ShoreTel, one of the most popular providers of high-tech solutions for simple communication services, recently announced their financial results for the 2017 third quarter (ending on March 31st). Following the careful change towards hosted revenue solutions, the total revenue for the third quarter was around $87.7 million, a great boost from the $85.2 million that the company achieved during the third quarter of 2016, but a small drop from the $88 million earned during the second quarter of 2017.
ShoreTel’s Third Quarter: The Lows
The “GAAP” net loss for the third quarter of 2017 was approximately $2.9 million, amounting to around $0.04 per share. However, it’s hard to see this as much of a loss when you compare it to the GAAP net loss of around $8.7 million that the company encountered during the third quarter of 2016. In fact, that equals out at around $0.13 per share. Although it remains exactly the same as the GAAP net loss in the prior quarter, that’s still not a huge fall for ShoreTel.
Additionally, Non-GAAP net income, the income that covers things like the amortisation of acquisition-related solutions, stock-based compensation charges, and tax charges for the 2017 third quarter came out at around $0.6 million. Again, this compares to a much higher net loss of around $3.9 million during the third quarter of the 2016 fiscal year.
The product revenues in the third quarter for 2017 had fallen by around 10% in the third quarter, to around $30.5 million, and they’re down by around 10% year-over-year. Although, the gross product margin for the third quarter of 2017 came out at around 67.4% during the third quarter, compared to around 67.1% in the same quarter for 2016.
ShoreTel’s Third Quarter: The Highs
Now that we’ve covered the lows, let’s move onto some of the highs that ShoreTel have experienced during the third quarter of 2017. Hosted revenues of around $28.3 million during the third 2017 fiscal quarter were up by around 17% year-over-year, and around 4% sequentially. Additionally, the GAAP hosted gross margin for the third quarter of 2017 came out at around 54.6%, compared to only 49.4% the year before.
Non-GAAP hosted margin was also around 57.3% in 2016’s third quarter, compared to around 53.3% during the third quarter of 2016. The complete number of installed seats for customers had also increased by 24% over 2016 to around 271,000, while hosted revenue churn came to around 5.1% annualised in 2017’s third quarter. Services and support revenues were also up 2% year-over-year in 2017, measuring at $18.9 million.
The cash flow from third-quarter operations for 2017’s third quarter was around $2.7 million, compared to only $2.1 million during the third quarter of 2016. Additionally, as per the 31st of March this year, ShoreTel has $104.9 million in cash, short-term investments, and extras – all that with no debt outstanding.
According to the CEO and president of ShoreTel, Don Joos, the cash flow, profitability and total revenue for operations are showing year-over-year improvements. The company are continuing to identify new ways of improving development and growth, boosting shareholder value.
