Investor Presentation February 2019

Transcription

1 Investor Presentation February

2 Safe Harbor Caution Concerning Forward-Looking Statements Various remarks that the Company makes contain forward-looking statements regarding acquisitions, acquisition integration, growth, growth priorities or plans, new products and related investment, revenues, adjusted OIBDA, churn, seats, lines or accounts, average revenues per user, cost of telephony services, the Company s share repurchase plan, new products and related investment, capital expenditures, and other statements that are not historical facts or information constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of The forward-looking statements are based on information available at the time the statements are made and/or management's belief as of that time with respect to future events and involve risks and uncertainties that could cause actual results and outcomes to be materially different. Important factors that could cause such differences include but are not limited to: the competition we face; the expansion of competition in the cloud communications market; risks related to the acquisition or integration of businesses we have acquired; our ability to adapt to rapid changes in the cloud communications market; the nascent state of the cloud communications for business market; our ability to retain customers and attract new customers cost-effectively; the risk associated with developing and maintaining effective internal sales teams and effective distribution channels; security breaches and other compromises of information security; risks associated with sales of our services to medium-sized and enterprise customers; our reliance on third-party hardware and software; our dependence on third-party facilities, equipment, systems and services; system disruptions or flaws in our technology and systems; our ability to comply with data privacy and related regulatory matters; our ability to scale our business and grow efficiently; our dependence on third party vendors; the impact of fluctuations in economic conditions, particularly on our small and medium business customers; our ability to obtain or maintain relevant intellectual property licenses or to protect our trademarks and internally developed software; restrictions in our debt agreements that may limit our operating flexibility; our ability to obtain additional financing if required; fraudulent use of our name or services; intellectual property and other litigation that have been and may be brought against us; reliance on third parties for our 911 services; uncertainties relating to regulation of business services; risks associated with legislative, regulatory or judicial actions regarding our business products; risks associated with operating abroad; risks associated with the taxation of our business; governmental regulation and taxes in our international operations; liability under anti-corruption laws or from governmental export controls or economic sanctions; our dependence on our customers' unimpeded access to broadband connections; foreign currency exchange risk; our history of net losses and ability to achieve consistent profitability in the future; our ability to fully realize the benefits of our net operating loss carry-forwards if an ownership change occurs; certain provisions of our charter documents; and other factors that are set forth in the Risk Factors section and other sections of this Annual Report on Form 10-K, as well as in our Quarterly Reports on Form 10-Q and amendments to these reports. While the Company may elect to update forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so, and therefore, you should not rely on these forward-looking statements as representing the Company's views as of any date subsequent to today. Non-GAAP Financial Measures This presentation contains non-gaap financial measures (including adjusted operating income before depreciation and amortization ( adjusted OIBDA ), adjusted OIBDA minus capex, net debt (cash), free cash flow, adjusted business revenue and adjusted business service revenue) as defined in Regulation G adopted by the SEC. The Company provides a reconciliation of these non-gaap financial measures to the most directly comparable financial measure at the end of the presentation and in the Company's quarterly earnings releases, which can be found on the Vonage Investor Relations website at 2

3 About Vonage COMPANY FOUNDED HEADQUARTERS: HOLMDEL, NJ EMPLOYEES WORLDWIDE ,200+ PATENTS WITH 150 PENDING STRATEGIC ACQUISITIONS IN 5 YEARS 200+ $1B ANNUAL REVENUE $1B+ DEVELOPERS WORLDWIDE USE OUR APIS 700K+ MINUTES & MESSAGES TERMINATED ANNUALLY 20B BUSINESS CUSTOMERS +100K 3

4 Vonage Has Transformed Into a Business Cloud Communications Leader ($ in millions) 4

5 2018: A Year of Great Strategic Progress ONE Improved Go-to-Market Sales Execution Strategic Acquisitions of TokBox and NewVoiceMedia Building a Communications Platform Company - One Vonage 5

6 Communication Use Cases Are Converging as Customer Expectations Grow Employee to Employee Communications for Collaboration Business to Customer Communications for Superior Engagement 6

7 Programmable Communications Enable Differentiated Experiences Customer and employee communication needs are getting more complex and demanding. Customers and employees communicate across multiple channels and devices and are increasingly mobile. They are virtual, constantly connected, and expect a personalized experience. 7

8 Why Does it Matter? Contact Center Unified Communications Integrations Communication APIs Integrated Contextual Any Channel Any Device 8

9 Our Innovation Engine Powered by One Vonage, we own the IP and roadmap across the entire communications stack. Our Programmable Communications Platform is the innovation engine across all of the Vonage solutions stack, providing: Personalized, immediate and intuitive experiences Contextual communications to business critical applications APIs for messaging, voice, verification and insights Programmable Communications Unified Communications Contact Center 9

10 One Vonage Platform Customer Benefits Enable Digital Transformation Meet Rising Customer Expectations Great Employee Experience Future Proof Platform 10

11 One Vonage: An Integrated Fully Programmable Communications Software Platform That Delivers Intelligent Interactions Programmable Communications Contact Center Unified Communications Public Cloud Infrastructure Vonage Global Carrier Network 11

12 Vonage Addresses the Entire Cloud Communications TAM $18B $3B Programmable Communications Programmable Communications $9B CCaaS $38B $38B UCaaS $38B UCaaS UCaaS $50B $11B CCaaS $50B UCaaS The Cloud Communications TAM is expected to grow by 60% over the next 5 years $79B Source: Vonage, Industry Research 12

13 At Scale, Industry Leader in Business Cloud Communications Single Cloud Platform, One Vonage, delivering a broad portfolio of Communications solutions Go-to-market through Applications and API Platform groups Large scale network terminating billions of minutes and messages Leveraging cash flows from Consumer segment and strong balance sheet to drive growth 13

14 Vonage Business Go to Market 14

15 Proven Solutions For All of a Customers Communication Needs Vonage Business Cloud Programmable APIs Voice Chat Messages Video SIP Trunking SMS Verify Number Insight Workflows Analytics Contact Center NewVoiceMedia CX Cloud Express And many more... 15

16 Significant Investments in Go-to-Market Efforts Inside Sales Channel Sales Field Sales Enterprise Sales Developers 16

17 Go-to-Market Initiatives Increase Sales From MME Customers Drive Sales of Integrated UCaaS/CCaaS/CPaaS Products Grow the Long-tail Customer Base 17

18 Q4 18 Go-to-Market Highlights: Business Service Revenues from Customers with $10,000+ in Monthly Revenue Increased 40% Year-over-Year in the Fourth Quarter Key New Customer Wins Applications Signed seven deals in the fourth quarter with TCV greater than $1 million, and most included programmable solutions 1 Channel bookings grew 60% in the fourth quarter, and six of the top ten deals originated from the Channel 2 API Platform Revenues from new API use case only customers added in the fourth quarter increased 82% year-over-year Revenues from long-tail customers increased 90% year-over-year in the fourth quarter, and we ended the year with 735,000 developers 3 A Fortune 500 Financial Services Firm A Fortune 100 Athletic Apparel Brand A World Leading Pizza Restaurant Chain 14,000 seat win due to: UCaaS Verify API SmartWAN 1,000 seat win due to: UCaaS Contact Center API Platform Won due to: Verify API UCaaS 18

19 2019 Growth Priorities Accelerate One Vonage Platform Development to Broaden Portfolio Focus on High Value, Long-tail and US API Penetration Strengthen Omni-Channel Sales Execution 19

20 Consumer Segment Overview 20

21 Consumer Segment ($ in millions, except ARPU) Quarterly Revenues Prod. & USF Service Consumer ARPU Stable ARPU Annual Revenues Consumer Customer Churn Improved Churn 21

22 Thank You 22

23 Product Highlights: Vonage Business Cloud Gaining Significant Traction ~100K Customers 85% 45% ON VBC PLATFORM OF Q4 NEW BOOKINGS ON VBC PLATFORM IN Q4 MESSAGING ON VONAGE FLOW AI & Chatbots 30% USED TO IMPROVE CUSTOMER ONBOARDING AND EXPERIENCE IN MOBILE APP USAGE 25% IN 2018 CUSTOMER CARE CALLS Vonage Business Cloud (VBC) 23

24 Travel Solution - Cancelled Flight Alert Cancelled flight sends SMS alert to travelers... Nexmo SMS Messaging TRAVEL ALERT: Flight 42 from London (LHR) to NYC (JFK) has been cancelled. Call this number and a travel representative will help you book another flight and hotel, if needed. Nexmo Voice connects call to InContact and provides context BOT: Hi Lisa, John is calling regarding his cancelled flight from LHR to JFK. He needs help booking another flight and hotel. LISA: Hi John, happy to help! Contact Center Representative 2018 Vonage Analyst Event 24

25 Non-GAAP Reconciliation 25

26 Non-GAAP Reconciliation 26