Despite recording improving financial metrics in its fourth-quarter earnings report, Vonage is facing serious scrutiny over its potential ability to pay down debt that may come due by the end of this year. The company reported 56,000 new customer additions and 19.3% revenue growth, compared to the final quarter of 2006, while also posting a loss of $11.1 million that was far lower than the $117 million loss Vonage reported for Q4 2006.
However, churn of about 3% spooked some analysts who were also hoping for more new customers. Meanwhile, the company has $250 million in short-term debt that debt holders may require pay-back on by the end of 2008, and re-financing that debt could prove challenging. Some observers are calling it Vonage's very own credit crisis, though the broader credit crisis is as much at fault as Vonage's corporate financial problems, which according to its recent earnings reports, are improving by the quarter.
The company is coming off a year in which it settled several patent lawsuits, a year in which I previously thought we would saw Vonage's precipitous decline into bankruptcy or buyout. Yet, the fourth-quarter numbers and ongoing customer growth prove Vonage has something left.
For more:
- read this story [1] in Forbes
Related articles:
- Vonage [2] recently announced the departure of its chief legal officer
Links:
[1] http://www.forbes.com/markets/currencies/2008/02/13/vonage-earnings-closer-markets-equity-cx_cg_0213markets27.html
[2] http://www.fiercetelecom.com/story/vonage-legal-chief-departs-after-busy-year/2008-02-07