Company reports non-GAAP income from operations
of $1.3 million and adjusted EBITDA of $2.7 million
Brightcove Inc. (Nasdaq: BCOV), a leading global provider
of cloud services for video, today announced financial results for
the quarter ended September 30, 2015.
“Brightcove reported strong third quarter financial results that
exceeded expectations on both the top and bottom lines, which were
highlighted by a return to non-GAAP profitability a quarter earlier
than expected,” said David Mendels, Chief Executive Officer of
Brightcove. “We are seeing exciting proofpoints that our
go-to-market strategy and enhanced product portfolio, which is
designed to enable customers to leverage online video to drive
better business results, is working in both our media and digital
marketing businesses.”
Mendels added, “We are at the epicenter of several positive
macro trends that are shaping our industry - the evolution of
consumers and businesses using video; the proliferation of devices;
the transitioning away from Flash to HTML5; the challenge of ad
blockers and enabling ad-supported business models; and the wide
adoption of digital marketing technology. We are uniquely
positioned to capitalize on these trends as we help our customers
harness video to drive business results.”
Third Quarter 2015 Financial Highlights:
- Revenue for the third quarter of
2015 was $33.8 million, an increase of 7% compared to $31.5 million
for the third quarter of 2014. Subscription and support revenue was
$33.2 million, an increase of 9% compared with $30.5 million for
the third quarter of 2014.
- Gross profit for the third
quarter of 2015 was $22.3 million, compared to $20.7 million for
the third quarter of 2014, representing a gross margin of 66% for
the third quarter of 2015. Non-GAAP gross profit for the third
quarter of 2015 was $22.9 million, representing a year-over-year
increase of 8% and a non-GAAP gross margin of 68%. 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 $1.0
million for the third quarter of 2015, compared to a loss from
operations of $3.1 million for the third quarter of 2014. Non-GAAP
income from operations, which excludes stock-based compensation
expense, the amortization of acquired intangible assets and
merger-related expenses, was $1.3 million for the third quarter of
2015, an improvement compared to a non-GAAP loss from operations of
$134,000 during the third quarter of 2014.
- Net loss was $1.3 million, or
$0.04 per diluted share, for the third quarter of 2015. This
compares to a net loss of $3.8 million, or $0.12 per diluted share,
for the third quarter of 2014. Non-GAAP net income, which excludes
stock-based compensation expense, the amortization of acquired
intangible assets and merger-related expenses, was $1.1 million for
the third quarter of 2015, or $0.03 per diluted share, compared to
a non-GAAP net loss of $829,000 for the third quarter of 2014, or
$0.03 per diluted share.
- Adjusted EBITDA was $2.7 million
for the third quarter of 2015, compared to $1.2 million for the
third 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
$3.8 million, compared to $2.6 million for the third quarter of
2014.
- Free cash flow was $3.1 million
after the company invested $722,000 in capital expenditures and
capitalization of internal-use software during the third quarter of
2015. Free cash flow was $1.5 million for the third quarter of
2014.
- Cash and cash equivalents were
$23.8 million as of September 30, 2015 compared to $21.2 million at
June 30, 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 Third Quarter and Recent Highlights:
- Announced Brightcove Jump Start for
Apple TV®, a new offering that enables publishers to quickly build
and launch video apps on the fourth-generation Apple TV®.
- The new Video Cloud, which shipped in
mid-July, incorporates a beautiful new HTML5 user interface, faster
upload and playback, mobile publishing, and new custom analytics to
scale workflows, speed time-to-live, and measure the impact of
video content.
- At the end of July, we released
Brightcove Audience which connects Video Cloud analytics directly
into Oracle Eloqua and Marketo marketing automation platforms to
capture leads and translate video engagement data into contact
tracking, lead scoring, and customer segmentation.
- Brightcove Gallery Live, announced
recently in October, is a “live-event-in-a-box” solution for
companies who want to live stream events for external and internal
audiences. It provides marketers and communications professionals
with an easy-to-use toolkit to promote and publish live streamed
events without dedicated IT or other technical support.
- Brightcove Lift is the newest addition
to Brightcove’s media solutions. It is an ad optimization solution,
which enables publishers, broadcasters, OTT providers, and other
media companies to combine server-side ad insertion (SSAI) with the
industry-leading HTML5 Brightcove Player to maximize video ad
delivery and video ad revenue across mobile and desktop by
defeating ad blockers.
- Average revenue per premium customer
was $67,000 in the third quarter of 2015. This is an increase of
10% from $61,000 in the comparable period in 2014.
- Recurring dollar retention rate was
101% in the third quarter of 2015, which was above our historical
target in the low to mid 90% range.
- Ended the quarter with 5,162 customers,
of which 1,852 were premium.
- New media customers and media customers
who expanded their relationship during the quarter included: Brit +
Co., Electus Digital, International Data Group, Marathon Ventures,
MediaWorks NZ, Presentcast (a new consortium of broadcasters in
Japan), Scripps Interactive, Sunbeam Television, Time, Inc., Tokyo
Broadcasting, and Wenner Media Networks.
- New digital marketing customers and
digital marketing customers who expanded their relationship during
the quarter included: All Nippon Airways, Artnet, John Wiley &
Sons, Money Map Press, MWH Global, PennWell Corporation, SAS
Institute, Samsung Electronics America, and Think and Learn (one of
India’s leading providers of prep courses for competitive entrance
exams).
Business Outlook
Based on information as of today, October 29, 2015, the Company
is issuing the following financial guidance:
Fourth Quarter 2015:
- Revenue is expected to be in the
range of $33.8 million to $34.3 million, including $800,000 of
professional services revenue.
- Non-GAAP income from operations
is expected to be in the range of $600,000 to $1.1 million, 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 $1.9 million to $2.4 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 income per diluted
share is expected to be $0.01 to $0.02, assuming approximately
33.7 million shares outstanding.
Full Year 2015:
- Revenue is expected to be in the
range of $133.4 million to $133.9 million. Full year revenue is
being impacted by $3.9 million due to foreign exchange rate
fluctuations.
- Non-GAAP income from operations
is expected to be in the range of $700,000 to $1.2 million, which
excludes stock-based compensation, the amortization of acquired
intangible assets and merger-related expenses totaling
approximately $9.2 million.
- Adjusted EBITDA is expected to
be in the range of $6.5 to $7.0 million, which excludes stock-based
compensation, the amortization of acquired intangible assets,
merger-related expenses, depreciation, other income/expense and
taxes totaling approximately $16.4 million.
- Non-GAAP net income/loss per diluted
share is expected to be $0.00 to a loss of $0.02, assuming
approximately 33.6 million shares outstanding.
Conference Call Information
Brightcove will host a conference call today, October 29, 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 13621643. 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 fourth 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) September 30, 2015
December 31, 2014 Assets Current assets: Cash and
cash equivalents $ 23,788 $ 22,916 Accounts receivable, net of
allowance 20,110 21,463 Prepaid expenses and other current assets
4,730 4,342 Deferred tax asset 37 109
Total current assets 48,665 48,830 Property and equipment, net
10,519 10,372 Intangible assets, net 14,545 16,898 Goodwill 50,776
50,776 Restricted cash 201 201 Other assets 984
507 Total assets $ 125,690 $ 127,584
Liabilities and stockholders' equity Current liabilities:
Accounts payable $ 2,573 $ 1,618 Accrued expenses 10,554 11,722
Capital lease liability 918 1,159 Equipment Financing 704 -
Deferred revenue 30,419 29,640 Total
current liabilities 45,168 44,139 Deferred revenue, net of current
portion 269 64 Other liabilities 2,967 2,618
Total liabilities 48,404 46,821 Stockholders' equity:
Common stock 33 32 Additional-paid-in-capital 218,859 214,524
Accumulated other comprehensive loss (837 ) (776 ) Accumulated
deficit (140,769 ) (133,017 ) Total stockholders’
equity 77,286 80,763 Total liabilities
and stockholders' equity $ 125,690 $ 127,584
Brightcove Inc. Condensed
Consolidated Statements of Operations (in thousands, except
per share amounts) (unaudited) Three Months
Ended September 30, Nine Months Ended September
30, 2015 2014 2015 2014 Revenue:
Subscription and support revenue $ 33,184 $ 30,450 $ 96,912 $
89,754 Professional services and other revenue 653
1,077 2,658 3,881 Total
revenue 33,837 31,527 99,570 93,635 Cost of revenue: (1) (2) Cost
of subscription and support revenue 10,314 9,467 31,017 28,096 Cost
of professional services and other revenue 1,198
1,352 3,645 4,414 Total
cost of revenue 11,512 10,819
34,662 32,510 Gross profit 22,325
20,708 64,908 61,125
Operating expenses: (1) (2) Research and development 7,233
7,187 22,320 20,548 Sales and marketing 11,664 11,273 34,406 34,714
General and administrative 4,391 4,735 14,761 14,597 Merger-related
62 623 138 3,011
Total operating expenses 23,350 23,818
71,625 72,870 Loss from
operations (1,025 ) (3,110 ) (6,717 ) (11,745 ) Other expense, net
(127 ) (614 ) (780 ) (1,020 ) Loss
before income taxes and non-controlling interest in consolidated
subsidiary (1,152 ) (3,724 ) (7,497 ) (12,765 ) Provision for
income taxes 123 81 255
204 Net loss $ (1,275 ) $ (3,805 ) $ (7,752 ) $
(12,969 ) Net loss per share—basic and diluted $ (0.04 ) $
(0.12 ) $ (0.24 ) $ (0.41 ) Weighted-average shares —basic
and diluted 32,636 32,247 32,560 31,815 (1) Stock-based
compensation included in above line items: Cost of subscription and
support revenue $ 30 $ 37 $ 101 $ 147 Cost of professional services
and other revenue 79 53 131 121 Research and development 400 376
1,060 950 Sales and marketing 843 533 1,764 1,678 General and
administrative 171 527 1,256 1,877 (2) Amortization
of acquired intangible assets included in the above line items:
Cost of subscription and support revenue $ 508 $ 509 $ 1,523 $
1,439 Research and development 31 36 94 108 Sales and marketing 235
282 736 863
Brightcove
Inc. Condensed Consolidated Statements of Cash Flows
(in thousands) (unaudited) Nine Months
Ended September 30, Operating activities
2015 2014 Net loss $ (7,752 ) $
(12,969 ) Adjustments to reconcile net loss to net cash used in
operating activities: Depreciation and amortization 6,898 6,114
Stock-based compensation 4,312 4,773 Provision for reserves on
accounts receivable 317 122 Amortization of premium on investments
- 1 Loss on disposal of equipment 45 92 Changes in assets and
liabilities: Accounts receivable 1,050 2,399 Prepaid expenses and
other current assets (441 ) (1,005 ) Other assets (478 ) 1,185
Accounts payable 1,001 (3,097 ) Accrued expenses (1,660 ) (4,126 )
Deferred revenue 957 4,861 Net cash
provided by (used in) operating activities 4,249
(1,650 )
Investing activities Cash paid for
acquisition, net of cash acquired - (9,100 ) Maturities of
investments - 3,060 Purchases of property and equipment (2,479 )
(2,500 ) Capitalization of internal-use software costs (1,020 )
(927 ) Decrease in restricted cash - 113
Net cash used in investing activities (3,499 )
(9,354 )
Financing activities Proceeds from exercise
of stock options 72 584 Payments of withholding tax on RSU vesting
(48 ) - Proceeds from equipment financing 1,704 - Payments on
equipment financing (576 ) - Payments under capital lease
obligation (988 ) (860 ) Net cash provided by (used
in) financing activities 164 (276 )
Effect of exchange rate changes on cash (42 ) (62 )
Net increase (decrease) in cash and cash equivalents 872
(11,342 ) Cash and cash equivalents at beginning of period
22,916 33,047 Cash and cash equivalents at end
of period $ 23,788 $ 21,705
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 Income (Loss) From
Operations, Non-GAAP Net Income (Loss) and Non-GAAP Net Income
(Loss) Per Share (in thousands, except per share
amounts) (unaudited)
Three Months Ended September
30,
Nine Months Ended September 30, 2015
2014 2015
2014 GROSS PROFIT: GAAP gross profit $ 22,325 $
20,708 $ 64,908 $ 61,125 Stock-based compensation expense 109 90
232 268 Amortization of acquired intangible assets 508
509 1,523 1,439
Non-GAAP gross profit $ 22,942 $ 21,307 $ 66,663
$ 62,832 LOSS FROM OPERATIONS: GAAP loss from
operations $ (1,025 ) $ (3,110 ) $ (6,717 ) $ (11,745 ) Stock-based
compensation expense 1,523 1,526 4,312 4,773 Merger-related
expenses 62 623 138 3,011 Amortization of acquired intangible
assets 774 827 2,353
2,410 Non-GAAP income (loss) from operations $ 1,334
$ (134 ) $ 86 $ (1,551 ) NET LOSS: GAAP net loss $
(1,275 ) $ (3,805 ) $ (7,752 ) $ (12,969 ) Stock-based compensation
expense 1,523 1,526 4,312 4,773 Merger-related expenses 62 623 138
3,011 Amortization of acquired intangible assets 774
827 2,353 2,410 Non-GAAP
net income (loss) $ 1,084 $ (829 ) $ (949 ) $ (2,775 ) GAAP
diluted net loss per share $ (0.04 ) $ (0.12 ) $ (0.24 ) $ (0.41 )
Non-GAAP diluted net income (loss) per share $ 0.03 $ (0.03
) $ (0.03 ) $ (0.09 ) Shares used in computing GAAP diluted
net loss per share 32,636 32,247 32,560 31,815 Shares used in
computing Non-GAAP diluted net income (loss) per share 33,493
32,247 32,560 31,815
Brightcove Inc.
Calculation of Adjusted EBITDA and Adjusted EBITDA Margin
(in thousands) (unaudited) Three Months
Ended September 30, Nine Months Ended September 30,
2015 2014
2015 2014 Net loss $
(1,275 ) $ (3,805 ) $ (7,752 ) $ (12,969 ) Other expense, net 127
614 780 1,020 Provision for income taxes 123 81 255 204
Merger-related expenses 62 623 138 3,011 Depreciation and
amortization 2,096 2,156 6,898 6,114 Stock-based compensation
expense 1,523 1,526 4,312
4,773 Adjusted EBITDA $ 2,656 $ 1,195 $
4,631 $ 2,153 Adjusted EBITDA margin 7.8 % 3.8
% 4.7 % 2.3 %
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version on businesswire.com: http://www.businesswire.com/news/home/20151029006477/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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