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Brightcove Announces Financial Results for Second Quarter Fiscal Year 2022

August 2, 2022 at 4:05 PM EDT

BOSTON--(BUSINESS WIRE)--Aug. 2, 2022-- 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

 

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

Source: Brightcove Inc.

Primary IR Contact

Investor Relations:
ICR
Brian Denyeau
Phone:
+1-617-500-4947 or
1-888-882-1880
Email:
InvestorRelations@brightcove.com