Brightcove Inc. (NASDAQ: BCOV), a leading global provider of
cloud content services, today announced financial results for the
quarter ended June 30, 2013.
“Brightcove delivered strong second quarter results highlighted
by revenue and profitability that exceeded the high end of our
guidance,” said David Mendels, Chief Executive Officer of
Brightcove. “We are seeing strong demand across a wide variety of
industries as our customers embrace the use of digital content as a
way to drive deeper levels of engagement with their customers.
During the quarter we delivered exciting new technology to the
market that enhances our market leadership position and strengthens
our ability to penetrate the multi-billion dollar online video
platform market.”
Second Quarter 2013 Financial Highlights:
Revenue: Total revenue for the second quarter of 2013 was
$26.9 million, an increase of 24% compared to $21.6 million for the
second quarter of 2012. Subscription and support revenue was $25.6
million, an increase of 23% compared with $20.7 million for the
second quarter of 2012. Professional services and other revenue was
$1.3 million, compared to $902,000 for the second quarter of
2012.
Gross Profit: Gross profit for the second quarter of 2013
was $17.7 million, compared to $15.2 million for the second quarter
of 2012, and gross margin was 66% for the second quarter of 2013.
Non-GAAP gross profit for the second quarter of 2013 was $18.1
million, representing a year-over-year increase of 18% and a
non-GAAP gross margin of 67%. Non-GAAP gross profit and non-GAAP
gross margin exclude stock-based compensation expense and the
amortization of acquired intangible assets.
Loss from Operations: Loss from operations was $3.3
million for the second quarter of 2013, compared to a loss of $3.9
million for the second quarter of 2012. Non-GAAP loss from
operations, which excludes stock-based compensation expense, the
amortization of acquired intangible assets and merger-related
expenses, was $874,000 for the second quarter of 2013, compared to
a non-GAAP loss from operations of $2.1 million during the second
quarter of 2012.
Net Loss: Net loss attributable to common stockholders
was $3.5 million, or $0.12 per basic and diluted share, for the
second quarter of 2013. This compares to a net loss attributable to
common stockholders of $4.3 million, or $0.16 per basic and diluted
share, for the second quarter of 2012.
Non-GAAP net loss attributable to common stockholders, which
excludes stock-based compensation expense, the amortization of
acquired intangible assets, merger-related expenses, and the
accretion of dividends on redeemable convertible preferred stock,
was $1.1 million for the second quarter of 2013, or $0.04 per basic
and diluted share, compared to a non-GAAP net loss attributable to
common stockholders of $2.6 million for the second quarter of 2012,
or $0.10 per basic and diluted share.
Balance Sheet and Cash Flow: As of June 30, 2013,
Brightcove had $30.5 million of cash, cash equivalents and
investments, compared to $28.6 million at March 31, 2013.
Brightcove generated $2.8 million in cash from operations and
invested $802,000 in capital expenditures, leading to free cash
flow of $2.0 million for the second quarter of 2013. Free cash flow
was ($2.1) million for the second quarter of 2012.
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 Second Quarter and Recent Highlights
- Yahoo!7, a leading online destination
for Australian consumers and advertisers, chose Brightcove to
support their current and future online video initiatives,
including their catch-up TV service, Plus7, and their breaking news
services. Yahoo!7 is a joint venture between Seven Network Limited
and Yahoo! Inc., which combines the online assets, television
content and magazine properties of the Seven Network with the
strength of Yahoo!’s global Internet platform.
- Launched Brightcove Video Cloud Live,
an add-on product that provides an easy-to-use dashboard for live
video events and delivering multi-bitrate streams to multiple
devices.
- Asahi Shimbun, one of the top
newspapers in Japan, adopted Video Cloud to publish video of the
National High School Baseball Championship of Japan, one of that
country’s most popular sporting events.
- Ended the quarter with 6,386 customers,
which included a net increase of 16 premium customers during the
quarter. New customers added during the quarter included Campbell
Soup Company, IBM and All State Insurance.
Business Outlook
Based on information as of today, July 25, 2013, the Company is
issuing the following financial guidance:
Third Quarter 2013: The Company expects revenue to be
$26.8 million to $27.3 million, and non-GAAP loss from operations
to be $900,000 to $1.2 million. Assuming approximately 28.3 million
shares outstanding, Brightcove expects its net loss per basic and
diluted share attributable to common stockholders to be $0.14 to
$0.15, which includes estimates for stock-based compensation
expense of $1.6 million, merger-related expenses of $375,000 and
amortization of acquired intangible assets of $430,000. Brightcove
expects its non-GAAP net loss per basic and diluted share
attributable to common stockholders to be $0.05 to $0.06, which
excludes the estimated expenses referenced in the previous
sentence.
Full Year 2013:
The Company is raising its 2013 financial guidance for revenue
and non-GAAP loss from operations. Revenue is expected to be $106.3
million to $107.5 million, and non-GAAP loss from operations is
expected to be $3.0 million to $4.0 million. Assuming approximately
28.4 million shares outstanding, Brightcove expects its net loss
per basic and diluted share attributable to common stockholders to
be $0.48 to $0.53, which includes estimates for stock-based
compensation expense of $6.6 million, merger-related expenses of
$1.6 million and amortization of acquired intangible assets of $1.7
million. Brightcove expects its non-GAAP net loss per basic and
diluted share attributable to common stockholders to be $0.13 to
$0.18, which excludes the estimated expenses referenced in the
previous sentence.
Conference Call Information
Brightcove will host a conference call today, July 25, 2013, at
5:00 p.m. (Eastern Time) to discuss the Company's financial results
and current business outlook. 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
877-870-5176 (domestic) or 858-384-5517 (international). The replay
conference ID is 416473. A replay of the webcast will also be
available for a limited time at http://investor.brightcove.com.
About Brightcove
Brightcove Inc. (NASDAQ: BCOV), a leading global provider of
cloud content services, offers a family of products used to publish
and distribute the world's professional digital media. The
company's products include Video Cloud, the market-leading online
video platform and Zencoder, a leading cloud-based media processing
service and HTML5 video player technology provider. Brightcove has
more than 6,300 customers in over 65 countries that rely on
Brightcove cloud content services to build and operate media
experiences across PCs, smartphones, tablets and connected TVs. For
more information, visit http://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 third fiscal quarter of 2013 and the full year of 2013, our
position to execute on our growth strategy, and our ability to
penetrate our market and expand our leadership position. 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, risks associated with our
history of losses, our limited operating history, expectations
regarding the widespread adoption of customer demand for our Video
Cloud and Zencoder 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 the Company’s 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
loss from operations, non-GAAP net loss attributable to common
stockholders and non-GAAP basic and diluted net loss per share
attributable to common stockholders. 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 exclude stock-based compensation expense, the amortization of
acquired intangible assets, merger-related expenses, and the
accretion of dividends on redeemable convertible preferred
stock.
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)(unaudited)
June 30,
2013 December 31, 2012 Assets Current assets:
Cash and cash equivalents $ 25,495 $ 21,708 Short-term investments
4,958 8,264 Restricted cash 42 102 Accounts receivable, net of
allowance 18,922 18,956 Prepaid expenses and other current assets
4,402 2,987 Deferred tax asset 163 187 Total current assets 53,982
52,204 Long-term investments - 3,069 Property and equipment, net
7,115 8,400 Intangible assets, net 9,528 10,387 Goodwill 22,018
22,018 Restricted cash 201 201 Other assets 732 714 Total assets $
93,576 $ 96,993
Liabilities, redeemable convertible
preferred stock and stockholders' equity
Current liabilities: Accounts payable $ 911 $ 619 Accrued expenses
10,556 11,639 Deferred revenue 22,501 19,103 Total current
liabilities 33,968 31,361 Deferred revenue, net of current portion
99 113 Other liabilities 1,267 1,027 Total liabilities 35,334
32,501 Stockholders' Equity: Common stock 28 28
Additional-paid-in-capital 172,069 167,912 Accumulated other
comprehensive income (242) 572 Accumulated deficit (113,613)
(105,862) Total stockholders’ equity attributable to Brightcove
Inc. 58,242 62,650 Non-controlling interest in consolidated
subsidiary - 1,842 Total stockholders’ equity 58,242 64,492
Total liabilities, redeemable convertible
preferred stock and stockholders' equity
$ 93,576 $ 96,993
Brightcove Inc.Condensed
Consolidated Statements of Operations(in thousands, except
per share amounts)(unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
2013 2012
2013 2012 Revenue: Subscription
and support revenue $ 25,575 $ 20,718 $ 49,352 $ 39,554
Professional services and other
revenue
1,326
902
2,270 2,010 Total revenue 26,901
21,620 51,622 41,564 Cost of revenue: (1) (2) Cost of subscription
and support revenue 7,647 5,233 14,394 10,428 Cost of professional
services and other revenue 1,525 1,211
3,192 2,380 Total cost of revenue
9,172 6,444 17,586
12,808 Gross profit 17,729 15,176
34,036 28,756 Operating
expenses: (1) (2) Research and development 4,982 4,564 10,043 8,741
Sales and marketing 10,749 9,745 20,696 18,753 General and
administrative 4,754 4,274 9,380 7,911 Merger-related 546
479 1,091 479
Total operating expenses 21,031 19,062
41,210 35,884 Loss from operations
(3,302 ) (3,886 ) (7,174 ) (7,128 ) Other expense, net (164
) (273 ) (463 ) (536 )
Loss before income taxes and
non-controlling interest in consolidated subsidiary
(3,466 ) (4,159 ) (7,637 ) (7,664 ) Provision for income taxes
56 29 94 58
Consolidated net loss (3,522 ) (4,188 ) (7,731 ) (7,722 )
Net income attributable to noncontrolling
interest in consolidated subsidiary
(150 ) (20 ) (202 ) Net loss attributable to Brightcove Inc. (3,522
) (4,338 ) (7,751 ) (7,924 ) Accretion of dividends on redeemable
convertible preferred stock - -
(733 ) Net loss attributable to common stockholders $ (3,522
) $ (4,338 ) $ (7,751 ) $ (8,657 )
Net loss per share attributable to common
stockholders—basic and diluted
$ (0.12 ) $ (0.16 ) $ (0.28 ) $ (0.40 ) Weighted-average
shares —basic and diluted 28,181 27,256 28,103 21,550 (1)
Stock-based compensation included in above line items: Cost of
subscription and support revenue Cost of professional services and
other revenue Research and development Sales and marketing General
and administrative $ 57 $ 35 $ 125 $ 55 13 25 64 47 228 136 548 217
509 363 1,084 615 645 704 1,330 1,276 (2) Amortization of
acquired intangible assets included in the above line items: Cost
of subscription and support revenue Research and development Sales
and marketing $ 253 $ - $ 506 $ - 10 - 20 - 167 - 334 -
Brightcove Inc.Condensed Consolidated Statements
of Cash Flows(in thousands)(unaudited)
Six Months Ended June 30, Operating
activities 2013 2012
Net loss $ (7,731 ) $ (7,722 ) Adjustments to reconcile net loss to
net cash used in operating activities: Depreciation and
amortization 3,069 1,821 Stock-based compensation 3,151 2,210
Change in fair value of warrants - (28 ) Provision for reserves on
accounts receivable 321 247 Amortization of premium on investments
55 45 Amortization of deferred financing costs - 44 Loss on
disposal of equipment - 83 Changes in assets and liabilities:
Accounts receivable (411 ) (3,048 ) Prepaid expenses and other
current assets (1,484 ) (345 ) Other assets (29 ) 362 Accounts
payable 294 (453 ) Accrued expenses (750 ) 415 Deferred revenue
3,509 2,473 Net cash used in operating
activities (6 ) (3,896 )
Investing
activities Purchases of investments - (14,067 ) Maturities of
investments 6,320 - Purchases of property and equipment (928 )
(4,669 ) Capitalization of internal-use software costs - (24 )
Decrease in restricted cash 60 - Net
cash provided by (used in) investing activities 5,452
(18,760 )
Financing activities Proceeds from
exercise of stock options 220 343 Purchase of non-controlling
interest in consolidated subsidiary (1,084 ) - Proceeds from
issuance of common stock in connection with initial public
offering, net of offering costs - 56,762 Repayments under term loan
- (7,000 ) Net cash (used in) provided by
financing activities (864 ) 50,105
Effect of exchange rate changes on cash (795 ) (69 )
Net increase in cash and cash equivalents 3,787 27,380 Cash
and cash equivalents at beginning of period 21,708
17,227 Cash and cash equivalents at end of period $
25,495 $ 44,607
Brightcove Inc.Reconciliation of
GAAP Gross Profit, GAAP Loss From Operations, GAAP Net Loss and
GAAP Net Loss Per Share to Non-GAAP Gross Profit, Non-GAAP Loss
From Operations, Non-GAAP Net Loss and Non-GAAP Net Loss Per
Share(in thousands, except per share
amounts)(unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
2013 2012
2013 2012 GROSS PROFIT: GAAP
gross profit $ 17,729 $ 15,176 $ 34,036 $ 28,756 Stock-based
compensation expense 70 60 189 102 Amortization of acquired
intangible assets 253 - 506
- Non-GAAP gross profit $ 18,052 $
15,236 $ 34,731 $ 28,858 LOSS FROM OPERATIONS:
GAAP loss from operations $ (3,302 ) $ (3,886 ) $ (7,174 ) $ (7,128
) Stock-based compensation expense 1,452 1,263 3,151 2,210
Merger-related expenses 546 479 1,091 479 Amortization of acquired
intangible assets 430 - 860
- Non-GAAP loss from operations $ (874 ) $
(2,144 ) $ (2,072 ) $ (4,439 ) NET LOSS: GAAP net loss attributable
to common stockholders $ (3,522 ) $ (4,338 ) $ (7,751 ) $ (8,657 )
Stock-based compensation expense 1,452 1,263 3,151 2,210
Merger-related expenses 546 479 1,091 479 Accretion of dividends on
redeemable convertible preferred stock - - - 733 Amortization of
acquired intangible assets 430 -
860 - Non-GAAP net loss attributable to common
stockholders $ (1,094 ) $ (2,596 ) $ (2,649 ) $ (5,235 ) GAAP basic
and diluted net loss per share attributable to common stockholders
$ (0.12 ) $ (0.16 ) $ (0.28 ) $ (0.40 ) Non-GAAP basic and diluted
net loss per share attributable to common stockholders $ (0.04 ) $
(0.10 ) $ (0.09 ) $ (0.24 )
Shares used in computing GAAP and Non-GAAP
basic and diluted net loss per share attributable to common
stockholders
28,181 27,256 28,103 21,550
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