Despite adding a whopping 256,000 subscribers during 2006’s second quarter, VoIP service provider
Vonage Holdings Corp. today reported losses totalling $74 million during this period, due mostly to operational and marketing costs.
Vonage (
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Vonage’s much-anticipated IPO disappointed most investors as its shares almost lost half their value a day after its debut on May 30 at $17 a share. The sinking shares rushed the company into a money recovery mission in order to repay the “promised investment” made by individuals who signed up to buy shares through a special program and later refused to buy the stock. The company announced that it will allocate more than $17 million to pay and reimburse IPO underwriters.
Mike Snyder, Vonage’s CEO, remains optimistic: “This quarter represents an important milestone for Vonage, as we begin to report our results as a newly public company. We also see this quarter as a key inflection point on our path to profitability. Adjusted loss from operations declined by 18 percent from the prior quarter even as we continued to make meaningful investments in marketing to achieve continued growth. Total revenue more than doubled from the second quarter of 2005, primarily driven by growth in total subscriber lines and an increase in average revenue per line. At the same time, the direct costs of operating our business, direct cost of telephony services and cost of goods sold, remain well in control and in fact, continue to drive scale benefits as we leverage our cost base.”
Snyder added, “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.”
Specifically, the company’s report showed that its second quarter 2006 revenue grew to $143 million, up 21 percent from the prior quarter and up 141 percent from the year-ago quarter. The company owes these numbers mainly to its subscriber line growth, as well as by an increase in average monthly revenue per line. Total subscriber lines were over 1,853,000 at June 30, 2006, versus 1,597,000 at March 31, 2006 and approximately 848,000 at June 30, 2005. Vonage reported an average monthly revenue per line in the second quarter 2006 of $27.70, an increase of $1.07 from $26.63 in the second quarter 2005.
Vonage Holdings Corp.
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