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SeaChange Sheds its Tech Legacy

SeaChange International said revenues on new products climbed in Q3  as the multiscreen video specialist continued to shed most of its financial reliance on older, legacy products and technologies.

“We continue to grow our new product revenue, while effectively managing the decline in our legacy revenue, which now accounts for just 3% of our total revenue,” CEO Jay Samit said Thursday on the company’s earnings call. “We are delighted that the significant declines in our legacy product revenue which have impacted our results over the last few years are now largely behind us.”

By comparison, new products accounted for 86% of product revenue in the quarter, and 19% of total revenue. 

As for the legacy side, Samit reiterated SeaChange’s plans to end-of-life its Axiom backoffice platform as it secures more deals for its multiscreen-focused platform, Adrenalin, which now serves iOS and Android mobile devices with live TV, as well as its Nucleus gateway software and its new, OTT-focused Rave offering.

Axiom is still in use by more than 50 customers serving about 10 million subs, Samit said. “The fact that we’ve told everybody that they’ve got to move off it and we’re sun-setting it has made many active discussions and you’re going to see many transitioning next year off of it and into Adrenalin,” he added.

Liberty Global is one of SeaChange’s marquee customers for Adrenaline, and has it rolled in parts of Poland, the Czech Republic, and Australia, with Chile on deck for later this month.  Samit declined to confirm an analyst’s belief that Liberty Global systems in the Netherlands and Belgium are also on the docket.

Samit also shed some light on the progress being made at NewCoin LLC, a data-focused venture with Fox,  Tribune Media, Univision and Timeline Labs, that aims to improve local market TV audience measurement across linear and digital platforms. Timeline Labs, acquired by SeaChange about a year ago, is providing the software platform to analyze the data.

“NewCoin goes into beta this month,” Samit said, noting that partners are talking about how they might fund and expand the operation in 2016.

On the financial front, SeaChange posted Q3 revenues of $28.7 million, down from $30 million a year earlier, and a loss of $11.8 million, or 35 cents per share, widened from a year-ago loss of $5.9 million, or 19 cents per share.  Without non-GAAP charges of $12.2 million, non-GAAP income from operations for Q3 was $400,000, or 1 cent per diluted share.