8x8, Vonage Announce Financials

By Staff -- TWICE, 11/17/2008

NEW YORK — Two of the last remaining independent providers of VoIP service announced their financials earlier this month, painting a mixed picture of the state of the market.

Santa Clara, Calif.-based provider 8x8 moved back into the black during the second quarter of fiscal year 2009.

The company posted revenues of $16.4 million for the quarter vs. $14.8 million a year ago. Net income for the quarter was $44,000, up from a net loss of $2.6 million for the same period last year.

Consistent with the company's change of emphasis from residential to business telephony, 8x8's Virtual Office revenue accounted for 60 percent of total revenues — up from 47 percent in the year-ago quarter.

8x8 said it added 1,846 net new customers for its Virtual Office business service for a total of more than 13,700 customers.

Vonage reported a net loss of $8 million for its third quarter.

The VoIP firm said third-quarter revenues climbed 7 percent from the year-ago quarter to $226 million. Subscriber growth slowed as the firm added 9,500 net new lines vs. 77,763 in the year-ago quarter. Churn remained flat at 3 percent.

Vonage spent $272 in marketing per gross subscriber line, up from $206 last year.

With the firm's convertible debt refinanced, CEO Marc Lefar said in a statement that the company was focused on "fixing the business fundamentals."

"We are becoming more selective in our product investments, continuing to improve customer care and reevaluating our marketing messaging and media investment. Although we anticipate modest growth for the balance of the year, the changes we are putting in place should position us for accelerated growth in 2009."