Venture Global, Inc. Q2 FY2020 earnings call

• Rory Read discussed his initial thoughts on taking Vonage to new levels of execution and growth, his experience in technology and software, and excitement about leading Vonage forward. • David Pearson reviewed second quarter results: total revenue $226M, ahead of guidance; business service revenue up 18%; API platform revenue up 32% (47% of business revenue ex USF); applications revenue $123M; business segment revenue churn 0.9% (down from 1% year ago); monthly service revenue per customer up 16% to $509; business service margin 53%, up 1% YOY; consumer revenue $84M, churn 1.5% (down from 1.7% prior year), average monthly revenue per line $27.59. • Omar Javaid added on API business opportunity, noting enterprise growth and digital transformation acceleration driving the opportunity. • Rodolpho Cardenuto touched on UCaaS and CCaaS market and product aspects.

Second quarter Vonage business total revenue was $226 million. Business service revenue increased 18%. API platform revenue was $103 million, up 32% and representing 47% of business revenue ex USF. Revenue from applications was $123 million, with $109 million as service revenue increasing 7% GAAP. Consumer revenue was $84 million, churn 1.5% (down from 1.7% prior year), average monthly revenue per line $27.59, and ended the quarter with ~1 million consumer subscriber lines.

• Updated 2020 GAAP business revenues to $885 million to $900 million. • Consumer revenues expected in the $330 million area, a $5 million increase due to projected USF fee increase. • Full year 2020 adjusted EBITDA expected between $150 million and $155 million. • Third quarter business segment revenues projected in the range of $226 million to $228 million (including $6 million of USF), consumer revenues in the $81 million area (including USF of $11 million), and adjusted EBITDA in the $36 million area.

• Macroeconomic environment uncertainty. • Exposure to travel and hospitality industries on the API side, which still face pressure but have shown improvement from lows. • Potential concessions to customers in travel and hospitality sectors, though not seeing significant requests for price breaks thus far.

Q: Rich Valera asked about the API business, including expansion of CPaaS market view, sustainability of trends, and margin implications.

A: Rory Read discussed CPaaS being part of a major communications trend accelerating due to COVID-19, expecting secular change over 5-7 years, and API mix moving to higher-margin segments. Omar Javaid added on enterprise growth acceleration driving the opportunity.

Q: Alex Kurtz asked about UCaaS and CCaaS optimization and extracting value from in-house platforms.

A: Rory Read discussed business optimization and alignment project, tailoring go-to-market for different customer segments, hiring Curt Allen, and targeting specific customer groups in UCaaS and CCaaS.

Q: Alexander Kurtz asked about consumer business exit process.

A: Rory Read stated they're going through the process as part of the business optimization alignment project, expecting to complete later in the year, and the consumer business is cash-generative.

Q: Ryan MacWilliams asked about API geographic revenue breakdown and new developers since COVID.

A: Rory Read and Omar Javaid mentioned strength across all geographies, Asia Pacific traffic recovery to pre-COVID levels, and growth across the board.

Q: Catharine Trebnick asked about sales and marketing and G&A changes.

A: Rory Read and David Pearson discussed streamlining and efficiency opportunities in sales and marketing and G&A, with sales and marketing having efficiencies and G&A driven by consulting fees and CEO transition costs.

Q: Timothy Horan asked about Domino's differentiation and API service differentiation.

A: Rory Read and Omar Javaid discussed multi-location capability, intellectual property in video (from TokBox acquisition), ease of use of software, and global footprint as differentiators.

Q: Eric (Meta) asked about Salesforce relationship and pull-through in contact center.

A: Rory Read discussed continued activity with Salesforce, deep integration in contact center, and pull-through of unified communication in targeted accounts.

Q: Drew Glaeser asked about travel and hospitality verticals performance and concessions.

A: Rory Read and Omar Javaid mentioned travel and hospitality verticals saw impact peak in May, Asia Pacific recovery, and no significant concessions requested.

Q: William Power asked about contact center trends.

A: Rory Read discussed contact center focus, higher growth rates compared to unified communication, and focus on Salesforce and service spaces for differentiation.

Q: George Sutton asked about branding shift to business-centric.

A: Rory Read discussed addition of Joy Corso as CMO, focus on delivering business-centric messaging, and continued building of the business brand with marketing efforts.