Troubled VoIP company Vonage Holdings Corp. reported Thursday its net loss narrowed during the first quarter despite an ongoing legal battle with Verizon Communications Inc.
The first-quarters net loss was $72 million, or 47 cents per share, compared with a loss of $85 million during the first quarter last year. The company was not publicly traded until last May.
First-quarter revenue also grew 64 percent to $196 million compared with $120 million over the same period in 2006.
A federal jury found in March that Vonage infringed on three Verizon patents and was ordered to pay $58 million plus 5.5 percent royalty fees on future revenue. A judge also ordered the company to stop using that technology.
Vonage was then barred from signing up new customers. But an appeals court overturned that decision and the case is set for appeals court next month.
The companys CEO, Michael Snyder, also resigned and Vonage cut 200 jobs.
Through it all, Vonages stock hit an all-time low. But with the losses not as great as expected and showing improvement, stocks rose 10 percent to $3.36 on Thursday. That is still far below its last years initial offering of $17.
“We have battled through an extremely difficult quarter and will continue the fight in the courtroom,” Vonage Chairman and interim CEO Jeffrey Citron said in a statement. “While the patent litigation has challenged our business, it has not distracted our focus on providing consumers with the opportunity to choose a better phone service.”
Vonage subscribers grew by 166,000 and the company finished the quarter with nearly 2.4 million lines in service. The pace of customers closing accounts went up to 2.4 percent of the subscriber base per month, up barely from 2.3 percent during the last quarter.
Citron said the company has workarounds for the Verizon patents nearly ready to go and they should be deployed soon.
Vonage Holdings Corp. www.vonage.com