Company reports second quarter revenue of $37.0
million, up 13% year-over-year
Brightcove Inc. (NASDAQ: BCOV), a leading global provider
of cloud services for video, today announced financial results for
the quarter ended June 30, 2016.
“Brightcove delivered strong second quarter results that met or
exceeded our expectations from both a revenue and profitability
perspective,” said David Mendels, Chief Executive Officer of
Brightcove. “We are excited by the positive momentum we are seeing
across our business, highlighted by the signing of multi-year,
multi-million dollar contracts with two media customers, including
our first 8 figure contract.”
Mendels continued, “During the second quarter, we demonstrated
our commitment to innovation by introducing many exciting new
product announcements that address some of the biggest trends in
video, including OTT, expanding media delivery across more devices,
and social distribution. The product innovation we have brought to
market in recent quarters is putting Brightcove in a great position
to help customers utilize their video assets to generate better
business performance. We are confident that our strategy will drive
more revenue growth and profitability over time while generating
significant value for our shareholders.”
Second Quarter 2016 Financial Highlights:
- Revenue for the second quarter
of 2016 was $37.0 million, an increase of 13% compared to $32.8
million for the second quarter of 2015. Subscription and support
revenue was $35.1 million, an increase of 10% compared with $31.9
million for the second quarter of 2015.
- Gross profit for the second
quarter of 2016 was $23.5 million, compared to $21.3 million for
the second quarter of 2015, representing a gross margin of 64% for
the second quarter of 2016. Non-GAAP gross profit for the second
quarter of 2016 was $24.1 million, representing a year-over-year
increase of 10% and a non-GAAP gross margin of 65%. 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 $2.2
million for the second quarter of 2016, compared to a loss of $3.2
million for the second quarter of 2015. Non-GAAP loss from
operations, which excludes stock-based compensation expense, the
amortization of acquired intangible assets and merger-related
expenses, was $302,000 for the second quarter of 2016, an
improvement compared to a non-GAAP loss of $964,000 during the
second quarter of 2015.
- Net loss was $2.4 million, or
$0.07 per diluted share, for the second quarter of 2016. This
compares to a net loss of $3.6 million, or $0.11 per diluted share,
for the second quarter of 2015. Non-GAAP net loss, which excludes
stock-based compensation expense, the amortization of acquired
intangible assets and merger-related expenses, was $489,000 for the
second quarter of 2016, or $0.01 per diluted share, compared to a
non-GAAP net loss of $1.5 million for the second quarter of 2015,
or $0.04 per diluted share.
- Adjusted EBITDA was $885,000 for
the second quarter of 2016, compared to $620,000 for the second
quarter of 2015. 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
$2.0 million for the second quarter of 2016, compared to cash flow
from operations of $385,000 for the second quarter of 2015.
- Free cash flow was $1.0 million
after the company invested $1.0 million in capital expenditures and
capitalization of internal-use software during the second quarter
of 2016. Free cash flow was negative $1.6 million for the second
quarter of 2015.
- Cash and cash equivalents were
$30.2 million as of June 30, 2016 compared to $29.3 million at
March 31, 2016.
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:
- Average revenue per premium customer
was $69,000 in the second quarter of 2016. This is an increase of
8% from $64,000 in the comparable period in 2015.
- Recurring dollar retention rate was 95%
in the second quarter of 2016, which was within our historical
target in the low to mid 90% range.
- Ended the quarter with 4,774 customers,
of which 1,926 were premium.
- New media customers and media customers
who expanded their relationship during the quarter included: AMC,
BounceTV, Box Plus, Express Newspapers, Le Parisien, Pluto TV,
Ringier AG, TV Dorama, TV5Monde Asia, Woven Digital and Yelp, among
others.
- New digital marketing customers and
digital marketing customers who expanded their relationship during
the quarter included: Angie’s List, Comodo, Jardine Matheson,
Keurig Green Mountain, Lush Cosmetics, Morningstar, Omron, Rolls
Royce, SAS Institute, TUI Travel Group, and Xero, among
others.
- Launched a video content marketplace
powered by Vemba, a next generation video distribution and content
discovery platform for premium publishers. The Vemba marketplace is
integrated with Brightcove’s Video Cloud, which helps expand
content libraries and create new revenue opportunities for media
companies.
- Partnered with IRIS.TV to license its
Adaptive Stream™ technology, which will enable Brightcove customers
to provide personalized programming to their viewers through
content discovery and recommendations.
Business Outlook
Based on information as of today, July 28, 2016, the Company is
issuing the following financial guidance:
Third Quarter 2016:
- Revenue is expected to be in the
range of $37.0 million to $37.5 million.
- Non-GAAP income/loss from
operations is expected to be in the range of $800,000 to $1.3
million, which excludes stock-based compensation of approximately
$1.6 million and the amortization of acquired intangible assets of
approximately $800,000.
- Adjusted EBITDA in the second
quarter is expected to be in the range of $2.0 million to $2.5
million, which excludes stock-based compensation of approximately
$1.6 million, the amortization of acquired intangible assets and
depreciation of approximately $1.2 million, and other expense and
taxes of approximately $300,000.
- Non-GAAP diluted net income per
share is expected to be $0.01 to $0.03, which excludes
stock-based compensation of approximately $1.6 million and the
amortization of acquired intangible assets of approximately
$800,000, and assumes approximately 34.9 million shares
outstanding.
Full Year 2016:
- Revenue is expected to be in the
range of $148.3 million to $149.3 million.
- Non-GAAP income/loss from
operations is expected to be in the range of $2.3 to $3.8
million, which excludes stock-based compensation of approximately
$6.0 million and the amortization of acquired intangible assets of
approximately $3.1 million.
- Adjusted EBITDA for the full
year is expected to be in the range of $8.0 to $9.5 million, which
excludes stock-based compensation of approximately $6.0 million,
the amortization of acquired intangible assets and depreciation of
approximately $5.0 million, and other expense and taxes of
approximately $800,000.
- Non-GAAP diluted net income per
share is expected to be in the range of $0.05 to $0.08, which
excludes stock-based compensation of approximately $6.0 million and
the amortization of acquired intangible assets of approximately
$3.1 million, and assumes approximately 34.3 million shares
outstanding.
Conference Call Information
Brightcove will host a conference call today, July 28, 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 13640131. 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 nearly 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 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 and non-GAAP diluted net income (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 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. 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, 2016 December 31,
2015 Assets Current assets: Cash and cash equivalents $
30,194 $ 27,637 Accounts receivable, net of allowance 18,869 21,213
Prepaid expenses and other current assets 5,842
4,579 Total current assets 54,905 53,429 Property and
equipment, net 9,362 8,689 Intangible assets, net 12,537 13,786
Goodwill 50,776 50,776 Deferred tax asset 82 63 Restricted cash 201
201 Other assets 980 724 Total assets $
128,843 $ 127,668
Liabilities and stockholders'
equity Current liabilities: Accounts payable $ 4,883 $ 3,302
Accrued expenses 11,301 12,849 Capital lease liability 633 850
Equipment financing 301 - Deferred revenue 32,253
29,836 Total current liabilities 49,371 46,837
Deferred revenue, net of current portion 90 95 Other liabilities
2,299 2,601 Total liabilities 51,760
49,533 Stockholders' equity: Common stock 33 33 Additional
paid-in capital 223,180 220,458 Treasury stock, at cost (871 ) (871
) Accumulated other comprehensive loss (657 ) (888 ) Accumulated
deficit (144,602 ) (140,597 ) Total stockholders’
equity 77,083 78,135 Total liabilities
and stockholders' equity $ 128,843 $ 127,668
Brightcove Inc. Condensed Consolidated Statements
of Operations (in thousands, except per share amounts)
(unaudited) Three
Months Ended June 30, Six Months Ended June 30,
2016 2015 2016
2015 Revenue: Subscription and support
revenue $ 35,080 $ 31,917 $ 69,733 $ 63,728 Professional services
and other revenue 1,880 931
3,519 2,005 Total revenue 36,960 32,848 73,252
65,733 Cost of revenue: (1) (2) Cost of subscription and support
revenue 11,675 10,357 23,350 20,703 Cost of professional services
and other revenue 1,778 1,201
3,367 2,447 Total cost of revenue
13,453 11,558 26,717
23,150 Gross profit 23,507 21,290
46,535 42,583 Operating
expenses: (1) (2) Research and development 7,255 7,267 14,681
15,087 Sales and marketing 13,976 11,903 26,511 22,742 General and
administrative 4,487 5,209 9,064 10,370 Merger-related -
62 21 76 Total
operating expenses 25,718 24,441
50,277 48,275 Loss from operations (2,211 )
(3,151 ) (3,742 ) (5,692 ) Other expense, net (91 )
(429 ) (122 ) (653 ) Net loss before income taxes
(2,302 ) (3,580 ) (3,864 ) (6,345 ) Provision for income taxes
96 66 141 132
Net loss $ (2,398 ) $ (3,646 ) $ (4,005 ) $ (6,477 )
Net income (loss) per share—basic and diluted $ (0.07 ) $ (0.11 ) $
(0.12 ) $ (0.20 ) Weighted-average shares—basic and diluted
32,794 32,548 32,760 32,522 (1) Stock-based compensation
included in above line items: Cost of subscription and support
revenue $ 68 $ 51 $ 110 $ 71 Cost of professional services and
other revenue 32 19 89 52 Research and development 181 226 570 660
Sales and marketing 497 463 979 921 General and administrative 347
577 836 1,085 (2) Amortization of acquired intangible
assets included in the above line items: Cost of subscription and
support revenue $ 508 $ 508 $ 1,016 $ 1,015 Research and
development 32 31 63 63 Sales and marketing 244 250 470 501
Brightcove Inc. Condensed Consolidated Statements
of Cash Flows (in thousands) (unaudited)
Six Months Ended June 30, Operating activities
2016 2015
Net loss $ (4,005 ) $ (6,477 ) Adjustments to reconcile net loss to
net cash provided by operating activities: Depreciation and
amortization 3,985 4,802 Stock-based compensation 2,584 2,789
Provision for reserves on accounts receivable 165 167 Loss on
disposal of equipment - 44 Changes in assets and liabilities:
Accounts receivable 2,364 2,035 Prepaid expenses and other current
assets (1,647 ) (878 ) Other assets (231 ) (530 ) Accounts payable
881 1,332 Accrued expenses (1,067 ) (2,127 ) Deferred revenue
1,980 (726 ) Net cash provided by operating
activities 5,009 431
Investing activities Cash paid for purchase of intangible
asset (300 ) - Purchases of property and equipment, net of returns
(1,026 ) (2,441 ) Capitalization of internal-use software costs
(1,677 ) (336 ) Net cash used in investing activities
(3,003 ) (2,777 )
Financing activities
Proceeds from exercise of stock options 188 58 Payments of
withholding tax on RSU vesting (108 ) - Proceeds from equipment
financing 604 1,704 Payments on equipment financing (122 ) (404 )
Payments under capital lease obligation (461 ) (627 )
Net cash provided by financing activities 101
731 Effect of exchange rate changes on cash and cash
equivalents 450 (63 ) Net increase
(decrease) in cash and cash equivalents 2,557 (1,678 ) Cash and
cash equivalents at beginning of period 27,637
22,916 Cash and cash equivalents at end of period $ 30,194
$ 21,238
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 June 30,
Six Months Ended June 30, 2016
2015 2016 2015
GROSS PROFIT: GAAP gross profit $ 23,507 $ 21,290 $ 46,535 $
42,583 Stock-based compensation expense 100 70 199 123 Amortization
of acquired intangible assets 508 508
1,016 1,015 Non-GAAP gross profit $
24,115 $ 21,868 $ 47,750 $ 43,721 LOSS
FROM OPERATIONS: GAAP loss from operations $ (2,211 ) $ (3,151 ) $
(3,742 ) $ (5,692 ) Stock-based compensation expense 1,125 1,336
2,584 2,789 Merger-related expenses - 62 21 76 Amortization of
acquired intangible assets 784 789
1,549 1,579 Non-GAAP (loss) income from
operations $ (302 ) $ (964 ) $ 412 $ (1,248 ) NET LOSS: GAAP
net loss $ (2,398 ) $ (3,646 ) $ (4,005 ) $ (6,477 ) Stock-based
compensation expense 1,125 1,336 2,584 2,789 Merger-related
expenses - 62 21 76 Amortization of acquired intangible assets
784 789 1,549
1,579 Non-GAAP net (loss) income $ (489 ) $ (1,459 ) $ 149
$ (2,033 ) GAAP diluted net loss per share $ (0.07 ) $ (0.11
) $ (0.12 ) $ (0.20 ) Non-GAAP diluted net (loss) income per share
$ (0.01 ) $ (0.04 ) $ 0.00 $ (0.06 ) Shares used in
computing GAAP diluted net loss per share 32,794 32,548 32,760
32,522 Shares used in computing Non-GAAP diluted net (loss) income
per share 32,794 32,548 33,787 32,522
Brightcove
Inc. Calculation of Adjusted EBITDA (in
thousands) (unaudited)
Three Months Ended June 30, Six Months
Ended June 30, 2016
2015 2016
2015 Net loss $ (2,398 ) $ (3,646 ) $ (4,005 ) $
(6,477 ) Other expense, net (91 ) (429 ) (122 ) (653 ) Provision
for income taxes 96 66 141 132 Merger-related expenses - 62 21 76
Depreciation and amortization 1,971 2,373 3,985 4,802 Stock-based
compensation expense 1,125 1,336
2,584 2,789 Adjusted EBITDA $ 885 $ 620
$ 2,848 $ 1,975
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version on businesswire.com: http://www.businesswire.com/news/home/20160728006496/en/
Investor Contact:ICR for BrightcoveBrian Denyeau,
646-277-1251brian.denyeau@icrinc.comorMedia
Contact:Brightcove Inc.Phil LeClare,
617-674-6510pleclare@brightcove.com
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