Video-on-demand specialist SeaChange released their Q2 results on Thursday. Revenues for the quarter increased 11% to 51.6m, but were below the expectation of analysts who expected revenues to come in at around $54m. The company earned $3.5m, an improvement on the $376K loss it posted a year ago.
The higher top-line was driven by an increase in software revenue, thanks to the recent acquisitions of eventIS and VividLogic. The company also said that higher VOD software maintenance revenue contributed to the increase in Software segment revenue.
However hardware sales declined 13% during the quarter, due to lower VOD server shipments to North American and Latin American service providers offset partially by a large Broadcast server order shipped in a previous quarter and accepted by the customer in the 2011 fiscal second quarter.
The company said that it expects lower VOD hardware demand to continue through the end of the fiscal year.
Company Chairman & CEO Bill Styslinger said that the company plans to restructure the server and storage business, and issued lower guidance for the company due to lower revenue in the server and storage revenue, combined with “software revenue challenges related to product commercialization and customer launch delays.”
Investors did not like this outlook, sending shares down sharply.
You can read the full SeaChange earnings press release here.