Vonage Beats On Q1 Earnings, Issues Robust Q2 Guidance

Vonage Holdings Corp VG reported first-quarter FY21 revenue growth of 11.9% year-on-year to $332.9 million, beating the analyst consensus of $317.12 million.
Service, access, and product revenues rose 11.2% Y/Y to $314.8 million, USF revenues increased 25.9% Y/Y to $18.1 million.
Vonage Communications Platform (VCP) revenues were $255 million, with VCP service revenues growing 23% Y/Y to $240 million. API revenues rose 47% Y/Y, with High-Value API revenues increasing 112% Y/Y.
Service Revenues from Unified Communications and Contact Center (UC and CC) customers grew 4% Y/Y. VCP Service Revenue per Customer rose 23% Y/Y to $582 per month, and VCP Service Revenue Churn declined from 0.8% to 0.5%.
Consumer Revenues declined 11% Y/Y to $77 million. Customer churn rose 1.9%. The average revenue per line (ARPU) increased by $1.7 to $29.05. The company had 867 thousand consumer subscriber lines as of Q1, with 95% of these customers tenured over two years and 80% tenured over five years.
The adjusted net income remained flat at $13 million, with adjusted EPS of $0.05, beating the analyst consensus of $0.04.
Adjusted EBITDA was $48 million.
The company generated $47.3 million in operating cash flow and held $51.6 million in cash and equivalents.
Guidance: Vonage sees a Q2 revenue outlook of $333 million - $337 million, above the analyst consensus of $330.1 million, Vonage Communications Platform outlook of $260 million - $264 million, and Consumer revenues outlook of $73 million.
Adjusted EBITDA outlook is $42 million - $46 million, and Capex guidance is $16 million.
Vonage continues to see increased demand across the portfolio as hybrid working trends emerge and the focus on customer experience across channels continues to grow, CEO Rory Read said.
Price action: VG shares traded lower by 1.01% at $12.76 on the last check Thursday.

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Vonage Beats On Q1 Earnings, Issues Robust Q2 Guidance