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| And third, by innovating with new and expanded products and services that can help our customers optimize returns across all TV and streaming channels, as well as enhancing end user retention and engagement |
| So we're very proud of the accomplishments on the financial side |
| For Q4, the improvement was primarily driven by increases in product revenue due to the acceptance of a development project, triggering a material license fee related to the company's connected TV software product |
| So all-in-all, both teams have an extremely strong leadership team, immense tech talent and an org structure that allow us to scale up quickly and seamlessly |
| This represents our third consecutive quarter of positive non-GAAP income |
| By extending our product and service portfolio for our existing customer base and adding new customers that adopt these ad-based business models, we can harness this opportunity to expand our market share and maximize our opportunity in this new growth sector driven by changes in consumer preferences |
| At SeaChange, we believe our differentiated technology can help operators and content owners protect and build incremental revenue streams, placing us in an excellent position to grow our market share in this rapidly expanding sector of the industry |
| Second, bolstering our recurring revenue stream by securing higher margin SaaS deals |
| With a record $1.7 million in adjusted EBITDA in the fourth quarter, that's over a 12 quarter period |
| The second growth catalyst involves the consumer shift towards free ad-supported content and away from subscription-based business models |
| We are confident that our existing technology solutions and services along with continued delivery of innovative solutions will allow us to capitalize on this growing demand |
| And this is due in part to strong sales in fiscal '23 and continued cost control |
| Our longstanding relationships with many Tier 1 operators as well as our growing and financial presence coupled with positive reference cases from content owners and broadcasters make us an ideal partner for players in the connected TV space |
| In this changing landscape, the company is well positioned as a technology vendor to help content owners realize their connected strategies and optimize monetization opportunities |
| This is yet another company that sees tremendous value in our SaaS-based platform, which provides our customers with flexible billing and payment handling, including in-app purchases, vouchers and refunds, advanced analytics to track key service metrics and make data-driven decisions to optimize the business performance, support for all content types, including VOD, live linear and time shift with the option to add fast channels to the platform and a seamless onboarding flow for new subscribers and users |
| The way we're organized in Poland is state-of-the-art, agile development teams under a very strong and experienced senior leadership, adding value to the product in accordance to a clearly defined road map |
| Customer service improvements also lead to lower costs and minimize this churn |
| These renewals further demonstrate our ability to deliver on our strategy of fortifying relationships with our long standing TV operator customers |
| The key categories were first, improved financial performance; second, service excellence and third, executing on a large development plus project that we were planning on with VIDAA |
| And in summary, if you look at SeaChange's evolution in just 12 quarters, we create a growing profitable platform that is poised for the next step up to gain scale |
| With SeaChange Xstream technology, VIDAA will now be able to provide a superior streaming and advertising insertion solution to accelerate the expansion of free ad supported content globally on smart TVs powered by VIDAA, in addition to enabling full control of video content and the ability to seamlessly manage, curate, publish and monetize this content |
| The Xstream platform, in addition to being another innovative offering we have released, will also help SeaChange expanded SaaS offering to customers and generate recurring higher margin revenue |
| I must say that I'm very, very proud of our team |
| Our strong balance sheet and recent cost-cutting measures provide our company with an opportunity to invest in areas to promote profitable growth and generate positive cash flows in the future |
| And I'm happy to report that we generated substantial growth across all of our main KPIs |
| I'm convinced that this can work best with a clear value proposition, focused on helping the stakeholders to increase their value of their ad inventory with smart ways to use data to target advertising and personalize the overall experience |
| It also shows that our core value proposition that is focused on helping our customers to distribute and monetize their content portfolio continues to gain traction in the exciting dynamic and rapidly growing TV streaming and video advertising markets |
| Instrumental to our successful operational performance in fiscal ‘23 and our positive outlook into fiscal ‘24, are our three drivers for success |
| Our customer churn rate is close to zero and that says something very positive about our core software products and our support team |
| We have strong accounts receivable and unbilled receivable balances |
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| For 2023 fiscal year, as a percentage of total revenue, GAAP loss from operations was a negative 36% compared to a negative 34% in the year prior |
| Services revenue for fiscal Q4 2023 decreased 35% to $3.9 million, or 39% of total revenue compared to $6.1 million or 74% of total revenue in the prior quarter |
| As a percent of total revenue, GAAP income from operations for fourth quarter of fiscal 2023 was 12%, which compares to a negative 44% in the prior quarter |
| While non-GAAP income from operations for 2023 fiscal year as a percentage of revenue was 1% compared to a negative 16% in the prior year |
| The sequential decrease in quarterly services revenue was primarily due to an increase in professional service revenue accepted in the third quarter after completed work for multiple customers |
| For the 2023 fiscal year, the adjusted EBITDA totaled $0.5 million or $0.01 per fully diluted share compared to an adjusted EBITDA net loss of $4.1 million or a loss of $0.09 per fully diluted share in fiscal 2022 |
| Note, during the year that we recorded a non-cash impairment loss on goodwill during the second and third quarters of $5.8 million and $3.3 million, respectively |
| GAAP net loss for the fiscal year 2023 was $11.4 million, inclusive of the aforementioned goodwill impairment loss or a loss of $0.23 per fully diluted share compared to a net loss of $7.4 million or a loss of $0.16 per fully diluted share in fiscal 2022 |
| While fiscal year 2023, non-GAAP operating expenses were $20.3 million, down slightly from the $20.7 million in fiscal 2022 |
| GAAP loss from operations for the prior year 2023 totaled $11.7 million compared to a loss of $9.4 million in fiscal 2022 |
| As indicated, forward-looking statements are based on management's current expectations and are subject to a number of risks and uncertainties that may cause actual results to differ materially from expectations |
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