Vonage posts Q2 profit, boosted by lower costs
HOLMDEL, N.J. (AP) – Internet phone service provider Vonage Holdings Corp. on Wednesday said it moved to a profit in the second quarter, as lower costs buoyed the bottom line even as revenue fell.
The company earned $2.3 million, or a penny per share, in the quarter, compared with a loss of $6.9 million, or 4 cents per share, in the same quarter a year earlier. The just-concluded quarter included a $1 million benefit related to its convertible notes.
Revenue fell 3 percent to $220 million from $227.5 million. Its total operating expenses declined 11 percent to $205 million.
Vonage said it lost 89,000 net subscriber lines to end the quarter with 2.5 million lines. Churn, or loss of customers, rose to 3.2 percent from 3 percent in 2008.
"While our financial performance was strong, our subscriber base did not grow at expected levels due in part to the challenges of the current economy and the increasing impact of wireless substitution," said CEO Marc Lefar.
He said Vonage launched a new marketing campaign in the second quarter to bring in new customers over time. The company will unveil new products and plans revolving around growth opportunities in mobile services and international markets.
Shares of Holmdel, N.J.-based Vonage fell 4 cents, or 8 percent, to 44 cents in afternoon trading.