Aferian announces results for the year ended 30 November 2021.

Aferian plc (LSE AIM: AFRN), the B2B video streaming solutions company, announces its results for the year ended 30 November 2021.

Strategic and Operational Highlights

• Strong progress against our 2025 strategic goals in the first year of execution
• Continued focus and investment to drive growth in recurring software revenues and conversion of the streaming and Pay TV convergence opportunity
  • 24i : continued focus on building recurring revenues and migrating subscribers from legacy systems to 24i’s more flexible and extensible platform
  • Amino : grew revenues by 19% to $75.1m, maintaining strong margins and cash generation
• · Strategically important customer deployments achieved during the period across 24i and Amino:
  • 24i: deployed 24i’s streaming platform for new customers including the Canadian Hockey League and Cinessance, a subscription video on demand service, which launched in November 2021 as the ‘Netflix of French Film’
  • Amino: multiple new deployments of Amino’s Android TV platform including at Go Malta and CableNet in Europe, Optage in APAC and Conway, Home Telecom and Hay Communications in North America
• Successful integration of Danish streaming and Pay TV platform specialist, Nordija (now part of 24i), immediately adding $2.1m ARR upon acquisition.
• Continued product innovation and success, 24i’s video platform named best OTT Video Platform in the Streaming Media European Readers’ Choice Awards, and Amino’s Hybrid Android TV streaming device securing CSI Magazine’s Award for Best Customer Premise Technology 2021.

Operational review

The Group has two operating companies: 24i and Amino.

24i

24i offers a robust technology platform that streams TV and video programming to any type of screen. 24i has a 12-year market-leading position and works with customers like NPO, Telenor, Pure Flix and Broadway HD.

24i continues to focus on building recurring revenues and has reported a significant year-on-year increase of 61% in exit run rate ARR (29% increase year-on-year on an organic basis). As previously highlighted, we will continue to invest in both sales & marketing and in our products to build our sales pipeline.

We continue to migrate customers to the latest version of our industry-leading end-to-end streaming platform, which was launched last year. The new platform enables our customers to get their TV and video content to consumers faster and more cost-effectively. In December 2021, we unveiled 24i Mod Studio as the new identity and go to market name for our new platform. The new name and image are designed to better articulate the flexibility and modularity of the platform as well as its ability to rapidly meet the end-to-end needs of our target markets with turnkey solutions. Generally, across our platforms, customers are now benefiting from the worldwide shift to streaming and consumer demand for more flexible viewing powered by our platform.

24i continues to grow recurring revenue organically. This is in part a reflection of low customer churn but also the success that customers enjoy from using the 24i video streaming platform which has led to increased use of recurring software licenses. For example, during the period, we have seen growth in per-subscriber revenues from customers like Delta Fiber in the Netherlands who have migrated more of their consumer base to the 24i Pay TV streaming platform from legacy systems.

With other customers, growth has come from use of an increased range of 24i solutions. For example, the convenience of 24i’s cross-platform application codebase has enabled customers like KPN to upgrade their Smart TV applications and expand their offering to new devices including Android TV screens.

Likewise, many of our existing customers are using more of 24i’s products (with associated license fees) as they transition away from their legacy, custom-built applications to using our productized solution instead. We have also enhanced our content management system to allow customers to manage the processing of their video files from the same web tool they use to promote their content and manage their user experience. This helps our customers to more clearly see the benefits of our end-to-end solution and in turn helps our sales team to more clearly articulate the benefits of our solutions.

During the year we implemented our video platform for the Canadian Hockey League, and Cinessance, an SVOD service that launched in November 2021 with the aim of becoming the ‘Netflix of French Film’. The integration of Nordija was completed in 2021 and 24i enters 2022 with a strong product portfolio, customer base and pipeline of opportunities with which to continue to grow recurring revenue.

Amino

Amino seamlessly connects Pay TV to streaming services and provides the features required in a multiscreen entertainment world. Amino has a 20-year heritage with customers like PCCW, Cincinnati Bell, T-Mobile NL and Entel.

During the year, Amino grew revenues by 11% to $75.1m and maintained its strong margins and cash generation. By offering services that converge linear TV and streaming, Amino delivered several new deployments of its Android TV platform in the period. These included Go Malta and CableNet in Europe, Optage in APAC and Conway, Home Telecom and Hay Communications in North America. These deployments showcase our ability to roll out a next generation TV experience as operators, such as Disney+, look to combine the best of both worlds for linear TV and streaming apps.

During the year, Amino completed the implementation of our Android TV platform and Netflix integration with PCCW in Hong Kong to enable its Now TV video service. This was done using Amino’s Hailstorm Partnership with Netflix. This partnership cuts the time to integrate Netflix from as long as 12 months to only a few weeks.

Our leading SaaS device software management, customer support and analytics solution continued to grow strongly. 29 new customers deployed this solution in the year and the user base grew by 53% year-on-year. We regard this solution as a key differentiator in our competitive landscape.

The global component supply chain shortage continues to be a challenge for businesses globally, though one we are navigating well. This is a market-wide issue, and the impact of COVID-19 continues to be seen in our supply chain. We have seen extended lead times and cost increases of key components such as semi-conductors in the year. Despite these challenges, we shipped approximately 5% more devices in 2021 compared to 2020. We continue to actively manage the situation and are working closely both with customers on longer-term supply arrangements to enhance visibility and with suppliers to ensure timely deliveries of materials. As we enter 2022, we therefore have increased visibility of orders.