Vonage Holdings Corp.

Greetings. Welcome to Vonage third quarter 2021 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Monica Gould, Investor Relations. Thank you. You may begin.

Thank you, Operator, and good morning, and welcome to our third quarter 2021 earnings conference call. Speaking on our call this morning is Rory Reed, Chief Executive Officer, and Steve Lasher, Chief Financial Officer. Rory will discuss our strategy and third quarter results, and Steve will provide a more detailed view on our third quarter results, fourth quarter guidance, and updated full year 2021 guidance. Slides that accompany today's discussion are available on the IR website. At the conclusion of our prepared remarks, we'll be happy to take your questions. As referenced on slide two, I would like to remind everyone that statements made during this call may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's expectations, depend on assumptions that may be incorrect or imprecise, and are subject to risks and uncertainties that could cause actual results to differ materially. More information about these risks and uncertainties is highlighted on the second page of the slide and contained in our SEC filings. We caution listeners not to rely unduly on these statements and disclaim any intent or obligation to update. During this call, we will be referring to non-GAAP financial measures. A reconciliation to GAAP is available in the third quarter earnings press release or the third quarter earnings slides posted on the IR website. So with that, I'd like to turn the call over to Rory.

Thanks, Monica, and hello, everyone. Thank you for joining us today. Next-generation technology happens in ways that build upon each other. What is happening now is the convergence of the Internet, mobility, the cloud, and powerful 5G networks that is forming the digital transformation and intelligent communications wave, driving a secular change in the way businesses operate. customers expect to digitally engage with companies to get the information they want in the channel they choose when they want it from anywhere similarly employees expect seamless collaboration engagement and access to technology no matter where when or how they choose to work to achieve this level of engagement We believe all communication modes will be embedded in applications, workflows, and customer experiences through composable API-based programming techniques that enable businesses to move from transactional interactions to true ongoing engagement. We provide all of these capabilities through the Vonage Communications Platform, our single global cloud communications platform. Last month, we acquired Jumper.ai, a leader in conversational commerce. With Jumper, we have added significant technology, talent, and expertise to capitalize on this growing convergence of seamless shopping and conversations on services such as Messenger, WhatsApp, and Instagram. Jumper AI will accelerate our ability to enable our customers to differentiate themselves as social messaging becomes increasingly important to consumers as a frontline way of connecting with their favorite brands. Leading brands such as L'Oreal, Kiehl's, Disney, Axe, Dove, Ben & Jerry's, and Burger King use Jumper's technology to create personalized, unique digital engagement experiences for their customers. And this is just the beginning. We're truly delighted to welcome the Jumper team. Now let's review our third quarter Vonage communication platform results, where I'll focus my comments on our continued strong execution and the progress we are making on our strategic investment. BCP service revenues for $274 million, representing 25% year-over-year growth, up from 19% in 3Q a year ago. Third quarter, VCP adjusted EBITDA was $5 million, a $19 million year-over-year improvement. VCP rule of 40 this quarter was 27, more than double the 13 in the third quarter a year ago. We are ahead of the plan we laid out in our March investor day, and we are confident in our ability to continue to deliver on our commitment. API revenues increased 43% year-over-year to $155 million in the quarter. Our continued strong performance was driven by robust demand of our composable APIs from new and existing customers across all key industries, geographies, and customer sizes. While messaging growth was particularly strong in the quarter, we also saw a strong adoption of our other APIs, particularly Voice, Verify for authentication, and our Messages API for customer engagement. I'll highlight just a few of the new customers for the quarter. A UK-based real estate and technology company is leveraging multiple Vonage APIs to build and differentiate their business. They are using our messages API to facilitate connections between buyers and real estate agents. And they are using our video API to power virtual property viewings between agents and their customers. In the United States, Ping Identity, a Gardner Magic Quadrant leader in the access management software space, Selected Vonage to provide two-factor authentication services for its customers, which now include 60% of the Fortune 100. In addition to our strong new customer growth, existing customers continued to expand on our platform. Third quarter, dollar-based net expansion was 129%, driven by strength in e-commerce, travel, hospitality, logistics, and the social industries. We also saw increased momentum in several areas across fintech, including crypto trading platforms, digital lending, and payments. A great example is Finicel, a digital lending pioneer in Southeast Asia, already a Vonage Voice API customer. Finicel selected our SMS API and two-factor authentication capabilities to provide customers with account updates and password assistance. Finicel also added our messages API to power engagement with its customers over WhatsApp. Now moving to unified communications and contact center products, service revenue grew 8% ahead of expectations. Combined VBC and VCC cloud product growth was 13%, driven by improving micro and SMB growth, along with strong mid-market and enterprise growth. We continue to make progress on our go-to-market initiatives. Total bookings were up year over year and sequentially. Within the channel, our momentum is building, highlighted by significant year over year bookings growth, with five out of our top 10 deals, including three of our largest deals in the quarter, coming from the channel. Given our improving trajectory, We're well positioned to accelerate revenue to double-digit growth in early 2022, as we shared during our investor day in March. Key to our bookings growth is our integrated unified communications and contact center solution, which continues to be a key differentiator. Ten of our top 15 wins this quarter included both UC and CC solutions. I'll highlight two examples. An innovative financial services firm chose Vonage to replace its legacy UC and CC infrastructure. The full scope of the Vonage communication platform, including the depth of our Salesforce integration and the ability to leverage our APIs for custom integrations, were key differentiators in this seven-figure TCV deal. One of the largest roofing manufacturers in North America turned to Vonage and Salesforce to transform their customer service organization and leverage customer data to provide more proactive and intelligent customer support. Originally, only a contact center deal, it became apparent to the customer that they needed to move to a full cloud offering to replace their legacy on-prem UC and CC solution. Last quarter, we discussed the importance that the Salesforce Service Cloud Voice Partner Telephony Program represents for Vonage. I'm pleased to share that we are seeing early success here with several new wins and a strengthening pipeline. We had an exciting win with Stratton Finance, one of Australia's largest car and asset finance brokers. An existing Salesforce customer, The company selected Vonage for our contact center solution integrated with Service Cloud Voice and our unified communication solution. With Vonage and Salesforce, Stratton Finance will accelerate its digital transformation by creating an improved agent experience, better operational efficiency, and stronger customer engagement. Now moving on to product, our innovation engine continues to accelerate. During the quarter, we introduced an impressive number of new capabilities across our entire platform. I'll highlight just three. Our new AI Virtual Assistant for VVC is one of the first AI-driven conversational solutions to deliver enhanced self-service interactions for unified communication. This AI solution creates intelligent conversational experiences using natural language understanding and machine learning to engage every caller with applications using voice and text. We also launched Vonage Video Express to make it easier and faster for developers to access Vonage's video API for multi-party calls. Vonage Video Express democratizes video, making every web developer a video developer. Instead of taking days, weeks, or even months to integrate video into applications, Developers can now integrate video within hours using just a few lines of code. Additionally, Vonage Contact Center solution was one of the first to be selected by Google in its new Chrome Enterprise Recommended Contact Center category. Integrating the Vonage Contact Center with Chrome OS devices empowers IT and contact center administrators to leverage a full suite of contact center capabilities remotely and enable agents to work from anywhere, enhancing the agent experience for better efficiency and productivity. In summary, we had another strong quarter and expect to finish 2021 well ahead of our original revenue projection due to improving execution, go-to-market focus, and product innovation. Vonage is in the right place at the right time in a large and rapidly growing market as the world begins to ride this next technology wave around digital transformation and intelligent communication. The way we work, shop, learn, see a doctor, even exercise has fundamentally changed. Businesses need to move beyond transactions and notifications to digitally transform to deliver personalized conversations on the customer's terms as the demand for virtual engagement continues to grow. Whether it's getting medical attention through telehealth, tracking a package or a food delivery, booking a ride-sharing service, providing fraud protection, connecting the right customer to the right support agent, or enabling video and voice communications across thousands of office locations, Vonage does that. I would like to thank our talented team members around the world for their continued hard work and dedication. We're delivering on our commitment, executing our transformation plan and investing for future growth. And every day we're actively looking at all options to create value for our customers, our team members and our shareholders. I look forward to updating you on our continued progress. And with that, I'll turn it over to Steve.