Vonage loss grows

Second quarter losses at internet telephony provider Vonage widened from $63.6m (£34m) in 2005 to $74.1m this year, the company said Tuesday. Revenues however increased 141 per cent year on year to reach $143m during the quarter.

Vonage has been under fire from investors and customers alike since the company launched its disastrous IPO in May. Users of the service filed suit against the company for misleading and “improperly cramming investors into the Vonage IPO regardless of their suitability”.

The company’s stock debuted on the New York Stock Exchange on May 24 at $17 (£9) per share but plummeted some 30 per cent in its first week of trading.

Vonage’s stock closed at $7.09 Monday night and it remains to be seen how it will be affected by today’s news.

Nevertheless, Mike Snyder, Vonage CEO, said today: “We anticipate that our adjusted loss from operations will continue to decline over the next six quarters, and based on our current outlook, we believe we will generate adjusted operating profits as early as the first quarter 2008.”

Vonage added 1 million net subscriber lines during the twelve months ended June 30, including approximately 256,000 during the second quarter. Vonage ended the second quarter with over 1.85 million total subscriber lines, up 119 per cent from the year-ago level.

Average monthly customer churn for the second quarter was 2.3 per cent versus 2.1 per cent in the prior quarter.


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