Profitability eludes ShoreTel in fourth quarter

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Profitability eludes ShoreTel in fourth quarter

Alex Scroxton

IP telephony vendor ShoreTel has again capitalised on high levels of demand for cost-effective products during the downturn, with its Q4 sales up 30% year-on-year to $42.2m, but was unable to convert this growth to profits, sinking to a GAAP net loss of $3.7m, compared to a loss of $700,000 this time last year.

Full-year sales reached a record high of $148.5m, up 10%, while GAAP net loss was $12.8m, including $10.7m in stock-based compensation expenses.

CEO John Combs, who announced last month his intention to leave the company he has run for six years, said the company was ending the financial year on a high note, with a particularly strong international sales book.

"The industry is a different place today than it was only a year ago, and ShoreTel is benefiting from its foresight to begin to increase investments strategically in distribution development, product development, as well as branding and lead generation," he said.

"These effots have been successful, as shown by our broad-based revenue growth and record-high gross margin in the fourth quarter," added Combs.

ShoreTel provided no guidance on how the hunt for Combs' successor is going, but the pressure will be on his replacement to address the vendor's ongoing profitability issues.


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