NDS Group Shows Steady Revenue Growth in Q3

Conditional-Access Deals in Germany, India Help to Push Software Provider

By Glen Dickson -- Broadcasting & Cable, 5/1/2008 4:20:00 PM

Conditional-access and interactive-TV-software provider NDS Group posted a 20% increase in revenues for the financial quarter ending March 31, driven largely by conditional-access contracts in the German and Indian pay TV markets.

NDS, a majority-owned subsidiary of News Corp., had revenues of $213.3 in the quarter, which represented the third quarter of its 2008 fiscal year, compared with $178.4 million in the same period a year ago. Operating income for the third quarter was up 21% to $43.3 million versus $35.7 million last year, while operating margin held steady at 20%.

The U.K.-based company now has 86.9 million active digital-TV smart cards deployed, 83.1 million cumulative middleware set-top software clients deployed and 12.1 million cumulative digital-video-recorder software clients deployed.

Key customer wins for NDS in the quarter included the decision by German satellite pay TV operator Premiere to deploy NDS' VideoGuard conditional-access system in Germany and Austria; a deal with pan-Indian cable network operator DEN Digital Entertainment for NDS' VideoGuard conditional-access system, MediaHighway middleware and customized electronic program guide; and an extension of an existing VideoGuard contract with Scandinavia's Viasat Broadcasting and a new deal to supply set-top and DVR software for Viasat's new HD satellite pay TV service.

"This has been another good quarter for NDS,” chairman and CEO Abe Peled said in a statement. “We are particularly pleased with our continuing progress on entering the German pay TV market, and our additional wins in India. Our CA contract extension with Viasat and expanding the relationship to include our MediaHighway middleware are also gratifying and clear evidence of our focus on customer support.”