VoIP Announces Second Quarter Results.

ORLANDO, Fla. -- VoIP, Inc. (OTCBB: VOIC), a leading provider of turnkey Voice over Internet Protocol communications solutions, today announced results for the second quarter and six months ended June 30, 2007.

"This quarter was one of building the business - paving the way for future growth," said Anthony J. Cataldo, VoIP, Inc.'s Chairman and CEO. "We executed according to plan and, as recently reported, saw July revenues increase 59% sequentially from June to approximately $852,000, primarily reflecting the 47% improvement in total termination minutes of use on our network. In addition, the average price per minute charged to our customers rose approximately 15% sequentially. In August, we are experiencing even greater traffic over our network, and expect revenue for the month to climb well over $1 million, with a corresponding increase in total termination minutes.

"Going forward, we will look to drive margin expansion as we continue to leverage our state-of-the-art network to increase minutes, streamline our operations, and rapidly grow the business," Mr. Cataldo continued. "Having completed the initial investment in our infrastructure, we are now positioned to service over 50 million households and businesses, offering improved quality and service to our clients nationwide. During the remainder of 2007, we plan to further build out the network, which will enable us to service over 200 million subscriber and enterprise lines by year end - with the most reliable platform in the industry.

"In addition, the recent completion of our reverse stock split allows the Company to attract a wider audience of investors who can appreciate our rapidly-evolving story; and at the same time, we have reduced the Company's debt, improved our balance sheet and provided for increased financial flexibility, as we finalize plans to provide capital for future growth. We are encouraged by our increasing traffic and improving fundamentals, and we expect our operations to post strong growth during the second half of 2007 - positioning VoIP to truly become the leading provider of internet-enabled communications in the U.S."

Financial Results

Revenue for the second quarter was $1.9 million, as compared with $2.0 million for the same period in 2006. The negative gross profit of $456 thousand (23% of revenues) in 2006 reflects costs paid to third party vendors that exceeded the revenues we charged to terminate the calls of our customers. For the same period in 2007, our negative gross profit was $126 thousand (7% of revenues). The gross profit improvement in 2007 was achieved by using lower cost routes and negotiating more favorable pricing. The Company's operating loss for the quarter was $5.1 million, versus a loss of $6.8 million for the second quarter of last year. Net loss for the second quarter, excluding discontinued operations, was $5.8 million, versus a net loss of $5.0 million for the second quarter of 2006. The 2007 second quarter loss includes $3.5 million in litigation credits and a $0.9 million credit to reflect the fair value of the Company's warrant liability; the 2006 second quarter includes a charge of $4.7 million in relation to the warrants' fair value. Net loss applicable to common stockholders, including discontinued operations, for the second quarter was $11.9 million, or $(1.60) per share, versus $5.2 million, or $(1.47) per share, for the second quarter of 2006. The Company's weighted average common shares outstanding rose to 7.5 million during the second quarter of 2007 versus 3.5 million last year, with both periods adjusted to reflect the Company's recent 1-for-20 reverse stock split.

For the first six months of 2007, VoIP reported revenue of $3.6 million versus $4.2 million in the same period last year. The negative gross profit of $1.6 million (39% of revenues) in 2006 reflects costs paid to third party vendors that exceeded the revenues we charged to terminate the calls of our customers. For the same period in 2007, our negative gross profit was $477 thousand (13% of revenues). The gross profit improvement in 2007 was achieved by using lower cost routes and negotiating more favorable vendor pricing. The operating loss was $9.9 million for the six months ended June 30, 2007, as compared with a loss of $15.7 million in 2006. Net loss for the period, excluding discontinued operations, was $19.9 million, versus a net loss of $17.6 million for the first six months of 2006. The 2007 results include $2.5 million in litigation credits and a $2.7 million increase in the fair value of the Company's warrant liability; the 2006 second quarter includes a credit of $3.4 million in relation to the warrants' fair value. Net loss applicable to common stockholders, including discontinued operations, for the first six months of 2007 was $25.4 million or $(4.10) per share, versus $19.0 million, or $(5.51) per share, for the same period in 2006. The Company's weighted average common shares outstanding rose to 6.2 million during the first half of 2007 versus 3.5 million last year, with both periods adjusted to reflect the Company's recent 1-for-20 reverse stock split.

For more details, please see the Company's Quarterly Report on Form 10-Q filed with the SEC on August 20, 2007.

About VoIP, Inc.

VoIP, Inc. is a leading provider of turnkey Voice over Internet Protocol (VoIP) communications solutions for service providers, resellers and consumers worldwide. The Company is also a certified Competitive Local Exchange Carrier (CLEC) and Inter Exchange Carrier (IXC). Through its wholly owned subsidiary, VoiceOne Communications, LLC, the Company provides a comprehensive portfolio of advanced telecommunications technologies, enhanced services, broadband products, and fulfillment services to the VoIP and related communications industries. Current and targeted customers include IXCs, CLECs, Internet Telephony and Conventional Telephony Service Providers (ISPs and ITSPs), cable operators and other VoIP Service Providers in the United States and countries around the world. The Company enables these customers to expand their product/service offerings by providing VoIP's nationwide Multi-Protocol Label Switching (MPLS) and other services such as voice termination/origination, e911 emergency call service for VoIP, CALEA, Broadband Voice, IP Centrex and other advanced communications services and technologies. For information on VoIP, Inc. please visit the Company's web site: www.voipincorporated.com.

Safe Harbor Statements about the Company's future expectations and all other statements in this press release other than historical facts, are 'forward-looking statements' within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as that term is defined in the Private Securities Litigation Reform Act of 1995. The Company intends that such forward-looking statements be subject to the safe harbors created thereby. The above information contains information relating to the Company that is based on the beliefs of the Company and/or its management as well as assumptions made by and information currently available to the Company or its management. When used in this document, the words 'anticipate,' 'estimate,' 'expect,' 'intend,' 'plans,' 'projects,' and similar expressions, as they relate to the Company or its management, are intended to identify forward-looking statements. Such statements reflect the current view of the Company regarding future events and are subject to certain risks, uncertainties and assumptions, including the risks and uncertainties noted. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove to be incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected, intended or projected. In each instance, forward-looking information should be considered in light of the accompanying meaningful cautionary statements herein. Factors that could cause results to differ include, but are not limited to, successful performance of internal plans, the impact of competitive services and pricing and general economic risks and uncertainties.

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