Executives
Erica Abrams – Co-Founder and Managing Director, The Blueshirt Group
Amir Bassan-Eskenazi – CEO
Ravi Narula – CFO
Analysts
Vivek Arya – Bank of America Merrill Lynch
Blair King – Avondale Partners
George Notter – Jefferies & Company
Greg Mesniaeff – Needham & Company
Victor Chiu – Morgan Keegan
BigBand Networks, Inc., (BBND) Q2 2010 Earnings Call August 4, 2010 6:00 PM ET
Operator
Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the BigBand Networks second quarter 2010 conference call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions. (Operator Instructions).
This conference is being recorded today, Wednesday, August 4th of 2010.
Now, I’ll turn the conference over to Erica Abrams. Please go ahead, ma’am.
Erica Abrams
Thank you, operator, and welcome, everyone. If you’ve not seen our earnings press release, it can be found on the Investor Relations section of our website at www.bigbandnet.com.
Joining me on the call today are Amir Bassan-Eskenazi, CEO; and Ravi Narula, CFO of BigBand Networks. We will discuss the financial results for the second quarter ended June 30th, 2010 as well as outline the company’s outlook for the third quarter of 2010.
Before I turn the call over to Amir, let me remind you that the matters we will discuss today may include projections and other forward-looking statements and as such are subject to the risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statements, including those risks and uncertainties discussed in our report on Form 10-Q for the quarter ended March 31st, 2010.
Now, I will turn the call over to Amir. Please go ahead.
Amir Bassan-Eskenazi
Hello and thank you all for joining us today, as we report our second quarter of 2010 results.
As you know from our press release, revenues for the quarter were $26.4 million and our non-GAAP loss was $0.07 per share. Revenues and EPS were within the range of our outlook we provided last quarter. Gross margins were better than expected and the result was a stronger mix of software sales.
During the second quarter, we continued to invest in our product and technology, while maintaining a strong balance sheet. BigBand Network’s broadcast, SDV, and IPTV solutions provided a bandwidth management and advanced media processing that our customers are investing to expand their current capacity for HD and evolve their network to more personalized television. We believe these are critical elements for the core customers and are working closely with them to ensure that our roadmap aligns with their requirements.
Turning to our broadcast business, revenues in the second quarter for the cable and Telco in that segment were relatively flat when compared to revenues in the first quarter in 2010.
In our SDV and QAM business, we experienced a slowdown in revenues as we discussed with you last quarter as some customers are preparing for capacity expansion and others are taking a breather on deploying new systems. We believe this is a temporary situation, but it impacts our Q3 outlook.
We’re excited about the opportunity in front of us in SDV in terms of footprint expansion into new systems and new customers, capacity expansion, supporting HD growth, as well as functional expansion with new IPTV applications. We believe we’ll remain the clear leader in SDV and have now reached over 37 million household pass, deployed or in the process of being deployed.
In the quarter, we announced our deployment with new customers, SureWest Communications, and expanded our footprint with existing customers such as Charter Communications.
SureWest is a leading integrated communication provider that shows BigBand SDV for bandwidth management as it expands its HD availability. A key differentiator was BigBand proven expertise in SDV and show a stability to leverage its investment to deliver IPTV in the future.
Charter Communication, the fourth largest cable operator also selected BigBand SDV in the quarter for footprint rollout to new systems. Charter is using BigBand SDV in both Cisco and Motorola set-top box system to expand capacity for HD programming and faster Internet speeds. Charter is in the process of launching SDV in approximately 60% of its market by the end of 2010. We’re proud to be working with them to achieve this important goal.
Turning to our QAM product, we made progress to diversifying QAM revenues with international wins. We continue to maintain a leading position having shipped over 820,000 channels up from 750,000 channels in the prior quarter to over 60 service providers and customers worldwide.
We believe BigBand’s QAM platform provide the best mix of performance, reliability, and cost with the unique pass to next-generation applications. As cable operators migrate more of their services to HD and personal television, we expect this segment to see increased growth.
In our IPTV solutions, we continue to experience strong interest from prospect and customers. We made significant progress with our IPTV product in the quarter on product development and ecosystem integration. We expect to be successful in helping customers meet their growing demand to deliver video to multiple devices.
At the recent NCTA Cable Show, we demonstrated our vIP PASS solution, a real-world IPTV application in which we connected live video programming to a host of devices, including PC, Apple iPod, and Sony PlayStation, and received a very positive customer response.
In the second quarter, we won our first North American deployment of vIP PASS with Buckeye Cable Systems, an innovative, independent operator. Buckeye chose BigBand vIP PASS to extend its BigBand SDV infrastructure and scale to IPTV quickly and cost effectively. Buckeye is the second customer that we have announced for vIP PASS, following our previous success with LG Telecom in Asia.
Turning to Telco IPTV, we continue to make progress and expect trial based on our MSP offering to convert to revenues in 2011. In particular, we’re seeing renewed interest in advertising-based applications, initially with localizing [inaudible], but ultimately moving through more personalized advertising and content delivery as networks transform from the broadcast to a unicast model. We are working with Tier 1 operators on the deployment plan in this area.
In summary, BigBand has made important progress in establishing and advancing our product portfolio during the first half of the year. The progress for our business HDTV, IPTV and personal TV remains strong, and we believe that the investment we are making will position our business for a stronger 2011.
Before turning the call over to Ravi for his financial review, I would like to take a moment and welcome David Lockwood to the BigBand Board of Directors. David’s extensive experience would enhance our ability to continue to execute against our business plan and ensure close alignment with shareholder interests.
Now, I’ll turn the call over Ravi, who will review the quarter.
Ravi Narula
Thanks Amir, and thanks everyone for joining us this afternoon. I’ll first review some of the details of our second quarter 2010 income statement and balance sheet, and then I’ll provide you with an outlook for the third quarter 2010.
During today’s call, I’ll outline our financial results on a non-GAAP basis, unless as specified otherwise. This means, that the second quarter non-GAAP results will exclude stock-based compensation expense of $2.6 million, restructuring charges of $1 million, and related income taxes.
A reconciliation of GAAP to non-GAAP financial measures can be found attached to our press release.
For the second quarter of 2010, total revenues were $26.4 million. This compares to $32.2 million reported in the first quarter of 2010. As we discussed before, our lower sequential revenues reflect a slowdown in SDV and QAM business, as some of our customers prepared for capacity expansion and others delayed new deployments.
10% customers in the second quarter 2010 included, Time Warner Cable and Verizon, with Time Warner at 36% and Verizon at 22% of our Q2 revenues. Our top five customers represented 79% of our second quarter 2010 revenues as compared to 77% in the first quarter of 2010.
On a geographic basis, 89% of our revenues in the second quarter of 2010 were from the US, which is very comparable to the first quarter of 2010.
We are working hard to diversify our customer base and expect to see meaningful results in 2011.
Gross margins for the second quarter 2010 were 55% as compared to 48% in the first quarter 2010, as we had a favorable product mix, due to higher concentration of software content. In the third quarter of 2010, we expect this mix of higher software content to continue, thus maintaining stronger gross margins.
Our non-GAAP operating expenses in the second quarter were at the low end of our previously provided guidance at $20.1 million. This compares to a $20.9 million reported in the first quarter 2010. This improvement reflects our efforts to reduce costs, while still investing in R&D to accelerate development of new solutions.
In the third quarter of 2010, we expect to achieve full benefits of our cost reduction efforts taken in the second quarter and expect operating expenses to decline to between $19 million and $19.5 million. We are on track for annualized cost savings of approximately $7 million as previously discussed in the first quarter 2010 earnings call.
On a non-GAAP basis, our net loss was $5.1 million or $0.07 per share in the second quarter 2010.
Now, let me review our balance sheet. We closed the second quarter with $163.1 million in cash and marketable securities, down slightly from $165.5 million at the end of the first quarter 2010.
Our cash collections during the second quarter was strong and we focused on maintaining healthy cash position. Our DSOs were at 23 days at the end of the second quarter. Deferred revenues increased to $41 million at June 30th, 2010 as compared to $37.4 million at March 31st, 2010 due to higher shipments in the second quarter.
Now, let me provide our third quarter outlook. We expect that third quarter 2010 revenues to be in the range of $24 million to $27 million. This reflects the temporary softness in our business as we discussed in our Q1 earnings call.
Non-GAAP gross margin is expected to be in the range of 54% to 56%, after excluding approximately $600,000 of stock-based compensation expense, included in cost of good sold.
Non-GAAP operating expenses are expected to be in the range of $19 million to $19.5 million, after excluding stock comp expense of $3 million.
Based on the above outlook for the third quarter 2010, we expect a GAAP net loss per share in the range of $0.11 to $0.14 and a non-GAAP net loss per share of $0.06 to $0.09. We’ll use approximately 69 million shares to compute our third quarter loss per share.
With that, I’ll turn the call back to Amir, for some closing comments.
Amir Bassan-Eskenazi
Thanks Ravi. In summary, we believe the progress we’ve made in the quarter on executing our product and business plan has strengthened BigBand position in the market. We continue to work closely with our customers’ importance as they deploy HD and other next-generation premium video services. We also are maintaining a sharp focus on cash management.
This will end the formal part of the prepared statement. And, we will now open the lines up for questions.
Operator, please go ahead.
Question-and-Answer Session
Operator
Thank you, sir. We’ll now begin the question-and-answer session. (Operator Instructions). Our first question comes from Vivek Arya with Bank of America Merrill Lynch. Please go ahead.
Vivek Arya – Bank of America Merrill Lynch
Thank you. Hi guys. Amir, when do you expect sales to catch up with the very strong growth that you are seeing in the SDV deployments? I think you mentioned that it’s a temporary impact, so should we expect recovery in Q4, Q1? Any visibility around that.
Amir Bassan-Eskenazi
Hi Vivek. Yes, we stated that what we see on the SDV is a temporary pause as some customers that have deployed footprint are not expanding the footprint yet and other customers are in the process of planning their additional – their footprint rollout. So obviously in the guidance that we gave for Q3 that was reflected and we expect that to be after Q3. But I think some of it might go into Q4 and possibly beyond Q4. It’s hard to tell at this point as this planning is still undergoing.
Vivek Arya – Bank of America Merrill Lynch
I see. And you still have a very healthy balance sheet. Could you give us a sense? Is there a way to use that to improve top line growth, maybe do buybacks, or is the goal to sort of preserve that and continue with the current business plan?
Ravi Narula
We are always evaluating – hi Vivek, this is Ravi here.
Vivek Arya – Bank of America Merrill Lynch
Hi Ravi.
Ravi Narula
We are always evaluating the use of cash and we are – we continue to invest in key R&D projects which will help us with the long-term growth. That’s our primary objective, which will help with the top line growth. And, obviously, there are other options we consider. But, right now, we are given our cash position and our situation, we are absolutely focused on major R&D growths which will yield products and we expect those to start – get into fruition in 2011.
Vivek Arya – Bank of America Merrill Lynch
Got it. And just lastly, I believe in the last quarter, you gave full-year guidance I think $115 million to $125 million, are you still on track for that?
Ravi Narula
So we have given Q3 guidance at this time. Given the challenges we are seeing in some of our order pattern and the slowness in our SDV and QAM business deployments. So we are giving right now our Q3 outlook and will update you with our Q4 in our Q3 earnings call.
Amir Bassan-Eskenazi
And, obviously, it remains the plan, but we obviously have work to do.
Vivek Arya – Bank of America Merrill Lynch
So just for the moment, should we expect Q4 to be what roughly flattish or so with respect to Q3 or –?
Amir Bassan-Eskenazi
Yes, at this time we guide for Q3, and we’re going to focus on that, and move from there.
Vivek Arya – Bank of America Merrill Lynch
I see, okay. Thanks, and good luck, guys.
Amir Bassan-Eskenazi
Thank you.
Operator
Thank you. Our next question comes from line of Blair King with Avondale Partners. Please go ahead.
Blair King – Avondale Partners
Yes, thank you. Can you hear me guys?
Amir Bassan-Eskenazi
Yes. Hello Blair, how are you?
Blair King – Avondale Partners
Hi. I’m great. Hi guys. Amir, with regard to the DSOs, nice improvements from quarters in the past. Is that a number we should continue to look at somewhere between 23 days and say 30 days?
Ravi Narula
So, yes, the DSOs were pretty lower this time, which we’re very happy, because of strong cash collections. We do expect as it becomes more normalized business, the DSOs will probably go higher and we will – but it won’t be a 23 days in the long term, we do expect that to be in the 40 days to 50 days range eventually in 2011.
Blair King – Avondale Partners
Okay, so 40 days to 50 days is kind of the target to model that.
Ravi Narula
That’s our – that’s our target. But, obviously, we will have – because of lumpy business, we will see some peaks and valleys given the timing of our orders in various quarters.
Blair King – Avondale Partners
Okay. And then, Amir, just with regard to IPTV deployments assuming to gained some momentum within the cable space, maybe you could give some background just probably on BigBand’s new vIP PASS opportunity and particularly when you consider to just sort of the lower ASPs that people are driving for the downstream ports on the CMPS and also in light of Comcast’s CMAP spec?
Amir Bassan-Eskenazi
Absolutely. It’s clear that the cable industry is very focused and expanding their video and network reach to more devices. And we believe that our vIP PASS is very unique in that regard in offering a very smooth transition that its scales and is proven in the field, as we now we deployed it before. Now with two customers, with LG Telecom a while back and now we’re happy to mark our first North American deployment with Buckeye. Both of which shows that the proven – it’s a proven solution and it scales in the field.
And in terms of the ASP question, such is a significantly better pricing for customers than alternative based on the fact that it’s leveraging the QAM and the control band capabilities that are in the market with SDV to offer video-over-IP avoiding more expensive solutions that are out there that we believe don’t scare as well and provide a much more expensive ASP. So that’s where the vIP PASS fit in.
On the CMAP front, there is a standard that comes together and in terms of the industry to offer our Edge devices and the integration of those with their networking and routing devices that we believe will produce new price point and unique capabilities in the market. We’re very involved in this activity. And we think it’s not a near-term proposal and it’s in the early stages, but we’re going to have a lot to say, and we believe we have a lot to contribute in this area, and looking forward to tell you about this in future calls.
Blair King – Avondale Partners
That’s great. And then, moving on to the MSP2000, you mentioned on this call and you’ve mentioned on calls previously, some of the delay in your expected timing for commercialization of the product has been relative to the, I guess, the development of the ecosystem and the integration activity. And I was hoping maybe you could just give us some of the high-level key priorities that are really needed to make this little commercialization of the MSP2000 comes to fruition, just from the standpoint of looking into the product from an outsider and knowing what things have to happen to make that work.
Amir Bassan-Eskenazi
Yes, so as we deploy this product on the Telco side into a whole new ecosystem and network that’s being put together, there’s quite a lot of integration and various trials and hardening of the end-to-end solution in the MSP in the middle of that and that takes a little bit of time going through mocks and procedures specifically on Tier 1 type of networks and the amount of integration that takes place with the back office and the various moving parts in this network.
I can tell you that it’s moving very well and we’re very confident and excited about the progress we’ve made and the ability to leverage that to revenues at the trials that we’re at and then leverage it to other customers as we think that’s going to be a major trend that’s happening in the market in the next few years. So we think we can participate in that in a very nice way.
The application seems to be – in terms of the customer interest is moving more and more towards advertising and I think more and more attention seems to be addressed there initially with local ad insertion. But more and more towards a personalization of advertising are moving to highly aggressive advertising. And the MSP ability to migrate and scale from podcast to narrowcasting and sending a specific stream to specific households from the edge of the network is a unique capability that we believe will bring to this market. And I think that’s what we’re going to be spending more and more time on and hoping to be able to make some announcement in the next periods.
Blair King – Avondale Partners
Amir, just one follow-up to that, in terms of the back office, if the back – once you get one back office done, you get kind of a cookie kind of approach that you can move it through various networks or is each independent network going to be different set of challenges?
Amir Bassan-Eskenazi
So there’s a several ecosystems, but the real commonality between those ecosystems and a lot of them are fairly specifically on the IPTV side. For example, the Microsoft Mediaroom back office is used by quite a few customers and prospects, and the ability to integrate with that will enable us to then duplicate this with multiple locations.
Specifically with the MSP platform approach, our ability to learn from one application and one capability and moving to other capabilities with a lot of the software content of the product we’re seeing a strong advantage that will enable us to leverage this and scale it rapidly in various ecosystems.
Blair King – Avondale Partners
Okay. All right, thank you very much, Amir. I appreciate it.
Amir Bassan-Eskenazi
Thanks Blair.
Ravi Narula
Thank you.
Operator
Thank you. Our next question comes from the line of George Notter with Jefferies & Company. Please go ahead.
George Notter – Jefferies & Company
Hi, guys. Thanks very much. I wanted to ask about just where we are in the development of the SDV market and market opportunity? I mean, it just kind of feels like people are talking more positively about SDV certainly in the context of Comcast, I was interested to hear your comments about Cablevision, yet at the same time you are talking about the sluggishness potentially extending through Q3 into Q4 and even in the next year. I guess I’m scratching my head and trying to understand exactly where we are in the development of the market and why are you seeing things slow relative to some of the anecdotes we’ve been picking up recently?
Amir Bassan-Eskenazi
Yes. Hi George. Sure, the SDV market, we continue to believe is a large market that’s far more saturation. We believe that of less than third of the opportunity it was been addressed by now. We continue to grow our households and we’ve developed now over 37 million households that are deployed or in the process of being deployed with our solution.
And we believe that that put us on greater than two-thirds of the market. So we’re happy about that. The fact that there’s more to go should enable us to leverage our leading position and continue and win significant amount of the business moving forward and that’s on the footprint side.
I think the fact that is more positive sentiments are honest, the view reflects the fact that we’ve always said, which is, the ability to manage them with more efficiently as more content is being add to the network, more high-definition streams, and more video-on-demand is moving to HD, and more services are being scaled is very, very important.
But, beyond that, SDV is a platform to move the network from not only having more bandwidth but moving towards personal television, being aware of what content flows, where, and ability to value add to this on the path to personal television is very important. And I think that’s what people will understand and why there is a positive sentiment about the platform and the solution which you’re obviously are very happy about.
The timing issues that we described in the call, like we said, we believe is temporary. And what’s happening there is that some operators that have already deployed if not scaled their services yet with more capacity going through the system, while others that have multiplied yet or didn’t deploy older systems are in a process of planning and rolling those systems out, and I think it’s just a timing issue of a fairly lumpy business with larger project that are being selected and deployed – and takes a little time to deploy and then becomes revenues and so forth, and that’s what you see in our guidance.
But, like I said, I think there’s a lot of more foot print to be add and we feel good about our ability to participate and explore that additional footprint. Beyond just the footprint, the two other things that enable us to really take a platform approach in the SDV market here is the capacity increase that’s largely is in front of us and the functional increase, such that we believe that every SDV deployment is going to with time offer services to more devices and that would be a great growth opportunity for our vIP PASS, everyone of those would need to have advertising and that would be an opportunity for MSP platform, and I think there are other growth in functionality beyond that.
The example we gave in the quarter with SureWest and Charter continuing to deploy is an example of more operators coming to that. And I think in the future, we’d have more evidence of that.
George Notter – Jefferies & Company
Got it. I guess, I was just thinking more about the timing. Again, I mean, I sensed from your commentary earlier that the timing you’re taking even longer than you had thought previously. I understand the comments about carriers digesting prior deployments or gearing up. But I guess I’m just trying to figure out exactly what has caused some of this push out in your minds most recently?
Amir Bassan-Eskenazi
I don’t think there’s any one reason of push out and I won’t read too much into it. I think it’s just an issue of timing and the other operators would put more of their systems towards switch, smart operators would join this market, and I think the international market we expect in selected areas to go into switch. And as all this is happening, I think you’re going to see this continuing to grow in the next – on an ongoing basis in the next few years. The timing in the quarter and so forth, I think it’s a – like I said, it’s just a temporary issue and we expect to this to come to pass.
George Notter – Jefferies & Company
Got it, okay. And then just, I think I may have asked this question in the past. Have you guys talked about what mixture of business comes from the SDV application? I’d love to see if I can update an update or a sense there, qualitatively or quantitatively.
Amir Bassan-Eskenazi
So we typically don’t breakdown revenues by solution. And so we didn’t give really a sense of the exact breakdown. What we did say is that it was relatively lower than in previous quarters and we expect that to come back up for the reasons I just described.
George Notter – Jefferies & Company
Got it, okay. Thanks very much.
Ravi Narula
And, George, this is Ravi. So, yes, SDV was a significant portion of our revenues in quarter – in Q2 also so.
George Notter – Jefferies & Company
Got it, okay. Thank you.
Operator
Thank you. (Operator Instructions). Our next question comes from the line of Greg Mesniaeff with Needham & Company. Please go ahead.
Greg Mesniaeff – Needham & Company
Yes, thank you. I was wondering if you can comment on your statement about the Edge QAM market contributing to the softness in the revenues in the quarter. Do you attribute that to a general state of the market currently or is this any kind of function of market share shifts or anything of that nature? I know one of your competitors has talked about a new Edge QAM product being announced this coming quarter and I was wondering if maybe there’s been any kind of deferrals on the part of some of your customers in anticipation of certain new rollouts? Thanks.
Amir Bassan-Eskenazi
Sure. Yes, I don’t believe that the phenomenon we described has to do with deferral of orders relative to competitive situation. What I do believe is we are currently exposed with our QAM and SDV more to the North American market. We participate in multiple type of applications. But, in terms of the international, not so much because of the product order application just in terms of the channels, we have less exposure than we should have.
We have identified this and discussed this in previous calls and we’ve put a lot of effort into building those sales channels to remediate the situation. But these things take a little bit of time and is not yet affecting the outcome. And as you’ve seen, we’ve been – we’re well above 10% of revenue coming this quarter from the international market.
And I think as a result of that, we probably did not fully participate with the QAM product in some of the opportunities that exist in Latin America, in EMEA, and in Asia Pacific. The good news here as I have mentioned is we did have some wins, but it did not become revenues yet in the [inaudible] in this areas would give us the exposure to the opportunities there and provided the statement I just made, but we are not yet fully participating in there and I think that’s part of the difference of between us and some maybe other vendors.
The – other than that, I think the QAM is very much like the SDV. A lot of our QAMs are sold in context of setting the SDV solution. We’re selling those as an open solution and people can choose our QAM. Lot of people QAM in many a cases they choose our QAMs, we believe because of the product superiority and the ability to provide them a better product in that way. But because of the timing issues we describe on the overall solution, I think QAM was a part of that as well.
Like, I said in my previous statement, I think this as well is something that we will work itself out overtime and is a temporary situation.
Greg Mesniaeff – Needham & Company
Thank you. And as a follow-up Amir, as you focus on diversifying your revenues geographically outside the US, do you envision building up a direct sales and marketing organization globally or are you inclined to focus foreign partnerships?
Amir Bassan-Eskenazi
We focus on building sales channel partnership for the rest of the world and there is various aspect to that in terms of the different solution so forth. We're building this as an overlay on specific direct efforts that we have in place, but a lot of our effort is going towards building those channels and we’re looking to leverage the in-market expertise and relations that a global channel can add to us, and that’s one of the efforts we’re very serious about, and we think it’s going to make a big difference as we’re getting into 2011. Those things are not built overnight and beyond just getting the relationship, there is trending and other things will have to take place and we’re very serious about that and that’s what we’re doing right now.
Greg Mesniaeff – Needham & Company
Thank you.
Amir Bassan-Eskenazi
Thank you.
Operator
Our next question comes from the line of Simon Leopold with Morgan Keegan. Please go ahead.
Victor Chiu – Morgan Keegan
Hi, this is Victor Chiu in for Simon Leopold. You mentioned that the SDV products were taking more scrutiny and more time to get approved last quarter. Are you seeing any changes in that trend or just getting a sense for how you see that, going forward?
Amir Bassan-Eskenazi
Yes, we saw, Victor in the last few years a more scrutiny being given to pretty much every large project. In our case, SDV tends to be when the larger project is done and as a part of that this could indeed in fact take place and it delayed some deployment in terms of the different levels of reviews that different project took place. But I think this is an overarching another – this product versus that product of an issue, I think it’s an industry affecting issue, and it did affect us, but I don’t think it is specific for the SDV.
Victor Chiu – Morgan Keegan
And is that – are you expecting that to ease I guess on the same timeline that you were expecting the overall business to kind of pickup I guess later this year.
Amir Bassan-Eskenazi
I think the overall business and the temporary aspect that we discussed before has to do with the number of customers that we see in planning phases and turning this planning into deployment in the cases that have these various processes in place, it will affect the timing. But the fact all of them come together is what’s resolving the issue in terms of the pickup in revenues.
Like we said before, we think the market is very far from saturation. The drivers, of course, people who want to deploy SDV, the addition of HD, the addition of more content, the move to personal television is a strong trend that’s here to stay. And being two-thirds or greater of this market we expect to benefit from that. And as that happens, we expect to go back into grow from the baseline, that’s before we talk about the addition of the IPTV and MSP and vIP PASS contribution to revenues.
Victor Chiu – Morgan Keegan
Great. And just trying to get a sense of growth, how many new customers contributed to revenue in this quarter and how is that compared to the last several quarters?
Ravi Narula
Victor, we actually do not provide details about new customers versus – we don’t crack that way. We don’t provide that clarity. But we had new customers in this quarter and in the past quarters also. For example, we mentioned SureWest was one customer who actually is deploying our solution. So there are always customers, then there are significant customers we do mention that in our – but to give you some color, we have more than 200 total customers worldwide just to give you a flavor of that.
Victor Chiu – Morgan Keegan
Great. Verizon, just one thing on Verizon and their FiOS footprint that’s been a big driver for you in the past. Are there any changes that you’ve noticing in that project pattern? I mean when the footprint’s done, can you give us some metrics to kind of model exposure?
Ravi Narula
Sure. From a Verizon perspective as we have mentioned in the previous earnings call, most of the DSO deployments, file deployments were largely done. Yes, they’re still rolling out some more files deployments which we are – which we’ll get the benefit of it. But along with that, they have – they buy newer applications from us ongoing and we definitely believe Verizon will continue to be an important customer for us going forward, for this year and going forward.
Victor Chiu – Morgan Keegan
And just, one last question, just can you give us a little more color around what you’re seeing international. I think a few several cable TV suppliers, they noticed strength in Latin America recently. Are you seeing opportunities there or –?
Amir Bassan-Eskenazi
We’re aware and of the opportunities in Latin America as well as other regions. Like I said before, we don’t feel we’re sufficiently exposed to this. We – our channels are being put together as we speak and we probably are not as exposed to it as we should be. And this is something we work on remediating in the next few quarters.
Victor Chiu – Morgan Keegan
Great, thank you.
Ravi Narula
Thank you.
Operator
Thank you. Ladies and gentlemen, this concludes the BigBand Networks second quarter 2010 conference call. You may access the replay system anytime by dialing 1-800-406-7325 and entering the access code 4329716. We thank you for your participation and you may now disconnect.
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Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.
THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.
If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!