This morning, ShoreTel revised its expectation for fiscal 2017 hosted revenue growth, offering lower guidance in the 21-24% range. According to the release, "certain aspects of the business integration and revenue ramp associated with the Corvisa acquisition are not progressing as originally anticipated and are thus impacting our previous near term assumptions." However, the company's fiscal Q4 projections remain intact.
Just before Christmas, ShoreTel announced the acquisition of Corvisa. The purchase closed during January, bringing in 95 employees and costing them $8.5M. At the time they were looking ahead to fiscal 2017 hosted revenue growth of around 30%. But things apparently haven't gone that well thus far. Just what they uncovered or stumbled on remains unclear, although the company's CEO is scheduled to talk about the subject at the J.P. Morgan TMT Conference later today.
The hosted UC marketplace has seen a lot of M&A activity in recent years, and ShoreTel's winter acquisitions of Corvisa and M5 were aimed at giving the company footholds in Europe and Australia. The market segment has been seeing solid growth for some time, and many providers have been seeking to add scale to their business models. ShoreTel