Video transport technology provider Net Insight reported that its revenue for the second quarter of 2012 was SEK 75m ($8.9m), an increase of 3.9% versus the same period a year ago, and down 2% versus the previous quarter.
Q2 sales in APAC increased 125% versus the same period a year ago, thanks to strong demand from China. The company it has focused on emerging markets and that Asia represented 16% of total revenues in the quarter. Americas sales declined 20% versus last year when the company had a large order from a single customer. EMEA revenue was essentially flat with the same period a year ago.
Net income in the quarter was SEK 12.5m, up 34% versus the same period ago, resulting in a net profit margin of 16.7%, an increase of 29% versus last year.
Operating earnings in the quarter were SEK 3.4m, down 59% versus the same period a year ago, which equates to an operating margin of 4.6% for the quarter, down from SEK 11.5 last year. The company said that the decrease in operating margin is due to higher expenses related to hiring of staff, mainly in the R&D and sales areas.
Gross margins in the quarter were 60.8%, down 1% versus the same period a year ago. The company attributed the margin decline to increased depreciation of capitalized R&D expenditures.
Operating expenses for the quarter were SEK 42.2m , up 18% versus last year. The company attributed the higher expenses to an increase in sales and sales support staff. Sales and marketing expenses increased 14% versus last year, and R&D expenses increased by 40% “as more resources have been added and the rate of capitalization has decreased somewhat.”
Broadcast and media networks accounted for 81% of revenue in the quarter, with Digital Terrestrial TV networks (DTT) accounting for the reminder. The company said that its DTT revenues are mainly coming from existing customers’ network build-outs in Argentina, Belgium and Sweden.
On a product line basis, hardware amounted for 70% of revenue during the quarter, software contributed 8%, and service and support revenue was 17% of revenue. The remaining 5% of revenue consists mainly of revaluation of accounts receivables stock in foreign currencies and leasing revenues.
The company said it had a “large amount of repeat business with existing customers during the quarter,” specifically mentioning that more than 70% of its revenue comes from service providers i.e. network owners selling transport services.
Press release: Net Insight AB : Interim Report January – June 2012
Previous quarter: Net Insight Revenue Grows 15 Percent in Q1 2012
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