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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

 

FORM 8-K

 

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): July 24, 2014

 

 

 

BRIGHTCOVE INC.

(Exact name of registrant as specified in its charter)

 

 

 

         
DELAWARE   001-35429   20-1579162

(State or other jurisdiction of

incorporation)

  

(Commission

File Number)

  

(I.R.S. Employer

Identification No.)

 

290 Congress Street, Boston, MA   02210
(Address of principal executive offices)   (Zip Code)

  

Registrant’s telephone number, including area code (888) 882-1880

 

Not Applicable

(Former name or former address, if changed since last report)

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

 
 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On July 24, 2014, Brightcove Inc. (the “Company”) issued a press release announcing certain financial and other information for the quarter ended June 30, 2014. The full text of the press release and the related attachments are furnished as Exhibit 99.1 hereto and incorporated herein by reference.

 

The information in this Item 2.02 of this Report on Form 8-K and Exhibit 99.1 attached hereto is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

 

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits

 

     

Exhibit No.

   Description     
   
99.1   Press Release of Brightcove Inc. dated July 24, 2014, including attachments.
     
     

 

 

 

 
 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. 

             
Date: July 24, 2014       Brightcove Inc.
       
        By:   /s/ Christopher Menard
            Christopher Menard
            Chief Financial Officer

 

 

 

 

 

 

 

 

Description: BC

 

Brightcove Announces Financial Results for Second Quarter 2014

Second quarter revenue of $31.0 million up 15% year-over-year

 

BOSTON, MA (July 24, 2014) – Brightcove Inc. (Nasdaq: BCOV), a leading global provider of cloud services for video, today announced financial results for the quarter ended June 30, 2014.

 

“Brightcove delivered second quarter results that exceeded our expectations from both a revenue and profitability perspective, and was highlighted by a significant sequential improvement in our monthly revenue retention rate,” said David Mendels, Chief Executive Officer of Brightcove. “During the second quarter we also experienced slower than expected progress on large deal opportunities and certain customer implementations. When combined with the fact that we now expect a large customer with an uncommon use case to churn in the third quarter, we have adjusted our full year outlook in response.”

 

Mendels added “We remain confident in our strategy and in the very meaningful market opportunity in front of us. We believe our recent and upcoming product innovations, including Gallery and the Video Marketing Suite, combined with shifting our go-to-market focus towards enabling better business results for both media companies and digital marketers, better position Brightcove to generate improved long-term growth.”

 

Second Quarter 2014 Financial Highlights:

 

Revenue: Total revenue for the second quarter of 2014 was $31.0 million, an increase of 15% compared to $26.9 million for the second quarter of 2013. Subscription and support revenue was $29.9 million, an increase of 17% compared with $25.6 million for the second quarter of 2013. Professional services and other revenue was $1.1 million, compared to $1.3 million for the second quarter of 2013.

 

Gross Profit: Gross profit for the second quarter of 2014 was $20.6 million, compared to $17.7 million for the second quarter of 2013, and gross margin was 66% for the second quarter of 2014. Non-GAAP gross profit for the second quarter of 2014 was $21.2 million, representing a year-over-year increase of 17% and a non-GAAP gross margin of 68%. Non-GAAP gross profit and non-GAAP gross margin exclude stock-based compensation expense and the amortization of acquired intangible assets.

 

Operating Loss: Loss from operations was $4.0 million for the second quarter of 2014, compared to a loss of $3.3 million for the second quarter of 2013. Non-GAAP loss from operations, which excludes stock-based compensation expense, the amortization of acquired intangible assets and merger-related expenses, was $1.1 million for the second quarter of 2014, compared to a non-GAAP loss of $874,000 during the second quarter of 2013.

 

Net Loss: Net loss was $4.3 million, or $0.13 per basic and diluted share, for the second quarter of 2014. This compares to a net loss of $3.5 million, or $0.12 per basic and diluted share, for the second quarter of 2013.

 

Non-GAAP net loss, which excludes stock-based compensation expense, the amortization of acquired intangible assets, and merger-related expenses, was $1.4 million for the second quarter of 2014, or $0.04 per basic and diluted share, compared to a non-GAAP net loss of $1.1 million for the second quarter of 2013, or $0.04 per basic and diluted share.

 

Balance Sheet and Cash Flow: As of June 30, 2014, Brightcove had $20.8 million of cash, cash equivalents and investments, compared to $21.4 million at March 31, 2014. Brightcove generated $724,000 in cash from operations and invested $1.6 million in capital expenditures and capitalization of internal-use software costs, leading to negative free cash flow of $861,000 for the second quarter of 2014. Free cash flow was $2.0 million for the second quarter of 2013.

 

 
 

 

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

 

Business Outlook

 

Based on information as of today, July 24, 2014, the Company is issuing the following financial guidance:

 

Third Quarter 2014*: The Company expects revenue to be $30.0 million to $30.5 million, and non-GAAP loss from operations to be $2.2 million to $2.5 million. Assuming approximately 32.3 million shares outstanding, Brightcove expects its non-GAAP net loss per basic and diluted share to be $0.08 to $0.09.

 

Full Year 2014*: The Company now expects revenue to be $122.0 million to $123.5 million, and non-GAAP loss from operations is expected to be $6.5 million to $7.5 million. Assuming approximately 32 million shares outstanding, Brightcove expects its non-GAAP net loss per basic and diluted share to be $0.24 to $0.28.

*With respect to the Company’s expectations under “Business Outlook” above, the Company has not reconciled non-GAAP loss from operations or non-GAAP net loss per share to GAAP loss from operations and GAAP net loss per share, respectively, because the Company does not provide guidance for stock-based compensation expense, merger-related expenses, or amortization of acquired intangible assets, which are reconciling items between those Non-GAAP and GAAP measures. As the items that impact GAAP loss from operations and GAAP net loss per share are out of the Company’s control and/or cannot be reasonably predicted, the Company is unable to provide such guidance. Accordingly, a reconciliation to GAAP loss from operations and GAAP net loss per share is not available without unreasonable effort.

 

Conference Call Information

Brightcove will host a conference call today, July 24, 2014, at 5:00 p.m. (Eastern Time) to discuss the Company's financial results and current business outlook. 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 877-870-5176 (domestic) or 858-384-5517 (international). The replay conference ID is 13585688. A replay of the webcast will also be available for a limited time at http://investor.brightcove.com.

 

 

 
 

 

About Brightcove

Brightcove Inc. (NASDAQ: BCOV), a leading global provider of cloud services for video, offers a family of products that revolutionize the way organizations deliver video experiences. The company's products include Video Cloud, the market-leading online video platform, Zencoder, a leading cloud-based media processing service and HTML5 video player technology provider and Once, a cloud-based ad insertion and video stitching service. Brightcove has more than 5,500 customers in over 70 countries that rely on Brightcove cloud content services to build and operate video experiences across PCs, smartphones, tablets and connected TVs. For more information, visit http://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 third fiscal quarter of 2014 and full year 2014, our position to execute on our go-to-market 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 ability to retain existing customers; difficulties integrating the technologies, products, operations, existing contracts and personnel of Unicorn Media and realizing the anticipated benefits of the combined business; difficulties executing on our go-to-market strategy and realizing the anticipated benefits of this strategy; expectations regarding the widespread adoption of customer demand for our products, including recently launched products; 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 history of losses, our limited operating history; our ability to manage our growth effectively and successfully recruit additional highly-qualified personnel; and 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 loss from operations, non-GAAP net loss and non-GAAP basic and diluted net 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 exclude stock-based compensation expense, amortization of acquired intangible assets and merger-related costs. Merger-related costs 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.

 

Investor Contact:

 

Brian Denyeau

ICR for Brightcove

brian.denyeau@icrinc.com

646-277-1251

 

Media Contact:

 

Kristin Leighton

Brightcove Inc.

kleighton@brightcove.com

617-245-5094

 
 

 

Brightcove Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
         
   June 30, 2014   December 31, 2013 
Assets
Current assets:          
Cash and cash equivalents  $20,785   $33,047 
Short-term investments   -    3,061 
Restricted cash   8    121 
Accounts receivable, net of allowance   19,838    21,560 
Prepaid expenses and other current assets   5,818    4,011 
Deferred tax asset   129    125 
Total current assets   46,578    61,925 
Property and equipment, net   11,118    8,795 
Intangible assets, net   18,514    8,668 
Goodwill   51,099    22,018 
Restricted cash   201    201 
Other assets   482    1,519 
Total assets  $127,992   $103,126 
Liabilities and  stockholders' equity          
Current liabilities:          
Accounts payable  $899   $3,067 
Accrued expenses   9,735    14,528 
Capital lease liability   1,351    - 
Deferred revenue   27,243    23,571 
Total current liabilities   39,228    41,166 
Deferred revenue, net of current portion   123    247 
Other liabilities   2,811    1,333 
Total liabilities   42,162    42,746 
           
Stockholders' equity:          
Common stock   32    29 
Additional-paid-in-capital   211,342    176,928 
Accumulated other comprehensive loss   (256)   (453)
Accumulated deficit   (125,288)   (116,124)
Total stockholders’ equity   85,830    60,380 
Total liabilities and  stockholders' equity  $127,992   $103,126 

 

 

 
 

 

Brightcove Inc.        
Condensed Consolidated Statements of Operations        
(in thousands, except per share amounts)        
(unaudited)        
                 
   Three Months Ended June 30,   Six Months Ended June 30, 
   2014   2013   2014   2013 
Revenue:                
         Subscription and support revenue  $29,929   $25,575   $59,304   $49,352 
         Professional services and other revenue   1,074    1,326    2,804    2,270 
Total revenue   31,003    26,901    62,108    51,622 
Cost of revenue: (1) (2)                    
         Cost of subscription and support revenue   9,109    7,647    18,629    14,394 
         Cost of professional services and other revenue   1,315    1,525    3,062    3,192 
Total cost of revenue   10,424    9,172    21,691    17,586 
               Gross profit   20,579    17,729    40,417    34,036 
Operating expenses: (1) (2)                    
         Research and development   6,792    4,982    13,361    10,043 
         Sales and marketing   12,095    10,749    23,441    20,696 
         General and administrative   5,148    4,754    9,862    9,380 
        Merger-related   521    546    2,388    1,091 
Total operating expenses   24,556    21,031    49,052    41,210 
Loss from operations   (3,977)   (3,302)   (8,635)   (7,174)
Other expense, net   (294)   (164)   (406)   (463)
Loss before income taxes and non-controlling interest in                    
    consolidated subsidiary   (4,271)   (3,466)   (9,041)   (7,637)
Provision for income taxes   56    56    123    94 
Consolidated net loss   (4,327)   (3,522)   (9,164)   (7,731)
Net income attributable to noncontrolling interest in                    
    consolidated subsidiary   -    -    -    (20)
Net loss  $(4,327)  $(3,522)  $(9,164)  $(7,751)
                     
Net loss per share—basic and diluted  $(0.13)  $(0.12)  $(0.29)  $(0.28)
                     
Weighted-average shares —basic and diluted   32,145    28,181    31,595    28,103 
                     
(1) Stock-based compensation included in above line items:                    
         Cost of subscription and support revenue  $50   $57   $110   $125 
         Cost of professional services and other revenue   16    13    68    64 
         Research and development   178    228    574    548 
         Sales and marketing   512    509    1,145    1,084 
         General and administrative   741    645    1,350    1,330 
                     
                     
(2) Amortization of acquired intangible assets included in the above line items:                       
         Cost of subscription and support revenue  $507   $253   $930   $506 
         Research and development   41    10    72    20 
         Sales and marketing   316    167    581    334 

 

 

 

 
 

 

Brightcove Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
         
   Six Months Ended June 30, 
Operating activities  2014   2013 
Net loss  $(9,164)   $(7,731) 
Adjustments to reconcile net loss to net cash used in operating activities:          
   Depreciation and amortization   3,958    3,069 
   Stock-based compensation   3,247    3,151 
   Provision for reserves on accounts receivable   41    321 
   Amortization of premium on investments   1    55 
   Loss on disposal of equipment   91    - 
   Changes in assets and liabilities:          
        Accounts receivable   2,261    (411)
        Prepaid expenses and other current assets   (1,755)   (1,484)
        Other assets   1,188    (29)
        Accounts payable   (3,177)   294 
        Accrued expenses   (4,416)   (750)
        Deferred revenue   3,515    3,509 
Net cash used in operating activities   (4,210)   (6)
           
Investing activities          
Cash paid for acquisition, net of cash acquired   (9,100)   - 
Maturities of investments   3,060    6,320 
Purchases of property and equipment   (1,487)   (928)
Capitalization of internal-use software costs   (875)   - 
Decrease in restricted cash   113    60 
Net cash (used in) provided by investing activities   (8,289)   5,452 
           
Financing activities          
Proceeds from exercise of stock options   555    220 
Purchase of non-controlling interest in consolidated subsidiary   -    (1,084)
Payments under capital lease obligation   (524)   - 
Net cash provided by (used in) financing activities   31    (864)
           
Effect of exchange rate changes on cash   206    (795)
           
Net (decrease) increase in cash and cash equivalents   (12,262)   3,787 
Cash and cash equivalents at beginning of period   33,047    21,708 
Cash and cash equivalents at end of period  $20,785   $25,495 

 

 

 
 

 

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 Loss From Operations, Non-GAAP Net Loss and Non-GAAP Net Loss Per Share    
(in thousands, except per share amounts)    
(unaudited)    
                 
   Three Months Ended June 30,   Six Months Ended June 30, 
   2014   2013   2014   2013 
GROSS PROFIT:            
GAAP gross profit  $20,579   $17,729   $40,417   $34,036 
Stock-based compensation expense   66    70    178    189 
Amortization of acquired intangible assets   507    253    930    506 
Non-GAAP gross profit  $21,152   $18,052   $41,525   $34,731 
LOSS FROM OPERATIONS:                    
GAAP loss from operations  $(3,977)  $(3,302)  $(8,635)  $(7,174)
Stock-based compensation expense   1,497    1,452    3,247    3,151 
Merger-related expenses   521    546    2,388    1,091 
Amortization of acquired intangible assets   864    430    1,583    860 
Non-GAAP loss from operations  $(1,095)  $(874)  $(1,417)  $(2,072)
NET LOSS:                    
GAAP net loss  $(4,327)  $(3,522)  $(9,164)  $(7,751)
Stock-based compensation expense   1,497    1,452    3,247    3,151 
Merger-related expenses   521    546    2,388    1,091 
Amortization of acquired intangible assets   864    430    1,583    860 
Non-GAAP net loss attributable to common stockholders  $(1,445)  $(1,094)  $(1,946)  $(2,649)
GAAP basic and diluted net loss per share  $(0.13)  $(0.12)  $(0.29)  $(0.28)
Non-GAAP basic and diluted net loss per share  $(0.04)  $(0.04)  $(0.06)  $(0.09)
                     
Shares used in computing GAAP and Non-GAAP basic and diluted net loss per share   32,145    28,181    31,595    28,103