's.
  • Fusion Telecommunications Establishes Strong Revenue Platform 1 comment
    Apr 30, 2013 2:16 PM | about stocks: FSNN

    The Cloud Services industry represents a $109 billion market opportunity. 79% of US businesses will have deployed a cloud-based solution by 2013 and cloud services used by 62% of SMBs, up from 48% in first half of 2012; jumps to 73% in first half of 2013. In fact, Cloud-based unified communications (UC) services alone are forecasted to grow from $12.2 billion in 2011 to $20.8 billion in 2016. Additionally, Cloud Computing fastest growing cloud services segment at 45.4%; forecast to reach $241 billion by 2014. Cloud management and security forecast to grow to $3.3 billion in 2012.* (*Gartner)

    Fusion Telecommunications International, Inc. (OTCQB:FSNN) is currently gaining traction in the Cloud Services industry. The company provides unified communications and cloud services primarily Internet protocol-based digital voice and data communications services to small and medium sized businesses, and other telecommunications carriers in the United States and internationally.

    Management has successfully solidified its revenue platform via the recent acquisition of Network Billing Systems, LLC ("NBS"), a Unified Communications and cloud services provider. Prior to the acquisition, NBS generated $26.5 million annual revenue, more than 95% of which is contracted and monthly recurring, and $4.9 million in adjusted EBITDA. The integrated company is expected to generate approximately $70 million in annual revenue, and achieve positive adjusted EBITDA in the first half of 2013. The acquisition adds over 5,000 small, medium and large business customers to Fusion's Corporate Services business segment, which delivers Unified Communications and cloud service solutions to the business market. Additionally, upon completion of the integration with NBS, Fusion expects to achieve approximately $2 million in annual cost synergies, and additional revenue growth from the cross-sale of the companies' combined products and services.

    Fusion also recently announced a strategic agreement with Unisys (NYSE: UIS) regarding the marketing of a fully integrated suite of secure network and cloud services, with an emphasis on leading-edge Unisys security solutions. Fusion will offer Unisys solutions to enterprises in the U.S., with an initial focus on healthcare.

    Initially, Fusion will focus on the Unisys Stealth Solution Suite of cybersecurity software to help organizations address the growing challenge of cybersecurity attacks and hacker incidents. The NSA-certified solutions use patented pending security techniques designed to cloak data communication end points, such as end user devices, data center servers and applications, to become obscured on the network and therefore concealed as targets for hackers. A staggering 23 million records were exposed to data breaches in 2011*, compromising privacy and undermining customer confidence while costing enterprises millions in operating costs. The Unisys Stealth solutions are intended to help enterprises avoid such attacks. (*Identity Theft Resource Center Breach Report, July, 2012)

    Numerous analysts have predicted vast growth throughout the Cloud computing services industry during 2013. It is true that Fusion must compete with both larger and more established competitors, such as traditional carriers like AT&T or Verizon and cable companies such as Comcast, focused IP Telephony companies; including 8x8, and IP network hardware and software providers such as Cisco and Broadview. However, the market is highly fragmented, with no single market participant having more than 5% of the market. This presents a tremendous opportunity for market penetration for an emerging company such as Fusion Telecommunications.

    In fact, I believe the stock is a microcosm of the company itself. While most investors will continue to bet on blue chip stocks, Fusion continues to present itself as an exciting growth opportunity for micro cap investors seeking the next big thing. With a strong revenue base comprised vastly of reoccurring sales, numerous industry relationships, and an established management team, FSNN is one cloud computing company which all investors should take notice.

    Stocks: FSNN
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  • johnbriz
    , contributor
    Comment (1) | Send Message
     
    I've been watching them since the acquisition of NBS. Don't think Fusion has ever been profitable, but the synergy from NBS could change that very quickly. If it does this is a stock that could go from 10 cents to $5 in a year or two.
    1 May 2013, 01:30 PM Reply Like
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