Corporate Overview May 2019
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Corporate Overview
May 2019
© SEACHANGE INTERNATIONAL, INC. CONFIDENTIAL
Safe Harbor
During the course of this presentation, we will provide projections and other forward looking statements
regarding future events or the future financial performance of SeaChange International, Inc. (the Company),
including expectations concerning our business strategy for this year and beyond. Such statements are only
current expectations and actual events or results may differ materially. We refer you to the Company’s filings
with the SEC, particularly our most recent Reports on Form 10-K, Form 10-Q and Form 8-K. These documents
identify important risk factors that could cause actual results to differ materially from our projections or other
forward looking statements. We will also present financial metrics determined on a “non-GAAP” basis. These
items, together with the corresponding GAAP numbers and a reconciliation to GAAP, are contained in this
presentation and the related earnings press release on our website at
https://www.seachange.com/about/news-events/.
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© SEACHANGE INTERNATIONAL, INC. CONFIDENTIAL
Agenda
1. SeaChange
2. Market
3. Strategy
4. Financial
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© SEACHANGE INTERNATIONAL, INC. CONFIDENTIAL
Management Team
Peter Faubert Dave McEvoy
CFO Legal Counsel
Previously Previously
CFO This Technology Inc. General Counsel ATG
(Acquired by Comcast) (Acquired by Oracle)
Mark Bonney
Executive Chairman Yossi
MarekAloni
Kiełczewski Yossi Aloni
CCO
CTO CCO
Previously Previously
Previously Previously
CEO RhythmOne plc CEO DCC
Chief Labs
Corp Ops ATEME SA Chief Corp Ops Ateme
(Acquired by Taptica LTD) (acquired by SeaChange)
(Euronext) (Euronext: ATEME SA)
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© SEACHANGE INTERNATIONAL, INC. CONFIDENTIAL
This Is SeaChange
FY19 $62M Servicing the 340 Employees, 50M+
HQ: Boston
Net Revenues Video Delivery Global-Regional Subscribers
Market R&D: Warsaw Served Daily
Sales
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© SEACHANGE INTERNATIONAL, INC. CONFIDENTIALComplete Video Delivery Platform
Managed Network
Unmanaged Network / Internet
SeaChange Framework Mobile, TV & STB Apps
On-premises Headend
SeaChange Framework
Cloud Headend
The Framework
Orchestration
Containers, Native OS, Virtualized, On-Premises, Private & Public Cloud
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© SEACHANGE INTERNATIONAL, INC. CONFIDENTIALUnique, Value-Based Engagement
• Our value-based engagement, provides content and service providers with a
complete delivery platform for linear, VOD and TSTV over managed and
unmanaged networks.
• We deliver solutions for on-premises and cloud OVP portals, back-office,
media asset management, ads-management, analytics and client for STBs,
Smart-TVs and mobile devices. The SeaChange solution is available as a
product, SAAS and/or managed service, on-premises, cloud and hybrid.
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© SEACHANGE INTERNATIONAL, INC. CONFIDENTIALAgenda
1. SeaChange
2. Market
3. Strategy
4. Financial
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© SEACHANGE INTERNATIONAL, INC. CONFIDENTIALIncreasing Demand for Video Delivery
Subscription VOD Virtual Multi-Channel Content Providers Direct to Service Providers OTT
Distributor Consumer
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© SEACHANGE INTERNATIONAL, INC. CONFIDENTIALIncreasing Content Cost
Increase in Video ARPU, Content Cost vs. Inflation1
10.1% 9.8% 10.1%
9.5%
Average Annual Increase 8.6% 8.6% 8.7%
7.7%
• Programming Fees 9%
• Video ARPU 3% 4.2% 4.3% 4.2%
• Inflation 2% 3.2%
2.3% 2.1% 2.1%
3.3%
2.7%
2.1%
2.9%
2.4%
1.5% 1.6% 1.3%
0.1%
2011 2012 2013 2014 2015 2016 2017 2018
Video Inflation Content
NFL Broadcasting Cost $M2 Broadcast Retransmission Fee $B3
6000 12
5000 10
4000 8
3000 6
2000 4
1000 2
0 0
1983 1987 1990 1994 1998 2006 2015 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
1 Data from Industry Leader Cable DTH Telco
2 NFL.com 10
3 FCC
© SEACHANGE INTERNATIONAL, INC. CONFIDENTIALFierce Competition for Advertising Revenues
• Targeted, Dynamic Advertising
Driving Digital Revenues Increase
• “Traditional” TV Losing
Advertising Revenues
• TV Providers Looking to Provide
Segmented, Targeted, Dynamic
Advertising
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© SEACHANGE INTERNATIONAL, INC. CONFIDENTIALAgenda
1. SeaChange
2. Market
3. Strategy
4. Financial
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© SEACHANGE INTERNATIONAL, INC. CONFIDENTIALService & Content Providers
Revenues Increase, Customer Retention, OPEX Savings
• Win the Advertising Revenues
• Bringing a browser ad-experience to the TV/Mobile video screen
• Dynamic & targeted ads by viewer, device, and household
• Powered by AI and Machine-Learning
• Enhanced Viewing Experience
• Interface look, feel and speed for both OTT and “legacy” Set-top-box
• In home and out of home OTT service enablement
• OPEX Savings
• Cloud and on-premises Integrated, managed and self-care system
• High quality of service – simplified customers’ engineering operations
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© SEACHANGE INTERNATIONAL, INC. CONFIDENTIALAgenda
1. SeaChange
2. Market
3. Strategy
4. Financial
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© SEACHANGE INTERNATIONAL, INC. CONFIDENTIALRevenues $M
$140
Industry Transition
$120
to Software Corrective Action:
Product investment in
Virtualized & Cloud
$100 Software Ready to Market
Product, loyal
$80 installed base
$60
$40
$20
$-
FY2015 FY2016 FY2017 FY2018 FY2019 FY2020
2020 figure reflects midpoint of guidance provided on April 10, 2019 15
© SEACHANGE INTERNATIONAL, INC. CONFIDENTIALGross Margin %
80% Corrective Action:
Restructuring, $38M Annualized
70% Run-rate Cost Saving Software & Cloud
Products
60% Legacy Hardware
support challenges
50% (HR & BOM)
40%
30%
20%
10%
0%
FY2015 FY2016 FY2017 FY2018 FY2019 FY2020
* Non- GAAP
2020 figure reflects midpoint of guidance provided on April 10, 2019
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© SEACHANGE INTERNATIONAL, INC. CONFIDENTIALOperating Expenses $M
$80
Corrective Action:
$70
Restructuring, $38M Annualized
Run-rate Cost Saving Virtualized
$60 Software
Offering Enabling
$50 >$6M Cost
Savings (started)
$40
$30
$20
$10
$-
FY2015 FY2016 FY2017 FY2018 FY2019 FY2020
* Non- GAAP
2020 figure reflects midpoint of guidance provided on April 10, 2019
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© SEACHANGE INTERNATIONAL, INC. CONFIDENTIALNon-GAAP Operating Results $M
$10 Corrective Action:
Restructuring, $38M Annualized
Revenues Growth
Run-rate Cost Saving
$5 & Cost Savings
$-
FY2015 FY2016 FY2017 FY2018 FY2019 FY2020
$(5)
$(10)
$(15)
$(20)
$(25)
* Non- GAAP
2020 figure reflects midpoint of guidance provided on April 10, 2019
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© SEACHANGE INTERNATIONAL, INC. CONFIDENTIALKey Operating Metrics
• Close 20 – 25 significant deals for multiple product / service
offerings on an annual basis
• Complete the development and product launch of 3 significant new
product offerings
• Continue to reduce costs by focusing on reducing essential third-
party costs and eliminating non-essential costs
• Increase cash by $3 - $6 million to $33 - $36 million, from
approximately $30 million at the end of Fiscal year 2019
Guidance provided on April 10, 2019
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© SEACHANGE INTERNATIONAL, INC. CONFIDENTIALFY 2020 Guidance and Intermediate Term Goals
FY 2020
FY 2019 2 to 3 Year Goals
Guidance
REVENUE $62M $70 – 80M Double-digit growth
GAAP GROSS MARGIN 60% 60% - 65% 63% - 65%
RESEARCH & DEVELOPMENT 31% 21% - 18% 20% - 22%
SALES & MARKETING 21% 21% - 19% 20% - 22%
GENERAL & ADMINISTRATIVE 27% 20% - 17% 10% - 11%
OPERATING MARGIN/INCOME* -19% 2% – 8% 10% - 13%
* Non- GAAP
FY20 Guidance provided on April 10, 2019
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© SEACHANGE INTERNATIONAL, INC. CONFIDENTIALQ&A © SEACHANGE INTERNATIONAL, INC. CONFIDENTIAL
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