Brightcove Announces Financial Results for Second Quarter Fiscal Year 2017
"Brightcove reported second quarter financial results that exceeded the
high end of our revenue guidance but fell short of our profitability
expectations due primarily to additional investments that were made
during the second quarter to support one of our strategic customers. We
remain on track to return to sustainable adjusted EBITDA profitability
in the fourth quarter," said
Feinberg added, "During the second quarter, we delivered another strong bookings performance, driven by our expanded product portfolio, and we remain on track to achieve our mid- to high-teens bookings growth target for the year. We are delivering significant value to our customers, which gives us confidence that our continued innovation and increased focus on go-to-market execution will drive improved operational performance and long-term shareholder value."
Second Quarter 2017 Financial Highlights:
-
Revenue for the second quarter of 2017 was
$38.8 million , an increase of 5% compared to$37.0 million for the second quarter of 2016. Subscription and support revenue was$35.5 million , compared to$35.1 million for the second quarter of 2016. -
Gross profit for the second quarter of 2017 was
$22.2 million , representing a gross margin of 57%, compared to a gross profit of$23.5 million for the second quarter of 2016. Non-GAAP gross profit for the second quarter of 2017 was$22.8 million , representing a non-GAAP gross margin of 59%, compared to a non-GAAP gross profit of$24.1 million for the second quarter of 2016. 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
$7.9 million for the second quarter of 2017, compared to a loss from operations of$2.2 million for the second quarter of 2016. Non-GAAP loss from operations, which excludes stock-based compensation expense and the amortization of acquired intangible assets, was$5.5 million for the second quarter of 2017, compared to non-GAAP loss from operations of$302,000 during the second quarter of 2016. -
Net loss was
$7.7 million , or$0.22 per diluted share, for the second quarter of 2017. This compares to a net loss of$2.4 million , or$0.07 per diluted share, for the second quarter of 2016. Non-GAAP net loss, which excludes stock-based compensation expense and the amortization of acquired intangible assets, was$5.3 million for the second quarter of 2017, or$0.16 per diluted share, compared to non-GAAP net loss of$489,000 for the second quarter of 2016, or$0.01 per diluted share. -
Adjusted EBITDA loss was
$4.3 million for the second quarter of 2017, compared to adjusted EBITDA of$885,000 for the second quarter of 2016. Adjusted EBITDA excludes stock-based compensation expense, the amortization of acquired intangible assets, depreciation expense, other income/expense and the provision for income taxes. -
Cash flow used in operations was
$119,000 for the second quarter for 2017, compared to cash flow from operations of$2.0 million for the second quarter of 2016. -
Free cash flow was negative
$937,000 after the company invested$818,000 in capital expenditures and capitalization of internal-use software during the second quarter of 2017. Free cash flow was$1.0 million for the second quarter of 2016. -
Cash and cash equivalents were
$28.4 million as ofJune 30, 2017 compared to$29.2 million atMarch 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 Second Quarter and Recent Highlights:
-
Average annual subscription revenue per premium customer was
$71,000 in the second quarter of 2017, excluding starter customers who had average annualized revenue of$5,000 per customer. This compares to$70,000 in the comparable period in 2016. - Recurring dollar retention rate was 91% in the second quarter of 2017, which was in-line with our historical target of the low to mid 90% range.
- Ended the quarter with 4,304 customers, of which 2,079 were premium.
-
New enterprise customers and enterprise customers who expanded their
relationship during the quarter included:
Avon , Boston Children's Hospital, Konica-Minolta, Masterclass,Navy Federal Credit Union , SAP, The Vitamin Shoppe and Under Armour, among others. -
New media customers and media customers who expanded their
relationship during the quarter included: The Africa Channel,
AsiaNet News Media and Entertainment , Entravision,Football Federation Australia ,Foxtel , Madison Square Garden Networks,Major League Soccer , Masterclass,Republic World , RugbyPass, and TV Asahi, among others. -
Introduced several new innovations at its annual PLAY conference that
further empower media, marketers and enterprises:
- Brightcove Live is a high-performance, scalable live streaming service that includes server-side ad insertion, cloud DVR, content encryption, on-the-fly clipping and VOD asset creation to deliver seamless monetization and clipping for live events and 24/7 channels.
- Brightcove SSAI (Server-Side Ad Insertion) improves monetization, minimizes the impact of ad blockers and delivers a TV-like experience across every device.
- Dynamic Delivery is Brightcove's next-generation media delivery platform that offers enhanced reach, flexibility and performance with less storage.
- In-Page Experiences enables users to build customized video layouts that incorporate calls-to-action and dynamic capabilities to deliver different experiences before, during and after a video is played.
- Audience Profiles allows users to analyze the viewing history of individual viewers, providing insight that can be used to guide both short-term actions and long-term program strategies.
- Context Aware Encoding, now in beta, is a new video compression technology that utilizes machine learning to deliver higher quality viewer experiences while also reducing storage and bandwidth costs by up to 50%.
Business Outlook
Based on information as of today,
Third Quarter 2017:
-
Revenue is expected to be in the range of
$37.5 million to$38.5 million , including approximately$2.5 million of professional services revenue. -
Non-GAAP loss from operations is expected to be in the range of
$3.2 million to$3.7 million , which excludes stock-based compensation of approximately$1.7 million and the amortization of acquired intangible assets of approximately$700,000 . -
Adjusted EBITDA loss is expected to be in the range of
$1.9 million to$2.4 million , which excludes stock-based compensation of approximately$1.7 million , the amortization of acquired intangible assets of approximately$700,000 , depreciation expense of approximately$1.3 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
$0.10 to$0.11 , which excludes stock-based compensation of approximately$1.7 million and the amortization of acquired intangible assets of approximately$700,000 , and assumes approximately 34.5 million weighted-average shares outstanding.
Full Year 2017:
-
Revenue is expected to be in the range of
$152.0 million to$155.0 million . Professional services revenue is expected to be in a range of$10.5 million to$11.0 million . -
Non-GAAP loss from operations is expected to be in the range of
$11.8 million to$13.3 million , which excludes stock-based compensation of approximately$7.2 million and the amortization of acquired intangible assets of approximately$2.7 million . -
Adjusted EBITDA loss is expected to be in the range of
$7.0 million to$8.5 million , which excludes stock-based compensation of approximately$7.2 million , the amortization of acquired intangible assets of approximately$2.7 million , depreciation expense of approximately$4.8 million and other income/expense and the provision for income taxes of approximately$100,000 . -
Non-GAAP net loss per diluted share is expected to be
$0.34 to$0.39 , which excludes stock-based compensation of approximately$7.2 million and the amortization of acquired intangible assets of approximately$2.7 million , and assumes approximately 34.4 million weighted-average shares outstanding.
Conference Call Information
About
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 2017 and full year 2017, our bookings growth, and our
ability to execute our go-to-market strategy to drive improved
operational performance and long-term shareholder value. 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 ability to scale and adapt our existing
infrastructure to accommodate customer requirements; our ability to
execute on booking and revenue growth and operating margin improvements;
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
Non-GAAP Financial Measures
|
||||||||||
Condensed Consolidated Balance Sheets | ||||||||||
(in thousands) | ||||||||||
|
|
|||||||||
Assets | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 28,351 | $ | 36,813 | ||||||
Accounts receivable, net of allowance | 23,153 | 21,575 | ||||||||
Prepaid expenses and other current assets | 7,517 | 5,897 | ||||||||
Total current assets | 59,021 | 64,285 | ||||||||
Property and equipment, net | 9,065 | 9,264 | ||||||||
Intangible assets, net | 9,585 | 10,970 | ||||||||
|
50,776 | 50,776 | ||||||||
Deferred tax asset | 135 | 121 | ||||||||
Other assets | 920 | 1,008 | ||||||||
Total assets | $ | 129,502 | $ | 136,424 | ||||||
Liabilities and stockholders' equity | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | $ | 8,467 | $ | 5,327 | ||||||
Accrued expenses | 13,538 | 15,705 | ||||||||
Capital lease liability | 404 | 489 | ||||||||
Equipment financing | 181 | 307 | ||||||||
Deferred revenue | 36,088 | 34,665 | ||||||||
Total current liabilities | 58,678 | 56,493 | ||||||||
Deferred revenue, net of current portion | 31 | 91 | ||||||||
Other liabilities | 1,378 | 1,644 | ||||||||
Total liabilities | 60,087 | 58,228 | ||||||||
Stockholders' equity: | ||||||||||
Common stock | 34 | 34 | ||||||||
Additional paid-in capital | 234,698 | 230,788 | ||||||||
|
(871 | ) | (871 | ) | ||||||
Accumulated other comprehensive loss | (915 | ) | (1,172 | ) | ||||||
Accumulated deficit | (163,531 | ) | (150,583 | ) | ||||||
Total stockholders' equity | 69,415 | 78,196 | ||||||||
Total liabilities and stockholders' equity | $ | 129,502 | $ | 136,424 | ||||||
|
||||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||
Revenue: | ||||||||||||||||||
Subscription and support revenue | $ | 35,528 | $ | 35,080 | $ | 69,770 | $ | 69,733 | ||||||||||
Professional services and other revenue | 3,225 | 1,880 | 6,555 | 3,519 | ||||||||||||||
Total revenue | 38,753 | 36,960 | 76,325 | 73,252 | ||||||||||||||
Cost of revenue: (1) (2) | ||||||||||||||||||
Cost of subscription and support revenue | 13,102 | 11,675 | 25,256 | 23,350 | ||||||||||||||
Cost of professional services and other revenue | 3,476 | 1,778 | 6,540 | 3,367 | ||||||||||||||
Total cost of revenue | 16,578 | 13,453 | 31,796 | 26,717 | ||||||||||||||
Gross profit | 22,175 | 23,507 | 44,529 | 46,535 | ||||||||||||||
Operating expenses: (1) (2) | ||||||||||||||||||
Research and development | 8,279 | 7,255 | 16,473 | 14,681 | ||||||||||||||
Sales and marketing | 15,904 | 13,976 | 29,805 | 26,511 | ||||||||||||||
General and administrative | 5,876 | 4,487 | 11,267 | 9,064 | ||||||||||||||
Merger-related | - | - | - | 21 | ||||||||||||||
Total operating expenses | 30,059 | 25,718 | 57,545 | 50,277 | ||||||||||||||
Loss from operations | (7,884 | ) | (2,211 | ) | (13,016 | ) | (3,742 | ) | ||||||||||
Other income (expense), net | 314 | (91 | ) | 452 | (122 | ) | ||||||||||||
Net loss before income taxes | (7,570 | ) | (2,302 | ) | (12,564 | ) | (3,864 | ) | ||||||||||
Provision for income taxes | 108 | 96 | 187 | 141 | ||||||||||||||
Net loss | $ | (7,678 | ) | $ | (2,398 | ) | $ | (12,751 | ) | $ | (4,005 | ) | ||||||
Net loss per share—basic and diluted | ||||||||||||||||||
Basic | $ | (0.22 | ) | $ | (0.07 | ) | $ | (0.37 | ) | $ | (0.12 | ) | ||||||
Diluted | (0.22 | ) | (0.07 | ) | (0.37 | ) | (0.12 | ) | ||||||||||
Weighted-average shares—basic and diluted | ||||||||||||||||||
Basic | 34,247 | 32,794 | 34,152 | 32,760 | ||||||||||||||
Diluted | 34,247 | 32,794 | 34,152 | 32,760 | ||||||||||||||
(1) Stock-based compensation included in above line items: | ||||||||||||||||||
Cost of subscription and support revenue | $ | 89 | $ | 68 | $ | 191 | $ | 110 | ||||||||||
Cost of professional services and other revenue | 59 | 32 | 119 | 89 | ||||||||||||||
Research and development | 341 | 181 | 748 | 570 | ||||||||||||||
Sales and marketing | 517 | 497 | 1,263 | 979 | ||||||||||||||
General and administrative | 680 | 347 | 1,155 | 836 | ||||||||||||||
(2) Amortization of acquired intangible assets included in the above line items: | ||||||||||||||||||
Cost of subscription and support revenue | $ | 508 | $ | 508 | $ | 1,015 | $ | 1,016 | ||||||||||
Research and development | - | 32 | 11 | 63 | ||||||||||||||
Sales and marketing | 166 | 244 | 359 | 470 | ||||||||||||||
|
||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||
(in thousands) | ||||||||||
Six Months Ended |
||||||||||
Operating activities | 2017 | 2016 | ||||||||
Net loss | $ | (12,751 | ) | $ | (4,005 | ) | ||||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||||||
Depreciation and amortization | 3,665 | 3,985 | ||||||||
Stock-based compensation | 3,476 | 2,584 | ||||||||
Provision for reserves on accounts receivable | 96 | 165 | ||||||||
Changes in assets and liabilities: | ||||||||||
Accounts receivable | (1,606 | ) | 2,364 | |||||||
Prepaid expenses and other current assets | (2,421 | ) | (1,647 | ) | ||||||
Other assets | 92 | (231 | ) | |||||||
Accounts payable | 3,959 | 881 | ||||||||
Accrued expenses | (2,457 | ) | (1,067 | ) | ||||||
Deferred revenue | 1,233 | 1,980 | ||||||||
Net cash (used in) provided by operating activities | (6,714 | ) | 5,009 | |||||||
Investing activities | ||||||||||
Cash paid for purchase of intangible asset | - | (300 | ) | |||||||
Purchases of property and equipment, net of returns | (650 | ) | (1,026 | ) | ||||||
Capitalization of internal-use software costs | (1,149 | ) | (1,677 | ) | ||||||
Net cash used in investing activities | (1,799 | ) | (3,003 | ) | ||||||
Financing activities | ||||||||||
Proceeds from exercise of stock options | 277 | 188 | ||||||||
Payments of withholding tax on RSU vesting | (118 | ) | (108 | ) | ||||||
Proceeds from equipment financing | - | 604 | ||||||||
Payments on equipment financing | (152 | ) | (122 | ) | ||||||
Payments under capital lease obligation | (278 | ) | (461 | ) | ||||||
Net cash (used in) provided by financing activities | (271 | ) | 101 | |||||||
Effect of exchange rate changes on cash and cash equivalents | 322 | 450 | ||||||||
Net (decrease) increase in cash and cash equivalents | (8,462 | ) | 2,557 | |||||||
Cash and cash equivalents at beginning of period | 36,813 | 27,637 | ||||||||
Cash and cash equivalents at end of period | $ | 28,351 | $ | 30,194 | ||||||
|
||||||||||||||||||
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 (Loss) Income From Operations, Non-GAAP Net (Loss) Income and Non-GAAP Net (Loss) Income Per Share | ||||||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||||
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||
GROSS PROFIT: | ||||||||||||||||||
GAAP gross profit | $ | 22,175 | $ | 23,507 | $ | 44,529 | $ | 46,535 | ||||||||||
Stock-based compensation expense | 148 | 100 | 310 | 199 | ||||||||||||||
Amortization of acquired intangible assets | 508 | 508 | 1,015 | 1,016 | ||||||||||||||
Non-GAAP gross profit | $ | 22,831 | $ | 24,115 | $ | 45,854 | $ | 47,750 | ||||||||||
LOSS FROM OPERATIONS: | ||||||||||||||||||
GAAP loss from operations | $ | (7,884 | ) | $ | (2,211 | ) | $ | (13,016 | ) | $ | (3,742 | ) | ||||||
Stock-based compensation expense | 1,686 | 1,125 | 3,476 | 2,584 | ||||||||||||||
Merger-related expenses | - | - | - | 21 | ||||||||||||||
Amortization of acquired intangible assets | 674 | 784 | 1,385 | 1,549 | ||||||||||||||
Non-GAAP (loss) income from operations | $ | (5,524 | ) | $ | (302 | ) | $ | (8,155 | ) | $ | 412 | |||||||
NET LOSS: | ||||||||||||||||||
GAAP net loss | $ | (7,678 | ) | $ | (2,398 | ) | $ | (12,751 | ) | $ | (4,005 | ) | ||||||
Stock-based compensation expense | 1,686 | 1,125 | 3,476 | 2,584 | ||||||||||||||
Merger-related expenses | - | - | - | 21 | ||||||||||||||
Amortization of acquired intangible assets | 674 | 784 | 1,385 | 1,549 | ||||||||||||||
Non-GAAP net (loss) income | $ | (5,318 | ) | $ | (489 | ) | $ | (7,890 | ) | $ | 149 | |||||||
GAAP diluted net loss per share | $ | (0.22 | ) | $ | (0.07 | ) | $ | (0.37 | ) | $ | (0.12 | ) | ||||||
Non-GAAP diluted net (loss) income per share | $ | (0.16 | ) | $ | (0.01 | ) | $ | (0.23 | ) | $ | 0.00 | |||||||
Shares used in computing GAAP diluted net (loss) income per share | 34,247 | 32,794 | 34,152 | 32,760 | ||||||||||||||
Shares used in computing Non-GAAP diluted net (loss) income per share | 34,247 | 32,794 | 34,152 | 33,787 | ||||||||||||||
|
||||||||||||||||||
Calculation of Adjusted EBITDA | ||||||||||||||||||
(in thousands) | ||||||||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||
Net loss | $ | (7,678 | ) | $ | (2,398 | ) | $ | (12,751 | ) | $ | (4,005 | ) | ||||||
Other (income) expense, net | (314 | ) | 91 | (452 | ) | 122 | ||||||||||||
Provision for income taxes | 108 | 96 | 187 | 141 | ||||||||||||||
Merger-related expenses | - | - | - | 21 | ||||||||||||||
Depreciation and amortization | 1,931 | 1,971 | 3,665 | 3,985 | ||||||||||||||
Stock-based compensation expense | 1,686 | 1,125 | 3,476 | 2,584 | ||||||||||||||
Adjusted EBITDA | $ | (4,267 | ) | $ | 885 | $ | (5,875 | ) | $ | 2,848 |
View source version on businesswire.com: http://www.businesswire.com/news/home/20170726006158/en/
Investor Contact:
ICR for
brian.denyeau@icrinc.com
or
Media
Contact:
pleclare@brightcove.com
Source:
News Provided by Acquire Media