ShoreTel CEO pledges profitability by Q4


ShoreTel CEO pledges profitability by Q4

Alex Scroxton

IP telephony vendor ShoreTel returned a GAAP net loss for its fiscal Q2, but an otherwise sound quarterly performance coupled with healthy revenue figures has led new CEO Peter Blackmore to say the company will be profitable by Q4.

"The investments the company has made over the past five quarters have clearly driven growth," he said. "I believe that we need to continue to invest to further drive that in order to scale our business.

"We are planning profitability in our quarter four," Blackmore added, "and we want to meet profitability going forward."

The data show that ShoreTel has consistently failed to turn a GAAP net profit after exceptional items for eight straight quarters, and for the three months to the end of December it made a GAAP net loss of $3.7m.

This figure following stock-based compensation expenses of $2.6m and some other items, and was down from losses of $2.5m this time last year.

Without taking GAAP into account, a net profit of $300,000 booked this time last year fell to a net loss of $1m following the acquisition of Agito Networks in October.

However, ShoreTel posted record total sales of $47.7m (£29.9m), which rose 8% sequentially and 35% year-on-year, and according to CFO Mike Healy added 1,000 customers during the quarter and saw growing traction in the enterprise business.

As of 31 December, ShoreTel had $105.4m in cash, cash equivalents and long-term investments, having generated $1.1m in cash from operations while blowing through $11.4m to buy Agito.

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