Virgin put the improvement down, despite an ongoing spat with BSkyB and the loss of channels like Sky One, to the appeal of its video-on-demand service and a promotional reduction in pricing for its digital video recorder offering V+.
Average monthly views of its video-on-demand service were up 45% on the third quarter to 33m, while it added 72,200 V+ subscribers taking its total V+ customers to 262,400, a long way behind Sky's 3.1m Sky+ customers.
It also added 106,200 broadband subscribers, taking its total to 3.7m. This includes 3.4m using its cable network and 300,000 people off the network.
The proportion of customers signed up to its 'triple-play' offering of TV, broadband and home phone rose to a record 49.5%, while churn among customers on its cable network fell to 1.4% per month, the lowest since the company's creation with the NTL/Telewest/Virgin Mobile merger.
Neil Berkett, acting chief executive of Virgin Media, said: "Our fourth quarter results represent our best operational performance since the cable merger in early 2006.
"We are achieving good results from our stated strategy of exploiting our superior network capability to drive broadband growth and deliver the next generation of personalised on-demand content, as well as focusing on reducing churn."
However, Virgin made a net fourth quarter loss of £163.2m on revenues of £1.05bn.
Its full year net loss was £463.5m, which was reduced from £533.9m in 2006. Annual revenues for 2007 were £4.07bn, up 13% from 2006.
Last week Virgin 1 debuted the hit US show 'Terminator: the Sarah Connor Chronicles' to 642,000 viewers giving the channel its biggest audience to date.
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