Shares in Envivio surged more than 28% Wednesday in after-hours trading following second quarter results that beat Wall Street expectations thanks to healthier sales to tier 1 operators in the U.S. and in Europe.
The video encoding specialist posted revenues of $11.5 million, up from $10.8 million in the year-ago period, matched with a net loss of $2.5 million (9 cents per share), narrowed from a net loss of $4.3 million (16 cents per share). Analysts were expecting a net loss of 17 cents per share on revenues of $8.17 million.
"In the second quarter, we began to see the fruits of our efforts to improve sales execution, particularly in North America," Envivio president and CEO Julien Signes, said in a statement. "We are encouraged by our results, which were principally driven by large orders from two tier 1 North American cable customers, one of which was a new customer.”
Envivio did not identify those operators by name in Wednesday’s earnings announcement, but Time Warner Cable has historically been its biggest cable operator customer. The new tier 1 U.S. cable customer contributed 30.2% of revenue, while its existing tier 1 U.S. cable operator customer, believed to be TWC, contributed 18.9%.
In the second quarter, revenue from the Americas reached $6.2 million in the quarter, up from $3.5 million a year earlier, while an existing tier 1 European customer contributed 13.4% of revenue.
The quarter was a marked improving from the year-ago period, when Envivio fell well short of original revenue targets due to slow spending by customers in North America and Western Europe.
Signes attributed the improved results on both changes to its North American sales organization beginning in the fiscal fourth quarter of 2012 and product differentiation.
In January, Envivio hired Ira Goldfarb, a former longtime sales exec at SeaChange International, as SVP of global sales and service.
Envivio, like encoding rivals such as Harmonic and Elemental Technologies, is banking on multiscreen deployments and 4K and mobile video services that will lean on HEVC, a compression standard that is 50% more efficient than H.264/MPEG-4.
Envivio shares were up 80 cents (28.57%) to $3.60 each in after-hours trading Wednesday.