Earnings Review and Free Research Report: SeaChange Reported Better than Expected Quarterly Results

LONDON, UK / ACCESSWIRE / September 29, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on SeaChange International, Inc. (NASDAQ: SEAC) (“SeaChange”), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=SEAC, following the Company’s release of its second quarter fiscal 2018 financial results on September 06, 2017. The video software Company’s net loss narrowed on a y-o-y basis. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member’s account at:

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Earnings Reviewed

SeaChange reported second-quarter fiscal 2018 revenue of $17.2 million compared to revenue of $18.5 million in Q2 FY17. The Company’s revenue number topped analysts’ estimates of $17.94 million.

SeaChange’s blended GAAP gross profit margin increased to 66% in Q2 FY18 compared to 44% in Q2 FY17, driven by product mix and efficiencies generated from the Company’s restructuring program. Excluding the provision for loss contract and other non-GAAP charges in the reported quarter, SeaChange’s blended non-GAAP gross profit margin was 63% compared to 46% in the prior year’s same quarter.

For Q2 FY18, SeaChange posted GAAP loss from operations of $2.1 million, or $0.06 per basic share, compared to Q2 FY17 GAAP loss from operations of $11.7 million, or $0.33 per basic share. The Company’s reported quarter results included non-GAAP charges of $1.1 million, stock-based compensation of $0.7 million, amortization of intangible assets from prior acquisitions of $0.6 million and a reduction of $0.8 million in the previously recorded provision for loss contract, while the year-ago corresponding period results included $4.1 million of non-GAAP charges.

SeaChange’s non-GAAP loss from operations for Q2 FY18 was $1.0 million, or $0.03 per basic share, compared to Q2 FY17 non-GAAP loss from operations of $7.6 million, or $0.21 per basic share. The Company’s results were better than Wall Street’s estimates for a loss of $0.06 per share.

SeaChange’s Segment Results

During Q2 FY18, Video platform software revenue totaled $3.6 million and accounted for 71% of the total product revenue compared to $1.8 million or 70% of the total product revenue in Q2 FY17. The remaining product revenues of $1.5 million included revenues for user experience and hardware.

Total service revenue was $12.2 million, or 71% of total revenue, in Q2 FY18 compared to $15.9 million, or 86% of total revenue, in Q2 FY17. The Company’s Cideo platform professional service’s revenue totaled $3 million in the reported quarter, down from $5.7 million in the prior year’s same quarter.

The Maintenance revenue totaled $8.7 million, or 51% of total revenue and 72% of total service revenue, in Q2 FY18 compared to $9.1 million, or 49% of total revenue and 57% of total service revenue, in Q2 FY17. The decline in maintenance revenue was driven by the decrease in legacy video streamer support.

For Q2 FY18, the Company’s revenue from international customers was $10.2 million, which accounted for 59% of total revenue compared to $11.8 million, or 64% of total revenue, in Q2 FY17.

Backlog

SeaChange ended Q2 FY18 with $9 million in total backlog, excluding maintenance and support. The Company booked new business of $10 million during the reported quarter, ending Q2 FY18 with a backlog of $11 million.

Cash Matters

SeaChange ended Q2 FY18 with cash, cash equivalents, restricted cash, and marketable securities of approximately $36 million, with no debt outstanding. In the reported quarter, the Company’s cash decreased by approximately $900,000, mainly associated with the operating loss for the reported quarter.

SeaChange’s deferred revenue of $14.5 million increased from $12.1 million in Q2 FY17 due to an increase in deferred revenue related to the Company’s subscription business deals as well as annual service contract billings in the reported quarter versus the year-earlier comparable quarter. SeaChange’s unbilled receivables were $4.3 million in Q2 FY18 compared to $11.6 million in Q2 FY17.

Outlook

SeaChange anticipates Q3 FY18 revenue to be in the range of $19 million to $21 million, GAAP loss from operations to be in the band of $0.04 to $0.01 per basic share, and non-GAAP income from operations to be in the range of $0.00 to $0.03 per diluted share. For FY18, the Company lowered and narrowed its expectations to revenue in the range of $75 million to $80 million, GAAP loss from operations in between $0.28 to $0.23 per basic share, and non-GAAP operating income in the band of a loss of $0.03 per basic share to income of $0.02 per diluted share.

Stock Performance

On Thursday, September 28, 2017, the stock closed the trading session at $2.77, climbing 1.09% from its previous closing price of $2.74. A total volume of 43.40 thousand shares have exchanged hands. SeaChange Intl.’s stock price rallied 6.13% in the last one month, 2.59% in the past three months, and 13.52% in the previous six months. Furthermore, since the start of the year, shares of the Company have surged 20.43%. The stock currently has a market cap of $97.92 million.

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