Ottawa-based Espial Group made only slight headway in its effort to grow revenues in the third quarter as the video software provider continued its drive to convert customers to a subscription-based sales model.
Espial (TSX:ESP) reported revenues of $7.0 million for the three-month period ending Sept. 30, a three per cent increase over the $6.8 million it posted in the third quarter of 2017 and the same amount it generated in the previous quarter. Software licence revenues – the firm’s No. 1 source of income – continued to tumble, falling 28 per cent year-over-year to $2.23 million.
The decline in software licence revenues was largely offset by a major boost in revenue from Espial’s Elevate SaaS video platform, which grew from zero a year ago to nearly $2.1 million in the third quarter as the firm continued to convert customers to its new subscription-based products.
Support revenues, meanwhile, plunged 32 per cent year-over-year as customers begin to transition to the new SaaS offerings and choose not to replace older software products, the company said in regulatory filings.
Espial’s revenues in North America were up 16 per cent from a year ago to $4.3 million, due largely to growing adoption of its SaaS platform, the company said. European revenues also grew slightly from $2.24 million to nearly $2.5 million year-over-year, while Asia Pacific revenues fell from $890,000 to about $286,000 – a drop Espial blamed on lower software licence revenues in that region.
The company slashed its net loss substantially year-over-year from $3.1 million to about $600,000, thanks in large part to cutting operating expenses from $7.6 million in the third quarter of 2017 to $5.3 million this year.
Espial announced in the spring that it was shuttering offices around the world and laying off staff in an effort to trim costs. The firm said then it expected the moves to save it $6 million annually as it shifts to focus on IP and cloud-based solutions.
Espial also announced this week it had landed a couple of U.S.-based service providers as new customers. It said Colorado’s WideOpenWest has signed on to use Espial’s Elevate video platform on its latest cable box offering, while TDS Broadband Services inked an agreement to license the Ottawa company’s Elevate Cloud technology.
Espial’s shares were up just over two per cent in late-day trading on the Toronto Stock Exchange. Friday’s stock price of $1.34 is 38 per cent lower than the 52-week high of $2.15.