Vonage reports on May 7: What to look for

Vonage reports its first-quarter financial results Thursday. Given the statements made by the company's CEO on the last earnings call, analysts will be scrutinizing three key metrics: SLAC, customer churn, and net customer gains/losses.

At the end of February, Vonage CEO Marc Lefar called the company's expenses to secure customers - SLAC - "not acceptable," with net addition of customers "well below" expectations. SLAC increased to $309 per customer in Q1 2009, up from $289 per customer in Q4 2008. SLAC should be down given the noises the company made about finding a new ad agency.

Customer churn per month was battered down to 2.9 percent per month in Q1 2009, but that didn't help much, since Vonage registered its first net customer loss of 14,700 subscribers. Lefar said the company had been working on automating its customer care functions and making customer turn up more efficient.

If the "It's cheaper than landline/bad economy drives price shopping" theory holds, net subscribers should be up a bit, assuming the company has managed to reduce churn again.

Other items to look for: Progress on market opportunities outside of North America and the UK, a mobile application, and a new SMB offering. All items were referenced in the Q1 2009 conference call, but new product announcements haven't happened yet.

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