As we continue to execute the next stage of our strategy and Blackbird becomes more widely adopted, I look forward to delivering further good news and strong results to the market
CEO Ian McDonough
What it does
Features of the company’s technology include a codec (a compression-decompression) algorithm which that creates a system able to operate at very low bandwidth without blocking or blurring, making online video editing extremely agile.
Current estimates suggest Blackbird has a small slice of a market worth over US$1bn a year, but it is one that is growing strongly driven by the proliferation of video content on the web and TV.
The firm is also potentially looking at other areas into which it can expand the use of its codec technology. That might mean licensing the IP out to other tech companies that offer video solutions.
How it is doing
For the six months ended June 30, 2020, the company reported revenues of £714,000, up 49% year-on-year, while the firm’s underlying (EBITDA) loss narrowed 30% to £714,000.
The firm highlighted numerous developments during the period, including US TV network A+E doubling the volume of video edited using Blackbird’s platform for the next year, while the group also contracted with Liverpool FC and Arsenal FC to deliver remote working solutions.
Post-period, Blackbird said as of August 31, 2020, it has secured £1.45mln in revenues compared to £943,000 in the prior year, while contracted but unrecognised revenues stood at £2mln, £453,000 of which relates to 2020.
Into the second half, the group said it had made a “strong start” to the final six months of the year, with new deals with Tata Communications, live-broadcast video specialist Zixi and production and broadcast group Live X will “accelerate” its future revenue growth.
What the boss says – CEO Ian McDonough
Commenting on the company’s interim results, McDonough said: "I am pleased to deliver record revenues for the six-month period of £714k, up 49% year on year. This accelerated performance has come despite the [coronavirus] lockdown, proving the resilience of our operating model and whilst moving the Blackbird team fully to remote working.”
“It has also enabled our customers to continue their operations remotely and, at the same time, ensure the safety of their staff. I am genuinely excited about the future prospects for the company and made a further significant investment in the company in April 2020. As we continue to execute the next stage of our strategy and Blackbird becomes more widely adopted, I look forward to delivering further good news and strong results to the market."
What the broker says
In early September, analysts at Allenby Capital said Blackbird is “extremely well placed to take advantage of the clear opportunities for cloud-based editing”.
In a note initiating coverage of the company, the broker said the firm’s “relatively fixed cost base and sales growth from partnerships with large-scale global [original equipment manufacturers] should quickly take the business to profitability over the next two years”, adding that the market for the firm’s technology may have been catalysed or accelerated by the coronavirus pandemic.
“In our view, Blackbird currently has a strong opportunity to build partnerships with large-scale global OEMs – such as its recent deal with Tata Communications – and public cloud platforms, helped by its growing reputation and increasing brand awareness from prominent deals signed over the last year. Its near-term prospects have been lifted by COVID-19, with the video editing industry more actively exploring remote working, and Blackbird’s typical sales cycle has shortened from 6-9 to 3-6 months”, the broker said.
“We believe OEM partnerships should drive significant revenue growth, with a limited effect on costs, as OEMs resell to their clients and provide first line support, giving a realistic prospect of Blackbird moving into profitability and showing its true potential over the next two years”, they added.
Allenby also said opportunities “may arise for Blackbird to expand its current relationships into larger scale OEM partnerships with the three main public cloud platforms: Microsoft Azure, Google Cloud Platform (GCP) and Amazon Web Services (AWS)”.
“Beyond this, the flexibility of Blackbird’s technology provides scope for OEM partners to commercialise other potentially large-scale applications in the future”, the broker concluded.
- More contract wins for cloud-editing software
- Increased use of services among existing clients
- New uses for software
- Licence deals for intellectual property