SeaChange International, Inc.

Good afternoon and welcome to SeedChange's fiscal third quarter 2022 conference call for the period ended October 31st, 2021. My name is Hillary and I will be your operator this afternoon. Joining us from the company is President and Chief Executive Officer Peter Aquino, Chief Financial Officer Michael Prynne, and Senior Vice President and Chief Revenue Officer Chris Clemmer. After the market closed today, SeedChange issued its financial results for the fiscal third quarter in a press release a copy of which is available in the Investors section of the company's website at www.cchange.com. Before we begin today's call, I would like everyone to please take note of the Safe Harbor paragraph that is included at the end of today's press release. This paragraph emphasizes the major uncertainties and risks inherent in the forward-looking statements that management will be making today. 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. These risks and uncertainties are also outlined in the company's SEC filings, including its annual report on Form 10-K and quarterly reports on Form 10-Q. Any forward-looking statements should be considered in light of these factors. Additionally, this call contains certain non-GAAP financial measures, as that term is defined by the SEC and Regulation G. Non-GAAP financial measures should not be considered in isolation from or as a substitute for financial information presented in compliance with GAAP. Accordingly, C-Change has provided a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures in the company's early earnings release issued today. I would like to remind everyone that this call is being recorded and will be made available for replay via a link available in the Investor Relations section of C-Change's website. Now, I would like to turn the call over to C-Change's President and Chief Executive Officer, Peter Aquino. Sir, please proceed.

Thank you, Hillary. This is Peter Aquino, CEO of SEEK, and before we begin with our prepared remarks today and focus on the third quarter, I'd like to announce that We will not be addressing any rumors related to any SEEK transaction that is circulating in the news. I appreciate your consideration, as it's not appropriate for us to provide any commentary today. So with that, let me turn it over to the operator to begin our prepared remarks. Good afternoon. My name is Peter Aquino, and I'm the new president and CEO of SeaChange International. We had a solid third quarter and I consider a good marker for jumping off point to reinvent SEEK for the long term. I've been a quick study here on the opportunities ahead of SeeChange given my deep experience in technology, media and telecom or TMT. In fact, I was a customer of SeeChange when I ran RCN from 2004 to 2010, more than a decade ago. For nearly 30 years, Seek has delivered cable TV back office support in VOD, pay-per-view, and ad insertion and has a long-lasting core competency in delivering video and advertising software to the who's who global client base in cable, telco, satellite, and now the exciting migration towards cloud-based streaming. As tailwinds and trends shift from linear to OTT, everything we do needs to be the best of both worlds. Our new roadmap not only includes software upgrades for our existing customer platforms and VOD and pay-per-view, but more importantly, leads us to double our efforts to leverage our capabilities to develop SaaS products for content and advertising and a growing TAM for both. The good news for SEEK is that our opportunity goes well beyond North America. There are numerous use cases for our capabilities in content distribution and programmatic advertising. Through our experienced software engineering team, SEEK operations, and motivated sales teams distributed worldwide, our pipeline of new deals is exponential. Our job is to get there one way or another, that is organically or by considering strategic initiatives. We are great partners and believe that we can accelerate our ability to capture future growth opportunities with others through scale. Looking ahead, we have a head start with three new focus areas that are natural extensions of our traditional linear and ad insertion business. And I consider it less of a pivot and more of a lean in to the areas that we have significant upside. The three product areas are stream vid, advertising rev shares on streaming, and our new product that we call Xtreme. First, StreamVid was launched this year and is expected to be a SaaS workhorse for us for years to come. StreamIL and PopcornFlix are the first two examples of new logos that we recently closed. StreamVid is a white label offering whereby we package content into a customized app to be distributed everywhere on any device. With StreamVid, we are seek inside. This allows specific customer content to be discovered, curated, and consumed. Our team is now gearing up to sell this new service more rapidly and considering business segment targeting, including entertainment, healthcare, and education. We currently offer a previous version of this software product to a major healthcare provider and expect to migrate everyone to the new StreamVid SaaS platform. Second, We all know that advertising has a huge TAM globally, and the more targeted it can be, the more valuable it can be to our clients. Ad selection and customization in the streaming world can maximize channel real estate and provide real-time data to our customers to monetize. We're also shifting our business model to what I call Development Plus, meaning that we will work with operators to develop the SaaS platform and also share in the upside through revenue share arrangements. Historically, C-Change would simply provide the hardware and software and be done. Now we're aiming to be part of the upside. Specifically, we closed our first revenue share deal with a large national satellite provider to test our ability to monetize advertising real estate within the lineup. We are very excited about this development with our partner and consider this to be a significant avenue for growth for SEEK down the road. And last but not least is our newest product that we're branding, Xtreme. This is a current capability that is being repurposed and aimed at the smart TV industry. The trend towards zero set-top boxes is here and advertising funded content or apps placed on any device lends its way to free advertising supported TV or fast channels. SEEK is uniquely qualified through our highly skilled software team to partner with content aggregators who are already in discussion with smart TV players. We are being very proactive in this area and look forward to reporting back to you on our progress on Xtreme. So at this point, let me turn it over to Chris to give you some more examples of our product use cases and accomplishments in Q3. Chris?

Thank you, Pete, and good afternoon, everyone. I would like to spend the next several minutes providing an update on our progress in each of our business segments and on the significant market opportunities on the horizon. At a high level, I remain very encouraged with the advancement of our key sales and marketing initiatives that position SeaChange for long-term growth as a valuable player to the cable, streaming, and ad tech spaces. Starting first with our cable and operator TV business, which has always been one of our core competencies and remains a key driver of our future success. As many of you know, we have a long track record of delivering value to clients in this space, which include Tier 1 operators such as Verizon, AT&T and Liberty Global, where we are deeply embedded in their operations. You may have seen our announcement in late November of our multi-million dollar contract renewal with one of the largest MSOs in the US, which provides high margin recurring revenue over the next two years for the company. We have been working with this MSO for over a decade now, demonstrating the long tails of these business engagements. Within Cable, we are also working diligently to secure license upgrades, professional services projects, and support extensions. These types of opportunities not only provide continued revenue, but also can help us streamline our efforts and costs to support various customer deployments while we upgrade our footprint to the latest software versions. Within advertising, we are highly focused on securing meaningful market share in this massive multi-billion dollar TAM by being more than just a back-office supplier, which we have been in the past, and by allowing us to achieve more upside through revenue-sharing arrangements. We are seeing early signs of success in this market and new business model, as we recently picked up a new logo in advertising with Beam, a cable and broadband provider serving eastern Alabama. We were selected to replace its aging linear broadcast ad insertion platform with our advanced ad platform providing robust ad insertion capabilities for its cable TV business as well as providing a pathway for its next-gen television streaming operations. A very important development in our advertising business that I am incredibly excited about is a recent agreement with a nationwide US satellite operator for a long-term recurring revenue share deal. While it is too early in the rollout to discuss specifics of monetization expectations, this is the exact type of deal we aspire to accomplish more of going forward that leverages our capabilities and relationships to enter a large TAM with a Tier 1 customer. We are encouraged with our progress converting customers to our new revenue model and look forward to executing similar deals that provide sea change with significant upside as we perform for our customers. Now moving on to streaming where there are two main points that I would like you to take away from this call. The first is that we're seeing a lot of traction in the streaming market as content orders continue to go direct to consumer. We believe we have some of the best technology with a rapid cycle time that can allow the customer to quickly come to market. And I'm proud to say that we have an outstanding pipeline of streaming enablement opportunities globally. We recently entered into an agreement with a new streaming customer whose special interest S-WATS service we expect to launch in late Q1 or early Q2 of our next fiscal year with the exact launch date depending on the customer's finalization of their content strategy. Second, I'd also like to point out the extension of our StreamVid product to now support access to gaming content. This product extension came at the request of a customer and turned StreamVid into a true multi-aggregation service platform that provides a unified immersive user experience for the discovery of all types of content, including third-party content such as games. The customer, a large Middle Eastern telecom company, entered into a paid proof-of-concept agreement with us, and we anticipate the customer will roll the offering out to subscribers, resulting in a more material agreement with SeaChange. The creation of this product enhancement provides SeaChange with another valuable offering that we are starting to market and expect healthy demand as we demonstrate our capabilities. The last thing I want to cover is a new opportunity we're developing in the Free Advertising Supported Television segment, or FAST. FAST is a consumer trend of replicating the traditional linear TV experience on connected smart TVs with personalized targeted advertising, which we believe creates a host of opportunities for a technology provider such as SeaChange, where we can leverage our core competencies in streaming and advertising. Under the brand name Xtreme, We're currently building an offering to target a concrete opportunity within the fast market, while simultaneously having discussions with large players in this market as we progress towards future monetization opportunities. We will keep you apprised of future updates as we expect finalizing our go-to-market offering in Q1 of our next fiscal year. That concludes my prepared remarks. I'll now turn the call over to Mike. Mike?