Vonage Holdings Corporation (NYSE:VG) Q1 2020 Earnings Conference Call - Final Transcript

May 07, 2020 • 08:30 am ET


Vonage Holdings Corporation (NYSE:VG) Q1 2020 Earnings Conference Call - Final Transcript


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Good day, ladies and gentlemen, and welcome to the Vonage First Quarter 2020 Earnings Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to your host, Mr. Hunter Blankenbaker. Please go ahead, sir.

Hunter Blankenbaker

Great. Thank you, Elene, and good morning, and welcome to our first quarter 2020 earnings conference call. Speaking on the call this morning is Alan Masarek, Chief Executive Officer; and Dave Pearson, CFO. Also joining us is Omar Javaid, President of the API Platform; and Rodolfo Cardenuto, President of the Applications Group. Alan will discuss our strategy and first quarter results, and Dave will provide a more detailed view on our first quarter and 2020 guidance. Slides that accompany today's discussion are available on the IR website. At the conclusion of our prepared remarks, we'll be happy to take your questions.

As referenced on Slide 2, I would like to remind everyone that statements made during this call may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's expectations, depend on assumptions that may be incorrect or imprecise and are subject to risks and uncertainties that could cause actual results to differ materially. More information about those risks and uncertainties is highlighted on the second page of the slides and contained in our SEC filings. We caution listeners not to rely unduly on these statements and disclaim any intent or obligation to update them.

During this call, we will be referring to non-GAAP financial measures. A reconciliation to GAAP is available in the first quarter earnings press release, or the first quarter earnings slides posted on the IR website. Additionally, during prepared remarks today, all comparisons to prior periods are year-over-year, unless otherwise noted as sequential.

So with that, I'll turn the call over to Alan.

Alan Masarek

Thanks, Hunter. Good morning. I'd first like to offer best wishes to everyone. I hope you're safe, healthy and you're taking all necessary precautions and importantly, as we take care of yourself, you remember to support others who might be in need. To our 2,400 employees, thank you. Thank you for your commitment during unprecedented times. I'm proud of your response to the crisis. I'm proud of how you've supported the Company, one another and our customers. You enabled our own business continuity plans virtually overnight. And our own technology enabled all 2,400 of you across the globe to be working productively in your own Vonage remote office. Just a great job. Thank you so much.

Turning to results. The first quarter demonstrated broad-based strength across the Company. Business segment revenues totaled $210 million. Within this, API Platform revenues grew 44%, driven by high-value APIs. Application service revenue grew 10%, which was slightly above our own expectations. On a consolidated basis, revenues totaled $297 million, including $14 million of USF fees, and we delivered adjusted EBITDA of $39 million.

Now let me lead off, I want to highlight that over the long term,