Vonage: Better, But Not In The Clear
Posted by: Olga Kharif on February 13, 2008
We got some good news from Web-calling provider Vonage today. For the first time ever, in the fourth quarter Vonage reached operational profitability — actually ahead of schedule. The company was only supposed to reach this milestone in the first quarter of 2008.
What’s more, Vonage’s net loss narrowed. And the company just appointed a new chief of customer care, a position that’s been vacated since October. I talked to interim CEO Jeffrey Citron soon after the company’s earnings announcement, and he emphasized that the restructuring effort “is working, the underlying metrics are getting better.”
Is Vonage out of the woods? Not quite. The company still needs to secure more funding ($100 million or so) or reach an agreement with holders of some $253 million in debt that could come due in December. The company has retained financial advisors and is in discussions with lenders and bondholders. Citron is optimistic, but he notes: “We are not exactly sure how long this will take given the state of the capital markets.”