Streaming revenues show Amino is right to pivot strategy
Amino Technologies plc in Cambridge believes it is already seeing the benefits of transforming the group into a broad church for the delivery of cutting edge media and entertainment technology.
Revenue in the six months to May 31 was up 10 per cent to $38 million and despite operating profit falling 68 per cent to $0.7m – largely due to the coronavirus lockdown – Amino says it has laid the foundations for long-term success.
A key to this strategy has been the performance of its relatively new subsidiary 24i Media, an online video solutions and services provider acquired last summer for around €21.4m.
Amino CEO Donald McGarva said 24i continues to grow. Organic year-on-year revenue growth for this division was 30 per cent in the first half of the year as a result of increased volumes from existing customers and new customer implementations.
Government lockdowns in response to the COVID-19 pandemic resulted in significantly increased streaming volumes and user sign-ups from the existing customer base.
One broadcaster client in the EMEA region saw streaming starts increase by 35 per cent and another media VoD customer in North America increased active users by 2,000 per cent.
McGarva added: “During the period we have continued to invest in our next generation Smart Apps platform which has a faster deployment time and is more cost effective for our customers.
“Having successfully deployed this at Slovak Telecom in the latter half of 2019 it has now been rolled out to three more new customers in 2020 in EMEA and Latin America.
“In the first half of the financial year, our full end-to-end platform was also deployed at Dutch mobile virtual network operator Youfone in conjunction with Amino's Operator Ready Android TV devices, device management and customer support software. In addition, deployment of our Android TV custom launcher incorporating Netflix is currently ongoing at a customer in LATAM.
“Our Smart Apps and Smart Video platforms were deployed at Topic, an ambitious new entertainment and storytelling studio based in New York. This is the first deployment of Smart Video outside EMEA.”
Forecasting long-term benefits from its transformative tech strategy to focus on software and services revenues, and as operators look to add more OTT content to their linear services, MGarva says Amino has made further progress.
“This is reflected in progress for our PayTV+ strategy, with five operators across North America, EMEA and Asia choosing Operator Ready Android TV devices and three operators now choosing devices running AminoOS certified with Netflix,” he says.
“We have also completed Amazon Prime certification on our Android devices on which our customers are also able to provide Disney+.
“Further to the two upcycling projects delivered in the second half of last year, we are also now undertaking a new project for another European operator which will save them c.$5 million of capital expenditure.
“We have also entered trials with three North American operators to upcycle already deployed Amino devices in partnership with MOBITV's next generation multiscreen PayTV platform.
“We have offered our self-install, remote device management and customer support software free of charge during the COVID-19 pandemic period. We anticipate that many customers would want to maintain this service.
“Active devices managed on this platform have increased 98 per cent year on year and we continue to invest in additional data analysis tools to allow operators better insights into device and network performance in the home.
“Operationally, we have worked very closely with our customers and suppliers to ensure that COVID-19 had a minimal impact on our supply chain. Whilst we have seen and continue to experience some production delays due to restrictions on the movement of goods as a result of government lockdowns, factory capacity at our manufacturing partners in Asia is back at pre-COVID-19 levels.
“We have seen good volume demand from our customers for devices during the period and, importantly, have maintained our gross margins. Device revenue has declined year on year since the devices shipped are now lower cost.
“Our largest market for devices continues to be North America which had similar levels of activity year on year. However, the impact of COVID-19 on demand for devices, particularly in North America, in the second half of the year remains subject to any further impacts of the pandemic.”