Fusion Reports Revenue of US$120.8 Million for Second Quarter

Fusion (NASDAQ:FSNN), a leading cloud services provider announced financial results for the three and six months ended June 30, 2018 with the company posting a revenue for US$120.8 million for the second quarter.

The company said that its average monthly revenue per user (ARPU) was US$309 as compared to US$203 in Q1, 2018.

As quoted in the press release:

“Fusion delivered solid second quarter financial results, demonstrating the progress we have made in stabilizing the Birch business, as we have indicated we would,” said Matthew Rosen, Fusion’s Chairman & CEO. “Our integration of Birch and MegaPath is running ahead of schedule, having made significant progress toward several major milestones in terms of real estate consolidation, network interconnection, sales and marketing, and financial operations. As a result, less than 60 days after closing Birch, we had already achieved nearly 40% of our original 12-month cost synergy target of approximately $35 million for the acquisitions, which we now expect to exceed as we continue to find incremental savings opportunities since the acquisitions closed.

“With integration well under way, we are focusing on driving Fusion’s growth by increasing our emphasis on our Product, Sales & Marketing organization, including the addition of Dan Foster as our Chief Revenue Officer and key hires in our Partner sales channel group. We anticipate that these efforts will further strengthen our bookings and churn performance, where we have already seen good progress, and lead to top line expansion.”

Second Quarter 2018 Highlights

• Revenue was $120.8 million, compared to $102.9 million in Q1 2018 and $116.7 million in Q2 2017

• Gross margin was 45.2%, compared to 46.4% in Q1 2018 and 46.0% in Q2 2017

• Net loss attributable to common stockholders was $34.5 million, or $0.59 per share, compared to a net loss of $4.0 million, or $0.33 per share in Q1 2018 and a net loss of $4.7 million, or $0.19 per share in Q2 2017

• Excluding the retirement of debt obligations, non-GAAP net loss attributable to common stockholders was $20.1 million, or $0.34 per share

• Adjusted EBITDA (a non-GAAP measure) was $26.6 million, or 22.0% revenue, compared to $26.7 million in Q1 2018 and $28.1 million in Q2 2017

• Unlevered Free Cash Flow (a non-GAAP measure), defined as Adjusted EBITDA less capital expenditures, was $18.6 million, or 15.4% of revenue, compared to $19.3 million in in Q1 2018 and $18.2 million in Q2 2017

• Acquisition integration proceeding ahead of schedule in key areas including: Service Delivery; Network & Engineering; Sales, Marketing and Product; HR and Administration; and Finance and Accounting

• Achieved integration-related cost synergies with an annualized run-rate of approximately $14 million exiting Q2 2018, representing 40% of the $35 million of targeted acquisition-related synergies within 12 months following the closings

• Average monthly revenue per customer (ARPU) was $309, compared to $203 in Q1 2018

• Churn was at the mid-1% level, compared to more than 2% in Q2 2017

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