SeaChange International Reports Fourth Quarter and Fiscal Year 2020 Financial Results Download as PDF April 06, 2020 4:05pm EDT Related Documents Audio
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Record Number of Framework Wins in Q4 Drives 14% Revenue Increase
Non-GAAP Income from Operations of $4.8 million and
GAAP Income from Operations of $3.6 million
WALTHAM, MA / ACCESSWIRE / April 6, 2020 / SeaChange International Inc. (NASDAQ:SEAC), a leading provider of cloud and on-premise video delivery platforms worldwide, today reported financial results for the fourth quarter and fiscal year ended January 31, 2020.
Management Commentary
The fourth quarter represented an incremental step forward and was a strong finish to a transformational year for SeaChange, said CEO Yossi Aloni. Our success in fiscal 2020 can be summed up best through a handful of key operating metrics and milestone achievements, most notably the 26 significant Framework deals we closed, our expanded gross margins at 65%, the more than $12 million in annualized cost savings we realized throughout the year, and the $4.8 million we recorded in non-GAAP operating income during the fourth quarter.
As we completed our transition to becoming a pure software and cloud solutions provider, we faced a rapid decline in our legacy revenue, which we were prepared for and which is now behind us. However, with the Frameworks superior technology and disruptive value-based go-to-market strategy, we successfully grew in our core business segment and were able to deliver $36.8 million in new Framework revenue since we began selling the Framework solution in April 2019. In the fourth quarter, our Framework revenue made up 68% of total revenue, reflecting our transition to a software-centric business model, which we believe provides us with tremendous predictability and a favorable margin profile.
We entered the new fiscal year with significant operating momentum and the most robust pipeline in our companys history. Even prior to the advent of COVID-19, the TV and video industry was in the midst of an unprecedented shift in how content is being consumed at home. This shift has been accelerated as more consumers stay at home in the wake of COVID-19, and we believe SeaChange is ideally positioned to capitalize on this long-term trend with our managed, cloud-based video delivery service. SeaChange allows content providers to meet the growing demand for content by enabling them to launch direct-to-consumer video services in a matter of days. During Q4 we enhanced the Framework platform with the industrys first end-to-end cloud advertisement management, placement and insertion solution for both live and on demand TV. This new feature allows TV providers to offer a web-online like workflow for its advertisers with real-time, dynamic and programmatic insertion, which enables TV providers to both better utilize their ad-inventory and win web-centric advertisers.
While the current global economic uncertainty makes our near-term visibility with respect to new bookings challenging, we are seeing increased interest in our Framework solution as operators look to preserve their existing revenue base and to find new sources of revenue, and importantly, to reduce operating expenses. SeaChanges Framework is the only solution in the industry that enables operators to lower costs by approximately 50% while helping them attract new subscribers and to better monetize their existing installed base. SeaChange is expanding upon its robust advertising solution with the development of a new module that will revolutionize how a customers unsold and underutilized ad inventory is sold. At this stage the company is testing it with a few customers, and more will be shared on this development in the near future. We believe that these factors, combined with the positive underlying industry trends bode exceptionally well for SeaChange for the foreseeable future.
Looking ahead, the progress we achieved on our key financial and operational objectives in fiscal 2020 gives us confidence in our ability to realize our mid-term target model of driving sustainable, double-digit revenue growth and a non-GAAP operating income margin of over 15%.
Fourth Quarter Fiscal 2020 and Recent Operational Highlights
Secured a record 11 customer wins with multi-year commitments for the Framework video delivery platform, amounting to more than $15 million in total contract value and bringing the total number of Framework customers to 26 with more than $54 million in total contract value.
Completed the transition to a 100% software and cloud solutions provider.
Achieved a 24% increase in bookings to $17.3 million from $13.9 million in the same period last year.
Completed numerous cost-optimization initiatives, resulting in more than $12 million in annualized cost savings.
Fourth Quarter Fiscal 2020 Financial Results
Total revenue increased 14% to $19.3 million from $17.0 million in the same period last year. Product revenue increased 69% to $13.2 million (69% of total revenue) from $7.8 million (46% of revenue) in the same period last year. Service revenue decreased 33% to $6.1 million (31% of total revenue) from $9.1 million (54% of total revenue) in the same period last year.
Gross profit increased by 29% to $14.0 million (73% of total revenue) from $10.9 million (64% of total revenue) in the same period last year.
GAAP income from operations totaled $3.6 million, an improvement from a loss of $19.9 million in the same period last year.
Non-GAAP income from operations totaled $4.8 million, or $0.13 per basic share, an improvement from a loss of $1.2 million, or $(0.03) per basic share, in the same period last year.
GAAP net loss totaled $43,000, or $(0.00) per basic s
