Vonage continues to see growth in Q1, raises outlook for Q2

VoIP service provider Vonage (NYSE: VG), continued its surge last week, reporting first quarter net income rose to a record $21 million, or 10 cents per share, from $14 million, or 7 cents a share, a year ago; revenues in the first quarter declined to $220 million, from  $226 million a year earlier.

But Vonage, which has been burdened by debt for years, said its "strong cash flow" was allowing it to aggressively pay down its debt, including $20 million in voluntary prepayments in the first quarter.

"And we expect to make another $30 million in voluntary prepayments by year end, resulting in annual interest savings of nearly $5 million," said Vonage CEO Marc Lefar. "Combined with scheduled amortization of $20 million, we expect term debt to be $130 million at the end of 2011."

Vonage also revised its second quarter guidance, saying its adjusted EBITDA guidance for 2011 would be at least $165 million from "more than $156 million".  

"Vonage continued to deliver strong financial results as we generated record high EBITDA and net income," said telecom industry vet Lefar. "We improved average revenue per user, reduced costs and continued to deliver on our strategy to penetrate international calling segments. There are more than one million subscribers, representing 43 percent of our base, on Vonage World."

For more:
- see this release

Related articles:
Vonage offers free calls to Japan
Vonage prepared for IPv6 shift, are you?
Vonage still top VoIP carrier
Vonage rolls out expanded unlimited calling plan, includes mobile