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ShoreTel Q4 revenue $88.6 million

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Staff writer ▼ | August 11, 2014
ShoreTel
Record quarter   ShoreTel year ends with very good results

ShoreTel announced financial results for its fiscal fourth quarter and fiscal year 2014, which ended June 30, 2014. For Q4 2014, total revenue was a record $88.6 million, an increase of 4 percent compared to Q4 2013.

Non-GAAP net income, which excludes stock-based compensation charges, amortization of acquisition-related intangibles, other charges and related tax adjustments, for the fourth quarter of fiscal year 2014, was a record $4.9 million, or $0.08 per diluted share. This compares with a non-GAAP net income of $3.4 million, or $0.06 per share, in the fourth quarter of fiscal 2013.

GAAP net income was $2.1 million, or $0.03 per diluted share, in the fourth quarter of fiscal 2014, compared with a GAAP net loss of $2.3 million, or $0.04 per share, in the fourth quarter of fiscal 2013.

Recurring revenues, which consist of cloud monthly recurring revenues and support revenues, represented 38 percent of total revenue in the fourth quarter of fiscal 2014 and reached an annualized value of $136 million; an increase of 19 percent compared to the fourth quarter of fiscal 2013.

Non-GAAP total gross margin, which excludes stock-based compensation charges, amortization of acquisition-related intangibles and other charges, for the fourth quarter of fiscal year 2014, was 61.1 percent, compared with 61.4 percent in the year-ago period. GAAP gross margin for the fourth quarter of fiscal year 2014 was 59.6 percent, compared with 59.9 percent in the fourth quarter of fiscal year 2013.

Hosted revenues of $24.1 million were up 25 percent year-over-year and 6 percent sequentially. Non-GAAP hosted gross margin was 43.7 percent in the fourth quarter of fiscal 2014, compared with 39.1 percent in the fourth quarter of fiscal 2013. GAAP hosted gross margin for the fourth quarter of fiscal year 2014 was 39.4 percent, compared with 34.9 percent in the fourth quarter of fiscal year 2013.

The total number of installed customer seats increased 30 percent over the fourth quarter of fiscal 2013 to approximately 151,000. Revenue churn was approximately 5 percent annualized in the fourth quarter of fiscal 2014 and continued to reflect an industry low metric.

Product revenues of $47.3 million were down 7 percent year-over-year, but up 9 percent sequentially. Non-GAAP product gross margin was 64.6 percent in the fourth quarter of fiscal 2014, compared with 65.9 percent in the fourth quarter of fiscal 2013. GAAP product gross margin for the fourth quarter of fiscal year 2014 was 64.0 percent, compared with 65.4 percent in the fourth quarter of fiscal year 2013.

Support and services revenues of $17.2 million were up 13 percent year-over-year and 5 percent sequentially. Non-GAAP support and service gross margin was 75.9 percent in the fourth quarter of fiscal 2014, compared with 74.3 percent in the fourth quarter of fiscal 2013. GAAP support and service gross margin for the fourth quarter of fiscal year 2014 was 75.4 percent, compared with 73.2 percent in the fourth quarter of fiscal year 2013.

As of June 30, 2014 the company had $56.1 million in cash, cash equivalents and short-term investment and no outstanding debt.

Recurring revenues, which consist of cloud monthly recurring revenues and support revenues, represented 38 percent of total revenue in fiscal 2014 compared to 34 percent in fiscal 2013.

Non-GAAP total gross margin, which excludes stock-based compensation charges, amortization of acquisition-related intangibles and other charges, for the fiscal year 2014, was 61.1 percent, compared with 62.0 percent in fiscal year 2013. GAAP total gross margin for the fiscal year 2014 was 59.4 percent, compared with 60.1 percent in the fiscal year 2013.

Hosted revenues for fiscal 2014 were $89.1 million, up 27 percent compared to fiscal 2013. Non-GAAP hosted gross margin was 42.0 percent in fiscal 2014, compared with 42.5 percent in fiscal 2013. GAAP hosted gross margin for the fiscal year 2014 was 37.7 percent, compared with 36.6 percent in the fiscal year 2013.

Product revenues for fiscal 2014 were $185.0 million, down 1 percent compared to fiscal 2013. Non-GAAP product gross margin was 65.2 percent in fiscal 2014, compared with 66.3 percent in fiscal 2013. GAAP product gross margin for the fiscal year 2014 was 64.6 percent, compared with 65.7 percent in the fiscal year 2013.

Support and services revenues for fiscal 2014 were $65.7 million, up 15 percent compared to fiscal 2013. Non-GAAP support and service gross margin was 75.2 percent in fiscal 2014, compared with 72.2 percent in fiscal 2013. GAAP support and service gross margin for the fiscal year 2014 was 74.3 percent, compared with 70.9 percent in the fiscal year 2013.

Non-GAAP net income for the fiscal year 2014, which excludes stock-based compensation charges, amortization of acquisition-related intangibles, other charges and related tax adjustments, was a record $14.7 million, or $0.23 per diluted share. This compares with a non-GAAP net loss of $1.6 million, or $0.03 per share, in fiscal 2013. GAAP net loss in fiscal 2014 was $1.0 million, or $0.02 per share, compared with a GAAP net loss of $25.7 million, or $0.44 per share in fiscal 2013.


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