ShoreTel Ends Full Year 2011 on a High Note
It is great to report that we ended our fiscal year on a high note and that we enter Fiscal 2012 with positive momentum.
The investments we have made in our sales channel, product development and branding over the past several quarters have helped us close fiscal 2011 strongly. In the fourth quarter, we recorded revenues of $56.5 million, which is slightly above the high end of our guided range of $53 to $56 million and once again, an all-time high for ShoreTel. This represents a 10 percent increase sequentially over the previous quarter and a 34 percent improvement over fourth quarter of fiscal 2010 revenues of $42.2 million. Non-GAAP gross margins were 66.3 percent, and our non-GAAP net income was $1.3 million, or 3 cents per share, which represents a solid improvement over last year’s numbers.
For the year, we were pleased to cross the $200 million dollar threshold for fiscal 2011 revenues, which were up 35 percent over last year’s revenues of $148.5 million. Non-GAAP gross margins for the fiscal year were 67.3 percent, up from 65.6 percent in fiscal 2010. We were pleased to deliver a non-GAAP profit of $681 thousand, or a penny per share for the year, as we continue to balance ongoing investments in our business with the desire to show leverage in our model.
Looking at the marketplace, we see continued evidence of market share gains, both worldwide and in the United States. According to Synergy Research’s most recently published data based on revenue, in the March 2011 quarter ShoreTel increased its share of the worldwide pure IP telephony market from 4 percent in the December quarter to 4.5 percent in the March quarter, a substantial quarterly improvement. Additionally, the company continues to command a greater share of the U.S. market. In the pure IP telephony market, we’ve seen a solid improvement in our market share from 8.4 percent in the December 2010 quarter to 9.1 percent in the March 2011 quarter. In fact, ShoreTel grew revenue by 35 percent over the past four quarters while the U.S. Enterprise IP telephony market grew 8 percent. This growth makes ShoreTel the fastest-growing major vendor in the Enterprise IP telephony market this year by a significant margin.
Several highlights of the fourth quarter.
- Overall, we saw strong growth across our various segments, channels and verticals.
- We continue to enjoy increasing success in selling to enterprise customers. Revenue from our major accounts group was strong this quarter, up 20%, with billings from transactions over $100,000 increasing 43 percent from the fourth quarter of last year. We are pleased with the increasing traction with enterprise customers deploying more than 500 licenses.
- Our international business experienced strong improvement, with revenue outside of the U.S. up 13 percent from Q3. This was driven primarily by returned strength in Australia, which last quarter experienced delays in closing certain deals. As expected, these transactions were finalized in Q4 and helped to deliver the best quarter in the company’s history in that region.
I am aware that there is some uncertainty in the macro economic situation but ShoreTel’s momentum is strong as evidenced by the growth this quarter and for the fiscal year. The year was also a year of tremendous change as we built a solid foundation to enable us to grow the company to the next level. Most of our competitors face a variety of distraction which provides an opportunity for a focused challenger like ShoreTel to step in and win market share which clearly we have been doing.