Light Reading

Broadsoft Boosts Revenues 20% in Q2

Sarah Thomas
8/5/2014
50%
50%

Unified communications (UC) vendor Broadsoft managed to boost its second-quarter revenues by almost 20% year-over-year, as one analyst says it continues to win "more than its fair share" of the deals with service providers against big names like Cisco.

BroadSoft Inc. earned $1.7 million in the second quarter on revenues of $52.5 million, an increase of 19% compared to $44.0 million in the second quarter of 2013 and its highest quarterly result ever.

Jefferies & Co. Inc. Equity Analyst George Notter points out in a research note that the positive earnings, which beat analyst estimates of $49.4 million, come as Broadsoft has found its sweet spot between big names like Cisco Systems Inc. (Nasdaq: CSCO) targeting the high-end carrier channel and competitive over-the-top (OTT) players such as 8x8 Inc. (Nasdaq: EGHT) and RingCentral Inc. focused on very small businesses. (See BroadSoft Becomes Telecom Italia Partner and Business Market Rediscovers Its Voice.)

"One of the main barriers to the further development of the SIP Trunking and Hosted markets is the incumbent telecom operators themselves," Notter writes in the note. "Naturally, they're hesitant to proactively push these offerings as it effectively reduces their monthly service revenue by 15% to 70% vis-à-vis TDM (ISDN) lines running into enterprise PBXs."


Want to know more about the future of voice communications? Check out our dedicated rich communications channel here on Light Reading.


Notter adds that the emergence of competitive offerings is driving these incumbent operators to embrace SIP trunking and hosted UC, which is good news for Broadsoft. The UC vendor is actually playing in a number of technologies that are critical to service providers today as they work to keep their voice services front-and-center amongst OTT competition and create new revenue-generating services with WebRTC, voice-over-LTE and UC. (See VoLTE: So Close You Can Hear It.)

Notter says that the transition to VoIP and UC-based services for real-time communications has only reached 10% to 15% of enterprises and consumers. Coupled with the fact that VoLTE is just now being deployed across the globe, Broadsoft is well positioned going forward as well. (See Sprint Taps BroadSoft for VoLTE Transition and D2 & BroadSoft Test VoLTE.)

The company's CEO, Michael Tessler, said on the earnings call that VoLTE rollouts have been slow, but Broadsoft is involved with a number of business VoLTE projects in Europe that will play out over the next two years.

"Take a small business today that would have a fixed infrastructure, high speed broadband router, switching, etc., serving 25 employees," Tessler said, according to a Seeking Alpha transcript. "What we're starting to work with and we're starting to see the operators looking to plan is offers that would be completely wireless."

The vendor is not, however, betting solely on the service provider market. It also announced on Tuesday that it has acquired hospitality software provider SDD, one of several acquisitions in the past few years and further evidence that Broadsoft is looking to bolster its offerings for particular verticals to diversify its business. (See Euronews: BroadSoft Buys in Germany, BroadSoft Buys Into British Cloud and BroadSoft Acquires Adaption Technologies.)

Buoyed by the strong earnings, Broadsoft's share price was up 3.65% to $24.96 in Tuesday morning trading.

— Sarah Reedy, Senior Editor, Light Reading

(1)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
SReedy
100%
0%
SReedy,
User Rank: Blogger
8/5/2014 | 12:13:18 PM
Enterprise VoLTE
Interesting to see enterprise VoLTE called out as a segment of 4G voice. There's an interest in richer communication and collaboration there. An analyst also asked on the call about WiFi in the enterprise, and Broadsoft's Tessler said he thinks we'll see some small businesses going Wi-Fi on the prem and others going fully into the RAN with no infrastructure on prem. 

He said: "I do think that it's kind of a personal belief that if I was running a small business and I could outsource my LAN and broadband and protecting that network into the radio network, into the carrier network, that would seem to be a pretty interesting opportunity, pretty interesting way to save money and complexity."
Educational Resources
sponsor supplied content
Educational Resources Archive
Flash Poll
From The Founder
The Swedish vendor has undergone a significant transformation during the past few years, adjusting to the demands of next-generation communications companies.
LRTV Documentaries
The 3GPP's Road to 5G Standardization

4|17|15   |   4:43   |   (0) comments


Satoshi Nagata, chairman of the 3GPP's TSG-RAN group and a manager at NTT Docomo, explains the standardization process for 5G, as well as the biggest challenges and opportunities.
LRTV Documentaries
AlcaLu CTO Makes the Case for a New 5G Air Interface

4|16|15   |   3:54   |   (0) comments


Michael Peeters, CTO of wireless at Alcatel-Lucent, explains why 5G will require a new air interface to meet its diverse performance targets.
LRTV Documentaries
AlcaLu + Nokia: The New Uber-Vendor

4|15|15   |   2:42   |   (4) comments


Heavy Reading Senior Analyst Gabriel Brown discusses the technological and competitive opportunities and challenges if a merger between Alcatel-Lucent and Nokia comes to pass.
LRTV Huawei Video Resource Center
Huawei's Data Center Power Play

4|15|15   |   6:22   |   (0) comments


Huawei has developed industry-leading energy efficiency capabilities for its indoor and outdoor data center solutions, explains Dr. Fang Liangzhou, vice president of Huawei's Network Energy product Line.
LRTV Huawei Video Resource Center
Huawei’s Routers, Switches Get the Green Mark

4|15|15   |   2:02   |   (0) comments


TUV Rheinland's Frank Dudley explains how Huawei's routers and switches have been successfully tested by energy efficiency experts and have gained Green Mark Certification.
LRTV Documentaries
A Finn, a Frenchman & a Guy From New Jersey Walk Into a Merger...

4|15|15   |   3:17   |   (0) comments


Stop us if you've heard this one before... Light Reading CEO Founder & CEO Steve Saunders weighs in on the technical and cultural implications of a Nokia and Alcatel-Lucent merger.
LRTV Huawei Video Resource Center
Accounting for Better Solutions

4|10|15   |   02:31   |   (1) comment


Murad Yousuf, CTO at Saudi Arabia's Ministry of Finance (Dept. of Zakat & Income Tax), talks about the benefits of deploying router technology from Huawei.
LRTV Huawei Video Resource Center
What's in Store for Huawei & DataCore?

4|10|15   |   05:44   |   (0) comments


At the CeBIT trade show in Hannover, Germany, George Teixeira, CEO of software-defined storage (SDS) specialist DataCore Software, explains why he has just signed a partnership agreement with Huawei Technologies.
LRTV Huawei Video Resource Center
Du Puts Its Faith in Huawei's Routers

4|9|15   |   3:42   |   (0) comments


Adnan Masood, director of Enterprise MS Solutions Marketing at du, the United Arab Emirates (UAE) operator also known as Emirates Integrated Telecommunications Company, explains why his company chose to use Huawei's multifunctional AR routers as part of its managed enterprise services.
LRTV Huawei Video Resource Center
Huawei Gets Active in the Data Center

4|9|15   |   3:17   |   (0) comments


With enterprise users looking to maximize the use of their data center assets, Huawei’s Chief Architect & Technical Director of IT Data Center Solutions, Bruce Su, explains how the company's six-layer active-active data center solution is eradicating the need to deploy passive, redundant data center assets.
LRTV Huawei Video Resource Center
Blue Consult & Huawei for a Better Solution

4|8|15   |   4:01   |   (0) comments


Martin Rott, CEO, and Marc Metzler, head of sales virtualization, from Germany's Blue Consult discuss their collaboration with Huawei and TrendMicro to develop a secure, scalable IT platform that can meet the needs of the most demanding enterprise users.
LRTV Huawei Video Resource Center
Beach Petroleum on eLTE & Mining

4|8|15   |   3:09   |   (0) comments


Network systems integrator Jeremy Hamlyn explains how Huawei's secure packet-based trunking communications system, eLTE, can help remote communities and companies in the mining, oil and gas sectors, deploy efficient communications networks that are perfect for video and data as well as voice.
Upcoming Live Events
May 5, 2015, Hyatt McCormick Place, Chicago, IL
May 6, 2015, Georgia World Congress, Atlanta, GA
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 8, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 10, 2015, Chicago, IL
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
November 11-12, 2015, The Westin Peachtree Plaza, Atlanta, GA
All Upcoming Live Events
Infographics
Network Instruments, a JDSU division, shares results from its 2015 State of the Network, a global survey on security.
Hot Topics
Verizon Scores New OTT Content Deals
Mari Silbey, Independent Technology Editor, 4/16/2015
Can WiFi Calling Find Its Voice?
Iain Morris, News Editor, 4/13/2015
Senator Proposes New 'Title X' for Net Neutrality
Carol Wilson, Editor-at-large, 4/13/2015
Nokia, Alcatel-Lucent in Merger Talks
Iain Morris, News Editor, 4/14/2015
Nokia & Alcatel-Lucent: What's Going On?
Ray Le Maistre, Editor-in-chief, 4/15/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Data Center Interconnect, or DCI, is one of the hottest sectors in telecom currently. Since coming back to Light Reading last year, prodigal-son style, I've ...
LR CEO and Founder Steve Saunders sits down with the head of Qosmos to talk about the changing state of the art in deep packet inspection technology, including its role in SDN and NFV architectures.
Cats with Phones
Steve's Phone Click Here
Steve Saunders's personal phone.