Company reports adjusted EBITDA of $620,000
Brightcove Inc. (Nasdaq: BCOV), a leading global provider
of cloud services for video, today announced financial results for
the quarter ended June 30, 2015.
“Brightcove reported second quarter results that were in-line
with our profitability expectations, while revenue was slightly
below expectations due to the timing of certain customer renewals,”
said David Mendels, Chief Executive Officer of Brightcove. “We are
delivering positive performance in many areas of the company,
especially in North America and Japan, though we have seen some
softness in our European business. We have taken steps to improve
our execution in Europe and believe they will improve results going
forward.”
Mendels continued, “From a demand perspective, our digital
marketing business is gaining traction, reflecting the significant
opportunity for video as part of the cloud marketing automation
stack. We are also seeing early interest from Media companies in
our ad yield optimization solution that combines Brightcove Perform
and Brightcove Once to significantly improve content monetization.
We remain confident our strategy can deliver consistent
double-digit growth in the future, while also generating strong
shareholder value.”
Second Quarter 2015 Financial Highlights:
- Revenue for the second quarter
of 2015 was $32.8 million, an increase of 6% compared to $31.0
million for the second quarter of 2014. Subscription and support
revenue was $31.9 million, an increase of 7% compared with $29.9
million for the second quarter of 2014.
- Gross profit for the second
quarter of 2015 was $21.3 million, compared to $20.6 million for
the second quarter of 2014, representing a gross margin of 65% for
the second quarter of 2015. Non-GAAP gross profit for the second
quarter of 2015 was $21.9 million, representing a year-over-year
increase of 3% 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 was $3.2
million for the second quarter of 2015, compared to a loss from
operations of $4.0 million for the second quarter of 2014. Non-GAAP
loss from operations, which excludes stock-based compensation
expense, the amortization of acquired intangible assets and
merger-related expenses, was $964,000 for the second quarter of
2015, an improvement compared to a non-GAAP loss from operations of
$1.1 million during the second quarter of 2014.
- Net loss was $3.6 million, or
$0.11 per diluted share, for the second quarter of 2015. This
compares to a net loss of $4.3 million, or $0.13 per diluted share,
for the second quarter of 2014. Non-GAAP net loss, which excludes
stock-based compensation expense, the amortization of acquired
intangible assets and merger-related expenses, was $1.5 million for
the second quarter of 2015, or $0.04 per diluted share, compared to
a non-GAAP net loss of $1.4 million for the second quarter of 2014,
or $0.04 per diluted share.
- Adjusted EBITDA was $620,000 for
the second quarter of 2015, compared to $173,000 for the second
quarter of 2014. Adjusted EBITDA excludes stock-based compensation
expense, the amortization of acquired intangible assets,
merger-related expenses, depreciation expense, other income/expense
and the provision for income taxes.
- Cash flow from operations was
$385,000, compared to $724,000 for the second quarter of 2014.
- Free cash flow was negative $1.6
million after the company invested $2.0 million in capital
expenditures and capitalization of internal-use software during the
second quarter of 2015. Free cash flow was negative $861,000 for
the second quarter of 2014.
- Cash and cash equivalents were
$21.2 million as of June 30, 2015 compared to $21.9 million at
March 31, 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 Second Quarter and Recent Highlights:
- Ended the quarter with 5,404 customers,
of which 1,847 were premium.
- New media customers and media customers
who expanded their relationship during the quarter included:
Barstool Sports, Canadian Football League, Forecast Communication
Inc., Manchester City Football Club, News Corp Australia, Quebecor
Media Inc., Rogers Media Inc., The Food Channel, Time, Inc., Vox
Media and Yelp, among others.
- New digital marketing customers and
digital marketing customers who expanded their relationship during
the quarter included: Aon, BassMasters, Blue Jeans Network, Bryant
University, GoNoodle, Ingram Micro, Janssen Pharmaceuticals,
Morningstar, Skillshare, Sotheby’s and Udemy, among others.
- Introduced a Brightcove-specific Amazon
Fire TV web app kit that helps content owners optimize the delivery
of their content from Brightcove Video Cloud directly to Amazon
Fire TV. This latest integration leverages the Brightcove Player so
that publishers can run ads against their content on Amazon Fire TV
using the Google IMA3 advertising plugin and view analytics related
to video consumption on Amazon Fire TV in Brightcove Video
Cloud.
- Announced the general availability of
the new Brightcove Video Cloud, which includes updates such as a
new HTML5 user interface and faster upload and playback time. The
latest release also includes a set of new features including mobile
and social publishing, a custom report builder that enables
advanced video analytics, and integrations with leading content
management systems such as Drupal, Adobe Experience Manager,
WordPress, and SharePoint.
- Announced general availability of
Brightcove Audience. Part of Brightcove's Video Marketing Suite,
Audience allows marketers to feed video engagement data directly
into marketing automation platforms such as Oracle Eloqua and
Marketo to capture leads and to convert video engagement data into
contact tracking, lead scoring, and customer segmentation.
- Average revenue per premium customer
was $64,000 in the second quarter of 2015. This is an increase of
6.7% from $60,000 in the comparable period in 2014.
- Recurring dollar retention rate was 88%
in the second quarter of 2015, which was below our historical
target in the low to mid 90% range. Foreign currency affected our
retention rate by 200 basis points and late renewals affected our
retention rate by 300 basis points in the quarter.
Business Outlook
Based on information as of today, July 30, 2015, the Company is
issuing the following financial guidance:
Third Quarter 2015:
- Revenue is expected to be in the
range of $32.9 million to $33.4 million.
- Non-GAAP loss from operations is
expected to be in the range of $0 to $500,000, which excludes
stock-based compensation, the amortization of acquired intangible
assets and merger-related expenses totaling approximately $2.4
million.
- Adjusted EBITDA is expected to
be in the range of $1.1 million to $1.6 million, which excludes
stock-based compensation, the amortization of acquired intangible
assets, merger-related expenses, depreciation expense, other
income/expense and taxes totaling approximately $4.0 million.
- Non-GAAP net loss per diluted
share is expected to be $0.01 to $0.03, assuming approximately
32.6 million shares outstanding.
Full Year 2015:
- Revenue is expected to be in the
range of $132.5 million to $133.5 million. Full year revenue is
being impacted by $4.2 million due to foreign exchange rate
fluctuations. We anticipate professional services will be
approximately $1 million per quarter for the remainder of the
year.
- Non-GAAP loss from operations is
expected to be in the range of $500,000 to $1.5 million, which
excludes stock-based compensation, the amortization of acquired
intangible assets and merger-related expenses totaling
approximately $9.2 million to $9.6 million.
- Adjusted EBITDA is expected to
be in the range of $5.0 to $6.0 million, which excludes stock-based
compensation, the amortization of acquired intangible assets,
merger-related expenses, depreciation, other income/expense and
taxes totaling approximately $16.5 million to $16.9 million.
- Non-GAAP net loss per diluted
share is expected to be $0.06 to $0.09, assuming approximately
32.6 million shares outstanding.
Conference Call Information
Brightcove will host a conference call today, July 30, 2015, 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 13613339. 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 a 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 more than 5,000 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 third fiscal quarter of 2015 and full year 2015, 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
loss from operations, non-GAAP net loss, adjusted EBITDA, adjusted
EBITDA margin and non-GAAP diluted net loss per 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 loss from operations, non-GAAP net loss and
non-GAAP diluted net loss per share exclude stock-based
compensation expense, the amortization of acquired intangible
assets and merger-related expenses. 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, and the provision for income
taxes. Merger-related expenses include fees incurred in connection
with closing an acquisition in addition to fees associated with the
retention of key employees. Adjusted EBITDA margin is defined as
adjusted EBITDA as a percentage of total revenue. 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, 2015 December 31,
2014 Assets Current assets: Cash and cash equivalents $
21,238 $ 22,916 Accounts receivable, net of allowance 19,235 21,463
Prepaid expenses and other current assets 5,254 4,342 Deferred tax
asset 19 109 Total current assets
45,746 48,830 Property and equipment, net 10,598 10,372 Intangible
assets, net 15,319 16,898 Goodwill 50,776 50,776 Restricted cash
201 201 Other assets 1,031 507 Total
assets $ 123,671 $ 127,584
Liabilities and
stockholders' equity Current liabilities: Accounts payable $
2,883 $ 1,618 Accrued expenses 9,795 11,722 Capital lease liability
1,080 1,159 Current portion of long-term debt 697 - Deferred
revenue 28,808 29,640 Total current
liabilities 43,263 44,139 Deferred revenue, net of current portion
122 64 Other liabilities 3,199 2,618
Total liabilities 46,584 46,821 Stockholders' equity: Common
stock 33 32 Additional-paid-in-capital 217,370 214,524 Accumulated
other comprehensive loss (822 ) (776 ) Accumulated deficit
(139,494 ) (133,017 ) Total stockholders’ equity
77,087 80,763 Total liabilities and
stockholders' equity $ 123,671 $ 127,584
Brightcove Inc.Condensed Consolidated Statements
of Operations(in thousands, except per share
amounts)(unaudited)
Three Months Ended June 30, Six
Months Ended June 30, 2015
2014 2015 2014
Revenue: Subscription and support revenue $ 31,917 $ 29,929
$ 63,728 $ 59,304 Professional services and other revenue
931 1,074 2,005 2,804
Total revenue 32,848 31,003 65,733 62,108 Cost of revenue:
(1) (2) Cost of subscription and support revenue 10,357 9,109
20,703 18,629 Cost of professional services and other revenue
1,201 1,315 2,447
3,062 Total cost of revenue 11,558
10,424 23,150 21,691 Gross
profit 21,290 20,579 42,583
40,417 Operating expenses: (1) (2) Research
and development 7,267 6,792 15,087 13,361 Sales and marketing
11,903 12,095 22,742 23,441 General and administrative 5,209 5,148
10,370 9,862 Merger-related 62 521
76 2,388 Total operating expenses
24,441 24,556 48,275
49,052 Loss from operations (3,151 ) (3,977 ) (5,692
) (8,635 ) Other expense, net (429 ) (294 )
(653 ) (406 ) Loss before income taxes and non-controlling
interest in consolidated subsidiary (3,580 ) (4,271 ) (6,345 )
(9,041 ) Provision for income taxes 66 56
132 123 Net loss $ (3,646 ) $
(4,327 ) $ (6,477 ) $ (9,164 ) Net loss per share—basic and
diluted $ (0.11 ) $ (0.13 ) $ (0.20 ) $ (0.29 )
Weighted-average shares —basic and diluted 32,548 32,145 32,522
31,595 (1) Stock-based compensation included in above line
items: Cost of subscription and support revenue $ 51 $ 50 $ 71 $
110 Cost of professional services and other revenue 19 16 52 68
Research and development 226 178 660 574 Sales and marketing 463
512 921 1,145 General and administrative 577 741 1,085 1,350
(2) Amortization of acquired intangible assets included in
the above line items: Cost of subscription and support revenue $
508 $ 507 $ 1,015 $ 930 Research and development 31 41 63 72 Sales
and marketing 250 316 501 581
Brightcove Inc.Condensed Consolidated
Statements of Cash Flows(in thousands)(unaudited)
Six Months Ended June 30, Operating activities
2015 2014 Net loss $
(6,477 ) $ (9,164 ) Adjustments to reconcile net loss to net cash
used in operating activities: Depreciation and amortization 4,802
3,958 Stock-based compensation 2,789 3,247 Provision for reserves
on accounts receivable 167 41 Amortization of premium on
investments - 1 Loss on disposal of equipment 44 91 Changes in
assets and liabilities: Accounts receivable 2,035 2,261 Prepaid
expenses and other current assets (878 ) (1,755 ) Other assets (530
) 1,188 Accounts payable 1,332 (3,177 ) Accrued expenses (2,127 )
(4,416 ) Deferred revenue (726 ) 3,515 Net
cash provided by (used in) operating activities 431
(4,210 )
Investing activities Purchases of
property and equipment (2,441 ) (1,487 ) Capitalization of
internal-use software costs (336 ) (875 ) Cash paid for
acquisition, net of cash acquired - (9,100 ) Maturities of
investments - 3,060 Decrease in restricted cash -
113 Net cash used in investing activities
(2,777 ) (8,289 )
Financing activities
Proceeds from exercise of stock options 58 555 Proceeds from
issuance of debt 1,704 - Payments on debt (404 ) - Payments under
capital lease obligation (627 ) (524 ) Net cash
provided by financing activities 731 31
Effect of exchange rate changes on cash (63 )
206 Net decrease in cash and cash equivalents (1,678
) (12,262 ) Cash and cash equivalents at beginning of period
22,916 33,047 Cash and cash equivalents at end
of period $ 21,238 $ 20,785
Brightcove
Inc.Reconciliation of GAAP Gross Profit, GAAP Loss From
Operations, GAAP Net Loss and GAAP Net Loss Per Share
toNon-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,
2015
2014
2015
2014 GROSS PROFIT: GAAP gross profit $
21,290 $ 20,579 $ 42,583 $ 40,417 Stock-based compensation expense
70 66 123 178 Amortization of acquired intangible assets 508
507 1,015 930
Non-GAAP gross profit $ 21,868 $ 21,152 $ 43,721
$ 41,525 LOSS FROM OPERATIONS: GAAP loss from
operations $ (3,151 ) $ (3,977 ) $ (5,692 ) $ (8,635 ) Stock-based
compensation expense 1,336 1,497 2,789 3,247 Merger-related
expenses 62 521 76 2,388 Amortization of acquired intangible assets
789 864 1,579
1,583 Non-GAAP loss from operations $ (964 ) $ (1,095 ) $
(1,248 ) $ (1,417 ) NET LOSS: GAAP net loss $ (3,646 ) $ (4,327 ) $
(6,477 ) $ (9,164 ) Stock-based compensation expense 1,336 1,497
2,789 3,247 Merger-related expenses 62 521 76 2,388 Amortization of
acquired intangible assets 789 864
1,579 1,583 Non-GAAP net loss
attributable to common stockholders $ (1,459 ) $ (1,445 ) $ (2,033
) $ (1,946 ) GAAP basic and diluted net loss per share $ (0.11 ) $
(0.13 ) $ (0.20 ) $ (0.29 ) Non-GAAP basic and diluted net loss per
share $ (0.04 ) $ (0.04 ) $ (0.06 ) $ (0.06 ) Shares used in
computing GAAP and Non-GAAP basic and diluted net loss per share
32,548 32,145 32,522 31,595
Brightcove Inc.Calculation of Adjusted
EBITDA and Adjusted EBITDA Margin(in thousands)(unaudited)
Three Months Ended June 30, Six Months Ended June
30, 2015 2014
2015 2014 Net loss
$ (3,646 ) $ (4,327 ) $ (6,477 ) $ (9,164 ) Other expense, net (429
) (294 ) (653 ) (406 ) Provision for income taxes 66 56 132 123
Merger-related expenses 62 521 76 2,388 Depreciation and
amortization 2,373 2,132 4,802 3,958 Stock-based compensation
expense 1,336 1,497 2,789
3,247 Adjusted EBITDA $ 620 $ 173 $
1,975 $ 958 Adjusted EBITDA margin 1.9 % 0.6 %
3.0 % 1.5 %
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version on businesswire.com: http://www.businesswire.com/news/home/20150730006628/en/
Investor Contact:ICR for BrightcoveBrian Denyeau,
646-277-1251brian.denyeau@icrinc.comorMedia
Contact:Brightcove Inc.DoShik Wood,
617-299-8453dwood@brightcove.com
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