Polycom Reports First Quarter 2011 Earnings

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Polycom, Inc., a global leader in unified communications (UC), reported its earnings for the first quarter that ended on March 31, 2011.

First quarter 2011 consolidated net revenues were a record US$344 million, compared to US$276 million for the first quarter of 2010. GAAP net income for the first quarter of 2011 was US$34 million, or 38 cents per diluted share, compared to US$5 million, or 6 cents per diluted share, for the same period last year. Non-GAAP net income for the first quarter of 2011 was US$43 million, or 48 cents per diluted share, compared to non-GAAP net income of US$25 million, or 29 cents per diluted share, for the first quarter of 2010.

“Record results for the first quarter were driven by broad-based customer demand for Polycom’s leading UC solutions across all major geographies,” said Andrew Miller, Polycom president and CEO. “We are particularly pleased with the traction Polycom’s UC strategy is gaining within our partner and customer communities, as well as the outstanding results we continue to achieve in emerging markets such as China and India.”

“In summary, we believe the UC industry is at an inflection point and we are uniquely positioned to benefit directly from the fundamental shift in the way people communicate. The rapid adoption of video, the pervasive use of mobile devices, and the emerging use of the cloud to deliver UC solutions are driving our strategy as principal catalysts for our business. As the only independent provider of scale, we believe Polycom is in an excellent position to capture this momentum and deliver strong revenue growth and expanding operating margins in the future,” concluded Miller.

“Driven by record revenues, strong gross margins, and operating cost management, Polycom’s operating income grew both sequentially and year-over-year in the first quarter,” said Michael Kourey, Polycom executive vice president, finance and administration, and CFO. “This is especially noteworthy given typical first quarter seasonality, as these results illustrate the demand for Polycom’s UC solution and the margin growth opportunity for our business. As a result of our strong operating results and effective working capital management, we generated positive operating cash flow of US$46 million — a record for a Q1, and we exited the first quarter with US$539 million in cash and investments and no debt.”