Verimatrix has reported its consolidated (IFRS) revenue for the first quarter period ended March 31st 2021. Revenue was $20.1 million (€16.5m) in the first quarter of 2021, stable overall year-on-year.
During the quarter Verimatrix reported a steady flow of business for its conditional access solutions, in particular its VCAS broadcast security for on-premise implementation. The Company also commercially launched six customers on the new Multi-DRM Core cloud native solution which provides a customisable and scalable Digital Rights Management solution with unmatched onboarding speed and security for streaming OTT providers.
The Company also demonstrated further the multi-market reach of its Application Shielding product line in the quarter by winning new customers across the Mobile Payment, Media & Entertainment and Automotive markets.
Recurring revenues from royalties, maintenance and subscription fees were $11.4 million in the first quarter of 2021 (57 per cent of total revenue). These recurring revenues are down year-over-year due to weak royalty collection from set-top boxes makers in the context of on-going Covid-19 supply-chain and component shortages and retail challenges in certain regions (Latin America notably). However, subscription revenue continued to increase, up 23 per cent v. Q1 2020, at $1.4 million, a progression underpinned by a growing demand for Verimatrix technology.
The Company said it continued to experience good momentum on subscription-based and SaaS business by signing six new subscription and SaaS contracts during the quarter for a total contract value (TCV) of $2.8 million (up 100 per cent year-over-year). The ARR (Annual Recurring Revenue) of subscription increased by 56 per cent year-over-year to $9.7 million as of March 31, 2021.
Revenue from software licences and non-recurring services was $8.7 million in the first quarter of 2021, up 41 per cent year-over-year. During the quarter, the Company was able to regain part of the licence orders which had been delayed in the fourth quarter of 2020.
Also, Verimatrix signed new term-licence deals with existing customers converting them from a yearly maintenance-only relationship with perpetual license ownership to a multiyear license agreement delivering new versions of its conditional access and DRM software. The aim is to move them to a subscription-based contract at the renewal of their new licenses. This transition will ultimately increase ARR and continue to improve the Company’s revenue mix.
Amedeo D’Angelo, Chairman and Chief Executive Officer of Verimatrix, stated: “In the first quarter of 2021, Verimatrix delivered stable revenue despite headwinds in royalties in the context of Covid-19 and the short-term impact of the transition to our subscription business including for SaaS implementations. During the quarter, we saw good momentum in signing new licences in general and were able to regain part of the new licences that had been delayed in the fourth quarter of 2020 in particular. Although the context remains volatile, we see it improving for our customers, giving us the confidence that we are well on track to achieve our annual objectives. At the same time, we continue to expand our Cloud-based offerings, as exemplified with the release of the Verimatrix Multi-DRM Core service earlier in April 2021.”