Cannell Capital Is Loading Its Activism Cannon For A Volley At Envivio Inc (ENVI)

Although up by nearly 36% year-to-date, Envivio Inc (NASDAQ:ENVI)’s stock has depreciated by more than 21% over the last year. In comparison, the communication equipment industry is up by 1.38% so far this year and 6.93% over the last year. As far as Envivio Inc (NASDAQ:ENVI)’s financial results for the first quarter are concerned, the compay’s net loss per share of $0.02 managed to beat the estimates by $0.02, but revenues of $9.51 million were $1.95 million short of expectations, despite marking an increase of 13.1% on a year-over-year basis. Although sales in the Americas increased to $5.8 million from $3.8 million in the same quarter a year earlier, Europe, Middle East, and Africa’s contribution to the top line shrank by nearly 37%, owing to Europe’s weak macroeconomic environment and the strengthening of the US dollar.

The highlight of the quarter were the video software solutions orders from Time Warner Cable Inc (NYSE:TWC) and Comcast Corporation (NASDAQ:CMCSA), representing 57% of the revenues. Since the software segment of the company is associated with higher margins, the new orders helped Envivio Inc (NASDAQ:ENVI) deliver historically high gross margins of 76%. This was also helped by the cost cutting measures that management has been initiating to help the company move towards profitability. The non-GAAP operating expenses dipped by almost 19% as compared to the same quarter a year before.

The hedge fund interest in Envivio Inc (NASDAQ:ENVI) decreased during the last quarter as five funds had investments in the company at the end of March as compared to six firms at the end of the previous quarter. The aggregate amount invested has, however, increased 20% to $10.43 million from $8.69 million during this period while the stock price appreciated a little over 14%. Edward Gilhuly and Scott Stuart‘s Sageview Capital is the largest stockholder of Envivio Inc (NASDAQ:ENVI) among these, holding some 2.63 million shares valued at $4.67 million.

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