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Vonage Holdings Misses on Revenues but Beats on EPS

By Seth Jayson – Updated Apr 7, 2017 at 12:01PM

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Just the facts, Fool.

Vonage Holdings (NYSE: VG) reported earnings on Oct. 31. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Vonage Holdings missed slightly on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue contracted and GAAP earnings per share contracted.

Gross margins grew, operating margins dropped, net margins shrank.

Revenue details
Vonage Holdings recorded revenue of $207.6 million. The one analyst polled by S&P Capital IQ wanted to see revenue of $211.3 million on the same basis. GAAP reported sales were 4.1% lower than the prior-year quarter's $216.5 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.09. The two earnings estimates compiled by S&P Capital IQ predicted $0.06 per share. GAAP EPS of $0.06 for Q3 were 14% lower than the prior-year quarter's $0.07 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 68.4%, 70 basis points better than the prior-year quarter. Operating margin was 11.0%, 170 basis points worse than the prior-year quarter. Net margin was 6.4%, 100 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $211.0 million. On the bottom line, the average EPS estimate is $0.07.

Next year's average estimate for revenue is $850.1 million. The average EPS estimate is $0.29.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 509 members out of 1,567 rating the stock outperform, and 1,058 members rating it underperform. Among 411 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 72 give Vonage Holdings a green thumbs-up, and 339 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Vonage Holdings is outperform, with an average price target of $3.00.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy

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