Why Vonage Holdings Stock Jumped Tuesday

Robust performance in business services fueled strong revenue growth during the communications services specialist's second quarter.

Daniel Sparks
Daniel Sparks
Aug 6, 2019 at 1:56PM
Technology and Telecom

What happened

Shares of cloud-based communications services company Vonage Holdings (NYSE:VG) jumped on Tuesday, rising as much as 13.5%.

The stock's gain follows Vonage's second-quarter earnings release, which included better-than-expected revenue and earnings per share.

So what

Vonage's revenue rose 15% year over year to $298 million, easily beating analysts' average forecast for revenue of $290.6 million, according to data from Yahoo! Finance. Revenue growth was fueled by a 35% year-over-year increase in Vonage business revenue, bringing total Vonage business revenue to $200 million. Notably, business services revenue (a subsegment within Vonage business revenue) increased 41% year over year to $180 million. Consumer revenue decreased 13% year over year to $98 million.

A chart showing a stock price moving higher

Image source: Getty Images.

Vonage's earnings per share rose from $0.07 in the year-ago quarter to $0.08, coming in ahead of a consensus analyst estimate for $0.03.

Now what

For its third quarter, management said it expected revenue between $302 million and $305 million. This compares to revenue of $261.5 million in the third quarter of 2018.

In the second-quarter earnings release, Vonage CEO Alan Masarek said the company is "uniquely positioned to deliver differentiated communication solutions, and in doing so, to capitalize on a vast opportunity in cloud communications."