Cloud Services Provider Fusion (NasdaqCM: FSNN) States “Strong Momentum From 2016 Has Accelerated in Q1 2017”
Fusion (NasdaqCM: FSNN), a leading provider of integrated cloud solutions to small, medium and large businesses, is the industry’s single source for the cloud. Matthew Rosen, Fusion’s Chief Executive Officer stated recently “The strong momentum from 2016 has accelerated into the first quarter of 2017, as demonstrated by our solid growth in both revenue and Adjusted EBITDA. Our first quarter results validate our sales and marketing initiatives and our investments in our service delivery platform that are now generating improved operating and financial performance. We also saw continued traction in delivering organic growth in our Business Services segment, as our key service metrics of ARPU and churn once again reflect the success of our strategy to sell multiple cloud services to our growing customer base. Our sales and M&A pipelines remain robust and position Fusion to achieve our intermediate financial goals of $200 million in annual revenue and $30 million in annual Adjusted EBITDA. In addition, we expect to continue de-levering our balance sheet by making scheduled principal payments on our indebtedness, expanding our Adjusted EBITDA with continued revenue growth, and executing on targeted acquisitions at attractive valuations. For all these reasons, we believe Fusion is poised to create substantial value for shareholders.”
Michael Bauer, Fusion’s Chief Financial Officer, stated, “During the first quarter, we converted a significant number of outstanding B-2 Preferred Stock into common stock, thereby reducing future dividend obligations. This brings the total amount of B-2 Preferred Stock that we have eliminated to approximately 60% of the original $23 million issued. We intend to take meaningful steps to simplify our capital structure and improve our financial flexibility in the coming quarters. We are also making excellent progress on the integration of Apptix which should result in greater operating efficiencies, and we remain on track to realize the full run-rate of our expected cost synergies by the second half of 2017.”
Fusion’ s First Quarter 2017 Financial Results were reported and summarzied as follows:
Consolidated revenue grew 6% in Q1 2017 to $35.8 million, compared to $33.8 million in Q1 2016, due to an increase in the Company’s Business Services segment revenue. Business Services revenue grew 32% in Q1 2017 to $28.5 million, compared to $21.6 million in Q1 2016, primarily due to the acquisition of Apptix. Carrier Services revenue in Q1 2017 was $7.3 million, compared to $12.2 million in Q1 2016, primarily due to a decline in the total minutes of traffic carried on Fusion’s network.
Consolidated gross margin in Q1 2017 was 46.2%, an increase of approximately 700 basis points compared to 39.2% in Q1 2016, primarily due to a greater proportion of Business Services revenue in consolidated revenue. Business Services gross margin was 57.4%, compared to 59.0% in Q1 2016. Carrier Services gross margin was 2.7%, compared to 4.4% in Q1 2016.
Net loss attributable to common shareholders in Q1 2017 was $4.7 million, or $(0.23) per share on a basic and diluted basis, compared to net loss in Q1 2016 of $4.1 million, or $(0.30) per share on a basic and diluted basis.
Adjusted EBITDA grew 18% in Q1 2017 to $3.3 million, compared to $2.8 million in Q1 2016. Adjusted EBITDA grew 49% compared to $2.2 million in Q4 2016, due primarily to the successful integration of Apptix and synergies achieved from the acquisition which closed in November 2016.
Cash at March 31, 2017 totaled $6.6 million, compared to $7.2 million at December 31, 2016. During Q1 2017, the Company made approximately $813,000 in principal payments, reducing its outstanding term loan balance.
On March 31, 2017, the Company converted 2,958 shares of its Series B-2 Preferred Stock into 986,665 shares of common stock.
Further details about the Company’s financial results are available in its quarterly report on Form 10-Q, which is available in the investor relations section of the Company’s website at ir.fusionconnect.com.
To learn more about Fusion (NasdaqCM: FSNN) and stay abreast of its future developments please visit its Coverage Page at Vista Partners.