SeaChange International expects to be profitable in 2008 despite a fall in revenue in the second quarter. Compared to last year, second-quarter revenue was down 3% to $44.2 million. Following a $1 million profit a year ago, the company reported a net loss of $8 million for this year's second quarter, attributing the loss mainly to severance costs and charges related to capitalized software licenses.

Bill Styslinger, CEO for SeaChange, tried to paint a rosier picture of the company, saying that, contrary to the company's projections, revenue from the first six months of the year already exceeded that from the previous six months — a trend they expect to continue.

"We indicated last quarter that we believed that it would be unlikely we would meet our previous guidance that this year's first-half revenue would exceed last year's second-half revenue," said Styslinger. "I'm happy to report today that, in fact, this year's first-half revenue exceeded last year's second-half revenue on the heels of a very strong second-quarter revenue performance. The strength in [video on demand] systems revenue from our North American cable customers that drove our record revenue performance last year has returned."

The company reiterated that it hopes to return to profitability in this year's second half, despite its reported loss. Styslinger based this expectation on "continued order strength in VOD systems, selected Axiom Software deployments with non-SeaChange VOD servers, increased software subscription revenue and the benefits from the second quarter cost reduction actions."