Blog Post

For Vonage it keeps getting worse

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

Vonage, which is locked in a death match with Verizon, just announced its first quarter 2007 results, and the picture isn’t pretty. Even though the results didn’t deviate from the previously announced (and lowered) guidance, there are some dangerous signs.

* Revenues for the quarter came in at about $196 million, and the company had a net loss of $72 million. In the fourth quarter of 2007, revenues were $181 million, and a net loss of $65 million.
* The average revenue per user declines from 3.8% from the fourth quarter 2006 to $28.31.
* In the quarter the company had 166,000 net adds, lower than what some analysts were expecting.
* The churn increased to 2.4% vs 2.3% in 4Q 2007.
* Vonage burned about $90 million in cash, so now has $410 million of the $500 million left.
* The pre-marketing cash flow per customer came in at $5.7 versus $7.6 in 4Q 2007, mostly because Vonage had to pay $10 million in royalty payments. Without that, pre-marketing cash would have been $7.2, still lower. Adjusting for the royalties, pre-marketing cash flow was still lower sequentially at $7.2 per user.

8 Responses to “For Vonage it keeps getting worse”

  1. Dilip

    I hope Vonage survives, I’ve used Skype, Telus and Packet8 and to be honest its the best one, in terms of value, call quality and features.

  2. My whole business relies on Vonage. Couldn’t be happier with it.

    I hope Vonage survives because I haven’t found any service that does what Vonage does at the prices they offer.

  3. Ironically, as dire as things seem with their finances and patent case with Verizon, my Vonage service has never been better. (Knock on wood – calling support has always been painful.)