Ericsson (NASDAQ:ERIC) acquires Envivio (NASDAQ:ENVI), a developer of software-based solutions for video processing, delivery and monetization, for $4.10 per share in cash. The company will be folded into Ericsson's TV and Media business.
In its Q2 earnings report, Envivio (ENVI +2.2%) company posted a GAAP net loss of $0.6M compared with a non-GAAP net loss of $0.4M, and is making "significant progress toward profitability," said founder and CEO Julien Signès, who pointed to "accelerated momentum for large, software-only converged head-end solutions."
Revenue by segment: Product, $8.9M (up 0.9%) ; Professional services and support, $2.75M (up 5.8%).
The company secured orders from four new customers, and its first customer win for its Nuage cloud video delivery solution.
Gross margin increased to 70.2% from the prior year's 58.3%. Cash and equivalents at quarter's end were $34.5M.
Envivio (NASDAQ:ENVI) is off 0.6% after hours following a Q1 report where it beat profit expectations but missed on the top line with $9.5M in revenue, up 13.1% Y/Y but down 25% sequentially.
Revenues were driven mainly in North America, and 56% of them came from two Tier 1 operators who expanded their video software installations. "We also continued our drive towards profitability, having reduced our year-on-year GAAP net losses by more than 80% to $0.8 million," says CEO Julien Signès.
The company added orders from eight new customers. Gross margin increased to 76.1%, up from a year-ago 68% and Q4's 64.8%.
After falling 23% Y/Y in FQ3, Envivio's (NASDAQ:ENVI) revenue managed to rise 2% Y/Y in FQ4. With shares far below a 52-week high of $4.25 (never mind their 2012 levels), that's going over quite well.
Product revenue (drives future services revenue) fell 7% Y/Y to $9.3M, while professional services/support revenue rose 13% to $3.4M. Significant incremental purchases were made by 3 tier-1 U.S. service providers, and a "leading" Latin American tier-1 provider also placed a large order. Four new customers were added vs. 3 in FQ3.
CEO Julien Signes: "We are encouraged by our results, and by the positive business environment as we head into fiscal 2016. While we have been impacted by the consolidation in the [pay-TV] market, we are starting to see results from the increased adoption of our video processing software solutions in our customer base."
Cost cuts boosted FQ4 EPS: Operating expenses (non-GAAP) fell 10% Y/Y to $8.6M. Gross margin fell to 64.9% from 66.8% a year ago. The cash balance fell by $100K Q/Q to $37.8M (compares with a current market cap of $52.7M).
Shares have soared to $1.96 AH. They rose 10% in regular trading (previous) ahead of the report.
Envivio (NASDAQ:ENVI) is seeing big gains ahead of this afternoon's Q4 report. 45K shares have been traded vs. a 3-month daily average of 52K.
Earlier today, the professional video hardware/software provider issued a PR regarding the products it's showing off at the broadcast industry's annual NAB 2015 conference (runs from April 13-16). On Tuesday, Envivio proclaimed Frost & Sullivan had named it the #1 vendor in the live video transcoding hardware market.