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May 5, 2010

1 Min Read
Vonage International Gives Provider Another Profit

Vonage Holdings Corp.’s (VG) international calling plan proved key to the VoIP provider’s first-quarter earnings.

For the second consecutive quarter, Vonage reported a profit, thanks in large part to Vonage World. The New Jersey-based company showed net income of $14 million, up from $5.3 million a year earlier. The year-ago profit, however, happened as a result of a benefit form an accounting adjustment; otherwise, Vonage would have posted a loss.

Revenue this quarter amounted to $228 million, up from $224 million. Subscribers paid about $3 more per month, on average, because they opted for the international service that offers unlimited calls to many countries for a flat fee.

But Vonage doesn’t expect those average monthly customer increases to continue to grow because a six-month Vonage World promotion will have expired.

Meantime, Vonage is improving its churn. The percentage fell to 2.6 percent, from 3.1 percent a year ago. At the same time, though, the over-the-top VoIP provider didn’t add as many new customers as it had hoped; it lost 25,779 net users, ending with 2.4 million.

Shares of Vonage closed up 10.13 percent at $1.74 on Wednesday.

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