Company reports fourth quarter revenue growth
of 12% and adjusted EBITDA of $3.3 million
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, 2015.
“Brightcove’s strong fourth quarter financial results, which
exceeded expectations on both the top and bottom lines, were a good
finish to an important year for the company,” said David Mendels,
Chief Executive Officer of Brightcove. “In recent quarters we have
validated that the enhanced product portfolio we brought to market
in 2015 and our targeted go-to-market approach focused on driving
improved business performance for media companies and digital
marketers can drive accelerated revenue growth.”
Mendels added, “In 2016 we will make additional investments in
the business to expand our sales capacity. The results we delivered
in 2015 and the positive productivity trends from our existing
sales organization give us confidence these investments will drive
improved revenue growth and profitability in the future. We are
increasingly confident in our ability to achieve our long-term
financial objectives and deliver significant value to our
shareholders.”
Fourth Quarter 2015 Financial Highlights:
- Revenue for the fourth quarter
of 2015 was $35.1 million, an increase of 12% compared to $31.4
million for the fourth quarter of 2014. Subscription and support
revenue was $34.1 million, an increase of 12% compared with $30.6
million for the fourth quarter of 2014.
- Gross profit for the fourth
quarter of 2015 was $23.3 million, representing a gross margin of
66%, compared to a gross profit of $20.2 million for the fourth
quarter of 2014. Non-GAAP gross profit for the fourth quarter of
2015 was $24.0 million, representing a year-over-year increase of
15% 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
$214,000 for the fourth quarter of 2015, compared to a loss from
operations of $3.4 million for the fourth 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 $2.3 million for the fourth quarter of
2015, an improvement compared to a non-GAAP loss from operations of
$980,000 during the fourth quarter of 2014.
- Net income was $172,000, or
$0.01 per diluted share, for the fourth quarter of 2015. This
compares to a net loss of $3.9 million, or $0.12 per diluted share,
for the fourth quarter of 2014. Non-GAAP net income, which excludes
stock-based compensation expense, the amortization of acquired
intangible assets, merger-related expenses and gain from settlement
of escrow claim, was $1.8 million for the fourth quarter of 2015,
or $0.05 per diluted share, compared to a non-GAAP net loss of $1.5
million for the fourth quarter of 2014, or $0.05 per diluted
share.
- Adjusted EBITDA was $3.3 million
for the fourth quarter of 2015, up 375% as compared to $703,000 for
the fourth 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
$4.8 million, compared to $3.1 million for the fourth quarter of
2014.
- Free cash flow was $5.5 million,
including $1.2 million related to the return of previously
purchased equipment. Free cash flow was $2.0 million for the fourth
quarter of 2014.
- Cash and cash equivalents were
$27.6 million as of December 31, 2015 compared to $23.8 million at
September 30, 2015.
Full Year 2015 Financial Highlights:
- Revenue for the full year 2015
was $134.7 million, an increase of 8% compared to $125.0 million
for 2014. Subscription and support revenue for 2015 was $131.0
million, an increase of 9% compared with $120.3 million for
2014.
- Gross Profit was $88.2 million
for 2015, compared to $81.3 million for 2014, representing a gross
margin of 65% for 2015. Non-GAAP gross profit was $90.6 million for
2015, representing a year-over-year increase of 8% 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 $6.9
million for 2015, compared to a loss from operations of $15.2
million for 2014. Non-GAAP income from operations, which excludes
stock-based compensation expense, the amortization of acquired
intangible assets and merger-related expenses, was $2.4 million for
2015, compared to a non-GAAP loss from operations of $2.5 million
for 2014.
- Net loss was $7.6 million, or
$0.23 per diluted share, for 2015. This compares to a net loss of
$16.9 million, or $0.53 per diluted share, for 2014. Non-GAAP net
income, which excludes stock-based compensation expense, the
amortization of acquired intangible assets, merger-related expenses
and gain from settlement of escrow claim, was $876,000 for 2015, or
$0.03 per diluted share, compared to a non-GAAP net loss of $4.2
million for 2014, or $0.13 per diluted share.
- Adjusted EBITDA was $8.0 million
for 2015, compared to $2.9 million for 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
$9.1 million for 2015, compared to $1.5 million for 2014.
- Free cash flow was $6.2 million
after we invested $2.9 million in capital expenditures and
capitalization of internal-use software during 2015. Free cash flow
was ($3.1) million for 2014.
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 $69,000 in the fourth quarter of 2015. This is an increase of
15% from $60,000 in the comparable period in 2014.
- Recurring dollar retention rate was 98%
in the fourth quarter of 2015, which was above our historical
target in the low to mid 90% range.
- Ended the quarter with 5,047 customers,
of which 1,863 were premium.
- New media customers and media customers
who expanded their relationship during the quarter included: Azubu,
CatchPlay, a Taiwan-based distributor of independent films, CBS
Shows including Entertainment Tonight, The Insider, and The Jeff
Probst Show; Australia’s National Rugby League, Publishers Clearing
House, Reader’s Digest, RLJ Entertainment, Sony Digital Audio Disc
Corp, Tennis Australia, and Yomiuri TV, a sister company of Nippon
Television.
- New digital marketing customers and
digital marketing customers who expanded their relationship during
the quarter included: AMC Entertainment, Amgen, BAFTA, Baxter
Healthcare, Cars.com, Cargill, Consumer Reports, Demandware, Ford,
IHS, Northern Trust, Sapporo Breweries, Starwood, Tribeca Film
Festival, University of Pittsburgh Medical Center, and Weight
Watchers
Business Outlook
Based on information as of today, February 11, 2016, the Company
is issuing the following financial guidance:
First Quarter 2016:
- Revenue is expected to be in the
range of $34.7 million to $35.2 million, including $1.3 million of
professional services revenue.
- Non-GAAP income from operations
is expected to be in the range of breakeven to $500,000, which
excludes stock-based compensation, the amortization of acquired
intangible assets and merger-related expenses totaling
approximately $2.2 million.
- Adjusted EBITDA is expected to
be in the range of $1.4 million to $1.9 million, which excludes
stock-based compensation, the amortization of acquired intangible
assets, merger-related expenses, depreciation expense, other
income/expense and taxes totaling approximately $3.9 million.
- Non-GAAP net income/loss per diluted
share is expected to be a loss of $0.01 to income of $0.01,
which excludes stock-based compensation, the amortization of
acquired intangible assets and merger-related expenses totaling
approximately $2.2 million, and assumes approximately 33.8 million
shares outstanding.
Full Year 2016:
- Revenue is expected to be in the
range of $145.0 million to $147.0 million.
- Non-GAAP income from operations
is expected to be in the range of $2.0 million to $3.5 million,
which excludes stock-based compensation, the amortization of
acquired intangible assets and merger-related expenses totaling
approximately $9.5 million to $9.9 million.
- Adjusted EBITDA is expected to
be in the range of $8.0 to $9.5 million, which excludes stock-based
compensation, the amortization of acquired intangible assets,
merger-related expenses, depreciation, other income/expense and
taxes totaling approximately $16.7 million to $17.1 million.
- Non-GAAP net income per diluted
share is expected to be $0.02 to $0.07, which excludes
stock-based compensation, the amortization of acquired intangible
assets and merger-related expenses totaling approximately $9.5
million to $9.9 million, and assumes approximately 34.2 million
shares outstanding.
Conference Call Information
Brightcove will host a conference call today, February 11, 2016,
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 13629168. 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 first fiscal quarter of 2016 and full year 2016, 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, 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 income (loss) from
operations, non-GAAP net income (loss) and non-GAAP diluted net
income (loss) per share exclude stock-based compensation expense,
the amortization of acquired intangible assets, merger-related
expenses and gain from settlement of escrow claim. 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. 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. 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)
December 31,
2015 December 31, 2014 Assets Current assets:
Cash and cash equivalents $ 27,637 $ 22,916 Accounts receivable,
net of allowance 21,213 21,463 Prepaid expenses and other current
assets 4,579 4,342 Total current assets
53,429 48,721 Property and equipment, net 8,689 10,372 Intangible
assets, net 13,786 16,898 Goodwill 50,776 50,776 Deferred tax asset
63 109 Restricted cash 201 201 Other assets 724
507 Total assets $ 127,668 $ 127,584
Liabilities and stockholders' equity Current liabilities:
Accounts payable $ 3,302 $ 1,618 Accrued expenses 12,849 11,722
Capital lease liability 850 1,159 Deferred revenue 29,836
29,640 Total current liabilities 46,837 44,139
Deferred revenue, net of current portion 95 64 Other liabilities
2,601 2,618 Total liabilities 49,533
46,821 Stockholders' equity: Common stock 33 32 Additional
paid-in capital 220,458 214,524 Treasury stock, at cost (871 ) -
Accumulated other comprehensive loss (888 ) (776 ) Accumulated
deficit (140,597 ) (133,017 ) Total stockholders’
equity 78,135 80,763 Total liabilities
and stockholders' equity $ 127,668 $ 127,584
Brightcove Inc. Condensed Consolidated Statements
of Operations (in thousands, except per share amounts)
(unaudited)
Three Months Ended December 31,
Twelve Months Ended December 31, 2015 2014
2015 2014 Revenue: Subscription and support revenue $
34,098 $ 30,570 $ 131,010 $ 120,324 Professional services and other
revenue 1,038 812 3,696
4,693 Total revenue 35,136 31,382 134,706 125,017
Cost of revenue: (1) (2) Cost of subscription and support revenue
10,718 9,919 41,735 38,015
Cost of professional services and other
revenue
1,097 1,304 4,742
5,718 Total cost of revenue 11,815
11,223 46,477 43,733 Gross
profit 23,321 20,159 88,229
81,284 Operating expenses: (1) (2) Research
and development 6,982 7,704 29,302 28,252 Sales and marketing
11,389 11,300 45,795 46,014 General and administrative 5,101 4,539
19,862 19,136 Merger-related 63 64
201 3,075 Total operating expenses
23,535 23,607 95,160
96,477 Loss from operations (214 ) (3,448 ) (6,931 )
(15,193 ) Other income (expense), net 522 (420
) (258 ) (1,440 ) Net income (loss) before income
taxes 308 (3,868 ) (7,189 ) (16,633 ) Provision for income taxes
136 56 391 260
Net income (loss) $ 172 $ (3,924 ) $ (7,580 ) $
(16,893 ) Net income (loss) per share—basic Basic $ 0.01 $
(0.12 ) $ (0.23 ) $ (0.53 ) Diluted 0.01 (0.12
) (0.23 ) (0.53 ) Weighted-average shares
Basic 32,709 32,349 32,598 31,949 Diluted 33,682 32,349 32,598
31,949 (1) Stock-based compensation included in above line
items: Cost of subscription and support revenue $ 80 $ 71 $ 181 $
218 Cost of professional services and other revenue 50 20 181 141
Research and development 332 449 1,392 1,399 Sales and marketing
391 515 2,155 2,193 General and administrative 849 559 2,105 2,436
(2) Amortization of acquired intangible assets
included in the above line items: Cost of subscription and support
revenue $ 508 $ 507 $ 2,031 $ 1,946 Research and development 32 32
126 140 Sales and marketing 219 251 955 1,114
Brightcove Inc. Condensed Consolidated Statements of Cash
Flows (in thousands) (unaudited)
Twelve Months Ended December 31,
Operating activities 2015 2014 Net loss $
(7,580 ) $ (16,893 ) Adjustments to reconcile net loss to net cash
provided by operating activities: Depreciation and amortization
8,687 8,587 Stock-based compensation 6,014 6,387 Provision for
reserves on accounts receivable 408 118 Amortization of premium on
investments - 1 Loss on disposal of equipment 68 86 Gain from
settlement of escrow claim (871 ) - Changes in assets and
liabilities: Accounts receivable (157 ) 409 Prepaid expenses and
other current assets 680 (199 ) Other assets (283 ) 1,140 Accounts
payable 1,751 (2,324 ) Accrued expenses 137 (1,902 ) Deferred
revenue 227 6,075 Net cash provided by
operating activities 9,081 1,485
Investing activities Cash paid for acquisition, net of cash
acquired - (9,100 ) Maturities of investments - 3,060 Purchases of
property and equipment, net of returns (1,390 ) (3,518 )
Capitalization of internal-use software costs (1,456 ) (1,034 )
Decrease in restricted cash - 121 Net
cash used in investing activities (2,846 ) (10,471 )
Financing activities Proceeds from exercise of stock
options 129 597 Payments of withholding tax on RSU vesting (209 ) -
Proceeds from equipment financing 1,704 - Repayment of equipment
financing (1,704 ) - Payments under capital lease obligation
(1,332 ) (1,399 ) Net cash used in financing activities
(1,412 ) (802 ) Effect of exchange rate
changes on cash and cash equivalents (102 ) (343 )
Net increase (decrease) in cash and cash equivalents 4,721
(10,131 ) Cash and cash equivalents at beginning of period
22,916 33,047 Cash and cash equivalents at end
of period $ 27,637 $ 22,916
Brightcove Inc. Reconciliation of GAAP Gross Profit, GAAP
Loss From Operations, GAAP Net Income (Loss) and GAAP Net Income
(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
December 31, Twelve Months Ended December 31,
2015 2014 2015 2014 GROSS PROFIT: GAAP
gross profit $ 23,321 $ 20,159 $ 88,229 $ 81,284 Stock-based
compensation expense 130 91 362 359 Amortization of acquired
intangible assets 508 507 2,031
1,946 Non-GAAP gross profit $ 23,959 $
20,757 $ 90,622 $ 83,589 LOSS FROM OPERATIONS:
GAAP loss from operations $ (214 ) $ (3,448 ) $ (6,931 ) $ (15,193
) Stock-based compensation expense 1,702 1,614 6,014 6,387
Merger-related expenses 63 64 201 3,075 Amortization of acquired
intangible assets 759 790 3,112
3,200 Non-GAAP income (loss) from operations $
2,310 $ (980 ) $ 2,396 $ (2,531 ) NET INCOME (LOSS):
GAAP net income (loss) $ 172 $ (3,924 ) $ (7,580 ) $ (16,893 )
Stock-based compensation expense 1,702 1,614 6,014 6,387
Merger-related expenses 63 64 201 3,075 Amortization of acquired
intangible assets 759 790 3,112 3,200 Gain from settlement of
escrow claim (871 ) - (871 ) -
Non-GAAP net income (loss) $ 1,825 $ (1,456 ) $ 876
$ (4,231 ) GAAP diluted net income (loss) per share $ 0.01
$ (0.12 ) $ (0.23 ) $ (0.53 ) Non-GAAP diluted net income
(loss) per share $ 0.05 $ (0.05 ) $ 0.03 $ (0.13 )
Shares used in computing GAAP diluted net income (loss) per
share 32,709 32,349 32,598 31,949 Shares used in computing Non-GAAP
diluted net income (loss) per share 33,682 32,349 33,591 31,949
Brightcove Inc. Calculation of Adjusted
EBITDA and Adjusted EBITDA Margin (in thousands)
(unaudited)
Three Months Ended
December 31, Twelve Months Ended December 31,
2015 2014 2015
2014 Net income (loss) $ 172 $ (3,924 ) $ (7,580 ) $ (16,893
) Other (income) expense, net (522 ) 420 258 1,440 Provision for
income taxes 136 56 391 260 Merger-related expenses 63 64 201 3,075
Depreciation and amortization 1,789 2,473 8,687 8,587 Stock-based
compensation expense 1,702 1,614
6,014 6,387 Adjusted EBITDA $ 3,340 $
703 $ 7,971 $ 2,856 Adjusted EBITDA
margin 9.5 % 2.2 % 5.9 % 2.3 %
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version on businesswire.com: http://www.businesswire.com/news/home/20160211006366/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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