Mitel hits cloud milestone, breaks records in 2014 Q4

Mitel hit a major milestone and set new benchmarks for financial results in its fourth quarter, CEO Rich McBee said after the company released its latest earnings report Thursday.

The business communications company surpassed the one-million mark in installed cloud seats at 1,039,000, which represented an 83 per cent jump year-over-year.

Mitel (TSX:MNW) posted fourth-quarter revenue of $301.4 million and total 2014 revenue of $1.1 billion, with record quarterly EBITDA of $57.9 million and annual EBITDA of $166.9 million.

Fourth-quarter revenue was up 108 per cent, primarily due to the company’s acquisition of Aastra Technologies in January 2014, but pro forma fourth-quarter revenue – assuming Aastra had already been part of Mitel a year earlier – was down 5.6 percent, due mostly to currency changes.

“Our sales performance speaks to the fact that our broad portfolio of business communications solutions – premise, cloud and hybrid – is able to address the diverse and evolving needs of customers in markets around the world,” Mr. McBee said in a statement.

The company also posted record non-GAAP earnings per share of 36 cents for the quarter and 99 cents for the year.

The company said integration synergies, cost reductions and a good product mix contributed to a pro forma gross margin of 55.1 per cent for the quarter, compared with 51.5 per cent for the fourth quarter of 2013.

Mitel installed 177,000 new cloud seats in the fourth quarter, 24,000 of them recurring. On Dec. 31, 2014, it had 269,155 recurring cloud seats, up 122 per cent from the year before.

Mr. McBee said this positions the company to continue its momentum in 2015.

“Our foundation is solid, our growth initiatives are delivering, our team is running at full speed, and we are seeing the results of the full scale and power of the new Mitel,” he said.

Mitel is projecting revenue for the first quarter of 2015 of between $245 million and $265 million, which reflects continuing currency volatility. The company expects its gross margin to be between 52.5 per cent and 54 per cent, its adjusted EBITDA margin percentage to be between 11.5 per cent and 13 per cent, and its non-GAAP earnings to be between 13 and 16 cents per share.