Espial’s revenue grows on the back of US and German wins

Canadian IPTV software house Espial has published an impressive set of financial results this week growing its Q1 revenue by 63% year-on-year, from C$5.3 million (Canadian dollars) to C$8.7 million.

The company cited the launch of Tele Columbus’ 4K hybrid IP video service AdvanceTV in Germany in February as a major driver to the company’s growth – and probably breathing a sigh of relief that the project finally got off the ground over a year since it was first scheduled.

Yet the majority of Espial’s growth came in North America, with revenues rocketing from just C$800,000 in Q1 2016, to more than C$5 million this year. Revenues in Europe rose from C$3.05 million to C$3.4 million in the period, while revenues in Asia slipped from C$1.1 million to C$520,000. Perhaps Tele Columbus revenues will be realized over the lifetime of that particular deal and little of it has been taken up front.

Future growth in North America looks promising for Espial, as it also reported that its Elevate cloud service, which it inherited from Arris, has five lab trials with North American operators.

Espial has challenged views about high costs associated with IP based video services – claiming it delivers a combination of quality and speed without cutting corners where technology is concerned.

Faultline Online Reporter recalled a conversation with Espial just before the new year, when we discussed that the AdvanceTV project at Tele Columbus cost a fraction of what Liberty Global spent on Horizon – with some estimates on that project going as high as $400 million – while producing a product which to customers has similar feature sets.

Espial would not spill the beans on how much the project cost Tele Columbus, but the fact that Espial’s European revenue grew by a slim $350,000 in the one year period, suggests that AdvanceTV was very cheap to build and is now being charged on a per license basis going forwards.

The AdvanceTV multiscreen product is powered by the Espial cloud platform, including its G4 set top client and Media Service Platform (MSP) software. It provides Tele Columbus’ 3.6 million connected homes with an offering combining OTT video, linear TV, apps, DVR capabilities, plus the integration of German SVoD service maxdome.

Espial acquired the Whole Home Solution Platform from Arris in June last year, which it has since rebranded as Espial Elevate. The company previously told us it has big plans for Elevate, continuing its work with Arris and other major vendors, and we will keep a keen eye on its five ongoing North American trials. The cloud-based platform is currently restricted to the US because it works on a purpose-built gateway that only adheres to US standards.

The lack of DVB support means Elevate cannot make its mark in Europe, so Espial and Arris are collaborating to roll out a set top running the Elevate software with DVB-support, for an estimated launch in the second half of this year. This could also be a HDMI stick which supports RDK.

Espial says revenues from software license royalty revenues were C$5 million in the first quarter, rising from C$2.4 million in the same period last year, while professional services increased from C$1.59 million to C$1.67 million, and maintenance and support grew to C$2 million from C$1.2 million in Q1 2016. This quarter’s results brings Espial’s revenue back in line to where it was in Q3 2015, after seeing slipping revenues in the last few quarters.

Espial CEO, Jaison Dolvane, commented on his company’s results, “we’re off to a good start in 2017. Our Agile and DevOps software engineering processes have increased our velocity in delivering new features and updates to enhance subscriber experience and help our customers expand their footprint. We’re continuing to invest in our cloud and device products aimed at accelerating adoption of Espial solutions. In Q1, we progressed our sales pipeline further and believe we are well positioned to become a partner to major service providers for their next generation pay TV platforms.”