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Brightcove Announces Financial Results for Second Quarter Fiscal Year 2022

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BOSTON, August 02, 2022--(BUSINESS WIRE)--Brightcove Inc. (Nasdaq: BCOV), the trusted leader in streaming technology, today announced financial results for the second quarter ended June 30, 2022.

"Brightcove’s second quarter revenue and profitability once again exceeded the high end of our guidance range. In my first 100 days with the company, we have developed a comprehensive plan that will leverage the strength of our online streaming platform with new innovation and solutions that will enable any company, brand or creator to own their digital future," said Marc DeBevoise, Brightcove’s Chief Executive Officer.

DeBevoise added, "Brightcove’s vision is to be the most trusted streaming technology company in the world. I am confident that we have the right team and strategy in place to deliver on this vision and accelerate Brightcove’s revenue and profitability in the years ahead."

Second Quarter 2022 Financial Highlights:

Revenue for the second quarter of 2022 was $54.4 million, an increase of 6% compared to $51.5 million for the second quarter of 2021. Subscription and support revenue was $53.0 million, an increase of 9% compared to $48.6 million for the second quarter of 2021.

Gross profit for the second quarter of 2022 was $35.7 million, representing a gross margin of 66% compared to a gross profit of $34.2 million, representing a gross margin of 67% for the second quarter of 2021. Non-GAAP gross profit for the second quarter of 2022 was $36.4 million, representing a non-GAAP gross margin of 67%, compared to a non-GAAP gross profit of $34.9 million, representing a non-GAAP gross margin of 68% for the second quarter of 2021. 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 $703 thousand for the second quarter of 2022, compared to income from operations of $590 thousand for the second quarter of 2021. Non-GAAP operating income, which excludes stock-based compensation expense, the amortization of acquired intangible assets, merger-related expense and other (benefit) expense, was $5.3 million for the second quarter of 2022, compared to non-GAAP operating income of $4.2 million during the second quarter of 2021.

Net loss was $301 thousand, or a loss of $0.01 per diluted share, for the second quarter of 2022. This compares to a net income of $870 thousand, or $0.02 per diluted share, for the second quarter of 2021. Non-GAAP net income, which excludes stock-based compensation expense, the amortization of acquired intangible assets, merger-related expense and other (benefit) expense, was $4.3 million for the second quarter of 2022, or $0.10 per diluted share, compared to non-GAAP net income of $4.5 million for the second quarter of 2021, or $0.11 per diluted share.

Adjusted EBITDA was $6.7 million for the second quarter of 2022, compared to adjusted EBITDA of $5.6 million for the second quarter of 2021. Adjusted EBITDA excludes stock-based compensation expense, merger-related expense, other (benefit) expense, the amortization of acquired intangible assets, depreciation expense, other income/expense and the provision for income taxes.

Cash flow provided by operations was $9.9 million for the second quarter for 2022, compared to cash flow provided by operations of $8.0 million for the second quarter of 2021.

Free cash flow was $2.4 million after the company invested $7.5 million in capital expenditures and capitalization of internal-use software during the second quarter of 2022. Free cash flow was $5.7 for the second quarter of 2021.

Cash and cash equivalents were $27.8 million as of June 30, 2022 compared to $45.7 million on December 31, 2021.

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 $98,000 in the second quarter of 2022, excluding starter customers who had average annualized revenue of $3,900 per customer. The average annual subscription revenue per premium customer compares to $92,200 in the second quarter of 2021.

● Recurring dollar retention rate was 84% in the second quarter of 2022, versus our historical target of the low to mid-90 percent range.

● Net revenue retention in the quarter was 95%, which compares to 98% in the first quarter of 2022 and 98% in the second quarter of 2021.

● Ended the second quarter of 2022 with 2,937 customers, of which 2,301 were premium.

● New customers and customers who expanded their relationship during the second quarter of 2022 include: The Academy of Motion Picture Arts and Sciences, TVB USA, Gaia, GoalCast and L3Harris Technologies, among others.

● Appointed David Beck as its first Chief Strategy and Corporate Development Officer. Beck brings two decades of experience in strategy, operations, and business development at elite digital brands, most recently having served as the Executive Vice President, Head of Content Strategy and Business Operations at AMC. At AMC, Beck led the strategy to accelerate AMC’s streaming business model transformation, including its integrated Linear, SVOD (AMC+), and AVOD/FAST services and partnerships for B2B and DTC distribution. He also drove the modernization of its core operations across AMC, BBC America, Sundance TV, IFC, and WE TV.

● Appointed Dan Freund as its Chief Revenue Officer. Freund brings more than 25 years of global leadership experience in leading commercial sales and fueling revenue growth for enterprise software companies. Most recently, Freund served as the Chief Revenue Officer for Brandwatch, a data-driven digital consumer intelligence company. Prior to Brandwatch, Freund served as Chief Sales Officer for Quickbase, an application development platform, where he grew recurring revenue by over 50% in less than two years.

● Announced Trisha Stiles as its new Chief People Officer. Stiles brings over 20 years of experience leading human resources for Fortune 500 companies, including Tableau, a Salesforce Business Unit, CBS Interactive, and NBC Universal. In this role, Stiles will work to strengthen and amplify Brightcove’s organizational structure, talent development, and culture. She will assume her responsibilities on August 29.

Business Outlook

Based on information as of today, August 2, 2022, the Company is issuing the following financial guidance.

Third Quarter 2022:

Revenue is expected to be in the range of $52.0 million to $53.0 million, including approximately $1.7 million of professional services revenue.

Non-GAAP income from operations is expected to be in the range of $1.2 million to $2.2 million, which excludes stock-based compensation of approximately $3.5 million and the amortization of acquired intangible assets of approximately $0.7 million.

Adjusted EBITDA is expected to be in the range of $3.3 million to $4.3 million, which excludes stock-based compensation of approximately $3.5 million, the amortization of acquired intangible assets of approximately $0.7 million, depreciation expense of approximately $2.1 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 $0.02 to $0.04, which excludes stock-based compensation of approximately $3.5 million, the amortization of acquired intangible assets of approximately $0.7 million, and assumes approximately 42.3 million weighted-average shares outstanding.

Full Year 2022:

Revenue is expected to be in the range of $211.0 million to $215.0 million, including approximately $6.6 million of professional services revenue.

Non-GAAP income from operations is expected to be in the range of $11.0 million to $14.0 million, which excludes stock-based compensation of approximately $13.9 million, the amortization of acquired intangible assets of approximately $3.0 million, merger-related expense of approximately $0.7 million, and other expenses of $1.1 million.

Adjusted EBITDA is expected to be in the range of $18.0 million to $21.0 million, which excludes stock-based compensation of approximately $13.9 million, merger-related expense of approximately $0.7 million, other expenses of $1.1 million, the amortization of acquired intangible assets of approximately $3.0 million, depreciation expense of approximately $7.0 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 $0.23 to $0.30, which excludes stock-based compensation of approximately $13.9 million, the amortization of acquired intangible assets of approximately $3.0 million, merger-related expense of approximately $0.7 million, other expenses of $1.1 million and assumes approximately 42.2 million weighted-average shares outstanding.

Earnings Stream Information

Brightcove earnings will be streamed on August 2, 2022, at 5:00 p.m. (Eastern Time) to discuss the Company's financial results and current business outlook. To access the live stream, visit the "Investors" page of the Company’s website, http://investor.brightcove.com. Once the live stream concludes, an on-demand recording will be available on Brightcove’s Investor page for a limited time at http://investor.brightcove.com.

About Brightcove Inc. (NASDAQ: BCOV)

Brightcove creates the world’s most reliable, scalable, and secure video technology solutions to build a greater connection between companies and their audiences, no matter where they are or on which devices they consume content. In more than 80 countries, Brightcove’s intelligent video platform enables businesses to sell to customers more effectively, media leaders to stream and monetize content more reliably, and every organization to communicate with team members more powerfully. With two Technology and Engineering Emmy® Awards for innovation, uptime that consistently leads the industry, and unmatched scalability, we continuously push the boundaries of what video can do. Follow Brightcove on Twitter, LinkedIn, and Facebook.

Visit www.brightcove.com. Brightcove. 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 second fiscal quarter and full year 2022, 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 on our business operations and broader conditions, 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; 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 and similar disclosures in our subsequent filings with the SEC. 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, 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, 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.

Brightcove Inc.

Condensed Consolidated Balance Sheets

(in thousands)

June 30, 2022

December 31, 2021

Assets

Current assets:

Cash and cash equivalents

$

27,804

$

45,739

Accounts receivable, net of allowance

32,567

29,866

Prepaid expenses and other current assets

21,262

18,625

Total current assets

81,633

94,230

Property and equipment, net

32,538

20,514

Operating lease right-of-use asset

19,048

24,891

Intangible assets, net

12,088

9,276

Goodwill

74,837

60,902

Other assets

6,465

6,655

Total assets

$

226,609

$

216,468

Liabilities and stockholders' equity

Current liabilities:

Accounts payable

$

11,956

$

11,039

Accrued expenses

22,907

20,925

Operating lease liability

2,595

2,600

Deferred revenue

64,567

62,057

Total current liabilities

102,025

96,621

Operating lease liability, net of current portion

20,970

22,801

Other liabilities

877

786

Total liabilities

123,872

120,208

Stockholders' equity:

Common stock

42

41

Additional paid-in capital

308,307

298,793

Treasury stock, at cost

(871

)

(871

)

Accumulated other comprehensive loss

(1,762

)

(662

)

Accumulated deficit

(202,979

)

(201,041

)

Total stockholders’ equity

102,737

96,260

Total liabilities and stockholders' equity

$

226,609

$

216,468

Brightcove Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

Three Months Ended June 30,

Six Months Ended June 30,

2022

2021

2022

2021

Revenue:

Subscription and support revenue

$

52,988

$

48,602

$

104,589

$

99,441

Professional services and other revenue

1,459

2,870

3,237

6,848

Total revenue

54,447

51,472

107,826

106,289

Cost of revenue: (1) (2)

Cost of subscription and support revenue

16,943

14,756

33,925

30,434

Cost of professional services and other revenue

1,761

2,468

3,759

5,958

Total cost of revenue

18,704

17,224

37,684

36,392

Gross profit

35,743

34,248

70,142

69,897

Operating expenses: (1) (2)

Research and development

8,372

7,855

16,609

16,139

Sales and marketing

17,961

18,130

36,249

34,279

General and administrative

8,554

7,418

16,643

14,477

Merger-related

153

255

747

255

Other expense (benefit)

-

-

1,149

(1,965

)

Total operating expenses

35,040

33,658

71,397

63,185

Income (loss) from operations

703

590

(1,255

)

6,712

Other (expense) income, net

(825

)

117

(1,212

)

(618

)

(Loss) income before income taxes

(122

)

707

(2,467

)

6,094

Loss (benefit) from provision for income taxes

179

(163

)

(529

)

94

Net (loss) income

$

(301

)

$

870

$

(1,938

)

$

6,000

Net (loss) income per share—basic and diluted

Basic

$

(0.01

)

$

0.02

$

(0.05

)

$

0.15

Diluted

(0.01

)

0.02

(0.05

)

0.14

Weighted-average shares—basic and diluted

Basic

41,723

40,615

41,580

40,386

Diluted

41,723

42,209

41,580

42,391

(1) Stock-based compensation included in above line items:

Cost of subscription and support revenue

$

144

$

187

$

253

$

344

Cost of professional services and other revenue

139

118

258

186

Research and development

935

531

1,657

853

Sales and marketing

899

762

1,842

1,499

General and administrative

1,527

1,011

2,864

2,019

Other expense (benefit)

-

-

249

-

(2) Amortization of acquired intangible assets included in the above line items:

Cost of subscription and support revenue

$

376

$

336

$

780

$

671

Sales and marketing

416

407

829

838

Brightcove Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

Six Months Ended June 30,

Operating activities

2022

2021

Net (loss) income

$

(1,938

)

$

6,000

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

4,227

4,278

Stock-based compensation

7,123

4,901

Provision for reserves on accounts receivable

70

276

Changes in assets and liabilities:

Accounts receivable

(2,394

)

(2,634

)

Prepaid expenses and other current assets

(2,612

)

(1,337

)

Other assets

161

(1,000

)

Accounts payable

(834

)

105

Accrued expenses

(1,183

)

(6,053

)

Operating leases

4,007

(960

)

Deferred revenue

2,630

3,801

Net cash provided by operating activities

9,257

7,377

Investing activities

Cash paid for acquisition, net of cash acquired

(13,215

)

-

Purchases of property and equipment, net of returns

(5,791

)

(808

)

Capitalization of internal-use software costs

(6,479

)

(2,977

)

Net cash used in investing activities

(25,485

)

(3,785

)

Financing activities

Proceeds from exercise of stock options

100

1,980

Deferred acquisition payments

-

(475

)

Other financing activities

(7

)

(1,348

)

Net cash provided by financing activities

93

157

Effect of exchange rate changes on cash and cash equivalents

(1,800

)

(834

)

Net increase in cash and cash equivalents

(17,935

)

2,915

Cash and cash equivalents at beginning of period

45,739

37,472

Cash and cash equivalents at end of period

$

27,804

$

40,387

Brightcove Inc.

Reconciliation of GAAP Gross Profit, GAAP Income (Loss) From Operations, GAAP Net (Loss) Income and GAAP Net (Loss) Income Per Share to

Non-GAAP Gross Profit, Non-GAAP Income From Operations, Non-GAAP Net Income and Non-GAAP Net Income Per Share

(in thousands, except per share amounts)

Three Months Ended June 30,

Six Months Ended June 30,

2022

2021

2022

2021

GROSS PROFIT:

GAAP gross profit

$

35,743

$

34,248

$

70,142

$

69,897

Stock-based compensation expense

283

305

511

530

Amortization of acquired intangible assets

376

336

780

671

Non-GAAP gross profit

$

36,402

$

34,889

$

71,433

$

71,098

INCOME (LOSS) FROM OPERATIONS:

GAAP income (loss) from operations

$

703

$

590

$

(1,255

)

$

6,712

Stock-based compensation expense

3,644

2,609

6,874

4,901

Amortization of acquired intangible assets

792

743

1,609

1,509

Merger-related

153

255

747

255

Other expense (benefit)

-

-

1,149

(1,965

)

Non-GAAP income from operations

$

5,292

$

4,197

$

9,124

$

11,412

NET INCOME (LOSS):

GAAP net (loss) income

$

(301

)

$

870

$

(1,938

)

$

6,000

Stock-based compensation expense

3,644

2,609

6,874

4,901

Amortization of acquired intangible assets

792

743

1,609

1,509

Merger-related

153

255

747

255

Other expense (benefit)

-

-

1,149

(1,965

)

Non-GAAP net income

$

4,288

$

4,477

$

8,441

$

10,700

GAAP diluted net (loss) income per share

$

(0.01

)

$

0.02

$

(0.05

)

$

0.14

Non-GAAP diluted net income per share

$

0.10

$

0.11

$

0.20

$

0.25

Shares used in computing GAAP diluted net (loss) income per share

41,723

42,209

41,580

42,391

Shares used in computing Non-GAAP diluted net income per share

41,975

42,209

41,983

42,391

Brightcove Inc.

Calculation of Adjusted EBITDA

(in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

2022

2021

2022

2021

Net (loss) income

$

(301

)

$

870

$

(1,938

)

$

6,000

Other expense, net

825

(117

)

1,212

618

Provision for income taxes

179

(163

)

(529

)

94

Depreciation and amortization

2,166

2,115

4,227

4,278

Stock-based compensation expense

3,644

2,609

6,874

4,901

Merger-related

153

255

747

255

Other expense (benefit)

-

-

1,149

(1,965

)

Adjusted EBITDA

$

6,666

$

5,569

$

11,742

$

14,181

View source version on businesswire.com: https://www.businesswire.com/news/home/20220802005881/en/

Contacts

Investors:
ICR for Brightcove
Brian Denyeau, 646-277-1251
brian.denyeau@icrinc.com
or
Media:
Brightcove
Sara Griggs, 929-888-4866
sgriggs@brightcove.com