Brightcove Inc. (Nasdaq: BCOV), the global leader in video for
business, today announced financial results for the second quarter
ended June 30, 2021.
“Brightcove’s second quarter performance was highlighted by
revenue that was ahead of expectations and 33% growth in adjusted
EBITDA,” said Jeff Ray, Brightcove’s Chief Executive Officer. “Our
customers continue to turn to Brightcove as their trusted partner
as they expand their use of video in new and innovative ways to
engage with their audiences.”
Ray continued, “We made good progress across each of our four
strategic focus areas that will enhance customer success and
retention, accelerate product innovation, and grow our direct and
indirect sales efforts. In the near-term, it will take some
additional time to complete these initiatives. Longer-term, we are
confident we will be on track to hit our long-term financial goal
of being a Rule of 40 company.”
Second Quarter 2021 Financial Highlights:
● Revenue for the second quarter of 2021 was $51.5
million, an increase of 7% compared to $47.9 million for the second
quarter of 2020. Subscription and support revenue was $48.6
million, an increase of 7% compared to $45.6 million for the second
quarter of 2020.
● Gross profit for the second quarter of 2021 was $34.2
million, representing a gross margin of 67% compared to a gross
profit of $28.0 million and 58% for the second quarter of 2020.
Non-GAAP gross profit for the second quarter of 2021 was $34.9
million, representing a non-GAAP gross margin of 68%, compared to a
non-GAAP gross profit of $28.6 million and 60% for the second
quarter of 2020. Non-GAAP gross profit and non-GAAP gross margin
exclude stock-based compensation expense and the amortization of
acquired intangible assets.
● Income from operations was $590 thousand for the second
quarter of 2021, compared to a loss of $1.2 million for the second
quarter of 2020. Non-GAAP operating income, which excludes
stock-based compensation expense, restructuring, the amortization
of acquired intangible assets, merger-related expense and other
(benefit) expense, was $4.2 million for the second quarter of 2021,
compared to non-GAAP operating income of $3.1 million during the
second quarter of 2020.
● Net income was $870 thousand, or $0.02 per diluted
share, for the second quarter of 2021. This compares to a net loss
of $1.3 million, or a loss of $0.03 per diluted share, for the
second quarter of 2020. Non-GAAP net income, which excludes
stock-based compensation expense, restructuring, the amortization
of acquired intangible assets, merger-related expense and other
(benefit) expense, was $4.5 million for the second quarter of 2021,
or $0.11 per diluted share, compared to non-GAAP net income of $2.9
million for the second quarter of 2020, or $0.07 per diluted
share.
● Adjusted EBITDA was $5.6 million for the second quarter
of 2021, compared to adjusted EBITDA of $4.2 million for the second
quarter of 2020. Adjusted EBITDA excludes stock-based compensation
expense, merger-related expense, other (benefit) expense,
restructuring, the amortization of acquired intangible assets,
depreciation expense, other income/expense and the provision for
income taxes.
● Cash flow provided by operations was $8.0 for the
second quarter for 2021, compared to cash flow provided by
operations of $2.9 million for the second quarter of 2020.
● Free cash flow was $5.7 million after the company
invested $2.3 million in capital expenditures and capitalization of
internal-use software during the second quarter of 2021. Free cash
flow was $516,000 for the second quarter of 2020.
● Cash and cash equivalents were $40.4 million as of June
30, 2021 compared to $37.5 million on December 31, 2020.
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 annual subscription revenue per premium customer was
$92,200 in the second quarter of 2021, excluding starter customers
who had average annualized revenue of $4,500 per customer. This
compares to $87,200 in the comparable period in 2020.
● Recurring dollar retention rate was 86% in the second quarter
of 2021, versus our historical target of the low to mid-90 percent
range.
● Ended the quarter with 3,263 customers, of which 2,280 were
premium.
● New customers and customers who expanded their relationship
during the second quarter include: Black News Channel, Sparrow
Live, Dal-Tile Corp, Rooster Teeth Productions, The Edinburgh
Fringe Festival, Softbank, TVNZ, and Hydrow.
● Established a partnership with Alibaba to create the
Brightcove China Delivery via Alibaba Cloud solution, which makes
Brightcove the first video provider to enable on-demand video
streaming in China. With this new partnership, we are able to solve
the challenges that have long hindered enterprise video adoption in
China, including government restrictions, video loading or analytic
failures, or being blacklisted for not having an in-country domain
or license.
● Announced a technology partnership with ByteArk, a leading
content delivery network (CDN) in Thailand. Together, we will be
able to leverage each other’s technology to provide media
organizations, content owners using OTT platforms and enterprises a
flawless viewer experience across any device.
Business Outlook
Based on information as of today, July 28, 2021, the Company is
issuing the following financial guidance.
Third Quarter 2021:
● Revenue is expected to be in the range of $50.5 million
to $51.5 million, including approximately $2.7 million of
professional services revenue.
● Non-GAAP income from operations is expected to be in
the range of $0.5 million to $1.5 million, which excludes
stock-based compensation of approximately $2.6 million and the
amortization of acquired intangible assets of approximately $0.7
million.
● Adjusted EBITDA is expected to be in the range of $1.7
million to $2.7 million, which excludes stock-based compensation of
approximately $2.6 million, the amortization of acquired intangible
assets of approximately $0.7 million, depreciation expense of
approximately $1.2 million, and other income/expense and the
provision for income taxes of approximately $0.3 million.
● Non-GAAP net income per diluted share is expected to be
$0.01 to $0.03, which excludes stock-based compensation of
approximately $2.6 million, the amortization of acquired intangible
assets of approximately $0.7 million, and assumes approximately
42.4 million weighted-average shares outstanding.
Full Year 2021:
● Revenue is expected to be in the range of $211.0
million to $213.0 million, including approximately $12.5 million of
professional services revenue.
● Non-GAAP income from operations is expected to be in
the range of $14.0 million to $17.0 million, which excludes
stock-based compensation of approximately $10.4 million, the
amortization of acquired intangible assets of approximately $3.0
million, merger-related expenses of $0.3 and other (benefit)
expense of ($2.0) million.
● Adjusted EBITDA is expected to be in the range of $19.1
million to $22.1 million, which excludes stock-based compensation
of approximately $10.4 million, the amortization of acquired
intangible assets of approximately $3.0 million, merger-related
expenses of $0.3, depreciation expense of approximately $5.1
million, other (benefit) expense of approximately ($2.0) million,
and other income/expense and the provision for income taxes of
approximately $1.3 million.
● Non-GAAP earnings per diluted share is expected to be
$0.30 to $0.37, which excludes stock-based compensation of
approximately $10.4 million, the amortization of acquired
intangible assets of approximately $3.0 million, merger-related
expenses of $0.3, other (benefit) expense of ($2.0) million and
assumes approximately 42.3 million weighted-average shares
outstanding.
Conference Call Information
Brightcove will host a conference call today, July 28, 2021, 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
877-407-3982 (domestic) or 201-493-6780 (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 13721361. A replay of the webcast will also be
available for a limited time at http://investor.brightcove.com.
About Brightcove Inc. (NASDAQ: BCOV)
When video is done right, it can have a powerful and lasting
effect. Hearts open. Minds change. Creativity thrives. Since 2004,
Brightcove has been helping customers discover and experience the
incredible power of video through its award-winning technology,
empowering organizations in more than 70 countries across the globe
to touch audiences in bold and innovative ways.
Brightcove achieves this by developing technologies once thought
impossible, providing customer support without parallel or excuses,
and leveraging the expertise and resources of a global
infrastructure. Video is the world’s most compelling, exciting
medium. Visit www.brightcove.com. Video That Means Business.™
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 and full year 2021, 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: the effect of the COVID-19 pandemic,
including our business operations, as well as its impact on the
general economic and financial market conditions; our ability to
retain existing customers and acquire new ones; our history of
losses; the timing and successful integration of the Ooyala
acquisition; 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; keeping up with the rapid technological
change required to remain competitive in our industry; 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. 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, amortization of acquired
intangible assets, merger-related expenses, restructuring and other
(benefit) expense. The non-GAAP financial results discussed above
of adjusted EBITDA is defined as consolidated net income (loss),
plus other income/expense, including interest expense and interest
income, the provision for income taxes, depreciation expense, the
amortization of acquired intangible assets, stock-based
compensation expense, merger-related expenses, restructuring and
other (benefit) expense. Merger-related expenses include fees
incurred in connection with an acquisition. 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.
Net Revenue Retention Rate. We assess our ability to retain and
expand customers using a metric we refer to as our net revenue
retention rate. We calculate the net revenue retention rate by
dividing; a) the current annualized recurring revenue for premium
customers that existed twelve months prior by b) the annualized
recurring revenue for all premium customers that existed twelve
months prior. We define annualized recurring revenue for premium
customers as the aggregate annualized contract value from our
premium customer base, measured as of the end of a given period. We
typically calculate our net revenue retention rate on a quarterly
basis. For annual periods, we report net revenue retention rate as
the average of the net revenue retention rate for all fiscal
quarters included in the period. By dividing the retained recurring
revenue by the base recurring revenue, we measure our success in
retaining and growing installed revenue from the specific cohort of
customers we served at the beginning of the period.
Brightcove Inc. Condensed Consolidated Balance Sheets
(in thousands)
June 30, 2021
December 31, 2020
Assets Current assets: Cash and cash
equivalents
$
40,387
$
37,472
Accounts receivable, net of allowance
31,445
29,305
Prepaid expenses and other current assets
21,046
18,738
Total current assets
92,878
85,515
Property and equipment, net
17,460
15,968
Operating lease right-of-use asset
6,749
8,699
Intangible assets, net
8,956
10,465
Goodwill
60,902
60,902
Other assets
6,236
5,254
Total assets
$
193,181
$
186,803
Liabilities and stockholders' equity Current
liabilities: Accounts payable
$
11,001
$
10,456
Accrued expenses
20,779
25,397
Operating lease liability
2,734
4,346
Deferred revenue
62,433
58,741
Total current liabilities
96,947
98,940
Operating lease liability, net of current portion
4,200
5,498
Other liabilities
889
2,763
Total liabilities
102,036
107,201
Stockholders' equity: Common stock
41
40
Additional paid-in capital
292,775
287,059
Treasury stock, at cost
(871
)
(871
)
Accumulated other comprehensive loss
(362
)
(188
)
Accumulated deficit
(200,438
)
(206,438
)
Total stockholders’ equity
91,145
79,602
Total liabilities and stockholders' equity
$
193,181
$
186,803
Brightcove Inc. Condensed
Consolidated Statements of Operations (in thousands, except
per share amounts) Three Months Ended June
30, Six Months Ended June 30,
2021
2020
2021
2020
Revenue: Subscription and support revenue
$
48,602
$
45,617
$
99,441
$
90,275
Professional services and other revenue
2,870
2,309
6,848
4,304
Total revenue
51,472
47,926
106,289
94,579
Cost of revenue: (1) (2) Cost of subscription and support revenue
14,756
17,807
30,434
34,555
Cost of professional services and other revenue
2,468
2,092
5,958
3,986
Total cost of revenue
17,224
19,899
36,392
38,541
Gross profit
34,248
28,027
69,897
56,038
Operating expenses: (1) (2) Research and development
7,855
9,131
16,139
17,984
Sales and marketing
18,130
13,383
34,279
27,557
General and administrative
7,418
6,407
14,477
12,939
Merger-related
255
259
255
5,768
Other (benefit) expense
-
-
(1,965
)
-
Total operating expenses
33,658
29,180
63,185
64,248
Income (loss) from operations
590
(1,153
)
6,712
(8,210
)
Other income (expense), net
117
(27
)
(618
)
(495
)
Income (loss) before income taxes
707
(1,180
)
6,094
(8,705
)
Provision for income taxes
(163
)
115
94
443
Net income (loss) before income taxes
$
870
$
(1,295
)
$
6,000
$
(9,148
)
Net income (loss) per share—basic and diluted Basic
$
0.02
$
(0.03
)
$
0.15
$
(0.23
)
Diluted
0.02
(0.03
)
0.14
(0.23
)
Weighted-average shares—basic and diluted Basic
40,615
39,292
40,386
39,136
Diluted
42,209
39,292
42,391
39,136
(1) Stock-based compensation included in above line items:
Cost of subscription and support revenue
$
187
$
123
$
344
$
313
Cost of professional services and other revenue
118
90
186
170
Research and development
531
257
853
697
Sales and marketing
762
761
1,499
1,672
General and administrative
1,011
867
2,019
1,864
(2) Amortization of acquired intangible assets
included in the above line items: Cost of subscription and support
revenue
$
336
$
335
$
671
$
830
Sales and marketing
407
478
838
955
Brightcove Inc. Condensed Consolidated Statements
of Cash Flows (in thousands) Six Months Ended
June 30, Operating activities
2021
2020
Net income (loss)
$
6,000
$
(9,148
)
Adjustments to reconcile net loss to net cash provided by operating
activities: Depreciation and amortization
4,278
4,357
Stock-based compensation
4,901
4,716
Provision for reserves on accounts receivable
276
401
Changes in assets and liabilities: Accounts receivable
(2,634
)
4,055
Prepaid expenses and other current assets
(1,337
)
(5,357
)
Other assets
(1,000
)
(300
)
Accounts payable
105
2,038
Accrued expenses
(6,053
)
(577
)
Operating leases
(960
)
3
Deferred revenue
3,801
5,112
Net cash provided by operating activities
7,377
5,300
Investing activities Purchases of property and
equipment, net of returns
(808
)
(1,197
)
Capitalization of internal-use software costs
(2,977
)
(3,839
)
Net cash used in investing activities
(3,785
)
(5,036
)
Financing activities Proceeds from exercise of stock
options
1,980
394
Deferred acquisition payments
(475
)
-
Proceeds from debt
-
10,000
Debt paydown
-
(5,000
)
Other financing activities
(1,348
)
(429
)
Net cash provided by financing activities
157
4,965
Effect of exchange rate changes on cash and cash equivalents
(834
)
(235
)
Net (decrease) increase in cash and cash equivalents
2,915
4,994
Cash and cash equivalents at beginning of period
37,472
22,759
Cash and cash equivalents at end of period
$
40,387
$
27,753
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 From
Operations, Non-GAAP Net Income (Loss) and Non-GAAP Net Income
(Loss) Per Share (in thousands, except per share
amounts) Three Months Ended June 31,
Six Months Ended June 31,
2021
2020
2021
2020
GROSS PROFIT: GAAP gross profit
$
34,248
$
28,027
$
69,897
$
56,038
Stock-based compensation expense
305
213
530
483
Amortization of acquired intangible assets
336
335
671
830
Restructuring
-
51
-
51
Non-GAAP gross profit
$
34,889
$
28,626
$
71,098
$
57,402
INCOME (LOSS) FROM OPERATIONS: GAAP income (loss) from operations
$
590
$
(1,153
)
$
6,712
$
(8,210
)
Stock-based compensation expense
2,609
2,098
4,901
4,716
Amortization of acquired intangible assets
743
813
1,509
1,785
Merger-related
255
259
255
5,768
Restructuring
-
1,039
-
1,268
Other (benefit) expense
-
-
(1,965
)
-
Non-GAAP income from operations
$
4,197
$
3,056
$
11,412
$
5,327
NET INCOME (LOSS): GAAP net income (loss)
$
870
$
(1,295
)
$
6,000
$
(9,148
)
Stock-based compensation expense
2,609
2,098
4,901
4,716
Amortization of acquired intangible assets
743
813
1,509
1,785
Merger-related
255
259
255
5,768
Restructuring
-
1,039
-
1,268
Other (benefit) expense
-
-
(1,965
)
-
Non-GAAP net income
$
4,477
$
2,914
$
10,700
$
4,389
GAAP diluted net income (loss) per share
$
0.02
$
(0.03
)
$
0.14
$
(0.23
)
Non-GAAP diluted net income per share
$
0.11
$
0.07
$
0.25
$
0.11
Shares used in computing GAAP diluted net income (loss) per
share
40,615
39,292
40,386
39,136
Shares used in computing Non-GAAP diluted net income (loss) per
share
42,209
39,952
42,391
39,802
Brightcove Inc. Calculation of Adjusted EBITDA
(in thousands) Three Months Ended June
30, Six Months Ended June 30,
2021
2020
2021
2020
Net income (loss)
$
870
$
(1,295
)
$
6,000
$
(9,148
)
Other expense, net
(117
)
27
618
495
Provision for income taxes
(163
)
115
94
443
Depreciation and amortization
2,115
1,949
4,278
4,357
Stock-based compensation expense
2,609
2,098
4,901
4,716
Merger-related
255
259
255
5,768
Restructuring
-
1,039
-
1,268
Other (benefit) expense
-
-
(1,965
)
-
Adjusted EBITDA
$
5,569
$
4,192
$
14,181
$
7,899
Brightcove Inc. Historical
Net Revenue Retention (NRR)
1Q19
2Q19
3Q19
4Q19
1Q20
2Q20
3Q20
4Q20
1Q21
2Q21
Net Revenue Retention Rate
95%
100%
97%
97%
92%
92%
98%
100%
99%
98%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210728005956/en/
Investors: ICR for Brightcove Brian Denyeau, 646-277-1251
brian.denyeau@icrinc.com
Media: Brightcove Meredith Duhaime
mduhaime@brightcove.com
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