Artificial Intelligence
Vonage Reports Third Quarter 2020 Financial Results
Third Quarter 2020 Highlights:
- Consolidated Revenues of $317 million
- Vonage Communications Platform (VCP) Revenues of $234 million
- VCP Service Revenues increased 19%
- API Revenues Increased 35%
- Unified Communications & Contact Center Service Revenues Increased 7%
- Net Loss of $10 Million and Adjusted EBITDA of $42 million
- Announcing business optimization and alignment project to accelerate growth and improve profitability
- Consumer Segment marketing process to begin in November
HOLMDEL, N.J., Nov. 05, 2020 (GLOBE NEWSWIRE) — Vonage Holdings Corp. (Nasdaq: VG), a global leader in cloud communications helping businesses accelerate their digital transformation, today announced results for the quarter ended September 30, 2020.
“We executed well in the third quarter and delivered solid results,” said Rory Read, Chief Executive Officer. “The Vonage Communications Platform, our single global cloud technology platform, delivers our wide range of powerful services and solutions that enable our customers to transform the way they communicate and operate as the world undergoes a secular shift in how business gets done.”
Read continued, “Vonage Communications Platform service revenues grew 19% year over year. Within this, API revenues grew 35%, highlighted by a 143% increase in high-value API revenues, driven by our leadership in video and another record quarter of new customer additions. Unified Communications and Contact Center Applications service revenue grew 7%, and we signed 17 seven-figure total contract value deals in the quarter, with a 28% increase in average deal size. Our Platform’s flexibility, scalability, security and ease of use were consistent areas of strength in our ability to win.”
Business Optimization and Alignment Project
Vonage has undertaken a multi-quarter initiative to review and optimize the Company’s operations while setting the strategy and business plans for the next two to three years. The work has provided clarity on where the Company needs to create efficiency, position its talent and invest to drive Vonage’s long-term growth and profitability.
Based on this review, the Company has implemented a number of cost saving and efficiency initiatives to improve operations and expects to reduce operating expenses by $8 to $10 million in the fourth quarter of 2020 and approximately $50 million in 2021. This resulted in a restructuring charge of approximately $15 million in the third quarter.
In parallel, Vonage is developing its business strategy and operating plan to make key investments to deliver improved growth and profitability. The Company plans to increase investments in artificial intelligence, high-value API leadership, advancements in mobility, omnichannel capabilities, and expanding its addressable market while tailoring its go-to-market initiatives to reach and win more customers.
“We are taking decisive action to improve the operational effectiveness of our business while making strategic investments where we can win a disproportionate share of the market, and where our communications platform solutions best fit the needs of our customers,” Read commented. “We are also investing in our Sales and Marketing to strengthen our channel presence, effectively reach all customer segments, and increase our cross-sell and upsell opportunities. The management team and our Board are focused on delivering on these strategic initiatives, and we expect to accelerate growth and profitability in 2021 and 2022.”
Third Quarter 2020 Vonage Communications Platform Highlights (compared to the year-ago quarter)
- Vonage Communications Platform (VCP) revenues, which consist of Unified Communications, Contact Center and API revenues, were $234 million. VCP service revenues were $218 million, a 19% increase.
- API revenues grew 35%
- High-Value API revenues grew 143%, driven by strength in programmable video.
- Service Revenues from Unified Communications and Contact Center (UC and CC) customers grew 7%.
- Service Revenues from Mid-market and Enterprise UC and CC customers (those with greater than $12,000 of ARR) grew 13%.
- VCP Service Revenue per Customer was $527 per month, up 17%.
- VCP Service Revenue Churn increased to 1.2% from 1.0%.
Third Quarter 2020 Consumer Segment Results (compared to the year-ago quarter)
- Consumer Revenues were $83 million, down 14%.
- Customer churn was stable at 1.8%.
- Average revenue per line (“ARPU”) was $28.31, up $0.75.
- Ended the quarter with approximately 1 million Consumer subscriber lines
- 96% of these customers are tenured over two years and 80% are tenured over five years.
Consolidated Income and Balance Sheet
For the third quarter of 2020, Vonage reported consolidated revenues of $317 million, up from $303 million in the year-ago quarter. GAAP net loss was $10 million, or ($0.04) per share, versus a net loss of $21 million in the prior-year period, or ($0.09) per share. Third quarter adjusted net income(1) was $17 million or $0.07 per share, an increase from a net loss of $4 million or ($0.02) per share in the prior-year period.
For the third quarter, the Company generated Adjusted EBITDA(2) of $42 million, and Adjusted EBITDA minus Capex(2) of $29 million. Net Cash from Operations was $13 million and Free Cash Flow(3) was breakeven for the quarter. As of September 30, 2020, the Company had a Net Debt to Last Twelve Months Adjusted EBITDA ratio of 3.2 times.
Strategic Review of Consumer Segment Update
The Company is nearing completion of the strategic review of its Consumer segment and has engaged advisors to proceed with its potential sale. The marketing process is expected to begin in November 2020. The Company will provide an update once a buyer is identified or at the completion of the process.
Updated 2020 and Fourth Quarter Outlook
The Company is increasing its 2020 revenue and adjusted EBITDA guidance to reflect its solid third quarter and a fourth-quarter above its prior outlook.
For the full year, Vonage now expects the following (based on constant currency as of November 2020):
- Consolidated revenues in the range of $1.239 billion to $1.242 billion
- Total Vonage Communications Platform Revenues in the range of $906 million to $909 million (which includes approximately $22 million of USF revenues)
- Total Consumer Segment Revenues in the $332 million area (which includes approximately $41 million of USF revenues)
- Consolidated Adjusted EBITDA in the $167 million area
- Capex in the $53 million area
For the fourth quarter of 2020, Vonage expects the following:
- Consolidated Revenues in the range of $314 million to $317 million
- Total Vonage Communications Platform Revenues in the range of $236 million to $239 million (which includes approximately $6 million of USF revenues)
- Total Consumer Revenues in the $78 million area (which includes approximately $11 million of USF revenues)
- Consolidated Adjusted EBITDA in the $45 million area
Conference Call and Webcast
The company will host a conference call to discuss its financial results for the third quarter of 2020 and other matters at 8:30 AM Eastern Time. To participate, please dial (877) 407-9716. International callers should dial (201) 493-6779.
A live webcast of the conference call will be available on the Vonage Investor Relations website. A replay of the webcast will also be available shortly after the conclusion of the call, and may be accessed through Vonage’s Investor Relations website or by dialing (844) 512-2921 or (412) 317-6671 for international callers, and entering the passcode 13707113.
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: Hunter Blankenbaker, 732.444.4926, [email protected]
Media Contact: Jo Ann Tizzano, 732.365.1363, [email protected]
(1) This is a non-GAAP financial measure. Refer below to Table 4 for a reconciliation to GAAP net (loss) income.
(2) This is a non-GAAP financial measure. Refer below to Table 3 for a reconciliation to GAAP net (loss) income.
(3) This is a non-GAAP financial measure. Refer below to Table 5 for a reconciliation to GAAP cash from operations.
VONAGE HOLDINGS CORP.
TABLE 1. CONSOLIDATED FINANCIAL DATA
(Dollars in thousands, except per share amounts)
(unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
September 30, | June 30, | September 30, | September 30, | ||||||||||||||||||||||
2020 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||
Statement of Operations Data: | |||||||||||||||||||||||||
Service, access and product revenues | $ | 298,991 | $ | 296,516 | $ | 279,871 | $ | 878,584 | $ | 819,006 | |||||||||||||||
USF revenues | 17,658 | 14,017 | 22,663 | 46,055 | 60,653 | ||||||||||||||||||||
Total revenues | 316,649 | 310,533 | 302,534 | $ | 924,639 | $ | 879,659 | ||||||||||||||||||
Operating Expenses: | |||||||||||||||||||||||||
Service, access and product cost of revenues (excluding depreciation and amortization of $13,649, $11,148, $9,658, $35,953, and $28,220, respectively) | 124,243 | 119,971 | 111,170 | 357,252 | 314,812 | ||||||||||||||||||||
USF cost of revenues | 17,658 | 14,017 | 22,663 | 46,055 | 60,653 | ||||||||||||||||||||
Sales and marketing | 85,505 | 90,827 | 83,628 | 261,953 | 274,513 | ||||||||||||||||||||
Engineering and development | 20,110 | 19,784 | 16,901 | 59,097 | 50,318 | ||||||||||||||||||||
General and administrative | 56,835 | 42,820 | 41,306 | 140,537 | 113,380 | ||||||||||||||||||||
Depreciation and amortization | 22,887 | 20,692 | 21,319 | 64,064 | 63,195 | ||||||||||||||||||||
327,238 | 308,111 | 296,987 | 928,958 | 876,871 | |||||||||||||||||||||
(Loss) Income from operations | (10,589 | ) | 2,422 | 5,547 | (4,319 | ) | 2,788 | ||||||||||||||||||
Other Income (Expense): | |||||||||||||||||||||||||
Interest expense | (7,373 | ) | (9,321 | ) | (8,454 | ) | (24,776 | ) | (24,517 | ) | |||||||||||||||
Other income (expense), net | (37 | ) | (38 | ) | 58 | 154 | (505 | ) | |||||||||||||||||
(7,410 | ) | (9,359 | ) | (8,396 | ) | (24,622 | ) | (25,022 | ) | ||||||||||||||||
Loss before income tax benefit | (17,999 | ) | (6,937 | ) | (2,849 | ) | (28,941 | ) | (22,234 | ) | |||||||||||||||
Income tax benefit (expense) | 7,937 | (1,493 | ) | (18,248 | ) | 6,694 | 5,127 | ||||||||||||||||||
Net loss | $ | (10,062 | ) | $ | (8,430 | ) | $ | (21,097 | ) | $ | (22,247 | ) | $ | (17,107 | ) | ||||||||||
Loss per common share: | |||||||||||||||||||||||||
Basic and diluted | $ | (0.04 | ) | $ | (0.03 | ) | $ | (0.09 | ) | $ | (0.09 | ) | $ | (0.07 | ) | ||||||||||
Weighted-average common shares outstanding: | |||||||||||||||||||||||||
Basic and diluted | 246,697 | 245,385 | 242,336 | 245,242 | 241,786 | ||||||||||||||||||||
VONAGE HOLDINGS CORP.
TABLE 1. CONSOLIDATED FINANCIAL DATA – (Continued)
(Dollars in thousands, except per share amounts)
(unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
September 30, | June 30, | September 30, | September 30, | |||||||||||||||||||||
2020 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Statement of Cash Flow Data: | ||||||||||||||||||||||||
Net cash provided by operating activities | $ | 12,628 | $ | 36,300 | $ | 31,783 | $ | 51,431 | $ | 59,850 | ||||||||||||||
Net cash used in investing activities | (12,990 | ) | (12,009 | ) | (16,809 | ) | (38,234 | ) | (39,262 | ) | ||||||||||||||
Net cash provided by (used in) financing activities | 807 | (20,435 | ) | (14,259 | ) | 12,871 | (6,234 | ) | ||||||||||||||||
Capital expenditures, acquisition of intangible assets, acquisition and development of software assets | (12,990 | ) | (12,009 | ) | (13,809 | ) | (38,234 | ) | (36,262 | ) | ||||||||||||||
September 30, | December 31, | |||||||
2020 | 2019 | |||||||
Balance Sheet Data: | ||||||||
Cash and cash equivalents | $ | 48,370 | $ | 23,620 | ||||
Restricted cash | 1,999 | 2,015 | ||||||
Accounts receivable, net of allowance | 119,553 | 101,813 | ||||||
Inventory, net of allowance | 614 | 1,475 | ||||||
Prepaid expenses and other current assets | 42,639 | 32,326 | ||||||
Deferred customer acquisition costs, current and non-current | 79,644 | 68,982 | ||||||
Property and equipment, net | 37,449 | 48,371 | ||||||
Goodwill | 606,958 | 602,970 | ||||||
Operating lease right of use assets | 22,971 | 50,847 | ||||||
Software, net | 69,389 | 40,300 | ||||||
Intangible assets, net | 208,507 | 249,905 | ||||||
Deferred tax assets | 115,178 | 108,347 | ||||||
Other assets | 34,643 | 33,729 | ||||||
Total assets | $ | 1,387,914 | $ | 1,364,700 | ||||
Accounts payable and accrued expenses | $ | 183,918 | $ | 179,955 | ||||
Operating lease liabilities, current and non-current | 33,228 | 58,199 | ||||||
Deferred revenue, current | 62,813 | 59,464 | ||||||
Total notes payable, net and indebtedness under revolving credit facility, including current portion | 240,500 | 220,500 | ||||||
Convertible senior notes, net | 287,176 | 276,658 | ||||||
Other liabilities | 3,048 | 2,862 | ||||||
Total liabilities | $ | 810,683 | $ | 797,638 | ||||
Total stockholders’ equity | $ | 577,231 | $ | 567,062 | ||||
VONAGE HOLDINGS CORP.
TABLE 2. SUMMARY CONSOLIDATED OPERATING DATA
(Dollars in thousands, except per line amounts)
(unaudited)
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 Platform | Three Months Ended | Nine Months Ended | |||||||||||||||||
September 30, | June 30, | September 30, | September 30, | ||||||||||||||||
2020 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||
Revenues: | |||||||||||||||||||
Service revenues | $ | 218,456 | $ | 212,310 | $ | 183,701 | $ | 626,416 | $ | 523,060 | |||||||||
Access and product revenues(1) | 8,757 | 9,109 | 12,120 | 27,987 | 35,524 | ||||||||||||||
Service, access and product revenues excluding USF | 227,213 | 221,419 | 195,821 | 654,403 | 558,584 | ||||||||||||||
USF revenues | 6,613 | 4,830 | 10,709 | 15,925 | 27,563 | ||||||||||||||
Total revenues | $ | 233,826 | $ | 226,249 | $ | 206,530 | $ | 670,328 | $ | 586,147 | |||||||||
Cost of Revenues: | |||||||||||||||||||
Service cost of revenues(2) | $ | 105,593 | $ | 100,638 | $ | 87,352 | $ | 298,588 | $ | 243,496 | |||||||||
Access and product cost of revenues(1) | 9,894 | 10,266 | 13,858 | 31,756 | 41,323 | ||||||||||||||
Service, access and product cost of revenues excluding USF | 115,487 | 110,904 | 101,210 | 330,344 | 284,819 | ||||||||||||||
USF revenues | 6,613 | 4,830 | 10,709 | 15,925 | 27,563 | ||||||||||||||
Total cost of revenues | $ | 122,100 | $ | 115,734 | $ | 111,919 | $ | 346,269 | $ | 312,382 | |||||||||
Service margin % | 51.7 | % | 52.6 | % | 52.4 | % | 52.3 | % | 53.4 | % | |||||||||
Gross margin % excluding USF (Service, access and product margin %) | 49.2 | % | 49.9 | % | 48.3 | % | 49.5 | % | 49.0 | % | |||||||||
Gross margin % | 47.8 | % | 48.8 | % | 45.8 | % | 48.3 | % | 46.7 | % |
(1) Includes customer premise equipment, access, professional services, and shipping and handling.
(2) Excludes depreciation and amortization of $12,691, $9,891, and $8,492 for the quarters ended September 30, 2020, June 30, 2020 and September 30, 2019, respectively, and $32,370 and $24,684 for the nine months ended September 30, 2020 and 2019, respectively.
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:
Consumer | Three Months Ended | Nine Months Ended | |||||||||||||||||
September 30, | June 30, | September 30, | September 30, | ||||||||||||||||
2020 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||
Revenues: | |||||||||||||||||||
Service revenues | $ | 71,693 | $ | 75,045 | $ | 83,981 | $ | 223,981 | $ | 260,225 | |||||||||
Access and product revenues(1) | 85 | 52 | 69 | 200 | 197 | ||||||||||||||
Service, access and product revenues excluding USF | 71,778 | 75,097 | 84,050 | 224,181 | 260,422 | ||||||||||||||
USF revenues | 11,045 | 9,187 | 11,954 | 30,130 | 33,090 | ||||||||||||||
Total revenues | $ | 82,823 | $ | 84,284 | $ | 96,004 | $ | 254,311 | $ | 293,512 | |||||||||
Cost of Revenues: | |||||||||||||||||||
Service cost of revenues(2) | $ | 8,287 | $ | 8,671 | $ | 8,587 | $ | 25,470 | $ | 26,706 | |||||||||
Access and product cost of revenues(1) | 469 | 396 | 1,373 | 1,438 | 3,287 | ||||||||||||||
Service, access and product cost of revenues excluding USF | 8,756 | 9,067 | 9,960 | 26,908 | 29,993 | ||||||||||||||
USF revenues | 11,045 | 9,187 | 11,954 | 30,130 | 33,090 | ||||||||||||||
Total cost of revenues | $ | 19,801 | $ | 18,254 | $ | 21,914 | $ | 57,038 | $ | 63,083 | |||||||||
Service margin % | 88.4 | % | 88.4 | % | 89.8 | % | 88.6 | % | 89.7 | % | |||||||||
Gross margin % excluding USF (Service, access and product margin %) | 87.8 | % | 87.9 | % | 88.1 | % | 88.0 | % | 88.5 | % | |||||||||
Gross margin % | 76.1 | % | 78.3 | % | 77.2 | % | 77.6 | % | 78.5 | % |
(1) Includes customer premise equipment, access, professional services, and shipping and handling.
(2) Excludes depreciation and amortization of $958, $1,257, $1,166 for the quarters ended September 30, 2020, June 30, 2020 and September 30, 2019, respectively, and $3,583 and $3,536 for the nine months ended September 30, 2020 and 2019, respectively.
The table below includes key operating data that our management uses to measure the growth and operating performance of the Vonage Communications Platform focused portion of our business:
Vonage Communications Platform | Three Months Ended | Nine Months Ended | |||||||||||||||||
September 30, | June 30, | September 30, | September 30, | ||||||||||||||||
2020 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||
Service revenue per customer | $ | 527 | $ | 509 | $ | 451 | $ | 504 | $ | 435 | |||||||||
Vonage Communications Platform revenue churn | 1.2 | % | 0.9 | % | 1.0 | % | 1.0 | % | 1.1 | % | |||||||||
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:
Consumer | Three Months Ended | Nine Months Ended | |||||||||||||||||
September 30, | June 30, | September 30, | September 30, | ||||||||||||||||
2020 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||
Average monthly revenues per line | $ | 28.31 | $ | 27.59 | $ | 27.56 | $ | 27.71 | $ | 26.91 | |||||||||
Subscriber lines (at period end) | 951,729 | 998,475 | 1,136,112 | 951,729 | 1,136,112 | ||||||||||||||
Customer churn | 1.8 | % | 1.5 | % | 1.8 | % | 1.7 | % | 1.8 | % | |||||||||
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 Ended | Nine Months Ended | |||||||||||||||||||||||
September 30, | June 30, | September 30, | September 30, | |||||||||||||||||||||
2020 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net loss | $ | (10,062 | ) | $ | (8,430 | ) | $ | (21,097 | ) | $ | (22,247 | ) | $ | (17,107 | ) | |||||||||
Interest expense | 7,373 | 9,321 | 8,454 | 24,776 | 24,517 | |||||||||||||||||||
Income tax | (7,937 | ) | 1,493 | 18,248 | (6,694 | ) | (5,127 | ) | ||||||||||||||||
Depreciation and amortization | 22,887 | 20,692 | 21,319 | 64,064 | 63,195 | |||||||||||||||||||
Amortization of costs to implement cloud computing arrangements | 670 | 668 | 411 | 1,947 | 682 | |||||||||||||||||||
EBITDA | 12,931 | 23,744 | 27,335 | 61,846 | 66,160 | |||||||||||||||||||
Share-based expense | 11,530 | 11,326 | 12,941 | 33,972 | 32,152 | |||||||||||||||||||
Acquisition related transaction and integration costs | — | — | 174 | — | 621 | |||||||||||||||||||
Organizational transformation (1) | — | 3,925 | 3,317 | 5,119 | 11,186 | |||||||||||||||||||
Restructuring activities (2) | 15,182 | — | — | 15,182 | — | |||||||||||||||||||
Other non-recurring items (3) | 1,959 | 2,549 | 1,014 | 5,864 | 3,174 | |||||||||||||||||||
Adjusted EBITDA | 41,602 | 41,544 | 44,781 | 121,983 | 113,293 | |||||||||||||||||||
Less: | ||||||||||||||||||||||||
Capital expenditures | (2,863 | ) | (1,968 | ) | (5,970 | ) | (7,718 | ) | (15,426 | ) | ||||||||||||||
Intangible assets | (70 | ) | (115 | ) | — | (260 | ) | — | ||||||||||||||||
Acquisition and development of software assets | (10,057 | ) | (9,926 | ) | (7,839 | ) | (30,256 | ) | (20,836 | ) | ||||||||||||||
Adjusted EBITDA Minus Capex | $ | 28,612 | $ | 29,535 | $ | 30,972 | $ | 83,749 | $ | 77,031 |
(1) The costs identified as “Organizational transformation” are related to the Company’s announced goal of becoming a pure-play Business 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 facility exit costs.
(3) Other non-recurring items principally include certain litigation charges and other non-recurring project costs.
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 Ended | Nine Months Ended | ||||||||||||||||||
September 30, | June 30, | September 30, | September 30, | ||||||||||||||||
2020 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||
Net loss | $ | (10,062 | ) | $ | (8,430 | ) | $ | (21,097 | ) | $ | (22,247 | ) | $ | (17,107 | ) | ||||
Amortization of acquisition – related intangibles | 12,948 | 13,681 | 13,962 | 40,408 | 41,959 | ||||||||||||||
Amortization of costs to implement cloud computing arrangements | 670 | 668 | 411 | 1,947 | 682 | ||||||||||||||
Amortization of debt discount | 3,159 | 3,109 | 2,948 | 9,322 | 3,435 | ||||||||||||||
Acquisition related transaction and integration costs | — | — | 174 | — | 621 | ||||||||||||||
Organizational transformation (1) | — | 3,925 | 3,317 | 5,119 | 11,186 | ||||||||||||||
Restructuring activities (2) | 15,182 | — | — | 15,182 | — | ||||||||||||||
Other non-recurring items (3) | 1,959 | 2,549 | 1,014 | 5,864 | 3,174 | ||||||||||||||
Tax effect on adjusting items | (7,123 | ) | (5,026 | ) | (4,583 | ) | (16,347 | ) | (12,822 | ) | |||||||||
Net income (loss) excluding adjustments | $ | 16,733 | $ | 10,476 | $ | (3,854 | ) | $ | 39,248 | $ | 31,128 | ||||||||
Loss per common share: | |||||||||||||||||||
Basic and diluted | $ | (0.04 | ) | $ | (0.03 | ) | $ | (0.09 | ) | $ | (0.09 | ) | $ | (0.07 | ) | ||||
Weighted-average common shares outstanding: | |||||||||||||||||||
Basic and diluted | 246,697 | 245,385 | 242,336 | 245,242 | 241,786 | ||||||||||||||
Earnings per common share, excluding adjustments: | |||||||||||||||||||
Basic | $ | 0.07 | $ | 0.04 | $ | (0.02 | ) | $ | 0.16 | $ | 0.13 | ||||||||
Diluted | $ | 0.07 | $ | 0.04 | $ | (0.02 | ) | $ | 0.15 | $ | 0.12 | ||||||||
Weighted-average common shares outstanding: | |||||||||||||||||||
Basic | 246,697 | 245,385 | 242,336 | 245,242 | 241,786 | ||||||||||||||
Diluted | 256,318 | 253,509 | 242,336 | 253,585 | 250,094 |
(1) The costs identified as “Organizational transformation” are related to the Company’s announced goal of becoming a pure-play Business 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 facility exit costs.
(3) Other non-recurring items principally include certain litigation charges and other non-recurring project costs.
VONAGE HOLDINGS CORP.
TABLE 5. FREE CASH FLOW
(Dollars in thousands)
(unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
September 30, | June 30, | September 30, | September 30, | |||||||||||||||||||||
2020 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net cash provided by operating activities | $ | 12,628 | $ | 36,300 | $ | 31,783 | $ | 51,431 | $ | 59,850 | ||||||||||||||
Less: | ||||||||||||||||||||||||
Capital expenditures | (2,863 | ) | (1,968 | ) | (5,970 | ) | (7,718 | ) | (15,426 | ) | ||||||||||||||
Intangible assets | (70 | ) | (115 | ) | — | (260 | ) | — | ||||||||||||||||
Acquisition and development of software assets | (10,057 | ) | (9,926 | ) | (7,839 | ) | (30,256 | ) | (20,836 | ) | ||||||||||||||
Free cash flow | $ | (362 | ) | $ | 24,291 | $ | 17,974 | $ | 13,197 | $ | 23,588 | |||||||||||||
VONAGE HOLDINGS CORP.
TABLE 6. RECONCILIATION OF INDEBTEDNESS UNDER REVOLVING CREDIT FACILITY AND CONVERTIBLE SENIOR NOTES TO NET DEBT
(Dollars in thousands)
(unaudited)
September 30, | December 31, | |||||||
2020 | 2019 | |||||||
Notes payable and indebtedness under revolving credit facility, net of current maturities | 240,500 | 220,500 | ||||||
Convertible senior notes, net | 287,176 | 276,658 | ||||||
Unamortized discount on debt | 5,912 | 7,108 | ||||||
Unamortized debt related costs | 51,912 | 61,234 | ||||||
Gross debt | 585,500 | 565,500 | ||||||
Less: | ||||||||
Unrestricted cash | 48,370 | 23,620 | ||||||
Net debt | $ | 537,130 | $ | 541,880 | ||||
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 announced goal of becoming a pure-play Business 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. Other non-recurring items principally include certain litigation charges and other non-recurring project costs.
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 the outcome and timing of the strategic review of consumer and operational review, including whether or not the reviews result in a transaction and if so the nature and timing of any such transaction, our business transformation, financing activity, 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: realizing the benefits of optimization and cost-saving initiatives; the impact of the COVID-19 pandemic; the competition we face; the expansion of competition in the cloud communications market; risks related to the acquisition or integration of businesses we have acquired; our ability to adapt to rapid changes in the cloud communications market; the nascent state of the cloud communications for business market; our ability to retain customers and attract new customers cost-effectively; developing and maintaining market awareness and a strong brand; developing and maintaining effective distribution channels; security breaches and other compromises of information security; risks associated with sales of our services to medium-sized and enterprise customers; our reliance on third-party hardware and software; our dependence on third-party vendors; system disruptions or flaws in our technology and systems; our ability to comply with data privacy and related regulatory matters; our ability to scale our business and grow efficiently; the impact of fluctuations in economic conditions, particularly on our small and medium business customers; the effects of significant foreign currency fluctuations; 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; restrictions in our debt agreements that may limit our operating flexibility; our ability to obtain additional financing if required; retaining senior executives and other key employees; 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; risks associated with legislative, regulatory or judicial actions regarding our business products; reliance on third parties for our 911 services; liability under anti-corruption laws or from governmental export controls or economic sanctions; actions of activist shareholders; 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; 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.
(vg-f)
Artificial Intelligence
IBM, Government of Canada, Government of Quebec Sign Agreements to Strengthen Canada’s Semiconductor Industry
Up to $187M CAD to be invested to progress expansion of chip packaging capacity and capabilities and to strengthen R&D at IBM Canada’s Bromont plant
BROMONT, QC, April 26, 2024 /PRNewswire/ — IBM (NYSE: IBM), the Government of Canada, and the Government of Quebec today announced agreements that will strengthen Canada’s semiconductor industry, and further develop the assembly, testing and packaging (ATP) capabilities for semiconductor modules to be used across a wide range of applications including telecommunications, high performance computing, automotive, aerospace & defence, computer networks, and generative AI, at IBM Canada’s plant in Bromont, Quebec. The agreements reflect a combined investment valued at approximately $187M CAD.
“Today’s announcement is a massive win for Canada and our dynamic tech sector. It will create high-paying jobs, invest in innovation, strengthen supply chains, and help make sure the most advanced technologies are Canadian-made. Semiconductors power the world, and we’re putting Canada at the forefront of that opportunity,” said the Right Honourable Justin Trudeau, Prime Minister of Canada
In addition to the advancement of packaging capabilities, IBM will be conducting R&D to develop methods for scalable manufacturing and other advanced assembly processes to support the packaging of different chip technologies, to further Canada’s role in the North American semiconductor supply chain and expand and anchor Canada’s capabilities in advanced packaging.
The agreements also allow for collaborations with small and medium-sized Canadian-based enterprises with the intent of fostering the development of a semiconductor ecosystem, now and into the future.
“IBM has long been a leader in semiconductor research and development, pioneering breakthroughs to meet tomorrow’s challenges. With the demand for compute surging in the age of AI, advanced packaging and chiplet technology is becoming critical for the acceleration of AI workloads,” said Darío Gil, IBM Senior Vice President and Director of Research. “As one of the largest chip assembly and testing facilities in North America, IBM’s Bromont facility will play a central role in this future. We are proud to be working with the governments of Canada and Quebec toward those goals and to build a stronger and more balanced semiconductor ecosystem in North America and beyond.”
IBM Canada’s Bromont plant is one of North America’s largest chip assembly and testing facilities, having operated in the region for 52 years. Today, the facility transforms advanced semiconductor components into state-of-the-art microelectronic solutions, playing a key role in IBM’s semiconductor R&D leadership alongside IBM’s facilities at the Albany NanoTech Complex and throughout New York’s Hudson Valley. These agreements will help to further establish a corridor of semiconductor innovation from New York to Bromont.
“Advanced packaging is a crucial component of the semiconductor industry, and IBM Canada’s Bromont plant has led the world in this process for decades,” said Deb Pimentel, president of IBM Canada. “Building upon IBM’s 107-year legacy of technology innovation and R&D in Canada, the Canadian semiconductor industry will now become even stronger, allowing for robust supply chains and giving Canadians steady access to even more innovative technologies and products. This announcement represents just one more example of IBM’s leadership and commitment to the country’s technology and business landscape.”
Chip packaging, the process of connecting integrated circuits on a chip or circuit board, has become more complex as electronic devices have shrunk and the components of chips themselves get smaller and smaller. IBM announced the world’s first 2 nanometer chip technology in 2021 and, as the semiconductor industry moves towards new methods of chip construction, advances in packaging will grow in importance.
“Semiconductors are part of our everyday life. They are in our phones, our cars, and our appliances. Through this investment, we are supporting Canadian innovators, creating good jobs, and solidifying Canada’s semiconductor industry to build a stronger economy. Canada is set to play a larger role in the global semiconductor industry thanks to projects like the one we are announcing today. Because, when we invest in semiconductor and quantum technologies, we invest in economic security.” — The Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry
“This investment by IBM in Bromont will ensure that Quebec continues to stand out in the field of microelectronics. An increase in production capacity will solidify Quebec’s position in the strategic microelectronics sector in North America.” — The Honourable Pierre Fitzgibbon, Minister of Economy, Innovation and Energy, Minister responsible for Regional Economic Development and Minister responsible for the Metropolis and the Montreal region
About IBMIBM is a leading provider of global hybrid cloud and AI, and consulting expertise. We help clients in more than 175 countries capitalize on insights from their data, streamline business processes, reduce costs and gain the competitive edge in their industries. More than 4,000 government and corporate entities in critical infrastructure areas such as financial services, telecommunications and healthcare rely on IBM’s hybrid cloud platform and Red Hat OpenShift to affect their digital transformations quickly, efficiently and securely. IBM’s breakthrough innovations in semiconductors, AI, quantum computing, industry-specific cloud solutions and consulting deliver open and flexible options to our clients. All of this is backed by IBM’s legendary commitment to trust, transparency, responsibility, inclusivity and service. Visit www.ibm.com for more information.
Media ContactLorraine BaldwinIBM [email protected]
Willa HahnIBM [email protected]
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Artificial Intelligence
HITACHI ACQUIRES MA MICRO AUTOMATION OF GERMANY IN EFFORT TO ACCELERATE GLOBAL EXPANSION OF ROBOTIC SI BUSINESS IN THE MEDICAL AND OTHER FIELDS
HOLLAND, Mich., April 26, 2024 /PRNewswire/ — Hitachi Ltd. (TSE: 6501, “Hitachi”) has signed a stock purchase agreement on April 26 to acquire all shares of MA micro automation GmbH (“MA micro automation”, headquartered in St. Leon-Rot, Germany) from MAX Management GmbH (a subsidiary of MAX Automation SE). MA micro automation is a leading provider of robotic and automation technology (robotic SI) including high-speed linear handling systems, high-precision assembly lines, and high-speed vision inspection technology for Europe, North America, and Southeast Asia, for EUR 71.5M million. The transaction is expected to close in the second half of 2024, pending completion of the customary regulatory filings. After the acquisition is completed, MA micro automation will join JR Automation Technologies, LLC (“JR Automation”), a market leader in providing advanced automation solutions and digital technologies in the robotic system integration business for North America, Europe, and Southeast Asia as a continued effort to expand the company’s global presence.
MA micro automation is a technology leader for automation solutions within micro-assembly. Through its state-of-the-art proprietary high-speed and high-precision automation know-how, combined with unique optical image inspection capabilities, MA micro automation serves high-growth med-tech automation end-markets, covering the production, assembly, and testing medical and optical components including contact lenses, IVD and diabetes diagnostics consumables, and injection molding for medical use. The company was established in 2003 through a carve-out from Siemens*1 and since 2013 has been part of the MAX Automation group.
JR Automation is a leading provider of intelligent automated manufacturing technology solutions, serving customers across the globe in a variety of industries including automotive, life sciences, e-mobility, consumer and industrial products. With over 20 locations between North America, Europe, and Southeast Asia, the leading integrator offers nearly 2 million square feet (185,806 sq. m) of available build and engineering floorspace. This acquisition allows JR Automation to further grow and strengthen both the company’s geographical footprint and their continued commitment on expanding support capabilities within the European region and medical market vertical.
“MA micro automation provides engineering, build and support expertise with established capabilities in complex vision applications, high-speed and high-precision automation technologies. When integrated with JR Automation’s uniform global process and digital technologies, this partnership will further enhance our ability to deliver added value and support to all of our customers worldwide and continue to grow our capabilities in the medical market,” says Dave DeGraaf, CEO of JR Automation. “As we integrate this new dimension, impressive talents and abilities of the MA micro automation team we further enhance our ability to serve our customers, creating a more robust and globally balanced offering.”
With this acquisition, Hitachi aims to further enhance its ability to provide a “Total Seamless Solution*2” to connect manufacturer’s factory floors seamlessly and digitally with their front office data, allowing them to achieve total optimization and bringing Industry 4.0 to life. This “Total Seamless Solution” strategy links organizations’ operational activities such as engineering, supply chain, and purchasing to the plant floor and allows for real time, data-driven decision-making that improves the overall business value for customers.
Kazunobu Morita, Vice President and Executive Officer, CEO of Industrial Digital Business Unit, Hitachi, Ltd. says, “We are very pleased to welcome MA micro automation to the Hitachi Group. The team is based in Europe, providing robotic SI to global medical device manufacturing customers with its high technological capabilities and will join forces with JR Automation and Hitachi Automation to strengthen our global competitiveness. Hitachi aims to enhance its ability to provide value to customers and grow alongside them by leveraging its strengths in both OT, IT, including robotic SI, and “Total Seamless Solution” through Lumada*3’s customer co-creation framework.”
Joachim Hardt, CEO MA micro automation GmbH says, “Following the successful establishment and growth of MA micro automation within the attractive automation market for medical technology products, we are now opening a new chapter. Our partnership with Hitachi will not only strengthen our global competitive position, but we will also benefit from joint technological synergies and a global market presence. We look forward to a synergistic partnership with Hitachi and JR Automation.”
Outline of MA micro automation
Name
MA micro automation GmbH
Head Office
St. Leon-Rot, Germany
Representative
Joachim Hardt (CEO)
Outline of Business
Automation solutions within micro-assembly
Total no. of Employees:
Approx. 200 (As of April 2024)
Founded
2003
Revenues (2023)
€ 46.5 million
Website
*1
“Siemens” is a registered trademark or trademark of Siemens Trademark GmbH & Co. KG in the U.S. and other countries.
*2
“Total Seamless Solution” is a registered trademark of Hitachi, Ltd. in the U.S. and Japan.
*3
Lumada: A collective term for solutions, services and technologies based on Hitachi’s advanced digital technologies for creating value from customers’ data accelerating digital innovation. https://www.hitachi.com/products/it/lumada/global/en/index.html
About JR AutomationEstablished in 1980, JR Automation is a leading provider of intelligent automated manufacturing technology solutions that solve customers’ key operational and productivity challenges. JR Automation serves customers across the globe in a variety of industries, including automotive, life sciences, aerospace, and more.
In 2019, JR Automation was acquired by Hitachi, Ltd. In a strategic effort towards offering a seamless connection between the physical and cyber space for industrial manufacturers and distributers worldwide. With this partnership, JR Automation provides customers a unique, single-source solution for complete integration of their physical assets and data information, offering greater speed, flexibility, and efficiencies towards achieving their Industry 4.0 visions. JR Automation employs over 2,000 people at 21 manufacturing facilities in North America, Europe, and Asia. For more information, please visit www.jrautomation.com.
About Hitachi, Ltd.Hitachi drives Social Innovation Business, creating a sustainable society through the use of data and technology. We solve customers’ and society’s challenges with Lumada solutions leveraging IT, OT (Operational Technology) and products. Hitachi operates under the 3 business sectors of “Digital Systems & Services” – supporting our customers’ digital transformation; “Green Energy & Mobility” – contributing to a decarbonized society through energy and railway systems, and “Connective Industries” – connecting products through digital technology to provide solutions in various industries. Driven by Digital, Green, and Innovation, we aim for growth through co-creation with our customers. The company’s revenues as 3 sectors for fiscal year 2023 (ended March 31, 2024) totaled 8,564.3 billion yen, with 573 consolidated subsidiaries and approximately 270,000 employees worldwide. For more information on Hitachi, please visit the company’s website at https://www.hitachi.com.
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Artificial Intelligence
$10 million Artificial Intelligence Mathematical Olympiad Prize appoints further advisory committee members
D. Sculley, Kevin Buzzard, Leo de Moura, Lester Mackey and Peter J. Liu appointed to the advisory committee for the Artificial Intelligence Mathematical Olympiad Prize.
LONDON, April 26, 2024 /PRNewswire/ — XTX Markets’ newly created Artificial Intelligence Mathematical Olympiad Prize (‘AIMO Prize’) is a $10mn challenge fund designed to spur the creation of a publicly shared AI model capable of winning a gold medal in the International Mathematical Olympiad (IMO).
XTX Markets is delighted to announce the appointment of five further advisory committee members. This group brings great expertise in machine learning, including D. Sculley, the CEO of Kaggle; Lester Mackey, a Principal Researcher at Microsoft Research and a Macarthur Fellow; and Peter J. Liu, a research scientist at Google DeepMind.
Prolific mathematicians Kevin Buzzard, who achieved a perfect score in the International Mathematical Olympiad, and Leo De Moura who is the Chief Architect for Lean, the automated reasoning tool, also join the advisory group.
They join the existing advisory committee members Terence Tao and Timothy Gowers, both winners of the Fields Medal, as well as Dan Roberts, Geoff Smith and Po-Shen Loh.
The AIMO Advisory Committee will support the development of the AIMO Prize, including advising on appropriate protocols and technical aspects, and designing the various competitions and prizes.
Simon Coyle, Head of Philanthropy at XTX Markets, commented:
“We are thrilled to complete the AIMO Advisory Committee with the appointments of D., Kevin, Leo, Lester and Peter. Together, they have enormous experience in machine learning and automated reasoning and are already bringing expertise and wisdom to the AIMO Prize. We look forward to announcing the winners of the AIMO’s first Progress Prize soon, and then publicly sharing the AI models to support the open and collaborative development of AI.”
Further information on the AIMO Prize
There will be a grand prize of $5mn for the first publicly shared AI model to enter an AIMO approved competition and perform at a standard equivalent to a gold medal in the IMO. There will also be a series of progress prizes, totalling up to $5mn, for publicly shared AI models that achieve key milestones towards the grand prize.
The first AIMO approved competition opened to participants in April 2024 on the Kaggle competition platform. The first progress prize focuses on problems pitched at junior and high-school level maths competitions. There is a total prize pot of $1.048m for the first progress prize, of which at least $254k will be awarded in July 2024, There will be a presentation of progress held in Bath, England in July 2024, as part of the 65th IMO.
For more information on the AIMO Prize visit: https://aimoprize.com/ or the competition page on Kaggle: https://www.kaggle.com/competitions/ai-mathematical-olympiad-prize/
Advisory Committee member profiles:
D. Sculley
D. is the CEO at Kaggle. Prior to joining Kaggle, he was a director at Google Brain, leading research teams working on robust, responsible, reliable and efficient ML and AI. In his career in ML, he has worked on nearly every aspect of machine learning, and has led both product and research teams including those on some of the most challenging business problems. Some of his well-known work involves ML technical debt, ML education, ML robustness, production-critical ML, and ML for scientific applications such as protein design.
Kevin Buzzard
Kevin a professor of pure mathematics at Imperial College London, specialising in algebraic number theory. As well as his research and teaching, he has a wide range of interests, including being Deputy Head of Pure Mathematics, Co-Director of a CDT and the department’s outreach champion. He is currently focusing on formal proof verification, including being an active participant in the Lean community. From October 2024, he will be leading a project to formalise a 21st century proof of Fermat’s Last Theorem. Before joining Imperial, some 20 years ago, he was a Junior Research Fellow at the University of Cambridge, where he had previously been named ‘Senior Wrangler’ (the highest scoring undergraduate mathematician). He was also a participant in the International Mathematical Olympiad, winning gold with a perfect score in 1987. He has been a visitor at the IAS in Princeton, a visiting lecturer at Harvard, has won several prizes both for research and teaching, and has given lectures all over the world.
Leo de Moura
Leo is a Senior Principal Applied Scientist in the Automated Reasoning Group at AWS. In his spare time, he dedicates himself to serving as the Chief Architect of the Lean FRO, a non-profit organization that he proudly co-founded alongside Sebastian Ullrich. He is also honoured to hold a position on the Board of Directors at the Lean FRO, where he actively contributes to its growth and development. Before joining AWS in 2023, he was a Senior Principal Researcher in the RiSE group at Microsoft Research, where he worked for 17 years starting in 2006. Prior to that, he worked as a Computer Scientist at SRI International. His research areas are automated reasoning, theorem proving, decision procedures, SAT and SMT. He is the main architect of several automated reasoning tools: Lean, Z3, Yices 1.0 and SAL. Leo’s work in automated reasoning has been acknowledged with a series of prestigious awards, including the CAV, Haifa, and Herbrand awards, as well as the Programming Languages Software Award by the ACM. Leo’s work has also been reported in the New York Times and many popular science magazines such as Wired, Quanta, and Nature News.
Lester Mackey
Lester Mackey is a Principal Researcher at Microsoft Research, where he develops machine learning methods, models, and theory for large-scale learning tasks driven by applications from climate forecasting, healthcare, and the social good. Lester moved to Microsoft from Stanford University, where he was an assistant professor of Statistics and, by courtesy, of Computer Science. He earned his PhD in Computer Science and MA in Statistics from UC Berkeley and his BSE in Computer Science from Princeton University. He co-organized the second place team in the Netflix Prize competition for collaborative filtering; won the Prize4Life ALS disease progression prediction challenge; won prizes for temperature and precipitation forecasting in the yearlong real-time Subseasonal Climate Forecast Rodeo; and received best paper, outstanding paper, and best student paper awards from the ACM Conference on Programming Language Design and Implementation, the Conference on Neural Information Processing Systems, and the International Conference on Machine Learning. He is a 2023 MacArthur Fellow, a Fellow of the Institute of Mathematical Statistics, an elected member of the COPSS Leadership Academy, and the recipient of the 2023 Ethel Newbold Prize.
Peter J. Liu
Peter J. Liu is a Research Scientist at Google DeepMind in the San Francisco Bay area, doing machine learning research with a specialisation in language models since 2015 starting in the Google Brain team. He has published and served as area chair in top machine learning and NLP conferences such as ICLR, ICML, NEURIPS, ACL and EMNLP. He also has extensive production experience, including launching the first deep learning model for Gmail Anti-Spam, and using neural network models to detect financial fraud for top banks. He has degrees in Mathematics and Computer Science from the University of Toronto.
About XTX Markets:
XTX Markets is a leading financial technology firm which partners with counterparties, exchanges and e-trading venues globally to provide liquidity in the Equity, FX, Fixed Income and Commodity markets. XTX has over 200 employees based in London, Paris, New York, Mumbai, Yerevan and Singapore. XTX is consistently a top 5 liquidity provider globally in FX (Euromoney 2018-present) and is also the largest European equities (systematic internaliser) liquidity provider (Rosenblatt FY: 2020-2023).
The company’s corporate philanthropy focuses on STEM education and maximum impact giving (alongside an employee matching programme). Since 2017, XTX has donated over £100mn to charities and good causes, establishing it as a major donor in the UK and globally.
In a changing world XTX Markets is at the forefront of making financial markets fairer and more efficient for all.
View original content:https://www.prnewswire.co.uk/news-releases/10-million-artificial-intelligence-mathematical-olympiad-prize-appoints-further-advisory-committee-members-302128542.html
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