From Wall Street – Vonage – CY2018-Q4

Current Highlights

The highlights for FY2018-Q4 (CY2018-Q4) are as follows:

  • Q4 revenues were up sequentially, but down year-over-year
  • Operating income for the quarter was a modest loss, while the income for the year was positive
  • Overall services revenue per customer increased from $327 in Y2017 to $359 in Y2018 – a rise of 9 ½ %

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Results Timeline

Q4-2018 vs. Q4-2017 Changes

Comments and Reflections

Vonage is evolving rapidly with the growth of service offerings to business customers.  This is consistent with the acquisitions the company has made, including NewVoiceMedia (cloud contact center platform), TokBox (video APIs), and Nexmo (communication APIs).  These three technology elements are being poured into a software solution dubbed OneVonage, along with R&D aimed at tight integration and enhanced features and functions.  The acquisitions also make Vonage less dependent on partners that can evolve into competitors.

As we noted previously, the big picture here is Vonage’s vision of creating a fully-programmable, integrated communications solution that spans three current, albeit confusing, technology domains known as UCaas, CCaaS, and CPaaS.

The Vonage solution has evolved to include voice, messaging, SMS, video, and contact center, thereby enabling single-vendor purchase decisions by customers.  At the same time the company seems to be moving from private hosting in data centers to public cloud hosting of the OneVonage platform.  This strategy should speed roll outs, improve scalability, and ease integration to other cloud-based workflow solutions.

Our charts above show:

  • The company’s annual revenues are growing at a fairly consistent compound annual growth rate of ~ 5%.
  • Net income was negative in Y2017, probably driven by tax law changes, but was positive in the other years.
  • On a quarterly basis, operating income in Q4 for each of the past three years has shown a large loss. Other quarters, however, were profitable.

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