As we now close the books for the second quarter 2016, it’s clear that
Net Insight has delivered its strongest quarter ever. Sales were SEK 132 million, up 42 percent year over year. The quarter also delivered a record organic growth of 21 percent, when adjusted for the acquisition of ScheduALL.
It’s obviously satisfying to deliver strong sales growth, but as CEO it’s even more important to report that Net Insight has a strong core business, and that our growth is firmly secured in the various geographical regions and customer segments. Region Rest of World showed the strongest sales growth (166 percent), followed by North and South Americas (71 percent), and Western Europe (4 percent). We experienced an increased interest in Africa and Saudi Arabia in the period, which resulted in a couple of major contracts.
Operating earnings for the second quarter was SEK 12 million, compared to SEK 5 million last year. Profitability also gathered strength in the quarter, despite continued investments in the development of Live OTT and the launch of Sye.
The commercial tests currently underway in Live OTT are proceeding according to plan, as we’ve previously communicated, although it will be some time before revenues hit the bottom line. This is due to a naturally long sales cycle in combination with a renewed business model, where the revenue is first made visible when the viewers are using the new services. It’s important to point out that our technology is innovative and that it always takes time for new technology to gain foothold on the market. Therefore it is important to continue our marketing initiatives unabated, especially since the customers’ offerings need to develop as well. We launched Sye on a commercial scale in the second quarter and we’ll continue to invest in the development of Live OTT in accordance with our strategic plan, and we’re very confident about our offering.
Sye was awarded TV Technology’s ”Best of Show” at the prestigious NAB Show in Las Vegas. We also announced a number of new partnerships regarding Sye, with Accedo, a global supplier of TV applications, and with Verimatrix, a software provider for managing digital rights (DRM). There are multiple aims for these partnerships, but the key purpose is to facilitate for customers to choose their future solutions for Live OTT.
In the quarter, Net Insight also launched its new media transport solution, Nimbra Gateway, which can be connected with various competitors’ transport solutions. This means that we’re able to strengthen our position further and approach new customer segments, which generates new business.
The acquisition of ScheduALL at the end of 2015 extended our product portfolio. We also expanded our joint customer base to 500 customers around the world. We now have a unique market breadth, which provides us with a stable foundation to continue to build on. The integration of ScheduALL continued according to plan, and product management and services were coordinated in the quarter, and we’ve now integrated these global functions.
One of our joint competitive offerings is Customer Provisioned Networks, where broadcasters are able to easily order and use network capacity for real-time, high-quality video transmissions. More customers also decided to implement this solution in the quarter. These deals are the result of successful cross-sales between Nimbra and ScheduALL.
2016 is a really exciting year for all sports lovers, with the Euro 2016 Football Championship in France and the Olympics in Brazil. These sporting events made a positive contribution to business in the period, and I look forward to watching exciting games and impressive sporting achievements. I also look forward to continue to drive progress in the future of television, and to creating new business opportunities for ourselves and our customers.
New ways of delivering content for live sporting events will be a key driver for the continued progress of Live OTT. Our broad-based offering, which currently includes a number of different product lines, has strengthened our market position, which means that we’re now more relevant to our customers than ever. Our ambition is to identify and develop new income models for our customers and their customers, but our main goal is to create an entirely new interactive experience for TV viewers around the world. And that’s amazing.