Net Insight has witnessed the impact of Covid-19 first-hand, as it reports its financial results for the quarter, yet the news was not all negative for the Swedish solutions provider.
The company reported first quarter sales of SEK 94.0 million, a decrease of 13.5% year-on-year. Operating earnings amounted to SEK 8.3 million, compared to a loss of SEK 4.5 million in the year-ago quarter.
“At the start of the quarter, we saw a positive trend, and we implemented a number of measures aimed at strengthening the Media Networks business,” said Crister Fritzson, CEO. “We acquired Aperi’s product portfolio, won our first deal for the Nimbra Edge cloud-based solution, and product development accelerated further according to plan.”
“Towards the end of the quarter, the world’s focus shifted towards the global outbreak of Covid-19. The market disruption had a negative impact on revenue towards the end of the quarter.
Covid-19 negatively impacted Net Insight’s business in Asia for most of the quarter, and in the US and Europe towards the end of the period. Thanks to active cost management, a good result was achieved despite the challenging conditions. The impact on our ability to deliver products and services was limited, and our accelerated product development was largely unchanged in the quarter. We plan to retain the same level of activity and investments in Q2.”
As part of its strategy to strengthen the Media Networks business, Net Insight acquired Aperi Corporation’s IP product portfolio for SEK 13 million. The transaction included the full product portfolio, brand, inventory, and accounts receivable. According to Net Insight, the new products and some unique technology solutions complement and strengthen its existing media transport portfolio.
“This means that we can cover more use cases and increase sales to new and existing customers,” continued Fritzson. “Aperi’s R&D team and offices in California also strengthen Net Insight’s presence in the important US market. The open, flexible products built on a virtualised software architecture will help realise Net Insight’s strategy of an open and complete media transport portfolio. The first smaller Aperi deal was won after the close of the quarter.”
“During the quarter, we won our first commercial deal for Nimbra Edge with a larger customer in North America,” added Fritzson. “For this customer, Net Insight’s cloud solution will be used for primary distribution for a SVOD service at substantially lower cost compared to the existing distribution solution. The development and commercialisation of Nimbra Edge remains a strategic priority. Virtualised cloud-based solutions are increasingly being adopted, for both cost and flexibility reasons, and this is an attractive emerging market for Net Insight. Particularly in these times, with travel restrictions, our customers are increasingly focusing on cloud-based solutions.”