Company reports fiscal year 2016 revenue growth
of 12%
Brightcove Inc. (Nasdaq: BCOV), a leading global provider
of cloud services for video, today announced financial results for
the fourth quarter and fiscal year ended December 31, 2016.
“Brightcove reported solid fourth quarter financial results that
capped a very strong year for the company,” said David Mendels,
Chief Executive Officer of Brightcove. “The momentum we are seeing
across our business drove a number of important milestones for our
company in 2016, including the return to double-digit revenue
growth, 15% bookings growth for the year, the signing of multiple
seven-figure, multi-year media wins and strong performance in our
digital marketing and enterprise group, marked by an impressive
fourth quarter performance. In addition, we delivered on a number
of exciting product innovations like Dynamic Delivery and
Brightcove Social.”
Mendels added, “The investments we made throughout the year
significantly strengthened our competitive position in the market
and we enter 2017 more confident in our ability to continue to
drive improved long-term revenue growth and profitability. We are
focused on executing even better in the year ahead in order to
generate meaningful shareholder value.”
Fourth Quarter 2016 Financial Highlights:
- Revenue for the fourth quarter
of 2016 was $38.6 million, an increase of 10% compared to $35.1
million for the fourth quarter of 2015. Subscription and support
revenue was $36.1 million, an increase of 6% compared with $34.1
million for the fourth quarter of 2015.
- Gross profit for the fourth
quarter of 2016 was $23.3 million, representing a gross margin of
60%, compared to a gross profit of $23.3 million for the fourth
quarter of 2015. Non-GAAP gross profit for the fourth quarter of
2016 was $24.8 million, representing a non-GAAP gross margin of
64%, compared to a non-GAAP gross profit of $24.0 million for the
fourth quarter of 2015. Non-GAAP gross profit and non-GAAP gross
margin exclude stock-based compensation expense, the amortization
of acquired intangible assets and costs to exit a facility.
- Loss from operations was $3.7
million for the fourth quarter of 2016, compared to a loss from
operations of $214,000 for the fourth quarter of 2015. Non-GAAP
loss from operations, which excludes stock-based compensation
expense, the amortization of acquired intangible assets,
merger-related expenses and costs to exit a facility, was $309,000
for the fourth quarter of 2016, compared to non-GAAP income from
operations of $2.3 million during the fourth quarter of 2015.
- Net loss was $4.4 million, or
$0.13 per diluted share, for the fourth quarter of 2016. This
compares to a net income of $172,000, or $0.01 per diluted share,
for the fourth quarter of 2015. Non-GAAP net loss, which excludes
stock-based compensation expense, the amortization of acquired
intangible assets, merger-related expenses, gain from settlement of
escrow claim and costs to exit a facility, was $988,000 for the
fourth quarter of 2016, or $0.03 per diluted share, compared to a
non-GAAP net income of $1.8 million for the fourth quarter of 2015,
or $0.05 per diluted share.
- Adjusted EBITDA was $803,000 for
the fourth quarter of 2016, compared to $3.3 million for the fourth
quarter of 2015. Adjusted EBITDA excludes stock-based compensation
expense, the amortization of acquired intangible assets,
merger-related expenses, depreciation expense, other
income/expense, the provision for income taxes and costs to exit a
facility.
- Cash flow from operations was
$3.4 million, compared to $4.8 million for the fourth quarter of
2015.
- Free cash flow was $2.4 million
after the company invested $1.0 million in capital expenditures and
capitalization of internal-use software during the fourth quarter
of 2016. Free cash flow was $5.5 million for the fourth quarter of
2015.
- Cash and cash equivalents were
$36.8 million as of December 31, 2016 compared to $35.2 million at
September 30, 2016.
Full Year 2016 Financial Highlights:
- Revenue for the full year 2016
was $150.3 million, an increase of 12% compared to $134.7 million
for 2015. Subscription and support revenue for 2016 was $142.0
million, an increase of 8% compared with $131.0 million for
2015.
- Gross Profit was $94.4 million
for 2016, compared to $88.2 million for 2015, representing a gross
margin of 63% for 2016. Non-GAAP gross profit was $97.8 million for
2016, representing a year-over-year increase of 8% and a non-GAAP
gross margin of 65%. Non-GAAP gross profit and non-GAAP gross
margin exclude stock-based compensation expense, the amortization
of acquired intangible assets and costs to exit a facility.
- Loss from operations was $9.0
million for 2016, compared to a loss from operations of $6.9
million for 2015. Non-GAAP income from operations, which excludes
stock-based compensation expense, the amortization of acquired
intangible assets, merger-related expenses and costs to exit a
facility, was $1.0 million for 2016, compared to a non-GAAP income
from operations of $2.4 million for 2015.
- Net loss was $10.0 million, or
$0.30 per diluted share, for 2016. This compares to a net loss of
$7.6 million, or $0.23 per diluted share, for 2015. Non-GAAP net
income, which excludes stock-based compensation expense, the
amortization of acquired intangible assets, merger-related
expenses, gain from settlement of escrow claim and costs to exit a
facility, was $8,000 for 2016, or $0.00 per diluted share, compared
to non-GAAP net income of $876,000 for 2015, or $0.03 per diluted
share.
- Adjusted EBITDA was $5.7 million
for 2016, compared to $8.0 million for 2015. Adjusted EBITDA
excludes stock-based compensation expense, the amortization of
acquired intangible assets, merger-related expenses, depreciation
expense, other income/expense, the provision for income taxes and
costs to exit a facility.
- Cash flow from operations was
$11.1 million for 2016, compared to $9.1 million for 2015.
- Free cash flow was $5.9 million
after we invested $5.2 million in capital expenditures and
capitalization of internal-use software during 2016. Free cash flow
was $6.2 million for 2015.
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 Fourth Quarter and Recent Highlights:
- Average revenue per premium customer
was $71,000 in the fourth quarter of 2016, excluding starter
customers who had annualized revenue of $4,500 per customer. This
is an increase of 3% from $69,000 in the comparable period in
2015.
- Recurring dollar retention rate was 93%
in the fourth quarter of 2016, which was in-line with our
historical target in the low to mid 90% range.
- Ended the quarter with 4,571 customers,
of which 2,007 were premium.
- New media customers and media customers
who expanded their relationship during the quarter included:
Barstool Sports, Comicbook.com, Dallas Mavericks, Discovery
Networks - Asia, Forbes, National HotRod Association, Playboy
Enterprises, Sony Pictures - India, and Snap Inc, among
others.
- New digital marketing customers and
digital marketing customers who expanded their relationship during
the quarter included: BNP Paribas, Kennedy Center, Lifetime
Fitness, Loews Hotels, McDonald’s, Quinnipiac University, and US
Bank, among others.
- Released Brightcove Social, a video
solution that enables organizations to manage their presence across
social networks from a single interface. From Brightcove’s Video
Cloud, users are able to edit, publish and track their videos in
the native playback environments of Facebook, YouTube, and Twitter,
as well as their own websites.
- Named a leader in both Gartner’s Magic
Quadrant for Enterprise Video Content Management and the Forrester
Wave™: Online Video Platforms (OVPs) for Sales And Marketing
Business Outlook
Based on information as of today, February 16, 2017, the Company
is issuing the following financial guidance:
First Quarter 2017:
- Revenue is expected to be in the
range of $37.0 million to $37.75 million, including approximately
$2.6 million of professional services revenue.
- Non-GAAP loss from operations is
expected to be in the range of $1.0 million to $1.5 million, which
excludes stock-based compensation of approximately $1.7 million and
the amortization of acquired intangible assets of approximately
$700,000.
- Adjusted EBITDA is expected to
be in the range of breakeven to $500,000, which excludes
stock-based compensation of approximately $1.7 million, the
amortization of acquired intangible assets of approximately
$700,000, depreciation expense of approximately $1.5 million and
other income/expense and the provision for income taxes of
approximately $200,000.
- Non-GAAP net loss per diluted
share is expected to be $0.03 to $0.05, which excludes
stock-based compensation of approximately $1.7 million and the
amortization of acquired intangible assets of approximately
$700,000, and assumes approximately 35.2 million shares
outstanding.
Full Year 2017:
- Revenue is expected to be in the
range of $163.0 million to $167.0 million. Professional services is
expected to be in a range of $9 million to $10 million.
- Non-GAAP income from operations
is expected to be in the range of $3.5 million to $6.0 million,
which excludes stock-based compensation of approximately $8.2
million and the amortization of acquired intangible assets of
approximately $2.7 million.
- Adjusted EBITDA is expected to
be in the range of $7.5 to $10.0 million, which excludes
stock-based compensation of approximately $8.2 million, the
amortization of acquired intangible assets of approximately $2.7
million, depreciation expense of approximately $4.0 million and
other income/expense and the provision for income taxes of
approximately $800,000.
- Non-GAAP net income per diluted
share is expected to be $0.07 to $0.14, which excludes
stock-based compensation of approximately $8.2 million and the
amortization of acquired intangible assets of approximately $2.7
million, and assumes approximately 35.5 million shares
outstanding.
Conference Call Information
Brightcove will host a conference call today, February 16, 2017,
at 5:00 p.m. (Eastern Time) to discuss the Company's financial
results and current business outlook. A live webcast of the call
will be available at the “Investors” page of the Company’s website,
http://investor.brightcove.com. To access the call, dial
877-407-3982 (domestic) or 201-493-6780 (international). A replay
of this conference call will be available for a limited time at
844-512-2921 (domestic) or 412-317-6671 (international). The replay
conference ID is 13652432. A replay of the webcast will also be
available for a limited time at http://investor.brightcove.com.
About Brightcove
Brightcove Inc. (NASDAQ:BCOV) is the leading global provider of
powerful cloud solutions for delivering and monetizing video across
connected devices. The company offers a full suite of products and
services that reduce the cost and complexity associated with
publishing, distributing, measuring and monetizing video across
devices. Brightcove has thousands of customers in over 70 countries
that rely on the company's cloud solutions to successfully publish
high-quality video experiences to audiences everywhere. To learn
more, 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 first fiscal quarter of 2017 and full year 2017, our position
to execute on our growth strategy, 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: our history of losses; our limited
operating history; expectations regarding the widespread adoption
of customer demand for our products; our ability to expand the
sales of our products to customers located outside the U.S.;
keeping up with the rapid technological change required to remain
competitive in our industry; our ability to retain existing
customers; our ability to manage our growth effectively and
successfully recruit additional highly-qualified personnel; 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, as updated by our subsequently filed Quarterly
Reports on Form 10-Q and our other SEC filings. 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 and non-GAAP diluted net income (loss) per diluted share.
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 diluted share exclude stock-based compensation
expense, the amortization of acquired intangible assets,
merger-related expenses, gain from settlement of escrow claim and
costs to exit a facility. The non-GAAP financial results discussed
above of adjusted EBITDA is defined as consolidated net income
(loss), plus stock-based compensation expense, the amortization of
acquired intangible assets, merger-related expenses, depreciation
expense, other income/expense, including interest expense and
interest income, the provision for income taxes and costs to exit a
facility. Merger-related expenses include fees incurred in
connection with closing an acquisition in addition to fees
associated with the retention of key employees. The gain from
settlement of escrow claim represents the value of shares settled
from escrow claims in connection with the purchase of substantially
all the assets of Unicorn Media, Inc. and subsidiaries. Costs to
exit a facility include termination fees and the disposal of
property and equipment in connection with the closure of certain
facilities for the purpose of consolidating its data centers.
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)
December 31, 2016
December 31, 2015 Assets Current assets: Cash and
cash equivalents $ 36,813 $ 27,637 Accounts receivable, net of
allowance 21,575 21,213 Prepaid expenses and other current assets
5,897 4,579 Total current assets 64,285
53,429 Property and equipment, net 9,264 8,689 Intangible assets,
net 10,970 13,786 Goodwill 50,776 50,776 Deferred tax asset 121 63
Restricted cash - 201 Other assets 1,008 724
Total assets $ 136,424 $ 127,668
Liabilities and stockholders' equity Current liabilities:
Accounts payable $ 5,327 $ 3,302 Accrued expenses 15,705 12,849
Capital lease liability 489 850 Equipment financing 307 - Deferred
revenue 34,665 29,836 Total current
liabilities 56,493 46,837 Deferred revenue, net of current portion
91 95 Other liabilities 1,644 2,601
Total liabilities 58,228 49,533 Stockholders' equity: Common
stock 34 33 Additional paid-in capital 230,788 220,458 Treasury
stock, at cost (871 ) (871 ) Accumulated other comprehensive loss
(1,172 ) (888 ) Accumulated deficit (150,583 )
(140,597 ) Total stockholders’ equity 78,196
78,135 Total liabilities and stockholders' equity $ 136,424
$ 127,668
Brightcove Inc.
Condensed Consolidated Statements of Operations (in
thousands, except per share amounts)
Three
Months Ended December 31, Twelve Months Ended December
31, 2016 2015 2016 2015 Revenue:
Subscription and support revenue $ 36,086 $ 34,098 $ 142,022 $
131,010 Professional services and other revenue 2,539
1,038 8,244 3,696 Total
revenue 38,625 35,136 150,266 134,706 Cost of revenue: (1) (2) Cost
of subscription and support revenue 12,970 10,718 48,011 41,735
Cost of professional services and other revenue 2,383
1,097 7,836 4,742 Total
cost of revenue 15,353 11,815
55,847 46,477 Gross profit 23,272
23,321 94,419 88,229
Operating expenses: (1) (2) Research and development 7,786
6,982 30,171 29,302 Sales and marketing 14,193 11,389 54,038 45,795
General and administrative 4,977 5,101 19,167 19,862 Merger-related
- 63 21 201
Total operating expenses 26,956 23,535
103,397 95,160 Loss from operations
(3,684 ) (214 ) (8,978 ) (6,931 ) Other (expense) income, net
(471 ) 522 (598 ) (258 ) Net
(loss) income before income taxes (4,155 ) 308 (9,576 ) (7,189 )
Provision for income taxes 208 136
410 391 Net (loss) income $ (4,363 ) $
172 $ (9,986 ) $ (7,580 ) Net (loss) income per
share—basic and diluted Basic $ (0.13 ) $ 0.01 $ (0.30 ) $ (0.23 )
Diluted (0.13 ) 0.01 (0.30 )
(0.23 ) Weighted-average shares—basic and diluted Basic
33,877 32,709 33,189 32,598 Diluted 33,877 33,682 33,189 32,598
(1) Stock-based compensation included in above line items:
Cost of subscription and support revenue $ 120 $ 80 $ 324 $ 181
Cost of professional services and other revenue 59 50 217 181
Research and development 333 332 1,275 1,392 Sales and marketing
690 391 2,320 2,155 General and administrative 545 849 1,876 2,105
(2) Amortization of acquired intangible assets
included in the above line items: Cost of subscription and support
revenue $ 508 $ 508 $ 2,031 $ 2,031 Research and development 31 32
126 126 Sales and marketing 244 219 959 955
Brightcove Inc. Condensed
Consolidated Statements of Cash Flows (in thousands)
Twelve Months Ended December 31, Operating
activities 2016 2015 Net loss $ (9,986 ) $ (7,580
) Adjustments to reconcile net loss to net cash provided by
operating activities: Depreciation and amortization 7,796 8,687
Stock-based compensation 6,012 6,014 Deferred income taxes (47 )
(27 ) Provision for reserves on accounts receivable 230 408 Loss on
disposal of equipment 155 68 Gain from settlement of escrow claim -
(871 ) Changes in assets and liabilities: Accounts receivable (559
) (157 ) Prepaid expenses and other current assets (894 ) 680 Other
assets (299 ) (256 ) Accounts payable 733 1,751 Accrued expenses
3,172 137 Deferred revenue 4,764 227
Net cash provided by operating activities 11,077
9,081
Investing activities Cash paid
for purchase of intangible asset (300 ) - Purchases of property and
equipment, net of returns (1,307 ) (1,390 ) Capitalization of
internal-use software costs (3,887 ) (1,456 ) Decrease in
restricted cash 201 - Net cash used in
investing activities (5,293 ) (2,846 )
Financing activities Proceeds from exercise of stock options
4,555 129 Payments of withholding tax on RSU vesting (405 ) (209 )
Proceeds from equipment financing 604 1,704 Payments on equipment
financing (271 ) (1,704 ) Payments under capital lease obligation
(850 ) (1,332 ) Net cash provided by (used in)
financing activities 3,633 (1,412 )
Effect of exchange rate changes on cash and cash equivalents
(241 ) (102 ) Net increase in cash and cash
equivalents 9,176 4,721 Cash and cash equivalents at beginning of
period 27,637 22,916 Cash and cash
equivalents at end of period $ 36,813 $ 27,637
Brightcove Inc. Reconciliation of GAAP
Gross Profit, GAAP Loss From Operations, GAAP Net (Loss) Income and
GAAP Net (Loss) Income Per Share to Non-GAAP Gross Profit,
Non-GAAP (Loss) Income From Operations, Non-GAAP Net (Loss) Income
and Non-GAAP Net (Loss) Income Per Share (in thousands,
except per share amounts) Three Months Ended
December 31, Twelve Months Ended December 31,
2016 2015 2016 2015 GROSS PROFIT: GAAP
gross profit $ 23,272 $ 23,321 $ 94,419 $ 88,229 Stock-based
compensation expense 179 130 541 362 Amortization of acquired
intangible assets 508 508 2,031 2,031 Costs to exit a facility
845 - 845 -
Non-GAAP gross profit $ 24,804 $ 23,959 $ 97,836
$ 90,622 LOSS FROM OPERATIONS: GAAP loss from
operations $ (3,684 ) $ (214 ) $ (8,978 ) $ (6,931 ) Stock-based
compensation expense 1,747 1,702 6,012 6,014 Merger-related
expenses - 63 21 201 Amortization of acquired intangible assets 783
759 3,116 3,112 Costs to exit a facility 845 -
845 - Non-GAAP (loss) income
from operations $ (309 ) $ 2,310 $ 1,016 $ 2,396
NET LOSS: GAAP net (loss) income $ (4,363 ) $ 172 $ (9,986 )
$ (7,580 ) Stock-based compensation expense 1,747 1,702 6,012 6,014
Merger-related expenses - 63 21 201 Amortization of acquired
intangible assets 783 759 3,116 3,112 Gain from settlement of
escrow claim - (871 ) - (871 ) Costs to exit a facility 845
- 845 - Non-GAAP
net (loss) income $ (988 ) $ 1,825 $ 8 $ 876
GAAP diluted net (loss) income per share $ (0.13 ) $ 0.01 $
(0.30 ) $ (0.23 ) Non-GAAP diluted net (loss) income per share $
(0.03 ) $ 0.05 $ 0.00 $ 0.03 Shares
used in computing GAAP diluted net (loss) income per share 33,877
32,709 33,189 32,598 Shares used in computing Non-GAAP diluted net
(loss) income per share 33,877 33,682 34,620 33,591
Brightcove Inc. Calculation of Adjusted EBITDA
(in thousands) Three Months Ended December
31, Twelve Months Ended December 31, 2016
2015 2016 2015 Net (loss) income $ (4,363 ) $
172 $ (9,986 ) $ (7,580 ) Other expense, net 471 (522 ) 598 258
Provision for income taxes 208 136 410 391 Merger-related expenses
- 63 21 201 Depreciation and amortization 1,895 1,789 7,796 8,687
Stock-based compensation expense 1,747 1,702 6,012 6,014 Costs to
exit a facility 845 - 845
- Adjusted EBITDA $ 803 $ 3,340 $ 5,696
$ 7,971
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version on businesswire.com: http://www.businesswire.com/news/home/20170216006195/en/
Investor Contact:ICR for BrightcoveBrian Denyeau,
646-277-1251brian.denyeau@icrinc.comorMedia
Contact:Brightcove, IncPhil LeClare,
617-674-6510pleclare@brightcove.com
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