Troubled VoIP pioneer Vonage issued its Q2 07 earnings report this morning showing decent revenue growth and a remarkable reduction in net losses. But, the trouble surrounding Vonage’s patent lawsuit defeat combined with strong triple-play service bundles resulted in a steep drop-off in net new customer gains for the quarter.
Revenues rose 44% year-over-year and 5% sequentially to $205.9 million. Net loss dropped by 55% year-over-year and 54% sequentially to $33.6 million.
It’s too bad, however, that customers steered clear of the voice competitor. During the quarter, Vonage added only 56,691 net new customers, a run-rate down 78% from the 255,936 net new lines added during Q2 06, and down 66% from the 165,646 net new adds during Q1 07.
During the company’s earnings call, interim CEO Jeffrey Citron said that “we know the negative press [surrounding the patent litigation with Verizon] that came out in April and May had two big impacts on the business.” The first, of course, was to scare people away from becoming new Vonage customers. The second was to speed up the rate at which customers churned away from the service.
Citron also said that Vonage has “substantially” completed its work-around to the Verizon patents, as they have been construed by the court. But, the company is also confident in the strength of its appeal of the patent decision, he added.
Looking ahead, Vonage hopes to bolster its competitive standing against cable operators and phone companies partnering with broadband service providers to sell bundled high-speed and VoIP services. Citron said that trials are under way with selected providers and Vonage hopes to expand the nascent efforts to a larger footprint
Cynthia Brumfield at 1:37 PM|Comments(0)
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