Brightcove Inc. (Nasdaq: BCOV), the world’s most trusted
streaming technology company, today announced financial results for
the third quarter ended September 30, 2023.
“Our third quarter results were highlighted by double-digit
adjusted EBITDA growth and margins, as well as revenue and
profitability that were at or above the high end of our guidance
ranges. Our continued strength in new business in both our
Enterprise and Media end-markets, including important new customer
wins, demonstrates the success of our strategy and the long-term
opportunity we see. Our focus in the coming quarters is to build
upon this success, our market-leading position in streaming, and
deliver improved year-over-year revenue and profitability,” said
Marc DeBevoise, Brightcove’s Chief Executive Officer.
Third Quarter 2023 Financial Highlights:
- Revenue for the third quarter of 2023 was $51.0 million,
a decrease of 5% compared to $53.9 million for the third quarter of
2022. Subscription and support revenue was $48.6 million, a
decrease of 6% compared to $51.8 million for the third quarter of
2022.
- Gross profit for the third quarter of 2023 was $31.7
million, representing a gross margin of 62%, compared to a gross
profit of $33.9 million, representing a gross margin of 63% for the
third quarter of 2022. Non-GAAP gross profit for the third quarter
of 2023 was $32.5 million, representing a non-GAAP gross margin of
64%, compared to a non-GAAP gross profit of $34.5 million,
representing a non-GAAP gross margin of 64% for the third quarter
of 2022. Non-GAAP gross profit and non-GAAP gross margin exclude
stock-based compensation expense, the amortization of acquired
intangible assets and restructuring expenses.
- Loss from operations was $2.3 million for the third
quarter of 2023, compared to loss from operations of $821,000 for
the third quarter of 2022. Non-GAAP operating income, which
excludes stock-based compensation expense, the amortization of
acquired intangible assets, merger-related and restructuring
expenses and other (benefit) expense, was $2.3 million for the
third quarter of 2023, compared to non-GAAP operating income of
$2.8 million during the third quarter of 2022.
- Net loss was $2.4 million, or a loss of $0.06 per
diluted share, for the third quarter of 2023. This compares to a
net loss of $1.7 million, or $0.04 per diluted share, for the third
quarter of 2022. Non-GAAP net income, which excludes stock-based
compensation expense, the amortization of acquired intangible
assets, merger-related and restructuring expenses and other
(benefit) expense, was $2.1 million for the third quarter of 2023,
or $0.05 per diluted share, compared to non-GAAP net income of $2.0
million for the third quarter of 2022, or $0.05 per diluted
share.
- Adjusted EBITDA was $5.5 million for the third quarter
of 2023, representing an adjusted EBITDA margin of 11% and an
increase of 12% compared to adjusted EBITDA of $4.9 million for the
third quarter of 2022. Adjusted EBITDA excludes stock-based
compensation expense, merger-related and restructuring expenses,
other (benefit) expense, the amortization of acquired intangible
assets, depreciation expense, other income/expense and the
provision for income taxes.
- Cash flow provided by operations was $2.1 million for
the third quarter of 2023, compared to cash flow provided by
operations of $10.5 million for the third quarter of 2022.
- Free cash flow was negative $2.2 million after the
company invested $4.3 million in capital expenditures and
capitalization of internal-use software during the third quarter of
2023. Free cash flow was positive $4.5 million for the third
quarter of 2022.
- Cash and cash equivalents were $16.4 million as of
September 30, 2023 compared to $31.9 million on December 31,
2022.
A Reconciliation of GAAP to Non-GAAP results has been provided
in the financial statement tables included at the end of this press
release. An explanation of these measures is also included below
under the heading “Non-GAAP Financial Measures.”
Other Third Quarter and Recent Highlights/Updates:
- In the Black Network (ITBN), a new OTT company focused on
streaming content that showcases Black storytellers and culture,
successfully launched its new streaming service powered by
Brightcove’s industry-leading technology. In addition, ITBN will be
using Brightcove’s Ad Monetization service to help maximize its ad
revenue opportunities. Other notable media customers signed,
renewed or expanded in the third quarter include Academy of Motion
Picture Arts and Sciences, Carnegie Hall, CBS Television Network,
Coupang, D-League, DogTV, Funny or Die, J:Com, the largest cable
company in Japan, The Metropolitan Opera, RayCom Sports, and SBT,
one of the largest broadcast media companies in Brazil.
Additionally, we extended our leadership with media customers with
the successful launches of Yahoo and the NHL on our platform, as
they deliver compelling viewing experiences to their millions of
customers by utilizing our end-to-end solutions.
- Announced that Acquia, the digital experience leader with
Drupal at its core, has selected Brightcove to power its video
marketing strategy. By leveraging the Brightcove platform, Acquia
will be better able to reach current and prospective customers with
market and technology trends that will increase engagement and
ultimately conversion. Other notable enterprise customers signed,
renewed or expanded in the third quarter include a mix of
Technology, Financial Services, Consumer/Retail and other
companies, including: AMC Theatres, Autodesk, Bain & Company,
Blackstone, Build-a-Bear, Chick-Fil-A, CNC Technologies, Docusign,
Estee Lauder, Navy Federal Credit Union, NYU Langone Health, Palo
Alto Networks, ServiceNow, Tyson Foods, and VMWare.
- Named the winner of the “Best Overall Marketing Campaign
Management Solution” award in the 6th annual MarTech Breakthrough
Awards program, as our robust technology stack and resources
demonstrated the ability to help customers enhance the viewer
experience and increase audience engagement across enterprise and
media customers.
- Expanded the capabilities of our platform with the successful
launch of Brightcove Ad Insights, which uses machine learning
models and proprietary metrics, to provide Brightcove customers
with detailed analytics and insights that accurately portray viewer
tolerance for ads, enabling them to optimize their ad load without
disrupting the audience experience and retention. We also added
PubMatic (Nasdaq: PUBM), via a previously announced partnership, as
a new source of demand to our Brightcove Ad Monetization
capabilities. Additionally, we extended our social distribution
capabilities to include Pinterest (Nasdaq: PINS), a key social
platform for our enterprise customers using video to move
ecommerce.
- 12-month Backlog (which we define as the aggregate amount of
committed subscription revenue related to future performance
obligations in the next 12 months) was $121.1 million. This
represents a 6% increase year-over-year over $113.8 million at the
end of the third quarter of 2022. Total backlog was $174.2 million,
a 21% increase year-over-year over $144.1 million at the end of the
third quarter 2022.
- Average annual subscription revenue per premium customer was
$95,900 in the third quarter of 2023, excluding starter customers
who had average annualized revenue of $3,800 per customer. The
average annual subscription revenue per premium customer compares
to $95,900 in the third quarter of 2022.
- Ended the third quarter of 2023 with 2,618 customers, of which
2,077 were premium.
Business Outlook:
Based on information as of today, November 1, 2023, the Company
is issuing the following business updates and financial
guidance
Fourth Quarter 2023 Guidance:
- Revenue is expected to be in the range of $49.0 million
to $51.0 million, including approximately $2.6 million of
professional services revenue and $0.9 million of overages.
- Non-GAAP income from operations is expected to be in the
range of $0.3 million to $2.3 million, which excludes stock-based
compensation of approximately $3.5 million and the amortization of
acquired intangible assets of approximately $1.0 million.
- Adjusted EBITDA is expected to be in the range of $4.0
million to $6.0 million, which excludes stock-based compensation of
approximately $3.5 million, the amortization of acquired intangible
assets of approximately $1.0 million, depreciation expense of
approximately $3.7 million, and other (income) expense and the
provision for income taxes of approximately $0.3 million.
- Non-GAAP net income per diluted share is expected to be
$0.00 to $0.05, which excludes stock-based compensation of
approximately $3.5 million, the amortization of acquired intangible
assets of approximately $1.0 million, and assumes approximately
43.7 million weighted-average shares outstanding.
Full Year 2023 Guidance:
- Revenue is expected to be in the range of $200.0 million
to $202.0 million, including approximately $8.9 million of
professional services revenue and $4.8 million of overages.
- Non-GAAP loss from operations is expected to be in the
range of ($2.5) million to ($0.5) million, which excludes
stock-based compensation of approximately $13.9 million, the
amortization of acquired intangible assets of approximately $4.0
million, merger-related expense of approximately $0.3 million, and
restructuring expense of $2.8 million.
- Adjusted EBITDA is expected to be in the range of $10.4
million to $12.4 million, which excludes stock-based compensation
of approximately $13.9 million, the amortization of acquired
intangible assets of approximately $4.0 million, merger-related
expense of approximately $0.3 million, restructuring expense of
$2.8 million, depreciation expense of approximately $12.9 million,
and other (income) expense and the provision for income taxes of
approximately $1.3 million.
- Non-GAAP loss per diluted share is expected to be
($0.09) to ($0.04), which excludes stock-based compensation of
approximately $13.9 million, the amortization of acquired
intangible assets of approximately $4.0 million, merger-related
expense of approximately $0.3 million, restructuring expense of
$2.8 million, and assumes approximately 43.0 million
weighted-average shares outstanding.
Earnings Stream Information:
Brightcove earnings will be streamed on November 1, 2023, at
5:00 p.m. (Eastern Time) to discuss the Company's financial results
and current business outlook. To access the live stream, visit the
“Investors” page of the Company’s website,
http://investor.brightcove.com. Once the live stream concludes, an
on-demand recording will be available on Brightcove’s Investor page
for a limited time at http://investor.brightcove.com.
About Brightcove Inc. (NASDAQ: BCOV)
Brightcove creates the world’s most reliable, scalable, and
secure streaming technology solutions to build a greater connection
between companies and their audiences, no matter where they are or
on which devices they consume content. In more than 60 countries,
Brightcove’s intelligent video platform enables businesses to sell
to customers more effectively, media leaders to stream and monetize
content more reliably, and every organization to communicate with
team members more powerfully. With two Technology and Engineering
Emmy® Awards for innovation, uptime that consistently leads the
industry, and unmatched scalability, we continuously push the
boundaries of what video can do. Follow on LinkedIn, Twitter,
Facebook, Instagram and YouTube. Visit www.brightcove.com.
Forward-Looking Statements
This press release includes certain “forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995, including statements concerning our financial guidance for
the fourth fiscal quarter and full year 2023, our position to
execute on our growth strategy, the effects of our restructuring
efforts, and our ability to expand our leadership position and
market opportunity. These forward-looking statements include, but
are not limited to, plans, objectives, expectations and intentions
and other statements contained in this press release that are not
historical facts and statements identified by words such as
"expects," "anticipates," "intends," "plans," "believes," "seeks,"
"estimates" or words of similar meaning. These forward-looking
statements reflect our current views about our plans, intentions,
expectations, strategies and prospects, which are based on the
information currently available to us and on assumptions we have
made. Although we believe that our plans, intentions, expectations,
strategies and prospects as reflected in or suggested by those
forward-looking statements are reasonable, we can give no assurance
that the plans, intentions, expectations or strategies will be
attained or achieved. Furthermore, actual results may differ
materially from those described in the forward-looking statements
and will be affected by a variety of risks and factors that are
beyond our control including, without limitation: the effect of
macro-economic conditions currently affecting the global economy;
our ability to retain existing customers and acquire new ones; our
history of losses; expectations regarding the widespread adoption
of customer demand for our products; the effects of increased
competition and commoditization of services we offer, including
data delivery and storage; keeping up with the rapid technological
change required to remain competitive in our industry; our ability
to manage our growth effectively and successfully recruit
additional highly-qualified personnel; our reduction in force,
including risks that the related costs and charges may be greater
than anticipated and that the restructuring efforts may not
generate their intended benefits, may adversely affect the
Company’s internal programs and the Company’s ability to recruit
and train skilled and motivated personnel, and may be distracting
to employees and management; the price volatility of our common
stock; and other risks set forth under the caption "Risk Factors"
in our most recently filed Annual Report on Form 10-K and similar
disclosures in our subsequent filings with the SEC. We assume no
obligation to update any forward-looking statements contained in
this document as a result of new information, future events or
otherwise.
Non-GAAP Financial Measures
Brightcove has provided in this release the non-GAAP financial
measures of non-GAAP gross profit, non-GAAP gross margin, non-GAAP
income (loss) from operations, non-GAAP net income (loss), adjusted
EBITDA, non-GAAP diluted net income (loss) per share, and revenue
and adjusted EBITDA on a constant currency basis. Brightcove uses
these non-GAAP financial measures internally in analyzing its
financial results and believes they are useful to investors, as a
supplement to GAAP measures, in evaluating Brightcove's ongoing
operational performance. Brightcove believes that the use of these
non-GAAP financial measures provides an additional tool for
investors to use in evaluating ongoing operating results and trends
and in comparing its financial results with other companies in
Brightcove’s industry, many of which present similar non-GAAP
financial measures to investors. As noted, the non-GAAP financial
results discussed above of non-GAAP gross profit, non-GAAP gross
margin, non-GAAP income (loss) from operations, non-GAAP net income
(loss) and non-GAAP diluted net income (loss) per share exclude
stock-based compensation expense, amortization of acquired
intangible assets, merger-related and restructuring expenses,
restructuring and other (benefit) expense. The non-GAAP financial
results discussed above of adjusted EBITDA is defined as
consolidated net income (loss), plus other income/expense,
including interest expense and interest income, the provision for
income taxes, depreciation expense, the amortization of acquired
intangible assets, stock-based compensation expense, merger-related
and restructuring expenses, restructuring and other (benefit)
expense. Merger-related expenses include fees incurred in
connection with an acquisition and restructuring expenses include
primarily cash severance costs. Revenue and adjusted EBITDA on a
constant currency basis reflect our revenues and adjusted EBITDA
using exchange rates used for Brightcove’s Fiscal Year 2023 outlook
on Brightcove’s press release on February 23, 2023. Non-GAAP
financial measures have limitations as an analytical tool and
should not be considered in isolation from, or as a substitute for,
financial information prepared in accordance with GAAP. Investors
are encouraged to review the reconciliation of these non-GAAP
measures to their most directly comparable GAAP financial measures.
As previously mentioned, a reconciliation of our non-GAAP financial
measures to their most directly comparable GAAP measures has been
provided in the financial statement tables included below in this
press release. The Company’s earnings press releases containing
such non-GAAP reconciliations can be found on the Investors section
of the Company’s web site at http://www.brightcove.com.
Brightcove Inc. Condensed Consolidated Balance Sheets
(in thousands) September 30, 2023 December
31, 2022 Assets Current assets: Cash and cash
equivalents
$
16,422
$
31,894
Accounts receivable, net of allowance
30,262
26,004
Prepaid expenses and other current assets
19,743
19,422
Total current assets
66,427
77,320
Property and equipment, net
42,730
39,677
Operating lease right-of-use asset
16,823
18,671
Intangible assets, net
7,290
10,279
Goodwill
74,859
74,859
Other assets
6,016
7,007
Total assets
$
214,145
$
227,813
Liabilities and stockholders' equity Current liabilities:
Accounts payable
$
13,857
$
11,326
Accrued expenses
17,519
26,877
Operating lease liability
4,403
4,157
Deferred revenue
67,248
61,597
Total current liabilities
103,027
103,957
Operating lease liability, net of current portion
18,143
20,528
Other liabilities
673
981
Total liabilities
121,843
125,466
Stockholders' equity: Common stock
44
42
Additional paid-in capital
325,402
314,825
Treasury stock, at cost
(871
)
(871
)
Accumulated other comprehensive loss
(1,845
)
(1,593
)
Accumulated deficit
(230,428
)
(210,056
)
Total stockholders’ equity
92,302
102,347
Total liabilities and stockholders' equity
$
214,145
$
227,813
Brightcove Inc. Condensed Consolidated Statements
of Operations (in thousands, except per share amounts)
Three Months Ended September 30, Nine
Months Ended September 30,
2023
2022
2023
2022
Revenue: Subscription and support revenue
$
48,571
$
51,814
$
144,686
$
156,403
Professional services and other revenue
2,409
2,130
6,345
5,367
Total revenue
50,980
53,944
151,031
161,770
Cost of revenue: (1) (2) Cost of subscription and support revenue
16,892
18,247
51,760
52,172
Cost of professional services and other revenue
2,369
1,816
6,269
5,575
Total cost of revenue
19,261
20,063
58,029
57,747
Gross profit
31,719
33,881
93,002
104,023
Operating expenses: (1) (2) Research and development
8,730
7,931
28,941
24,540
Sales and marketing
17,222
19,023
55,721
55,272
General and administrative
7,941
7,748
27,410
24,391
Merger-related
117
-
307
747
Other expense
-
-
-
1,149
Total operating expenses
34,010
34,702
112,379
106,099
Loss from operations
(2,291
)
(821
)
(19,377
)
(2,076
)
Other income (expense), net
130
(668
)
9
(1,880
)
Loss before income taxes
(2,161
)
(1,489
)
(19,368
)
(3,956
)
Loss (benefit) from provision for income taxes
260
191
1,004
(338
)
Net loss
$
(2,421
)
$
(1,680
)
$
(20,372
)
$
(3,618
)
Net loss per share—basic and diluted Basic
$
(0.06
)
$
(0.04
)
$
(0.47
)
$
(0.09
)
Diluted
(0.06
)
(0.04
)
(0.47
)
(0.09
)
Weighted-average shares—basic and diluted Basic
43,332
41,972
42,976
41,712
Diluted
43,332
41,972
42,976
41,712
(1) Stock-based compensation included in above line items:
Cost of subscription and support revenue
$
122
$
132
$
389
$
385
Cost of professional services and other revenue
92
76
284
334
Research and development
598
378
1,837
2,035
Sales and marketing
1,057
1,015
3,157
2,857
General and administrative
1,541
1,245
4,773
4,109
Other expense
-
-
-
249
(2) Amortization of acquired intangible assets included in
the above line items: Cost of subscription and support revenue
$
547
$
376
$
1,749
$
1,156
Sales and marketing
406
417
1,239
1,246
Brightcove Inc. Condensed Consolidated Statements
of Cash Flows (in thousands) Nine Months Ended
September 30, Operating activities
2023
2022
Net loss
$
(20,372
)
$
(3,618
)
Adjustments to reconcile net loss to net cash used in operating
activities: Depreciation and amortization
12,244
7,141
Stock-based compensation
10,440
9,969
Provision for reserves on accounts receivable
138
166
Changes in assets and liabilities: Accounts receivable
(4,556
)
(1,871
)
Prepaid expenses and other current assets
(684
)
(1,351
)
Other assets
1,042
38
Accounts payable
3,065
863
Accrued expenses
(6,737
)
(242
)
Operating leases
(291
)
5,202
Deferred revenue
6,017
3,452
Net cash provided by (used in) operating activities
306
19,749
Investing activities Cash paid for acquisition, net
of cash acquired
-
(13,215
)
Purchases of property and equipment, net of returns
(2,820
)
(8,617
)
Capitalization of internal-use software costs
(10,037
)
(9,678
)
Net cash used in investing activities
(12,857
)
(31,510
)
Financing activities Proceeds from exercise of stock
options
-
142
Deferred acquisition payments
(1,700
)
-
Other financing activities
(256
)
(50
)
Net cash (used in) provided by financing activities
(1,956
)
92
Effect of exchange rate changes on cash and cash equivalents
(965
)
(2,722
)
Net decrease in cash and cash equivalents
(15,472
)
(14,391
)
Cash and cash equivalents at beginning of period
31,894
45,739
Cash and cash equivalents at end of period
$
16,422
$
31,348
Brightcove Inc. Reconciliation of GAAP
Gross Profit, GAAP Loss (Income) From Operations, GAAP Net Loss and
GAAP Net Loss Per Share to Non-GAAP Gross Profit, Non-GAAP
Income (Loss) From Operations, Non-GAAP Net (Loss) Income and
Non-GAAP Net (Loss) Income Per Share (in thousands, except
per share amounts) Three Months Ended
September 30, Nine Months Ended September 30,
2023
2022
2023
2022
GROSS PROFIT: GAAP gross profit
$
31,719
$
33,881
$
93,002
$
104,023
Stock-based compensation expense
214
208
673
719
Amortization of acquired intangible assets
547
376
1,749
1,156
Restructuring
6
-
104
-
Non-GAAP gross profit
$
32,486
$
34,465
$
95,528
$
105,898
GAAP gross profit as a percentage of revenue
62
%
63
%
62
%
64
%
Stock-based compensation expense
0.4
%
0.4
%
0.4
%
0.4
%
Amortization of acquired intangible assets
1.1
%
0.7
%
1.2
%
0.7
%
Restructuring
0.0
%
0.0
%
0.1
%
0.0
%
Non-GAAP gross profit as a percentage of revenue
64
%
64
%
63
%
65
%
INCOME (LOSS) FROM OPERATIONS: GAAP loss from operations
$
(2,291
)
$
(821
)
$
(19,377
)
$
(2,076
)
Stock-based compensation expense
3,410
2,846
10,440
9,720
Amortization of acquired intangible assets
953
793
2,988
2,402
Merger-related
117
-
307
747
Restructuring
74
-
2,830
-
Other expense
-
-
-
1,149
Non-GAAP income (loss) from operations
$
2,263
$
2,818
$
(2,812
)
$
11,942
NET INCOME (LOSS): GAAP net loss
$
(2,421
)
$
(1,680
)
$
(20,372
)
$
(3,618
)
Stock-based compensation expense
3,410
2,846
10,440
9,720
Amortization of acquired intangible assets
953
793
2,988
2,402
Merger-related
117
-
307
747
Restructuring
74
-
2,830
-
Other expense
-
-
-
1,149
Non-GAAP net income (loss)
$
2,133
$
1,959
$
(3,807
)
$
10,400
GAAP diluted net loss per share
$
(0.06
)
$
(0.04
)
$
(0.47
)
$
(0.09
)
Non-GAAP diluted net income (loss) per share
$
0.05
$
0.05
$
(0.09
)
$
0.25
Shares used in computing GAAP diluted net loss per share
43,332
41,972
42,976
41,712
Shares used in computing Non-GAAP diluted net income per share
43,364
42,148
42,976
42,080
Brightcove Inc. Calculation of Adjusted EBITDA
(in thousands) Three Months Ended September
30, Nine Months Ended September 30,
2023
2022
2023
2022
Net loss
$
(2,421
)
$
(1,680
)
$
(20,372
)
$
(3,618
)
Other expense, net
(130
)
668
(9
)
1,880
Loss (benefit) from income taxes
260
191
1,004
(338
)
Depreciation and amortization
4,236
2,914
12,244
7,141
Stock-based compensation expense
3,410
2,846
10,440
9,720
Merger-related
117
-
307
747
Restructuring
74
-
2,830
-
Other expense
-
-
-
1,149
Adjusted EBITDA
$
5,546
$
4,939
$
6,444
$
16,681
Brightcove Inc.
Reconciliation of Revenue on a
Constant Currency Basis and Calculation of Adjusted EBITDA on a
Constant Currency Basis
(in thousands)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2023
Total revenue
$
50,980
$
151,031
Constant currency adjustment
323
161
Total revenue on a constant currency basis
$
51,303
$
151,192
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2023
Adjusted EBITDA
$
5,546
$
6,444
Constant currency adjustment
636
860
Adjusted EBITDA on a constant currency basis
$
6,182
$
7,304
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231101298742/en/
Investors: ICR for Brightcove Brian Denyeau, 646-277-1251
brian.denyeau@icrinc.com or Media: Brightcove Sara Griggs,
929-888-4866 sgriggs@brightcove.com
Brightcove (NASDAQ:BCOV)
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Brightcove (NASDAQ:BCOV)
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