Unified comms and cloud vendor ShoreTel has ended its financial year on a high with sales up 39% on both a sequential and year-on-year basis to $78.5m (£50.05m) but posted yet another quarterly net loss.
In its fourth quarter, which closed on 30 June, ShoreTel’s GAAP net loss widened significantly year-on-year to $5m after it took $3m of stock compensation charges and $1.9m of amortisation of acquisition-related intangibles, tax adjustments and other charges.
ShoreTel CFO Michael Healy said that he had “spoken with many investors over the last couple of quarters that strongly urge us to show profit in the premise business” and insisted ShoreTel was awake to the problem. It realigned some headcount resources last month and is planning to cut its R&D budget to around 16.5% of revenue, which is more in-line with the industry average.
The firm is now targeting a “small amount” of operating profit in fiscal 2013 but does not expect the cloud business – acquired in February – to become accretive to earnings in the next 12 months, which will hamper the overall figures.
Nevertheless the M5 Networks cloud comms business is proving a very solid performer for the firm, adding $14.3m of new sales to the balance sheet in the fourth quarter.
ShoreTel is keen to exploit the growth potential that the cloud offers in the UC space, and CEO Peter Blackmore said it will soon be taking steps to present a unified front to both its channel and customers.
This will include the development of a hybrid solution architecture, a rebranding exercise to take place next month, and a new partner programme launching in November. At present it deals with cloud partners on a referral basis.
Said Blackmore: “We will be pushing hard to improve.… And I think the big driver there is improvement in productivity, which we’re working on.
“We made a bold acquisition [and] I think it was a very good move,” he added. “That raw model has got huge leverage as you get going.”
Conference call courtesy: Seeking Alpha