Good afternoon and welcome to SeaChange's Fiscal First Quarter 2021 Conference Call for the period ended April 30, 2020. My name is Kevin, and I'll be your operator this afternoon. Joining me for today's call is the Company's Chief Executive Officer, Yossi Aloni; Chief Commercial Officer, Chad Hassler; and Chief Financial Officer, Michael Prinn. After the market closed, SeaChange issued its financial results for the fiscal first quarter of 2021 in a press release, a copy of which is available in the Investors section of the Company's website at investors.seachange.com. To accompany today's call, the Company has made available its prepared remarks along with a supplemental slide deck, both of which are posted in the Investors section of SeaChange's website. Management encourages you to download the slide deck if you haven't done so already. Before we begin today's call, I'd like everyone to please take a note of the Safe Harbor paragraph that is included at the end of today's press release. This paragraph emphasizes the major uncertainties and risks inherent in the forward-looking statements that management will be making today. As we have indicated, forward-looking statements are based on management's current expectations, and are subject to a number of risks and uncertainties that may cause actual results to differ materially from expectations. These risks and uncertainties are also outlined in the Company's SEC filings, including its annual report on Form 10-K and quarterly reports on Form 10-Q. Any forward-looking statements should be considered in light of these factors. Additionally, this presentation contains certain non-GAAP financial measures as that term is defined by the SEC in Regulation G. Non-GAAP financial measures should not be considered in isolation form from, or as a substitute for, financial information presented in compliance with GAAP. Accordingly, SeaChange has provided a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures in the Company's earnings release issued today. I would like to remind everyone that this call is being recorded and will be made available for replay via a link available on the Investor Relations section of SeaChange's website. Now I'd like to turn the call over to SeaChange's CEO, Mr. Yossi Aloni. Mr. Aloni, please go ahead.

Thanks, operator. Good afternoon and thank you for joining our first quarter of fiscal 2021 conference call. It's been nine weeks since we held our last earnings call. As we all know now, early April marked the initial stages of the global pandemic. At the time of the call no one could have predicted the intensity, duration and ultimate impact to the world economy. On that call, I talked about how COVID-19 created uncertainty and reduced visibility for SeaChange in the near-term, but also how the pandemic was dramatically transforming the TV video industry. COVID-19 has also accelerated the industry shift in how content is being consumed at home, which has resulted in a robust pipeline of opportunities and continued interest in our Framework solution as operators look to preserve their revenues and reduce their operating expenses. Both secular drivers remain very much intact and bode well for SeaChange business over the medium and long-term. Unfortunately, the negative effects of COVID-19 have been longer lasting than we initially expected, with many of the countries in which our prospective customers are based continuing to be in various stages of government-mandated lockdown. This dynamic significantly slowed customer engagement with the new remote work environment. At the same time, many customers are focusing their resources on remote networking support and servicing the growing demand for bandwidth due to the higher network usage caused by the COVID-19 confinement. As a result, several of our current and prospective customers temporarily paused their technology purchasing and deployment decision of our Framework solution. To be clear, our pipeline remains robust, and we have not lost any business. Our customers have simply delayed making a final decision regarding their planned engagements and deployments, pending the return to a more typical operating environment. In the face of the intensifying COVID crisis, we are remaining focused on employee safety, ensuring business continuity and supporting customers. We have also took immediate actions and institute a plan to manage the business through the crisis and implementing additional cost-savings measures. These decisive moves have allowed us to shift to a leaner, more focused operation, as well as better align our strategy with current market demands without impacting our go-to-market motions. Combined with our cash position of nearly $10 million, these actions provide us with enough resources to execute our growth strategy. We are confident in our business and remain committed to our long-term strategy. Despite the headwinds we experienced in Q1 and continue to experience in our current quarter, we are encouraged by our initial success securing our first Framework win that included our new Ad Insertion module. As I’ve talked about, monetizing unsold ad inventory during this difficult time is a tremendous value-add that our Framework platform can provide. Research firm Magid recently reported that TV stations experienced a 40% to 60% loss in advertising revenue in April and May due to COVID. And Broadcast and linear TV hasn’t been the only platform affected. Conviva, another industry analytics and research firm, found that nearly 50% of all streaming ads represented in April and May missed opportunities due to unfilled ads or ad failures. SeaChange's new Ad Insertion module addresses these issues by integrating a demand side platform to source ad buyers and a supply side platform to define ad placement and then programmatically filling unsold advertising slots in real-time. The model of auctioning unsold ad spots has existed for years, but has been used exclusively online. Now SeaChange is making it available to our customer base for linear, OTT and VOD. This workflow eliminates the need for sales teams to seek out the ad buyers themselves. An unsold spot that is auctioned at a discount minutes before the airing is better than allowing the spot to generate no revenue at all. With SeaChange's technology, a lucrative new revenue stream is opened and the value of the TV provider ad inventory increases. We believe our early success selling our Ad module reflects industry's unmet need for such a unique solution. Before I continue, I am now going to turn the podium over to our Chief Commercial Officer, Chad Hassler to provide a brief overview on our Framework wins in the quarter. Then, our Chief Financial Officer, Mike Prinn will walk you through our financial results. Afterwards, I will share our outlook and then open the call for questions. Chad?

Thanks, Yossi, and good afternoon, everyone. As Yossi mentioned in his opening remarks, the health crisis presented significant headwinds to our sales and business development activities in the first quarter. Nevertheless, we were able to secure two new wins with multi-year commitments to our Framework video delivery platform. These two wins brought our total count for our Framework solution to 28 at quarter end. Framework’s total contract value at quarter end exceeded $60 million, of which nearly 20% represented business with global Tier 1 operators, which demonstrates our platform's robustness and enterprise-grade functionality. As Yossi also mentioned, we secured our first Framework win that included our Ad Insertion module in the quarter. The win was with a Tier 1 international TV provider that services more than five million subscribers globally. This new customer selected Framework because of the platform's value-based engagement model, ease-of-use and innovative features that enable the customer not only to reduce its operating costs, but also drive new revenue streams. This is an exciting opportunity for SeaChange because we not only benefit from the recurring revenue associated with the Framework sale, but we also receive a portion of the ad revenue this customer generates using our ad monetization module. As you can tell, we are really excited about this win and eager to leverage it as a case study with our existing Framework customers and prospective customers as well. As we've talked about on prior calls, one of the most impactful differentiators for SeaChange is our technology. The $250 million in investment in our technology over the last five years combined with our disruptive value-based go-to-market strategy has established SeaChange as the video delivery platform leader. Our team is committed to not only maintaining this position, but furthering it as well. Through partnerships with industry leaders like Amazon Web Services, we can cost-effectively leverage other best-of-breed technologies and tools to augment the Framework offering. A good example of this is our recently expanded partnership with AWS that expands functionality for our customers. The Framework Predictive Analytics algorithms leverage AWS' machine learning services to help TV providers better understand user engagement. The platform identifies patterns that suggest whether a user is at risk of churning, which prompts the TV provider to launch targeted retention actions. Understanding user behavior such as channel lineup utilization, video on demand catalog engagement, and promotion effectiveness can also improve the accuracy of advertising campaigns. With predictive analytics from AWS, Framework is the ultimate tool for TV providers to reduce subscriber churn and increase revenues through better monetization of advertising inventory. In terms of our current operating environment, we are starting to see business activity pick up as stay-at-home orders are lifted and offices reopened. We believe that our industry-leading solutions, disruptive value-based go-to-market strategy and new advertisement revenue-share business model will enable us to capitalize on the disruption-in-process and the accelerating demand for streaming services. Framework is one of the most effective tools for TV operators and content owners to improve their customer experience, while reducing their operating cost and enabling them to generate incremental revenue through advertising. We believe our differentiated position in the market will translate to a strong second half of fiscal 2021 and giving us good momentum entering fiscal 2022. With that, I'll turn the call over to Mike to walk us through our financial performance for fiscal Q1 2021. Mike?

Thanks, Chad, and good afternoon, everyone. Looking at our financial results for the fiscal first quarter ended April 30, 2020. We entered the first quarter with $21.8 million in total backlog, excluding legacy maintenance and support. We booked $4.1 million of new business during Q1 and ended the quarter with backlog of $21.5 million. Total revenue for fiscal Q1 2021 decreased 19% to $6.9 million from $8.5 million in the same year-ago period. The year-over-year revenue decrease was primarily due to lower legacy services revenue, partially offset by higher product revenue in the period. As Chad and Yossi mentioned, we signed two new Framework deals in the first quarter of this year, which compares to one new Framework deal signed in Q1 of last fiscal year, and the eight deals that we averaged per quarter in Q2, Q3 and Q4 of last fiscal year. Product revenue increased 163% to $3.1 million, or 45% of total revenue, from $1.2 million, or 14% of revenue, in the same year-ago period. The increase in product revenue was driven by a $2.3 million increase in Framework revenue. Service revenue decreased 48% to $3.8 million, or 55% of total revenue, from $7.3 million, or 86% of total revenue, in the same year-ago period. The decrease in service revenue was due to lower revenue from both professional services and support revenue from customers related to legacy products. As we've mentioned on prior calls, these declines are consistent with our expectations as we transitioned legacy customers to new Framework arrangements and transitioned our professional services organization to our customer engineering organization as we completed legacy professional services projects. Revenue from our international markets was $4.6 million, or 66% of total revenue, which compares to $5.1 million, or 60% of total revenue in the same year-ago period. Revenue in our U.S. market was $2.3 million, or 34% of total revenue, which was down from $3.4 million, or 40% of total revenue in the same year-ago period. The decrease in revenue from both the U.S. and international markets was due to a reduction in bookings, primarily attributable to the COVID-19 pandemic. In terms of customer concentration, we had two customers that accounted for 15% and 13% of our total revenue compared to one customer in Q1 of last year that accounted for 16% of our total revenue. Looking at our margins. Gross profit decreased to $2.5 million, or 36% of total revenue, from $2.9 million, or 34% of total revenue in the same year-ago period. The 34% gross margin last year was a result of the transition from legacy to Framework, as we focused on completing a number of professional services projects and lower margin work. The 36% gross margin in the fiscal first quarter of 2021 was a result of only closing two Framework deals during the period. Our business model and cost structure have the ability to drive gross margins in the low 70% and above, as you saw in Q3 and Q4 of last year. However, in order to achieve that margin level, we need to generate more product revenue from Framework deals than we did in the first quarter of this year. Product gross margin was 49%, compared to 23% in Q1 of last year. Service gross margin was 26%, compared to 36% in Q1 of last year. Looking at our expenses. Non-GAAP operating expenses decreased 26% to $7.7 million from $10.4 million in Q1 of last year. The decrease reflects the continued cost-savings initiatives related to the reduction of third-party costs and elimination of non-essential internal costs throughout the organization. In response to the COVID-19 pandemic, in late April, we shifted our business operations to further reduce our operating expenses and to better align our strategy with current market conditions. These actions included instituting additional cost-optimization measures in addition to the ones we made last year. GAAP loss from operations totaled $6.3 million, an improvement from a loss of $8.7 million in the same year-ago period. As a percentage of total revenue, GAAP loss from operations for the first quarter of fiscal 2020 was negative 91%, which compares to negative 102% in the year-ago period. Non-GAAP loss from operations totaled $5.2 million or a loss of $0.14 per basic share, an improvement from a loss of $7.5 million, or a loss of $0.20 per basic share, in the same year-ago period. As a percentage of total revenue, non-GAAP loss from operations was negative 75% compared to negative 88% in Q1 of last year. GAAP net loss totaled $6.5 million or a loss of $0.17 per basic share, a significant improvement from a loss of $10.8 million, or a loss of $0.30 per basic share in the same year-ago period. Non-GAAP net loss totaled $5.4 million or a loss of $0.14 per basic share. This was an improvement from a loss of $9.7 million, or a loss of $0.26 per basic share in Q1 of last year. As a percentage of total revenue, non-GAAP net loss was negative 78% compared to negative 114% in Q1 of last year. Turning to the balance sheet. We ended the quarter with $9.8 million in cash and cash equivalents and marketable securities and had no debt. In addition, in early May, we qualified and received a little more than $2.4 million from the Payroll Protection Program. We currently believe that our liquidity position coupled with the recent cost reduction measures I just mentioned, enable us to execute our growth strategy. Deferred revenue at quarter end was $6.2 million, which was flat from the prior quarter and compares to $9.9 million at the end of Q1 last year. The year-over-year decrease was primarily due to the decrease in legacy revenue. DSOs, excluding unbilled receivables was 155 days at the end of the first quarter, compared to 66 days at the end of the prior and 165 days at the end of Q1 last year. The increase in DSOs was a result of the lower than expected revenue in the first quarter, and we expect to be able to reduce the DSO number in future quarters. Unbilled receivables were $22.7 million, which compares to $23.3 million in the prior quarter and $6 million in Q1 of last year. Unbilled receivables remained relatively stable from last quarter due to the lower than expected revenue in the first quarter, and the increase from Q1 of last year is really a result of the transition to the new Framework business model in fiscal 2020. Finally, as we indicated on our fiscal year-end earnings call in April, we anticipated being able to provide more clarity regarding our financial guidance for fiscal 2021 by this time. Unfortunately, the effects of COVID-19 have been longer-lasting than we initially expected, with many of the countries in which our prospective customers are based continuing to be in various stages of government-mandated lockdown. However, based on our current pipeline of opportunities, customer discussions and engagement, we expect to generate growth and profitability in the second half of the fiscal year. We intend to provide formal guidance when we have better visibility with respect to returning to a more normal operating environment. This completes my financial summary. For a more detailed analysis of our financial results, please refer to today's earnings release as well as our Form 10-Q, which we plan to file tomorrow. Yossi?

Thanks, Mike. The decisive measures we took over the last several months have allowed us to mitigate the present macro risks and be better positioned to capitalize on the expected demand for our Framework in the second half of fiscal 2021. We believe that the unexpected factors that significantly affected our financial results in Q1 will continue through Q2. Although, we can't forecast when our industry will return to normal so to speak, we are seeing many positive green shoots that gives us increased confidence in our business. While it's our intention to provide formal financial guidance when visibility returns to a more normal operating environment, we think it's important to describe what we are seeing. Today, our pipeline of opportunities is robust, customer engagement is increasing, and interest for the Framework is strong. We currently expect to generate solid growth and profitability in the second half of the fiscal year. While we have positive expectations for the business in the second half of the year, we are in fact, navigating the current situation cautiously. Our leadership and the Board are confident in our plan. It will put SeaChange in the best possible position to capitalize on the abundant opportunities in front of us and deliver profitable growth over the long run. That concludes our prepared remarks. Operator, we are ready to open the call for questions. Operator?

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question today is coming from Jaeson Schmidt from Lake Street. Your line is now live.

Hey guys. Thanks for taking my questions. I just want to clarify your comments on growth in the second half of this fiscal year. I assume that second half growth is over the first half of fiscal year 2021 and not year-over-year?

Correct.

Okay. And then have you seen any change in the size of the Framework deals? You're engaging with customers on just given the current backdrop? I think previously, you had mentioned Framework deals that are sort of in that $2 million to $3 million range?

Yes. Jaeson, it's Mike. So at the end of the year, through the 26 significant deals, $2.1 million was the average size. And the two in Q1 were slightly below that, but just because of the – on those two deals, it’s just what they happen to be. But when you look forward at our pipeline from an average deal perspective, we are continuing to see that around $2 million to $3 million, and I think as we've indicated before even strategically some larger deals.

Okay. And then any additional color? Obviously, the macro backdrop is challenging, and it sounds like your customers are diverting their focus to other aspects of their business. I mean, is this a situation where you have deals that are at the goal line and are just being paused? Or do you think the whole sales cycle has been pushed further to the right?

Jaeson, this is Yossi. So the customer retention in networking infrastructure, this is something temporary. And this is during the COVID confinement only when customers are working from home and they need to face multiple challenges. We expect that this is going to change very soon. In fact, we expect that the challenges our customers are facing today will be beneficial for us in the second part of the year when we are back in the office. Most of these customers will have to compensate for the OpEx increase. They'll have to carry the Q in the first part of the year due to the investment in infrastructure. And using the Framework, they can balance, if you will, some of this OpEx increase. So I believe that the engagement cycle will be similar to last year, maybe a bit shorter, and this should start within a few weeks after our customers are back at the office.

Okay. And then just the last one for me, and I'll jump back into queue. Mike, how should we think about the current OpEx run right now with these additional cost cuts?

Yes. I think probably $8 million to $8.5 million is probably good going forward. I mean it could be even less. The tough part is there's a variable piece in there, right? So OpEx was $7.7 million for Q1, non-GAAP operating OpEx, but obviously given the – kind of the topline and the bottom line variable comp is very low. So you could see anywhere from a number similar to what we have now to maybe a little bit above $8 million going forward in the next couple of quarters.

Okay. Thanks guys.

Yep.

Thank you. [Operator Instructions] Our next question is coming from Steven Frankel from Colliers. Your line is now live.

Good afternoon. A couple of questions on the service line. Do you expect legacy maintenance to kind of bleed off towards zero over the next couple of quarters? Or is there some bottom that we can reach?

Yes. So the legacy piece, Steve, was about $3.5 million. It will continue to decrease, but I still think we'll probably end the year where we've got between maybe $1 million to $2 million. And part of the reason why just kind of the uncertainty is some of these customers were working on converting to Framework, right? So if those deals don't happen, then the legacy revenue will maybe stick around for a couple of quarters and maybe even into next year. But if we convert them, that would change. But I think at the beginning of the year or on our Q4 call, we gave guidance that the legacy revenue would be between maybe $5 million to $10 million for the year, and it's $3.5 million in Q1. So you will see a decrease over the next couple of quarters.

Okay. And then on the Framework piece, it was my understanding that every time you did a deal, you've recognized the piece upfront, and then you recognized the piece that kind of got amortized into the support services line. So I would expect that line to be growing sequentially and it was down sequentially in Q4. What would account for that? I’m sorry, in Q1. It was down sequentially in Q1 from the Q4 level?

Yes, it was $948,000 in Q1. I didn't think it was down. There can occasionally be some kind of catch-up if there's an uncertainty in the kind of the first quarter with just kind of the various parts and pieces and the dust might settle, but I'll take a look and can follow-up with you. I didn't think it was down significantly from Q4.

Yes, it was down $50,000 or so. But again, down given you did a bunch of deals in Q4 and two deals in Q1, I would have thought it would have been up slightly rather than down slightly.

Yes. It can be timing. I can follow-up with you. The two deals in this quarter came at the very end, so that wouldn't have added anything. And then it's probably just some adjustments from deals in Q3 and Q4 because there's a number of different kind of parts and pieces, hardware that could continue to kind of shift some of those numbers around just like a quarter or two after they close until they settle down.

Okay. And then would you expect cash burn in Q2 to be relatively close to what was in Q1? Or was there something special in Q1 that maybe isn't repeatable?

Yes. I think the continued cost reductions should make the burn less than Q1. And then we ended the quarter with $9.8 million in cash, right? So we continue to reduce our operating expenses and cost of goods sold as well, started in late March, continued through May. We made reductions that we think will generate, on an annualized basis, an additional $5 million in savings. In May, we received over $2.4 million for the Payroll Protection Program in early May and obviously the expectation that a good portion of that will be forgiven. So I think there will be burn in Q2, but I think it will be slightly less than Q1, and then hope we get to a point where in the second half of the year, we won't see a significant cash burn.

Okay. All right. I think that's all my questions. Thank you.

Thanks Steve.

Thank you. At this time, this concludes our question-and-answer session. If your question was not taken, please contact SeaChange's IR team at seac@gatewayir.com. I'd now like to turn the call back over to Mr. Aloni for his closing remarks.

Thank you for joining our call. We appreciate your support of our mission and confidence in our ability to achieve it. Stay safe, and we look forward to speaking with you again soon. Have a great evening. Thanks, everyone.

Thank you for joining us today for SeaChange's fiscal first quarter 2021 conference call. You may now disconnect.