Software sales fuel SeaChange's 4Q profit
SeaChange International's decision to focus more on software paid off in the fourth quarter as software revenue rose 32 percent to help offset declining sales in VOD hardware.
For the fourth quarter that ended Jan. 31, SeaChange posted a profit of $10.9 million, or 34 cents per share, compared to $44,000 in the same quarter a year ago. SeaChange's revenue increased 16 percent to $61 million.
During the fourth quarter, one of SeaChange's customers, which was won through a system integrator, began de-activating its SeaChange VOD equipment in favor of a competitor's VOD platform. Because this customer had prepaid several years of annual maintenance revenue, $4.6 million of deferred maintenance revenue was recognized as service revenue in this year's fourth quarter as a result of the deactivation notice.
For the full year, SeaChange's revenues grew to $217 million from $202 million in fiscal 2010, while profits grew to $29.5 million from $1.3 million.
SeaChange's software revenue for the fourth quarter was $46.1 million, while revenue from servers and storage was down 29 percent to $8.8 million. The company's media services revenue rose 10 percent to $6.4 million.
"Our fiscal 2011 was a year of putting proof and progress to our software strategy with major multi-screen product releases and wins," said SeaChange CEO and chairman Bill Styslinger, SeaChange. "We can point to our Virgin Media and StarHub launches, breakthroughs in pure-play mobile video such as Three in the U.K., 3 Italia and Vodacom South Africa, as well as the advancement of home gateway, tablet and smartphone video. With our introduction of Adrenalin, we believe we've created the global standard for video back office software. All of these developments readily demonstrate the value and early return from our leading edge software acquisitions."