Media Tech Vendor M&A: Blackmagic Design Acquires Ultimatte

broadcast technology market research, Broadcast Vendor M&A | Posted by Joe Zaller
Sep 09 2016

Blackmagic Design today announced it has acquired blue and green screen Ultimatte.

Terms of the deal were not disclosed.

Ultimatte was founded in 1976 and has won an Emmy for their realtime compositing technology, a Lifetime Achievement Award from the Academy of Motion Picture Arts and Sciences, as well as an Oscar.

Ultimatte is known worldwide for delivering broadcast quality compositing results that make virtual sets indistinguishable from real sets. Ultimatte creates realtime blue and green screen removal hardware that is used in broadcast studios around the world to seamlessly composite reporters, talk show hosts and more into virtual sets. Almost every newscaster and weather reporter stands in front of a green or blue screen while delivering the news and weather. For the past 40 years, Ultimatte has been the industry standard hardware or software responsible for keying these people in front of weather maps, stock charts, and other info graphics. In fact, many of these newscasters are using Ultimatte to place them into completely virtual sets.
Ultimatte uses advanced 4:4:4:4 image processing and provides enhanced matte controls that lets customers accurately separate the subject from the background. Customers also get matte correction features, indirect and direct lighting features, spill suppression tools, edge artifact controls and more, all in realtime.
“Ultimatte’s realtime blue and green screen compositing solutions have been the standard for 40 years,” said Grant Petty, Blackmagic Design CEO. “Ultimatte has been used by virtually every major broadcast network in the world. We are thrilled to bring Ultimatte and Blackmagic Design together, and are excited about continuing to build innovative products for our customers!”

 

Media Tech Vendor M&A: Telestream Buys Vidcheck

Broadcast technology channel strategy, Broadcast Vendor M&A | Posted by Joe Zaller
Sep 05 2016

telestream-logo-transparant

Telestream announced that it has acquired Vidcheck, a provider of automated quality control (QC) solutions for broadcast and media technology applications.

Vidcheck_Logo

The deal, which was funded by cash from operations, has been completed. Terms were not disclosed.

Vidcheck founder Tom Dove will remain with the enlarged company.

The Vidcheck deal is Telestream’s sixth acquisition.  Similar to its recent purchases of cloud encoding company Panda, and captioning specialist CPC, Telestream CEO Dan Castles described the Vidcheck deal as a “tuck-in,” rather than a transformation. Although Telestream’s Vantage workflow orchestration platform currently includes an option called Analysis, the company believes that it can drive greater value for its customers by offering Vidcheck’s automated file-based QC software as part of its overall offering.

“Vidcheck’s team and product portfolio line up very well with our area of expertise,” said Castles. “It is not just some great technology and products that we are acquiring but also a gifted, talented and passionate team that will reinforce our resources here at Telestream. We look forward to leveraging our combined know-how to offer our worldwide customer base an even more complete and exciting product portfolio.”

Telestream says it will also continue to integrate and interoperate with multiple QC vendors, as it already does today.

 

© Devoncroft Partners 2009-2016. All Rights Reserved.

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Interested in Updated Market Sizing Data on the Media Technology Sector, Join us for a Webinar Tomorrow (8/31)

broadcast industry technology trends, broadcast industry trends, broadcast technology market research, market research | Posted by Josh Stinehour
Aug 30 2016

This Wednesday (August 31th) IABM DC is holding a brief webinar where Devoncroft’s Joe Zaller will review findings from the updated 2016 IABM DC Global Market Valuation Report (GMVR), the definitive reference on market sizing, segmentation, and forecasting for the broadcast and media technology sector.  IABM DC Logo and GMVR Cover Image

IABM DC is a 50/50 joint venture between Devoncroft Partners and IABM, the industry trade association that advocates on behalf of media technology suppliers worldwide.

In addition to a summary of key findings, the webinar will provide an overview of the vendor initiative supporting the GMVR, the technology segmentation underlying the report model, and the deliverables available for purchase.  For the 2016 edition the GMVR initiative continued to benefit from direct participation from a substantial number of vendors and service provider.  Partners to the report initiative provide data submissions (under strict confidentiality) on actual and project revenue.  This data is then anonymized and used to create the most comprehensive and authoritative reference on current and future market sizing for the sector.

The 2016 edition of the GMVR contains market sizing figures for historical years beginning in 2009 along with forward projections thru the 2019 calendar year.  A more detailed description of the GMVR is available from the report initiative website (www.iabmdc.com).

The webinar will begin at 8:00 am US PT (11:00am US ET / 5:00pm CET).  You can sign up for the webinar at the following website.  All interested parties are welcome to attend.

 

Should you have any detailed questions on the GMVR, please email us.

We hope you are able to join the webinar this Wednesday (8/31).

 

Related Content:

Sign up for Webinar

 

 

© Devoncroft Partners 2009-2016. All Rights Reserved.

 

Autodesk M&E Declines 16% in Q2, Driven by Subscription Model Transition

Analysis, Broadcast technology vendor financials, Quarterly Results, SEC Filings | Posted by Joe Zaller
Aug 26 2016

Autodesk reported revenue for the second quarter of fiscal year 2017, which aligns with the three month period ending July 31, 2016.  Autodesk breaks out the revenue performance of its Media and Entertainment (M&E) business segment, which comprises visual effects and post-production solutions including Maya, Flame, and Shotgun.  Autodesk_Logo

Autodesk M&E revenue for the quarter was $34 million, a decrease of 16% compared to the second quarter of fiscal 2015, and a 2.9% decrease versus the preceding quarter, FQ1 2017.  M&E contributed 6.2% of Autodesk’s total sales in the quarter.  This compares to 6.7% during the year-earlier quarter and 6.8% during the preceding quarter.

There was no commentary provided by Autodesk’s management on the reason for the year-over-year decline, though Autodesk’s overall revenue decline was attributable to the Company’s transition from perpetual licenses to a subscription revenue model.

The close of the second quarter marked another milestone for Autodesk’s transition to a subscription business model, as the Company no longer sells perpetual licenses for its Suite products.  Autodesk discontinued selling perpetual licenses for individual products with the close of the fourth fiscal quarter of 2016.  Beginning with the start of the current quarter (FQ3 2017) Autodesk only sells subscription or flexible license offerings.

Update on Business Model Transition

Autodesk’s M&E division has been a public data point on the impact of pricing compression in the post-production technology segment of the media technology sector.  Revenue for the M&E division has been on a declining revenue trajectory for almost a decade given the impacts of the transition from hardware to software, the collapsing of functionality into Suites, and now the shift from perpetual licenses to subscription.

The below chart illustrates the revenue performance of the M&E division since the second half of fiscal 2008.

autodesk-chart

At the same time, the gross margin of the M&E division has benefited from these market trends.  Gross margins increased from 74.4% in the first quarter of fiscal 2008 to 80.0% during the first fiscal quarter of 2017.

The short-term implications of the business model transition is captured in the first paragraph of Autodesk’s prepared remarks for the quarter, “Autodesk is undergoing a business model transition in which it has discontinued most new perpetual license sales in favor of subscriptions and flexible license arrangements. During the transition, revenue, margins, EPS, deferred revenue, billings and cash flow from operations will be impacted as more revenue is recognized ratably rather than up front and as new product offerings generally have a lower initial purchase price.”

Related Content:

Press Release: Autodesk FY Q2 2017 Financial Results

Prepared Remarks: Autodesk management FY Q2 2017 Financial Results

Conference Call Transcript:  Autodesk FY Q2 2017

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© Devoncroft Partners 2009-2016. All Rights Reserved.

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EVS Revenue Increases Over 70% in Q2, Driven by Upgrades for Rio 2016

Analysis, Broadcast technology vendor financials, Quarterly Results | Posted by Josh Stinehour
Aug 25 2016

Production and playout video server specialist EVS reported Q2 2016 financial results.  Revenues for the second quarter of 2016 were €39.8 million, an increase of 70.8% over Q2 2015 results, and an incrEVS_Logo (2013)ease of 48.0% versus the preceding quarter, Q1 2016.  Excluding the effect of exchange rate movements and big event rentals, the EVS’s Q2 2016 revenue increased 67.6% versus the year earlier period.

Driving revenue in the quarter were upgrades by outside broadcast (“OB”) companies upgrading equipment in preparation for the large events of 2016, in particular the Rio 2016 Summer Olympics.  Year-over-year revenue growth also benefited in part from a softer comparable period of Q2 2015.

Net profit for Q2 2016 amounted to €12.6 million (€0.93 per share), compared to €0.70 million (€0.05 per share) in the year earlier period and €4.9 million (€0.36 per share) in the preceding quarter.

Gross margins for the quarter were 77.3%, an increase of over 1000 basis points compared to Q2 2015, and an increase of 680 basis points when measured against Q1 2016.  Gross margins were boosted in part by higher margins associated with Rental revenue.  Management attributed the margin increase in Rental revenue to the completion of C-Cast development work, which negatively impacted the gross margin of Rental revenue in earlier periods.

Operating profit for the second quarter of 2016 was €17.40 million, up 815.8% compared to the second quarter of 2015 and up 128.9% versus the first quarter of 2016.  Operating margin for the quarter was 44.0%, a sharp rise over the 8.0% operating margins from the same period last year and the 22.7% operating margin achieved during the first quarter of 2016.

Research and development (“R&D”) expenses for the second quarter of 2016 were €5.45 million, or 14.0% of total revenue, a decline of 11.5% versus the R&D expense in Q2 2015, and a decline of 6.0% against Q1 2016.  As a percentage of sales, R&D expense was 26.0% of total revenue in Q2 2015 and 22.0% during Q1 2016.  Year-over-year comparisons were impacted by costs associated with the closing of EVS’s development office in Chengdu during Q2 2015.

Selling and administrative expenses for the second quarter of 2016 were €7.44 million, or 19.0% of total revenue, representing an increase 4.3% over the second quarter of 2015, and an increase of 16.3% versus the preceding quarter.  As a percentage of sales, selling and administrative expense was 30.6% of total revenue in Q2 2015 and 24.0% during Q1 2016.

EVS ended the quarter with 482 employees, down slightly from 483 at the end of the first quarter of 2016, and down from the 471 employees at the end of Q2 2015.

The order book stood at €41.8 million as of August 24, 2016, with 80% to 85% of the current order book set to invoice during the third quarter of 2016.  The current order book represents an increase of 13.6% over the order book on August 25, 2015 and a decline of 22.3% compared to the order book on May 10, 2016.

Revenue by Destination:

  • Revenues from Outside broadcast vans during the second quarter of 2016 were €22.2 million, a 75.3% increase versus the second quarter of 2015, and a 47.2% increase compared to first quarter of 2016. For the second quarter of 2016, this segment contributed 56.0% of the total revenue, which compares to 54.0% in Q2 2015 and 56.0% in Q1 2016. Revenue in this category was driven by customer upgrades to support the large event taking place in 2016.
  • Revenues from Studio & others during the quarter were €13.7 million, up 53.2% compared to the year earlier period, and up 16.0% versus the preceding quarter. For the second quarter of 2015, this segment contributed 34.0% of total revenue, a decline versus the contribution of 38.0% in Q2 2015 and 44.0% in Q1 2016.
  • Revenues from Big sporting event rentals during the quarter were €3.9 million, an increase of 127.3% versus the year-earlier period. There were no rental sales in the first quarter of 2016.  For the second quarter of 2016, this segment contributed 10.0% of total revenue, a decrease versus 7.0% contribution in Q2 2015.

The below slide from EVS’s Q2 2016 earnings presentation illustrates the revenue breakout by destination for historical periods.

slide

Revenue by Nature:

  • Systems revenue in the quarter was €36.80 million, up 68.8% versus Q2 2015, and an increase of 49.3% against Q1 2016. During the second quarter of 2016, Systems revenue represented 92.0% of total revenue, comparable to the 94.0% in Q2 2015 and 92.0% in Q1 2016.
  • Services revenue was €2.98 million for Q2 2016, up 97.4% versus the year ago period, and a rise of 34.2% compared to Q1 2016. Contribution to the second quarter of 2016 revenue was 7.0% of the total, which is in-line with the contribution of 6.0% in Q2 2015 and 8.0% in Q1 2016.

Revenue by Geography:

  • Revenue from EMEA (excluding events) in the second quarter was €13.5 million, up 52.5% against last year’s comparable quarter, and a rise of 57.7% compared to Q1 2016. Sales in EMEA (excluding events) accounted for 38.0% of EVS’s revenue during the quarter.  This compares to 41.0% of total revenue during the second quarter of 2015 and 32.0% during first quarter of 2016.
  • Americas’ revenue for the second quarter of 2016 was €14.6 million, an increase of 107.8% versus the year-over-year period, and an increase of 38.5% compared to the preceding quarter. Americas accounted for 41.0% of total revenue during the quarter, up from 33.0% of total revenue during Q2 2015 and 39.0% in Q1 2016.
  • Q2 2016 revenue from the APAC region was €7.71 million, up 36.0% versus last year’s quarter, and a slight decline of 0.3% versus the preceding quarter. APAC accounted for 22.0% of total revenue in the Q2 2016, versus a contribution of 26.0% during Q2 2015 and 29.0% in Q1 2016.

 

Business Outlook:

As part of the earnings release, Management increased and narrowed revenue guidance for the full year.  Revenues for 2016 are now expected between €128 million and €138 million.

During EVS’s conference call, Managing Director & CEO Muriel De Lathouwer, offered commentary on the market environment.  “We see that the adoption of 4K and IP progressed across all geographies with more concrete discussions that we have now on those subjects with our customers. We are very happy with the order book and the evolution, but we still don’t want to have too much excitement as we know that part of the uptake of these new technologies will be included in the traditional lifecycle of upgrades.”

 

Related Content:

Press Release: EVS Q2 2016 Results

Presentation: EVS Q2 2016 Results

 

 

© Devoncroft Partners 2009-2016. All Rights Reserved.

 

 

Software Growth Drives Substantial Increase in Dalet 1H 2016 Margins

Analysis, Broadcast technology vendor financials, Quarterly Results | Posted by Josh Stinehour
Aug 22 2016

Dalet, a provider of software solutions for the creation, management and distribution of multimedia content, announced revenues for the first half of 2016 of €21.9 million, a decrease of 4% versus 1H 2015 revenues of €20.9m.  Dalet_Logo_New

The year-over-year decline is attributable to a 43% decrease in revenue from hardware resale compared to the first half of 2015.  Revenues in 1H 2015 included a one-off large contract where Dalet was responsible for the entire infrastructure, including the hardware procurement.

Gross margin for the first half of 2016 was 87.1%, up from 79.0% in the comparable period during 2015.  The over 800 basis point rise in gross margin is again related to the sharp decrease in low-margin hardware resale during 1H 2016.

Revenue breakdown:

  • Software license revenue was €5.9 million for 1H 2016, up 9% versus 1H 2015. License revenue represented 28.2% of total revenue in 1H 2016, compared to 24.6% in 1H 2015. Growth in software licenses was driven by the North America and Asia-Pacific regions.
  • Maintenance support was €7.6 million, up 10% versus the 2015 first half. Maintenance revenue represented 36.3% of total revenue in 1H 2016, compared to 31.5% in 1H 2015. Growth in maintenance mirrors the expansion in software licenses and was similarly driven by installed base gains in the North America and Asia-Pacific regions.
  • Services revenue was €4.2 million in 1H 2016, up 7% versus the year-earlier period. Services revenue was 20.1% of total revenue during the first half of the year and 17.8% during the first half of 2015.
  • Hardware revenue was €3.3 million, down 43% versus 1H 2015. Hardware revenue represented 15.8% of total revenue in 1H 2016, versus 26.0% in 1H 2015.

On a geographic basis:

  • Revenue in Europe remained the largest geographic component at €9.2 million during the first half of the year, a decrease of 14.3% when measured against the first half of 2015. Europe represented 44% of total revenue for the first six months of the year, versus 49% in the same period of 2015.  Year-over-year comparisons in Europe were affected by the aforementioned large contract from the first half of 2015 involving a significant hardware resale component.
  • Revenues from the Americas were €8.0 million, or 38% of total revenue for 1H 2016, up from 36% in 1H 2015. This represented year-over-year growth of 1.5% in the Americas region.
  • First half 2016 revenue from the Middle East and Africa (MEA) was €0.6 million, down 27.6% versus 1H 2015. The MEA region represented 3.0% of revenue in 1H 2016, down from 3.9% during the first half of 2015.
  • APAC revenue in 1H 2016 was €2.9 million, up 20% versus the comparable 2015 period. APAC revenue was 14% of total revenue in 1H 2016, up from 11.1% in 1H 2015.

The revenue and gross margin results were announced in a press release.  The full operating results will publish in late September.

Business Outlook:

In the press release announcing the first half results, Management indicated revenue performance was as expected for the first six months of 2016.  Dalet is anticipating continued growth in the second half 2016, especially in terms of gross margin.  Management also stated an objective of improving operating margins to a goal of 4% to 5% by the 2017 fiscal year.

The Company entered the second half of 2016 with an order book of €23 million, which is expected to invoice during the period.

 

Related Content:

Press Release: Dalet First Half 2016 Results

 

 

© Devoncroft Partners 2009-2016. All Rights Reserved.

 

 

Vizrt Grows Revenue 6.5% in Q2; Expects Further Growth in Second Half of 2016

Analysis, Broadcast technology vendor financials, Quarterly Results | Posted by Josh Stinehour
Aug 22 2016

Vizrt announced results for the second quarter of 2016.  For the quarter Vizrt had revenue of $34.2 million, an increase of 6.5% versus the second quarter of 2015, and an increase of 21.2% versus the preceding quarter, Q1 2016. Vizrt Logo

Gross margins for Q2 2016 were 72.6%, which compares to 71.8% gross margins recorded during Q2 2015 and 70.4% gross margins from the preceding quarter.

Operating income for the quarter was $9.0 million, an increase of 56.6% compared to the second quarter of 2015, and an increase of 126.5% over the preceding quarter.  Operating margin for Q2 2016 was 26.4% versus 17.9% in Q2 2015 and 14.1% in Q1 2016.

Operating margins benefited from the decision to capitalize $1.7 million of research and development expenses in the quarter – and thereby exclude from operating expenses.  Vizrt had one-time expenses of $1.8 million in the quarter related to compensation to the Company’s former CEO, recruitment of the current CEO, and certain legal costs.

Net income for Q2 2016 was $11.0 million.  In the year-earlier period, Q2 2015, Vizrt recorded a net loss of $0.1 million, and in the preceding quarter net loss was $6.8 million.

Cash and cash equivalents ended the quarter at a balance of $37.2 million, up slightly from $36.6 million at the end of Q1 2016.

Revenue by Geography:

  • Revenues from EMEA for the quarter were $16.3 million, an increase of 3.8% in comparison to Q2 2015 and an increase of 27.3% against the preceding quarter. For Q2 2016 EMEA accounted for 48.0% of overall revenue, versus 49.0% in Q2 2015 and 45.0% in Q1 2016.
  • Revenues from the Americas region were $9.4 million during the second quarter of 2016, a year-over-year decrease of 3.7% and a sequential increase of 3.1%. Americas represented 27.0% of total revenue in the quarter, compared to 30.0% in Q2 2015 and 32.0% in Q1 2016.
  • Revenues from the Asia-Pacific geography during the second quarter of 2016 were $8.5 million, a 27.5% increase over Q2 2015, and an increase of 34.4% against Q1 2016. Asia-Pacific accounted for 25.0% of total sales in Q2 2016.  During the year-earlier period Asia-Pacific contributed 21.0% of sales and in Q1 2016 Asia-Pacific contributed 23.0% of total revenue.

Operating Expenses by Category:

  • Research and development (“R&D”) expenses in the quarter were $3.9 million, a 24.9% decrease versus the same period a year ago, and a decrease of 28.5% versus the previous quarter. In terms of total sales, R&D expenses represented 11.4% of revenue in the Q2 2016, compared to 17.0% in Q2 2015 and 19.3% in 19.3%. The decline in R&D expense is attributed to the accounting decision in the quarter to capitalize $1.7 million of R&D expenditure.  When including this capitalized portion of R&D, total R&D expenses were 16.4% of total sales.
  • Sales and marketing (“S&M”) expenses in the quarter were $7.39 million, a decrease of 6.8% against the year earlier period and an increase of 2.7% versus Q1 2016. S&M expenses were 21.6% of total sales in the quarter.  This compares to 24.7% in Q2 2015 and 25.5% in Q1 2016.
  • General and administrative (“G&A”) expenses in the quarter were $2.676 million, a decrease of 6.1% versus the same period a year ago, and a decrease of 7.5% versus the preceding quarter. As a percentage of sales, G&A expenses represented 7.8% of revenue in the quarter, versus 9.3% in Q2 2015 and 10.3% in Q1 2016.

 

Appointment of New CEO:

Announced on June 15, 2016, Vizrt appointed a new Chief Executive Officer, Michael Hallén.   Mr. Hallén replaces former CEO Martin Burkhalter, who retired after leading Vizrt for six years.

“I’m looking forward to working together with Vizrt’s world-class team to serve long term customers while capturing the new market opportunities that are being created in this fast changing industry,” said Mr. Hallén in the press release announcing his appointment.

Mr. Hallén assumed the responsibilities of CEO effective August 1, 2016.  Dr. Francois Laborie had served as action CEO through August 1, 2016 and will return to his role as COO of Vizrt.

 

Business Outlook:

Vizrt ended Q2 2016 with a total backlog of $56 million, a 4% year-over-year decline, and a sequential decrease of 1.1%.

Vizrt’s management provided the following commentary on the market environment, “In general, the market remains cautious with large infrastructure investments prioritized to meet future IP and 4K demands. However, we remain confident that the second half of 2016 will deliver growth for Vizrt as our backlog remains healthy and our customers understand the need to implement efficiency gains while reaching all their viewers regardless of the platform or of the method of consumption.”

 

Related Content: 

Press Release: Vizrt Q2 2016 Financial Results

 

 

© Devoncroft Partners 2009 – 2016. All Rights Reserved.

DTS Grows 41% in Q2; Offers Commentary on Competitive Environment

Analysis, Broadcast technology vendor financials, Quarterly Results | Posted by Josh Stinehour
Aug 18 2016

DTS reported revenue of $48.7 million for the second quarter of 2016, a 41% year-over-year increase over Q2 2015, and a 7.7% increase over the preceding quarter. logo

Revenue growth was driven by DTS’s acquisition of iBiquity in the fourth quarter of 2015.  iBiquity was a developer and licensor of HD Radio technology.

GAAP gross margins were 87.2% during the quarter down from the 92% gross margins recorded during Q2 2015 and also a decline against the 86.5% gross margins in Q1 2016.

GAAP operating margins were 19% during the quarter.  This compares favorable versus the same period last year when GAAP operating margins were 11% and the preceding quarter when GAAP operating margins of 4.0% were recorded.

On a GAAP basis net income for Q2 2016 was $4.7 million or $0.26 per share compared to net income during the year earlier period of $2.3 million or $0.12 per share.  Net income for Q1 2016 was $0.5 million or $0.03 per share.

Cash and cash equivalents ended the quarter at $43.8 million, up from $37.2 million at the end of the first quarter of 2016.

Revenue by Market Segment:

  • DTS’s Home division had revenue of $23 million during the quarter, down 5% against the second quarter of 2015. Management attributed the decline to softness in standalone Blue-ray players and a strong Q2 2015 in DTS’s TV segment.  The Home division accounted for 49% of total revenue in the quarter.
  • The Company’s Automotive division had revenue of $17.5 million in the second quarter, a substantial increase over the comparable year-earlier period (pre-acquisition of iBiquity). As a percentage of total sales, Automotive contributed 37% of overall revenue.
  • Revenues from DTS’s Mobile category were $6.4 million, an increase of 37% over Q2 2015. Mobile accounted for 14% of DTS’s overall revenue in the quarter.

Operating Expenses by Category:

  • Sales, General and Administrative (“SG&A”) expenses were $20.8 million in Q2 2016, an increase of 4.9% versus the year prior. SG&A represented 42.6% of sales during the quarter, which compares to 52.8% during Q2 2015.
  • Research and development (“R&D”) expenses were $12.6 million during the second quarter, an increase of over 30% compared to the second quarter of 2015. The increase is primarily due to an increase in headcount associated with iBiquity.  For the quarter, R&D expense was 25.8% of sales.  In the year-earlier period R&D represented 27.9% of sales.

Update on Market Adoption of Next-Generation Technologies:

As part of the Q2 Earnings release, management highlighted the market adoption of DTS-enabled content in both the cinema and the home.

The Company’s immersive audio technology, DTS:X, was incorporated in several feature films in the quarter such as Warcraft, Now You See Me 2 and The Secret Life of Pets.  In total, 31 feature films have been released with DTS:X audio technology.  DTS’s technology is now used in over 130 screens globally, which represents a more than 60% increase over the preceding quarter.

During the quarter DTS announced an agreement with Paramount Home Media Distribution to release a collection of full-length movies using DTS:X beginning with Daddy’s Home, The Big Short, Zoolander 2, and Whiskey Tango Foxtrot.

The below slide is taken from DTS’s investor presentation for the quarter.

slide

During DTS’s conference call with analysts, Chairman and CEO Jon Kircher responded to a question about competition in the theater market and offered context on the competitive environment.

“I think, the marketplace wants choice. DTS:X in the cinema as well as from an immersive audio format perspective is designed to offer a range of performance and flexibility advantages. So, today, we are in 130 screens and growing that doesn’t include all those that potentially or under contract. There is ongoing discussions with other parties around expanding that number. Year-over-year with the product essentially being slightly more than 15 months ago, we are actually tracking I think pretty well to into an accelerating future for DTS:X in cinemas. So, the bottom-line is that, not unlike our prior experience over the past 20 years in the professional space, or in the consumer space is that DTS is going to have an important role to play as it relates to the high quality consumption and enjoyment of immersive entertainment. And this is just part of a broader strategy to support our business downstream (source: SeekingAlpha transcript)” said Mr. Kircher.

 

Business Outlook:

Based on the strong quarterly results, management increased its guidance for the full year 2016.  DTS now anticipates full year revenue in the range of $185 million to $190 million, with growth driven by the mobile and automotive markets.  Operating margins for the full year are expected between 10% and 15%.

 

Related Content:

Press Release: DTS Q2 2016 Earnings Release

Presentation:  DTS Q2 2016 Investor Presentation

Transcript: DTS Q2 2016 Earnings Call (Seeking Alpha)

 

 

© Devoncroft Partners 2009 – 2016. All Rights Reserved.

 

 

Cisco Service Provider Video Segment Grows 12% in Fiscal 2016

Analysis, broadcast industry trends, Broadcast technology vendor financials, Quarterly Results | Posted by Josh Stinehour
Aug 17 2016

Cisco announced its 2016 fiscal year results for the twelve months ending July 30, 2016.  In its financial reporting Cisco breaks out the results of its Service Provider Video (“SPV”) product segment. Cisco_logo

With Cisco’s divestiture of its CPE business to Technicolor, the SPV segment reporting offers greater visibility into Cisco’s products targeted to media customers.  Those product categories span Cable Access Products, Cloud-based video solutions, Content Security, Content Management and Distribution Products, Digital Headend, and Virtualized Video Processing Systems.

Many of these product categories were acquired in a series of M&A transactions in the media technology sector including 1 Mainstream (2015), NDS (2012), BNI Video (2011), Inlet (2011), Extend Media (2010), and Scientific Atlanta (2005).

When excluding revenues from the divested CPE business, the SPV segment had revenues of $1,920 million for the 2016 fiscal year, an increase of 12% over the 2015 fiscal year.  As a percentage of Cisco’s total product sales (not including services revenue), SPV represented 5.2% in FY2016 and 4.7% in FY2015.

The 2016 fiscal year results benefited from an especially strong second quarter driven by sales of video solutions and cable access products in China.

Fiscal Fourth Quarter 2016 Results:

For the fiscal fourth quarter, Cisco’s SPV segment had revenue of $444 million, a decline of 12% versus the fourth quarter of 2015.  SPV accounted for 4.6% of Cisco’s product revenue in the fourth quarter, a decline versus the contribution of 5.3% in the fourth quarter 2015.

Again, the above figures only include revenues for the continuing operations of the SPV segment.

 

Update on Cisco’s Broader Activities in Media Technology Sector

Not captured in the SPV segment are the sales of Cisco’s general-purpose technologies such as switchers and blade servers in the media sector.  Cisco has been an active contributor to the virtualization and IP transition efforts in the media technology industry.

Cisco’s CTO of Engineering and Chief Architect Dave Ward gave a presentation as part of the ImagineLIVE Power Sessions at the 2016 NAB Show.  During the presentation, Mr. Ward reviewed Cisco’s perspectives on the future of technology architecture in the media sector and Cisco’s role in that architecture.

 

cisco-slide-1

 

When referring to the above slide, Mr. Ward offered background on the high-level focus of Cisco in the media sector. “The target that we have for the industry and the target that we work on with Imagine is actually all at the top layer.  At the top layer creating a Media Platform-as-a-Service (PaaS) where a media workflow engineer – or any independent part of those workflows – those engineers can focus on doing their jobs and the stack and the network can take care of themselves” said Mr. Ward.

Later in the presentation Mr. Ward provided a more detailed review of the technology architecture supporting the Media PaaS target along with an overview of where Cisco’s technology would fit into that architecture.

 

cisco-slide-2

 

The blue line in the above slide represents the divide between where Cisco will focus and where Cisco will partner with other vendors – in this instance with Imagine.  As stated by Mr. Ward, “Imagine’s job is everything above that layer [blue bar] and what I’m trying to build is everything below that. A self- managing orchestrated reactive system that can allocate resources, can engineer admission control into an IP datacenter and across the WAN, and make it all as easy as possible.”

 

 

Related Content:

Press Release: Cisco Fiscal Year 2016 Results

 

 

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ATEME Grows 21.5% in 1H 2016; Cites UHD Adoption

Analysis, Broadcast technology vendor financials, Quarterly Results | Posted by Josh Stinehour
Aug 17 2016

Video compression specialist ATEME announced first half 2016 revenue of €14.98 million, an increase of 21.5% versus the first half of 2015. ATEME_Black-960x218

On a quarterly basis, Q1 2016 had revenue €7.4 million, a 12.2% increase over Q1 2015.  Revenues for the second quarter of 2016 were €7.5 million, a 32.3% year-over-year improvement.

Management cited the renewed confidence of media clients as a market driver along with an accelerating adoption of 4K / UHD.  Several examples of 4K / UHD were given including TF1 and M6 broadcasting eight soccer matches from the 2016 European Football Championship and the broadcasting of the semifinals rounds of the French Open Tennis tournament.

ATEME highlighted its first major orders for the Company’s next-generation compression solution, TITAN (launched in early 2016).   Those major orders were with DirecTV and an unnamed Tier1 cable operator in the US, along with Arcana (Malaysian satellite operator) and FPT Telecom (Vietnam).

Revenue by Geography:

  • Revenues for the EMEA region during the first half of 2016 were €8.1 million, a 19.8% increase over 1H 2015. As a percentage of total sales, EMEA was 54% of revenue during 1H 2016, which compares to 55% during 1H 2015.
  • The USA / Canada region contributed revenue of €4.1 million, a 47.4% rise over the year-earlier period. USA / Canada was 27.3% percent of total sales in the period versus 22.8% during 1H 2015.
  • Latin America was responsible for €1.47 million of revenue during the first half, a slight decline of -0.7% versus 1H 2015. For 1H 2016, Latin America accounted for 9.8% of total sales, compared to 12.0% during 1H 2015.
  • Asia Pacific accounted for €1.23 million of revenue, a decline of -1.1% versus the first half of 2015. The Asia Pacific region contributed 8.2% of total sales during 1H 2016, versus 10.0% during 1H 2015.

The strong growth in the EMEA and USA / Canada regions was attributed to investments made in prior periods including the opening of a new office in Denver.

The revenue results were announced in a press release.  The full operating results will publish in late September.  In the press release ATEME expressed an expectation of reducing operating loss during 1H 2016 from the €2.5 million loss recorded in the first half of 2015.

 

Business Outlook:

Commenting on the first half results, ATEME President Michel Artieres stated, “”The first half of 2016 marked an important stage in our commercial development in the United States where activity increased by almost 50%. The contracts secured during this period confirm the potential of our new TITAN software with major operators in both the US and Europe; sales of TITAN will further underpin growth over the second half in a market driven by the rise in video consumption around the world and the increasing penetration of Ultra High Definition (UHD). As such, we are confident in our ability to continue to improve our operating performance.”

 

 

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Press Release: Ateme 1H 2016 Results

 

 

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