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Vonage: As if it didn't have enough financial challenges...

$58 million court judgment comes atop mounting net losses for VoIP carrier.

By , Network World
March 09, 2007 04:30 PM ET

Network World - The multimillion dollar judgment handed down this week against Vonage in a patent infringement case brought to court by Verizon adds to the VoIP carrier's financial challenges.

The company owes $58 million in damages plus 5.5% royalty rates for future use of Verizon technology, a federal jury has ruled.

That will be another drain on the company’s already negative cash flow. The company’s net losses in 2005 were $261 million and rose to $286 million in 2006.

Not all the financial news for Vonage is bad, though. Its revenue jumped from $269 million in 2005 to $607 million in 2006. And it landed 955,000 new customers in 2006, paying $248.51 on average in marketing costs for every new customer it signed.

About 75% of its customers are residential and the rest are small businesses, the company says.

But whatever progress Vonage has made doesn’t seem to be impressing Wall Street, as the company’s stock price has steadily dropped over the past year from a high of about $14 to the current price of roughly $4.50.

Vonage says it will appeal the verdict in the court case.

Read more about voip & convergence in Network World's VoIP & Convergence section.

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