Vonage Cuts Its Quarterly Loss
By Staff -- TWICE, 2/25/2008
HOMDEL, N.J. —Vonage said it had narrowed its quarterly loss in fourth quarter.
Revenue grew 19 percent during the fourth quarter which ended Dec. 31 to $216 million compared to the previous year's final quarter, thanks to new subscribers, the company said. Vonage lost $11 million for the quarter compared to a $65 million loss in the fourth quarter of 2006. For the first time the company generated positive operating income of $6 million for the quarter compared to a $53 million loss in the previous year's fourth quarter.
The firm added 56,000 subscribers during the fourth quarter, bringing its total to 2.6 million lines. Vonage added a total of 356,000 subscribers for the year.
As previously announced Vonage trimmed back its marketing, spending only $63 million for the quarter vs. $96 million in the year-ago quarter. Marketing costs per new subscriber line was $223 while churn was flat, at 3 percent, from the third to fourth quarter.
The company ended the year with $190 million worth of cash (including restricted cash) and marketable securities. According to Vonage, the company is looking to refinance $253 million worth of convertible debt, which it owes by December.
For the year, Vonage earned $828 million in revenues, a gain of 36 percent from 2006, while losing $46 million. In 2006, the firm lost $238 million.
