Vonage Holdings Corp.NYSE
Vonage's Dramatic Transition Led By Google's Former Head Of Apps And Chrome Has Gone Largely Unnoticed
ACM Research Team • 11 Comments
ACM Research Team • 11 Comments
Thu, May 5, 10:50 AM
- Vonage Holdings (NYSE:VG) opened strong, then tanked 12.5% after posting a Q1 beat along with news that it's acquiring communications platform company Nexmo for $230M.
- Revenue by segment: Business, $74M (up 76%); Consumer, $153M (down 14%).
- Customer churn was 2.2%, down from the prior year's 2.4%. In Business, revenue churn was 1.3%, down from last year's 1.4%. With the company shifting toward its Business segment, ending seats were 564,000, up from a year-ago 338,000 (includes organic growth as well as SimpleSignal and iCore customers).
- The deal for Nexmo -- a Communications Platform-as-a-Service company -- is in cash and stock. Vonage expects annual cost synergies of $5M from the acquisition, amid a CPaaS market growing to $8B by 2018.
- With the acquisition, Vonage has updated guidance -- now expecting GAAP revenue for 2016 of $950M-$960M (Business revenues of $365M-$370M). It sees EBITDA of at least $150M after a small loss in that area from Nexmo the rest of the way.
Sep. 1, 2015, 9:43 AM
- Vonage (VG -1.3%) has closed on its $92M acquisition of iCore Networks, which it says gives it the largest sales force in the Unified Communications-as-a-Service market.
- ICore is a "natural complement to Vonage's rapidly growing UCaaS business and strengthens the Company's national footprint," says Vonage CEO Alan Masarek. "ICore is particularly successful in serving mid-market and enterprise customers, with more than 60% of its revenue derived from customers with 100 or more seats."
- Vonage had previously bumped its revenue guidance for the full year based on the deal, to GAAP revenues of $885M-$892M.
- Previously: Vonage boosts guidance on $92M iCore acquisition (Aug. 20 2015)
Aug. 20, 2015, 9:32 AM
- Vonage (NYSE:VG) is up 1% out of the market's open after updating guidance, on news that it's acquiring privately held iCore Networks, for $92M in cash.
- Vonage says adding iCore will give it the largest sales force in the Unified Communications-as-a-Service market, as iCore supports more than 85,000 customer seats with revenue churn of less than 1%.
- With the acquisition, Vonage now sees full-year GAAP revenue of $885M-$892M, and a resulting pro forma organic revenue growth of about 37%. It's guiding to EBITDA of at least $135M and capex of about $30M.
- Vonage will use balance sheet cash and its revolving credit facility for the deal, to end up with pro forma net debt/LTM EBITDA of about 1.5x. The transaction is expected to close by the end of Q3.
Mar. 16, 2015, 7:42 PM
- Vonage (VG +1.8%) is working to build its "Unified Communications-as-a-Service" business with an agreement to acquire Simple Signal, which provides those services to small and medium businesses.
- The deal to buy privately held Simple Signal (and its 1,600 customers, not counting white-label partners) is for $25.25M -- about $20M in cash and 1.1M in Vonage common stock.
- The price is about 1.5x estimated 2015 revenues for Simple Signal. Vonage expects recurring cost synergies will exceed $1.7M in 2016.
- The deal should close in the next several weeks.
Oct. 10, 2013, 10:11 AM
- Vonage (VG +18.4%) is acquiring Vocalocity, a provider of fairly inexpensive cloud-based VoIP services and value-added features for SMBs, for $130M ($105M in cash + $25M in stock). Investors are quite pleased with the news. (PR)
- Vocalocity had 1H revenue of $28M (+39% Y/Y), and was free cash flow positive during the period. The company focuses on companies with less than 20 employees, and had 21K customers at the end of Q2.
- The market for hosted/cloud-based business telecom services market has been growing quickly (hence the enthusiasm for RingCentral's recent IPO), and generally features higher margins than the consumer VoIP market Vonage remains dependent on.
- The deal is expected to close in Q4, and Vonage eventually expects annual synergies in "the high single-digit million dollar range." Vonage is paying for the cash portion of the deal using $30M in existing cash and $75M drawn from a credit facility.