Vonage Stock Gains On Q2 Beat, ARPU Growth, Better Than Expected Q3 Revenue Outlook

Vonage Holdings Corp VG reported second-quarter FY21 revenue growth of 13.2% to $351.5 million, beating the analyst consensus of $335.3 million.
Service revenues grew 12.2% Y/Y to $332.6 million. USF revenues rose 34.9% Y/Y to $18.9 million.
Vonage Communications Platform revenue increased 22.2% Y/Y to $276.4 million. VCP service revenues increased 23% Y/Y to $260 million.
API revenues grew 40%, driven by strong growth from new and existing customers, and Unified Communications (UC) and Contact Center (CC) service revenue growth increased to 7%.
VCP Service revenue per customer rose 24% Y/Y to $632 per month, VCP Service revenue churn of 1.0% was essentially flat.
Consumer revenues declined 11% Y/Y to $75 million, and Customer churn was unchanged at 1.5%.
The average revenue per line (ARPU) was $29.37, an increase of $1.78. Vonage ended Q2 with 836 thousand consumer subscriber lines.
Vonage Communications Platform segment gross margin contracted 30 bps to 46.4%. Consumer segment gross margin declined 70 bps to 72.5%.
Adjusted EBITDA improved 17.5% Y/Y to $48.8 million.
Adjusted EPS of $0.05 beat the analyst consensus of $0.04.
Vonage generated $42 million in operating cash flow and held $42.1 million in cash and equivalents.
Customer needs are rapidly growing across their communications and engagement platforms, driven by secular tailwinds like cloud migration, digital transformation, and, more recently, hybrid working models.
Outlook: Vonage sees Q3 revenue of $345 million - $349 million above the analyst consensus of $$337.5 million.
Price action: VG shares traded higher by 5.35% at $15.08 on the last check Thursday.

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Vonage Stock Gains On Q2 Beat, ARPU Growth, Better Than Expected Q3 Revenue Outlook

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