SEAC - Earnings call transcript Q4 2020 | SeaChange International, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, and welcome to SeaChange Fiscal Fourth Quarter and Full-Year 2020 Earnings Call for the period ended January 31, 2020. My name is Diego, and I will be your operator this afternoon.

Joining me for today’s call is the company's Chief Executive Officer, Yossi Aloni; Chief Commercial Officer, Chad Hassler; and Chief Financial Officer, Michael Prinn. After the market closed today, SeaChange issued its financial results for the fiscal fourth quarter and full-year 2020 and the press release. A copy of which is available in the Investor section of the company's website at investors.seachange.com. section the the made of supplemental posted the call, remarks its which today’s in with website. along slide investor accompany company available has prepared are To SeaChange's of deck both encourages done already to you so. the deck slide Management if you haven’t download

of in at paragraph begin note inherent the and forward-looking today’s release. call, This end the management making take today’s paragraph major will risks Harbor we today. like everyone of Safe Before please statements that that emphasizes uncertainties to the I’d a the is included be press

also its in based filings, As to we forward-looking have on and outlined and Form XX-K statements actual indicated, management’s of from number SEC differ expectations, forward-looking company’s light annual factors. in uncertainties subject reports considered statements expectations. on of are on are to XX-Q. may risks cause are results including quarterly the and these risks that current should a materially and Form Any report uncertainties be These

this compliance that as reconciliation the Accordingly, GAAP measures with term presented has provided the SeaChange company’s a financial in measures for, information G. the most considered financial today. is issued of measures in substitute not in or presentation a financial as non-GAAP comparable isolation Non-GAAP be by these in GAAP. Regulation from, to directly SEC earnings on-GAAP defined contains Additionally, measures financial should certain release

in is investor that everyone via call remind being and SeaChange’s available to this for like of website. relations made the would replay will recorded I a link section be available

Yossi Aloni. over call Now, Mr. CEO, turn I would the to SeaChange’s like to

Yosef Aloni

operator good everyone. Thanks, and afternoon,

new our is announce began that which is late We are a completed. in company Today, to transformation QX the of SeaChange company. pleased

organization. months new and R&D the we a and executive of organization, new our team, have more marketing and sales efficient stronger upgraded past Board a Directors, nine Over

with products software a In Framework the single excellent XXXX, standalone all solution go-to-market value-based initial just results the integrating are engagement. SeaChange into great. we launched The [indiscernible] strategy,

projects albeit than years. enabled our a the of During growth nine over seven months us last won wins profit SeaChange we won to and deliver cliff in the more revenues. legacy past fiscal XXXX, These

Overall, XXXX half over XX% total engagements of We We where our of of improved total XXXX this XX%. revenue engagements million, $XX.X gross for our year Framework from achieved positive SeaChange: amount Framework fiscal was In of margins XX%. gross came revenues margin our fiscal second the a are was most of revenue. to our total

more $XX $X.X cost We our generated realized than operating single location, annualized just beginning. million the savings to We and in XXXX. meaningful for fiscal this R&D fiscal additional increasing and million income. this is consolidated We in savings non-GAAP operations our savings a negative for cleaned customer commitments, our up many enabling efficiency additional all enables We of XXXX. ROI, which generated legacy

As segment. lean the and efficient company, well we positioned media exited the from SeaChange is QX, benefit impact and on a COVID-XX profitable, to growing,

maintain support: development both from customer with took and and CTO As We timely current needed no all actions customer impact, a our roadmap roadmap operating the COVID-XX, environment the pace. manner. in our high-quality support

our and home; slowing from engagements. customers we engagements: Customer of some are therefore, our this is working

we to close continue to expect and push continue to We forward, business.

by solution being opportunity: operating the up with the our only for customer help As expense XX%. Framework to the delivery that can video reduce

our business within We expect few to see a very significant months. boost to

operating challenges for increase days: these and are demand in provider’s expenses. revenues. expenses an providers facing Growing increases two the TV video declining

for increasing more others CDN, many providers are network demand. the support growing making are paying and network to enable TV immediate investments For example, servicing

operating down. for as and is we video a is with expense providers. are ARPU perfect the while increasing storm The recession enter a addition, increasing, revenues In operating expenses revenues going TV declining providers the advertising TV

in addresses tool best these the challenges. to industry Our Framework the is

On customer the to many expenses the the is cost while value-based it protecting impossible our a delivery XX%. ownership point no, reduce their to total almost our for engagement In target make Framework their to by we operating say of using cases, customers margins. side customers’ operating cost to where reduced expenses use zero. our our We try video

claim. which Framework be the solution business. for revenues. and demand both to TV On their will advertising amazing up own scale and will to months some the our revenue year web-like combination the fiscal live SeaChange. side, very protect cost us No providers zero vendor few enables to in on increase offer or this the to believe advertising within a of enable for a them industry This TV, great other a offer XXXX We make that enables

outlook our XXXX, you to through strategic our I’ll wins. discuss financial to Chad our turn on fiscal walk the for our over the and Framework Chad? Mike I Before details provide initiatives CFO, Afterwards CCO will performance.

Chad Hassler

of We finished win the XX its the strong significant exceptionally all quarter which to a year Thanks, year, our Framework in achieved It’s we own. to which XX, securing with XX feat you year quarter. with up less Yossi, afternoon for wins over speak the and in mentioned, rate truly exceeded XX% And, The good brought the in fiscal Yossi today. approximately great everyone. prior XX Framework wins again deals total an QX, to on by was annual a this impressive target as XX. number the of than

wins needs. service seeing versatile, by industry The using solution. cloud-based service delivery we video-on-demand, services are stay a generate and providers and meet organizations and/or we video for and the across enables for content to demand XX streams viewing competitive both live to offering increasing Framework our owners, these broadcasters networks all reflects their content the revenue customers’ new and localized unique over-the-top. Netflix-like helps existing cable This or secured offer channels

successfully common From in just a number noteworthy, mix existing significant not we replaced during the the legacy including effectively wins monetize regional the that’s new these which their are It’s leading globally, secured solution. and operating logos the the also the sheer that year, organizations installed more of companies and healthy base. it’s of user competing, we the reduce U.S. denominator wins to the significantly telecommunications top selecting experience, costs, Framework is enhance in service providers to

An integral is our go-to-market we thanks last to strategy success April. part the implemented of

plug-and-play Yossi interface Framework, This I the inspired components. began worked, had that to not that the integrated for in the a We know which they solution. talk about to is the as was started assemble back it you’ve that multiple as best components, how any opportunity sold, simplicity. or the to company being hear best the by it truly strategy If office, solution. solution fully detail, had of had just sold by components you’ll user previously instead and were looking introducing we a selling a standalone best were includes the we build Customers that

to introduce plug-ins approaches customers more designed on avenues install plug-ins, will While both to not help are this additional we’ve success following had drive further with revenue premium actively laurels them channels be great Framework plan the which greater selling do resting our pursuing store, our proven providing and Later adoption strategy, SeaChange. with and their we to the through for base. Framework monetize free Framework year, and we’re and this streams

of the the turn, lost ads which, to industry Additionally, sold, the us revenue way Web change to over are past the has our TV in allow Framework ad enables the will recoup customers TV decade. technology the some to

fact, should coming initial on-going to In customer able several be announce deployments customer the we have engagements and in the months.

list with Overall, traction growing technology, new multi-year pipeline our Framework of along of encouraged we XXXX. is recurring year the distributed building robust with We’ve a geographic a we’re by entered new revenues through industry-leading the that well really sales opportunities fiscal achieved in customers, across regions. agreements,

and in continued positioned well We’re XXXX factors confident beyond. fiscal these have for success

turn over our to the XXXX. for us walk Mike? the of fiscal I’ll that, QX call With to full-year Mike performance and financial through

Michael Prinn

and Thanks, Chad, everyone. good afternoon

for legacy new with results during entered fourth XXXX. and with financial maintenance We the of of support. booked $XX.X total fourth our business quarter of in XX, backlog $XX.X the to backlog, fourth and million. We quarter excluding ended quarter XXXX the the January ended $XX.X fiscal quarter million million Turning

Total Framework to million a million period, year-ago XX% the $XX a The million total million compared increase year-ago in by in from no increased in same Framework revenue revenue $XX offset in revenue decrease revenue. in period. by $XX.X driven the to increase revenue $XX.X same was legacy

or by revenue. total from Product of of to revenue, year-ago million, $XX.X same million XX% in revenue The million, or was increase XX% revenue revenue, increase in period. increased Framework a $XX.X XX% $X.X in the product driven

our XX% XX% services decreased legacy revenue related in was revenue, million, or service revenue revenue to from support customers to from in million, decrease period. the $X.X revenue same or due from of total year-ago lower and The professional XX% $X.X to products. total of Service both revenue,

expectations As legacy we organization Framework call, organization customer completed with these to legacy customers to mentioned as services as engineering are transitioned professional our projects. on consistent and we we arrangements declines new services our QX professional transitioned our our

international from markets decrease revenue was The the in which Revenue project due significant million, year-ago quarter in last XX% customer total was of same to fourth XX% of or in a large total million, revenue, $XX to or compares international revenue, $XX.X period. our for year. of the a international

in period. Framework was which same the up in total Revenue revenue, of being offering introduced was or XX% million, XX% to $X.X in our from U.S. $X.X or year-ago XXXX. total market fiscal from our revenue, million, of was the due U.S increase revenue in The

accounted of one revenue. In year total revenue QX that terms compared XX% concentration, customers XX% XX% of total that two of accounted customer customer in for and our of we had last our to for

profit QX XX% exceeded due gross XX% last compared fiscal in increase to sales our was product of million, margin the year. target a XX%, shift total in from XX% compared to in gross to Looking the XX% of quarter guidance XXXX. in profit Product of increased Service margin at year. our QX gross in Gross for total year-ago $XX in year. or the The fiscal margin $XX.X Framework The starting period. annual we of XX% same XX%, last in our to was or QX XX% revenue, gross margins. was revenue, of to million, of achieved

all eliminated at non-essential in the completed services reduction remaining we initiatives and reflects year. million In The projects resources related XX% and throughout support Looking organization. as to savings had related the to cost internal the elimination of Non-GAAP QX, we we arrangements professional from decreased operating costs our $X.X continued legacy improvement third-party million legacy to expenses of our underway. of costs QX expenses. $XX.X last

operations income reducing a million of GAAP to realize income million, of non-GAAP in income. operating well period. as three net from success $X.X $XX.X consecutive quarters from Our loss as of year-ago non-GAAP the OpEx an three enabled totaled consecutive us quarters improvement same

fiscal of quarter of revenue, was compares percentage total year-ago percentage XXXX the operations from a for fourth in income negative period. As a XX%, GAAP which the to

Non-GAAP improvement income totaled or in basic share, million, operations million, or period. an from $X.X year-ago from a $X.X per the same of share, per diluted $X.XX $X.XX loss

As a last total percentage from non-GAAP of was negative XX% compared X% revenue, to year. in QX of operations income

significant totaled a $XX.X basic loss the or GAAP share, $X.XX or period. in year-ago improvement basic $XX,XXX, from share, net a per loss per $X.XX of same million,

improvement or Non-GAAP $X.X of million per share. an in $X.XX loss from a or net $XXX,XXX, totaled diluted year. $X.XX basic share, QX last income This per was

net of As last to of non-GAAP revenue, in negative income a percentage QX compared was X% total X% year.

year in no cash marketable ended securities the We and had equivalents with balance debt. sheet. and the cash to $XX.X million and Turning

that so quarter, Our progress prior cash and in cash $XXX,XXX prior had position up we we with significant for have were the the years quarter, was burn. quarters as pleased prior from

recognized Deferred of last the the end legacy decrease at of primarily quarter end at revenue to was year-over-year million and due the prior million the QX end to decrease renewal year. in of $X.X support the $X.X post-warranty and during revenue timing compares which quarter. quarter revenue The maintenance agreements and sequential at the and of million, $XX.X was and

payment at last to quarter in timing XX receivables, Framework of those year. $XX.X $X.X terms of recognition the excluding was The days and days in sequential year, the the million, on billings for quarter of QX to to fourth quarter end the was compares Unbilled fiscal and $XX.X DSOs, our fourth of result fiscal revenue million deals. the of were Framework year. compared from increase the the prior in XX to compared deals deals million unbilled the receivables last this which the year-over-year of due

decrease XXXX, revenue was no Total compared million short XX% our Framework from of to $XX.X fiscal We because of the a Framework in out to in lower XXXX turning XXXX. compared primarily by to in $XX.X Now, fiscal deals revenue our results. guidance a to fiscal million in year million Framework legacy of revenue slightly revenue offset $XX.X The driven in pushed XXXX. range, end to of million quarter. a million increased $XX.X increase total fell that X% by fiscal in the few increase $XX.X revenue

our revenue product XX% million, of $XX.X $XX.X increase or in The Product million, in to a $XX.X revenue, in increase revenue fiscal at million XX% Framework was total Looking from buckets. revenue of increased XXXX. by revenue. revenue, or driven total XX%

a Framework million result decrease XX% to in $X million decrease a installation decreased XX% revenue, $X.X as with million, legacy in service well driven revenue associated by or products. development as out-of-the-box $XX.X of our services maintenance in as and decrease in Service million, customized product’s of functionality, decommissioned fiscal was total of revenue from $XX.X XX% a or total XXXX. revenue, The

or from of in $XX.X Revenue total to in total from million, or which revenue, XX% revenue, market of Revenue compares total revenue, was XXXX. XX% million, fiscal international of XX% revenue, fiscal our was which of million, or total million, $XX.X XX% or our up in $XX.X $XX.X was U.S. XXXX. markets

who concentration, customer XXXX. than customers had fiscal in customers revenue of accounting XX% year each of XX% in represented each no compared to we the fiscal more total our and terms XX% for In two

or total our $XX.X $XX.X revenue, XX% XX% to margins. million, profit fiscal of XXXX. total from increased at revenue, in million, Looking Gross of or

XXXX. XX% our The go-to-market I product margin QX was fiscal increase we annual of in profit target fiscal our earlier, the guidance in year. strategy the gross gross of for As of exceeded to XX% due a starting mentioned achieved new Framework

was XX%, margin higher-margin compared compared was in of Service decommissioning XX% XXXX. in the our gross decline in in XXXX. related due fiscal fiscal improvement Framework products in fiscal Product costs fixed to margin fiscal increase was to was XX% XXXX. The to The revenue to legacy gross an due to XX%, XXXX.

expenses to from Non-GAAP operating XXXX. Looking decreased XX% in million $XX.X at or $X.X fiscal our expenses. million $XX million

reduction earlier, mentioned and I savings internal of throughout third-party As initiatives the the reflects cost the to organization. continued the improvement costs of non-essential related costs elimination

loss $XX.X or income million, from measures. or our loss share, per totaled Turning loss diluted $XX.X an to totaled operations from of million significant in a fiscal $X.X Non-GAAP from profitability of per operations fiscal $X.XX a basic improvement GAAP from million, in million, $X.XX $X.X XXXX. a improvement share, XXXX.

to total revenue, operations fiscal As was X%, negative XXXX. a income a percentage compares percentage in of from which non-GAAP

loss million fiscal XXXX. $X.XX loss $XX totaled sale related prior a finally, GAAP net million one-time, loss or charge per of share our to the $XX in for a $X.X million, Acton. of from loss headquarters the net year loss improvement non-GAAP in the in loss fiscal million basic per significant from fiscal And $X.X $X.XX improved by $X.XX basic share, of or share $X.X million for to per or of on a was $XX.X loss per of net in non-cash basic XXXX or Included the $X.XX a a million, share, basic XXXX.

our Yossi, were hand previous to I operating for onset Based of in million fiscal Prior we consistent our $XX with I revenue guidance achievable. meaningful to call to million on representing guidance believed pipeline, $XX provide the metrics of discuss for Before prepared XXXX. fiscal XXXX our growth was with guidance COVID-XX, revenue wanted the to fiscal to XXXX. we over guidance

of formal We fiscal guidance are COVID-XX business summary. This working COVID’s the impact on my our financial and better as XXXX completes clearer. understand becomes impact to will our provide

today's financial detailed results, file more analysis we refer plan as our Yossi? a to April which as to earnings XX-K, XX. release our by well please For of

Yosef Aloni

best momentum ever and have the We Thanks, we pipeline XXXX fiscal started had. with positive Mike.

we to guide million fiscal Mike prior mentioned, planned to $XX As million to for $XX for COVID-XX, XXXX.

unique that to short-term engagement expect later impact cost value next and next value-based believe months We we COVID-XX structure better XX the right endure our to have understand prevail proposition. to during the the using days. the We few and

inventory item one unsold is will added the new monetized. we to module is a the way final which underutilized mention. industry to the advertising I’d Recently There and Framework, TV like change

and currently several are will future. the in more with working We share near customers

to With Q&A. the call turn over that, to me operator the let the begin Operator?

Operator

Steven Our question from Thank with comes first Dougherty. you. your [Operator Please question. Frankel Instructions] state

Steven Frankel

Good afternoon.

in talked of you closed hoped far QX those about thus of you many that I their close several What if out. QX? have that deals wonder Yossi you us in out might So approximately any And how to slipped slipped the quarter. tell value? deals deals was

Yosef Aloni

Steve. Thanks,

are the these deals any them. So four international We lose did on market. not of

four able all exceed don't agreement not you the ratio. note, close Unfortunately, deals if four of Closing significantly a not also we we to It's ratio, our enabled them. target. complete in to these expect revenue including We us important our deals the the manner. win have timely would consider of that mind, to that to were part win

last over did positive for ratio are decent. And the we It win deals we also not Our them. out, momentum. XX%. which, starting of lose pushed was four were Out year was quite with

So overall, future the company. we bullish are on of seeing our very

Steven Frankel

plan of cash we talk of What relatively Okay. cash burn cash Yes, higher plan did but let's a quarters kind was the picks about QX, And that. internal minor I problem. expect until it the your might -- than you in generate was for up? assume business solving amount. something in couple next some

Michael Prinn

take Yes. It's Mike. that. I can

prior years. did year three small us. QX. prior a but was first as or think million. bit in of XXXX burn the significant to the was was a we in it burn Granted, comparison in -- for enter $XX transition I cash a of it we kind of a the had three quarters, increase, in cash in So, quarters neutral, first cash generated during the little We year, we

And at in receivable that’s to decided unbilled cash. think optimizing a that I generating we step. put wanted a building a on some an think structure, an just base. accounts business future something the ever our would if stability, And we place, logical of be So kind and we're we've got consistently in I terms next then cost -- point in of focused

Steven Frankel

burn next company's been something business just cash? generate of that recovers That's your history, if But in says that’s you is or couple business quarters, the the different will material you there cash in QX, cycle right?

Yosef Aloni

look this, you answer you before I need Mike, there's more that one think at. Steve, to

we had these challenge commitments on impact The the organization. OpEx. we both meaningful organization terms updated in on and the very legacy R&D OpEx. see will had legacy The the of year, last commitments, You was some support

Now that done all is completed ROI, need. Mike will that negative on obviously, much have our cash cost of these and are it commitments better. legacy structure Therefore, impact in [indiscernible]. a significant with we the QX,

Michael Prinn

think makes that No, I sense.

outlook I think just I in give guidance. little some expect longer bit will we burns when a term add see don't of maybe thing may especially like mentioned, to I the quarter-to-quarter. we type is, think yes, that kind we only SeaChange, give cash legacy We'll significant -- of of XXXX. the a burn, But I additional maybe compared

Steven Frankel

maybe a derive any had I today But that's on is increases? you, to going revenue on in obviously in incremental last understand release there component week talked of the increase customer activity Okay. Framework just press as was about where follow-up market. and And you the streaming, you where what's

Yosef Aloni

limited to Its components. new

places This new be will as analytics of Framework this Obviously, require we over where take increase. obviously, better in to decent margin instance, them some Also customers, and will meaningful of there, -- cloud there advertisement. positive. the increasing, activity many will more over is be require is our will and we’re well. have For they services, going customer where some certainly when gross

Steven Frankel

Okay.

the can and is So count accounts? are come the Where shrinking are contemplating the today, these head you potentially that play over year. further given situation, in into COVID-XX next things

Michael Prinn

Yes, so right we're at globally. now about XXX

it of our some I think made a made QX evaluate monthly lot we basis. of end like kind have changes on quarterly and feel We and going just at and are in I we continue to a fiscal a of the changes a 'XX QX. to

to and efficient monitor feel we we’re and leverage that forward. of and so And that like going lean can we'll kind continue

Steven Frankel

a question. picture Okay. And big then

done many legacy So customers universe, large If how you've outside could how base even us deals, XX didn’t is? move of potential Framework that remind if your you convert? installed you

Yosef Aloni

new installed to So of the functionality. are base customers the customers. it's new many important and note Framework XXX It's many, that about legacy many, wins for

solution. market, If looking legacy The target the customers at obviously of majority only solution. are Framework are OTT service. our only we you not are is customer, It's cable to not servicing the so the [indiscernible] vast a

think if also providers we customer, do of providers is you is to suggesting domain, over-the-top when a but to content cable Bloomberg about owners, not them And starting is information. is best and have be service will and Now think direct-to-consumer this you there them. continue Channel. is our owners. Bloomberg and about and out for course, your to content instance, not I'm content Bloomberg and support service. Bloomberg so that content But public future Bloomberg, a This an the owner with confused you

provider. content of type another is this So

If customers you growing it's the especially so and a down. facing, [indiscernible] think these it's are significant that about going thing it, we a target days,

an And QX. that opportunity, and the So in is do of best call It's sense, means going opportunity look there hundreds we pipeline. very have pipeline there we meaningful we the there's a more. much what [indiscernible], ever And that's budget are that is had, we’ve just a pipeline pipeline the into at this to the millions.

don't close XX% all are even We win this this we ratio to meet [indiscernible] target it to the year. So to for our year? year No. for of our going meet

going to we to engage, So few or this are year the great? weeks confident few next be be Yes. in see. continue months we going feel challenging, we'll Is maybe is to next

Steven Frankel

you see of in year-over-year in of at OpEx QX? then give in maybe idea an OpEx QX. kind expense savings us might we Maybe decline some hinted And what

Michael Prinn

Yes.

'XX. in of better I that the expenses operating prior quarters non-GAAP And a And quarters, that's prior fiscal significantly our million run $X.X be QX. around years. for rate So we going than are for couple to -- next obviously were or think, for generally

Steven Frankel

I'll somebody you. That's very Thank great. helpful. Okay, some else ask questions. let

Operator

Thank from Lake Please with Our question. question you. [Operator Street. Instructions] comes Jaeson your Schmidt next state

Jaeson Schmidt

questions. Fully not on confidence sort being it time. you a reduced more your spending this Hey, that being Thanks of recognizing if makes for taking a bit difficult, just could is COVID-XX customer at the and comment guys. situation curious pushed my

Yosef Aloni

the Jaeson, for So, thanks question.

other customers going budget, to Who enable TV Some else have Almost look the are is push reduce XX%. them planet, a just There their will XXXX. at optimize their to But solution every are do We’ve on price like and offer needs provider not engagement. OpEx. too multiple and each with no their complex events them It's that will other there. and -- list, value has absolutely. based by many They video to to for they’ve to this the side. bright delivery and the is going OpEx up to one. all that is very but Look [ph] are unique. of OpEx them, at with operator long vendors, platform, the vendors components the the which we challenges, the a there selling nothing are operator

very more budget? are are delay will in I we're to optimize to customers we see see sure. some customers to Are that fast those. OpEx? of that their move do to many, going see going So going their order many to we Yes, going think forward

to fair we -- those. of or it's think I already to those see say some many that see of

Jaeson Schmidt

win with a pretty customers impressive with pushback a from curious primary today but Okay. be not going just you deal? what helpful. mentioned Framework That's to tends the rate, I know And

Yosef Aloni

than I Also XX%. So rates our said XX we more and reported win was wins that. slightly may be that over

did these push very, we opportunities. I'm year. So some lost win, including to very of [ph] this also In few we different XX% not the that

to very, within has the And close lost to losing customers to we So so to not we each hard another convince we is -- not losing were only few, the lost able and for say. the one some it We and reason engagement initiated so It's vendor, engagement year. it. that losing opportunities. own cases means in few very its

Jaeson Schmidt

Okay, that's fair.

Okay. a a just of question Yes. or viewed deal? then gone segment already additive market that plug-in is of on at this has a targeted the for broad And really based a with Is store. as this Framework quick different Framework more the more kind customer

Yosef Aloni

phone. think if is best So analogy about the you a Framework, probably the

are So SeaChange will a we CPU one form. all volume selling the button, every have that used these to took gauge and power have Each back all the phone components to the and to has this we access plug-ins. like best-in-class this components and now [indiscernible],

So this meaningful majority something to going able to that And we customer. be single the them, vast customers, deliver and XX months is win every of is nine the within were customer them. vast of each to majority

I will, over will as see think customers well. meaningful more win number Framework decent some these should there if then revenue access a And contribution able we of we to once will to you be App have number year. this the Framework plug-ins, Store, the

Jaeson Schmidt

Thanks a lot, helpful. guys. That's Okay.

Michael Prinn

Thanks, Jaeson.

Yosef Aloni

Thank you, Jaeson.

Operator

Marema state comes Pareto with Our from your question Please next question. Ventures. George

George Marema

Yossi. Afternoon,

Yosef Aloni

Hey, George.

George Marema

So on does of the a revenue What sort us? opportunities installed on bit represent XXXX to -- illuminate base? the little you XXX can fiscal legacy in that

Yosef Aloni

So into this can some of convert installed Framework. base we

that customers The these components using component. change from one single SC XXX, are not using majority They vast them are the with the component Framework. several using are [ph] are So many vendor. other of

terms In -- about X to of the is majority value, million. these of Obviously, cable X are them average Framework base, million the probably average installed this vast value current the providers. of of these value the are

to we COVID-XX cable the of be and them pace able the the year we are to maybe able the market be position the is impact going of on this the to a with in half segment, But many should slower. in slightly of where convert Framework. So the second

providers growing the networks, to in smallest make If fact, worse, have in you support the operators for continue demand similar to bandwidth. even and even since think XXXX investments about the they cable to or

then increasing. to XXXX, similar OpEx We video is is going report, going to And down. their their ARPU are video So down. go ARPU see this already

Then probably our what publish is you will in so we with a providers, manner, cable have we public their report. see back us. they or at installed this also a month they many so when will in So that office see share

is installed increasing, into shouldn't accelerate of So their We the some base the OpEx conversion able of Framework. their are be decreasing. revenues to

George Marema

you Okay. And sort then are weeks next to what table see the other their [indiscernible] to the of moment, seeing their people happens, some go some the side to rush due other parties? you few engagement although of to online Are aren't true from for -- freezing -- the increase are is certain providers for the accelerating theaters to and due it plans like in content market? maybe to need necessity immediately people movie the some budget on video that

Yosef Aloni

yes, Oh, absolutely. sure,

You see for content owners. more demand

Some mentioned, content they're fairly that obviously The looking one we have you fast. and very, fact running solution, the enable quickly. on production very us obviously, move to owners go to quick AWS like a to

within For able were instance, we the production thousands that there's to few a customer in with the very subscribers very, take hundreds of Nordics of months.

more see this have to we So support right we believe demand solution and the I demand. that

George Marema

Europe now? or among noticing America North geography any trends? here stronger, stronger America Latin weaker Any trends QX weaker regions, like Are stronger weaker, or Okay. right is you or in

Yosef Aloni

Yes.

now the are session, require a And we engagement have are see we that terms in that close what that obviously to and this of today to we managed year, into is they that have, think everything obviously we than going last fair opportunity deals it's last today pipeline say QX So but getting have longer a size, year. deals there. we I built larger significantly the higher

new In react. a in where owners demand is more to new market. some demand, are Europe terms providers, of of is content content the the overall conservative most Americas, faster

demand. demand, moving there not current new in terms over it's So slower of slightly

Now, the for less it's months. think than you if out been only nine about Framework,

year. deliver nine Framework. offer So this offer [indiscernible] this in the well to so XX months -- less than 'XX. at then year, we the started the And the within started Framework, was to introduction to the or we after last days started for last Framework, We Framework of is of

enable the that right technology also value of fact to the them So to a to a take and pipeline, which this their obviously with fact good in will enable cost providers And during will that have reasons. quite them OpEx. that. enable that And TV this control. current the days great, engagement, amazing on providers to we service road us, and new a success acknowledge content two because especially that customers control way the it's in have way based these the launch Because of its we

George Marema

of Okay. XXXX? similar And ballpark service the still somewhere in for next the couple are a you in the per expecting of quarters revenue quarter guys

Yosef Aloni

… So

Michael Prinn

We will …

Yosef Aloni

No, Mike. Sorry, go go ahead, please ahead. no

Michael Prinn

Yes.

big revenue the obviously, a piece So, legacy was SeaChange. service of

the quarters. of in definitely will decline couple next that in We a see

with see to for million. but offset be So revenue decline in you service what have $XX which will will through maybe $X probably primarily revenue was $X million in still And of transition that revenue is. year, the a product the is in an We million QX increase the legacy to then total services. Framework revenue,

George Marema

when And is Framework a blood there through? that sell any component deal, you service gets

Michael Prinn

is. there Yes,

-- so there is a And component.

third. one thirds, two say maybe it's roughly So,

generally two generally of term the five that's software the it's or it's and over And of a contracts, which license. four $X million agreement. $X support a is a the deal, then pieces. $X So It's million are if services And generally, remaining million years.

that come So ratably. in would million other

tables this press you in so see the can our release. in And

We mix, are that scale is the thirds, third But life, piece one of over up spread a seeing being now. obviously, a given third starting with the framework [indiscernible] right that to recurring. smaller two you're build build that one

George Marema

at out Framework, in payments? the or And years? flow is earned How those cash the monthly, on annually quarterly it the revenues is

Michael Prinn

So the recognition there's cash. and model typically, there's revenue

right the think I revenue, … through So pieces, two we went

George Marema

right. Right,

Michael Prinn

… been terms the when first, new go-to-market, we the ratable. out spreading then ratably. XX kind that or so with we've sold and Generally with the deals we of payment deliver a it license

where So same X revenue ratable our deal in we walk $X to in over just that be years. million the from through where a billing X that will perspective, comes

George Marema

year or And a a it you bill once or once once quarter a what?

Michael Prinn

a once they're Sorry, once generally or year quarter. a

George Marema

Okay.

So …

Michael Prinn

kind assessed [multiple of is The speakers]. Yes, they'd the majority would say, most part, I annually. be So

George Marema

deal X this. million one, all $X million So $X year of million a you two, over year get years, $X

million if million, a April XXXX, XXXX, a X, is be $X [indiscernible]? April you million it'd a XXXX, April So it $X X, that April build X, X, $X XXXX,

Michael Prinn

Correct.

George Marema

you. Thank Okay.

Michael Prinn

Yes.

George Marema

Perfect.

Operator

closing Thank are this remarks. turn at you. for no back I the will time. you. There questions Yossi further to Thank Aloni Mr. floor

Yosef Aloni

for year Thank you everyone us XXXX and quarter for conference. joining today the fiscal fourth SeaChange

disconnect. now You may

Operator

great conference. disconnect. This you. parties a may All concludes today's Thank Have evening.

SeaChange International (SEAC) 6 Apr 202020 Q4 Earnings call transcript