CEO Statement Q1 2018

Launch of new generation Nimbra in the first quarter.

2018 started with several highlights, even if market conditions remained cautious. The global media industry is undergoing a major realignment, both in terms of equipment and media networks. Customers need to continue to increase capacity to be able to produce relevant content and meet changing viewing patterns. One example of this rapid progress is the roll-out of 4K video, which increases the demands on quality and flexibility. Other examples include OTT, 360° video and virtual reality, as well as new services to viewers using multiple screens simultaneously.

In order to satisfy our customers’ need for increased capacity, we launched Nimbra 1060, the next generation platform for media transport, in the first quarter. The development has taken place in close collaboration with customers in order to ensure the platform meets their future needs. This is one of our biggest launches ever, and has been very well received to date. Nimbra 1060 will help our customers to increase capacity in their media networks for a long time ahead. Increased capacity is a pre-requisite for creating more content, introducing new business models and increasing flexibility for the media production of the future. Nimbra 1060 was recently awarded “Best of Show by TV Technology” at the NAB trade fair in Las Vegas.

Revenues in the first quarter were SEK 110.5 (110.4) million, in line with the first quarter of 2017. Operating margin in the first quarter was 2 (6) percent, generating operating earnings of SEK 2.4 (6.8) million. Cash flow was SEK -13.5 (15.3) million, influenced by factors including investments in product development and the launch of Sye (Net Insight’s live OTT solution).

The commercialization of Sye is continuing, and in the first quarter we announced that our live OTT streaming solution Sye will be available on Microsoft Azure. This means that Sye will be available as a service on Microsoft Azure from the second quarter 2018. In addition, Net Insight will be included in Microsoft’s partner network, an important step towards increasing reach and accessibility on the global market.

In connection with the winter Olympics in South Korea, we contributed ScheduALL solutions for resource and transmission planning for TV production for NBC Olympics, a division of NBC Sports Group. The deal included software and staff on site. The project was very successful and the technology worked flawlessly.

Our assessment is that demand has stabilized, but that the transformation will continue to affect the market further.

As previously communicated, I will be leaving Net Insight this summer. It has been a real pleasure to work at Net Insight together with all our customers and competent staff.

Even though I am leaving Net Insight, I think it has never been more exciting to be a part of the global media industry. A great deal remains to be done at Net Insight and I can guarantee that the level of activity is high throughout the company.

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