Polycom CEO Steps Down as Second Quarter Revenues Slide
Polycom CEO resigns amid allegations of expense irregularities; earnings falter in fiscal Q2, though some bright spots remain.
The sudden resignation of Polycom's CEO leaves the unified communications vendor in need of new leadership.
Andy Miller has resigned after a three-year stint as Polycom CEO after irregularities were found in his expense submissions. Miller's resignation was made public when Polycom reported its second quarter fiscal 2013 earnings.
"While this situation is certainly disappointing, it should not be viewed as a reflection of the financial integrity of the company or the integrity of our nearly 4,000 employees worldwide," Polycom's chairman and interim CEO, Kevin Parker, said during Polycom's earnings call. "I can assure you the board's continuing commitment to the Polycom strategy and to our customers, partners and employees."
For the quarter, Polycom reported revenue of $345 million, a 4 percent year-over-year decline. Moving forward, Polycom provided third quarter guidance for revenue ranging from $330 million to $340 million.
Polycom does expect future growth from its RealPresence CloudAXIS product. CloudAXIS entered into production in April as a technology that aims to make online collaboration easier. The CloudAXIS suite is an integration platform built on top of Polycom's RealPresence technology. It enables Skype, Facebook and GoogleTalk conversations and users. Polycom first announced CloudAXIS as part of a big wave of new products in October 2012.
One key area of growth for Polycom is the company's integration and partnership with Microsoft's Lync unified communications offerings. Parker noted that the Lync business itself has tracked at 30 percent year-over-year growth rates for the last several quarters from Microsoft's perspective. Polycom's Lync-related revenue has mapped very closely to Microsoft's growth.
"So we experienced very strong double-digit year-over-year growth in our Lync-related revenue, and it influenced revenue for the June quarter," Parker said.
In considering Polycom's wide field of competition, Parker noted that Cisco stands out as the company's top day-to-day competitor.
"At kind of the mid to lower end, we see LifeSize Video as well as others," Parker said. "In the voice space, we see companies like snom and Astra. "
Overall, Polycom's new interim CEO remains optimistic about his company's prospects.
"We believe voice and video collaboration is a promising long-term growth industry," Parker said "I've personally been associated with Polycom as a member of the Board since 2005, and I have a great affinity for our team, our products and our customers."
Parker admitted that Miller's exit is a tough circumstance, but he's not too worried.
"Undoubtedly, it's a significant change when you have to have a leadership change like that, but, I think, beyond Andy's impact, I think the team is very, very committed," Parker said. "We've got a terrific leadership team and a terrific employee group that I think will continue to be such going forward."
Sean Michael Kerner is a senior editor at Enterprise Networking Planet and InternetNews.com. Follow him on Twitter @TechJournalist.