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Poly 3rd Quarter Results Reflects Market Buy-In to its Strategy
by Daniel Newman | February 8, 2021

The News: SANTA CRUZ, Calif.Feb. 4, 2021 /PRNewswire/ — Poly (NYSE: PLT), a global outfitter of professional-grade audio and video technology, today announced third quarter results for the period ended December 26, 2020.

Highlights for the third quarter include:

  • Poly posted record Professional Headset and Video revenues, with unit shipments more than doubling in each category year over year, reflecting the massive shift in the way work is done, where work is done, and the importance of reliable, high-fidelity connectivity.
  • The Company announced the Poly Studio P Series, a new family of sophisticated prosumer video solutions, addressing the growing need for tools that allow professionals to work from anywhere, connect easily using any platform, and enjoy enterprise-grade service and support.
  • The Company also announced Poly Lens Desktop App and Poly+. Poly Lens provides insights and management capabilities for voice, video, and headsets under a single pane of glass, while Poly+ is a personal device service providing 24/7 tech-support, overnight replacement, and advanced troubleshooting tools.
  • The Company generated $31M in operating cash flow, retired $12M of debt, and ended the quarter with $245M in cash and short-term investments, setting the stage for continued de-levering.

Catch the full news release here.

Analyst Note:  Poly has quietly been on quite a run as the shares of the company’s stock reached a 52-week high this past Friday.

The quarter marked a notable shift as the company way outperformed on EPS, delivering $1.47 versus expectations of $.83. Revenue also outperformed coming it at over $485 million well above the $440 million analysts had been looking for. Both serve as an indicator that Poly is gaining momentum with its product roadmap, and with its new leadership under CEO Dave Shull.

Over the past several months I have been more closely tracking Poly, both from a strategy and earnings stand point. The company had hit a bit of a stagnate state as we saw major shifts in the collaboration and communication space impact demand for its headsets and video equipment, however, the pandemic served as an inflection point for the company to reimagine its products, services, and solutions, which seems to be putting the company on the right track.

The leadership change was also an important moment for Poly. Dave Shull, as I mentioned in an earlier research note, comes in with a fresh, outside the industry perspective. Still a strong technology background, but a keen willingness to re-think how Poly goes to market and gains competitive strength and achieves growth amidst collaboration seeing exponential growth.

A big part of this will come down to the company being able to execute on key partnerships. The professional video business is seeing new requirements as work from home becomes a larger long-term part of many employees future work experience. The appliances for better video, and the services and capabilities from Poly prove to be compelling. Furthermore, the partnerships with the likes of Zoom and Microsoft are important and if these relationships gain momentum, there is significant upside for growth.

An overall strong quarter puts Poly into a better position going forward. Fundamentally its growth aids in strengthening its balance sheet, but also the market confidence in its longer term prospects. There will be plenty of competition and challenges for Poly, but this quarter’s results should quiet some of its critics.

Futurum Research provides industry research and analysis. These columns are for educational purposes only and should not be considered in any way investment advice.

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Image: Poly

About the Author

Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. Read Full Bio