EX-99 2 a8-kerq421exhibit991.htm EX-99 Document

Exhibit 99.1
vonagelogoa03.jpg

Vonage Reports Fourth Quarter 2021 Financial Results

HOLMDEL, N.J., February 24, 2022 -- Vonage Holdings Corp. (Nasdaq: VG), a global leader in cloud communications helping businesses accelerate their digital transformation, today announced results for the quarter and full year ended December 31, 2021.

Fourth Quarter 2021 Highlights:
•Consolidated revenue of $366 million, an increase of 13% year-over-year
◦Consumer revenue of $66 million, a decrease of 16% year-over-year
◦Vonage Communications Platform (VCP) revenue of $300 million, an increase of 23% year-over-year
▪VCP Service revenue of $287 million, an increase of 25% year-over-year
•API revenue of $165 million, an increase of 38% year-over-year
•Unified Communications & Contact Center Service revenue of $122 million, an increase of 10% year-over-year
•Consolidated Net Loss of $22 million, a decrease of $8 million from the prior year
•Consolidated Adjusted EBITDA(1) of $50 million, an increase of $2 million from the prior year
◦VCP Adjusted EBITDA of $6 million, an increase of $10 million from the prior year
◦Consumer Adjusted EBITDA of $43 million, a decrease of $9 million from the prior year

Full Year 2021 Highlights:
•Consolidated revenue of $1.409 billion, an increase of 13% year-over-year
◦Consumer revenue of $289 million, a decrease of 13% year-over-year
◦Vonage Communications Platform (VCP) revenue of $1.120 billion, an increase of 22% year-over-year
▪VCP Service revenue of $1.062 billion, an increase of 24% year-over-year
•API revenue of $591 million, an increase of 42% year-over-year
•Unified Communications & Contact Center Service revenue of $471 million, an increase of 7% year-over-year
•Consolidated Net Loss of $24 million, an increase of $12 million from the prior year
•Consolidated Adjusted EBITDA of $198 million, an increase of $27 million from the prior year
◦VCP Adjusted EBITDA of $11 million, an increase of $68 million from the prior year
◦Consumer Adjusted EBITDA of $187 million, a decrease of $40 million from the prior year

Vonage will not host a conference call to discuss its results for the fourth quarter and full year 2021 or provide financial guidance for the first quarter or full year 2022 due to the previously announced proposed acquisition of Vonage by Ericsson.



About Vonage

Vonage (Nasdaq:VG), a global cloud communications leader, helps businesses accelerate their digital transformation. Vonage's Communications Platform is fully programmable and allows for the integration of Video, Voice, Chat, Messaging and Verification into existing products, workflows and systems. Vonage's fully programmable unified communications and contact center applications are built from the Vonage platform and enable companies to transform how they communicate and operate from the office or anywhere, providing enormous flexibility and ensuring business continuity.

Vonage Holdings Corp. is headquartered in New Jersey, with offices throughout the United States, Europe, Israel and Asia. To follow Vonage on Twitter, please visit twitter.com/vonage. To become a fan on Facebook, go to facebook.com/vonage. To subscribe on YouTube, visit youtube.com/vonage.

Investor Contact: Monica Gould, 212.871.3927, ir@vonage.com

Media Contact: Jo Ann Tizzano, 732.365.1363, joann.tizzano@vonage.com

(1) This is a non-GAAP financial measure. Refer below to Table 3 for a reconciliation to GAAP net loss.


VONAGE HOLDINGS CORP.
TABLE 1. CONSOLIDATED FINANCIAL DATA
(Dollars in thousands, except per share amounts)
 
Three Months EndedFor the Years Ended
 December 31, September 30, December 31, December 31,
 2021 2021 2020 2021 2020
 (unaudited)(unaudited)(unaudited) (unaudited)(audited)
Statement of Operations Data:
Revenues, access and product revenues$350,167 $341,544 $306,773 $1,339,063 $1,185,357 
USF revenues16,138 16,797 16,522 69,952 62,577 
Total revenues366,305 358,341 323,295 1,409,015 1,247,934 
Operating Expenses:
Service, access and product cost of revenues (excluding depreciation and amortization of $16,895, $15,817, $15,455, $61,874, and $51,408, respectively)174,923 161,067 133,694 624,557 490,946 
USF cost of revenues16,138 16,797 16,522 69,952 62,577 
Sales and marketing80,702 86,826 80,100 335,217 342,053 
Engineering and development19,961 17,636 22,387 80,667 81,484 
General and administrative70,164 44,063 41,569 202,461 182,106 
Depreciation and amortization23,572 22,507 24,853 88,780 88,917 
385,460 348,896 319,125 1,401,634 1,248,083 
(Loss) Income from operations(19,155)9,445 4,170 7,381 (149)
Other Income (Expense):
Interest expense(6,924)(7,045)(7,384)(28,348)(32,160)
Other income (expense), net1,119 (100)160 905 314 
(5,805)(7,145)(7,224)(27,443)(31,846)
Loss before income taxes(24,960)2,300 (3,054)(20,062)(31,995)
Income tax benefit (expense) 2,809 (4,332)(10,911)(4,435)(4,217)
Net loss$(22,151)$(2,032)$(13,965)$(24,497)$(36,212)
Loss per common share:
Basic and diluted$(0.09)$(0.01)$(0.06)$(0.10)$(0.15)
Weighted-average common shares outstanding:
Basic and diluted252,791 252,101 248,586 251,500 246,082 





VONAGE HOLDINGS CORP.
TABLE 1. CONSOLIDATED FINANCIAL DATA - (Continued)
(Dollars in thousands, except per share amounts)
Three Months EndedFor the Years Ended
 December 31, September 30, December 31,December 31,
 2021 2021 2020 2021 2020
 (unaudited)(unaudited)(unaudited)(unaudited)(audited)
Statement of Cash Flow Data: 
Net cash provided by operating activities$25,304 $43,886 $32,449 $158,711 $83,880 
Net cash used in investing activities(20,735)(12,768)(14,489)(62,719)(52,723)
Net cash used in financing activities(33,030)(21,986)(23,721)(117,257)(10,850)
Capital expenditures, acquisition of intangible assets, acquisition and development of software assets(13,735)(12,768)(14,489)(55,719)(52,723)
 
December 31,December 31,
  2021 2020
(unaudited)(audited)
Balance Sheet Data (at period end):  
Cash and cash equivalents $18,342 $43,078 
Restricted cash 1,967 1,919 
Accounts receivable, net of allowance 147,622 116,304 
Prepaid expenses and other current assets 37,388 38,361 
Deferred customer acquisition costs, current and non-current 101,403 85,690 
Property and equipment, net 24,334 31,621 
Goodwill615,134 624,328 
Operating lease right of use assets31,855 29,330 
Software, net 106,516 80,638 
Intangible assets, net 161,134 204,267 
Deferred tax assets109,087 106,374 
Other assets 33,362 33,926 
Total assets $1,388,144  $1,395,836 
Accounts payable and accrued expenses $226,497 $175,544 
Deferred revenue, current 61,420 65,506 
Total notes payable, net and indebtedness under revolving credit facility, including current portion 130,500 215,500 
Operating lease liabilities, current and non-current 43,056 42,573 
Convertible senior notes, net305,609 290,784 
Other liabilities 3,341 3,155 
Total liabilities $770,423  $793,062 
Total stockholders' equity $617,721 $602,774 




VONAGE HOLDINGS CORP.
TABLE 2. SUMMARY CONSOLIDATED OPERATING DATA
(Dollars in thousands, except per line amounts)
(unaudited)
The table below includes summarized income statement information that our management uses to measure the operating performance of the Vonage Communications Platform focused portion of our business:
Vonage Communications PlatformThree Months EndedFor the Years Ended
 December 31, September 30, December 31, December 31,
 2021 2021 2020 2021 2020
Statement of Operations Data:
Revenues, access and product revenues$292,699 $281,311 $238,673 $1,092,267 $893,076 
USF revenues7,403 6,845 6,056 27,858 21,981 
Total revenues300,102 288,156 244,729 1,120,125 915,057 
Operating Expenses:
Service, access and product cost of revenues excluding depreciation and amortization167,062 152,939 125,214 590,623 455,558 
USF cost of revenues7,403 6,845 6,056 27,858 21,981 
Sales and marketing77,362 83,227 77,083 320,717 329,702 
Engineering and development19,173 16,519 20,181 76,936 73,012 
General and administrative66,720 42,439 38,425 190,936 167,704 
Depreciation and amortization23,412 22,325 24,433 87,872 85,210 
361,132 324,294 291,392 1,294,942 1,133,167 
Loss from operations$(61,030)$(36,138)$(46,663)$(174,817)$(218,110)

The table below includes revenues and cost of revenues that our management uses to measure the growth and operating performance of the Vonage Communications Platform focused portion of our business:
Vonage Communications PlatformThree Months Ended For the Years Ended
 December 31, September 30, December 31, December 31,
 2021 2021 2020 2021 2020
Revenues:
   Service revenues$286,820 $274,031 $230,077 $1,061,745 $856,492 
   Access and product revenues(1)
5,879 7,280 8,596 30,522 36,584 
      Service, access and product revenues excluding USF292,699 281,311 238,673 1,092,267 893,076 
   USF revenues7,403 6,845 6,056 27,858 21,981 
Total revenues$300,102 $288,156 $244,729 $1,120,125 $915,057 
Cost of Revenues:
   Service cost of revenues(2)
$158,013 $144,156 $114,491 $552,537 $413,079 
   Access and product cost of revenues(1)
9,049 8,783 10,723 38,086 42,479 
      Service, access and product cost of revenues excluding USF167,062 152,939 125,214 590,623 455,558 
   USF cost of revenues7,403 6,845 6,056 27,858 21,981 
Total cost of revenues$174,465 $159,784 $131,270 $618,481 $477,539 
Service margin %44.9 %47.4 %50.2 %48.0 %51.8 %
Gross margin % excluding USF (Service, access and product margin %)42.9 %45.6 %47.5 %45.9 %49.0 %
Gross margin %41.9 %44.5 %46.4 %44.8 %47.8 %

(1) Includes customer premise equipment, access, professional services, and shipping and handling.
(2) Excludes depreciation and amortization of $16,735, $15,635, $15,331 for the quarters ended December 31, 2021, September 30, 2021 and December 31, 2020, respectively, and $60,966 and $47,701 for the years ended December 31, 2021 and 2020, respectively.




The table below includes key operating data that our management uses to measure the growth and operating performance of the business focused portion of our business:
Vonage Communication PlatformThree Months Ended For the Years Ended
 December 31, September 30, December 31, December 31,
 2021 2021 2020 2021 2020
Service revenue per customer$678 $657 $552 $637 $516 
Vonage Communications Platform revenue churn0.5 %0.6 %1.3 %0.6 %1.1 %

The table below includes summarized income statement information that our management uses to measure the operating performance of the Consumer focused portion of our business:
ConsumerThree Months EndedFor the Years Ended
 December 31, September 30, December 31, December 31,
 2021 2021 2020 2021 2020
Statement of Operations Data:
Revenues, access and product revenues$57,468 $60,233 $68,100 $246,796 $292,281 
USF revenues8,735 9,952 10,466 42,094 40,596 
Total revenues66,203 70,185 78,566 288,890 332,877 
Operating Expenses:
Service, access and product cost of revenues excluding depreciation and amortization7,861 8,128 8,480 33,934 35,388 
USF cost of revenues8,735 9,952 10,466 42,094 40,596 
Sales and marketing3,340 3,599 3,017 14,500 12,351 
Engineering and development788 1,117 2,206 3,731 8,472 
General and administrative3,444 1,624 3,144 11,525 14,402 
Depreciation and amortization160 182 420 908 3,707 
24,328 24,602 27,733 106,692 114,916 
Income from operations$41,875 $45,583 $50,833 $182,198 $217,961 




The table below includes revenues and cost of revenues that our management uses to measure the growth and operating performance of the Consumer focused portion of our business:
ConsumerThree Months Ended For the Years Ended
 December 31, September 30, December 31, December 31,
 2021 2021 2020 2021 2020
Revenues:
   Service revenues$57,405 $60,162 $68,022 $246,553 $292,003 
   Access and product revenues(1)
63 71 78 243 278 
      Service, access and product revenues excluding USF57,468 60,233 68,100 246,796 292,281 
   USF revenues8,735 9,952 10,466 42,094 40,596 
Total revenues$66,203 $70,185 $78,566 $288,890 $332,877 
Cost of Revenues:
   Service cost of revenues(2)
$7,436 $7,607 $8,080 $31,968 $33,550 
   Access and product cost of revenues(1)
425 521 400 1,966 1,838 
      Service, access and product cost of revenues excluding USF7,861 8,128 8,480 33,934 35,388 
   USF cost of revenues8,735 9,952 10,466 42,094 40,596 
Total cost of revenues$16,596 $18,080 $18,946 $76,028 $75,984 
Service margin %87.0 %87.4 %88.1 %87.0 %88.5 %
Gross margin % excluding USF (Service, access and product margin %)86.3 %86.5 %87.5 %86.3 %87.9 %
Gross margin %74.9 %74.2 %75.9 %73.7 %77.2 %

(1) Includes customer premise equipment, access, professional services, and shipping and handling.
(2) Excludes depreciation and amortization of $160, $182, and $124 for the quarters ended December 31, 2021, September 30, 2021 and December 31, 2020, respectively, and $908 and $3,707 for the years ended December 31, 2021 and 2020, respectively.

The table below includes key operating data that our management uses to measure the growth and operating performance of the consumer focused portion of our business:
 
ConsumerThree Months Ended For the Years Ended
 December 31, September 30, December 31, December 31,
 2021 2021 2020 2021 2020
Average monthly revenues per line$27.82 $28.47 $28.13 $28.50 $27.77 
Subscriber lines (at period end)779,179 807,265 909,965 779,179 909,965 
Customer churn1.4 %1.5 %1.7 %1.4 %1.7 %



VONAGE HOLDINGS CORP.
TABLE 3. RECONCILIATION OF GAAP NET LOSS
TO ADJUSTED EBITDA AND TO ADJUSTED EBITDA MINUS CAPEX
(Dollars in thousands)
(unaudited)
 
Three Months EndedFor the Years Ended
 December 31,September 30, December 31, December 31,
20212021 2020 20212020
Net Loss$(22,151)$(2,032)$(13,965)$(24,497)$(36,212)
Interest expense6,924 7,045 7,384 28,348 32,160 
Income tax (2,809)4,332 10,911 4,435 4,217 
Depreciation and amortization23,572 22,507 24,853 88,780 88,917 
Amortization of costs to implement cloud computing arrangements840 818 938 3,515 2,885 
EBITDA6,376 32,670 30,121 100,581 91,967 
Share-based expense32,325 17,247 11,695 79,900 45,667 
Acquisition related transaction and integration costs10,120 — — 10,120 — 
Organizational transformation (1)
— — — — 5,119 
Restructuring activities (2)
— — 3,731 2,655 18,913 
Other non-recurring items (3)
916 944 $2,654 4,314 8,518 
Adjusted EBITDA$49,737 $50,861 48,201 $197,570 $170,184 
Consumer Adjusted EBITDA$43,297 $45,839 $52,169 $186,856 $227,152 
VCP Adjusted EBITDA6,440 5,022 (3,968)10,714 (56,968)
Adjusted EBITDA49,737 50,861 48,201 197,570 170,184 
Less:
Capital expenditures(2,214)(2,058)(2,853)(8,996)(10,571)
Intangible assets(62)431 (52)256 (312)
Acquisition and development of software assets(11,459)(11,141)(11,584)(46,979)(41,840)
Adjusted EBITDA Minus Capex$36,002 $38,093 $33,712 $141,851 $117,461 

(1) The cost identified as "Organizational transformation" are related to the Company’s previously announced goal of becoming a pure-play software-as-a-service (“SaaS”) company, offering a suite of communications solutions for businesses. These costs include employee related exits including CEO succession, system change management, facility exit costs, and rebranding.
(2) Restructuring activities relate to the Company's business-wide optimization and alignment project initiated in 2020 and include employee related exits and further facility exit costs executed upon as part of the overall project.
(3) Other non-recurring items principally include certain litigation charges and other non-recurring project costs such as the review of the Consumer business and the business optimization project, both of which were initiated in 2020.


VONAGE HOLDINGS CORP.
TABLE 4. RECONCILIATION OF GAAP NET LOSS TO
NET INCOME (LOSS) EXCLUDING ADJUSTMENTS
(Dollars in thousands, except per share amounts)
(unaudited) 
Three Months EndedFor the Years Ended
December 31,September 30,December 31,December 31,
20212021202020212020
Net loss$(22,151)$(2,032)$(13,965)$(24,497)$(36,212)
Amortization of acquisition - related intangibles10,823 10,733 13,131 43,141 53,539 
Amortization of costs to implement cloud computing arrangements840 818 938 3,515 2,885 
Acquisition related transaction and integration costs10,120 — — 10,120 — 
Amortization of debt discount3,402 3,349 3,210 13,230 12,532 
Organizational transformation (1)
— — — — 5,119 
Restructuring activities (2)
— — 3,731 2,655 18,913 
Other non-recurring items (3)
916 944 2,654 4,314 8,518 
Tax effect on adjusting items(6,787)(4,120)(4,969)(20,014)(21,316)
Net (loss) income excluding adjustments$(2,837)$9,692 $4,730 $32,464 $43,978 
Loss per common share:
Basic and diluted$(0.09)$(0.01)$(0.06)$(0.10)$(0.15)
Weighted-average common shares outstanding:
Basic and diluted252,791 252,101 248,586 251,500 246,082 
Earnings per common share, excluding adjustments:
Basic$(0.01)$0.04 $0.02 $0.13 $0.18 
Diluted$(0.01)$0.04 $0.02 $0.12 $0.17 
Weighted-average common shares outstanding:
Basic252,791 252,101 248,586 251,500 246,082 
Diluted252,791 260,851 258,211 270,831 254,874 

(1) The cost identified as "Organizational transformation" are related to the Company’s previously announced goal of becoming a pure-play software-as-a-service (“SaaS”) company, offering a suite of communications solutions for businesses. These costs include employee related exits including CEO succession, system change management, facility exit costs, and rebranding.
(2) Restructuring activities relate to the Company's business-wide optimization and alignment project initiated in 2020 and include employee related exits and further facility exit costs executed upon as part of the overall project.
(3) Other non-recurring items principally include certain litigation charges and other non-recurring project costs such as the review of the Consumer business and the business optimization project, both of which were initiated in 2020.


VONAGE HOLDINGS CORP.
TABLE 5. FREE CASH FLOW
(Dollars in thousands)
(unaudited)
 
Three Months EndedFor the Years Ended
December 31,September 30,December 31,December 31,
20212021202020212020
Net cash provided by operating activities$25,304 $43,886 $32,449 $158,711 $83,880 
Less:
Capital expenditures(2,214)(2,058)(2,853)(8,996)(10,571)
Intangible assets(62)431 (52)256 (312)
Acquisition and development of software assets(11,459)(11,141)(11,584)(46,979)(41,840)
Free cash flow$11,569 $31,118 $17,960 $102,992 $31,157 





VONAGE HOLDINGS CORP.
TABLE 6. RECONCILIATION OF INDEBTEDNESS UNDER REVOLVING CREDIT FACILITY, AND CONVERTIBLE SENIOR NOTES TO NET DEBT
(Dollars in thousands)
(unaudited)
 
December 31,December 31,
20212020
Convertible senior notes, net305,609 290,784 
Notes payable and indebtedness under revolving credit facility, net of current maturities130,500 215,500 
Unamortized debt related costs3,919 5,512 
Unamortized discount on debt35,472 48,704 
Gross debt475,500 560,500 
Less:
Unrestricted cash18,342 43,078 
Net debt$457,158 $517,422 


Use of Non-GAAP Financial Measures
This press release includes measures defined as non-GAAP financial measures by Regulation G adopted by the Securities and Exchange Commission, including: adjusted EBITDA, adjusted EBITDA less Capex, adjusted net income, constant currency, net debt (cash), and free cash flow.
Adjusted EBITDA
Vonage uses adjusted EBITDA as a principal indicator of the operating performance of its business.
Vonage defines adjusted EBITDA as GAAP net income (loss) before interest, tax, depreciation and amortization, share-based expense, amortization of costs to implement cloud computing arrangements, acquisition related transaction and integration costs, organizational transformation costs and other non-recurring items. The costs identified as “organizational transformation” are related to the Company’s previously announced goal of becoming a pure-play software-as-a-service (“SaaS”) company, offering a suite of communications solutions for businesses. These costs include employee related exits, system change management, facility exit costs, and rebranding.
Vonage believes that adjusted EBITDA permits a comparative assessment of its operating performance, relative to its performance based on its GAAP results, while isolating the effects of interest, tax, depreciation and amortization, which may vary from period to period without any correlation to underlying operating performance; of share-based expense, which is a non-cash expense that also varies from period to period; of one-time acquisition related transaction and integration costs, organizational transformation costs and other non-recurring items. Organizational transformation consists principally of costs in connection with exits of employees and facilities, system migration costs and certain professional related fees. Restructuring activities relate to the Company's business-wide optimization and alignment project initiated in 2020 and include employee related exit costs and further facility exit costs executed upon as part of the overall project. Other non-recurring items principally include certain litigation charges and other non-recurring project costs such as the review of the Consumer business and the business optimization project, both of which were initiated in 2020.
The Company provides information relating to its adjusted EBITDA so that investors have the same data that the Company employs in assessing its overall operations. The Company believes that trends in its adjusted EBITDA are valuable indicators of the operating performance of the Company on a consolidated basis.
The Company does not reconcile its forward-looking adjusted EBITDA to the corresponding GAAP measure of net income because stock-based compensation expense and other non-recurring items cannot be reasonably calculated or predicted at this time as they may be significantly impacted by future events, the timing and nature of which cannot be reasonably calculated or predicted at this time.  Accordingly, a reconciliation is not available without unreasonable effort.
Adjusted EBITDA less Capex
Vonage uses adjusted EBITDA less Capex as an indicator of the operating performance of its business. The Company provides information relating to its adjusted EBITDA less Capex so that investors have the same data that the Company employs in assessing its overall operations. The Company believes that trends in its Adjusted EBITDA less Capex are valuable indicators of the operating performance of the Company on a consolidated basis because they provide our investors with insight into current performance and period-to-period performance.
Adjusted net income
Vonage defines adjusted net income, as GAAP net income (loss) excluding amortization of acquisition-related intangible assets, amortization of costs to implement cloud computing arrangements, acquisition related transaction and integration costs, amortization of debt discount, organizational transformation costs, other non-recurring items and tax effect on adjusting items.
The Company believes that excluding these items will assist investors in evaluating the Company's operating performance and in better understanding its results of operations as amortization of acquisition-related intangible assets is a non-cash item, one-time acquisition related transaction and integration costs, organizational transformation, other non-recurring items, and tax effect on adjusting items are not reflective of operating performance. Organizational transformation consists principally of costs in connection with exits of employees and facilities, system migration costs and certain related professional fees. Other non-recurring items principally include certain litigation charges and other non-recurring project costs.
Constant Currency
Vonage reviews its results of operations on both an as reported and on a constant currency basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our results of operations, consistent with how we evaluate our performance. We calculate constant currency percentages by converting our current period local currency financial results using the prior period exchange rates and comparing these adjusted amounts to our prior period reported results.


Net debt (cash)
Vonage defines net debt (cash) as indebtedness under revolving credit facility, convertible senior notes, discount on debt, and debt related costs less unrestricted cash.
Vonage uses net debt (cash) as a measure of assessing leverage, as it reflects the gross debt under the Company's credit agreements and capital leases less cash available to repay such amounts. The Company believes that net cash is also a factor that first parties consider in valuing the Company.
Free cash flow
Vonage defines free cash flow as net cash provided by operating activities minus capital expenditures, purchase of intangible assets, and acquisition and development of software assets.
Vonage considers free cash flow to be a liquidity measure that provides useful information to management about the amount of cash generated by the business that, after the acquisition of equipment and software, can be used by Vonage for debt service and strategic opportunities. Free cash flow is not a measure of cash available for discretionary expenditures since the Company has certain non-discretionary obligations such as debt service that are not deducted from the measure.
The non-GAAP financial measures used by Vonage may not be directly comparable to similarly titled measures reported by other companies due to differences in accounting policies and items excluded or included in the adjustments, which limits its usefulness as a comparative measure. These non-GAAP financial measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results.

The Company does not reconcile its forward-looking adjusted business total revenue and adjusted business service revenue to the corresponding GAAP measures due to the significant variability and difficulty in making accurate forecasts with respect to the various acquisition-related and one-time events that we exclude, as they may be significantly impacted by future events the timing and nature of which are difficult to predict or are not within the control of management.  As such, the Company has determined that reconciliations of these forward-looking non-GAAP financial measures to the corresponding GAAP measures is not available without unreasonable effort.


Safe Harbor Statement
This press release contains forward-looking statements, including statements about future financial results, growth priorities or plans, revenues, adjusted EBITDA, churn, seats, lines or accounts, average revenue per customer, cost of communications services, capital expenditures, new products and related investment, and other statements that are not historical facts or information, that constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. In addition, other statements in this press release that are not historical facts or information may be forward-looking statements. The forward-looking statements in this release 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; incremental business, regulatory, and reputational risks related to the pending Ericsson merger; timing and satisfaction of the closing conditions related to the Ericsson merger; our ability to adapt to rapid changes in the cloud communications market; realizing the expected benefits of our business optimization or other cost-savings plans; risks related to the acquisition or integration of businesses we have acquired; our ability to scale our business and grow efficiently; the nascent state of the cloud communications for business market; our ability to retain customers and attract new customers cost-effectively; developing and maintaining effective distribution channels; risks associated with sales of our services to medium-sized and enterprise customers; the effects of COVID-19 on our business; our reliance on third-party hardware and software; our dependence on third-party vendors; reliance on third parties for our 911 services; the impact of fluctuations in economic conditions, particularly on our small and medium business customers; the effects of significant foreign currency fluctuations; developing and maintaining market awareness and a strong brand; retaining senior executives and other key employees; security breaches and other compromises of information security; system disruptions or flaws in our technology and systems; our ability to comply with data privacy and related regulatory matters; unfavorable litigation or governmental investigations; our ability to obtain or maintain relevant intellectual property licenses or to protect our trademarks and internally developed software; fraudulent use of our name or services; intellectual property and other litigation that have been and may be brought against us; rapid developments in global API regulation and uncertainties relating to regulation of VoIP services; liability under anti-corruption laws or from governmental export controls or economic sanctions; risks associated with the taxation of our business; governmental regulation and taxes in our international operations; 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; actions of activist shareholders; restrictions in our debt agreements that may limit our operating flexibility; our ability to obtain additional financing if required; risks associated with the settlement and conditional conversion of our Convertible Senior Notes; potential effects the capped call transactions may have on our stock in connection with our Convertible Senior Notes; certain provisions of our charter documents; and other factors that are set forth in the “Risk Factors” in our Annual Report on Form 10-K and in the Company's Quarterly Reports on Form 10-Q filed with the SEC. 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 except as required by law, and therefore, you should not rely on these forward-looking statements as representing the Company's views as of any date subsequent to today.
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