Big-ticket deals help ShoreTel pass $200m mark

Comms vendor still on high-growth track but continues to operate at a loss

ShoreTel's revenue soared past the $200m (£123m) mark in FY11, but the company is still struggling to rein in its operating losses.

The telephony vendor attributed its growth to a high win-to-pitch ratio and greater levels of success in bagging big contracts.

Fourth-quarter sales, covering the three-month period to the end of June, rose more than a third year on year to $56.5m. Product sales stood at $45.3m, while services and support chipped in $11.2m to the top line. Operating losses for the quarter narrowed from $3.7m in Q4 2010 to $1.6m.

For the full year, sales spiked 35 per cent annually to $200.1m, while operational losses narrowed by 6.7 per cent to $12.17m.

In a conference call with investors, transcribed by Seeking Alpha, ShoreTel chief executive Peter Blackmore claimed revenue from $100,000-plus deals had grown 43 per cent year on year during Q4 2011.

"Our growth is driven primarily by our outstanding win rate, coupled with our ability to steadily attain a higher consideration rate," he added. "This is the result of strengthening on go-to-market capability with our partner channel and building ourselves in marketing activities."

Blackmore stressed the importance of the vendor's recently released Mobility line of routers. ShoreTel will be looking to ramp up sales of the technology through skilled channel partners operating in the PBX space, said Blackmore.

"ShoreTel Mobility is particularly unique in that it is PBX-agnostic," he added. "We will support this effort with a new dedicated sales team that will target large opportunities and work with our Mobility partners to successfully fulfil and install these systems.

"To take advantage of this opportunity, we also need to recruit and train partners who can sell and support our Mobility unified communications solution. In particular, we want partners who can successfully sell into the Cisco and Avaya install base as well as sell Mobility to existing ShoreTel customers."