Vonage reports 3Q results, $8M loss

Vonage released its third quarter earnings Thursday, and despite a net gain of more than 9,000 customers in the quarter, it lost $8 million for the quarter, $1 million more than the previous quarter.
With increasing losses and continuing churn issues (3 percent for the quarter), the road to profitability never seems to end for Vonage. Add to the equation the time it took Vonage to find a taker on its debt and a threat of delisting by the NYSE, and it’s tough to see how Vonage makes it in the long-run. Bleeding millions of dollars while only adding a few thousand customers a quarter cannot sit well with Vonage stockholders.

CEO Marc Lefar tried to put a good spin on the news, highlighting the net customer gain and the eventual refinancing of the debt.

“As we look forward, we continue to maintain our focus on fixing the business fundamentals,” Lefar said. “We are becoming more selective in our product investments, continuing to improve customer care and reevaluating our marketing messaging and media investment. Although we anticipate modest growth for the balance of the year, the changes we are putting in place should position us for accelerated growth in 2009.”

But the pressing issues for Lefar and the rest of Vonage’s staff are figuring out a way to reduce churn and cutting marketing expense for new customers (it currently spends $272.24 per subscriber added).  While adding new customers is necessary, paying too much to do so is a recipe for continued insolvency. 

For more:
- see the Vonage press release about 3Q financial situation 

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