SeaChange International Reports Fiscal Second Quarter 2021 Financial Results Download as PDF September 08, 2020 4:05pm EDT Related Documents Audio
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WALTHAM, MA / ACCESSWIRE / September 8, 2020 / SeaChange International Inc. (NASDAQ:SEAC), a leading provider of video delivery platforms, today reported financial results for the fiscal second quarter ended July 31, 2020.
Management Commentary
As expected, our business continued to be impacted by COVID-19 during the second quarter, as our customers and prospective customers held off on making new technology investments and deployment decisions in favor of supporting their existing operations and infrastructure through the ongoing uncertainty, said SeaChange CEO Yossi Aloni. In response, the decisive measures we have implemented since March have optimized our cost-structure and improved our liquidity position and resources, and positioned us to ensure SeaChange emerges from the pandemic in a strong financial and operational position.
From a sales perspective, while online video collaboration tools have allowed us to temporarily supplement in-person meetings, on-premise proof-of-concepts remain a critical step in our go-to-market strategy. These hands-on experiences allow us to demonstrate the value of our platform to existing customers and prospective customers in a way that is not currently available to us online. These demonstrations proved to be incredibly effective pre-COVID as evidenced by the 26 Framework wins we secured in fiscal 2020. However, while travel restrictions and work-from-home mandates globally have greatly limited our access to customer sites, our recently expanded partnership with Amazon Web Services (AWS) has opened up several new cloud opportunities, allowing us to circumvent the need for on-site visits to certain prospective customers.
In addition to our partnership with AWS, we continue to gain traction with our new Ad Insertion module. We believe this application has the power to revolutionize the TV advertising industry by enhancing providers ability to monetize the approximately $10 billion of TV ads that go unsold annually without the need for salespeople through our automated auction platform Unsold.
As we enter the second half of the fiscal year, we are starting to see overall customer engagement pick up as companies look to take advantage of the accelerating demand for streaming services globally and prepare for calendar 2021. Our current revenue backlog, expanded pipeline of opportunities and industry-leading Framework platform give us confidence in a strong, incrementally improved second half of the fiscal year, both from a top and bottom line perspective. We currently expect to generate revenue growth in the second half of fiscal 2021 compared to the first half of fiscal 2021. Our leadership team and board, including our newest director Julien Singer, continue to have the utmost confidence in our near- and long-term plan, which we believe will put SeaChange in the best possible position to capitalize on the abundant opportunities in front of us and deliver profitable growth in the years ahead.
Second Quarter Fiscal 2021 Operational Highlights
Secured a new win with a U.S.-based regional cable television provider for the Framework video delivery platform. Since SeaChange launched the Framework platform in March 2019, the Company has secured 29 wins with an aggregate total contract value of approximately $62 million.
Expanded relationship with Amazon Web Services (AWS) to provide new functionalities for SeaChanges Framework platform with AWS machine learning (ML) services.
Ongoing cost-optimization measures produced a 9% sequential decrease and 31% year-over-year decrease in operating expenses in the fiscal second quarter of 2021.
Second Quarter Fiscal 2021 Financial Results
Total revenue was $5.0 million compared to $18.8 million in the same period last year. Product revenue was $1.1 million (or 21% of total revenue) compared to $12.0 million (or 64% of revenue) in the same period last year. Service revenue was $3.9 million (or 79% of total revenue) compared to $6.8 million (or 36% of total revenue) in the same period last year.
Revenue backlog at quarter end was $20.9 million compared to $16.0 million at the end of the second quarter of fiscal 2020.
Gross profit was $1.8 million (or 36% of total revenue) compared to $10.9 million (or 58% of total revenue) in the same period last year.
Total operating expenses were $8.0 million compared to $11.5 million in the same period last year.
GAAP loss from operations totaled $6.2 million compared to a loss of $659,000 in the same period last year.
Non-GAAP loss from operations totaled $5.1 million, or $(0.14) per basic share, compared to non-GAAP income from operations of $991,000, or $0.03 per fully diluted share, in the same period last year.
GAAP net loss totaled $5.8 million, or $(0.15) per basic share, compared to a loss of $174,000, or $(0.00) per basic share, in the same period last year.
Cash, cash equivalents, and marketable securities totaled $9.8 million at quarter-end. Management currently believes the Companys liquidity position, resources and recently implemented cost-reduction measures will enable the Company to execute its growth strategy.
Received a loan under the Paycheck Protection Program of approximately $2.4 million. Based on the current forgiveness rules and published guidelines, management expects that most of the loan will be eligible for forgiveness at the end of the measurement period.
Six Month Fiscal 2021 Financial Results
Total revenue was $11.9 million compared to $27.3 million in the same period last year. Product revenue was $4.2 million (or 35% of total revenue) compared to $13.1 million (or 48% of revenue) in the same p
