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Open Insight #16

(Click here to read the Swedish version)

Net Insight Achieves Strong Q1 2023 results on the back of significant media deals and strong new product launches in both media and 5G synchronization

Welcome to the sixteenth edition of Open Insight, our blog for investors. This is where you can find out more about our offering and market position, our progress, our challenges and our growth.

During the quarter, we saw a currency-adjusted growth of 6,1%. Revenue for the first quarter amounted to 126,6 MSEK, which is an increase of 15,4% compared to the same period last year (currency-adjusted 6,1%). Although the macroeconomic challenges still create some uncertainty, our business benefits from several long-term growth forces. The biggest one is the transformation towards IP and cloud-based services that the media industry is undergoing. Our media solutions remain well-positioned in this transformation, especially in live sports and remote production, which has helped us to gain strength and growth. At the start of the year, we see large orders in the media industry and a continued positive trend for our cloud-based Edge offering. We have secured three strong new customer wins for our cloud native Nimbra Edge platform in the quarter. The first with the large US operator Lumen, the second with CBS Sports for their newly launched 24/7 soccer channel Golazio and finally with the global media service provider Globecast. Globecast also upgraded their media network to the powerful Nimbra 1060 for higher capacity. These new orders demonstrate our ability to provide high-quality cloud-based solutions to a diverse range of prestigious customers, and we expect this trend to continue in the future.

Additionally, a strong contributing factor to the quarterly result is the APAC region, which has shown steady growth over the last three quarters. Besides a quarterly stable growth, they recently managed to secure a larger and prestigious order for a nationwide live sports contribution network, which interconnects 20 arenas for a major sports league using JPEG XS compression, the 680-series as well as 1060s. Over the past year, we have established a prominent position in this region in both live sports events, contribution and remote production.

In this edition of Open Insight, we will highlight our continuous and steady progress in 5G synchronization, provide a more in-depth review of our strategic partnerships with both customers and collaborative partners and how these have and will help us expand in the media value chain, pursue development in our media growth pockets, and create more value for our customers. We will also highlight how we have responded to the latest trends presented at this year’s NAB show in Las Vegas, with new joint partner solutions and product launches, which were showcased and well received. Finally, we will delve deeper into the details of our key media deals during the quarter and share some thoughts on the evolving trends and changes taking place in the media market.

Important milestone in launching new Zyntai platform for GPS independent time synchronization

At the Mobile World Congress in Barcelona, we launched the next-generation platform Zyntai for GPS independent time synchronization. It is specifically built for large-scale deployments in operator networks. The platform includes both Zyntai Time Nodes and an AI/ML enabled Zyntai Director to orchestrate, analyze and optimize the synchronization performance and time network.

The sync development is on track to release and begin deliver to customer in Q4 this year. Second generation pre-series products are already in lab trials. The solution is gaining strong traction in the market and recent increased customer interest in the North American market has led to the establishment of a new Head of Synchronization Sales in the US. The recruitment is an initial step in building a local sales organization for this region.

Net Insight continues strong growth with high market awareness and promising 150 MSEK order book for 5G synchronization

We initiated four new Proof of Concepts (POCs) in the first quarter for our synchronization solution. Since the launch of Zyntai at the Mobile World Congress, we have experienced significant interest in our next-generation synchronization solution. As a result, we have built an order book valued at over 150 million SEK, which includes both the new products and the agreed-upon support services.

We have deepened our partnership with Three Sweden and have signed a framework agreement worth 30 million SEK for a national rollout of Net Insight’s 5G synchronization solution in their network during the quarter, which shows their continued trust in us as a supplier and their overall strong confidence in our solution, both from a business benefits perspective and in terms of delivery, service, and support.

Also, our newly released case study with Three showcases the cost and efficiency benefits of the solution. The high business benefits shown in the case study confirm that the solution is working well and serving its purpose as a commitment to creating solutions that deliver value and competitive advantages to customers.

In addition, Net Insight’s existing Precision TimeNet solution has been chosen by a new government customer in Europe for their critical network, marking an initial phase deployment worth SEK 1 million. This demonstrates the performance of the solution under the most challenging environments, creating value for customers and showcasing the competitive advantages of its unique overlay qualities combined with high accuracy and security.

At the Mobile World Congress in Barcelona, one of the main topics up for discussion was GPS independence. Additionally, several regulators visited the Net insight booth to learn more about the Swedish PTS model, which requires a GPS independent backup for all 5G licenses by 1^st of January 2025. The event attracted 85,000 visitors, and for us, the show was a great success with many fruitful discussions and meetings with customers, the media, and analysts. In mid-April, we also attended WSTS, the yearly North American synchronization conference held in Vancouver, Canada, as an exhibitor. Two of the focus areas of the conference were reliability and GPS independence. Our solution, as well as our two speaker spots, received great interest.

By end of last month, we also participated as exhibitors at the Open RAN World event in Berlin, where we showcased how our overlay synchronization solution is in line with ORAN’s initiatives for open and vendor-agnostic solutions. We were pleased to see their efforts to promote these open solutions, particularly how they emphasize GPS-independence. During the event, we had the opportunity to speak with many operators who expressed positive interest in ORAN and were actively seeking open GPS alternatives to address their 5G synchronization needs.

Long-term strategy for working in close partnership with our strategic customers has led to larger deal sizes and more competitive solutions

Our strong emphasis on building and nurturing long-term partnerships with customers and channel partners has also contributed to the continuous and steady growth. As a result, we are winning larger deals, which is reflected in increased average order value and more stable revenue growth.

A continuous increase of our services and support revenues, further shows that we have managed to position us more closely to our customers. Additional proof of the fruit of this long-term work is the recent joint solution launches that we announced with some of our strategic partners prior to the NAB show in Las Vegas in mid-April, which were also showcased and very well received by customers during the show.

These include the MediaKind cooperation integrating Nimbra Edge software in their encoders, enabling seamless cloud workflows glass-to-glass, as well as integration with Comprimato converting media files using cloud-based servers instead of local and high-end ground-to-cloud workflows.

We have also deepened our relationship with Skyline to provide simple live media service provisioning and management covering both our Nimbra Edge and MSR media portfolio. Additionally, our next generation remote production solution together with Mo-Sys, which was showcased at the TATA booth at NAB, was very well received and enables further reduction in cost and carbon footprint for sports events.

Before NAB, the largest US media and broadcast exhibition, we launched several very important products to strengthen our media offerings, including the latest addition to our Trust Boundary portfolio: the award-winning which ensures secure IP media transport over different IP-based networks. Additionally, we have introduced JPEG XS compression for our Nimbra 1060s to support high-quality live IP media productions which further strengthens our offerings in remote production and high-end contribution.

Net Insight’s latest product releases contribute to setting a new standard for secure IP media transport and high-end live IP production

We announced the release of our Trust Boundary Appliance in mid-March, an innovative solution that provides a cost-effective way to move IP media safely across network boundaries while ensuring full visibility and manageability. This new product addresses the evolving needs of the media industry and creates new business opportunities for Net Insight’s media customers, including broadcasters, cable companies, content providers, and OTT providers.

We have recently introduced a new feature for our Nimbra 1060 product that allows for ST 2110 IP production with low latency encoding, which is particularly useful for remote production. This feature compresses live 2110 streams into JPEG XS in the WAN, which helps to minimize delays, and then transports them over TR 07 before decompressing them back into 2110 in a studio environment. This is mainly aimed at connecting studios or linking arenas with studios for live sports and other live productions.

The new interface was also showcased at NAB in a live demonstration performed with our solution partner Comprimato. In addition to showing ground-to-ground production, we also demonstrated a ground-to-cloud scenario using Comprimato’s transcoder together with our cloud-native Nimbra Edge. We used TR 07 to create a scenario where ST 2110 equipment on-premises can be easily integrated into cloud-based production and distribution workflows. This helps to make the complete process seamless and ensures that everything works together smoothly. The solution is well-suited to the needs of Tier 1 event organizers that want to leverage the flexibility and efficiency of cloud/data centers.

New strategic partnerships open doors for expansion in the media market value chain

We announced our partnership with MediaKind, a global leader in media technology solutions, in early April and it presents a valuable opportunity to provide more competitive solutions, benefiting both companies and their customers. MediaKind has integrated our cloud native Nimbra Edge with their RX1 and CE1 devices as well as their Aquila Live head-end, to provide a cloud-first IP video distribution system that simplifies live video workflows and content delivery for customers.

This partnership and the integrated solution have generated a lot of interest in the industry and was showcased at both Net Insight’s and MediaKind’s booth during the NAB Show.

We have also taken an important next step in our partnership with Skyline Communications, a global leader in developing software solutions for complex ecosystem management, to provide a completely new solution that allows our customers to manage and monitor their Net Insight products more easily and seamlessly.

Through our Nimbra Vision’s Northbound APIs and the Dataminer orchestration tool, customers can control and provision services seamlessly across all our media products. We recently showcased this solution at both the Net Insight and Skyline booths at the NAB show. The joint demonstrations received positive feedback from both customers and sales channels.

Many new and innovative solutions showcased at 2023 NAB Show with emphasis on sustainability, cost reduction, and simplicity for media industry

At this year’s NAB Show, we showcased several trends in the media industry that had been particularly highlighted prior to the event. Our partnership with Mo-Sys, featuring remote production 3.0, was a major spotlight of the show.

With this solution, we were able to demonstrate how true remote production can be achieved, reducing both production and camera crew, resulting in increased sustainability and cost savings. Another significant demonstration was the world premiere of our solution with Comprimato, which bridged the gap between cloud and high-end IP workflows.

We also showcased our newly launched Trust Boundary Appliance, which was nominated as one of the finalists in the IABM’s BaM Awards and ultimately awarded as a winner in TVTech’s Best of Show Awards at NAB. In total, we were able to showcase our wide range of live media transport solutions covering an extensive part of the media value chain.

In addition to the nine different solution scenarios shown at our booth, our company name, logo, product names as well as in-depth descriptions were also present at no less than four other company locations, including booth MediaKind and Skyline, which we touched on earlier.

Overall, we had a great show with a lot of attention from existing and new customers who were thrilled and sometimes surprised to see all the parts of media solutions that our portfolio covers. Our focus in terms of communication was on innovative solutions to help the media industry achieve greater efficiency, cost savings, and sustainability in their media operations.

Global media service providers continue to choose Net Insight’s IP-centric media solutions, solidifying our market position

During the first quarter we have won strategic new business with Lumen, who are market leaders in video transport. The Lumen implementation is further described in a new joint case study. Leveraging Nimbra Edge, Lumen provides a secure and scalable cloud delivery platform that can deliver high-quality video with low latency over public internet networks. Nimbra Edge offers an agile and open cloud delivery platform supporting a variety of protocols including SRT and RIST.

Some of the key benefits include bringing reliability and flexibility to Lumen’s Vyvx® fiber and teleport solutions. The fact that Lumen has chosen Net Insight confirms our leading position in cloud media transport.

Globecast, one of our existing global media customers, has recently selected our flagship product, Nimbra 1060, to support their transition from SDI to an IP-based infrastructure after its move to its new Westlake Village Studios facility in Los Angeles, CA. This deepened implementation represents an important step forward in our long-standing collaboration and will enable them to expand their service offerings and drive cost and operational efficiencies for their customers.

This customer case is particularly significant as it showcases a satellite service provider using our complete Nimbra platform – both Nimbra Edge and Nimbra MSR – to transition media transport over to cloud and IP. This is a testament to the versatility and scalability of our solutions, which can support a range of workflows and use cases across different types of media operators and service providers.

During the quarter, it was also announced that CBS Sports’ Golazo Network is using our Nimbra Edge for cloud contribution and distribution, making it one of the largest cloud deployments in broadcasting history for premier sports content. This shows the reliability and scalability of our cloud-native solutions and highlights the benefits of combining production, contribution, and playout in the cloud. By enabling streamlined operations and increasing efficiency, this solution offers clear customer benefits and positions us as a key player in the media industry.

We are proud to be part of such a significant project, and these new deals demonstrate our commitment to working closely with our customers to develop their businesses and help them transition to next-generation IP and cloud workflows. At SVG Chairman’s Forum in Las Vegas right before the start of NAB, Per Lindgren, CTO Media and Head of Sync at Net insight and Corey Smith, Sr. Director, Advanced Production Technologies at CBS Sports, held a joint panel presentation describing the use case. The presentation was very well received and resulted in many conversations and new visitors during the NAB Show.

Wind of change blows over the media industry as strategically important acquisitions take effect

Tata Communications to acquire The Switch Enterprises for global live video production and transmission

Tata Communications has recently acquired the American media operator The Switch. The acquisition will give Tata Communications a strong foothold in the American media and entertainment market and expand its portfolio into live video production. The combination of The Switch’s strong presence on the US media market with connections into all major media companies and sports arenas, with TATA Communication’s leading IP infrastructure and its global VideoConnect network will establish a very strong provider on the global media service market.

Furthermore, it will enable Tata Communications to develop scalable solutions for television programming, new content creation, and post-production. The Switch team will contribute with stability, investment, and vision for future growth. The acquisition takes place between two of Net Insight’s most significant media clients, for whom we are a major supplier, thus bolstering our market position where we can become more competitive together.

Large and strategically important mergers are a trend in the media market, leading to larger media service providers with multi-continent coverage and extensive service offerings. Net Insight is well-positioned with a broad media portfolio, a global sales organization, and a well-established service and support organization to handle large media customers.

The media and entertainment industry will continue to experience consolidation and strategic partnerships in 2023*, with a focus on bundled offerings, asset sales, and spin-merge transactions. Streaming companies, regional sports networks, and movie theaters will need to innovate or face marginalization.

*Media & Entertainment trends | EY – US

The annual report for 2022 has been published

Our annual report for 2022 was published on April 21st and is now available on our website. In it, you can read about the highlights of the year, financial results, market trends, and our strategic initiatives.

Recommended report on Net insight’s growth potential in 5G, provided by Swedish finance magazine Affärsvärlden

I also recommend interested readers to check out the newly released report by the Swedish analyst magazine, Affärsvärlden. This report provides an objective analysis of Net Insight’s growth potential, with a particular focus on our newest product area targeting 5G synchronization.

Crister Fritzson,

CEO Net Insight

Open Insight #16

Net Insight Achieves Strong Q1 2023 results on the back of significant media deals and strong new product launches in both media and 5G synchronization

Important milestone in launching new Zyntai platform for GPS independent time synchronization

Net Insight continues strong growth with high market awareness and promising 150 MSEK order book for 5G synchronization

Long-term strategy for working in close partnership with our strategic customers has led to larger deal sizes and more competitive solutions

Net Insight’s latest product releases contribute to setting a new standard for secure IP media transport and high-end live IP production

New strategic partnerships open doors for expansion in the media market value chain

Many new and innovative solutions showcased at 2023 NAB Show with emphasis on sustainability, cost reduction, and simplicity for media industry

Global media service providers continue to choose Net Insight’s IP-centric media solutions, solidifying our market position

Wind of change blows over the media industry as strategically important acquisitions take effect

The annual report for 2022 has been published

Recommended report on Net insight’s growth potential in 5G, provided by Swedish finance magazine Affärsvärlden

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