Posts Tagged ‘Geoff Stedman’

Quantum Announces 20th Consecutive Quarter of Scale-out Storage Growth; Cites Large Virtual Reality Deal

Broadcast technology vendor financials, Quarterly Results | Posted by Josh Stinehour
Jul 28 2016

Quantum announced results for its first fiscal quarter of 2017, representing the three month period ending June 30, 2016.  QuantumTotal revenue for the quarter was $116.3 million, an increase of 4.9%
versus the year earlier period (FY Q1 2016), and a 3.1% decrease versus the preceding quarter (FY Q4 2016).  The first fiscal quarter of the year is generally Quantum’s weakest.

The quarter’s revenue of $116.3 million exceeded the high end of management’s guidance of $115 million (issued during the previous quarter).  The Company’s gross margins were in-line with guidance for the quarter, and its earnings result were slightly above earlier guidance.

Gross margins (GAAP) were 43.3% for the quarter, a slight improvement over the 42.4% gross margins from the year earlier period, and a slight decline compared to the 45.6% gross margins in the preceding quarter.

Net loss (GAAP) for the quarter was $3.8 million, equating to $0.01 loss per diluted share.  Quantum recorded a net loss of $10.7 million (or a loss of $0.04 per diluted share) during the year-earlier period and a net loss of $52.4 million in the preceding quarter.  The preceding quarter, fiscal fourth quarter of 2016, included a non-cash goodwill impairment charge of $55.6 million.

As of June 30, 2016 cash and cash equivalents were $34.5 million, a slight increase over the $33.8 million balance as of March 31, 2016.

Most relevant to Quantum’s activities in the media and entertainment segment, the Company’s scale-out storage business, which includes Quantum’s StorNext storage offerings, registered its 20th consecutive quarter of year-over-year growth.  Scale-out storage revenue was $30.8 million in the quarter, an 11% increase versus last year’s first quarter.

Management disclosed a win rate for scale-out storage in the quarter in the 70% range.  Over 120 new scale-out storage customers were added during the quarter, which compares favorably to the more than 90 new customers added in the first quarter of fiscal 2016.  During the call with equity analysts, management also highlighted several recent scale-out storage projects in the media and entertainment sector including a $200,000 plus deal “with one of the emerging leaders in virtual reality.”

The earnings release noted Quantum’s NAB Show announcement of integration between Avid’s Interplay MAM system and Quantum’s StorNext.  The integration enables media customers to control StorNext archive and restore functions through Interplay.  Commenting on the Avid Integration at the NAB Show, Geoff Stedman, SVP of Marketing at Quantum, said, “Through initiatives ranging from solution development to closer alignment of sales and support activities, Quantum is working closely with Avid to help Avid customers better manage their content over the long term. Together our technologies empower users to optimize their media storage and access to content on a broad range of archive platforms, providing significant time and cost savings that make it easier to achieve their creative and business goals.”

 

Update on Convertible Notes due November 2017

Quantum’s CFO Fuad Ahmad provided an update on Quantum’s efforts to address its convertible note balance, in the amount of $69.3 million, due in November 2017.  On the earnings call with analysts, Mr. Ahman said, “we want to be proactive, but sensible about our financing options. To that end, we’re in discussions with a number of financial institutions regarding expanding our credit lines to provide sufficient near and long-term liquidity and to create a clear and executable roadmap to address the convertible notes, which I may add will mature in another 15 months.”

Quantum had repurchased approximately $83 million dollars of prior convertible notes during November 2015.

 

Guidance for Fiscal Second Quarter, Full Year 2017

Quantum’s management issued guidance for the second fiscal quarter of revenue between $188 million to $122 million with GAAP gross margins of between 41% and 42% and a GAAP loss per share of $0.01 to $0.00.

Management also reaffirmed the full year guidance of at least $500 million in total revenue, equating to year-over-year growth of at least 5%.  Driving this growth is an expectation of a continued increase in scale-out storage revenue across Quantum’s vertical focus areas – Media and entertainment, surveillance and intelligence, and unstructured data archives for technical workflows.

Scale-out storage is expected to account for 35% to 40% of Quantum’s total revenue, which would represent a year-over-year growth of 40% to 60%, if achieved.

Quantum’s CEO Jon Gacek offered the following commentary on the outlook for scale-out storage, “Looking more closely at scale-out storage, Q1 was our 20thth consecutive year-over-year growth quarter, and given our increasing market traction and opportunity, we feel very good about our ability to achieve our scale-out growth objectives for the year.”

 

Related Content:

Press Release: Fiscal first quarter 2017 earnings release

 

 

© Devoncroft Partners 2009 – 2016. All Rights Reserved.

 

 

Quantum Media & Entertainment Revenue up 150 Percent through First Nine Months of FY 2015

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Jan 30 2015

Quantum_LogoQuantum announced  that revenue for the third quarter of its 2015 fiscal year, which ended December 31, 2014, was $142.1m, down 3% versus the same period last year, and up 5% versus the previous quarter.

GAAP net income for the quarter was $6.9m, or $0.03 per diluted share, versus a net loss of $2.5m million (or $0.01 per diluted share) last year, and net income of $1.2m last quarter.

The results were below the low-end of previously issued guidance ($145 million to $150 million).  The company attributed the sales decline to a 31% year-over-year drop in the revenue from its OEM tape automation partners.

Despite the drop in OEM revenue, Quantum’s scale-out storage business, which includes its StorNext product line, continued to experience significant growth.

During the earnings conference call with equity analysts, Quantum president and CEO Jon Gacek said that “since StorNext 5 became generally available early last year, StorNext and Lattus combined solutions have been adopted in some of the largest most demanding workflows around the world, and was one of the key contributors to our overall media and entertainment product revenue growing more than 150% year-over-year in Q3 and our mid-market media and entertainment product sales nearly tripling.”

Highlighting the success of the StorNext and Lattus product lines, Gacek said Quantum closed a $4m deal during the quarter for managing video in one of the world’s largest consumer electronics companies. Other significant M&E wins in the quarter include a sale of nearly $300,000 to a large media production company, and StorNext sales of more than $300,000 each to two of the top U.S. broadcast networks and a major international radio broadcaster.

On an overall basis, Quantum’s scale-out storage and related service revenue was $27m in the third quarter, up 55% from the year-earlier period and up 6% from the preceding quarter.  Year-todate, the company’s scale-out storage products have seen growth of nearly 60% versus the first three quarters of fiscal 2014 year.

In a November 2014 press release, Quantum said its scale-out storage revenue had increased by nearly 60% during the first six months of its fiscal 2015, and with an annualized run-rate of more than $100m. At that time, the company attributed this growth to demand for its StorNext 5 high-performance shared storage and Lattus extended online storage solutions, from M&E customers including BBC Sport, MLB Network and UFC, who have deployed a suite of scale-out storage systems managed by StorNext 5. Quantum SVP Geoff Stedman, called StorNext a ‘hidden gem’ in Quantum’s portfolio, and said “an increasingly broad range of customers is recognizing the unique benefits it provides, including in conjunction with Lattus.  To a great extent, this represents the triumph of specialized workflow-intelligent storage over general-purpose storage that simply can’t handle the complexities of effectively managing and protecting modern digital assets.”

The company ended the quarter with cash and cash equivalents of approximately $110m.

 

Guidance:

Quantum says it expects to post a GAAP net loss of $0.8m to $1.8m in its fiscal Q4, with revenue in the range of $130m to $135m, and GAAP and non-GAAP gross margin of approximately 43-45 percent.

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Related Content:

Press Release: Quantum Corporation Reports Fiscal Third Quarter 2015 Results

Press Release: Quantum Scale-Out Storage Revenue Grows 50 Percent In First Half Of Fiscal Year

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© Devoncroft Partners 2009 – 2015. All Rights Reserved.

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Euro Weakness Offsets Strength in US for Harmonic in Q2 2012

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Jul 25 2012

Harmonic announced that its revenue for the second quarter of 2012 was $132.6m, down 1% versus the same period a year ago, and up 4% versus the previous quarter

GAAP net income for the quarter was $17,000, or $0.00 per share, versus GAAP net income of $400,000 or $0.00 per share during the same period a year ago.   Non-GAAP net income for the quarter was $7.2m or $0.06 per share, versus non-GAAP net income of $10.5 million, or $0.09 per share last year

The results were in-line with the company’s previously issued guidance of revenue $130m to $140m, but below the consensus expectations of equity analysts who were looking for revenue of $135m and non-GAAP net income of $0.07 per share.

On a GAAP basis, gross margins and operating margins for the quarter were 43% and -2%, versus 46% and 1%, respectively, last year; and 42% and -7% last quarter.  Non-GAAP gross margins and operating margins for the quarter were 48% and 7%, versus 51% and 11%, respectively last year.

Company CFO Carolyn Aver attributed the decrease in gross margins to product mix in the quarter, as well as the competitive environment, particularly in emerging markets.   

When asked on the company’s conference call with equity analysts about competitive pricing leading to lower gross margins, Harmonic CEO Patrick Harshman said emerging markets were particularly competitive.  However Harshman then went on to describe these markets as “beachfront property” where there is intense competition on the part of vendors to “get in on the foundation as new operators launch services and begin to expand.” Harshman went on to say that these market are strategically important and offer long-term growth potential. “We believe that being present as we are and as increasingly in places like Southeast Asia, in Brazil, in India, we think it’s very strategically significant. So, well, we’re not pleased with the gross margin, we believe the strategic value of the footprint that we’re establishing in these markets is quite valuable and important.”

On a product-line basis, video processing represented 45% of total revenue, production and playout (Omneon) represented 16% of total revenue, and edge and access revenue represented 25% of total revenue. Services represented 14% of total revenue and grew in absolute dollars.

On a segment basis, cable accounted for 48% of revenue, satellite & telco accounted for 21% of revenue, and broadcast and media accounted for 31% of revenue

International sales accounted for 54% of revenue in the quarter versus 59% during the same period a year ago, due primarily by weakness in Europe versus relative strength in the US.  More specifically, the company said that its revenue in the US grew by 10% in the quarter, but was offset by a 9% decline in Europe.  Service revenue in the quarter grew 13% versus last year, and the company said that it won more than 25 new projects for OTT video deployments, many at existing customers. 

Bookings in the quarter were approximately $139.5m, up 6% versus last year.  Harmonic said its total backlog of orders and deferred revenue now stands at $146m, an all-time record for the company. 

 

Omneon Performance

When asked by an analyst about the performance of Omneon, Harshman said the integration is “still a work in process,” and that Harmonic has been successful getting the Omneon sales force to take the historic Harmonic product line, including video processing and multi-screen products into the media and broadcast accounts, but he acknowledged that Harmonic  is doing somewhat less of a good job kind of cross selling the Omneon products the other way.

However Harshman went on to hint at some exciting prospects for the Omneon business, saying  “One of the kind of the apples in our eyes in terms putting Harmonic and Omneon together was to really to develop a whole next generation of – a new class of products that actually married or integrated historically disparate technologies. And well we are not prepared here to announce to anything yet. We are working in earnest on new products that really break down some barriers and we will really deliver I think exceptional, operational as well as capital saving to our customers that unify and integrate historically Harmonic and Omneon technologies. I think this is going to be really unique and powerful for us as well as our customers and well, we’re pretty excited about that.”

 

Senior Management & Board Changes:

Separately, the company announced several changes to its senior management team and board of directors. Longtime Harmonic executive Nimrod Ben-Natan was named SVP and GM of the company’s new Edge and Access business unit.  Cisco Systems alum Peter Alexander was named Harmonic’s new SVP and CMO, replacing Geoff Stedman who left the company in April 2012.   Joining from NetApp is Krishnan Padmanabhan who was named SVP of video products. In addition to these executive appointments, Mitzi Reaugh, senior vice president, strategy and business development at Miramax, has joined harmonic’s board of directors.

 

Guidance:

Harmonic said it anticipates net revenue in a range of $130m to $140m for the third quarter of 2012. GAAP gross margins and operating expenses for the third quarter of 2012 are expected to be in the range of 43% to 45% and $61 million to $62 million, respectively. Non-GAAP gross margins and operating expenses for the third quarter of 2012, which will exclude stock-based compensation and the amortization of intangibles, are anticipated to be in the range of 47.5% to 49.5% and $55 million to $56 million, respectively.

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Related Content:

 Press release: Harmonic Announces Second Quarter 2012 Results

 Harmonic Q2 2012 Conference Call Transcript

 Harmonic Announces $25 Million Stock Buyback Program

 Press release: Harmonic Adds Executive and Board Leadership

 Previous Quarter: Harmonic Q1 2012: Weakness in Europe Results in 4% Revenue Decline

 Previous Year: Harmonic Q2 2011 Revenues Falls Short of Estimates

 

© Devoncroft Partners.  All Rights Reserved

 

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Omneon President to Resign from Harmonic

broadcast industry technology trends, broadcast industry trends, Broadcast Vendor M&A | Posted by Joe Zaller
Jan 13 2011

Less than six months after the officially closing the deal to sell Omneon to Harmonic, Suresh Vasudevan has said he will resign from the company effective February 1, 2011. The news was disclosed via an 8K filing with the SEC.

Vasudevan was named president and CEO of Omneon in January 2009, replacing long-time Omneon CEO Joe Kennedy.  Following the sale to Harmonic in September 2010, Vasudevan was named President of Omneon at Harmonic.  Prior to the Omneon appointment, he worked for storage vendor NetApp for more than ten years, and worked at the management consulting firm McKinsey & Co. in New Delhi, Mumbai, and Chicago.

As part of the same filing, Harmonic also announced that Mark Carrington, who had been serving as VP sales for Harmonic-branded products, will now be VP of worldwide sales, and responsible for the entire sales organization and the complete product line. Before the Omneon acquisition, Carrington was the VP service and support at Harmonic.

This is the latest in a series of normal integration-related changes at Harmonic following the purchase of Omneon.  The company previously announced that Omneon’s marketing chief Geoff Stedman has been named Harmonic’s VP for Omneon and corporate marketing; and that Ron Howe, who led the Omneon customer service organization was appointed Harmonic’s , VP for Service and Support.

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You can read the full Harmonic 8K filing here.

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Harmonic Announces New Executive Appointments, Integrates Key Omneon Managers

Broadcast Vendor M&A | Posted by Joe Zaller
Nov 11 2010

When Harmonic purchased Omneon, they bought more than a video server product line.  They also acquired talent, and at the time the company said they intended to integrate Omneon’s management into Harmonic.  Today Harmonic revealed its first move in this integration process, with the announcement that it has named two former Omneon executives to key management roles serving the combined company

Omneons marketing chief Geoff Stedman, has been named Harmonic’s vp for Omneon and corporate marketing. In this role he is responsible for leading the combined company’s marketing communications.  David Price, who previously ran the company’s marketing communication function, will remain with Harmonic as vp of business development.

Ron Howe, who led the Omneon customer service organization, will take on a similar but expanded role for the combined company, leading the customer service organization for all Harmonic products. As Vice President for Service and Support, he will be responsible for driving the company’s overall customer service strategy, establishing consistent service level performance and delivering world-class customer satisfaction.

The company also said that it has appointed Mark Carrington to the role of VP sales for Harmonic.  He was previously VP service and support for the company

“As part of the process of bringing Harmonic and Omneon together, we are fortunate to be able to draw upon the expertise of the combined management teams to fill critical executive leadership positions and build on the strengths of the respective organizations,” said Patrick Harshman, President and CEO of Harmonic.

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You can read the full Harmonic announcement here.

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Devoncroft Digest – Week Ending May 7th 2010 — Broadcasters Earnings Improving, Will it Lead to Increased Capex? Vendors Report Mixed Earnings. Harmonic Buys Omneon.

broadcast industry technology trends, broadcast industry trends, broadcast technology market research, Broadcast technology vendor financials | Posted by Joe Zaller
May 09 2010

There was a lot of action last week.  Earnings season continued with several broadcasters, broadcast service providers and broadcast technology vendors reporting their numbers. 

There was also a big broadcast M&A deal announced, with Harmonic scooping up Omneon for $274m in cash and stock.

Earnings of Broadcasters and Broadcast Service Providers

A number of broadcasters and broadcast service providers reported their quarterly earnings this week.  For the most part, the news was positive with revenue and profits improving thanks to an improvement in the advertising environment.

News Corp posted strong numbers for its Q3, with revenue growth of 19% versus the previous year.  However revenues from satellite broadcasting declined.

Sinclair Broadcast Group announced that their Q1 revenue increased 12.7% versus the prior year period.  Sinclair reported that political advertising had increased sharply, and that 8 of its top 10 advertising categories were up in the quarter – with automotive up 35.6%, and services up 10.1%.  Sinclair gave a positive outlook for their Q2 and also said that they expect their capex to be $19m in 2010, including $8m in the current quarter.

TVB reported that Belo’s revenue increased 15.6% in the first quarter. Like Sinclair, Belo’s results  including a big jump in political revenue.

Liberty Media announced positive Q1 results, lifted by a strong performance at QVC.

Revenue at Cablevision grew 5.2%, but income more than doubled.  According to the Motley Fool website, the company’s “telecommunications services – which includes basic video, interactive optimum video, high-speed data, and voice, along with commercial data and voice service and the programming segment — chalked up a 20.6% growth in operating income. Keeping in step with its cable brethren, the company also posted a 35.1% jump in cable advertising.”

Ascent Media did not fare as well in their first quarter.  The company posted a loss of $11.1m as its revenues declined by 9% versus the previous year. Nevertheless the company’s earnings press release was relatively optimistic, noting that as advertising markets improve the company has been involved in the creation of “more than 800 television commercials and a substantial number of this year’s episodic television pilots…[and] are currently working on a solid pipeline of 3D features. Ascent CEO William Fitzgerald  said the company is “beginning to see stabilization in the global advertising and media markets.”

  

  

Broadcast Technology Vendor Financial Results

Several reported earning this week, including Miranda, DG FastChannel, Chyron, QuStream and Harmonic. 

Broadcast technology vendor results were mixed, with DG FastChannel, Harmonic and Chyron posting increases in revenue, while Miranda and QuStream fared less well.

 

DG FastChannel reported record Q1 results which the company’s CEO Scott Ginsburg attributed “Stellar growth in both traditional and online advertising, the continued adoption of the high definition (HD) advertising format, and the advent of a hotly contested year in politics.” The company’s revenue increased by 31% versus the same period last year, and EBIT increase by 71% y/y.  Investors liked the news and sent the company’s shares more than 12% higher following the announcement.

  

Harmonic announced strong Q1 results that saw revenues climb by 25% versus the previous year,  The company achieved a net income of $5.3m versus $18.8m loss last year.  The company also announced that it has agreed to acquire 100% of Omneon (see below).

Broadcast graphics provider Chyron said its revenue increased by 10% versus the same period last year, and that its service revenue accounted for 33% of total.  Nevertheless the company posted a net loss of $.7m during the period.  In Chyron’s earnings press release, company CEO Michael Wellesley-Wesley said he expects revenue and earnings to climb in 2010.  

Broadcast infrastructure provider Miranda Technologies reported first quarter results that were below the expectations of equity analysts.  The company’s revenues were down 13% versus the same quarter last year, and 19% versus the previous quarter. Revenue from the US market was down 50% y/y, while revenue from Canada and international markets both rose sharply.  In the company’s press release, Miranda CEO Strath Goodship said: “We continue to believe that broadcast markets have stabilized, however the timing and strength of a rebound remains uncertain. Sales momentum in International markets continues to build and we are seeing signs of a broad based recovery. Sales activity in North American markets, particularly the USA remains constrained, although we are hopeful the heightened product interest seen at NAB will translate into stronger revenues in these markets going forward. The new products introduced at NAB, along with a number of sporting and political events in 2010 should help drive revenues and position us for growth.”

Routing switcher and pro-AV vendor QuStream (Pesa) posted a net loss $1m.  Sales for the quarter were $1.7m, a decline of 29% versus the same period a year ago.

  

 

Harmonic Buys Omneon

In addition to announcing pretty good numbers for Q1, Harmonic also announced that it has signed a definitive agreement to acquire 100% of broadcast server and storage vendor Omneon.

Much of the Harmonic conference call was dedicated to the acquisition, and Omneon CEO Suresh Vasudevan presented the company to analysts (many of whom were clearly unfamiliar with Omneon and its business).  Here is a link to the replay of the Harmonic earnings conference call, which provides details of the Omneon acquisition   You can also read a transcript of the call here.

I spoke to Omneon SVP Geoff Stedman minutes after the announcement was made public.  He told me that the deal grew out of partnership talks that Omneon and Harmonic had started more than a year ago.  Stedman also said that the Omneon name will continue for the foreseeable future, with Omneon CEO Vasudevan becoming the president of the Omneon division of Harmonic.  Much of Omneon’s key leadership team will also remain in place, and continue to report to Vasudevan, who will report to Harmonic CEO Patrick Harshman.  In my view, this is a good move.  Omneon has a strong, execution-oriented executive team who understands their market well – and there is a very, very big difference between the cable / satellite market (where Harmonic plays) and the broadcast market where Omneon plays.

According to the press release, Harmonic agreed to pay $274m for Omneon.  Investors did not immediately warm to the deal… the AP reported that, Harmonic’s shares plummeted 19% following the announcement of the deal.

 

 

Other

Finally, broadcast business management specialist VCI Solutions has appointed Robert Furlong as its new president & CEO.  Furlong is an industry veteran and former VCI customer.  He has been a TV station GM with both Freedom and Meredith

 

 

Market Research Note of the Week:

How are broadcast technology products typically purchased – Direct from vendor, SI or dealer?

As part of the 2010 Big Broadcast Survey I asked several thousand technology buyers (including broadcasters, playout centers, cable/satellite/IPTV operators, education, film studios etc) in 120+ countries how they typically buy broadcast technology products – direct from a vendor; through a systems integrator; through a dealer; or some other way.

It turns out that there is considerable variation in the way broadcast technology products are purchased, with each category of buyer exhibiting different purchasing preferences. 

These results help readers to better understand the channel structure in the broadcast market.  They are interesting because they highlight that there are some times when it makes more sense for vendors to use a channel than go direct.  They also show that there are some types of buyers who are more used to buying through the channel versus direct.

To see the results, including a chart that breaks responses down by company type, please click here.

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