SeaChange Powers Up VOD Server Sales
Vendor Reports 8% Increase in Revenue For Quarter Ended April 30
By Todd Spangler -- Multichannel News, 6/4/2009 5:37:10 PM
Video-on-demand vendor SeaChange International boosted revenue 8% for the quarter ended April 30 thanks to an increase in server and storage sales to North American telco and cable TV operators.
Total revenue for the quarter was $48.9 million, compared with $45.4 million in the year-ago period. Net income for the first quarter was $1 million, or $0.03 per share, compared with $300,000, or $0.01 per share, for the same period last year.
"We are pleased with our financial performance in the first quarter which marked our seventh-consecutive quarter of profitability for the company," SeaChange CEO Bill Styslinger said in a statement. "We cemented our strong competitive position with our largest and growing telecommunications customer on the heels of signing a multiyear VOD and advertising purchase agreement early in the first quarter, which produced substantial VOD server and software order strength throughout."
SeaChange's Servers and Storage segment generated $14.1 million of revenue in the quarter, up 24% from $2.7 million in the year-ago period. The increase was principally due to significantly higher shipments of VOD servers to "our largest North American telecommunications customer" as well as increased VOD server shipments to several North American cable TV providers.
In its annual report filed in April, SeaChange lists only one North American telecommunications provider -- Verizon Communications -- and cites cable customers including Cablevision Systems, Comcast, Cox Communications and Rogers.
The company's software sales were $30.6 million, up $600,000 year-over-year, driven by increased Comcast VOD software subscription revenue as well as higher VOD maintenance, installation and professional services revenue.
Media Services segment revenue of $4.2 million was $200,000 higher than the same quarter last year; SeaChange said excluding the effect of currency exchange rate differences between years, the unit's revenue grew 44% year-over-year mainly because of multiyear content services contracts secured from customers in Greece and Turkey plus revenue from the company's acquisition of Mobix Interactive in the fourth quarter of last year.
Styslinger also highlighted two multiyear contract extensions with U.K. cable operator Virgin Media, for middleware through January 2011 and for Media Services VOD content processing agreement through December 2011.
For the remainder of fiscal 2010, Styslinger said the company will "continue to see a challenging near-term capital expenditure environment for many of our customers, particularly in the broadcast and advertising-insertion sectors."
As such, SeaChange expects revenue for the first half of fiscal 2010 to be comparable to revenues generated in the first half of last year and are "cautiously optimistic" that second-half fiscal 2010 revenue will be higher than first half revenues based on domestic VOD software upgrade opportunities, additional Media Services VOD content processing contracts, and increased professional services and maintenance revenue.
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