SEAC - Earnings call transcript Q3 2021 | SeaChange International, Inc.

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Operator

Good afternoon and welcome to SeaChange's Fiscal Third Quarter 2021 Conference Call for the period ended October 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 Financial Officer, Michael Prinn; Chief Technology Officer, Marek Kielczewski; and Chief Commercial Officer, Chad Hassler. After the market closed, SeaChange issued it's financial results for the fiscal third quarter of 2021 in a press release, a copy of which is available in the Investors section of the Company's website at investors.seachange.com. To accompany today's call, the Company has made available it's prepared remarks along with a supplemental slide deck, both of which are posted in the Investors section of SeaChange's website. download deck, to done you you already. so encourages the if slide haven't Management

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

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

non-GAAP isolation has remind issued certain the measures as these contains I reconciliation with measures in in section SeaChange's replay via release comparable in considered SEC Investor non-GAAP would available presentation the the GAAP recorded, SeaChange as presented GAAP. measures financial Company's in Accordingly, of Regulation website. call compliance a information term Relations by earnings should G. in this financial of like be financial Non-GAAP directly financial the is this a available substitute from, for is be defined to for, most provided everyone measures to being will that today. Additionally, and a or link not that

Sir, please over CEO, to call Yossi to Aloni. would like I Now, SeaChange's turn the proceed. Mr.

Yossi Aloni

call. the in delivery safe since provider our demand spending onset healthy pandemic these opportunity shift dramatic service during video is platform. extraordinary of the you hope with for today to great and fiscal afternoon and of to and XXXX our joining has near-term The Thanks, this the thank for third operator. everyone you I speak impacted times. have quarter It conference remains Good Framework

infrastructure that or to those investment closely our video industry forced in service and reduce follow COVID-XX many as providers know, technology eliminate Framework. such our For in heavily invest platforms

accelerating competitive, consumers. team's the content investments to the adapt of encouraged On hand, content by I'm directly to and TVs pivoted Apple are SeaChange's and landscape. distribution in by of to and strategically changing deeper addresses who looking Amazon are stay incredibly Chromecast, to and the directly strategy develop quickly high-quality launch to addressing directly over-the-top, deliver applications Fire their quickly content, and needs brand. content to market's service In our owners through new Smart Video build video accelerated Apps TV an to October, content monetize and strategies owners consumer levels changing ability direct-to-consumer platforms this between late shift TV, effective enabling and immediate content owners successfully behavior audience we to other now TV. connected Roku, engagement and spending

which technology will the I'll new front able come in our from over of opportunity perspective. us. should Mike rationale pivot, more about I Afterwards, the to Apps deeper walk you were service Marek the CTO, our quickly context QX, numbers the launch our Prinn, to strategic and the Before to into through to back on I Video provide behind share to to our like turn call Kielczewski, the Then CFO, for how would additional as massive platform discuss dive a pivot. we

the I outlook questions. in Hassler, then market. with traction Mike? Our share open our achieving share the CCO, and then we're to will Afterwards, the Chad will you call

Michael Prinn

and Thanks, Yossi, good afternoon everyone.

last $XX.X fiscal XXXX; from QX revenue was $X.X year. the quarter the down quarter ended for third fiscal total in XX, the flat and for prior of QX million, from results financial our was at XXXX Looking October which million

the $X.X Yossi fiscal year-over-year revenue in see Product lower in period revenue. for impact to, and continue quarter, to As $XX.X product of million, due decrease to the XX% pandemic. of the or as QX or the to XX% we revenue was the global of total million, prior primarily services revenue revenue, total XXXX was million, of compares and revenue, This or $X.X XX% alluded The products. was support period. revenue and in was year-ago revenue on due total the million, lower $X.X related in $X.X decrease to XX% fiscal or period. from basis in same to flat sequential legacy professional a services the XX% revenue, of revenue, down total for from and same was million, revenue Service QX from year-ago both XXXX or revenue service of customers which

mentioned XX% prior we professional QX new in from revenue customer or the organization these million, our $X.X are to QX Revenue markets decrease which and have of total was XXXX international in and U.S. transitioned transitioned Framework we prior legacy million period. $X.X $XX.X from for primarily prior quarter, XX% we in or our same to revenue, revenue, or services on the consistent projects. revenue from international as reduction completed quarter, total of customers the XX% market our in the same was services in or million, and and to of U.S. compares of engineering fiscal or year-ago attributable revenue, to million, revenue, $X.X bookings, XX% in professional $X.X revenue total pandemic. total was period. year-ago of Revenue XXXX our $XX.X our to both due or arrangements The which organization with compares XX% down declines to as in was of the a in markets total calls, million, legacy As fiscal total expectations the million, XX%

of quarter XX%, from to last $X.X was compared last to to Service prior or XX%, quarter from in the same of XX% and third year. XX% from year. total XX% or our Looking from quarter fiscal and XXXX $XX.X was the of revenue, XXXX gross XX% million, margin QX revenue margin for quarter, for or of profit compared margins; the million, gross gross QX the was QX prior Product period. prior in at million, XX% compared the fiscal revenue, of total of XX% XX% total year-ago and $X.X in

expenses; for expenses million at $X.X $X.X million quarter organization. to in the and prior costs QX operating of throughout elimination XXXX to the year. of in XX% of non-GAAP decrease X% from initiatives costs third quarter fiscal million Looking reduction internal $XX.X cost-savings the third-party of non-essential our decreased The continued our decreased from related last reflects the and

April for pandemic, our additional we market strategy As have previously, and better late in we our business operations align our current expenses communicated These to cost-optimization measures actions the to further included to of in the $X.X same fiscal year. COVID-XX XXXX reduce conditions. year-ago million with from addition $X.X shifted GAAP compared response operating in to the period. to establishing from QX and loss last made in in operations totaled million million income the operations prior $X.X ones we GAAP quarter,

loss loss in $X.X per fiscal GAAP the was the XX% $X.X fully same Non-GAAP million, As quarter of of gain operations of the to for fiscal a of XXXX which of compares a in period. million, $X.X XX%, prior from prior a share, quarter year from of $X.XX operations basic for share per quarter, year-ago total a and negative percentage operations and GAAP per the negative loss loss or ago from income gain compared third $X.XX revenue, of XXX% QX $X.XX diluted or totaled the million, XXXX basic in or period. share, to a in

net for per the the negative of in compared quarter prior in prior per prior quarter, of million, As a operations million, and in last fully of or in loss $X.XX loss $X.XX a a a million $X.X to of diluted the QX same fiscal quarter, XX% $X.XX $X.X to negative a basic share in share, a share XXX% loss last million loss net compared loss basic for $X.X QX was share, $X.XX totaled per basic per of or gain a loss diluted $X.X gain year-ago $X.X share, a Non-GAAP and percentage net loss in of fully XX% total XXXX of million, $X.X of net loss compared income of totaled fiscal a period. QX net basic share, or XXXX of a or revenue, per $X.XX GAAP year. non-GAAP or per and loss $X.XX QX to income year. million the net of of or

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

in Turning quarter $X.X cash and we ended with securities. and million cash equivalents balance marketable to the sheet; the

since strong pandemic summary. We and position liquidity end emerges the runway In we execute expect have us financial have giving strategy. on, cash, $X.X us March position. enhanced execute sufficient ensure the growth million completes continue in positioned at our summary, our This measures implemented with optimized and a year to liquidity and the and from decisive to financial least my SeaChange cost-structure, our operational and to resources, in to

our filed more Yossi? we a this XX-Q, analysis afternoon. as release For please results, financial detailed today's our which refer to of as well earnings

Yossi Aloni

Thanks, Mike.

TV, the could eMarketer video Apps particularly TV Google deliver usage Amazon with aggressively such accelerated this directly As decline. surpass The investments will connected Fire content devices Chromecast, that and seamlessly TV, deliver in year. through the providers' monetize XX% to our spending our addresses not timelier. viewers, been connected SeaChange and Fire new Apple forecasts category content launch of where approximately for independent TV their as comes Amazon Google COVID-XX content where results This burgeoning libraries. than TV. away of infrastructure is and lead and Video by consumers layer owners dramatically and illustrate, seen in owners, in. million financial from service platforms, content Chromecast platforms smaller Roku Apple are to from XXX demand TVs followed U.S. Apps greatly and ways high-quality looking service to Alternatively, Roku, alone rich viewers have has Video we the more and owners, TV. the have video Smart

placements, workflows. buying growing predicting streaming TV is as rise is deploy connected owners buyers, programmatically revenue in our audiences impressive, consumer and budgets model well for and surge service and to advertising the which From I to have market content. of OTT stop direct into successfully them a will that share linear by to Apps their ad a service expected the participate owner are SeaChange Industry is can spend, quickly launch a in and right inventory advancements to the real-time. would exploding Insertion into Video module epicenter perspective, module bringing content revenue Apps billion service 'one source fill away. pivot digital the at and Marek and content us to meaningfully CTO to ad Insertion technology Marek? slots delivered programmatic shop' automatically rich to eMarketer, Ad matter Ad new our is content that ad in is data like content ad and XXXX. With exceed are as stats define higher Kielczewski SeaChange's our according point to insights provides that a right monetize the advertising successfully devices our analysts invite the enabled generate these technology greater of our in on. in demand revenue-share us months. enable proprietary allows and how to high-quality analytics, Video globally While their easily $XX SeaChange's leverages the with to

Marek Kielczewski

afternoon, Thanks, Yossi, good and everyone.

the We to office rich suite due in our unrivaled and is our adapted a we innovation. or technology. that COVID, and involved of invest our using year, winning response company service, Solutions, has address cloud This those the of launch and amazing fully the quickly in be products Advertising now the consumers. video Framework scaling, Apps can SeaChange followed in in operating overly to For the lifecycle. content user campaigns and a to technology deployment service the streaming elastic solutions vendors. was orchestration history deliver of experience to their deliver to collective for consumer. service, content in R&D promotional needs a products cloud, enable Historically, industry our direct relationship Whether and disparate portfolio to Direct-to-Consumer cloud Video landscape technology have and SeaChange's owners best-in-breed to our complex, technologies content while owner With our modified with and tools, the our it while continue owners app content easily start own process controlling directly managing the maintaining desire We and invested platform, back changing industry. to analytics know, directly costly, the award rapid

reach the long-term to full over different relationship. of enabling to All data our of over app enhance sales XX% content greater using margins, turn the pipeline. the now to new also and service, only over control momentum owner creates call business value XX Not over this it this does customer discuss by Chad? platforms market. I'll Chad and approach

Chad Hassler

Thanks, good everyone. Marek, afternoon and

productive since the our suite. since new As offering Framework, Advertising has busy August, exceptionally spread an our We've last our secured strategic period team pivot Solutions particularly shared, in customer Apps wins and company's including it's XX and evolution, month. our across new platform. Video been

QX, secured Apps Platform customer formerly six Solutions, 'Unsold' During services; Video new Advertising win. we Video and including 'Framework' an wins, wins,

aggregate platform and Video on in built quarter, current have Apps Advertising this momentum customer we early Video with Collectively, an Advertising have we of including our March the in for Company meaningful Platform largest signing the of Solutions. services. secured one since total value We new in most Framework SeaChange's we operators wins, launched the world wins worth million. secured with QX, contract Solutions, in approximately four XXXX, history network mobile the wins Framework In for $XX win XX

successful for Advertising our entire across as OTT delivery previously selected video Solutions, in to of six-country deployment VOD Unsold, the linear, pilot its offering a Central and Following new channels. customer America, deployment referred

potential the now call as aggregate win on over I'll over high this endorsements organization share back a and exceeded As closing represents revenue customer inventory companies earned test, to SeaChange receive to the put technology. multi-country we're Yossi capabilities largest The $XXX the to to the major, turn and years the this quality the approximately million Their our and customer's is in annual for opportunity most next unsold remarks. based one the referenceable well-known of world, Yossi? the and ad of monetize proud and telecom the for three would tools it. their have standards result. his SeaChange's revenue

Yossi Aloni

Thanks, Chad.

and the the solution well exploding positioned content such OTT demand the industry's providing for market movement. and has are to high-quality The Apps While need impacted results, we to direct-to-consumer a opportunity platform pandemic growing and enable on the is with spend. our near-term Video ad financial the in ongoing owners Apps with discussions validated content four content advertising streaming engaged stages the the capitalize is we've launch customer strong by are are the the in of cycle. have the in for secured seeing who wins pipeline demand sales for varying of we robust Since Apps. platform we're owners, Video and Video XX built in in November, approximately

keep traction regular As community and we secure new apprised progress wins, we plan release our a more investment press cadence the through to of of communications.

Over thousands [ph] Wix be Similar direct-to-consumer for small a for will TV need ad enabled strategy. to five years, monetization we Apps of built-in a with the websites of next mass how expect to call open production TV questions. powering for Apps ready Video businesses, remarks. apps direct-to-consumer on SeaChange's medium major and role to revolution. play the We're concludes will to massive prepared the our service look in a That capitalizing launched

Operator

question-and-answer from your ladies [Operator first at we'll Colliers. question this with Steve question. Our And gentlemen, a Instructions] you. be conducting Please time, comes session. state and Frankel Thank

Steve Frankel

Thank Yossi. afternoon, you. Good

bit. Let's with just disclosed, that looking QX? and for products. start bookings write other number us, were in little framework that down didn't bookings backward I of What and on a bookings see

Michael Prinn

Yes, Steve. It Mike. is

Yossi Aloni

Go ahead, Mike.

Michael Prinn

of and with revenue disclose bit booking of can to then, piece of for opportunities We which didn't still probably business some framework have pretty of I And little small legacy take a traditional comparable rev-share value. a Yossi. the number Yes, legacy, couple QX. of the don't bookings. a that. It's the mix immediate opportunities,

Steve Frankel

number? -- after what why were just bookings curious not the changed the I'm disclose disclosing And why pattern consistently you bookings Okay.

Michael Prinn

change deals of just shape of it's the these kind of are be to some about in how up; Advertising, going how platform we talked think contracts and of percentage rev-share. Apps a traditional Video a kind will our the some I of

that and kind terms a deployed in so we'll time. And they're going value, after know it's little quantifying different a be of to of in as contract

couple revenue deals for the is what legacy; a framework about number dollars, million traditional was probably for of number and couple of definitely and then QX. a the XX% So, some of

Steve Frankel

Okay. And Video on to just will clarify then, rev-share. those be mostly comment this tied product; App new payments that to

no upfront from or is fee? with commitment the the minimum there customer So success

Michael Prinn

of for X it deployed, share for of the framework, one year just kind three, be percentage There's so based. traditional similar of the call of be kind what once five per will you fee, revenue next and per four, of addition, kind then fee it them of flavors; years. just said, advertising to will revenue two share fees. I be in And percentage a a as others a a platform will year; And X

Steve Frankel

your App And this space? are Video key competitors now who in

Yossi Aloni

I Mike, grant you [ph]. can if take that

Michael Prinn

Sure.

Yossi Aloni

a I'm the a is don't Steve, we There including launch direct looking the have solution; platform, an part side SSP, so advertising other solution, supply offsetting of content and companies provider to competitor. that additional the and are components. solution; a entrant

and have the will four the to market on and that momentum where with able this there. is needs are build have the the is You we to of we And have, partner solution two, to a at vendors demand we least execute immediately, solution; multi-vendor disruption solutions. probably part have others three, when that

Steve Frankel

you will customer solution? be this your Okay. first think live with when And do

Yossi Aloni

[Indiscernible].

Steve Frankel

Okay.

QX for and, would -- next rev revenue have So you so fiscal share in year?

Yossi Aloni

is it's correct, our That expectations.

Michael Prinn

we'll how up, some And Steve, QX metrics sharing a and expect take it and forward see significant while will we kind give ramps more little we a some to before that when do it meaningful of, ramp call. up, all. of but certainly color, kind quickly it. How we looking around material

Steve Frankel

there being the to attention we business like wait half should the will with because -- correct first to out expectation the deployment the than call didn't next way change share the revenue to half this to to more pay and revenue of less of this is the revenue. revenue run it wins not And seems model, likely it? and till company attached see That's group just with ad attention about to goes. and to be pivotal the where material think have rate -- bookings; prior of please, greater It specifically revenue back

Michael Prinn

this how -- you so, whether quarters kind the last of obviously COVID been; impact kind quarter. revenue can statements we half didn't of see couple that Combined of reaffirm for back of Correct. the challenging

Steve Frankel

back I'll All right, jump thank you. the in queue.

Michael Prinn

Thanks, Steve.

Yossi Aloni

Steve. Thanks,

Operator

Our question. state with Lake Jaeson next your Schmidt from Street. question Please comes

Jaeson Schmidt

questions. taking thanks Hey guys, my for

you've perspective Just far initial then, customers what And from -- takes long under with curious, on so to to of with seen how look these you your of a for Apps? talking fully kind guys; cycle? sales timeline with the we're eventually and sort the And engagement it Video hood? about them engage

Yossi Aloni

please ahead. Chad, go

Chad Hassler

Yes.

So, itself. pretty positive seeing we've into the that time engaging actually been has in moving actual customers been what from the deals been to we've

So, customers a moved at the execution we're the on to level now probably end, have anticipated. process of into but than months two had faster in the right quickly, of of have it looking very high interest three in I somewhere come very and and found top in agreement, neighborhood much between some what an

average a months on lines something more but So, execution. to two to I'm along the three see expecting of

Jaeson Schmidt

that bit at ultimately about with it a little network And Okay, sounds of looking that's you? large a chose helpful. mobile why pilot to go they customer; just program. pretty talk you extensive Can like then, sort

Yossi Aloni

the have enable the only linear, cost the inventory; this an it can the monetize will were underutilized SeaChange on and unsold solution only a VOD solution we [ph] solution Yes. inventory; you session what end-to-end for platform stage, many agent industry them solution enable this the is meaning, and will unsung the have advertising we had which likely enable we them, to for looking underutilized. is in running monetize the that that question. the this OTT, [ph]. programmatic them They At Jaeson, campaign to using is with also provide solution in cases, the in on Yossi. to Thank

Jaeson Schmidt

could the then How color. that Video about management could some or the top this mean, year; just sounds I flat to there And you to should Okay, lastly, near-term it Apps; here are remain as we additional OpEx challenged. is I there should the line be there that cuts this pivot -- remains expectation like mean think highlighted you be that then? expect in taken? I OpEx earlier we OpEx appreciate

Michael Prinn

Jaeson. Yes,

of it we to progress because lot our a a on decline you'll QX be a QX pretty QX, to rate flattish might consistent improvement quarter. from going big relatively QX made this you we've in OpEx, improvements see see So, had continue to to QX; in

technical to As to move goods then, cost us OpEx, result it, team quarter continue pop, in really that's sold. continue. the not in from every look of Weifang only and our [ph] saw support also Warsaw; but are of -- so moving that And we're you to kind we at going of

as I we a then better QX next in bit will we'll and give QX, 'XX. think be around expect probably for not but So, quarter fiscal little color significant more as what some

Jaeson Schmidt

Okay. Thanks a lot guys.

Michael Prinn

Thanks, Jaeson.

Yossi Aloni

Jaeson. Thanks,

Operator

you. time, session. Thank our this At concludes question-and-answer this

contact SeaChange's was now I'd to to call like seac@gatewayir.com. his back your please turn over for taken, Mr.Aloni closing If remarks. not IR team the question at

Yossi Aloni

to Thank you, to our Have we of We and And joining forward mission ability thank appreciate a Diego. great it. your speaking soon. in for our our confidence with support safe, all Stay you look and evening. achieve call. you

Michael Prinn

Thanks, everyone.

Operator

for joining today call. Thank XXXX us fiscal conference quarter SeaChange's you for third

your Thank You lines. you. may disconnect

SeaChange International (SEAC) 10 Dec 202021 Q3 Earnings call transcript