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Vonage Narrows Loss

2/14/2008 02:39:00 PM Eastern

Holmdel, N.J. — VoIP provider Vonage said it had narrowed its quarterly loss in the fourth quarter of 2007.

The company announced results for the fourth quarter and year ending Dec. 31, 2007.

Fourth-quarter revenue grew 19 percent from the year-ago quarter to $216 million, thanks to new subscribers, the company said. The company lost $11 million for the quarter vs. 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 vs. a $53 million loss in Q4 2006.

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.

In keeping with a previously announced strategy, 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.