Form 8-K

 

 

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 28, 2016

 

 

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 28, 2016, Brightcove Inc. issued a press release announcing certain financial and other information for the quarter ended June 30, 2016. 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 28, 2016, 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 28, 2016   Brightcove Inc.
  By:    

/s/ Kevin R. Rhodes

    Kevin R. Rhodes
    Chief Financial Officer
EX-99.1

Exhibit 99.1

 

LOGO

Brightcove Announces Financial Results for Second Quarter 2016

Company reports second quarter revenue of $37.0 million, up 13% year-over-year

BOSTON, MA (July 28, 2016) Brightcove Inc. (NASDAQ: BCOV), a leading global provider of cloud services for video, today announced financial results for the quarter ended June 30, 2016.

“Brightcove delivered strong second quarter results that met or exceeded our expectations from both a revenue and profitability perspective,” said David Mendels, Chief Executive Officer of Brightcove. “We are excited by the positive momentum we are seeing across our business, highlighted by the signing of multi-year, multi-million dollar contracts with two media customers, including our first 8 figure contract.”

Mendels continued, “During the second quarter, we demonstrated our commitment to innovation by introducing many exciting new product announcements that address some of the biggest trends in video, including OTT, expanding media delivery across more devices, and social distribution. The product innovation we have brought to market in recent quarters is putting Brightcove in a great position to help customers utilize their video assets to generate better business performance. We are confident that our strategy will drive more revenue growth and profitability over time while generating significant value for our shareholders.”

Second Quarter 2016 Financial Highlights:

 

    Revenue for the second quarter of 2016 was $37.0 million, an increase of 13% compared to $32.8 million for the second quarter of 2015. Subscription and support revenue was $35.1 million, an increase of 10% compared with $31.9 million for the second quarter of 2015.

 

    Gross profit for the second quarter of 2016 was $23.5 million, compared to $21.3 million for the second quarter of 2015, representing a gross margin of 64% for the second quarter of 2016. Non-GAAP gross profit for the second quarter of 2016 was $24.1 million, representing a year-over-year increase of 10% and a non-GAAP gross margin of 65%. 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 $2.2 million for the second quarter of 2016, compared to a loss of $3.2 million for the second quarter of 2015. Non-GAAP loss from operations, which excludes stock-based compensation expense, the amortization of acquired intangible assets and merger-related expenses, was $302,000 for the second quarter of 2016, an improvement compared to a non-GAAP loss of $964,000 during the second quarter of 2015.

 

    Net loss was $2.4 million, or $0.07 per diluted share, for the second quarter of 2016. This compares to a net loss of $3.6 million, or $0.11 per diluted share, for the second quarter of 2015. Non-GAAP net loss, which excludes stock-based compensation expense, the amortization of acquired intangible assets and merger-related expenses, was $489,000 for the second quarter of 2016, or $0.01 per diluted share, compared to a non-GAAP net loss of $1.5 million for the second quarter of 2015, or $0.04 per diluted share.

 

    Adjusted EBITDA was $885,000 for the second quarter of 2016, compared to $620,000 for the second quarter of 2015. Adjusted EBITDA excludes stock-based compensation expense, the amortization of acquired intangible assets, merger-related expenses, depreciation expense, other income/expense and the provision for income taxes.


LOGO

 

    Cash flow from operations was $2.0 million for the second quarter of 2016, compared to cash flow from operations of $385,000 for the second quarter of 2015.

 

    Free cash flow was $1.0 million after the company invested $1.0 million in capital expenditures and capitalization of internal-use software during the second quarter of 2016. Free cash flow was negative $1.6 million for the second quarter of 2015.

 

    Cash and cash equivalents were $30.2 million as of June 30, 2016 compared to $29.3 million at March 31, 2016.

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 revenue per premium customer was $69,000 in the second quarter of 2016. This is an increase of 8% from $64,000 in the comparable period in 2015.

 

    Recurring dollar retention rate was 95% in the second quarter of 2016, which was within our historical target in the low to mid 90% range.

 

    Ended the quarter with 4,774 customers, of which 1,926 were premium.

 

    New media customers and media customers who expanded their relationship during the quarter included: AMC, BounceTV, Box Plus, Express Newspapers, Le Parisien, Pluto TV, Ringier AG, TV Dorama, TV5Monde Asia, Woven Digital and Yelp, among others.

 

    New digital marketing customers and digital marketing customers who expanded their relationship during the quarter included: Angie’s List, Comodo, Jardine Matheson, Keurig Green Mountain, Lush Cosmetics, Morningstar, Omron, Rolls Royce, SAS Institute, TUI Travel Group, and Xero, among others.

 

    Launched a video content marketplace powered by Vemba, a next generation video distribution and content discovery platform for premium publishers. The Vemba marketplace is integrated with Brightcove’s Video Cloud, which helps expand content libraries and create new revenue opportunities for media companies.

 

    Partnered with IRIS.TV to license its Adaptive Stream™ technology, which will enable Brightcove customers to provide personalized programming to their viewers through content discovery and recommendations.

Business Outlook

Based on information as of today, July 28, 2016, the Company is issuing the following financial guidance:

Third Quarter 2016:

 

    Revenue is expected to be in the range of $37.0 million to $37.5 million.

 

    Non-GAAP income/loss from operations is expected to be in the range of $800,000 to $1.3 million, which excludes stock-based compensation of approximately $1.6 million and the amortization of acquired intangible assets of approximately $800,000.

 

    Adjusted EBITDA in the second quarter is expected to be in the range of $2.0 million to $2.5 million, which excludes stock-based compensation of approximately $1.6 million, the amortization of acquired intangible assets and depreciation of approximately $1.2 million, and other expense and taxes of approximately $300,000.


LOGO

 

    Non-GAAP diluted net income per share is expected to be $0.01 to $0.03, which excludes stock-based compensation of approximately $1.6 million and the amortization of acquired intangible assets of approximately $800,000, and assumes approximately 34.9 million shares outstanding.

Full Year 2016:

 

    Revenue is expected to be in the range of $148.3 million to $149.3 million.

 

    Non-GAAP income/loss from operations is expected to be in the range of $2.3 to $3.8 million, which excludes stock-based compensation of approximately $6.0 million and the amortization of acquired intangible assets of approximately $3.1 million.

 

    Adjusted EBITDA for the full year is expected to be in the range of $8.0 to $9.5 million, which excludes stock-based compensation of approximately $6.0 million, the amortization of acquired intangible assets and depreciation of approximately $5.0 million, and other expense and taxes of approximately $800,000.

 

    Non-GAAP diluted net income per share is expected to be in the range of $0.05 to $0.08, which excludes stock-based compensation of approximately $6.0 million and the amortization of acquired intangible assets of approximately $3.1 million, and assumes approximately 34.3 million shares outstanding.

Conference Call Information

Brightcove will host a conference call today, July 28, 2016, 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 13640131. 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 the 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 nearly 5,000 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 third fiscal quarter of 2016 and full year 2016, 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.


LOGO

 

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 history of losses; our limited operating history; expectations regarding the widespread adoption of customer demand for our 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 ability to retain existing customers; 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, 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), 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, the amortization of acquired intangible assets and merger-related expenses. The non-GAAP financial results discussed above of adjusted EBITDA is defined as consolidated net income (loss), plus stock-based compensation expense, the amortization of acquired intangible assets, merger-related expenses, depreciation expense, other income/expense, including interest expense and interest income, and the provision for income taxes. Merger-related expenses 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


LOGO

 

Media Contact:

Phil LeClare

Brightcove Inc

pleclare@brightcove.com

617-674-6510


Brightcove Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

     June 30, 2016     December 31, 2015  

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 30,194      $ 27,637   

Accounts receivable, net of allowance

     18,869        21,213   

Prepaid expenses and other current assets

     5,842        4,579   
  

 

 

   

 

 

 

Total current assets

     54,905        53,429   

Property and equipment, net

     9,362        8,689   

Intangible assets, net

     12,537        13,786   

Goodwill

     50,776        50,776   

Deferred tax asset

     82        63   

Restricted cash

     201        201   

Other assets

     980        724   
  

 

 

   

 

 

 

Total assets

   $ 128,843      $ 127,668   
  

 

 

   

 

 

 

Liabilities and stockholders’ equity

    

Current liabilities:

    

Accounts payable

   $ 4,883      $ 3,302   

Accrued expenses

     11,301        12,849   

Capital lease liability

     633        850   

Equipment financing

     301        —     

Deferred revenue

     32,253        29,836   
  

 

 

   

 

 

 

Total current liabilities

     49,371        46,837   

Deferred revenue, net of current portion

     90        95   

Other liabilities

     2,299        2,601   
  

 

 

   

 

 

 

Total liabilities

     51,760        49,533   

Stockholders’ equity:

    

Common stock

     33        33   

Additional paid-in capital

     223,180        220,458   

Treasury stock, at cost

     (871     (871

Accumulated other comprehensive loss

     (657     (888

Accumulated deficit

     (144,602     (140,597
  

 

 

   

 

 

 

Total stockholders’ equity

     77,083        78,135   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 128,843      $ 127,668   
  

 

 

   

 

 

 


Brightcove Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

 

     Three Months Ended June 30,     Six Months Ended June 30,  
     2016     2015     2016     2015  

Revenue:

        

Subscription and support revenue

   $ 35,080      $ 31,917      $ 69,733      $ 63,728   

Professional services and other revenue

     1,880        931        3,519        2,005   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     36,960        32,848        73,252        65,733   

Cost of revenue: (1) (2)

        

Cost of subscription and support revenue

     11,675        10,357        23,350        20,703   

Cost of professional services and other revenue

     1,778        1,201        3,367        2,447   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenue

     13,453        11,558        26,717        23,150   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     23,507        21,290        46,535        42,583   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses: (1) (2)

        

Research and development

     7,255        7,267        14,681        15,087   

Sales and marketing

     13,976        11,903        26,511        22,742   

General and administrative

     4,487        5,209        9,064        10,370   

Merger-related

     —          62        21        76   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     25,718        24,441        50,277        48,275   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (2,211     (3,151     (3,742     (5,692

Other expense, net

     (91     (429     (122     (653
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss before income taxes

     (2,302     (3,580     (3,864     (6,345

Provision for income taxes

     96        66        141        132   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

   $ (2,398   $ (3,646   $ (4,005   $ (6,477
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) per share—basic and diluted

   $ (0.07   $ (0.11   $ (0.12   $ (0.20
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average shares—basic and diluted

     32,794        32,548        32,760        32,522   

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

        

Cost of subscription and support revenue

   $ 68      $ 51      $ 110      $ 71   

Cost of professional services and other revenue

     32        19        89        52   

Research and development

     181        226        570        660   

Sales and marketing

     497        463        979        921   

General and administrative

     347        577        836        1,085   

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

        

Cost of subscription and support revenue

   $ 508      $ 508      $ 1,016      $ 1,015   

Research and development

     32        31        63        63   

Sales and marketing

     244        250        470        501   


Brightcove Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

     Six Months Ended June 30,  
     2016     2015  

Operating activities

    

Net loss

   $ (4,005   $ (6,477

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

    

Depreciation and amortization

     3,985        4,802   

Stock-based compensation

     2,584        2,789   

Provision for reserves on accounts receivable

     165        167   

Loss on disposal of equipment

     —          44   

Changes in assets and liabilities:

    

Accounts receivable

     2,364        2,035   

Prepaid expenses and other current assets

     (1,647     (878

Other assets

     (231     (530

Accounts payable

     881        1,332   

Accrued expenses

     (1,067     (2,127

Deferred revenue

     1,980        (726
  

 

 

   

 

 

 

Net cash provided by operating activities

     5,009        431   
  

 

 

   

 

 

 

Investing activities

    

Cash paid for purchase of intangible asset

     (300     —     

Purchases of property and equipment, net of returns

     (1,026     (2,441

Capitalization of internal-use software costs

     (1,677     (336
  

 

 

   

 

 

 

Net cash used in investing activities

     (3,003     (2,777
  

 

 

   

 

 

 

Financing activities

    

Proceeds from exercise of stock options

     188        58   

Payments of withholding tax on RSU vesting

     (108     —     

Proceeds from equipment financing

     604        1,704   

Payments on equipment financing

     (122     (404

Payments under capital lease obligation

     (461     (627
  

 

 

   

 

 

 

Net cash provided by financing activities

     101        731   
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     450        (63
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     2,557        (1,678

Cash and cash equivalents at beginning of period

     27,637        22,916   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 30,194      $ 21,238   
  

 

 

   

 

 

 


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

(in thousands, except per share amounts)

(unaudited)

 

     Three Months Ended June 30,     Six Months Ended June 30,  
     2016     2015     2016     2015  

GROSS PROFIT:

        

GAAP gross profit

   $ 23,507      $ 21,290      $ 46,535      $ 42,583   

Stock-based compensation expense

     100        70        199        123   

Amortization of acquired intangible assets

     508        508        1,016        1,015   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP gross profit

   $ 24,115      $ 21,868      $ 47,750      $ 43,721   
  

 

 

   

 

 

   

 

 

   

 

 

 

LOSS FROM OPERATIONS:

        

GAAP loss from operations

   $ (2,211   $ (3,151   $ (3,742   $ (5,692

Stock-based compensation expense

     1,125        1,336        2,584        2,789   

Merger-related expenses

     —          62        21        76   

Amortization of acquired intangible assets

     784        789        1,549        1,579   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP (loss) income from operations

   $ (302   $ (964   $ 412      $ (1,248
  

 

 

   

 

 

   

 

 

   

 

 

 

NET LOSS:

        

GAAP net loss

   $ (2,398   $ (3,646   $ (4,005   $ (6,477

Stock-based compensation expense

     1,125        1,336        2,584        2,789   

Merger-related expenses

     —          62        21        76   

Amortization of acquired intangible assets

     784        789        1,549        1,579   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net (loss) income

   $ (489   $ (1,459   $ 149      $ (2,033
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP diluted net loss per share

   $ (0.07   $ (0.11   $ (0.12   $ (0.20
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP diluted net (loss) income per share

   $ (0.01   $ (0.04   $ 0.00      $ (0.06
  

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in computing GAAP diluted net loss per share

     32,794        32,548        32,760        32,522   

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

     32,794        32,548        33,787        32,522   


Brightcove Inc.

Calculation of Adjusted EBITDA

(in thousands)

(unaudited)

 

     Three Months Ended June 30,     Six Months Ended June 30,  
     2016     2015     2016     2015  

Net loss

   $ (2,398   $ (3,646   $ (4,005   $ (6,477

Other expense, net

     (91     (429     (122     (653

Provision for income taxes

     96        66        141        132   

Merger-related expenses

     —          62        21        76   

Depreciation and amortization

     1,971        2,373        3,985        4,802   

Stock-based compensation expense

     1,125        1,336        2,584        2,789   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 885      $ 620      $ 2,848      $ 1,975