Vonage has narrowed its losses two consecutive quarters, but it remains to be seen whether the company can grow.
The company reported a second quarter net loss of $7 million, or 4 cents a share, on revenue of $228 million. Revenue was up 11 percent from a year ago and up 1 percent from the first quarter. Excluding items, Vonage had operating income of $12 million. Wall Street was expecting a loss of 6 cents a share.
Vonage's quarter (statement) marks the debut of new CEO Mark Lefar. Lefar noted in a statement the company's financial performance was improving. Indeed, the company reported a net loss of $23 million, or 15 cents a share, on revenue of $206 million in the second quarter a year ago.
By the numbers:
- Average revenue per line in the second quarter was $29.04, up from $28.38 a year ago.
- Direct costs of telephony service were $57 million, up from $52 million a year ago.
- Marketing expenses in the second quarter were $65 million, down from $68 million a year ago, but up from $61 million in the first quarter. Marketing expenses are worth monitoring going forward since spending lavishly on ineffective commercials is one reason Vonage dug itself a hole in the first place.
- Churn was 3 percent, down from 3.3 percent in the first quarter.
The bottom line: Vonage is off life support for sure. Now the question is whether it can grow. In the second quarter, Vonage added a mere 2,000 subscriber lines.