North American growth pushes Ottawa-based Espial’s Q2 revenues up 72%

Espial

Strong North American earnings continue to bolster Ottawa-based Espial’s results, as the firm reported a 72 per cent spike in revenues for its second quarter year-over-year.

Espial (TSX:ESP), which develops software and platforms for smart televisions and cable providers, saw total revenues for the three-month period ending June 30, 2017 of $7.8 million, as compared to $4.5 million a year ago.

Mirroring the Espial’s past two quarters’ results, these gains were driven by the firm’s growing North American channel. Here, revenues rose 590 per cent year-over-year, coming in at $4.7 million. Elsewhere, Espial’s revenues in Europe and Asia dipped by slightly less than $1 million total.

Recurring revenue, which increased 48 per cent year-over-year, made up roughly half of Espial’s earnings this quarter. Chief executive Jaison Dolvane told analysts and investors in the company’s earnings call that increases in this vertical were driven by the ARRIS acquisition the firm made roughly a year ago. Mr. Dolvane indicated that he believes this acquisition will continue to fuel Espial’s growth.

The firm’s net loss also increased this quarter, coming in at $3.8 million compared to $2.9 million a year ago. The firm’s adjusted EBITDA (earnings before interest, tax, depreciation and amortization) loss showed a slight improvement: Less one-time costs of $1.3 million, adjusted EBITDA was a loss of $1.5 million compared to $2.1 million last year.

After skirting a showdown with shareholder Vantage Asset Management in May over the makeup of Espial’s board, the Ottawa firm welcomed two new board members this past quarter. Toronto-based investor Brian McLaughlin was added as part of a compromise with Vantage. New addition Aamir Hussain, chief technical officer of US telecom firm CenturyLink, now rounds out the board.

Shares of Espial were down seven per cent in midday trading, falling to $2 on the Toronto Stock Exchange.