I see about one more transition — we call it a transition quarters, the one that you just saw in Q3 — in terms of revenue as we ramp up the volume in Classic, which we just announced, followed by revenue stabilizing and sequential growth sometime in FY16 as some of our investments start to gain traction.
I’d like to spend a few minutes on the revenue side. It is a number that obviously to us is not satisfying. We understand the makeup of the number and as we all said in a number of times our focus have always been in this year of our margin and cash flow.
We achieved that but now we’re going to turn our attention to revenue. So to give you a little bit of color on the revenue, on the hardware side the quarter was pretty much entirely focused on clearing out our old inventory. I’ll give you some stat, the numbers behind it.
This obviously weighted on the ASP of the quarter. Going forward, because of the new products, we expect the ASP to start picking back up again.
We’re able to fulfill about 200,000 Passport orders that was pre-ordered at the time we announced it, while reducing the manufacturing lead times to roughly now between four to six weeks.
However, because we have sold out or stock out a number of times in the quarter waiting for the fulfillment, we were only able to fulfill order backlog of Q3 by December 12. So that was clearly already into Q4.
And I also want to remind everybody that our revenue of these devices are all recognized on a sell-through basis. So not every one of those units, in fact most of those units revenue are not recognized in Q3. And we obviously will recognize as they lead up in throughout the next few quarters.
I spoke about inventory — cleaning out old inventory. I’m very pleased to announce that or to report that our inventory level, on the old inventory, old device inventory level is down 93% year-over-year since the 13 months that this team have taken over.
So now literally, we have very few prior devices left that we could provide. Despite all these, we achieved our second quarter in a row with positive hardware gross margin. And so that’s the old products and where our focus is in.
And then of course we just launched our Classic. I could report the fact that the Classic has been extremely well-received. The orders are ahead of where the Passport was at the time of the launch a few months ago.
Finally we did turn away a number of, I would call, low margin and simply negative margin deals in the quarter and we will continue to do that, by the way as a practice going forward. We will not do deals that we know the margins are hurting to our bottom line.
Moving onto the SAF, the SAF revenue was down about 13% quarter-over-quarter, which pretty much in the middle of the range that we expected. With the launch of the Classic we are modeling a little bit more aggressive SAF decline, which is no different from what we have shown you in San Francisco on November 12 which was the modeling a 15% sequential decline.
On software, recall that the Enterprise Software product we released in November, which I just referred to, and the typical enterprise software sale cycles are roughly about six to nine months.
For the Enterprise, however we have seen the BES 12 gain a lot of traction and partly because of the EZ program, EZ Pass program that we had in placed and the beta program we have placed and we already have made a number of very notable wins to date, for that matter. I’ll report on some of the names later.
Now on update to our progress in returning to the growth part of the story, first on the device side, on the device side on the Passport was successfully rolled out to 48 different countries in the last couple of months, including Canada, U.S., South Africa, Saudi Arabia and India. North America and Europe account for 61% of the Passport sales.
