SeaChange prospers in first quarter
SeaChange International reported total first-quarter revenue was up 11 percent, fueled by a 34 percent growth in software revenue, an indication that the company’s strategic shift to emphasize software products is finding success.
Revenues in the company’s first fiscal quarter of 2011 were $54.1 million, up from $48.9 million from a year ago. SeaChange’s software segment represented nearly four-fifths of the total – about $40.9 million.
Net income for the first quarter of fiscal 2011 was $24.6 million, compared with a profit of $1 million for the first quarter of fiscal 2010.
Figuring into the company’s quarter finances was a gain on the sale of the company’s equity investment in Casa Systems, deferred revenue adjustments related to recent acquisitions, restructuring charges related to a layoff earlier in the year and the purchase of VividLogic.
SeaChange reported that growth in the software segment was driven by higher Axiom and VOD advertising product revenue from a large North American cable television provider, increased advertising insertion revenue and the impact of the eventIS and VividLogic acquisitions.
The servers and storage segment generated $6.8 million of revenue for the first quarter of fiscal 2011, which was $7.3 million lower than comparable revenue for the first quarter of fiscal 2010. The decrease in servers and storage revenues between years was due to lower shipments of VOD servers to North American service providers when compared with an unusually high level of shipments in last year’s first quarter, the company said.
The media services segment revenues for this year’s first quarter were a record $6.4 million, which was $2.2 million, or 51 percent higher than the first quarter of last year. New content services contracts from customers in France and Dubai, combined with increased content processing revenues from customers in Greece and Turkey, contributed to the strong increase in media services revenue between years. The media services segment also reported an operating margin in excess of 10 percent for the second consecutive quarter.
Bill Styslinger, chairman and CEO of SeaChange, said: “SeaChange has continued to expand its software business while reducing overall research and development costs, primarily through our ability to offshore some development and support, by introducing new market advantages from our recent acquisitions, and through the creation of a common software platform comprising interchangeable components.”