Brightcove Inc. (Nasdaq: BCOV), a leading global provider
of cloud services for video, today announced financial results for
the first quarter ended March 31, 2018.
“Brightcove delivered strong first quarter financial results
that exceeded expectations across all key metrics and were
highlighted by double digit year-over-year subscription revenue
growth and 103% recurring dollar retention rate,” said Jeff Ray,
Brightcove’s chief executive officer. “We had good sales activity
across the company during the quarter, driven by positive
performance across all businesses and geographies, and remain on
track to deliver against our bookings growth target for the
year.”
Ray continued, “As the new CEO of Brightcove, my focus is on
putting customer success at the heart of everything we do. I’ve
been impressed with the world-class team and market-leading product
portfolio at Brightcove and I am confident we can leverage these
competitive advantages to drive increased revenue growth and
profitability over time.”
First Quarter 2018 Financial Highlights:
- Revenue for the first quarter of
2018 was $41.2 million, an increase of 10% compared to $37.6
million for the first quarter of 2017. Subscription and support
revenue was $37.9 million, compared to $34.2 million for the first
quarter of 2017.
- Gross profit for the first
quarter of 2018 was $24.0 million, representing a gross margin of
58%, compared to a gross profit of $22.4 million for the first
quarter of 2017. Non-GAAP gross profit for the first quarter of
2018 was $24.6 million, representing a non-GAAP gross margin of
60%, compared to a non-GAAP gross profit of $23.0 million for the
first quarter of 2017. 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 $2.4
million for the first quarter of 2018, compared to a loss from
operations of $5.1 million for the first quarter of 2017. Non-GAAP
loss from operations, which excludes stock-based compensation
expense, the amortization of acquired intangible assets and
merger-related expenses, was $74,000 for the first quarter of 2018,
compared to non-GAAP loss from operations of $2.6 million during
the first quarter of 2017.
- Net loss was $2.3 million, or
$0.06 per diluted share, for the first quarter of 2018. This
compares to a net loss of $5.1 million, or $0.15 per diluted share,
for the first quarter of 2017. Non-GAAP net income, which excludes
stock-based compensation expense, the amortization of acquired
intangible assets and merger-related expenses, was $85,000 for the
first quarter of 2018, or $0.00 per diluted share, compared to
non-GAAP net loss of $2.6 million for the first quarter of 2017, or
$0.08 per diluted share.
- Adjusted EBITDA was $896,000 for
the first quarter of 2018, compared to an adjusted EBITDA loss of
$1.6 million for the first quarter of 2017. Adjusted EBITDA
excludes stock-based compensation expense, executive severance, 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
$935,000 for the first quarter for 2018, compared to cash flow used
in operations of $6.6 million for the first quarter of 2017.
- Free cash flow was negative
$604,000 after the company invested $1.5 million in capital
expenditures and capitalization of internal-use software during the
first quarter of 2018. Free cash flow was negative $7.6 million for
the first quarter of 2017.
- Cash and cash equivalents were
$26.4 million as of March 31, 2018 compared to $26.1 million at
December 31, 2017.
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 First Quarter and Recent Highlights:
- Average annual subscription revenue per
premium customer was $75,000 in the first quarter of 2018,
excluding starter customers who had average annualized revenue of
$5,000 per customer. This compares to $67,000 in the comparable
period in 2017.
- Recurring dollar retention rate was
103% in the first quarter of 2018, which was well above our
historical target of the low to mid 90% range.
- Ended the quarter with 4,033 customers,
of which 2,180 were premium.
- Media and enterprise customers who
expanded their relationship during the quarter included: Discovery,
Dunkin’ Brands, EMC Corporation, Forbes Media LLC, Harley-Davidson,
Hess Corporation, MBS Spring, Network Ten, News UK, Opel Automobile
GmbH, Pandora, Production IG, RLJ Entertainment, SoftBank, Sony
Pictures India, and Spotify, among others.
- Appointed Jeff Ray as Chief Executive
Officer to succeed Acting CEO Andy Feinberg, who held the position
since 2017 while a search for a permanent replacement was
undertaken. Mr. Ray brings to Brightcove more than 30 years of
experience and has held a number of executive leadership roles at
enterprise technology companies of scale, including Ellucian,
Ventyx (acquired by ABB), DS SolidWorks, Progress Software, and
Compuware. He was also appointed to the Board of Directors.
- The company also added two additional
new members to its Board of Directors: Tom Wheeler, former Chairman
of the FCC and a telecommunications entrepreneur, and Kristin
Frank, an accomplished operations-focused leader and former
executive at Viacom. In conjunction with the new director
appointments, David Orfao, Managing Partner at General Catalyst and
an early investor in Brightcove, stepped down from his position as
a Director.
Business Outlook
Based on information as of today, April 26, 2018, the Company is
issuing the following financial guidance:
Second Quarter 2018:
- Revenue is expected to be in the
range of $41.3 million to $41.8 million, including approximately
$3.2 million of professional services revenue.
- Non-GAAP loss from operations is
expected to be in the range of $1.9 million to $2.4 million, which
excludes stock-based compensation of approximately $1.8 million,
executive severance of approximately $775,000 and the amortization
of acquired intangible assets of approximately $700,000.
- Adjusted EBITDA loss is expected
to be in the range of $0.9 million to $1.4 million, which excludes
stock-based compensation of approximately $1.8 million, executive
severance of approximately $775,000, the amortization of acquired
intangible assets of approximately $700,000, depreciation expense
of approximately $1.0 million and other income/expense and the
provision for income taxes of approximately $150,000.
- Non-GAAP net loss per diluted
share is expected to be $0.06 to $0.07, which excludes
stock-based compensation of approximately $1.8 million, executive
severance of approximately $775,000 and the amortization of
acquired intangible assets of approximately $700,000, and assumes
approximately 35.1 million weighted-average shares
outstanding.
Full Year 2018:
- Revenue is expected to be in the
range of $165.0 million to $168.0 million, including approximately
$12.1 million of professional services revenue.
- Non-GAAP income/loss from
operations is expected to be in the range of a loss of $1.5
million to income of $1.5 million, which excludes stock-based
compensation of approximately $7.9 million, executive severance of
approximately $775,000 and the amortization of acquired intangible
assets of approximately $2.3 million.
- Adjusted EBITDA is expected to
be in the range of $2.5 million to $5.5 million, which excludes
stock-based compensation of approximately $7.9 million, executive
severance of approximately $775,000, the amortization of acquired
intangible assets of approximately $2.3 million, depreciation
expense of approximately $3.8 million and other income/expense and
the provision for income taxes of approximately $300,000.
- Non-GAAP net income/loss per diluted
share is expected to be a loss of $0.06 to income $0.02, which
excludes stock-based compensation of approximately $7.9 million,
executive severance of approximately $775,000 and the amortization
of acquired intangible assets of approximately $2.3 million, and
assumes approximately 35.3 million weighted-average shares
outstanding.
Conference Call Information
Brightcove will host a conference call today, April 26, 2018, at
5:00 p.m. (Eastern Time) to discuss the Company's financial results
and current business outlook. A live webcast of the call will be
available at the “Investors” page of the Company’s website,
http://investor.brightcove.com. To access the call, dial
855-327-6837 (domestic) or 631-891-4304 (international). A replay
of this conference call will be available for a limited time at
844-512-2921 (domestic) or 412-317-6671 (international). The replay
conference ID is 13678331. 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 thousands of 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 second fiscal quarter of 2018 and full year 2018, 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; the effects of increased
competition and commoditization of services we offer, including
data delivery and storage; 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, executive severance 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, executive severance, 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)
March 31, 2018 December 31,
2017 Assets Current assets: Cash and cash equivalents $
26,419 $ 26,132 Accounts receivable, net of allowance 27,408 25,236
Prepaid expenses and other current assets 13,227
7,036 Total current assets 67,054 58,404 Property and
equipment, net 10,083 9,143 Intangible assets, net 7,562 8,236
Goodwill 50,776 50,776 Deferred tax asset 93 87 Other assets
2,141 969 Total assets $ 137,709 $
127,615
Liabilities and stockholders' equity Current
liabilities: Accounts payable $ 5,866 $ 6,142 Accrued expenses
14,480 13,621 Capital lease liability 121 228 Equipment financing -
26 Deferred revenue 43,200 39,370 Total
current liabilities 63,667 59,387 Deferred revenue, net of current
portion 148 244 Other liabilities 1,134 1,228
Total liabilities 64,949 60,859 Stockholders' equity:
Common stock 35 35 Additional paid-in capital 241,109 238,700
Treasury stock, at cost (871 ) (871 ) Accumulated other
comprehensive loss (562 ) (809 ) Accumulated deficit
(166,951 ) (170,299 ) Total stockholders’ equity
72,760 66,756 Total liabilities and
stockholders' equity $ 137,709 $ 127,615
Brightcove Inc.Condensed Consolidated Statements of
Operations(in thousands, except per share amounts)
Three Months Ended March
31, 2018 2017 Revenue: Subscription and support
revenue $ 37,867 $ 34,242 Professional services and other revenue
3,327 3,330 Total revenue 41,194 37,572
Cost of revenue: (1) (2) Cost of subscription and support revenue
13,456 12,154 Cost of professional services and other revenue
3,755 3,064 Total cost of revenue
17,211 15,218 Gross profit
23,983 22,354 Operating expenses: (1) (2)
Research and development 7,775 8,194 Sales and marketing 13,234
13,901 General and administrative 5,390 5,391
Total operating expenses 26,399 27,486
Loss from operations (2,416 ) (5,132 ) Other income, net
271 138 Net loss before income taxes
(2,145 ) (4,994 ) Provision for income taxes 112
79 Net loss $ (2,257 ) $ (5,073 ) Net loss per
share—basic and diluted $ (0.06 ) $ (0.15 ) Weighted-average
shares—basic and diluted 34,923 34,056 (1) Stock-based
compensation included in above line items: Cost of subscription and
support revenue $ 114 $ 102 Cost of professional services and other
revenue 40 60 Research and development 346 407 Sales and marketing
665 746 General and administrative 503 475 (2)
Amortization of acquired intangible assets included in the above
line items: Cost of subscription and support revenue $ 508 $ 508
Research and development - 11 Sales and marketing 166 193
Brightcove Inc. Condensed Consolidated Statements of Cash
Flows (in thousands)
Three Months Ended March 31, Operating activities
2018 2017 Net loss $ (2,257 ) $ (5,073
) Adjustments to reconcile net loss to net cash (used in) provided
by operating activities: Depreciation and amortization 1,644 1,734
Stock-based compensation 1,668 1,790 Provision for reserves on
accounts receivable 13 222 Changes in assets and liabilities:
Accounts receivable (2,038 ) (1,011 ) Prepaid expenses and other
current assets (616 ) (2,221 ) Other assets (179 ) 37 Accounts
payable (128 ) 695 Accrued expenses (80 ) (3,870 ) Deferred revenue
2,908 1,102 Net cash (used in) provided
by operating activities 935 (6,595 )
Investing activities Purchases of property and equipment,
net of returns (538 ) (378 ) Capitalization of internal-use
software costs (1,001 ) (603 ) Net cash used in
investing activities (1,539 ) (981 )
Financing activities Proceeds from exercise of stock options
683 79 Payments of withholding tax on RSU vesting (6 ) (118 )
Payments on equipment financing (26 ) (76 ) Payments under capital
lease obligation (107 ) (174 ) Net cash (used in)
provided by financing activities 544 (289 )
Effect of exchange rate changes on cash and cash equivalents
347 220 Net (decrease) increase
in cash and cash equivalents 287 (7,645 ) Cash and cash equivalents
at beginning of period 26,132 36,813
Cash and cash equivalents at end of period $ 26,419 $ 29,168
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) Three Months Ended
March 31, 2018 2017 GROSS PROFIT: GAAP gross
profit $ 23,983 $ 22,354 Stock-based compensation expense 154 162
Amortization of acquired intangible assets 508
508 Non-GAAP gross profit $ 24,645 $ 23,024
LOSS FROM OPERATIONS: GAAP loss from operations $ (2,416 ) $ (5,132
) Stock-based compensation expense 1,668 1,790 Amortization of
acquired intangible assets 674 712
Non-GAAP income (loss) from operations $ (74 ) $ (2,630 ) NET LOSS:
GAAP net loss $ (2,257 ) $ (5,073 ) Stock-based compensation
expense 1,668 1,790 Amortization of acquired intangible assets
674 712 Non-GAAP net income (loss) $ 85
$ (2,571 ) GAAP diluted net loss per share $ (0.06 ) $ (0.15
) Non-GAAP diluted net income (loss) per share $ 0.00 $
(0.08 ) Shares used in computing GAAP diluted net loss per
share 34,923 34,056 Shares used in computing Non-GAAP diluted net
income (loss) per share 35,663 34,056
Brightcove Inc.
Calculation of Adjusted EBITDA (in thousands)
Three Months Ended March 31,
2018 2017 Net loss $ (2,257 ) $ (5,073 ) Other
(income) expense, net (271 ) (138 ) Provision for income taxes 112
79 Depreciation and amortization 1,644 1,734 Stock-based
compensation expense 1,668 1,790
Adjusted EBITDA $ 896 $ (1,608 )
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version on businesswire.com: https://www.businesswire.com/news/home/20180426006644/en/
Investor Contact:ICR for BrightcoveBrian Denyeau,
646-277-1251brian.denyeau@icrinc.comorMedia
Contact:BrightcoveNeil Lieberman,
617-510-6346nlieberman@brightcove.com
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