Following an active start to 2015, during which Arris entered a $135 million co-venture with Charter Communications to purchase cloud-based video software company ActiveVideo, then put down a whopping $2.1 billion to buy competitor Pace LLC, company president and CEO Bob Stanzione put the acquisitions in context for investors.
Stanzione (Source: Arris)
"We believe the combination of the ActiveVideo Network software assets together with the Arris cloud assets, and the additional assets coming later with Pace will give us a substantial software base with which to grow," Stanzione said, delivering Arris' first quarterly earnings report since making both acquisitions.
Discussing its 65 percent share in ActiveVideo, Stanzione noted the company's pay-TV client base, which not only includes Charter (NASDAQ: CHTR), but Cablevision (NYSE: CVC), Liberty Global and Deutsche Telecom. ActiveVideo's software also delivers ads for American Express on Roku.
Stanzione noted that Pace delivers Arris "scale and integrates us into the satellite video sector."
The combined company, once it closes its merger in the latter half of 2015, will have combined revenue of $8 billion.
For the first quarter, Arris generated revenue of just over $1.2 billion, roughly flat with the year-ago time period.
"We've seen overall spending levels down from prior periods primarily due to the distractions and uncertainties associated with industry dynamics," Stanzione said. "And certainly the news in the last few days may extend that uncertainty. However, we feel great about our position in the market. We're going through a period of change that is having what we feel is a temporary effect on our business and we feel confident that the underlying trends and our strong positioning bode well for the future."
Asked specifically about the termination of the Comcast (NASDAQ: CMCSA)-Time Warner Cable (NYSE: TWC) merger, he remarked, "The news is just so new, it's hard for us to say on this evening's call what we expect to have happen. I can say we're very well positioned with Comcast and Time Warner with their next generation product."
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