Posts Tagged ‘OTT’

Devoncroft 180-Page Media Technology Industry Analysis Now Available

Analysis, broadcast industry technology trends, broadcast industry trends, broadcast technology market research, Broadcast technology vendor financials, Online Video, OTT Video, technology trends | Posted by Josh Stinehour
May 26 2017

Last month, more than 1,000 NAB Show attendees packed the largest room at the Las Vegas Convention Center for the Devoncroft Partners Media Technology Business Summit, to hear industry thought leaders discuss market trends and technology deployment strategies.

We have now published our analysis of the market in a 180-page report.  The report is available for purchase from our online store.  Alternatively, if you are a buyer, user, or supplier of media technology products or services, then we will send you a complimentary copy of report in exchange for taking our annual Big Broadcast Survey on industry trends.

The report is the culmination of several months of research in the media technology sector.  It incorporates data gathered in over 100 pre-show interviews of executives in the media technology sector, over 100 executive meetings at the NAB Show, year-over-year trend and project analysis from the last eight years of Big Broadcast Survey studies, and a detailed tracking of major announcements by media companies and media technology suppliers.

 

Report Purchase Option:

 

Take a Survey Option (Available to Technology Buyers, Users, and Suppliers):

  • Click here to register to take the 2017 Big Broadcast Survey.
  • You will receive a survey invitation automatically after sign up
  • The interactive survey will ask custom questions based on your specific interests. It will take 10-30 minutes to complete, and you can pause the survey at any time and restart where you left off by simply clicking the link again. All individual answers are kept strictly confidential.
  • Shortly after completing the survey, we will send you a link to download a complimentary copy of the 180-page report.
  • Recognizing the value of your time, in addition to the 180-page report, you will also receive:
    • A 50+ page summary of this year’s market study as soon as it’s available
    • One or more entries into the sweepstakes drawing to win 1 of 10 prizes: one of ten $500 (USD) Amazon gift cards. Please click here for full terms and conditions

 

 

© Devoncroft Partners 2009 – 2017. All Rights Reserved.

 

 

 

Dolby Announces 2016 Results; Continued Dolby Vision Progress

Analysis, Broadcast technology vendor financials, Quarterly Results | Posted by Josh Stinehour
Nov 03 2016

Dolby announced fiscal fourth quarter and full year revenue for the twelve months ending September 30, 2016.  2016 fiscal year revenue was $1,025.7 million, a 5.68% increase versus the 2015 fiscal year.  Dolby_logo.svg

Full year revenue was within the guidance provided at the end of fiscal 2015 for total revenue between $1 billion and $1.03 billion.

2016 FY GAAP net income was $185.9 million or $1.81 earnings per share (diluted).  This represents a 2.5% increase over the net income for the 2015 fiscal year of $181.4 million ($1.75 earnings per share).

GAAP gross margins were 89.4% for the year, a slight decrease versus the gross margins of 90.2% from the year earlier period.  Operating margins were 23%, an increase of 100 basis points over the operating margins from fiscal 2015.

2016 Fiscal Year 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 fiscal year 2016 was $917.0 million, an increase of 5.6% versus fiscal year 2015.
  • Product revenue was $90.5 million for the year, an increase of 7.9% compared to the 2015 fiscal year.
  • Services revenue were $18.2 million during fiscal year 2016, a decrease of 2.5% against 2015.

Product gross margins for 2016 were 28%, a substantial increase over the 16% gross margins from 2015.

2016 Fiscal Year Licensing Revenue by Customer Vertical:

Licensing revenue in the Broadcast vertical for televisions and set-top box sales was 46% of total licensing revenue or $421.8 million during fiscal 2016.  On an aggregate basis, broadcast licensing grew 10.4% versus the 2015 fiscal year.

As part of management’s prepared comments on the Dolby’s earnings call, President and CEO Kevin Yeaman drew attention to the strong performance in the broadcast sector.  “We had another strong year in broadcast. Dolby Audio is an established format in developed markets like North America and Western Europe, and we are well positioned in areas like Africa, India and China, when the transition to digital broadcast is underway. Future growth in broadcast will come from the continued migration of emerging markets to digital televisions and the rollout of high-definition and 4K set-top boxes with Dolby Audio in both developed and emerging markets” said Mr. Yeaman (Sourced from Seeking Alpha transcript).

Fiscal Q4 2016 Results:

Fiscal fourth quarter revenue was $233 million, flat against the year earlier period, and a decrease of 16.1% versus the preceding quarter, FQ3 2016. Management attributed the sequential drop in revenue to the higher timing of licensing payments in Q3 compared to Q4.

For the quarter, Dolby’s GAAP net income was $23.9 million or $0.23 earnings per share, a 48.6% decline when measured against the fiscal fourth quarter of 2015, and a 62.4% decline against the preceding quarter.

GAAP Gross Margins were 87% during the fourth quarter, a 210 basis point decline from the year earlier period and a 410 basis point decline versus FQ3 2016.  Operating margins were 16%, an increase over the 12% from FQ4 2015 and a decrease versus the 29% operating margins during the preceding quarter.

Management guidance at the end of third fiscal quarter was for revenue in the range of $220 million to $230 million for the fourth quarter with gross margins between 88% and 89%, and GAAP earnings per share of $0.16 and $0.22.  Dolby exceeded its guidance on both revenue and earnings per share, though underperformed on gross margins.

Update on Dolby Atmos, Doly Cinema, and Dolby Vision:

Among the revenue drivers cited by management were the growing adoption of Dolby Atmos (next-generation immersive audio technology), Dolby Vision (next-generation imaging technology), and Dolby Cinema (premium cinema experience combining multiple Dolby technologies).

  • Dolby Atmos is now installed or committed in over 2,400 cinematic screens worldwide. 550 feature films using Dolby Atmos have been announced or released.
  • The first televisions incorporating Dolby Vision become available in the past year. LG is including Dolby Vision in their OLED and Super UHD LCD TVs; VIZIO is including Dolby Vision in their R, P, and M Series; and TCL and Skyworth are also shipping TVs with Dolby Vision.  Content incorporating Dolby Vision is now available from Warner Bros., Sony Pictures, MGM, Universal, Lionsgate, Netflix and Amazon Studios.
  • Over 30 Dolby Cinema locations were added during 2016, bringing the total to over 40.

“We are well on our way to establishing that Dolby Vision is the best way to experience HDR content” stated Mr. Yeaman on Dolby’s earning call with analysts.  “Our job this year is to accelerate the deployment of Dolby Vision” continued Mr. Yeaman.

Financial Guidance

Dolby’s guidance for the fiscal year 2017 is for revenue between $1.06 billion and $1.09 billion.  Broadcast licensing revenue is expected to remain relatively flat in 2017.

Guidance for the first quarter of fiscal 2017 is revenue in the range of $250 million to $260 million, gross margins between 88% and 89%, and earnings per share between $0.34 and $0.40.

 

 

Related Content:

Press Release: Dolby Fiscal Fourth Quarter and Full Year 2016 Earnings Release

Earnings Transcript: Dolby Fiscal Fourth Quarter Results (SeekingAlpha)

 

 

© Devoncroft Partners 2009 – 2016. All Rights Reserved.

 

 

Evertz Announces Record Backlog and Shipments along with C$13.5 million IP Order

Analysis, Broadcaster Financial Results, Quarterly Results | Posted by Josh Stinehour
Sep 19 2016

Evertz announced revenue for the first quarter of its 2017 fiscal year, which ended on July 31, 2016.  Revenue for the quarter was C$87.0 million, up 2.5% versus the same period a year ago, and down 9.7% versus the previous quarter. evertz-logo

The strengthening US dollar contributed a foreign exchange gain of C$6.6 million during the quarter.

Net earnings for the quarter were C$18.6 million (C$0.25 earnings per share), flat versus the first fiscal quarter of 2016, and an increase of 129.6% versus the preceding quarter. The company generated C$19.9 million cash from operations in the quarter.  This compares to cash used by operations of C$7.8 million during the same period last year and cash from operations of C$10.1 million during the previous quarter.

Revenue results for the quarter were below the consensus estimates of equity analysts of C$95.1 million, while earnings results were above the consensus estimates of analysts of C$0.24 per share.

During management’s exchange with analysts, EVP Brian Campbell attributed the lower level of revenue in the quarter to the typical lumpiness of orders along with the stretching of certain orders into future quarters.

The Company said its shipments during August 2016 were C$31 million, and that its purchase order backlog at the end of the quarter was in excess of C$70 million.   The combined shipments and backlog of C$101 million is a record level for Evertz.

The top ten customers in the quarter accounted for 30% of revenue and no customer accounted for an excess of 6% of revenue. Evertz had 104 individual customers each representing over $200,000 of revenue.

Gross margins in the quarter were 57.3%, down slightly from 56.4% last year and also down from 57.1% last quarter.  For the quarter operating margins were 28.5%, compared to 29.9% during the same period last year and 23.9% in the FQ4 2016.

Evertz ended the quarter with C$125.4 million of cash and cash equivalents up slightly from C$123.1 million at the end of last quarter.

Revenue by Geography:

  • Revenue in the US/Canada region was C$52.1 million, an increase of 4.2% versus the same period a year ago, and flat versus the previous quarter. US/Canada sales were 59.9% of total revenue during the quarter, up from 58.9% of revenue during the same period a year ago, and a substantial increase versus the 53% contribution during the preceding quarter.
  • International revenue was C$34.9 million, flat versus the previous year’s result and a decrease of 22.6% when compared to the previous quarter. International sales were 40.1% of total revenue, down from 41.1% last year and 47.0% last quarter.

Operating Expenditures by Function:

  • R&D expenses (before tax credits) in the second quarter were C$17.5 million, an increase of 7.4% versus the same period last year, and an increase of 1.2% versus the previous quarter. R&D expenses were 20.1% of revenue in the quarter, higher on a percentage basis than the 19.2% last year and the 17.9% last quarter.
  • Selling and administrative expenses for the quarter were C$14.9 million, a slight increase of 0.7% versus last year, and a decrease of 8.0% versus the preceding quarter. Selling and administrative expenses represented approximately 17.1% of revenue in the quarter versus 19.2% of revenue during the same period last year, and 17.9% of revenue in the previous quarter.

Management Commentary on Results:

Consistent with earlier quarters, Evertz EVP Brian Campbell attributed the overall performance and combined shipment and order backlog “to the ongoing transition to HD, channel proliferation, the increasing global demand for high-quality video anywhere anytime”.  Also consistent with previous quarters, Mr. Campbell added emphasis on “the growing adoption of Evertz’s IP-based software-defined networking solutions.”

While Evertz declined to provide an update on the number of SDVN deployments (over 50 SDVN installments as of the 2016 NAB Show), the Company did issue a press release on the receipt of a C$13.5 million purchase order for a “state-of-the-art” IP facility for a US customer.  The purchase order includes multiple EXE hyperscale and IPX modular switch cores, IP media gateways, and compression and control solutions.

In responding to a question by Thanos Moschopoulos of BMO Capital Markets on the interest level of cloud for Evertz customers, Mr. Campbell provided commentary on cloud adoption in the media sector.  “It’s very much early days, but it is meaningful” stated Mr. Campbell.  “And Evertz is well down the path in virtualizing the important components for customers to meet to their needs, whether that’s in a public cloud or in a private cloud or hybrid” continued Mr. Campbell.

 

 

Related Content:

Press release on Evertz FY Q1 2017 Results

MD&A on Evertz FY Q1 2017 Results

Financial Statements for Evertz FY Q1 2017

Press Release on “State-of-the-Art” IP Facility Order

 

 

© Devoncroft Partners 2009-2016.  All Rights Reserved.

 

 

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

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

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

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

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

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

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

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

Revenue by Market Segment:

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

Operating Expenses by Category:

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

Update on Market Adoption of Next-Generation Technologies:

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

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

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

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

slide

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

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

 

Business Outlook:

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

 

Related Content:

Press Release: DTS Q2 2016 Earnings Release

Presentation:  DTS Q2 2016 Investor Presentation

Transcript: DTS Q2 2016 Earnings Call (Seeking Alpha)

 

 

© Devoncroft Partners 2009 – 2016. All Rights Reserved.

 

 

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