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Glowpoint Reports Third Quarter Results

November 10, 2009 | Chris Payatagool

Thumbnail image for Glowpoint_Logo_New.jpgPosts Record Subscription Revenue and Increase in Positive Operating Income

HILLSIDE, N.J.--- Glowpoint, Inc. (OTCBB: GLOW), a leading provider of advanced video communications solutions, today announced financial results for the third quarter and nine months ended September 30, 2009, yielding record subscription related revenues and a continuance of positive operating income.

Total revenue for the quarter was $6.54 million, an increase of more than 7.8% from the same period a year ago. Monthly recurring subscription and related revenue for the quarter was $5.03 million of such amount, up 16.2% year-over-year. Gross margin for the quarter increased to $3.22 million, a year-over-year increase of 32.2%. Total operating expenses were only 47.1% of revenues versus 50.8% in the same period a year ago and 50.2% last quarter. The third quarter income from operations was $0.14 million, which was an improvement from last quarter's income of $0.04 million and a loss of $0.64 million from the year ago period. The income from operations was primarily attributable to increased revenue from VNOC managed services and Telepresence interExchange Network (TEN) related services, improved gross margins, and containment of operating expenses.

Key highlights for the third quarter of 2009 include:

    --  Positive Operating Income: Glowpoint reported an increase in income from
        operations following its posting of positive operating income for the
        first time the previous quarter.
    --  Record Recurring Revenue from Subscription: Record quarterly
        subscription revenue of $5.03 million in the third quarter, driven by
        continued growth of its managed service solutions which is billed on a
        monthly recurring basis. Recurring revenue sources accounted for nearly
        77% of total revenue in the quarter.
    --  Strong Gross Margin: Gross margin of $3.22 million and gross margin
        percentage of 49.2%, driven by continued operating scale and efficiency
        with optimization of costs.
    --  Elimination of Preferred Stock Dividends: Dividends on Glowpoint's
        preferred stock, which were to begin in the fourth quarter of 2009, have
        been eliminated until January 2013, thereby avoiding payments of more
        than $5.2 million.
    --  Warrant Exchange: Glowpoint completed an exchange transaction that
        cancelled warrants to acquire 39.1 million shares by issuing 17.4
        million shares of common stock.

"The video industry is undergoing a massive transformation, and Glowpoint continues to be recognized as a leader in developing and distributing the applications that are driving many of the innovations behind it. Leading market analysts are now increasing the telepresence and video conferencing industry's growth projections, Gartner recently reported, "The value of the videoconferencing market as a whole is set to post a compound annual growth rate (CAGR) of 17.8% between 2008 and 2013, rising from $3.8 billion to $8.6 Billion.... Services revenue will grow stronger than revenue from endpoints or infrastructure..."1. Telepresence and video conferencing are now being discussed as components of the unified communications and cloud computing markets. When combining these projections with the consolidation and strategies within the Unified Communications market, we see great opportunities not only in the overall market size, but also a specific opportunity for Glowpoint to achieve broad market share for our cloud based video services," said Joe Laezza, Glowpoint's President and Co-CEO.

"Our continuation of generating positive income from operations is a result of Glowpoint's steady focus and successful execution of our business plan. We are proud of what we have achieved, and are very excited to have moved the company to generating income for the second consecutive quarter," said Dave Robinson, Glowpoint's Co-CEO. "We're also pleased to report record subscription revenue, which is the core of our recurring revenue business model, and report year-over-year revenue growth. We believe progress will continue in the fourth quarter of 2009, with year-over-year and sequential margin improvement and year-over-year subscription revenue growth of at least 10%, setting up a strong 2010, when economic conditions are forecasted to improve and industry analysts project that the growth for managed video services and B2B exchange services will begin to accelerate significantly."


Glowpoint will host a conference call at 4:30 pm EST today to discuss the results and field questions from investors. Interested participants should call (877) 407-1869 and use passcode 200973. International participants should call (201) 689-8044 and use the same passcode.

This call is being audio webcast by TalkPoint and can be accessed at Glowpoint's website at or by linking directly to Institutional investors can also access the call via Thomson Reuters' password-protected event management site, StreetEvents:

A recording of the webcast will be available beginning November 10, 2009 and will remain archived through November 10, 2010. To listen to the audio webcast, go to or directly at

About Glowpoint

Glowpoint, Inc. (OTCBB: GLOW) is a leading provider of advanced video communications solutions. Glowpoint's suite of robust telepresence and video communications solutions enables organizations to communicate with each other over disparate networks and technology platforms. Glowpoint supports thousands of video communications systems in more than 35 countries with its 24/7 video management services. Glowpoint also powers major broadcasters, Fortune 500 companies, as well as global carriers and video equipment manufacturers - and their customers - worldwide. To learn more, visit

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