Hosted IP services platform vendor BroadSoft Inc. had some positive news to talk about in its first earnings conference call as a public company today, as it exceeded its own and Wall Street's expectations for the three months to the end of June, and hinted at trends that suggest carriers are starting to invest in their IP transformation programs again. (See BroadSoft Reports Q2.)

The company, which joined the Nasdaq on June 16, needed a boost, as its shares have traded below its launch price of $9 since its IPO.

In the second quarter it generated revenues of $19.8 million, 11 percent better than a year ago and about 10 percent better than expected. But the company is still losing money: Its second-quarter net loss was $1.8 million, or $0.20 per share.

However, its net loss after one-time costs and exceptional items (the non-GAAP loss) was just $0.5 million, or 3 cents per share, much better than the non-GAAP net loss of 18 cents per share that analysts, on average, were expecting.

The news gave the company's stock a nudge in the right direction in early trading, as it added 6 cents to $8.56.

BroadSoft CEO Michael Tessler said the firm had seen increasing demand from new and existing customers. He also noted that BroadSoft's license revenues had increased sequentially, "reflecting service providers' demand, as they transition from TDM to IP-based communications, for our flagship product, BroadWorks, which enables carriers to deliver feature-rich IP-based communications services to their enterprise and consumer customers."

That trend should spell good news for other VoIP and IMS vendors, as carrier spending on IP transformation technology took a hit during the capex downturn, leaving BroadSoft to rely on growth from its maintenance and professional services divisions to help its revenues increase in 2009, while license revenues declined. (See Broadsoft Files for IPO.)

Now, though, BroadSoft's results suggest that spending on new platform licenses, and license expansion, may be returning. (See VoIP Forges Ahead.)

At least one analyst is expecting BroadSoft to continue improving. In a research note issued in late July, Jefferies & Company Inc. analyst George Notter stated that carriers are looking to "build more cost-efficient networks and differentiate their service offerings," while enterprise IT managers are "looking for ways to reduce IT costs while improving employee productivity," all of which points to the increasing deployment of IP-based telephony and data services. (See SMBs Key Market for SIP Trunking .)

And there's plenty of investment still to come in the systems (such as BroadWorks) that enable such services, added the analyst: "We're in the very early innings of this network transformation. Less than 5 percent of network infrastructure is currently IP-based."

— Ray Le Maistre, International Managing Editor, Light Reading