CSPs, Mergers and Acquisitions

ShoreTel Not Sold But Strategic Review Continues

ShoreTel (SHOR) announced a smaller-than-expected quarterly loss today, and confirmed that a strategic review of the business continues. However, there's still no assurance that a company sale will take place, the company said.

ShoreTel announced in August 2016 that the company had formed a strategic advisory committee to explore potential alternatives -- including a potential company sale. The Company retained J.P. Morgan Securities LLC as its financial advisor and Fenwick & West LLP as its legal counsel to assist the review process. Although ChannelE2E has speculated about potential ShoreTel buyers, there hasn't been much chatter about a potential company sale.

Fast forward to present day and ShoreTel's latest quarterly results had some bright spots. Total revenues dipped to $86.3 million, down from $90 million for the corresponding quarter last year. But the company's $5.6 million net loss was smaller than Wall Street expected.

The voice and unified communications company continues to accelerate from products toward recurring hosted revenues. Indeed, hosted revenues were $35.6 million in the quarter, up 21 percent year-over-year. Product revenues fell 23 percent to $31.8 million.

ShoreTel also maintains a strong balance sheet -- including $103.5 million in cash and no outstanding debt.

The ShoreTel results come one day after rival 8x8 Inc. announced stronger-than-expected revenue growth for its various hosted unified communications services. 8x8 showed particularly strong midmarket channel momentum, CEO Vik Verma said during an earnings call yesterday.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.