Posts Tagged ‘broadcast vendor financial results’

Akamai Media Division Declines in Q2, Despite Strong Growth in OTT Business

Analysis, Broadcast technology vendor financials, Quarterly Results | Posted by Josh Stinehour
Jul 27 2016

Content Delivery Network (CDN) service provider Akamai announced Q2 2016 financial results.  Akamai does more than $2 billion in annual revenue with operations across multiple industry verticals and several technology segments.  In its financial disclosures Akamai breaks out its revenue for Media Delivery Solutions (product category reporting) and for its Media Division (customer type reporting).  Akamai-Logo

Media Delivery Solutions encompasses a broader use case than traditional media operations.  Revenues associated with gaming, social media, software downloads, and other activities are reported in the Media Delivery Solutions category along with revenues related to the streaming of movies, television shows, and live events.   In a similar way, the Media Division includes revenues separate from the streaming of movies and television, such as technology solutions for security or website acceleration.

To address investor concerns on exposure to “do-it-yourself” initiatives from large customers, Akamai has started disclosing the revenue contribution of six large internet platform customers – Amazon, Apple, Facebook, Google, Microsoft, and Netflix.  In aggregate these six customers represented less than 11% of Akamai’s total revenue in Q2 2016, down from 18% in Q2 2015.  During the quarter’s earnings call, Akamai’s CFO’s Jim Benson indicated the six customers are predominantly classified as media customers.  Because of this, the revenue declines associated with “do-it-yourself” initiatives from these six internet platform customers has negatively impacted Akamai’s results in both Media reporting segments.

Media Delivery Solutions Category

Akamai’s Media Delivery Solutions category generated $197 million in revenue, a 9% year-over-year decline against Q2 2015 and a decline of 4% against the previous quarter, Q1 2016.  On a constant currency basis, the Media Delivery Solutions category was down 10% when compared to last year’s second quarter.

Management attributed the revenue declines to lower traffic from one of its largest customers.  Outside of Akamai’s business with the six large internet platforms, Media Delivery Solutions revenue grew 11% in the quarter versus the year prior.

As a percentage of Akamai’s total revenue, Media Delivery Solutions represented 34% during the quarter.  This compares to 45% of total revenue in Q2 2015.

Media Division

The Media Division had $288 million of revenue in the quarter, a decrease of 2% versus Q2 2015 and a decline of 1.2% against the preceding quarter.  Again, the decline was attributable to lower revenue from the six large internet platform customers.  Excluding activity from these six customers, Akamai’s Media Division grew 14% year-over-year.

During the quarter, the Media Division accounted for 50.4% of Akamai’s total revenue.  For the year-earlier quarter, the Media Division contributed 54.5% of Akamai’s sales.

In his prepared remarks on the Company’s earnings call, Akamai’s CEO Dr. Tom Leighton highlighted the strength of Akamai’s OTT business within the media division.  “…our OTT business has continued to grow at a rapid rate, following the record breaking results of the Super Bowl and March Madness in Q1, Akamai delivered a very successful EURO 2016. In addition to providing very high video quality in countries throughout Europe and North America, we set a new record for internet traffic for a single sporting event, during the final round match between Portugal and France” said Dr. Leighton.

 

Commentary on Media Vertical Results

The negative growth rates for its Media Delivery Solutions and Media Division were anticipated by Akamai’s management team.  Akamai experienced a moderating of growth in its Media Division segment during 2015 because of “do-it-yourself” initiatives, in particular at two of Akamai’s largest media customers (included in the six large internet platforms).  These two large customers accounted for 5% of Akamai’s total revenue in Q2 2016, down from 12% of the Company’s revenue in Q2 2015.  This continues a broader trend of Akamai’s Media Division (customer category) experiencing a declining growth rate in each of the last 10 quarters.

In responding to a question from Ganjit Sing of Morgan Stanley on growth rates related to over-the-top video (OTT) distribution, Mr. Benson offered commentary on OTT’s relative revenue contribution to Akamai’s Media Division.

“…it’s not a huge contributor to revenue in the near term. It just isn’t. What we’re seeing is steady growth in that customer base in the traffic. Steady growth in revenue. You have not seen a step function move to viewing content via those platforms. They are growing steadily. They’re growing nicely, but there has not been a catalyst yet to see a huge movement of people cutting the cord and moving online. So I think they will be a steady grower, but today the larger contributors to revenue and the media business are still software download customers, gaming, and social media.”

Later in the call, Dr. Leighton added further context on the video business when responding to a question about the nature of tasks insourced by large media customers.  Dr. Leighton stated, “…The insourcing of traffic is mostly around files where quality matters less and it’s easier to do…On the other side of the house, as we talked about, our OTT business is growing very well, much faster than the media business as a whole. And that’s because it’s more difficult to do with a high quality level, especially live and linear. And people are often paying to watch it, and so you really want to have a good experience there”

 

Successful Litigation Resolution

Separate to the earnings announcement, Akamai benefited from a final judgement in a long-standing legal case.  The day after the second quarter ended, July 1, 2016, Akamai received a $51 million judgement in its favor regarding a decade old patent dispute with Limelight.  The U.S. District Court in Massachusetts entered the final judgement after a series of appeals stemming from original damages awarded to Akamai in a 2008 jury ruling against Limelight.  The appeals process even reached the U.S. Supreme court in 2014.

 

 

Related Content:

Press Release: Q2 2016 Earnings Results

Press Release: $50 million dollar judgement in Akamai’s favor

 

 

© Devoncroft Partners 2009 – 2016. All Rights Reserved.

 

 

Net Insight Announces Record Second Quarter for 2016

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

Video transport technology provider Net Insight reported its Q2 2016 financial results.  Revenue was SEK 132.3 million, an increase of 42% over Q2 2015 and up 20% versus Q1 2016. logo-net-insight

A positive currency impact contributed 5.5% of the gain for the quarter and the acquisition of ScheduleALL contributed an additional 43.8% of the quarterly revenue increase.  Organic year-over-year growth for the quarter was still strong at 21.3%.

Management attributed the strong organic performance to deliveries relating to the Euro 2016 Football Championship in France and the upcoming Olympics in Brazil.  “We have had a great start to the year and I’m proud to present the strongest quarter ever for Net Insight” stated CEO Fredrik Tumegård at the outset of the Company’s earnings call.

Net income for the quarter was SEK 5.7 million or (0.01 earnings per share), an increase of 55.8% over Q2 2015, though a decrease of 71% against the preceding quarter, Q1 2016.

Gross margins for Q2 2016 were 62.8%, an increase above the 60.6% from the previous year’s quarter, and an improvement over the 61.7% gross margins from Q1 2016.

Operating income for the quarter was SEK 12.0 million, a 144.8% increase over the same 2015 period, and a 53.8% increase over the preceding quarter.  Operating margins were 9.0% for Q2 2016, which compares favorably to the 5.3% from Q2 2015 and the 7.1% operating margin from Q1 2016.

Since Net Insight capitalizes a portion of its development expenses, not all of the development expenditures in a given quarter are recognized in operating income.  This is offset by the amortization of previously capitalized development expenditures.  The difference in current development expense capitalization and historical development expense amortization for the quarter was SEK 4.4 million.

Net Insight had operating expenses of SEK 71.1 million in the quarter, an increase of 38% compared to Q2 2015, and an increase of 18.5% versus Q1 2016.

Sales and marketing expense was 36.4 million, an increase of 11.6% versus Q2 2015.  Expressed as a percentage of revenue, sales and market expense was 27.5% in the quarter versus 34.9% during Q2 2015.  The decline in sales and marketing as a percentage of revenue is consistent with the expected sales synergies from last year’s acquisition of ScheduALL.

Administrative expenses increased by 88.6% from 7.9 million SEK in Q2 2015 to SEK 14.9 million during the current quarter.  Administrative expenses represented 11.2% of revenue in the quarter, compared to 8.5% in the year earlier period.

Total Development expense (including the capitalized portion) for the quarter was SEK 38.4 million, a rise of 72.1% when compared to Q2 2015.  For the quarter total Development expense was 29% of revenue versus 23.9% in Q2 2015.   The increase in Development expense was caused by the integration of ScheduALL and further investments in Net Insight’s Live OTT Solution, Sye (released at the 2016 NAB Show).

Cash flow from operating activities for the quarter was SEK 7.7 million, a decrease of 48% against the year-earlier period, and a decline of 81.4% compared to the preceding quarter.  Net Insight’s CFO Thomas Bergstrom attributed the decline in part to a sharp increase in account receivables of SEK 28.5 million, which was caused by sales recognized late in the quarter.  Expressed in terms of trailing twelve month revenue, the accounts receivable balance on June 30, 2016 equates to 103 days of sales outstanding.  This compares to a figure of 81 days sales outstanding as of December 31, 2015.

Revenue by Geography

  • For the quarter, Net Insight generated sales from Western Europe of SEK 60.85 million, an increase of 4.1% versus previous year’s quarter. Western Europe was the largest contributor to total revenue, accounting for 45.7% of sales during the quarter.  In Q2 2015, Western Europe represented 62.3% of overall sales.
  • The Americas contributed SEK 38.7 million or 29.2% of Net Insight’s revenue in the quarter (versus 24.2% in the Q2 2015). Compared to Q2 2015, revenues from the Americas increased by 71.2%.  The increase is primarily attributable to the acquisition of ScheduALL, but also deliveries associated with the 2016 Olympics in Brazil
  • Rest of World sales were SEK 33.2 million, an increase of 165.6% versus the year earlier period. As a percentage of total sales, Rest of World contributed 25.4% in the quarter versus 13.4% during Q2 2015. The Company cited strong activity in both the Middle East and South Africa in its earnings release.

Revenue by Type

  • Sales attributed to Net Insight’s hardware products were SEK 66.3 million in the quarter, an increase of 32.8%. As a percentage of total sales, hardware products were 50.1% of the quarter’s sales versus 53.5% during Q2 2015.
  • Software licenses accounted for SEK 28.7 million of revenue in the quarter, an increase of 26.9% over the year earlier period. Software contributed 21.6% of overall revenue during the quarter versus 24.2% in Q2 2015.
  • Support and services sales were SEK 35.7 million during the quarter, an increase of 66.8% versus the year earlier quarter. Support and services were 26.9% of overall revenue in the quarter, an increase from the 22.9% contribution in Q2 2015.

Revenue by Vertical

  • Sales in the Broadcast & Media (BMN) business vertical were SEK 123.0 million, a 60.9% increase over the prior year’s quarter. BMN was responsible for 93% of Net Insight’s revenue in the quarter, more on a percentage basis versus the 82% in Q2 2015.
  • Sales in the Digital Terrestrial TV (DTT) vertical were SEK 9.26 million, a decrease of 37.8% over Q2 2015. On a percentage basis, DTT represented 7% of overall revenue in Q2 2016, compared to 16% in Q1 2015.
  • The CATV/IPTV vertical was0% of total sales in Q2 2016. It was 2% of total sales during Q2 2016.

Net Insight ended the second quarter with 202 employees, a substantial increase over the 138 employees from a year earlier, and a slight decline from the 204 employees at the end of the first quarter.  The acquisition of ScheduALL is the primary cause for the year-over-year increase in headcount.

Cash and cash equivalents was SEK 195.0 million at the end of the quarter, down from the SEK 170 million balance as of March 31, 2016.

 

Management Commentary on Live OTT Solution Offering

During Net Insight’s earnings conference call, CEO Fredrik Tumegård talked extensively on the capabilities and potential of Sye.  Net Insight is still working to secure its first commercial deployment of Sye and management was measured in setting expectations for the market adoption of the product.  “The commercial tests currently underway in Live OTT are proceeding according to plan, as we’ve previously communicated, although it will be some time before revenues hit the bottom line. This is due to a naturally long sales cycle in combination with a renewed business model, where the revenue is first made visible when the viewers are using the new services. It’s important to point out that our technology is innovative and that it always takes time for new technology to gain foothold on the market” said Mr. Tumegård.

The below slide illustrates commercial progress with Sye.  It is sourced from Net Insight’s Q2 2016 earnings presentation.

NetInsight-Slide

 

Related Content:

Press Release: on Q2 2016 Results

Net Insight CEO Statements on Q2 2016 Results

 

 

© Devoncroft Partners 2009 – 2016. All Rights Reserved.

 

 

Grass Valley Grows Double Digits; Ships 20th IP System in Q2

Analysis, Quarterly Results | Posted by Josh Stinehour
Jul 19 2016

Belden announced second quarter 2016 results.  Belden’s largest division in terms of revenue is its Broadcast Solutions division (32% of overall revenue in the quarter).  The division includes the operations of Grass Valley along with Belden’s broadband connectivity businesses.  GrassValley_Logo

Broadcast Solutions revenue for Q2 2016 was $193.5 million, an increase of 10.6% versus the year earlier quarter, and an increase of 13.0% against the preceding quarter, Q1 2016.

Currency translation for Q2 resulted in an unfavorable impact of $1.1 million dollars.  Belden’s acquisition of m2fx in January 2016 contributed $2.1 million to the Broadcast Solutions division in the second quarter.  m2fx is a manufacturer of optical fiber protection tubes and was integrated into Belden’s broadband connectivity business, which is included in the reporting segmentation for Broadcast Solutions.

Grass Valley generated 12% year-over-year growth versus the second quarter of 2015.  On a regional basis, international growth at Grass Valley was 16%, while the United States region grew at 6% during quarter.

Management attributed the double digit performance to a stable US dollar, technology spend associated with the 2016 Summer Olympics in Brazil, and a rise in US advertising expenditures.

Improved year-over-year performance for Grass Valley was anticipated by Belden’s management.  During the Q1 2016 earnings call, Belden’s CEO John Stroup reiterated the softness in Grass Valley’s revenue numbers began in Q2 2015, making the Q1 2016 announcement the last difficult year-over-year comparison for the division.

During this quarter’s earnings call with analysts, Mr. Stroup made several comments on the recent financial results at Grass Valley.  “…the Grass Valley results were very strong and I think that some of that has to do with the Olympics. But I think more of it has to do with the fact that a year ago, we had a number of customers outside of the US that were struggling with exchange rates moving around, our International business was up 16% in Grass Valley in the quarter. And then I’d say the other thing is that as customers are beginning to get more confident in the transition of technology into IP, I think we’re also seeing that improve as well” said Stroup.

EBITDA (Earnings before interest depreciation and amortization) for Broadcast Solutions in the quarter was $29.5 million, a 29% increase versus Q2 2015, and a 27% decrease against Q1 2016.

The EBITDA margin for Q2 2016 was 15.2%, which compares to a 13.1% EBITDA margin in Q2 2015, and a 13.6% EBITDA margin in Q1 2016.  The primary reason for the profitability improvement was revenue growth and improved productivity, though in part offset by a less favorable product mix.

For the second quarter, Belden recognized a $1.3 million charge in its Broadcast Solution division for severance, restructuring, and acquisition integration costs.  This compares to restructuring charges for the division of $3.2 million during Q2 2015 and $4.3 million during Q1 2016.

In the Company’s prepared remarks, management highlighted further momentum with IP based solutions.  Adding to the 11 IP system shipments by Belden in Q4 2015 and Q1 2016, Belden shipped a further nine IP systems during the second quarter of 2016.

Responding to an analyst question Mr. Stroup added further context on the positive developments with Grass Valley’s IP solution portfolio.

“…It’s still a relatively small percentage of our revenue, and for most of our customers this is going to be sort of their first installation, their proof of concept. So I feel like we’re building momentum. I think that the real breakthrough for us was that a year ago in the market there was a lot of confusion with our customers about which way to go, because there were vendors that were sort of battling standards. And I think that partially due to our leadership and collaboration with other vendors in the industry, I think we now have a very good solution that meets customers’ needs and an open standard that they can rely upon and interoperability.”

Later in the call with analysts. Mr. Stroup announced a significant integration of Belden’s recent acquisition of security solution provider Tripwire with Grass Valley’s broadcast solutions.

“… we did have a substantial development in the quarter where we have in fact integrated the Tripwire technology into our iTX Playout system, which is an important part of the Grass Valley product portfolio. This is a software based Playout system that is used by the world’s leading broadcasters and we now have integrated the Tripwire software in to that system.

We made that available this quarter. I think we announced it at NAB…I think it’s an important development and it’s just one of the many ways that our Grass Valley business is differentiating itself from others. We are the only one in the industry that has done anything like that. And I think it’s an important development.”

 

Related Content:

Press Release: Q2 2016 Results:

Presentation: Q2 2016 Results:

Prepared management remarks: Q2 2016 earnings call with analyst

 

 

© Devoncroft Partners 2009 – 2016. All Rights Reserved.

 

 

Evertz Reports Record Annual Revenue, Highlights SDVN Momentum

Analysis, Broadcast technology vendor financials, Quarterly Results | Posted by Josh Stinehour
Jun 10 2016

Evertz reported results for its fiscal fourth quarter and year ending April 30, 2016.  For the full year Evertz achieved record annual revenue of C$381.6 million, an increase of 5% versus fiscal 2015 revenue.  evertz-logo

Net earnings for the fiscal year were C$70.9 million (C$0.94 per share), an 8% increase against fiscal 2015.  Evertz generated cash flow of C$91.2 million from operations during 2016, an increase of 68% over 2015.

Gross margin percentage for fiscal 2016 was 57%, which is similar to the 56.7% recorded during fiscal 2015.  Operating margins for the 2016 year were 25.2%, a slight improvement over the 24.3% operating margins in 2015.

2016 annual revenue from the US/Canada region was $216.0 million, up 6% when compared to 2015.  US/Canada represented 56.6% of total revenue in 2016, approximately flat versus the 56.2% in 2015.

International revenue for full year 2016 was $165.5 million, a 3.9% increase compared to 2015.  As a percentage of total revenue, International represented 43.3% of total sales in 2016, which compares to 43.7% of total revenue in 2015.

The top ten customers for the year accounted for 29% of total revenue, and no customer accounted for an excess of 7% of revenue.  During the year, Evertz had 311 individual customers each representing over C$200,000 of revenue.

The Company ended the year with C$123.1 million of cash and cash equivalents down slightly from C$129.9 million at January 31, 2016.

 

Q4 FY2016 Results:

Evertz revenue for the fourth quarter of its 2016 fiscal year was C$96.4 million, up 5% versus the same quarter a year earlier, and down 3.3% versus the previous quarter ending January 31, 2016.

Revenue for the quarter was in line with the consensus analyst estimates for revenue of C$96.7 million.

The Company said that its shipments during May 2016 were C$21 million, and that its purchase order backlog at the end of the quarter was in excess of C$69 million.  May 2016 shipments represented a 28% year-over-year decline versus May 2015.  Management attributed the weakness to the timing of customer orders and fewer shipping days in May.

Net earnings for the quarter were C$8.1 million (C$0.11 earnings per share), a decrease of 26.6% versus the fourth fiscal quarter of 2015, and a decrease of 66% versus the preceding quarter.  Evertz generated cash from operations of C$10.1 million for the quarter, which compares favorably to the C$1.6 million used by operations during the fourth quarter of fiscal 2015.  The operating results included an unfavorable C$11.8 million foreign exchange loss during the quarter.

Revenue in quarter for the US/Canada region was C$51.2 million, up 2.4% versus the same period a year ago, and down 4.4% versus the previous quarter. US/Canada sales were 53% of total revenue during the quarter, down from 54% of revenue during the same period a year ago, and 53.7% of revenue last quarter.

International revenue for the quarter was C$45.1 million, representing a 7.6% increase versus the previous year’s result and a decrease of 2.3% when compared to the previous quarter. International sales were 47% of total revenue in the quarter, up from 45% during the same quarter last year and 46.3% from the preceding quarter.

Gross margins in the quarter were 57.1%, down slightly from 57.3% during the prior year period and equivalent to the 57.1% contribution from the third fiscal quarter of the year.

R&D expenses in the second quarter were C$17.3 million, a decrease of 1.9% versus the same period last year, and flat versus the previous quarter.  R&D expenses were approximately 17.9% of revenue in the quarter, lower on a percentage basis than last year (19.1%) and last quarter (17.3%).

Selling and administrative expenses for the quarter were C$16.2 million, an increase of 4.5% versus last year, and a decrease of 2.4% versus the sequential quarter. Selling and administrative expenses represented 16.8% of revenue in the quarter, the same as the year earlier quarter, and a slight increase versus the 16.6% contribution of revenue in the previous quarter.

On the call with earnings analyst, Evertz EVP Brian Campbell highlighted Evertz’s positive market momentum with its Software Defined Video Networking (SDVN) solutions.  Responding to a question by Robert Young from Canaccord Genuity, Brian Campbell stated, “We have over 50 deployments of SDVN including some of the first of their kind and largest scale.  By virtue of that, it would put us in leadership position.  As you recall as well, we were very early in developing the solutions and advocating software defined networking and also virtualized – whether it be private cloud or public cloud – solutions. So I think we are very well positioned to help our customers that are looking to move in that direction, and to give them great comfort that they’ve got fabulous solutions that they can count on going forward.”

 

 

Related Content:

Press Release on Evertz Q4 FY2016 Results

Evertz MD&A on Q4 FY2016 Results

Evertz Q4 FY2016 Financial Statements

 

 

© Devoncroft Partners 2009-2016.  All Rights Reserved.

 

 

Harmonic Declines 21.3% in Q1 Due to Revenue Recognition Challenges

Analysis, Broadcast technology vendor financials, Quarterly Results | Posted by Josh Stinehour
May 13 2016

Harmonic announced revenue for first quarter of 2016 of $81.8 million, a decrease of 21.3% versus Q1 2015 and a decrease of 5.5% versus the Q4 2015. Harmonic_Logo

Guidance for Q1 2016 had been for revenue in the range of $82 million to $86 million.  The guidance not include any potential contribution from the acquisition of Thomson Video Networks (“TVN”), which closed in late February.  Revenue contribution from TVN was approximately $3.5 million during quarter.

Managed attributed the underperformance of revenue against guidance to challenges in recognizing software and services revenue.  This is a visible aspect of Harmonic’s ongoing transformation to a software business model, which has created complexity in the accounting for the separate portions of software and services in solutions sales.

The accounting impact highlights Harmonic’s progress in selling its virtualized solutions, including VOS.  During the earnings release, Harmonic announced VOS has surpassed 20,000 channel deployments globally.  Management expects to clear up the revenue recognition challenges later in year, which would lead to an acceleration of revenue recognition in Q4 2016.

GAAP gross margins were 49.7% for the first quarter, a decline versus the 52.9% recorded in Q1 2015 and a decline against the 54.3% gross margins in Q4 2015.  Harmonic attributed lower gross margins to the delays in recognizing software and services revenue, which has high gross margins.

For the quarter, Harmonic recorded a GAAP net loss of $25.1 million or $(0.33) per diluted share.  This compares to a net loss of $2.6 million or $(0.03) per share in Q1 2015 and a net loss of $7.2 million or $(0.08) per share in Q4 2015.  The decline in overall profitability is due to the lower revenue levels for the quarter.

Bookings for the first quarter of 2016 were $109.6 million (including $5 million from TVN), an increase of 8.5% versus the year earlier period, and a 12.6% increase versus the preceding quarter.

The Company’s total backlog in deferred revenue was $180 million, up 47% and 49.8% over Q1 2015 and Q4 2015, respectively.  The backlog benefited from the slippage in revenue recognition and also a $21 million contribution from the acquisition of TVN.

On a geographic basis:

  • Americas accounted for 54% of the revenue for Q1 2016, a slight decline versus the 47% from Q1 2015, and equivalent to the 54% contribution recorded in the fourth quarter of 2015
  • The EMEA region was responsible for 24% of the revenue in the quarter, equivalent to the contribution from Q1 2015, and slightly lower than the 25% contribution in Q4 2015
  • APAC represented 16% of the revenue for the quarter, a slight decline versus the 18% contribution in Q1 2015, and a steeper decline against the 22% contribution in Q4 2015

On a product line basis:

  • Video products revenue for the quarter was $44.2 million, a decrease of 9.2% compared to Q1 2015, and a decrease of 12% versus Q4 2015. As a percent of total sales, video products represented 54% of revenue in Q1 2016.  This compares to 47% in year-earlier period Q1 2015 and 58% in the preceding quarter Q4 2015
  • Cable Edge revenue was $13.4 million during the quarter, a decrease of 57.8% versus first quarter of 2015, though an increase of 17.3% compared to the preceding fourth quarter. Cable Edge represented 16% of revenue in Q1 2016, a decrease versus the 30% contribution in Q1 2015, though an increase over the 13% of revenue recorded in Q4 2015.  The continued decline of Harmonic’s legacy EdgeQAM technology was anticipated.  Harmonic remains on schedule to ship its CableOS product line in the second half of 2016.
  • Services and support revenue amounted to $24.1 million in Q1 2016, an increase of 2.7% against Q1 2015, and a decrease of 2.8% versus Q4 2015. Service and support revenue was 30% of revenue for Q1 2016, an increase over the 23% from Q1 2015, and in-line with the 29% from Q4 2015

On a segment basis:

  • Broadcast and Media sales were $30.5 million during the quarter, a year-over-year decrease of 15.2%, and a decrease of 11.5% against the preceding quarter. Broadcast and Media was responsible for 37% of revenue for the first quarter of 2016, a slight percent increase from 35% in Q1 2015, and a decrease versus the 40% in Q4 2015.
  • Service Provider sales were $51.3 million in the first quarter, a 24.5% year-over-year decrease, and a decrease of 1.5% versus Q4 2015. Service Provider represented 63% of revenue in the quarter, a slight decrease from 65% contribution in Q1 2015, though an increase from the 60% contribution during Q4 2015.

The Company’s cash position ended the first quarter of 2016 at $76.2 million, down from $152.8 million from the end of 2015.  The decrease is primarily attributable to the cash purchase price paid for the acquisition of TVN.

Harmonic ended the first quarter with 1,418 employees, up from 989 at the end of 2015.  The TVN acquisition added approximately 430 employees.

Business outlook:

For Q2 2016 management is anticipating total revenue in the range of $102M – $107M and GAAP gross margins of 48% – 49%.  Operating loss is expected between $14.5 million and $12.5 million with earnings per share of $(0.19) to $(0.16).

As part of the release, management confirmed it remains on track to realize the $20 million annual synergy savings expected from the integration of TVN.  The full impact of these savings will begin with the start of 2017.

Managed also reiterated the prior financial guidance for 2016 from the Q4 2015 earnings release.

Commenting on quarter’s results, Harmonic President and CEO Patrick Harsham stated, “While our first quarter results fell below our expectations, new bookings grew sequentially and year-over-year and we ended the quarter with record backlog and deferred revenue.  We are excited that our transformation to virtual architectures and associated services remains on track including the announcement of our new VOS Cloud and VOS 360 software-as-a-service offerings. Our full-year financial guidance remains unchanged.”

 

Related Content:

Harmonic Q1 2016 Earnings Press Release

Harmonic Q1 2016 Earnings Presentation

 

 

© Devoncroft Partners 2009 – 2016. All Rights Reserved.

 

 

Avid Q1 Growth of 20%, Offset by Bookings Shortfall

Analysis, Broadcast technology vendor financials, Quarterly Results | Posted by Josh Stinehour
May 11 2016

Avid Technology announced Q1 2016 GAAP revenue of $143.5 million, an increase of 20% versus Q1 2015 revenue of $119.6 million. Avid Logo_ white background

Approximately 75% of the year-over-year growth is attributable to a change in the accounting treatment of revenue recognized for the release of the latest Pro Tools version 12.5 during the first quarter.  The ability to more quickly recognize revenue reflects Avid’s progress over the past two years of eliminating the practice of implied support for products and transitioning to explicit support and recurring revenue models.

Absent the revenue acceleration, management indicated Avid for the quarter would have been within the original guidance of $120 million to $125 million on a non-GAAP basis.

Avid’s public filings did not disclose the amount of the growth attributable to revenue contribution from Orad, purchased in the third quarter of 2016.  Orad had $10.4 million of revenue during Q1 2015.

Product revenue for the quarter was $84.5 million, an increase of 5.6% against year-earlier quarter.  Products represented 58.9% of overall revenue in the quarter, a decrease versus the 67% contribution during the first quarter of 2015.  Services revenue was $59.0 million, an increase of 49.2% versus the year-over-year period.  Services contributed 41.1% of total revenue for Q1 2016, an increase versus the 33% contribution from Q1 2015.

Q1 2016 net income was $20.9 million or $0.53 per share.  This compares to Q1 2015 net income of ($0.2) million, which was $0.00 per share.

Gross margins for the quarter were 69.7%, a substantial improvement over the 60.3% from Q1 2015.  Backing on the accelerated Pro Tools revenue recognition would have resulted in a gross margin of approximately 67%.  The remaining increase in gross margin was primarily due to lower non-variable costs of sales resulting from Avid’s ongoing efficiency programs.

Operating income for Q1 2016 was $25.7 million, a more than 20-fold increase over the operating income of $1.1 million in Q1 2015.

R&D expense for the quarter were $21.4 million, a 7.3% decline against Q1 2015 R&D levels.  As a percentage of revenue R&D expenses were 15.0% for the quarter, compared to 19.3% of total revenue in Q1 2015.

Sales and marketing costs for Q1 2016 were $31.6 million, representing a 12.8% rise versus Q1 2015 sales and marketing levels.  Sales and marketing expenses were 22.0% of Q1 2016 revenue, a decline versus 23.4% of total revenue from the first quarter of 2015.

G&A expense was $17.7 million for Q1 2016, a decline of 8.6% versus the year earlier quarter.  Expressed in terms of total revenue G&A expense was 12.3% of sales in Q1 2016 versus 16.2% in Q1 2015.

When considering the comparable period Q1 2015 figures do not include Orad’s operations (purchased in Q3 2015), the decline in R&D and G&A further illustrates the impact of Avid’s recent restructuring initiatives.

During the first quarter of 2016, Avid announced a $68 million (annualized) efficiency initiative.  The full $68 million savings are expected beginning in 2017.  During the earnings presentation for the quarter, management indicated $33 million of the goal has been completed through the first quarter activities.  $5 million was reflected in first quarter results.

There are many one-time expenses and non-cash items in Avid’s income statement results.  To provide a more normalized view of profitability Avid cites adjusted EBITDA, which is defined as operating income plus expense add backs for costs attributed to amortization, restructuring, restatements, stock-based compensation, acquisitions, integration activities, and efficiency program costs.  Adjusted EBITDA for the quarter was $38.5M, a substantial increase of 227% over Q1 2015.

Given the complexity of Avid’s financial statements, it is useful to review the impact on the Company’s cash balance.  Cash used in operations for the quarter was $11.2 million.  This compares to cash generated in operations of $4.6 million during the first quarter of 2016.

Cash generation in the quarter was negatively impacted by a build out of inventory for the recently announced Nexis storage platform.

Avid ended the quarter with $87.8 million of cash.  Avid had started the quarter with $17.9 million of cash.  The increase in the cash balance is attributable to the Company’s $100 million debt offering during the first quarter. 

Several factors have combined to make Avid’s financial disclosures difficult to comprehend, most notably the restatement in late 2014, which introduced a considerable amount of amortized revenue from prior financial periods.  Though this revenue is now recognized in Avid’s income statement, it does not represent any actual cash received from clients.  In other words, it is non-cash revenue with 100% gross margins.  In aggregate, changes in deferred revenue represented a negative cash adjustment (versus net income) of $40 million in Q1 2016 and $2.1 million in Q1 2015.

The negative deferred revenue dynamic also creates a revenue headwind for the future since this component of deferred revenue will decline with time. Management has indicated the impact is between $25 million and $30 million a quarter.

Adding to this complexity are the effects of recent restructuring initiatives, the impact of the Orad acquisition, and the ongoing transition to a subscription model.

In an effort to better communicate the results of Avid’s ongoing transformation, management references several new metrics.

Update on Transformation:

Below is a chart from Avid’s investor presentation for Q1 2016 illustrating several areas of progress on the market adoption of Avid’s Everywhere Platform.

investorslide

Commenting on the transformation progress, Avid CEO Louis Hernandez, Jr. stated, “Our work so far in 2016 demonstrates the continued momentum of the Avid Everywhere strategy, the increased adoption of the Avid MediaCentral Platform by our global base of customers and strong progress as we move steadily towards completing the transformation.”

Business Outlook:

Bookings for the quarter were $98 million on a constant currency basis, a decline of 18% versus Q1 2015.  The original guidance for Q1 2016 bookings was for $108 million to $118 million.

Management attributed the shortfall to market volatility created by the ongoing industry transition and delayed buying decisions related to the anticipated release of the Nexis storage platform, which will ship during Q2 2016.

The declining in bookings resulted in a lower end of quarter accounts receivable balance (approximately $15 million).  Management expects the lower accounts receivable balance to negatively impact Q2 2016 free cash flow.  Because of this management is anticipating a material use of adjusted free cash flow in the upcoming quarter of $27.5 million to $32.5 million.  Adjust free cash flow includes the impact of capital expenditures and excludes the cash impact of restructuring activities.

For Q2 2016, management provided guidance of bookings between $99 million and $115 million on a report basis (as opposed to constant currency).  Bookings for the second quarter of 2015 were $118 million.  The full backlog (post impact of restatement) was $480 at the end of first quarter, a 4% increase over the backlog at the end of the first quarter of 2015.

Avid is expecting to begin generating adjusted free cash flow in the second half of 2016.  As part of the earnings release, Avid reaffirmed earlier full year guidance for 2016.

During the earnings call, Louis Hernandez, Jr. added, “We’re probably most excited about the attractive financial model post transformation. We’ve a clear path to completion, the non-marketed products that we’re rolling off and are completed as expected, the efficiency gains are on track and then the accounting adjustments will end towards the end of this year early next year, leaving us with an adjusted EBITDA and free cash  flow, which are expected to increase dramatically post transformation.”

 

Related Content:

Press Release: Avid’s Q1 2016 Earnings Release

Presentation: Avid Q1 2016 Earnings Presentation

 

 

© Devoncroft Partners 2009 – 2016. All Rights Reserved.

 

 

 

Grass Valley Receives $20M Order; Slight Revenue Decline in Q1

Analysis, Broadcast technology vendor financials, Quarterly Results | Posted by Josh Stinehour
May 11 2016

Belden announced first quarter 2016 results.  Belden’s largest division in terms of revenue is its Broadcast Solutions division.  The division includes the operations of Grass Valley along with Belden’s broadband connectivity businesses.

Beginning with Q1 2016 Belden’s has moved its audio-video cable and connector business out of the Broadcast reporting unit and into the Enterprise Connectivity reporting segment.  The reporting change provides improved visibility into Belden’s broadcast revenues.  Prior periods were restated to similarly reflect the reporting modification.

Broadcast Solutions revenue for the first quarter 2016 was $171.3 million, a decrease of 2.9% over the year prior quarter, and a 15.1% decline against the preceding quarter, Q4 2015.

Broadcast Solutions revenue for the quarter was negatively impacted by currency translation, responsible for approximately 58% of the year-over-year decline ($3 million).  Managed attributed the sequential declines to typical seasonal patterns in the industry.

As part of the earnings release management highlighted the largest order in Grass Valley history.  The order was received in April and is in excess of $20 million.  It will ship over the next two to three years.  Managed also indicated a further seven IP systems shipped during Q1 2016.

EBITDA (Earnings before interest depreciation and amortization) for Broadcast Solutions in the quarter was $23.2 million, a 0.7% increase versus Q1 2015, and a 42.2% decrease against Q4 2015.

The EBITDA margin for Q1 2016 was 13.6%, which compares to a 13.1% EBITDA margin in Q1 2015, and a 19.9% EBITDA margin in Q4 2015.

For the quarter, Belden recognized a $4.3 million charge in its Broadcast Solution division for severance, restructuring, and acquisition integration costs.

On Belden’s earnings call with analyst, CEO John Stroup offered commentary on the recent financial results at Grass Valley.  “The Grass Valley business on a year-over-year basis, revenues were down. We expected that. That was sort of the last quarter of a difficult comparison. As you recall, last year, we began to see softness in order rates in Q2 and revenue in Q2.

On a year-over-year basis, I thought the team did a nice job on productivity improvement. On a year-over-year basis within the segment, productivity was about $7 million. So, obviously, with the high margins in that business, it’s difficult to overcome the revenue but I think the fact that they were able to expand margins, EBITDA margins on a year-over-year basis was a good outcome. In terms of order rates, the order rates in the quarter were pretty much as we expected. The book-to-bill at Broadcast was just about 1.0 for the quarter. But as we mentioned, we did make progress on the IP products although that is still a relatively small percentage of the business.” said Stroup.

Business Outlook:

In response to an analyst question, Stroup elaborated on the 2016 expectations for Grass Valley stating, “…I would say that our guidance right now on the full year implies modest growth in Grass Valley on a year-over-year basis. So, we are not incorporating a strong rebound in the Grass Valley business in 2016 to hit the numbers [management guidance for overall business] that we’ve given everybody today.”

 

Related Content:

Press Release: Q1 2016 Results

Presentation: Q1 2016 Earnings Presentation 

Transcript: Prepared management remarks

 

 

© Devoncroft Partners 2009 – 2016. All Rights Reserved.

 

 

Dolby Q2 Results Offer Updates on Atmos, Vision Adoption

Analysis, Broadcast technology vendor financials | Posted by Josh Stinehour
May 02 2016

Dolby announced revenue for its second fiscal quarter (ending April 1, 2016) of $274.3 million, up 1% versus the year earlier period, and an increase of 14% versus the preceding quarter, Q1 2016.

GAAP net income for the quarter was $67.4 million or $0.66 earnings per share.  This represents a 16% increase over the net income for Q2 2015 of $57.9 million ($0.56 earnings per share).

GAAP Gross Margins were 91.1% for the quarter, an increase over the gross margins of 90.8% from the year earlier period and the 87.6% gross margins recorded during Q1 2016.  Operating margins were 30%, an increase over the 29% from Q2 2015 and the 16% operating margins during the preceding quarter.

Management’s guidance at the end of first quarter had been for revenue in the range of $255 million to $270 million for the second quarter with gross margins between 89% and 90%, and GAAP earnings per share of $0.42 and $0.48.  On each measure, Dolby outperformed guidance.  Dolby’s shares were trading approximately 13% higher after the earnings release.

Revenue by Type:

Dolby reports revenue across licensing, product, and service activities.  Product revenues consists primarily of sales of Digital Cinema Servers and Dolby Cinema Audio Products.

  • Licensing revenue for Q2 2016 was $249.3 million, an increase of 2% versus Q2 2015 and an 18% increase versus Q1 2016.
  • Product revenue was $20.0 million, a decline of 12.6% compared to the year earlier period, and a decrease of 19% versus Q1 2016 results. The Q1 2016 results had been especially strong given cinema updates related to holiday movie releases, including Star Wars episode seven.  Year-over-year declines are consistent with the broader cinema equipment market, which has been impacted by the recent completion of the conversion from film to digital.
  • Services revenue were $4.9 million during the second quarter, a decrease of 12.5% against Q2 2015, and a slight increase of 2% versus the first quarter’s results.

Product gross margins for Q2 2016 were 30.3%, a substantial increase over the 20.7% gross margins from Q2 2015 and 23.3% gross margins in Q1 2016.

As part of the earning release, Dolby disclosed several data points on developments in its growth initiatives within its cinema business.

There are now nearly 1,800 screens worldwide where Dolby Atmos is installed or committed.  Over 450 Dolby Atmos titles have been announced or released.

There are also more than 20 Dolby Cinema locations open and another 200 Dolby Cinema locations are planned for roll out around the world.  Dolby Cinema is a partnership with cinema exhibitors (including AMC in the US) to create a branded premium cinema featuring Dolby Vision laser projection and Dolby Atmos audio technology.  Nearly 40 Dolby Vision theatrical titles have been announced or released since its launch in May 2015.

Licensing Revenue by Customer Vertical:

Licensing revenue in the Broadcast vertical (primarily televisions and set-top boxes) was 45% of total licensing revenue or $112.2 million.  On an aggregate basis, Broadcast licensing grew 9.8% versus Q2 2015 and 10.7% versus the preceding quarter, Q1 2016.  As a percentage of total licensing revenue, Broadcast contributed 42% in Q2 2015 and 48% during the first quarter of 2016.

The remainder of Dolby’s licensing revenue is attributable to PC, Mobile, Consumer Electronics, and Other (Video game consoles, automobile entertainment, and audio conferencing).

Management attributed the growth in Broadcast licensing to higher back payments and higher volume in set-top boxes. During its earnings call, management noted Dolby is well-positioned to benefit from further growth in the Broadcast market as emerging markets transition to digital broadcast.

Also on the earnings call, Management highlighted several developments with Dolby Vision and Dolby’s growing technology presence in online content delivery.

LG, the 2nd largest TV manufacturer in the world, is set to begin shipping OLED and UHD LED TV’s featuring Dolby Vision.  Dolby Vision is now included in three of the five television lines from Vizio, the 2nd largest TV manufacturer in the US.

Over 40 streaming services now deliver Dolby Audio including Google Play, Netflix, Microsoft, Amazon, and iTV.  Management is anticipating up to 100 Dolby Vision titles available for home entertainment delivery by the end of 2016.  Netflix and VUDU are now streaming content in Dolby Vision, and Amazon has announced a commitment to Dolby Vision.

Financial Guidance

Management guidance for the third fiscal quarter is revenue in the range of $260 million to $275 million, gross margins between 89% and 90%, and earnings per share between $0.47 and $0.53.

Commenting on the quarter’s results, Kevin Yeaman, President and CEO, Dolby Laboratories stated, “It was a solid quarter and we gained momentum in mobile with the inclusion of Dolby Audio in iOS.  We’ve also expanded the number of Dolby Vision TVs in market and the amount of Dolby Vision content, while continuing to roll out Dolby Cinema locations around the world.”

 

Related Content:

Press Release: Dolby Fiscal Q2 2016 Earnings Release

 

 

© Devoncroft Partners 2009 – 2016. All Rights Reserved.

 

 

AWS is now a $10 Billion Annual Revenue Business

Analysis, Broadcast technology vendor financials | Posted by Josh Stinehour
May 02 2016

Amazon reported results for the first quarter of 2016.  Since the first quarter of 2015, Amazon has been reporting the individual results of Amazon Web Services (AWS).  Based on Q1 2016 figures, AWS is now a $10 billion run-rate revenue business with a trailing twelve month operating income of nearly $2 billion.

The reported revenue for AWS consists of the more than 70 services now offered from the AWS platform including the sales of compute, storage, and database.  Amazon does not specifically address how much AWS revenue was attributable to the media industry.  However, the AWS figures are an informative data point for better understanding the broader adoption of cloud services.

For the three months ended March 31, 2016 AWS had revenue of $2.6 billion, a 64% increase over the first quarter of 2015.  AWS represented 8% of Amazon’s sales for the quarter, an increase from the 6% contribution for Q1 2015.

AWS operating income for Q1 2016 was $604 million, which was a 210% year-over-year increase versus the first quarter in 2015.  During the quarter AWS actually generated more operating income than all of Amazon’s other business lines – both on an individual and aggregate basis.

Operating margins for AWS in the quarter were 23.5%, a substantial increase over the 12.4% operating margins during Q1 2015. The reporting of operating income now includes a burden for stock-based compensation (this lowered operating margins versus historical reporting).

Management attributed the growth in AWS revenue and profitability to increased customer usage and cost structure productivity.  This was partially offset by continued pricing decreases and increased spending on technology infrastructure.

The below chart from Amazon’s Q1 2016 earnings presentation illustrates the growth of revenue and operating income for AWS over the past year.

 

AWS-Results

 

Operating incomes doesn’t capture the cash flow impact of capital expenditures and payments attributable to the financing of equipment for AWS, which is not disclosed directly.  It is a capital intensive business.

Additional information from Amazon’s filings are illustrative of the significant level of investment in technology infrastructure attributed to AWS.  The Company’s total capital expenditures (cash) were $1.2 billion in Q1 2016, a 38% increase over Q1 2015. According to Amazon’s SEC filings, “This primarily reflects additional investments in support of continued business growth due to investments in technology infrastructure (the majority of which is to support AWS) and additional capacity to support our fulfillment operations.”

Cash capital expenditures do not account for property and equipment acquired under capital lease obligation (non-balance sheet items).  Property and equipment acquired under capital leases were $875 million in Q1 2016, an 8% decrease over Q1 2015. A majority of this spend is due to investments in technology infrastructure for AWS.

On Amazon’s call with earnings analyst, Brian Olsavsky, SVP and Chief Financial Officer, stated the combined total of capital expenditures and capital lease obligations was $9.5 billion in the trailing 12 month period.  AWS is the largest driver of this spend, but does not consume all of this number

AWS specifically and cloud vendors more broadly, are benefiting from a secular trend toward cloud usage among media and entertainment sector.  As cloud providers replace the capital expenditures of media customers, there are significant implications for technology vendors and service providers.  The $9.5 billion figure (noted above) is equivalent to almost half of all annual product sales in the media and broadcast technology sector based on the latest results of the IABM DC Global Market Valuation Report (www.iabmdc.com).

The adoption of cloud infrastructure in the media industry is not necessarily a negative development for the technology vendor community.  AWS views its services as unburdening organizations from the undifferentiated heavy lifting of technology deployments.  In this way, AWS is allowing media customers and media technology suppliers to focus on the aspects of their businesses differentiating their products and services to customers.

Moving to cloud infrastructure does necessarily require new technology architectures, revenue models, and operating structures.  These topics were discussed extensively during the recent Media Technology Business Summit at the 2016 NAB Show including a keynote from AWS titled, “’All In’: Cloud Transformation of the Media Industry.”  If you haven’t downloaded our slides from the event, a complimentary copy is available from the following link.

While Amazon does not disclose specific AWS numbers in the media vertical, Amazon founder Jeff Bezos did note a high-profile media customer in his annual letter to shareholders (excerpt below).

“MLB Advanced Media is an example of an AWS customer that is constantly reinventing the customer experience. MLB’s Statcast tracking technology is a new feature for baseball fans that measures the position of each player, the baserunners, and the ball as they move during every play on the field, giving viewers on any screen access to empirical data that answers age-old questions like ‘what could have happened if…’ while also bringing new questions to life. Turning baseball into rocket science, Statcast uses a missile radar system to measure every pitched ball’s movements more than 2,000 times per second, streams and collects data in real-time through Amazon Kinesis (our service for processing real-time streaming data), stores the data on Amazon S3, and then performs analytics in Amazon EC2. The suite of services will generate nearly 7 TB of raw statistical data per game and up to 17 PB per season, shedding quantitative light on age-old, but never verified, baseball pearls of wisdom like ‘never slide into first.’”

 

Related Content:

Presentation: Q1 2016 Amazon Earnings Presentation

Press Release: Q1 2016 Amazon Earnings Press Release

SEC Filing: Q1 2016 Amazon SEC Filing

 

 

© Devoncroft Partners 2009 – 2016. All Rights Reserved.

 

 

Net Insight Revenue Grows 25% in Q1 2016, Driven by M&A

Analysis, Quarterly Results | Posted by Josh Stinehour
Apr 28 2016

Video transport technology provider Net Insight reported its Q1 2016 results.  Revenue was SEK 110.0 million, up 25.3% versus Q1 2015.  On a constant currency basis revenue for the quarter increased 24.1%. logo-net-insight

The vast majority of the year-over-year growth was attributable to the acquisition of ScheduALL in September 2015.  Organic growth in Q1 2016 amounted to 3.5% versus the year earlier period.

Net income for the quarter was SEK 14.0 million or (0.04 earnings per share), an increase of 250% over the net income of SEK 4.0 million (0.01 earnings per share) from Q1 2015.

Gross margins for Q1 2016 were 61.7%, a slight increase above the 60.1% from the previous year’s quarter.  Operating margins were 7.1%, which is approximately the same as Q1 2015.

Revenue by Geography

  • Sales from Western Europe were SEK 47.8 million, an increase of 26.6% versus Q1 2015. The region contributed 43% of total revenue for the quarter.  In Q1 2015, Western Europe also represented 43% of overall sales
  • The Americas contributed SEK 35.2 million or 32% of Net Insight’s revenue in the quarter (versus 41% in the Q1 2015). This was a slight decrease in performance of 1% versus the revenues from Americas in the year earlier period.  When excluding the revenue contribution from ScheduALL, revenues in the Americas decreased 31% (SEK -10.8 million) in the quarter.  Management attributed the organic decline to a large order recognized during Q1 2015 within the US.
  • Rest of World sales were SEK 26.9 million, an increase of 88% versus the year earlier period.  As a percentage of total sales, Rest of World contributed 25% in the quarter versus 16% during Q1 2015

 

Revenue by Product Type

  • Sales attributed to Net Insight’s hardware products were SEK 44.7 million in the quarter, a decrease of 17.5% versus the previous year. As a percentage of total sales, hardware products were 41% of the quarter’s sales versus 62% during Q1 2015.
  • Software licenses accounted for SEK 30.0 million of revenue in the quarter, a substantial increase of 94% over the year earlier period. Software contributed 27% of overall revenue during the quarter versus 18% in Q1 2015.
  • Support and services sales were SEK 35.5 million during the quarter, an increase of 110% versus the year earlier quarter. Support and services were 32% of overall revenue in the quarter, an increase from the 19% contribution in Q1 2015.

 

Net Insight’s sales by product type have been transitioning towards software and services and away from hardware for the past several quarters.  This was further accelerated with the acquisition of ScheduALL.  The trend is highlighted by the below chart from Net Insight’s earnings release.

Capture

 

Revenue by Customer Vertical

  • Sales in the Broadcast & Media (BMN) customer vertical were SEK 89.1 million, an 25% increase over the prior year’s quarter. BMN was responsible for 81% of Net Insight’s revenue in the quarter, less on a percentage basis than the 86% in Q1 2015.
  • Sales in the Digital Terristrial TV (DTT) vertical were SEK 18.7 million, an increase of 64% over Q1 2015. On a percentage basis, DTT represented 17% of overall revenue in Q1 2016, compared to 13% in Q1 2015.
  • The CATV/IPTV vertical was 2% of total sales in Q1 2016. It was 1% of total sales during Q1 2015.

 

Net Insight ended the first quarter with 204 employees a substantial increase over the 138 employees from a year earlier.  The acquisition of ScheduALL is the primary cause for the increase.

Cash and cash equivalents was SEK 170 million at the end of the quarter, up slightly from the SEK 164 million balance as of December 31, 2015.

Commenting on the results for the quarter, Net Insight CEO Fredrik Tumegård stated, “Sales increased by 25 per cent in the quarter with a stable operating margin of 7 per cent. The quarter has been characterized by continuous market penetration of our solution for true Live OTT, integration of last year’s acquisition of ScheduALL and both activities are progressing according to plan.”

 

 

Related Content:

Press Release: Net Insight releases Interim Report for January – March 2016

 

 

© Devoncroft Partners 2009-2016.  All Rights Reserved.

 

 

 

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