Posts Tagged ‘compression’

ATEME Grows 29% in 2017; Hints at Acquisitions

Annual Results, broadcast technology market research, Broadcast technology vendor financials, OTT Video | Posted by Josh Stinehour
Feb 02 2018

Video compression specialist ATEME announced 2017 revenue of €49.6 million (~$61.8M USD), an increase of 29.3% versus full year 2016.  At a constant exchange rate, year-over-year growth was even greater at 32.5%.  

On a quarterly basis, Q4 2017 had revenue of €16.4 million, a 38.3% increase over Q4 2016.

Management called attention to 2017 representing the sixth straight year of revenue growth.  Annual revenue increases averaged 23% per year during 2011-2015, and have accelerated since.  In a related observation (and given the growth stats, perhaps justified), ATEME has adopted the tag line, “the emerging leader of video delivery.”

In its press release, ATEME also highlighted a strong Q4 in the EMEA region and a multi-million software contract with a major US service provider.

Revenue by Geography:

ATEME benefited from growth in all regions during 2017.

  • Revenues for the EMEA region during the year were €18.6 million, a 14.1% increase 2016. As a percentage of total sales, EMEA was 38.4% of revenue during 2017, which compares to 43.5% during 2016.
  • The USA / Canada region contributed revenue of €15.7 million, a 31.4% rise over the year-earlier period. USA / Canada was 32.4% percent of total sales in the period versus 31.9% during 2016.
  • Latin America was responsible for €7.9 million of revenue during 2017, a substantial increase of 90.4% versus 2016. For 2017, Latin America accounted for 16.5% of total sales, compared to 11.2% during 2016.
  • Asia Pacific accounted for €6.1 million of revenue, an increase of 22.3% versus the full year 2016. The Asia Pacific region contributed 12.7% of total sales during 2017, versus 13.4% during 2016. This adds to growth of 80% in 2016.

The growth in the Latin America region was attributed to strong demand for digital terrestrial distribution solutions.

 

Business Outlook:

Commenting on the 2018 outlook, ATEME President Michel Artieres stated, “The outlook for 2018 remains positive and we aim to deliver further healthy growth in all regions. We will continue to focus on developing or acquiring new solutions aimed at expanding our addressable market beyond the video headend segment, downstream to the distribution network.”  The reference to ‘acquiring new solutions’ may suggest some upcoming corporate initiatives on the part of ATEME.

 

Related Content:

ATEME Full Year 2017 Results Press Release

 

 

© Devoncroft Partners 2009 – 2018. All Rights Reserved.

 

 

Ericsson Sells Majority Stake in Media Solutions Business

Analysis, Broadcast technology vendor financials, Broadcast Vendor M&A | Posted by Josh Stinehour
Jan 31 2018

Ericsson announced two major developments with its media operations: (1) the sale of a majority interest of 51% in its Media Solutions Business to private equity firm One Equity Partners; (2) and its decision to maintain ownership of Ericsson’s former Broadcast and Media Services, which was renamed Red Bee Media in November 2017. 

The Media Solution Business comprises Ericsson’s compression and PayTV product portfolio built in part through the acquisitions of Tandberg Television (2007), Microsoft Mediaroom (2013), Fabrix (2014), Azuki Systems (2014), and Envivio (2015).  Full year revenue for the Media Solution Business is around 3 billion SEK or approximately $380 million USD.

Red Bee Media encompasses Ericsson’s managed services portfolio in the broadcast sector, which was built in part through the acquisitions of Technicolor’s Broadcast Services (2012), Red Bee Media (2013), and FYI Television (2016). Annual revenue for Red Bee Media is approximately 3.5 billion SEK or around $444 million USD.

These announcements came after a nearly nine month evaluation of strategic alternatives for the businesses.  The initial announcement was made shortly before the 2017 NAB Show in March of last year.

Challenging operating performance for these businesses was also initially disclosed in early 2017.  It continued.  Ericsson’s Q3 2017 financial results showed a segment operating margin of -77% for the year-to-date nine month period in the Other segment where the Media Solution and Red Bee Media businesses were reported.  Further financial information indicated Media Solution and Red Bee Media represented around 75% of the sales reported in the Other segment during the third quarter of 2017.  In the most recent announcement, Management stated substantially improvements had been made during 2017, especially in regards to margins.

During its conference call with analysts, Ericsson indicated adjusted operating income for Red Bee Media was approximately -38M USD for 2017, though “steering towards breakeven.”

While improved, the Media Solutions business operating losses remained “substantially higher” than Red Bee Media in 2017.

The majority sale to One Equity Partners is anticipated to close in the third quarter of 2018.  As outlined in the public statements, at the time of closing employees, contractors, and specified assets and liabilities will transfer to the new company.  Since Ericsson is retaining a 49% ownership position, the Company will continue to report its portion of profit and loss in its financial statements.  No financial terms of the transaction were provided.

The decision to retain Red Bee Media was reached after considering a variety of alternatives.  While Ericsson disclosed it receive bids for Red Bee Media, Management concluded these bids did not reflect the value of the business.  In fact, Management stated in its public remarks that “upside from continued development was deemed to be significant.”

Several factors associated with the transaction are worthy of emphasis.  These combined businesses represent around 3% of Ericsson’s annual revenue.  While not significant assets in the context of Ericsson, these are considerable product and service portfolios in the global media technology sector.

The press releases announcing the strategic initiatives admonish several statistics highlighting the significant footprint of these businesses, among these almost 4,000 combined employees and a tier1 list of media customers. The consideration of their customers was apparent in Ericsson’s decision making. In fact, Ericsson’s President and CEO Börje Ekholm made explicit reference to this in the press release, stating “We are confident that the direction we announce today will enable us to create the best long-term value, for both our customers and our shareholders.”

 

 

Related Content:

Ericsson Press Release on Media Solutions Divestiture

Ericsson Press Release on Red Bee Media

 

 

© Devoncroft Partners 2009-2018.  All Rights Reserved.

 

 

ATEME Posts 24 Percent Revenue Gain in 2014, Provides Upbeat Outlook for 2015

Annual Results, Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Feb 16 2015

Video compression specialist ATEME announced that its revenue for 2014 was €25.4m, an increase of 24% versus the same period a year ago.

The company, which raised €13.3m through Initial Public Offering last year, said 2014 was its third consecutive year of revenue growth.

The company’s full performance appears to indicate that its growth accelerated during the second half of 2014, following on from revenue of €12m during the first six months of the year.

ATEME attributed its continued growth to both new business from existing customers such as the European Broadcasting Union (EBU), the acquisition of new customers including the BBC, leading Hollywood studios, tier-1 service providers and post-production studios; and the use of its technology at major events including the FIFA World Cup.

“We have a well-established, worldwide footprint and 2014 allowed us to solidify our base for growth,” said ATEME CEO Michel Artieres. “We are now the trusted technology partner in video compression for 200 customers from around the world. We will continue with investment strategies to provide full, flexible software solutions and to become a more agile solutions provider.”

The company said it believes it is “positioned to profit from soaring worldwide video consumption,” pointing to “the launch of new ultra high-definition/4K channels in Japan, Russia and the United Kingdom in 2015” as evidence of its future potential growth prospects.

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Related Content:

Press Release: ATEME Posts Significant Growth in 2014

Ateme raises €13.3 Million through Initial Public Offering

HD World Cup Drives 22 Percent Growth for ATEME During First Six Months of 2014

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© Devoncroft Partners 2009 – 2015. All Rights Reserved.

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HD World Cup Drives 22 Percent Growth for ATEME During First Six Months of 2014

Broadcast technology vendor financials | Posted by Joe Zaller
Jul 30 2014

Video compression specialist ATEME announced that its revenue for the first six months of 2014 was €12m, an increase of 22% versus the same period a year ago.

These are the first results published by ATEME as a public company, following its €13.3m initial public offering earlier this month.

The company attributed its revenue growth during the first half of 2014 to deals with customers in EMEA and Latin America, which facilitated HD broadcasts of the 2014 FIFA World Cup. The company also said it acquired several new clients during the period, including leading Mexican broadcaster Televisa.

ATEME also disclosed that, following the 2014 World Cup, it has expanded its team in Brazil to support new customers in the run up to the 2016 Olympics in Rio.

ATEME President Michel Artières said the company continues to gain market share and that it plans to capitalize on the eventual shift to HEVC compression drive future growth.

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Related Content: 

Press Release: ATEME Sustained growth in the first half of 2014: Turnover: 22%

Ateme raises €13.3m through Initial Public Offering

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© Devoncroft Partners 2009 – 2014. All Rights Reserved.

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