Vonage Undervalued Firm Sees Growth in Nexmo
By Anders Keitz Follow | Sep 21, 2016 | 1:02 PM EDT
Evidence continues to grow that Vonage (VG) made the right move in acquiring Twilio's (TWLO) top competitor, Nexmo, as a growing number of analysts believe the $6.30 stock is actually worth much more.
Research firm Sidoti raised its price target for Vonage to $9 from $7 on Wednesday as it believes the stock's valuation undervalues the growth potential of the Communications Platform as a Service ("CPaaS") business. Right now, Nexmo sits in second to Twilio in the space. But the cloud communications business is rapidly growing, driven in part by CPaaS. In an August investor presentation, Vonage highlighted data from Frost & Sullivan that suggest CPaaS, which was valued at about $1 billion in 2015, could be an $8 billion business by 2018.
Based on flexible and open standards, the new Nexmo Voice API allows developers to easily add capabilities like conferencing, call recording and call control to a company's workflow, backed by the quality, strength and reliability of the Vonage network. The new API is also perfectly positioned to integrate emerging technology software like bots, artificial intelligence and deep data analysis into new and existing voice solutions.
Nexmo also has the largest global reach of any communications platform with the ability to provision local numbers to 85 countries, enabling companies to quickly scale their voice communications to meet global expansion needs. The new voice API joins Nexmo's industry-leading global SMS API, innovative Chat App API and critical ID Verification API to create a powerful, easy-to-use suite of communications tools that are revolutionizing the way developers build communications software into applications that are transforming how companies connect with their customers.
"Building enterprise-grade voice applications used to be a complex and expensive task. But the new voice API will allow developers to effortlessly create modern voice capabilities with open, agile and globally scalable architectures, enabling customized communications solutions to enrich customer conversations and deepen customer relationships," said Tony Jamous, president of the Nexmo API Platform. "We are excited to have Vonage's industrial-strength network and second-to-none voice capabilities behind the new API, and the speed with which Vonage was able to help accelerate this launch surpassed our expectations."
HOLMDEL, N.J., Sept. 14, 2016 /PRNewswire/ -- Vonage (NYSE: VG) ("the Company'), a leading provider of cloud communications for business, has launched a next-generation voice API through recently-acquired communications platform, Nexmo. Integrated with Vonage's carrier-grade network, which terminates 15 billion minutes of global voice traffic annually to landline and mobile phones, the new Nexmo API provides a higher quality programmable voice experience than what is competitively available in the market today.
The Nexmo Voice API enables developers to build modern enterprise communications customized for any app, website or voice-based communications system, faster and easier than its previous APIs. The Nexmo Voice API also enables integrations with existing business workflow software to drive enhanced productivity. This next-gen voice API allows companies to create communications solutions that can increase customer engagement and enhance the customer experience with just a few lines of code.
"When Vonage purchased Nexmo only a few months ago, we knew we could pair Nexmo's APIs with Vonage's voice network to deliver a higher quality programmable voice experience to the market," said Alan Masarek, Vonage CEO. "We are encouraged by the speed with which we were able to bring enhanced voice capabilities to the Nexmo platform to accelerate the launch of the new voice API."
Mr. Masarek continued, "This launch represents a tangible example of the power of the combination of Vonage and Nexmo, and the unmatched value proposition that we envisioned. With the new voice API, Nexmo adds to its strength in global messaging and pioneering work with chat apps, creating a formidable and complete set of APIs that further solidify Vonage's leadership in the two most dominant forms of communication today, voice and messaging."
Vonage Chief Executive Officer to Present at the Dougherty & Company 2016 Institutional Investor Conference
HOLMDEL, N.J., Sept. 13, 2016 /PRNewswire/ -- Vonage Holdings Corp. (NYSE: VG) today announced that its Chief Executive Officer, Alan Masarek, is scheduled to present at the Dougherty & Company 2016 Institutional Investor Conference on Wednesday, September 28, 2016 at 1:50 p.m. CT in Minneapolis, Minnesota
A live webcast of this event will be available live on Vonage's Investor Relations website.
HOLMDEL, N.J., Sept. 13, 2016 /PRNewswire/ -- Vonage (NYSE: VG), is enhancing its mobile experience for customers in conjunction with the launch of Apple's iOS 10.
Vonage is among the first cloud communications providers to take advantage of the new iOS 10 CallKit capabilities, allowing VoIP apps, like the Vonage Essentials mobile app, to work just like a native call.
In addition, Vonage's integration with Apple's Siri provides Vonage business customers with a convenient, hands-free way to access the Vonage app to make business calls. The customer simply gives Siri a voice command that initiates a phone call from the app to any contact.
Omar Javaid, Chief Product Officer for Vonage, commented, "iOS 10 provides a much better user experience for VoIP apps. Vonage customers can initiate and receive calls using the app exactly the same way they do using their iPhone today. With the new upgrades, there is no difference in the calling experience when you use the Vonage app than when you use the standard iPhone functionality for calls."
Mr. Javaid continued, "The new functionality of the Vonage app will allow for a more robust mobile calling experience for business customers, and is particularly useful for those who want to make business calls from their iPhones using their business identities, taking advantage of all of the features and functionality that come with their Vonage service.
* Allows Vonage app calls to be received like any other incoming call - with the same quick, full screen, full functionality as the native call screen
* Eliminates push notifications for incoming calls and, therefore, the potential for missed calls
* Provides native access to call controls like Mute and Call Waiting
* Place calls using Vonage simply by asking Siri
* Automatically logs into the native Recents list
* Allows easy activation of call backs with a simple touch, whether the call comes from an app or through the iPhone directly
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Vonage Announces Strong Second Quarter 2016 Results, Driven by Vonage Business GAAP Revenues of $86 Million, a 75% Year-Over-Year Increase
-- Consolidated Revenues of $234 Million
-- Closes Acquisition of Nexmo, Which Grew Revenues 43% Year-Over-Year
-- Consumer Customer Churn of 2.1%, the Lowest in 10 Years
-- Income from Operations of $5 Million
-- Adjusted OIBDA of $40 Million
HOLMDEL, N.J., Aug. 2, 2016 /PRNewswire/ -- Vonage Holdings Corp. (NYSE: VG), a leading provider of Cloud Communications for Business, today announced results for the second quarter ended June 30, 2016.
Second Quarter Consolidated Financial Results
For the second quarter of 2016, Vonage reported revenues of $234 million, up from $222 million in the year ago quarter. GAAP Income from Operations was $5 million, down from $17 million in the prior year, primarily due to acquisition related costs. Adjusted Operating Income Before Depreciation and Amortization ("Adjusted OIBDA")1 for the second quarter was $40 million, a 5% increase over the prior year period. GAAP net income was $1 million or $0.00 per share, down from $8 million or $0.04 per share in the year ago quarter, also due to acquisition related costs. Adjusted net income2 was $18 million or $0.08 per share, up from $14 million or $0.07 per share in the year ago quarter.
"We reported a strong second quarter, highlighted by 75% revenue growth by Vonage Business. We continue to make significant progress on our business transformation, including the completion of our recent acquisition of Nexmo, a global leader in Communications Platform as a Service, or CPaaS. We are building a powerful and highly differentiated global Cloud Communications solution for business," said Vonage CEO Alan Masarek.
"At the same time, our strong adjusted OIBDA performance for the quarter reflects the disciplined execution of our plan to drive significant cash flows from Consumer Services, where churn hit a ten-year low," Mr. Masarek continued.
FBN Analysts Say Either Twilio Is Overvalued, Or Vonage Is Undervalued
Manikandan Raman , Benzinga Staff Writer
August 01, 2016 2:27pm
FBN Securities has adjusted its fair value on the shares of Vonage Holdings Corp. , saying the recent IPO of Twilio Inc suggests Vonage is undervalued.
"Here we note it seems to us that either shares of TWLO are being materially overvalued by the market or shares of Vonage with Nexmo are being materially undervalued," analyst Robert Routh wrote in a note.
Routh has adjusted his fair value of the Outperform-rated Vonage to $8.73, up 47.3 percent from current levels.
In June, Vonage completed the acquisition of the second largest "CPaaS" operator, Nexmo, for $230 million in cash and stock.
"The valuation came to a little less than 2x projected 2017 Nexmo revenue, which again based on the market valuation of TWLO seems quite a steal for VG. Upon closing Nexmo, Vonage should have leverage of 2.25x with 3.0x being the maximum leverage management plans to carry. Note the long term leverage goal remains 2.0x," Routh highlighted.
"Vonage expects 2016 revenue of between $950 million–$960 million with VBS revenue expected to be between $356 million–$370 million (including Nexmo)." Routh projects total Vonage revenue of $965.05 million for 2016 with VBS revenue of $368 million.
Vonage's adjusted EBITDA is still expected at around $150 million, despite a small loss expected at Nexmo for the remainder of 2016.
"We are expecting Nexmo to lose around $20 million in 2016 (for the full year, although Vonage will only capture Nexmo results since June 6th) and to post $137.5 million in revenue and $15 million in EBITDA for2017," Routh added.
Vonage is expected to report its second-quarter results on August 2. The Street expects EPS of $0.07 on revenue of $226.48 million.
HOLMDEL, N.J., July 28, 2016 /PRNewswire/ -- Vonage Holdings Corp. (NYSE: VG) today announced that its Chief Executive Officer, Alan Masarek, is scheduled to present at the Oppenheimer & Co. 19th Annual Technology, Internet & Communications Conference on Wednesday, August 10, 2016 at 10:25 a.m. ET in Boston, Massachusetts.
A live webcast of this event will be available on Vonage's Investor Relations website
Vonage(R) SmartWAN Receives SearchNetworking Network Innovation Award
HOLMDEL, N.J., July 18, 2016 /PRNewswire/ -- Vonage® (NYSE: VG), a leading provider of cloud communications services for businesses and consumers, announced today that it has received SearchNetworking Network Innovation Award. Presented by the editors of Tech Target Inc.'s Networking Media Group, the award recognizes Vonage® SmartWAN, launched in early 2016, which optimizes Quality of Service (QoS) for unified communications across a company's multiple locations.
Given to a select group of technology companies each year, the Network Innovation Awards are judged by the SearchNetworking.com editorial staff, in conjunction with a team of users, industry experts, analysts and consultants. The Innovation Award program recognizes companies that are making significant advances and network innovations in such areas as network management, data center network fabric, programmable networking, remote network management and software defined networking (SDN).
"Vonage SmartWAN complements the features and functionality of a company's cloud-based unified communications solution with the added reliability they need to maintain Quality of Service and keep their businesses running smoothly," said Sanjay Srinivasan, Vice President and Chief Technology Architect Business Engineering for Vonage. "We are honored to be recognized by SearchNetworking as we continue to look for ways in which to provide the best in Cloud Communications to meet the full spectrum of business needs for customers of all sizes, from SMB to mid-market to enterprise."
Vonage's new marketing campaign, "It's About Time," illustrates how Vonage is bridging this gap by providing modern, adaptive and intuitive communications solutions that enable businesses to communicate faster, better and smarter. To bring the campaign message to life, Vonage (NYSE: VG) executed a technology takeover at an office building in Atlanta.
Vonage CMO Ted Gilvar commented, "As a leader in cloud communications, we want business decision makers to understand new technology can help them improve how they do business. So, we've brought in amazing tech to take over an office building to make people rethink what they get from their communications partner."
The Vonage Business Tech Takeover featured:
•People flying jet packs with messages like, "We can do this, why can't we seamlessly pull a call from our desk phone to our mobile phones?"
•Drones carrying billboards with messages like, "We can do this, why can't we switch a phone call to a video call with the touch of a button?"
•Hovering billboards with messages like, "We can defy gravity, why can't we have our voicemail transcribed to email?"
•"Holocubes" where people can insert themselves into a hologram with a message around them.
"As we work to drive awareness of Vonage as a business-first communications company, we wanted to stay true to our disruptive roots and market in a different, innovative and disruptive way," Mr. Gilvar said.
The multi-media?campaign is rolling out over a variety of platforms including TV, out-of-home, digital, and social media.
VG has elected Gary Steele to serve as a member of its Board of Directors.
Mr. Steele brings a broad range of enterprise Software as a Service (SaaS) experience to Vonage, as well as deep knowledge of enterprise sales operations and distribution. As the founding Chief Executive Officer for Proofpoint, a publicly-traded global Security as a Service vendor, Mr. Steele has overseen Proofpoint's evolution from a focus on email security to its current status as a leader in next-generation, cloud-based cyber security.
This experience complements Vonage's rich history as an innovator in the consumer and small business space to where it now stands as a leading provider of Cloud Communications for enterprise customers.
Mr. Steele also led Proofpoint through a successful IPO in 2012 and the company currently has a market cap of well over $2 billion. Proofpoint supports tens of millions of end users across thousands of global enterprises, universities and government agencies, including more than 50 percent of the Fortune 100.
"With more than 30 years of experience in the software and business technology space, Gary will make an immediate impact on the Vonage Board," said Alan Masarek, Vonage Chief Executive Officer. "Not only will his knowledge and understanding of the evolving enterprise SaaS market provide invaluable insights for management, but his strategic experience with global B2B service and subscription businesses will help Vonage continue to grow as we realize our mission of becoming the global leader in Cloud Communications."
Before joining Proofpoint in 2002, Mr. Steele served as the CEO of Portera, an applications company delivering solutions for the professional services industry. Prior to Portera, Mr. Steele served as the Vice President and General Manager of the Middleware and Data Warehousing Product Group at Sybase, Inc. In this capacity, he initiated and spearheaded many early internet projects..