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.
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.
- 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.
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.
Press Release: Dalet First Half 2016 Results
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