& cplSiteName &

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        ADD A COMMENT
Educational Resources
sponsor supplied content
Educational Resources Archive
From The Founder
Download our complete guide to de-risking NFV deployment in 2016, including:
  • An eight-step strategy to deploying NFV safely, based on input from the companies that have already started virtualizing their production networks.
  • Interviews with leading executives at Colt, AT&T, Deutsche Telekom, Cisco, Nokia, ZTE, Ericsson and Heavy Reading.
  • Flash Poll
    Live Streaming Video
    Prepping for the Future: Upskill U Explained
    During this short kick-off video, Doug Webster, Vice President of Service Provider Marketing, Cisco, and Light Reading’s CEO & Founder Steve Saunders give an overview of Upskill U.
    LRTV Huawei Video Resource Center
    Digital Operation Transformation Roundtable Wrap-Up

    5|6|16   |     |   (0) comments


    Industry leaders at the Digital Operation Transformation Summit give their final thoughts at the roundtable.
    LRTV Huawei Video Resource Center
    Peter Sany on Digital Transformation

    5|6|16   |     |   (0) comments


    Peter Sany gives his view on digital transformation at the DOT Summit in Barcelona.
    LRTV Huawei Video Resource Center
    James McQuivey on Digital Transformation

    5|6|16   |     |   (0) comments


    James McQuivey gives his view on digital transformation at the DOT Summit in Barcelona.
    LRTV Interviews
    Courting the Apartment Crowd

    5|6|16   |     |   (0) comments


    In this LRTV interview, AT&T's Adrian Cardwell details the changing dynamics of the MDU markets and explains how AT&T is pursuing apartment dwellers with GigaPower.
    LRTV Interviews
    Demand Surges for On-Demand Ads

    5|5|16   |     |   (0) comments


    Ed Knudson, VP, Product and Strategy at Canoe Ventures, discusses the rising appeal of VoD ads and the challenges on inserting ads dynamically in live TV programming.
    LRTV Custom TV
    Exclusive: Video Interview With Sckipio CEO David Baum

    5|5|16   |     |   (0) comments


    At his headquarters in Tel Aviv, G.fast visionary David Baum, CEO of Sckipio, provided an exclusive interview to Light Reading and showed how innovations in rate and reach, vector densities, fast reconnecting times and SFP-based residential gateways are expanding the potential of G.fast.
    Telecom Innovators Video Showcase
    Atrinet's NetACE – Migration to NFV & SDN With NetOps-Driven LSO

    5|4|16   |     |   (0) comments


    At Atrinet's headquarters, Ray Le Maistre sits down with Roy Silon to get an in-depth look into the company's focus and the secret recipe for their success.
    LRTV Huawei Video Resource Center
    Amsterdam ArenA, Powered by Huawei

    5|4|16   |     |   (0) comments


    Huawei's ICT solutions power the state-of-the-art Amsterdam ArenA, turning it into a smart stadium.
    LRTV Interviews
    Testing When There's No 'There' There

    5|4|16   |     |   (1) comment


    The benefits of SDN/NFV are well known, but the transition comes with some challenges, prominent among them is: how do you test a network that has been abstracted and has the potential to be endlessly reconfigurable? Light Reading was at NFV World Congress in Santa Clara, Calif., where we bumped into Mats Nordlund, CEO and co-founder of Netrounds, a Swedish ...
    LRTV Interviews
    Ditching the Slash & the Orchestration Wars

    5|3|16   |     |   (2) comments


    SDN and NFV have been inextricably bound with each other for so long that on a conceptual level, smooshing them together into one catch-all phrase – SDNFV – is now justifiable, according to Dan Pitt, executive director of the Open Networking Foundation (ONF). Light Reading spoke to Pitt at the NFV World Congress, where he explained that the next ...
    LRTV Custom TV
    ZTE TV Connect Highlights

    5|3|16   |     |   (0) comments


    ZTE gives us a tour of its booth and new products at TV Connect in London.
    LRTV Custom TV
    Deluxe's Unified Delivery Solution

    5|3|16   |     |   (0) comments


    Join Alan Breznick of Light Reading and visit the Deluxe booth at NAB! Here you'll find Deluxe's Unified Delivery Solution, OTT video, virtual reality, HDR, 4K and much more!
    Upcoming Live Events
    May 23, 2016, Austin, TX
    May 23, 2016, Austin Convention Center
    May 24-25, 2016, Austin Convention Center, Austin, TX
    September 13-14, 2016, The Curtis Hotel, Denver, CO
    December 6-8, 2016,
    June 16-18, 2017, Austin Convention Center, Austin, TX
    All Upcoming Live Events
    Infographics
    A new survey conducted by Heavy Reading and TM Forum shows that CSPs around the world see the move to digital operations as a necessary part of their overall virtualization strategies.
    Hot Topics
    Sprint CEO: Our Spectrum Is for 5G
    Dan Jones, Mobile Editor, 5/3/2016
    Amazon & Other 'Big 4' Cloud Providers Crushing Competitors
    Mitch Wagner, West Coast Bureau Chief, Light Reading, 4/29/2016
    Showdown at the OpenStack Corral
    Carol Wilson, Editor-at-large, 5/3/2016
    Upskill U Kicks Off IoT Lectures With Ericsson
    Kelsey Kusterer Ziser, Editor, 5/4/2016
    WiCipedia: 'Meternity,' Lemonade & Chores
    Eryn Leavens, Special Features & Copy Editor, 5/6/2016
    Like Us on Facebook
    Twitter Feed
    BETWEEN THE CEOs - Executive Interviews
    In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
    Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
    Animals with Phones
    Sloth Mail Click Here
    Sloth mail -- somehow even slower than snail mail.
    Live Digital Audio

    Of all the tech companies in the Valley, Intel has made the most aggressive commitment to building a diverse and inclusive workplace culture. It's doing so by taking concrete, measurable steps, making a large financial investment and through a commitment to complete transparency about its progress. In this radio show, WiC Director Sarah Thomas will be joined by Shlomit Weiss, Intel's Vice President, Data Center Group, and General Manager of Networking Engineering, who will share with us why Intel is tackling this huge challenge, how and to what effect. She will also discuss her unique experiences leading development of Client SOC development in the past and today leading development of all of the chipmaker's silicon hardware for networking IPs and discrete devices and managing a team of 600 engineers across Israel, Europe and the US.