Envivio said revenues slowed and losses widened in its fiscal third quarter as the video encoding and processing specialist faced tough economic conditions in Europe, pending customer consolidation in the U.S., and cautious spending tied to Ultra HD transitions.
Despite those troublesome trends, Envivio said it did score a new multiscreen video deal with a new tier 1 service provider in the U.S.
“This order represented more than 10% of our Q3 revenue,” Julien Signès, Envivio’s president and CEO, said on Monday’s earnings call. “We believe this win…could lead to material business within the next 12 months.”
Envivio has yet to disclose the new tier 1, but Signès said it is "definitely one of the top five” U.S. MSOs. Comcast and Time Warner Cable, which are in the process of merging, have been among the Envivio’s historic 10%-or-greater customers.
While customers have been cautious in spending on transitions to HEVC, a new, more efficient encoding platform that will come in handy for bandwidth-intensive 4K/Ultra HD services, Envivio did win “an important evaluation” for HEVC with an unnamed tier 1 U.S. operator, Signès said.
On the financial front, Envivio posted third quarter revenues of $9 million, down from $11.7 million in the year-ago quarter. That was paired with a GAAP net loss of $5.4 million (20 cents per share), versus a net loss of $2.9 million (11 cents per share) in the year-ago period.
The third quarter GAAP net loss includes estimated costs to settle a stockholder class action suit filed in October 2012. While the settlement remains subject to negotiation court approval, the agreement, in principle, calls for Envivio to contribute about $1 million toward the settlement, with the balance to be covered by the liability insurance of the company’s directors and officers.
Update: Envivio shares closed Tuesday (December 2) at $1.26 each, down 29 cents, or 18.72%.