Sigma Designs' Q1 bottom line boosted by IPTV, set-tops, home connectivity

IPTV, both directly and peripherally, proved to be a good business for connected media platform developer and system-on-a-chip (SoC) provider Sigma Designs in the first quarter.

The company reported net revenues that were up $8.3 million to $52.5 million, 19 percent higher than the previous quarter and 31 percent higher year-over-year.

Set-top boxes, which use the company's silicon, are a leading reason why business is turning upwards, said Mustafa Ozgen, vice president and general manager during a conversation with analysts, noting that the set-top business "is being driven by three major trends, which include support for new ultra HD or 4Kx2K design resolution; more over-the-top Internet access capabilities; and a broadening array of IPTV hybrid set-top box configurations. We are also continuing to experience renewed success in second generation Microsoft (Nasdaq: MSFT) Mediaroom-based set-top box deployments."

In the first quarter, Ozgen said, the company began shipments of Mediaroom-certified set-tops to its Tier 1 OEM partners for deployment, not surprisingly, in emerging markets internationally. These markets are more likely to seek out advanced IPTV features, including the ability to deliver OTT content through the IPTV channels, than established providers in incumbent markets.

"We are experiencing increased new design engagements in the hybrid IPTV set-top box space that should lead to future deployments in emerging markets," he continued. "For example, our OEM partners started their pilot shipments to various operators in Vietnam."

That, Ozgen added, will be a continued trend throughout the year as the product line transitions from a traditional "DVR type of set-top box" to "new generation boxes … being certified and coming to the market as we move on."

The silicon for these new boxes, he said, is being certified on a "month-to-month" schedule so OEM partners will have access to various product configurations to meet changing demand throughout the year.

"We should be able to see growth from this point on forward in Q2, Q3 and Q4," he continued.

Also contributing to the company's success--and peripherally related to IPTV--was a growing home connectivity segment.

"We began shipment of HomePlug AV and Z-Wave component in support of AT&T's announced deployment of the AT&T Digital Life program (and) began shipping our Mediaroom-certified … SoC to key OEM and service providers in support of the transition to the next generation," said Thinh Tran, founder, CEO, president and director.

Looking at the whole picture, Tran said, "We feel we are in exciting markets and are confident in our ability to deliver technology innovation that will enable future growth along with continued profitability."

For more:
- see the earnings release (.pdf)
- and this analyst call transcript

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