Mitel reports record 2015 Q4 revenues

Mitel is “firing on all cylinders” heading into 2016, CFO Steve Spooner said after the Ottawa communications system provider reported record 2015 fourth-quarter revenues Thursday.

While its enterprise business revenues dropped from $271 million in the last quarter of 2014 to $233.1 million a year later, the company made up for it with a 44 per cent jump in its cloud business and a 73 per cent rise in its mobile business, thanks to last year’s acquisition of Mavenir.

Overall, Mitel’s fourth-quarter revenue was $335.7 million, up seven per cent from the $313.8 million it posted a year ago.

With earnings of 29 cents per share and a record EBITDA of $62.2 million, Mitel exceeded quarterly expectations in both areas.

“We’re thrilled to report the results that we posted today,” Mr. Spooner said. “We reported record earnings, strong cash position. We’re just wrapping up a terrific Mobile World Congress show over in Barcelona. We just feel that the business is firing on all cylinders.”

While Mr. Spooner called Mitel’s enterprise business “highly profitable,” he conceded users continue to look to migrate to newer technologies.

“It’s important that not only can we offer them industry-leading and enterprise applications and products, but also cloud solutions and mobile solutions,” he said. “We really feel that we have a unique combination of capabilities that is quite unique in the industry and have positioned Mitel extremely well to get market share and grow our business.”

CEO Rich McBee said the fourth-quarter results “lay the foundation for Mitel’s ongoing transformation.”

A big part of that transformation lies in the company’s recent announcement of its investment in a new initiative focused on 5G cloud connectivity.

Mitel has always been a technology innovator, Mr. Spooner said, so the firm felt it important to be on the “front end,” even though many in the industry feel 5G is still several years away from being widely available to consumers.

“The feedback that we received at Mobile World Congress at Barcelona this week has been a number of service providers excited to see Mitel getting at the front end of this and expressing interest in working with us,” he said.

Former Mavenir CEO Pardeep Kohli, who had been Mitel’s president of its mobile mivision, now becomes president of Mitel 5G Cloud Connectivity. Industry veteran BG Kumar becomes mobile president.

5G is all about a “very, very high-speed network,” Mr. Spooner said, one capable of handling predictions of 50 billion connected devices by 2020.

“With a world population of seven and a half billion, it indicates the scale of the potential,” he said.

It’s early days for the project, Mr. Spooner said, with a small core team that he expects to “ramp up over time.”

Mitel is also investing in an in-house incubator designed to solve specific customer needs. It recently announced its first partnership under the project with FieldAware, a Chicago-based service industry software provider.

Mr. Spooner said FieldAware “wanted to embed mobile communications and collaboration opportunities within our software offering.”

With a lot of other interest in the facility, Mr. Spooner said the company is happy with the incubator’s “early traction.”

Mitel shares were trading down three per cent in late day trading on the Toronto Stock Exchange, at $9.41.