Vonage Holdings Corp. Reports Third Quarter 2013 Results

           Vonage Holdings Corp. Reports Third Quarter 2013 Results

-- Vocalocity Acquisition Expected to Close in November 2013 --

-- Second Consecutive Quarter of Positive Net Line Additions --

-- Revenue of $204 Million --

-- Adjusted EBITDA1 of $23 Million --

-- Net Income of $9 Million or $0.04 per Share Excluding Adjustments2 --

PR Newswire

HOLMDEL, N.J., Nov. 6, 2013

HOLMDEL, N.J., Nov.6, 2013 /PRNewswire/ --Vonage Holdings Corp. (NYSE: VG),
a leading provider of communications services connecting people through
cloud-connected devices worldwide, today announced results for the third
quarter ended September 30, 2013.

Vonage reported gross line additions ("GLAs") of 175,000, up from 155,000
sequentially and up from 172,000 in the prior year. This was the Company's
best quarter of GLAs since the first quarter of 2011, reflecting stable volume
in the international calling segment and the first full quarter of national
sales of BasicTalk, its high-quality, low-cost domestic calling product. As
expected, customer churn increased modestly to 2.6%, up from 2.4% sequentially
due to targeted price increases executed in the quarter, the early life churn
associated with higher gross line additions, and seasonality, and was up from
2.5% in the year ago quarter. The Company grew total net lines by 11,000
during the quarter, up from 3,000 net lines sequentially and 9,000 net lines
in the year ago quarter. This is the second consecutive quarter of positive
net line additions and the highest level since the first quarter of 2008.

Adjusted earnings before interest, taxes, depreciation and amortization^1
("EBITDA") of $23 million was impacted by planned investments to build the
BasicTalk brand. As expected, adjusted EBITDA declined from $27 million in
the prior quarter and was  down from $34 million in the year ago quarter,
consistent with the Company's stated plan to invest in strategic growth
priorities. The Company reported income from operations of $9 million, down
from $14 million sequentially and down from $23 million in the year ago
quarter.

GAAP net income was $4 million or $0.02 per share, down from $7 million or
$0.04 per share sequentially and down from $13 million or $0.06 per share in
the year ago period. Net income, excluding adjustments^2, was $9 million or
$0.04 per share, down from $12 million or $0.06 per share sequentially and
down from $21 million or $0.09 per share in the year ago quarter.

"We continued to gain traction with BasicTalk, which launched nationally in
May," said Marc Lefar, Vonage Chief Executive Officer. "As a result, we
delivered our highest number of GLAs since first quarter 2011 and our second
consecutive quarter of positive net line additions. 

"We are making important strides towards our launch in Brazil. Mobile
continues to grow and nowrepresents 31% of all Vonage international
calls.And in the coming weeks, we expect to release our unique video
messaging and ReachMe Roaming features, which will further differentiate our
highly-rated Vonage Mobile app.

"In November we expect to close our deal to acquire Vocalocity. This
transformative acquisition will place Vonage at the forefront of the large and
rapidly growing small and medium business market. Vocalocity is already
growing customers and revenue rapidly, and we believe we can fuel their growth
with our brand and scale while achieving meaningful cost synergies.

"While we continued to invest for growth, we also met our commitment to return
capital to shareholders, repurchasing approximately five million shares of our
stock for $15 million. We remain on target to complete our $100 million
buyback by the end of 2014."

Third Quarter Financial and Operating Results

Revenue was $204 million, down from $205 million sequentially and from $208
million in the prior year, primarily due to lower customer acquisitions on
premium plans and retention activities. This was partly offset by penetration
of a new customer segment with BasicTalk.

Average Revenue per User was $28.87, down from $29.06 sequentially and from
$29.31 in the prior year, primarily due to rate plan mix as the Company added
more customers on lower-priced rate plans, including BasicTalk.

Direct cost of telephony services ("COTS") was $53 million, down from $54
million sequentially and from $55 million in the year ago quarter, primarily
due to lower domestic termination and interconnection costs. On a per line
basis, COTS was $7.48, down from $7.60 sequentially and from $7.80 in the year
ago quarter.

Direct cost of goods sold was $10 million, up $1 million sequentially and flat
compared to the year ago quarter. Direct margin^3 was 69%, flat sequentially
and up from 68% in the year ago quarter.

Selling, general and administrative ("SG&A") expense was $65 million, up from
$61 million in the prior quarter, which included the one-time benefit of an
insurance claim reimbursement, and up from $60 million in the year ago
quarter, primarily due to an increase in the number of retail stores with
assisted selling. Offsetting a portion of the increase from the prior year,
customer care costs per line declined 14%, reflecting continued operating
efficiencies and declines in contact rate per customer and average handle
time. Customer care costs per line were flat sequentially.

Marketing expense was $59 million, up from $58 million sequentially and from
$51 million in the year ago quarter. Subscriber line acquisition cost ("SLAC")
was $339, down from $375 sequentially and up from $299 in the year ago
quarter.

As of September 30, 2013, cash and cash equivalents, including $4 million in
restricted cash, totaled $104 million. Capital expenditures, including the
acquisition and development of software assets, were $4 million, down from $8
million sequentially and up from $1 million in the year ago quarter. Free Cash
Flow^4 was $20 million, up from $11 million sequentially due in part to
changes in working capital from the timing of payments and lower capital
expenditures, and up from $17 million in the year ago quarter, primarily due
to changes in working capital.

Share Repurchase Program

During the third quarter, Vonage repurchased 5 million shares of its common
stock for$15 million. The Company has repurchased 13 million shares for $39
million under the current $100 million plan authorized in February and
extending through 2014. Since the beginning of its repurchase program in
August 2012 through the third quarter of 2013, Vonage has repurchased 28
million shares for $72 million.

Growth Priorities

Building on the successful national launch of BasicTalk, Vonage grew BasicTalk
customer additions in the third quarter while improving sales efficiency in
Walmart stores and online. Although results are still early, customer
satisfaction and churn rates for BasicTalk appear to be comparable to
Vonage-branded services. The Company expects BasicTalk to continue to be a
meaningful contributor to gross line additions and revenue over time.

Vonage has made strong progress building the foundation to deliver VoIP
services through its joint venture in Brazil. The Company has completed
network testing, finalized plans to host its billing platform, and built out
its experienced local management team with the hiring of a chief marketing
officer. The Company is on track for customer and production testing later in
the fourth quarter of 2013 and phased market entry in the second quarter of
2014. In July 2013, Vonage formed the joint venture in which it has a
controlling interest and consolidates from an accounting perspective. As a
result, beginning in the third quarter, the Company began reporting the "net
loss attributable to noncontrolling interest" in its financial statements.

Mobile is a central component of the Company's core service offering,
international expansion opportunities and standalone products. The Vonage
Mobile app continues to attract new downloads and active users aided by the
recent addition of video calling.Approximately20% of all calls made on the
Vonage Mobile app are video calls. In the coming weeks, the Company expects
to launch a unique video messaging feature, followed by the U.S. launch of its
patented international roaming feature, ReachMe Roaming. Vonage Mobile
Extensions continues to grow in popularity and use, with 80% of Vonage's
international long distance callers having registered an Extension.

Vocalocity Acquisition

On October 10, 2013, Vonage announced a definitive agreement to acquire
Vocalocity, Inc., one of the fastest growing providers in the SMB hosted VoIP
market. During the first half of 2013,Vocalocityhad revenue of$28
millionand growing, implying an annual run rate of greater than$56 million.
First half 2013 revenues were 39% higher than the same period in the prior
year. The transaction positions Vonage as a leader in the rapidly growing
hosted VoIP market for SMBs, which Frost and Sullivan projects will grow at a
compound annual rate of 27.5% over the next five years^5.

After the close, Vocalocity will become Vonage Business Solutions, and will
continue to be led by current CEO Wain Kellum, supported by other key
Vocalocity managers. Launch plans for the combined company are focused on
delivering tangible benefits to customers and prospects immediately, and
accelerating growth by leveraging the Vonage brand and expansion of
Vocalocity's successful customer referral program to the Vonage customer base
and Vonage partners. The acquisition of Vocalocity also supports Vonage's
strategy to expand internationally by enabling the delivery of services to
SoHo and SMB markets abroad.  The Companyalso expects that the investments
it has made to build out its mobile capability can be leveraged in the
business market. 

Vonage will acquire Vocalocity for $130 million, including $105 million in
cash and $25 million in Vonage common stock (priced at day of announcement).
The Company expects to finance the cash portion of the transaction through $30
million of cash from the balance sheet and $75 million from its credit
facility. The transaction is expected to be accretive to adjusted earnings
per share and on an EBITDA multiple basis in 2015 and is expected to close in
mid-November 2013.

Patent Portfolio

Vonage continues to execute on its strategy to protect its intellectual
property, including in mobility and call quality, and has been granted 12 U.S.
patents and filed more than 80 U.S. patent applications in 2013. The Company
now has 30 U.S. patents and more than 200 U.S. patent applications pending,
along with many foreign patents and pending applications in jurisdictions
worldwide.

Outlook

Vonage expects fourth quarter 2013 adjusted EBITDA, excluding the impact of
Vocalocity, to be modestly higher than the third quarter. Aided by gross line
additions from BasicTalk and stable churn, the Company expects positive net
line additions in the fourth quarter and for the full year 2014.

(1) This is a non-GAAP financial measure. Refer below to Table 3 for a
    reconciliation to GAAP income (loss) from operations.
(2) This is a non-GAAP financial measure. Refer below to Table 4 for a
    reconciliation to GAAP net income (loss).
(3) Direct margin is defined as revenues less direct cost of telephony
    services and direct cost of goods sold as a percentage of revenues.
(4) This is a non-GAAP financial measure. Refer below to Table 5 for a
    reconciliation to GAAP net cash provided by operating activities.
(5) Frost and Sullivan North American Hosted IP Telephony and UCC Services
    Market report, July 2013



VONAGE HOLDINGS CORP.

TABLE 1. CONSOLIDATED FINANCIAL DATA

(Dollars in thousands, except per share amounts)
                         Three Months Ended               Nine Months Ended
                         September  June 30,   September  September 30,
                         30,                   30,
                         2013       2013       2012       2013       2012
                         (unaudited)                      (unaudited)
Statement of Operations
Data:
Revenues                 $ 203,984  $ 204,776  $ 207,584  $ 617,847  $ 635,403
Operating Expenses:
Direct cost of telephony
services (excluding
depreciation and
amortization of $3,522,
$3,510,
$3,722, $10,484, and    52,882     53,527     55,245     161,590    175,063
$11,581, respectively)
Direct cost of goods     9,535      9,217      10,444     27,630     29,565
sold
Selling, general and     64,752     61,481     59,676     189,143    179,907
administrative
Marketing                59,133     58,330     51,361     169,132    159,739
Depreciation and         8,459      8,205      8,110      24,639     25,272
amortization
Loss from abandonment of —          —          —          —          25,262
software assets
                         194,761    190,760    184,836    572,134    594,808
Income from operations   9,223      14,016     22,748     45,713     40,595
Other income (expense):
Interest income          97         74         30         208        80
Interest expense         (1,509)    (1,732)    (1,402)    (4,698)    (4,719)
Other (expense) income,  (15)       (17)       28         (71)       5
net
                         (1,427)    (1,675)    (1,344)    (4,561)    (4,634)
Income before income tax 7,796      12,341     21,404     41,152     35,961
expense
Income tax expense       (3,811)    (4,894)    (8,191)    (16,673)   (12,167)
Net income               3,985      7,447      13,213     24,479     23,794
Plus: Net loss
attributable to          222        —          —          222        —
noncontrolling interest
Net income attributable  $ 4,207    $ 7,447    $ 13,213   $ 24,701   $ 23,794
to Vonage
Net income attributable
to Vonage per common
share:
Basic                    $ 0.02     $ 0.04     $ 0.06     $ 0.12     $ 0.11
Diluted                  $ 0.02     $ 0.03     $ 0.06     $ 0.11     $ 0.10
Weighted-average common
shares outstanding:
Basic                    209,589    212,169    225,555    212,124    225,904
Diluted                  217,059    219,837    233,708    222,321    233,677





                    Three Months Ended                      Nine Months Ended
                    September 30,  June 30,  September 30,  September 30,
                    2013           2013      2012           2013      2012
                    (unaudited)                             (unaudited)
Statement of Cash
Flow Data:
Net cash provided
by operating        $   23,550     $ 18,852  $   18,157     $ 52,154  $ 58,797
activities
Net cash used in
investing           (3,760)        (7,657)   (1,120)        (14,504)  (13,461)
activities
Net cash used in
financing           (19,292)       (17,567)  (15,513)       (34,213)  (30,128)
activities
Capital
expenditures,
intangible asset    (3,758)        (7,656)   (1,402)        (15,758)  (14,741)
purchases and
developmentof
software assets





VONAGE HOLDINGS CORP.

TABLE 1. SUMMARY CONSOLIDATED FINANCIAL DATA - (Continued)

(Dollars in thousands, except per share amounts)
                                                   September 30,  December 31,
                                                   2013           2012
                                                   (unaudited)    (audited)
Balance Sheet Data (at period end):
Cash and cash equivalents                          $  99,915      $  97,110
Restricted cash                                    4,401          5,656
Accounts receivable, net of allowance              21,932         20,416
Inventory, net of allowance                        11,492         5,470
Prepaid expenses and other current assets          19,374         15,487
Deferred customer acquisition costs                6,199          5,765
Property and equipment, net                        52,657         60,533
Software, net                                      20,337         19,560
Debt related costs, net                            1,638          772
Intangible assets, net                             4,901          6,681
Total deferred tax assets, including current       290,170        306,113
portion, net
Other assets                                       1,970          3,826
Total assets                                       $  534,986     $  547,389
Accounts payable and accrued expenses              $  115,152     $  129,815
Deferred revenue                                   35,548         36,533
Total notes payable, including current portion     52,500         42,500
Capital lease obligations                          13,751         15,561
Other liabilities                                  1,612          1,565
Total liabilities                                  $  218,563     $  225,974
Redeemable noncontrolling interest                 $  233         $  —
Total stockholders' equity                         $  316,190     $  321,415



VONAGE HOLDINGS CORP.

TABLE 2. SUMMARY CONSOLIDATED OPERATING DATA

(unaudited)
             Three Months Ended                       Nine Months Ended
             September 30,  June 30,     September    September 30,
                                         30,
             2013           2013         2012         2013         2012
Gross
subscriber   174,670        155,412      171,628      478,085      500,431
line
additions
Change in
net          10,738         2,541        9,440        879          (9,363)
subscriber
lines
Subscriber
lines (at    2,360,695      2,349,957    2,365,524    2,360,695    2,365,524
period end)
Average
monthly      2.6         %  2.4       %  2.5       %  2.5       %  2.6       %
customer
churn
Average
monthly
operating    $   28.87      $  29.06     $  29.31     $  29.09     $  29.79
revenue per
line
Average
monthly
direct cost  $   7.48       $  7.60      $  7.80      $  7.61      $  8.21
of telephony
services per
line
Marketing
costs per
gross        $   339        $  375       $  299       $  354       $  319
subscriber
line
addition
Employees
(excluding
temporary    933            946          971          933          971
help) (at
period end)
Direct
margin as a  69.4        %  69.4      %  68.4      %  69.4      %  67.8      %
% of
revenues



VONAGE HOLDINGS CORP.

TABLE 3. RECONCILIATION OF GAAP INCOME FROM OPERATIONS

TO ADJUSTED EBITDA

(Dollars in thousands)

(unaudited)
                    Three Months Ended                      Nine Months Ended
                    September 30,  June 30,  September 30,  September 30,
                    2013           2013      2012           2013      2012
Income from         $   9,223      $ 14,016  $   22,748     $ 45,713  $ 40,595
operations
Depreciation and    8,459          8,205     8,110          24,639    25,272
amortization
Loss from
abandonment of      —              —         —              —         25,262
software assets
Share-based expense 4,684          4,419     3,473          13,085    9,601
Acquisition related 680            —         —              680       —
costs
Net loss
attributable to     222            —         —              222       —
noncontrolling
interest
Adjusted EBITDA     23,268         26,640    34,331         84,339    100,730





VONAGE HOLDINGS CORP.
TABLE 4. RECONCILIATION OF GAAP NET INCOME ATTRIBUTABLE TO VONAGE
TO NET INCOME ATTRIBUTABLE TO VONAGE EXCLUDING ADJUSTMENTS
(Dollars in thousands, except per share amounts)
(unaudited)
                        Three Months Ended                  Nine Months Ended
                        September 30,  June 30,  September  September 30,
                                                 30,
                        2013           2013      2012       2013      2012
Net income attributable $   4,207      $ 7,447   $  13,213  $ 24,701  $ 23,794
to Vonage
Loss from abandonment   —              —         —          —         25,262
of software assets
Acquisition related     680            —         —          680       —
costs
Income tax expense      3,811          4,894     8,191      16,673    12,167
Net income attributable
to Vonage excluding     $   8,698      $ 12,341  $  21,404  $ 42,054  $ 61,223
adjustments
Net income attributable
to Vonage per common
share:
Basic                   $   0.02       $ 0.04    $  0.06    $ 0.12    $ 0.11
Diluted                 $   0.02       $ 0.03    $  0.06    $ 0.11    $ 0.10
Weighted-average common
shares outstanding:
Basic                   209,589        212,169   225,555    212,124   225,904
Diluted                 217,059        219,837   233,708    222,321   233,677
Net income attributable
to Vonage per common
share, excluding
adjustments:
Basic                   $   0.04       $ 0.06    $  0.09    $ 0.20    $ 0.27
Diluted                 $   0.04       $ 0.06    $  0.09    $ 0.19    $ 0.26
Weighted-average common
shares outstanding:
Basic                   209,589        212,169   225,555    212,124   225,904
Diluted                 217,059        219,837   233,708    222,321   233,677





VONAGE HOLDINGS CORP.

TABLE 5. FREE CASH FLOW

(Dollars in thousands)

(unaudited)
                    Three Months Ended                      Nine Months Ended
                    September 30,  June 30,  September 30,  September 30,
                    2013           2013      2012           2013      2012
Net cash provided
by operating        $   23,550     $ 18,852  $   18,157     $ 52,154  $ 58,797
activities
Less:
Capital             (1,205)        (3,772)   (865)          (7,008)   (4,557)
expenditures
Acquisition and
development of      (2,553)        (3,884)   (537)          (8,750)   (10,184)
software assets
Free cash flow      $   19,792     $ 11,196  $   16,755     $ 36,396  $ 44,056





VONAGE HOLDINGS CORP.

TABLE 6. RECONCILIATION OF NOTES PAYABLE AND CAPITAL LEASES TO NET CASH

(Dollars in thousands)

(unaudited)
                                                   September 30,  December 31,
                                                   2013           2012
Current maturities of capital lease obligations    $  2,779       $  2,471
Current portion of notes payable                   23,333         28,333
Notes payable, net of discount and current         29,167         14,167
maturities
Capital lease obligations, net of current          10,972         13,090
maturities
Gross debt                                         66,251         58,061
Less:
Unrestricted cash                                  99,915         97,110
Net cash                                           $  (33,664)    $  (39,049)

About Vonage

Vonage (NYSE: VG) is a leading provider of communications services connecting
individuals through cloud-connected devices worldwide. Our technology serves
approximately 2.4 million subscribers. We provide feature-rich, affordable
communication solutions that offer flexibility, portability and ease-of-use
for both landline and mobile phones. Our Vonage World plan offers unlimited
calling to more than 60 countries with popular features like call waiting,
call forwarding and visual voicemail - for one low monthly rate. Our Vonage
Mobile app is a free downloadable app for iPhone® and Android™ that lets users
talk, text and video call worldwide for free with anyone else who uses the
app. Vonage's service is sold on the web and through regional and national
retailers including Walmart, Best Buy, Kmart and Sears, and is available to
customers in the U.S. (www.vonage.com), Canada (www.vonage.ca) and the United
Kingdom (www.vonage.co.uk). 

Vonage Holdings Corp. is headquartered in Holmdel, New Jersey. Vonage® is a
registered trademark of Vonage Marketing LLC., owned by Vonage America Inc.

To follow Vonage on Twitter, please visit www.twitter.com/vonage. To become a
fan on Facebook, go to www.facebook.com/vonage. To subscribe on YouTube, visit
www.youtube.com/vonage.

Use of Non-GAAP Financial Measures

This press release includes the following measures defined as non-GAAP
financial measures by the Securities and Exchange Commission: adjusted
earnings before interest, taxes, depreciation and amortization ("adjusted
EBITDA"), net income excluding adjustments, net cash and free cash flow.

Vonage uses adjusted EBITDA as a principal indicator of the operating
performance of its business.

Vonage believes that adjusted EBITDA permits a comparative assessment of its
operating performance, relative to its performance based on its GAAP results,
while isolating the effects of depreciation and amortization, which may vary
from period to period without any correlation to underlying operating
performance, of share-based expense, which is a non-cash expense that also
varies from period to period, of loss from abandonment of software assets due
to the one-time, non-cash write-off of our investment in the Amdocs billing
and ordering system that experienced development issues, of one-time
acquisition related costs, and of net loss attributable to our noncontrolling
interest in our Brazilian joint venture.

The Company provides information relating to its adjusted EBITDA so that
investors have the same data that the Company employs in assessing its overall
operations. The Company believes that trends in its adjusted EBITDA are
valuable indicators of the operating performance of the Company on a
consolidated basis and of its ability to produce operating cash flow to fund
working capital needs, to service debt obligations, and to fund capital
expenditures.

The Company has also excluded income tax expense, loss from abandonment of
software assets, and acquisition-related costs from its net income (loss).
The Company believes that excluding these item will assist investors in
evaluating the Company's operating performance and in better understanding its
results of operations as income tax expense does not reflect the taxes that we
pay during the periods reported due to the availability of significant net
operating losses, loss from abandonment of software assets was due to a
one-time, non-cash write-off, and one-time acquisition-related costs.

Vonage uses net cash as a measure of assessing leverage, as it reflects the
gross debt under the Company's credit agreements and capital leases less cash
available to repay such amounts. The Company believes that net cash is also a
factor that third parties consider in valuing the Company.

Vonage considers free cash flow to be a liquidity measure that provides useful
information to management about the amount of cash generated by the business
that, after the acquisition of equipment and software, can be used by Vonage
for debt service and strategic opportunities. Free cash flow is not a measure
of cash available for discretionary expenditures since the Company has certain
non-discretionary obligations such as debt service that are not deducted from
the measure.

The non-GAAP financial measures used by Vonage may not be directly comparable
to similarly titled measures reported by other companies due to differences in
accounting policies and items excluded or included in the adjustments, which
limits its usefulness as a comparative measure. These non-GAAP financial
measures should be considered in addition to results prepared in accordance
with GAAP, but should not be considered a substitute for, or superior to, GAAP
results.

Vonage defines adjusted EBITDA as GAAP income (loss) from operations excluding
depreciation and amortization, share-based expense, and loss from abandonment
of software assets, acquisition related costs, and net loss attributable to
our noncontrolling interest in our Brazilian joint venture.

Vonage defines net income excluding adjustments, as GAAP net income (loss)
excluding income tax expense, loss from abandonment of software assets, and
acquisition-related costs.

Vonage defines net cash as the current and long-term portion of notes payable
and capital lease obligations less unrestricted cash.

Vonage defines free cash flow as net cash provided by operating activities
minus capital expenditures and acquisition and development of software assets.

Conference Call and Webcast

Management will host a webcast discussion of the quarter on Wednesday,
November 6, 2013 at 10:00 AM Eastern Time. To participate, please dial (877)
359-9508 approximately 10 minutes prior to the call. International callers
should dial (224) 357-2393. A replay will be available approximately two hours
after the conclusion of the call through November 12, 2013, and may be
accessed by dialing (855) 859-2056. International callers should dial (404)
537-3406. The replay passcode is: 77182950.

The webcast will be broadcast live through Vonage's Investor Relations website
at http://ir.vonage.com. Windows Media Player or RealPlayer is required to
listen to this webcast. A replay will be available shortly after the live
webcast.

Safe Harbor Statement

This press release contains forward-looking statements regarding growth
priorities, including new products and related investment, gross line
additions and net lines, revenues, churn, financial resources, the Company's
stock repurchase plan, capital and software expenditures, and the acquisition
of Vocalocity. In addition, other statements in this press release that are
not historical facts or information may be forward-looking statements. The
forward-looking statements in this release are based on information available
at the time the statements are made and/or management's belief as of that time
with respect to future events and involve risks and uncertainties that could
cause actual results and outcomes to be materially different. Important
factors that could cause such differences include, but are not limited to: the
competition the Company faces; the Company's ability to adapt to rapid changes
in the market for voice and messaging services; the Company's ability to
retain customers and attract new customers; the Company's ability to establish
and expand strategic alliances; governmental regulation and related actions
and taxes in the Company's international operations; increased market and
competitive risks, including currency restrictions, in the Company's
international operations; risks related to the acquisition or integration of
future businesses or joint ventures; including the risks related to the
acquisition of Vocalocity; the Company's ability to obtain or maintain
relevant intellectual property licenses; intellectual property and other
litigation that have been and may be brought against the Company; failure to
protect the Company's trademarks and internally developed software; security
breaches and other compromises of information security; the Company's
dependence on third party facilities, equipment, systems and services; system
disruptions or flaws in the Company's technology and systems; uncertainties
relating to regulation of VoIP services; liability under anti-corruption laws;
results of regulatory inquiries into the Company's business practices;
fraudulent use of the Company's name or services; the Company's ability to
maintain data security; the Company's dependence upon key personnel; the
Company's dependence on the Company's customers' existing broadband
connections; differences between the Company's service and traditional phone
services, including the Company's 911 service; restrictions in the Company's
debt agreements that may limit the Company's operating flexibility; the
Company's ability to obtain additional financing if required; any
reinstatement of holdbacks by the Company's vendors; the Company's history of
net losses and ability to achieve consistent profitability in the future; the
Company's available capital resources and other financial and operational
performance which may cause the Company not to make common stock repurchases
as currently anticipated or to commence or suspend such repurchases from time
to time without prior notice; and other factors that are set forth in the
"Risk Factors" section and other sections of Vonage's Annual Report on Form
10-K for the year ended December31, 2012, as well as in the Company's
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. While the
Company may elect to update forward-looking statements at some point in the
future, it specifically disclaims any obligation to do so, and therefore, you
should not rely on these forward-looking statements as representing the
Company's views subsequent to today.

(vg-f)

SOURCE Vonage Holdings Corp.

Website: http://www.vonage.com
Contact: Vonage Investor Contact: Leslie Arena, 732.203.7372,
leslie.arena@vonage.com, or Vonage Media Contact: Jo Ann Tizzano,
732.365.1363, joann.tizzano@vonage.com
 
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