The global leader in enterprise communications, Mitel, recently announced their financial results for the second quarter of the year, ending on the 30th of June 2017. During this quarter, Mitel experienced significant acceleration from its customers into hosted cloud services and solutions. The new trend appeared in the form of a record level of cloud-based bookings for the company, according to the Chief Executive Officer, Rich McBee.
In the second quarter of the year, Mitel initiated a range of organisational changes to accelerate their move-to-the-cloud strategy even further with the consolidation of the separate silos of cloud and enterprise organisations. Although Mitel claims that they feel the benefits of those changes will become more obvious in the upcoming quarters, the brand has already seen some instant improvements in reduced operational expenditures and better customer experience.
Business Highlights for Mitel
Mitel saw a lot of positive changes in the second quarter in 2017. Some of the financial highlights to consider include:
- GAAP Revenues of $238.6 million compared to $260.3 million in 2016
- GAAP Net loss of $0.1 million, compared to $0.9 million in 2016
- Recurring cloud seats grew by approximately 77,000 during the second quarter, and now stand at approximately 665,000
- A US-based food processing company with operations in Central America, Europe, and North America will be deploying Mitel Cloud to support over 4,000 seats
- Mitel has been announced as a Leader for the fourth consecutive year in the Gartner Magic Quadrant for UC
The Business Outlook for Mitel
Mitel set out the following guidance for financial performance for continuing operations regarding the quarter that will end on the 30th of September 2017. It doesn’t include any contributions that might be made according to the upcoming acquisition of ShoreTel, provided that that transaction closes before the 30th of September 2017.
- GAAP Gross Margin Percentage: 53% to 55%
- GAAP Revenues $225 million, to $250 million
- Adjusted EBITDA Percentage: 12% to 17%
- Non-GAAP net income: 7% to 11%
- Diluted Share Count: 122,500,000
The Upcoming Purchase of ShoreTel
Though the upcoming purchase of ShoreTel is sure to have a significant impact on the financial performance of Mitel, it’s worth noting that this acquisition hasn’t been outlined in this particular financial report.
In his comments about the agreement to purchase ShoreTel, Mr. McBee stated that the upcoming consolidation will accelerate the growth strategy for Mitel overall by helping to move the company faster and further towards the growing UCaaS market. As the world of digital transformation continues to evolve and encourage customer demand for cloud-based solutions around the world, the emergence of the combined company will help to deliver a stronger solution for cloud technology and digital scale to take customers into the cloud faster.
