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Analyst Notes from Oppenheimer Meeting
We Hosted Investor Meeting with Vonage; Company Focusing on Growth Initiatives
Oppenheimer hosted a well-attended investor meeting with Vonage (VG, $1.54, Not Rated) CEO Marc Lefar, CFO Barry Rowan and VP of IR Leslie Arena. The main takeaways from the meeting were:
1. Management conveyed the company has reached a point of stability after putting behind various issues (litigation, bankruptcy risk) in 2009, and VG has managed to improve churn and ARPU, helped by new initiatives such as Vonage World (as of the YE09 totaled 645K subs out of 2.4M total subs) and Vonage Mobile.
2. Per the company, Vonage World (unlimited international calling) has been successful for the company, and these users have half the churn versus regular customers (though there is still more room for improvement in terms of gross adds). Wireless substitution has been negatively impacting the company's gross adds much more than any other factor.
3. The company is excited about the growth prospects for Vonage Mobile, which is a mobile application allowing VoIP calls on the iPhone, and recently it was announced that it will be allowed on Android phones as well. The company did not provide any user subs beyond those provided in the 4Q call (+100K downloads), but management seems confident the business will continue growing. There should be other announcements throughout the year for new applications/features, as the company is counting on these new products to eventually help grow the top line. |
