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): February 5, 2015

 

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:

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

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

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

o 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 February 5, 2015, Brightcove Inc. issued a press release announcing certain financial and other information for the quarter and year ended December 31, 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 February 5, 2015, 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: February 5, 2015

Brightcove Inc.

 

  By:   /s/ Kevin Rhodes
    Kevin Rhodes
    Chief Financial Officer

 

 

 

Exhibit 99.1

 

Description: BC

 

Brightcove Announces Financial Results for Fourth Quarter and Fiscal Year 2014

Full year 2014 total revenue of $125.0 million increased 14% year-over-year

 

BOSTON, MA. (February 5, 2015)Brightcove Inc. (NASDAQ: BCOV), a leading global provider of cloud services for video, today announced financial results for the fourth quarter and fiscal year ended December 31, 2014.

 

“We are pleased to report strong fourth quarter results that exceeded our expectations from both a revenue and profitability perspective,” said David Mendels, Chief Executive Officer of Brightcove. “Our performance reflects the significant progress we’ve made in our go-to-market approach of focusing on the media and digital marketing segments to enable those customers to leverage their digital assets to drive increased revenue growth using our technology. We are building traction across all areas of the business, and we are confident in our strategy and believe we can drive improved growth in our business as we move through 2015.”

 

Mendels added, “From a revenue growth and profitability perspective, we anticipate accelerating revenue growth throughout the year, while generating positive non-GAAP operating income during the fourth quarter. We believe the combination of improving revenue growth and sustainable profitability will drive significant value for our shareholders.”

 

Fourth Quarter 2014 Financial Highlights:

 

·Revenue for the fourth quarter of 2014 was $31.4 million, an increase of 5% compared to $29.7 million for the fourth quarter of 2013. Subscription and support revenue was $30.6 million, an increase of 12% compared to $27.2 million for the fourth quarter of 2013.

 

·Gross Profit for the fourth quarter of 2014 was $20.2 million, compared to $19.8 million for the fourth quarter of 2013, representing a gross margin for the fourth quarter of 2014 of 64%. Non-GAAP gross profit for the fourth quarter of 2014 was $20.8 million, representing a year-over-year increase of 3% and a non-GAAP gross margin of 66%. 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 $3.4 million for the fourth quarter of 2014, compared to a loss of $1.0 million for the fourth quarter of 2013. Non-GAAP loss from operations was $980,000 for the fourth quarter, which excludes stock-based compensation expense, the amortization of acquired intangible assets and merger-related expenses, compared to non-GAAP income from operations of $1.7 million during the fourth quarter of 2013.

 

·Net loss was $3.9 million, or $0.12 per diluted share, for the fourth quarter of 2014. This compares to a net loss of $1.2 million, or $0.04 per diluted share, for the fourth quarter of 2013.

 

·Non-GAAP net loss, which excludes stock-based compensation expense, the amortization of acquired intangible assets and merger-related expenses, was $1.5 million for the fourth quarter of 2014, or $0.05 per diluted share, compared to non-GAAP net income of $1.5 million for the fourth quarter of 2013, or $0.05 per diluted share.

 

·Cash flow from operations was $3.1 million, compared to $2.5 million for the fourth quarter of 2013.

 

·Free cash flow was $2.0 million, after the company invested $1.1 million in capital expenditures and capitalization of internal-use software costs during the fourth quarter of 2014, compared to free cash flow of $1.0 million for the fourth quarter of 2013.

  

·Cash, cash equivalents and marketable securities were $22.9 million at December 31, 2014, compared to $21.7 million at September 30, 2014.

 

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.”

 

 
 

 

Full Year 2014 Financial Highlights:

 

·Revenue was $125.0 million for 2014, an increase of 14% compared to $109.9 million for 2013. Subscription and support revenue was $120.3 million, an increase of 17% compared to $103.1 million for 2013.

 

·Gross Profit was $81.3 million for 2014, compared to $73.1 million for 2013, representing a gross margin of 65% for 2014. Non-GAAP gross profit was $83.6 million for 2014, representing a year-over-year increase of 12% and a non-GAAP gross margin of 67%. 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 $15.2 million for 2014, compared to a loss of $9.5 million for 2013. Non-GAAP loss from operations, which excludes stock-based compensation expense, the amortization of acquired intangible assets and merger-related expenses, was $2.5 million for 2014, compared to non-GAAP income from operations of $695,000 for 2013.

 

·Net loss was $16.9 million, or $0.53 per diluted share, for 2014. This compares to a net loss of $10.3 million, or $0.36 per diluted share, for 2013.

 

·Non GAAP net loss, which excludes stock-based compensation expense, the amortization of acquired intangible assets and merger-related expenses, was $4.2 million for 2014, or $0.13 per diluted share, compared to non-GAAP net loss of $73,000 for 2013, or $0.00 per diluted share.

 

·Cash flow from operations was $1.5 million for 2014, compared to cash flow from operations of $7.3 million for 2013.

 

·Free cash flow was ($3.1) million, after the company invested $4.6 million in capital expenditures and capitalization of internal-use software costs during 2014, compared to free cash flow of $3.4 million in 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 Fourth Quarter and Recent Highlights:

 

·Ended the quarter with 5,770 customers, of which 1,863 were premium.
·New customers and customers who expanded their relationship with us in our media business unit during the quarter included: Accuweather, Crunchyroll, Caracol Television SA, Entertainment Tonight, Fairfax Media Management, Hearst Communications and Nova Entertainment, among others.

·New customers and customers who expanded their relationship with us in our digital marketing business unit during the quarter included: Accenture, Bristol Meyers Squibb, Bunnings Group, Ford Motor Company, FujiFilm, Kickstarter, Kohler, Novartis, Vodafone, and Tableau Software, among others.
·Average revenue per premium customer was $60,000 in the fourth quarter of 2014. This is up 7% from $56,000 in the comparable period in 2013.
·Recurring dollar retention rate was 101% in the fourth quarter, as compared to our historical four quarter moving average in the low to mid 90% range.

 

Business Outlook:

 

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

 

First Quarter 2015: The Company expects revenue to be $31.8 million to $32.3 million, and non-GAAP loss from operations to be $800,000 to $1.3 million, which excludes stock based compensation, amortization of acquired intangible assets and merger-related expenses totaling approximately $2.3 million. Assuming approximately 32.5 million shares outstanding, Brightcove expects its non-GAAP net loss per diluted share to be $0.04 to $0.05.

 

Full Year 2015: The Company expects revenue to be $131.5 million to $134.5 million, and non-GAAP loss from operations to be $1.0 million to $3.0 million, which excludes stock-based compensation, amortization of acquired intangible assets and merger-related expenses totaling approximately $9.9 million to $10.3 million. Assuming approximately 32.8 million shares outstanding, Brightcove expects its non-GAAP net loss per diluted share to be $0.07 to $0.14.

 

 
 

 

Conference Call Information

 

Brightcove will host a conference call today, February 5, 2015, 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 13598737. A replay of the webcast will also be available for a limited time at http://investor.brightcove.com.

 

About Brightcove

 

Brightcove Inc. (NASDAQ:BCOV) is a leading global provider of powerful cloud solutions for delivering and monetizing video across connected devices. The company offers a full suite of products and services that reduce the cost and complexity associated with publishing, distributing, measuring and monetizing video across devices. Brightcove has more than 5,500 customers in over 70 countries that rely on the company’s cloud solutions to successfully publish high-quality video experiences to audiences everywhere. To learn more, visit 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 first fiscal quarter of 2015 and full year 2015, our ability to accelerate revenue growth during full year 2015, our ability to generate positive Non-GAAP operating income during the fourth quarter, 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 income (loss) from operations, non-GAAP net income (loss) 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 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)

 

   December 31, 2014   December 31, 2013 
Assets          
Current assets:          
Cash and cash equivalents  $22,916   $33,047 
Short-term investments   -    3,061 
Restricted cash   -    121 
Accounts receivable, net of allowance   21,463    21,560 
Prepaid expenses and other current assets   4,342    4,011 
Deferred tax asset   109    125 
Total current assets   48,830    61,925 
Property and equipment, net   10,372    8,795 
Intangible assets, net   16,898    8,668 
Goodwill   50,776    22,018 
Restricted cash   201    201 
Other assets   507    1,519 
Total assets  $127,584   $103,126 
Liabilities and  stockholders' equity          
Current liabilities:          
Accounts payable  $1,618   $3,067 
Accrued expenses   11,722    14,528 
Capital lease liability   1,159    - 
Deferred revenue   29,640    23,571 
Total current liabilities   44,139    41,166 
Deferred revenue, net of current portion   64    247 
Other liabilities   2,618    1,333 
Total liabilities   46,821    42,746 
Stockholders' equity:          
Common stock   32    29 
Additional-paid-in-capital   214,524    176,928 
Accumulated other comprehensive loss   (776)   (453)
Accumulated deficit   (133,017)   (116,124)
Total stockholders’ equity   80,763    60,380 
Total liabilities and  stockholders' equity  $127,584   $103,126 

 

 
 

 

Brightcove Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

 

   Three Months Ended December 31,   Twelve Months Ended December 31, 
   2014   2013   2014   2013 
Revenue:                
Subscription and support revenue  $30,570   $27,229   $120,324   $103,116 
Professional services and other revenue   812    2,517    4,693    6,779 
Total revenue   31,382    29,746    125,017    109,895 
Cost of revenue: (1) (2)                    
Cost of subscription and support revenue   9,919    7,764    38,015    29,205 
Cost of professional services and other revenue   1,304    2,192    5,718    7,585 
Total cost of revenue   11,223    9,956    43,733    36,790 
Gross profit   20,159    19,790    81,284    73,105 
Operating expenses: (1) (2)                    
Research and development   7,704    5,402    28,252    21,052 
Sales and marketing   11,300    10,145    46,014    41,000 
General and administrative   4,539    4,638    19,136    18,478 
Merger-related   64    608    3,075    2,069 
Total operating expenses   23,607    20,793    96,477    82,599 
Loss from operations   (3,448)   (1,003)   (15,193)   (9,494)
Other expense, net   (420)   (177)   (1,440)   (536)
Loss before income taxes and non-controlling interest in consolidated subsidiary   (3,868)   (1,180)   (16,633)   (10,030)
Provision for income taxes   56    63    260    212 
Consolidated net loss   (3,924)   (1,243)   (16,893)   (10,242)
Net income attributable to non-controlling interest in consolidated subsidiary   -    -    -    (20)
Net loss  $(3,924)  $(1,243)  $(16,893)  $(10,262)
                     
Net loss per share—basic and diluted  $(0.12)  $(0.04)  $(0.53)  $(0.36)
                     
Weighted-average shares —basic and diluted   32,349    28,845    31,949    28,351 
                     
(1) Stock-based compensation included in above line items:                    
Cost of subscription and support revenue  $71   $63   $218   $248 
Cost of professional services and other revenue   20    32    141    149 
Research and development   449    289    1,399    1,191 
Sales and marketing   515    584    2,193    2,225 
General and administrative   559    697    2,436    2,588 
                     
(2) Amortization of acquired intangible assets included in the above line items:               
Cost of subscription and support revenue  $507   $253   $1,946   $1,013 
Research and development   32    10    140    39 
Sales and marketing   251    167    1,114    667 

 

 
 

 

Brightcove Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

   Twelve Months Ended December 31, 
Operating activities  2014   2013 
Net loss  $(16,893)  $(10,242)
Adjustments to reconcile net loss to net cash used in operating activities:          
   Depreciation and amortization   8,587    5,867 
   Stock-based compensation   6,387    6,401 
   Deferred income taxes   -    62 
   Provision for reserves on accounts receivable   118    449 
   Amortization of premium on investments   1    73 
   Loss on disposal of equipment   86    43 
   Changes in assets and liabilities:          
        Accounts receivable   409    (3,247)
        Prepaid expenses and other current assets   (199)   (644)
        Other assets   1,140    (819)
        Accounts payable   (2,324)   2,117 
        Accrued expenses   (1,902)   2,473 
        Deferred revenue   6,075    4,785 
Net cash provided by operating activities   1,485    7,318 
           
Investing activities          
Cash paid for acquisition, net of cash acquired   (9,100)   - 
Maturities of investments   3,060    8,200 
Purchases of property and equipment   (3,518)   (3,415)
Capitalization of internal-use software costs   (1,034)   (500)
Decrease (increase) in restricted cash   121    (19)
Net cash (used in) provided by investing activities   (10,471)   4,266 
           
Financing activities          
Proceeds from exercise of stock options   598    1,830 
Purchase of non-controlling interest in consolidated subsidiary   -    (1,084)
Payments under capital lease obligation   (1,399)   - 
Net cash (used in) provided by financing activities   (801)   746 
           
Effect of exchange rate changes on cash   (344)   (991)
           
Net (decrease) increase in cash and cash equivalents   (10,131)   11,339 
Cash and cash equivalents at beginning of period   33,047    21,708 
Cash and cash equivalents at end of period  $22,916   $33,047 

 

 
 

 

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) Income From Operations, Non-GAAP Net (Loss) Income and Non-GAAP Net (Loss) Income Per Share

(in thousands, except per share amounts)

(unaudited)

 

   Three Months Ended December 31,   Twelve Months Ended December 31, 
   2014   2013   2014   2013 
GROSS PROFIT:                
GAAP gross profit  $20,159   $19,790   $81,284   $73,105 
Stock-based compensation expense   91    95    359    397 
Amortization of acquired intangible assets   507    253    1,946    1,013 
Non-GAAP gross profit  $20,757   $20,138   $83,589   $74,515 
LOSS FROM OPERATIONS:                    
GAAP loss from operations  $(3,448)  $(1,003)  $(15,193)  $(9,494)
Stock-based compensation expense   1,614    1,665    6,387    6,401 
Merger-related expenses   64    608    3,075    2,069 
Amortization of acquired intangible assets   790    430    3,200    1,719 
Non-GAAP (loss) income from operations  $(980)  $1,700   $(2,531)  $695 
NET LOSS:                    
GAAP net loss  $(3,924)  $(1,243)  $(16,893)  $(10,262)
Stock-based compensation expense   1,614    1,665    6,387    6,401 
Merger-related expenses   64    608    3,075    2,069 
Amortization of acquired intangible assets   790    430    3,200    1,719 
Non-GAAP net (loss) income  $(1,456)  $1,460   $(4,231)  $(73)
GAAP diluted net loss per share  $(0.12)  $(0.04)  $(0.53)  $(0.36)
Non-GAAP diluted net (loss) income per share  $(0.05)  $0.05   $(0.13)  $(0.00)
                     
Shares used in computing GAAP diluted net loss per share   32,349    28,845    31,949    28,351 
Shares used in computing Non-GAAP diluted net (loss) income per share   32,349    30,872    31,949    28,351