Higher software sales allowed SeaChange to set aside a fall in revenue from the VOD supplier’s hardware business in the fourth quarter ending January 31, 2011.
The company reported total non-GAAP revenues of $56.8 million, a 5% increase on the fourth quarter for last year. However, it emerged that an unnamed customer began switching over its VOD equipment to a rival supplier after a change in systems integrator who preferred their own solution. This resulted in $4.6 million in deferred maintenance revenue being carried in this quarter’s figures. The customer had already pre-paid the fees in advance. As SeaChange continues to supply the customer no names have been given.
For the 2011 fiscal year SeaChange reported non-GAAP revenues of $216 million, $12.5 million up on 2010.
“After much discussion about cord cutting recent data clearly shows losses are coming from the low end and not the high end digital market of our business,” said Bill Styslinger, SeaChange CEO and Chairman. This leaves us to the conclusion that our business isn’t really effected by cord cutting.” The company is anticipating a typically slow start to the year with advertising and in-home software helping to build revenues in the second half.
While SeaChange has been looking at ways to divest its hardware business, but Styslinger said he was confident in the profitability of the range, following recent cost reductions.