The best news for Vonage: It’s not getting sued anymore. Last year, the Internet phone company settled four patent lawsuits, paying out $240 million in settlement fees. Now the bad news, reported this morning: The company’s most important metric — subscriber growth — was down again in Q4. Vonage missed the Street’s revenue estimate. And it is restating Q2 and Q3 results, too, to fix stock compensation expenses.
Vonage’s Q4 sales grew 19% year-over-year to $216 million, narrowly missing the $219 million Street consensus. Net loss dropped to $9 million, or 6 cents per share, beating the Street’s projected 10 cents per share loss. Most concerning: The company convinced 284,000 people to sign up for Internet phone service, but 228,000 subscribers left the service. So Vonage only added 56,000 net subscribers during the quarter despite spending $63 million on marketing — that is, it spent $1,100 on land each new net subscriber. Release.
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