Monica Gould – Investor Relations-The Blueshirt Group Ed Terino – Chief Executive Officer Marek Kielczewski – Senior Vice President, CPE Software Tony Dias – Chief Financial Officer

Jaeson Schmidt – Lake Street Capital Markets Steven Frankel – Dougherty & Company Greg Mesniaeff – Drexel Hamilton Matt Galinko – Sidoti Hamed Khorsand – BWS Financial

Greetings and welcome to the First Quarter Fiscal 2017 Earnings Conference Call for SeaChange International. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host Ms. Monica Gould, Investor Relations for SeaChange International. Thank you, Ms. Gould. You may begin.

Thank you, Tim. Good afternoon, everyone, and thank you for joining us. SeaChange released results for the first quarter of fiscal 2017 ended April 30, 2016, today after the market closed. If you would like a copy of the release, you can access it on the IR section of our website at schange.com/ir. With me on today's call are Ed Terino, Chief Executive Officer; Marek Kielczewski, Senior Vice President of CPE Software; and Tony Dias, CFO. This call is being webcast and will be archived on the Investor Relations section of our website. Before I begin, I'd like to remind you that the information we're about to discuss today may include forward-looking statements, which are based on current expectations that are subject to a number of risks and uncertainties that may cause actual results to differ materially from expectations. These risks are outlined in our SEC filings including our annual report on Form 10-K, which was filed on April 13, 2016. Any forward-looking statements should be considered in light of these factors. Additionally, this presentation contains certain non-GAAP or adjusted financial measures as defined by the SEC. We have provided a reconciliation of these measures to the most directly comparable GAAP measures in tables attached to the press release. And with that, I'd like to turn the call over to Ed for opening remarks.

Thank you, Monica. Good afternoon, everyone, and thank you, for joining SeaChange's call today. Our first quarter performance was in line with our expectations and the guidance we provided you on our last earnings call. Revenues of $21.6 million declined 7% year-over-year, driven largely by a decrease in Nucleus, our in-home related services. However, overall product revenues increased by 33% over the first quarter of last year, led by our continued progress in migrating our remaining Axiom customers to Adrenalin. We were able to close two more transactions in the quarter and increase our pipeline for Q2 of fiscal 2017. I am very pleased that we have made substantial progress in building our pipeline, strengthening our product road maps, solidifying our product release schedule, expanding our sales and marketing capability, including improved lead generation, and optimizing our operating expenses and gross margins. Now, I would like to briefly touch on our progress on some of the strategic initiatives that I outlined on last quarter's call. With respect to our businesses including video platform, or Adrenalin and asset flow, advertising or infusion, and user experience or in-home, we increased our sales and marketing resources and lead generation capability. The results of these initiatives have been an improvement in our pipeline, which we believe will result in revenue growth in the second half of fiscal 2017. Our video platform and advertising – on the video platform and advertising product front, we are making good progress on building our product road maps and introducing new products to help our customers monetize their video assets, such as enabling our existing products to operate in a cloud environment. We believe that these developments will help to broaden our customer base, as well as increase our penetration into our existing customers. More specifically, we will be announcing a new release of Adrenalin globally this month. We will also be announcing a release of Infusion, our linear and VOD ad insertion product, for Rave in July. We believe that this announcement will position SeaChange to be the only solution provider that can provide both linear and VOD-based dynamic ad insertion for OTT. In the second half of fiscal 2017, we will be announcing a new release of our asset flow content management system that allows existing customers to upgrade and new customers to more efficiently and effectively manage the preparation and distribution of their content through their multi-channel and multi-screen environments. By the way, all of our product announcements for our video platform and advertising will be fully deployable in either a cloud environment or an on-premises for our customers. During the first quarter, we maintained our focus on improving our go-to-market capabilities. As part of these efforts, we began to build out an inside sales team to increase lead generation and help drive revenue growth and we hired a dedicated OTT sales team. As a result of these initiatives, we have increased our sales leads and begun to see more robust pipeline for our Rave, cloud-based OTT product offering. While we do not expect to see significant revenue contribution from Rave in fiscal 2017, our goal is to build and convert that pipeline into double-digit customer base by the end of fiscal 2017. With respect to optimizing operating expenses and gross margins, we completed the restructuring of our Timeline business during the first quarter and completed the acquisition of DCC Labs based in Wausau, Poland, early in the second quarter. We believe that these actions together will yield approximately $15 million in annualized cost reductions and will improve our gross margin performance. We expect to begin to realize significant portions of these benefits associated with these initiatives in the second half of fiscal 2017. These actions are intended to drive SeaChange's intermediate term financial model that we introduced last quarter, including attaining consistent double-digit year-over-year revenue growth and achieving double-digit operating margins within a two to three year timeframe. Lastly, we attended the INTX television conference in Boston in mid-May, which was very productive as we held numerous customer meetings that helped build and solidify our product – our revenue pipeline. Immediately following, SeaChange held a two day America's Customer User Meeting with a large number of cable and Telco service providers represented. The user meeting was the first user event that we have held since 2014, and it was an effective forum for SeaChange to present our product road maps for video platform, advertising and user experience and to get customers reactions, recommendations and priorities. The product management and engineering teams are now modifying our product road maps and updating the engineering release schedules for fiscal 2017 and beyond. The America's User Meeting is the first effort in our greater commitment to engage with our customers on a more consistent basis. We are planning a similar user meeting for EMEA later this year. Further, we are completing quarterly business reviews with our major customers in 2016 to engage with them on their road maps for their future video distribution platforms. We believe these initiatives will help improve our revenue visibility and forecasting capabilities. Now, I would like to introduce, Marek Kielczewski, SeaChange's new Senior Vice President of Consumer Premise Equipment, who was the founder and CEO of DCC Labs, which SeaChange acquired on May 6. And Marek will lead SeaChange's in-home business unit. We believe the acquisition of DCC Labs significantly strengthens SeaChange's ability to deliver a market leading user experience for the delivery of multi-screen digital media, not only for our RDK-based Nucleus platform, but also for other platforms such as Android TV and Linux, while substantially reducing our development cost, as well as our customers' implementation costs and time to market. I've asked Marek to join our call today to introduce himself and provide a brief overview of our strategy for enhancing SeaChange's product offerings related to the user experience. Marek, please go ahead.

Thanks, Ed. I'm pleased to provide some early insights on our progress since the acquisition last month of the company I've led for several years, DCC Labs, a multi-screen device software developer and integrator. My background includes extensive business and product development experience in software for digital TV and IPTV. I co-founded DC Labs and was the company's CEO from the beginning in 2009. Previously, I had been COO and co-founder of SentiVision, an IPTV middleware company that pioneered IP-VOD and IPTV and provided software for consumer IPTV devices in Japan from 2001 onwards, which was later sold to Sony. With the acquisition, SeaChange in-home now has over 70 former DC Labs engineers who are based in Warsaw, Poland. This team has a track record of commercially deployed product and consulting projects for service providers, systems integrators, technology providers impacting millions of IPTV cable and satellite set tops, mobile devices and smart TVs. Our develop and expertise spans the television industry's reference design kit, the RDK, as well as Android and Linux operating systems, immediately expanding the scope of SeaChange in-home product development capabilities and its overall market opportunity. We demonstrated valuable synergies from the outset of our collaboration with SeaChange to accelerate and improve product performance for the company's large cable television service provider customers. Late in calendar 2015, SeaChange engaged DC Labs to support a major set top development project for large European cable operator, resulting in rapid deployment of a user interface and an RDK2.1-based home video gateway for field trial tests within four months of engagement. We're pleased to have delivered one of the industry's first RDK2-based deployments. SeaChange then engaged DC Labs to assist with improving quality and providing enhancements for another European cable operators deployed [ph] home video gateway. Following the success, we worked in earnest to bring DC Labs together with SeaChange for long-term success. A global cross functional team has been executing the integration of DC Labs with SeaChange, focusing on all aspects of the business from product and software engineering, logic management, technical support to customer engagement and quality assurance, as well as sales and marketing. We see very good progress being made thanks to the fact that the Warsaw team has a working history with SeaChange and that the engineers within in-home are all aligned on common project and technology. With the integration, we are also building upon some of the industry's commonly accepted best practices such as agile development and DEV ops. I'm presently developing a long-term go-to-market plan to take the in-home business forward. The focal point is on embracing next generation user experiences and offering products that will allow our customers to harmonize video consumption across a broad range of devices and platforms that are on the market today. We want to make it easier for our customers to deploy our client software and to field with a cross-platform, attractive and intuitive UI. We also want to build upon the extensive intelligence behind Nucleus to productize existing features into a ready to launch commercial offering. And so my goal is to present a family of feature rich user interface products which can be quickly deployed and which leverage the key feature set of our existing Nucleus and video platform products. Based on my first few weeks since joining SeaChange and meeting with employees and customers globally, I'm highly enthusiastic about our opportunity to optimize the operations of the in-home business while improving product performance and expanding our reach in new market segments, geographies and devices. Thank you for the opportunity to provide an update on SeaChange in-home. I'll now turn the call back to Ed for his additional remarks.

Thank you, Marek. In order to provide greater clarity for our business in how we'll achieve revenue growth in fiscal 2017 and beyond, we are introducing new revenue breakdowns on a quarterly basis today. These breakdowns are included in a supplemental schedule to our Q1 fiscal 2017 earnings press release. Our CFO, Tony Dias, will discuss these expanded revenue breakdowns on this call. As we go forward, we will expand our reporting to include key metrics that drive each category of revenue and we will also breakdown - provide breakdowns for gross margins for each revenue category. Before I turn the call over to Tony for his financial report, I want to address the Liberty Global revenue outlook issue that was raised on last quarter's earnings call. Since our last earnings conference call, through a continued engagement with Liberty Global, we have affirmed our understanding of the scope of our services and future revenue opportunity. Liberty continues to be a significant customer to SeaChange and we expect that Liberty will continue to generate about $20 million in revenues annually over the next three years to four years. We expect that 20% of these revenues will be generated from licenses for both Adrenalin and Nucleus. With that, I will turn the call over to Tony to walk you through our financial results and provide our outlook for the second quarter and full fiscal year. Tony, please go ahead.

Thank you, Ed. Before I review our first quarter results, I'd like to note that in order to provide greater visibility into our business, we are now providing additional revenue detail on a quarterly basis, which I'll discuss in my prepared remarks. Starting with this quarter, we're presenting a more detailed revenue breakdown. Specifically, we have broken out product revenues into video platform, which includes our Adrenalin multi-screen back office software and asset flow content management system software. Advertising, which includes our Infusion software. User experience software, which includes Nucleus, Nitro and recently acquired DCC Labs products. Hardware, which includes hardware associated with advertising and video software deployments and third-party products such as CDN, digital rights management and other categories. We have broken out professional service revenues into maintenance and support, professional services for our video platform and advertising, user experience, which includes Nucleus related services and SaaS. Today, we're providing eight quarters of history on these metrics so you can better track our recent performance. Please see our earnings press release for this additional disclosure. Turning to our results for the first quarter fiscal 2017. Total revenues was $21.6 million, at the high-end of our revenue guidance range, but down 7% from a year ago revenue of $23.2 million. Product revenue equaled $4.2 million in the first quarter or 19% of total revenue, and rose 33% from $3.2 million in the year ago quarter. The increase in product revenue is primarily driven by Axiom to Adrenalin upgrades by North American customers. Video platform software doubled year-over-year to $2.6 million, reflecting the success of our upgrade strategy and accounted for 61% of total product revenue. Advertising software revenue was flat year-over-year. User experience software revenue totaled $400,000 compared to a negative $100,000 last year due to a reclassification of a prior period revenue from product to service. Hardware revenues decreased from $1.4 million to $500,000 as last year included legacy VOD streamer revenues to a customer in South America. The third-party product revenue was relatively flat year-over-year. Total service revenues equaled $17.4 million, a 13% decrease from $20 million in the prior year quarter. The decline was primarily due to a 62% decrease in user experience revenue from $5.2 million in the first quarter of fiscal - prior fiscal year to $2 million as a result of lower services from several customers in North America totaling $1.2 million, and two European customers totaling $2 million. Professional services revenue related to our video platform totaled $4.7 million and was slightly down 4% year-over-year. SaaS revenue nearly doubled year-over-year due to our Rave rollout with a European OTT customer. Maintenance revenues totaled $9.7 million or were up 3% from $9.4 million a year ago. Maintenance revenues accounted for 45% of the total revenue in the quarter, up from 41% in the prior year quarter due to support revenues from user experience. Sales to international customers accounted for 61% of total revenue compared to 49% in the prior year quarter. We had one customer in the quarter which accounted for 32% of total revenue. Our blended non-GAAP gross margin was 44% in the first quarter, flat with the prior year quarter. Product gross margins were 63% in the first quarter compared to 47% in the prior year quarter due to a lower hardware revenues. Service gross margins were 40% in the first quarter compared to 44% in the first quarter of last fiscal year, reflecting lower utilization of our Americas professional services organization and lower realization as we were not able to complete certain statements of work in order for us to recognize revenue this quarter. Non-GAAP operating expenses for the quarter of $16.3 million were down 4% from $17.1 million a year ago, driven by lower labor costs and a decrease in headcount relating to our restructuring on Timeline Labs during our fourth quarter, as well as restructuring efforts that we implemented in the first quarter last year. First quarter fiscal 2016 R&D expense reflected capitalization of R&D of $750,000, which we did not experience in first quarter fiscal 2017. We recorded restructure and severance charges of $1.8 million in the first quarter, primarily due to the restructuring of our Timeline Labs operation as we anticipated and for severance to our former CEO. With respect to the Timeline Labs cost reduction actions as well as the transition of our user experience development from Milpitas [ph] to our recently acquired DCC Labs organization in Poland, we'll begin to yield benefits starting in the second half and contribute to improved gross margins and reduced R&D expenses. We generated a non-GAAP loss of $0.20 per basic share, unchanged from a year-ago quarter. We ended the quarter with cash and cash equivalents of approximately $64.5 million and no debt. We used $5.3 million of cash for working capital needs and used $1.3 million of cash for severance, capital expenditures and the Timeline operations. Our DSOs excluding our unbilled receivables totaled 90 days versus the 84 days from last quarter. A portion of the increase in DSOs is attributed to the decrease in sequentially quarterly revenues. Including the unbilled receivables, our DSOs were 139 days. We expect to make significant progress in the second quarter in the collection of our unbilled receivables as we have several projects that are expected to reach milestones that will result in invoicing during the second quarter. As Ed already discussed, on May 6, we acquired DCC Labs for approximately $8 million in cash and SeaChange common stock. The purchase price amounted to $5.4 million cash, paid in cash in the second quarter and $2.6 million paid in shares of our common stock as a deferred payment. We anticipate that this acquisition will achieve approximately $8 million in annualized cost savings. Based on the actions taken in May to reduce our in-home workforce, we expect to realize approximately $5 million of savings in fiscal 2017. This reduction in the workforce is a result of the transition by user experience development from Milpitas to DCC Labs will result in the charge of a $1 million in severance and other restructuring charges due in the second quarter of fiscal 2017. Now, I'd like to turn to our outlook for the second quarter and full fiscal year. We anticipate second quarter of fiscal 2017 revenues to be in the range of $23 million to $25 million, and non-GAAP operating results to be in the range of a loss of $0.10 per basic share to a loss of $0.15 per basic share. For the full-year, we continue to expect revenues in the range of $110 million to $120 million, and non-GAAP operating income to be in the range of $0.05 to $0.15 per fully diluted share. As anticipated, we expected to burn cash during the second quarter due to projected operating loss as well as the acquisition of DCC Labs. But we continue to expect that we will be cash positive for fiscal 2017, excluding the acquisition. With that, I'll hand the call back to Monica. Thank you.

Thank you, Tony. Tim, could you please provide instructions for the Q&A session?

Absolutely. [Operator Instructions] Our first question comes from the line of Jaeson Schmidt of Lake Street Capital Markets. Please proceed with your question.

Hey, guys. Thanks for taking my question. I guess just first of all, with you maintaining your outlook for fiscal '17 and factoring in the July quarter guidance, that assumes a pretty steep ramp in the second half. Just wondering if you could comment a bit more on what gives you confidence in that forthcoming ramp?

Absolutely. Thanks. We have really strengthened the pipeline and I would just tell you that we have a number of fairly sizable transactions in the pipeline. We have several that are in the mid seven digits and we have several that are in the mid eight digit range, and we believe that we'll be able to convert some of those deals in the pipeline into booked business.

Okay. And did I hear correctly, you anticipate Liberty Global still to contribute $20 million annually going forward?

Correct.

Okay. Is there any potential upside to that figure or is that going to remain fairly stable?

I think the upside will be a function of our ability to perform and I do believe that if we are successful at executing for them, that there will be some improved opportunities there.

Okay. And then just the last one and I'll jump back into queue. How should we look at gross margin going forward?

Good question. So with some of the changes we've already announced, some of the cost for the businesses that were sort of addressed were included in gross margins. So we expect some of the savings, in fact, a significant portion of the savings related to the reductions we made for the in-home business to reflect themselves in the gross margin. So we expect to see gross margins moderate up through the 50 into really the mid-60s.

Okay. Thanks a lot, guys.

Our next question comes from the line of Steven Frankel of Dougherty & Company. Please proceed with your question.

I go back to the guidance again. So even if I assume you're going to get these transactions and get to your revenue number, I have a hard time getting to high enough earnings number in the back half, given you're in the hole $0.30 some in the front half. So what kind of run rate and operating expenses should we be assuming in the back half?

Yes, I think in the quarter we were in the 16s and I think that will have to move down into the low 15s with the margins at what I just responded to.

Okay. And you say you'll have consolidated gross margins in the mid-60s in the back half?

Correct.

Okay. Where does the Comcast service agreement show up under your new revenue breakdown?

We don't have really a Comcast service arrangement. Are you talking about legacy maintenance support, do you mean?

Well, my understanding was in the last several years you've been paid some kind of fee around the X1 to do professional services or something related to that. Is that no longer the case?

I mean, any revenue related to X1 would be in the user experience revenue line.

For professional services, correct?

Correct.

Right. And then where is the Liberty of this Liberty revenue that you expect, the bulk of that $20 million is going to be services, again, where does that show up?

It would be actually really in four categories. So it would be in professional services for video platform, for our back office. It would be in professional services for user experience. And then it would be in product revenues for Adrenalin or video platform and it would be in product revenues for our user experience.

Okay. You mentioned you made some progress in converting Axiom - customers from Axiom to Adrenaline. Can you kind of give us an update on where you are in terms of backlog of that business today, what roughly you have ahead of you? And in a related subject, we've talked before about the fact that you think a lot of your Adrenalin customers have expanded well beyond their original license agreements. And where are you on going back to those customers and trying to collect additional revenue?

Sure. With respect to Axiom to Adrenalin migrations, we had roughly about mid-40s for the number of targets and to date, we've gotten nine of those converted, of the remaining amount, we have currently about 11 quotes outstanding and we'd like to convert as many of these other accounts as we can. So we have a dedicated sales organization focused on this. I think we've had great interaction and engagement with our customers and I'm optimistic that we're going to be able to not only get the quotes we've submitted converted, but get additional quotes out and get those converted over the next seven quarters or eight quarters.

And did you back off the Jay's deadline of kind of end OI thing that product to force people to upgrade or have you changed…

Well, I think that obviously if people are evaluating an upgrade and they are in the process of going through that evaluation and that transition, we would certainly continue to support them.

Okay. And on my question on trying to get additional revenue out of the Adrenalin, existing Adrenalin base on the current release, where are you on that?

So that's a good question. So we are announcing our next release of Adrenalin, we hope that that release will be adopted by a number of our install base customers and that will drive license revenue as they adopt the next release of Adrenalin. So that's how we expect to derive license revenues from our existing Adrenalin install base.

And is it your anticipation that you would grow the license revenue per customer because you would get paid for seats today which you said you haven't been getting paid for?

It's not a matter of getting paid for it. We would certainly look at the seats that were incremental and get paid for those, but we think that we have a good enough handle on the number of deployed seats that we've gotten the licenses we're entitled to. This would be a license revenue associated with the upgrade.

Okay. I'll jump back in the queue.

Our next question comes from the line of Greg Mesniaeff of Drexel Hamilton. Please proceed with your question.

Yes, thank you. On that subject of Axiom to Adrenalin conversions, I just want to make sure I've got these data point’s right. You said your target was in the mid-40s as far as the number of customers to convert, is that right?

We started off with roughly about mid-40s for the number of eligible customers. Not all of them, some of them are very small and wouldn't be eligible to do a conversion. So of that, we probably would maybe have somewhere around 8 to 10 that might not be eligible, so that puts us down into the mid-30s that would be eligible. So we've done nine. We probably have another mid-20s kind of range to go and we've got 11 quotes outstanding.

Got you. And what timeline are you using as a benchmark for the ramp?

I'd like to get them all converted next quarter.

I know. But I mean realistically, what are some of your assumptions on the conversion rate?

I would tell you that in the industry we are operating, which is MSOs, decisions are very hard to predict. I mean, the timing of decisions are hard to predict. I would like - we've been able to get from one to two to three. I'd like to sees us keep it at two to three and maybe even get it up to even a little bit higher than that. But it's difficult to forecast because decisions are not very predictable. They are not indicators that you can identify that predict the timing of closure.

Sure. And when you look at the nine customers that have been converted, what was the average length of a decision cycle?

It varied quite a bit.

It varied. Okay.

Some were three months to six months, some were 6 months to 12 months.

Got it. Okay. So it's fair to say that maybe for lack of - on average, it's a nine month decision cycle?

Well, I think the way to look at it is we only have the product available until the end of 2017. So we would expect people to be making their decisions in that time frame.

Got you. Okay. Thank you.

[Operator Instructions] Our next question comes from the line of Matt Galinko of Sidoti. Please proceed with your question.

Hey, good afternoon. My question is, Ed, you alluded to a dedicated OTT sales team as well as some goals in terms of customer count exiting the year. I was hoping you could go over how many people you have dedicated to OTT and if you could talk about your goals for the size of the customers you hope to have signed up, is it a range or is it on a smaller size for now?

Yes, I mean, we have less than five people dedicated to this. We're getting some increase in lead generation. We're increasing the pipeline. I think the pipeline is bigger today than it was when we had our last call. We've actually had a couple of opportunities that have been able to come over the finish line. Hopefully, we'll have some news on that soon. But the goal is not really to try to drive through significant amount of revenue. I think you can see what we reported in the quarter on the schedule we provided. I think the goal is to build out the sales team. We'd like to expand it to a much larger organization, probably somewhere around six or seven full time people. And we certainly would like to increase the pipeline and that's really what we're setting as a goal this year.

Okay. And in terms of the ones you might be able to announce in the not too distant future, I guess, can you point to how competitive those wins were and what kind of got you the nod?

It was a European customer and it was very competitive and it took a long time to get the deal through the decision process. And I think it was overall the features and functions that we provide, especially some of the prospective capabilities we're going to have in advertising, because the audience base for this particular customer is an audience base that they would advertise to. So that was really what drove the decision.

Got it. Thank you.

Our next question comes from the line of Hamed Khorsand of BWS Financial. Please proceed with your question.

Hi, guys. First off, the transition that you were talking about last quarter and now you are talking about more this quarter with more engineers, especially now in Poland and Europe, is that accelerating the amount of deals available to you as far as the pipeline goes or is that causing some customers to actually hold off and try a reassessment? How's your relationship with that?

No, it's not causing customers to hold off. Actually, it's working to our benefit. So just as an example, we're able to deliver solutions faster. I think the example that Marek discussed, we were able to deliver a field test in-home gateway in about a five month timeframe. So that results in us actually realizing revenues faster and being able to generate more business. So the objective of trying to strengthen the engineering capabilities is to be able to develop more products in a shorter timeframe at a lower cost that give our salespeople more things to sell.

Okay. And then as far as the - you were talking about engaging the customers in meetings. Is that - in OpEx in any way?

An increase in OpEx, well, certainly, our sales and marketing expenses are increasing as you can see from the first quarter results, compared to what we had in the fourth quarter. We expect sales and marketing to continue to increase. But frankly, Hamed, we weren't engaging our customers as thoroughly and as frequently as we need to. And what we've learned is that when we engage our customers, we end up with opportunities and that's really the best news that I can report to you today.

Okay. And my last question is given the new product updates that you've been talking about, how does that contribute to guidance, what are you expecting that to be as far as the guidance benefit?

Well, we currently have a fairly sizable number of installed Adrenalin customers and some of the features and functions that we're putting into the new releases are designed to help our customers drive their own revenues. So for example, one of the key capabilities of the next release of Adrenalin will be 4K TV and another key feature will be what we call our business management system. Our business management system allows our customers to provide more promotional offers for VOD. That drives higher revenues. So the things we're really focused on are helping our customers to implement these features that help them get more revenues. So we think there's an excellent opportunity for a lot of our customers to do these upgrades. In fact, some of the sizable deals in our Q2 and Q3 pipeline are related to these upgrades.

Okay. Thank you.

[Operator Instructions] Our next question comes from the line of Steven Frankel of Dougherty & Company. Please proceed with your question.

Just to go back to the DSO issue, which on a consolidated basis continued to creep up. Would it be possible going forward to get a little more transparency and you breakout the unbilled from the billed receivables, so we can track that better on a quarterly basis?

Yes, absolutely. I think we do it on our 10-Qs and 10-K and I think we summarize it on our press release. So we'll break that out next quarter.

Okay. I think that's all I have. Thank you.

Thanks.

There are no further questions in the audio portion of the conference. I would now like to turn the conference back over to Ed Terino, the CEO for closing remarks.

Well, thank you, everyone, for joining us today and your continued support and interest in SeaChange. We look forward to an improved second quarter and improved second half of fiscal 2017 and we'll look forward to talking to you again on our Q2 fiscal '17 earnings call. Good night.

This concludes tonight's conference. Thank you for your participation. You may disconnect your lines at this time.