VICTORIA — Vecima Networks released its first quarter 2020 financial results Thursday morning, reporting a 5.6% decrease in overall revenues compared to the first quarter of 2019, despite a strong performance by the content delivery and storage segment of its business.
For the three-month period ended September 30, 2019, Vecima achieved first quarter 2020 revenues of $20.1 million, down from its Q1 2019 revenues of $21.3 million. While the company’s Content Delivery and Storage segment achieved 31% year-over-year sales growth, this was offset by declining demand for legacy products in the company’s Video and Broadband Solutions segment as customers prepare to transition to the next-generation Distributed Access Architecture (DAA) platforms, which Vecima has not yet rolled out commercially.
For Q1 2020, Vecima reported a gross margin of 52.0%, down from 52.5% in Q1 2019. The company’s adjusted EBITDA for the first quarter of 2020 was $1.8 million, down from $1.9 million in the same quarter of 2019. Vecima’s net loss for Q1 2020 was $1.4 million, compared to a net loss of $1.1 million it experienced in Q1 2019. Its cash balance was $41.3 million for the first quarter of 2020, compared to $53.4 million in the first quarter of 2019.
Among its business highlights for the first quarter of fiscal 2020, Vecima signed an agreement to deploy a content delivery network for an IPTV network with a Tier 1 multiple system operator (MSO) operating across Latin America and the Caribbean. With this agreement, there are now 20 operators using Vecima platforms to deliver IP video, the company said in a news release issued today.
Although its Entra family of DAA products are not yet on the market, Vecima continues to expand the product line as it prepares for commercial rollout, the company said. New products announced recently include: the Entra Interactive Video Controller, a headend device that provides two-way network connectivity for heavily deployed set-top boxes, enabling them to support Video on Demand, Switched Digital Video and other functionalities within both DAA and traditional RF network architectures; and the high-density Entra EN8124 DAA node, which supports two Remote PHY Devices in a single node to double both downstream and upstream capacity. In addition, Vecima received the first order for its recently launched Entra Video QAM Manager from a Tier 2 MSO, the company said.
“Fiscal 2020 got off to a fast and productive start as we moved closer to commercial rollout of our Entra family of Distributed Access Architecture (DAA) products, benefitted from growing demand for our MediaScaleX family of Content Delivery and Storage solutions, and continued to expand our product ecosystems in line with the growing opportunities in DAA and IPTV,” said Sumit Kumar, Vecima’s president and CEO, in the news release.
“On the Entra front, we stepped significantly forward in our DAA engagements. Nineteen MSOs are now in various stages of lab and field trials with our new DAA products, and as previously announced, we signed a Master Purchase Agreement with a Tier 1 customer for our Entra Remote PHY Nodes and Monitor products in the first quarter. I am delighted to announce that we also received our first customer order for our new Entra Video QAM Manager during the quarter, an important milestone on our path to commercialization. At the same time, we continued to expand our DAA ecosystem with the launch of our new Entra Interactive Video Controller and further enhanced our industry leadership position with the announcement of a new double-density Remote PHY node,” Kumar added.
“In our Content Delivery and Storage segment, we achieved 31% year-over-year revenue growth, despite Q1 being the seasonally slowest period for this part of our business. Our performance underscores the strong demand for our MediaScaleX solutions, as well as our success in building our customer base in the expanding IPTV market. During the first quarter, we added three new customers including a Tier 1 MSO in Latin America, and two additional operators in North America,” Kumar said.
As for Vecima’s Telematics segment, the company said it continues to experience incremental growth in the fleet management and moveable assets market.
“Vecima’s momentum is building,” Kumar added. “The global IPTV opportunity is burgeoning and we are capitalizing on it with our powerful MediaScaleX family of products. We continue to see the potential for year-over-year revenue growth of over 20% in our Content Delivery and Storage segment in fiscal 2020. At the same time, our portfolio of highly differentiated Entra DAA solutions is creating multiple near-term opportunities in the Video and Broadband Solutions segment where we are on the precipice of making DAA a reality. We are exceptionally well positioned to capitalize on these opportunities and expect fiscal 2020 will be a pivotal year for Vecima.”
