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ShoreTel Q1 revenues up but UK and EMEA may struggle to hit 20% growth target

Alex Scroxton

Shoretel added more than 1,000 customers and increased its global market share in the Pure IP telephony market as Q1 revenues rose 22%.

Gross margin for the quarter ending 30 September was down slightly at 65.9% and the company reported a GAAP loss of $4.6m, compared to a loss of $3.6m in the corresponding quarter of 2010.

Sales were down 5% sequentially on the previous quarter. In a conference call, transcribed by Seeking Alpha, CEO Peter Blackmore said there had been "a clear lengthening of the sales cycle, which we believe is driven by the uncertain macro economic environment", In addition, sales from regional partners had declined after a record fourth quarter.

He predicted growth of 20% for the company's fiscal year of 2012 but admitted the UK and EMEA were "a little less hopeful, given the macroeconomic conditions there".

Blackmore said the company expected "to continue to capture market share and grow revenue throughout the year".

ShoreTel's share of the global Pure IP telephony market increased from 4% to 5% and its US share rose from 8% to 10.2%. It is the third largest player in the US Enterprise IP telephony market.


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