8-K
BRIGHTCOVE INC DE false 0001313275 0001313275 2022-04-27 2022-04-27

 

 

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): April 27, 2022

 

 

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.)

281 Summer 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))

Securities registered pursuant to Section 12(b) of the Act

 

Title of each class

 

Trading
Symbol(s)

 

Name of each exchange
on which registered

Common Stock, par value $0.001 per share   BCOV   The NASDAQ Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 2.02.

Results of Operations and Financial Condition.

On April 27, 2022, Brightcove Inc. issued a press release announcing certain financial and other information for the quarter ended March 31, 2022. 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 April 27, 2022, including attachments, furnished herewith.
104    Cover Page Interactive Data File (embedded within the Inline XBRL document).


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: April 27, 2022   Brightcove Inc.
    By:  

/s/ Robert Noreck

      Robert Noreck
      Chief Financial Officer
EX-99.1

Exhibit 99.1

Brightcove Announces Financial Results for First Quarter Fiscal Year 2022

BOSTON, MA (April 27, 2022) Brightcove Inc. (Nasdaq: BCOV), the global leader in video for business, today announced financial results for the first quarter ended March 31, 2022.

“Brightcove’s 1st quarter results were highlighted by revenue and profitability that exceeded the high end of our guidance range. Customers continue to choose Brightcove due to the strength of our platform and our proven ability to deliver great video experiences reliably and securely for numerous use cases,” said Marc DeBevoise, Brightcove’s Chief Executive Officer.

DeBevoise added, “I have been impressed by what I have seen in my first few weeks as the new CEO of Brightcove. It’s clear that the streaming market is at an inflection point and we believe Brightcove is in a great position to be one of the primary winners in this market. I am confident that Brightcove can become a much larger, faster growing and profitable business in the years ahead as we capitalize on this market opportunity.”

First Quarter 2022 Financial Highlights:

 

   

Revenue for the first quarter of 2022 was $53.4 million, a decrease of 3% compared to $54.8 million for the first quarter of 2021. Subscription and support revenue was $51.6 million, an increase of 2% compared to $50.8 million for the first quarter of 2021.

 

   

Gross profit for the first quarter of 2022 was $34.4 million, representing a gross margin of 64% compared to a gross profit of $35.6 million for the first quarter of 2021. Non-GAAP gross profit for the first quarter of 2022 was $35.0 million, representing a non-GAAP gross margin of 66%, compared to a non-GAAP gross profit of $36.2 million for the first quarter of 2021. 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 $2.0 million for the first quarter of 2022, compared to income from operations of $6.1 million for the first 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 $3.8 million for the first quarter of 2022, compared to non-GAAP operating income of $7.2 million during the first quarter of 2021.

 

   

Net loss was $1.6 million, or a loss of $0.04 per diluted share, for the first quarter of 2022. This compares to a net income of $5.1 million, or $0.12 per diluted share, for the first 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 $4.2 million for the first quarter of 2022, or $0.10 per diluted share, compared to non-GAAP net income of $6.2 million for the first quarter of 2021, or $0.15 per diluted share.


   

Adjusted EBITDA was $5.1 million for the first quarter of 2022, compared to adjusted EBITDA of $8.6 million for the first 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 used by operations was $690,000 for the first quarter for 2022, compared to cash flow used by operations of $604,000 for the first quarter of 2021.

 

   

Free cash flow was negative $5.5 million after the company invested $4.8 million in capital expenditures and capitalization of internal-use software during the first quarter of 2022. Free cash flow was negative $2.1 for the first quarter of 2021.

 

   

Cash and cash equivalents were $26.7 million as of March 31, 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 First Quarter and Recent Highlights:

 

   

Average annual subscription revenue per premium customer was $96,521 in the first quarter of 2022, excluding starter customers who had average annualized revenue of $4,600 per customer. This compares to $97,039 in the comparable period in 2021. Our ARPU was down year-over-year from $97,039 to $96,521, due to the impact of one time events in Japan last Q1. Excluding these events, our 1st quarter 2021 ARPU was $93,494, and we are up 3% year-over-year.

 

   

Recurring dollar retention rate was 91% in the first quarter of 2022, versus our historical target of the low to mid-90 percent range.

 

   

Ended the quarter with 3,131 customers, of which 2,299 were premium.

 

   

New customers and customers who expanded their relationship during the first quarter include: Yamaha Music Japan, HubSpot, Danfoss, and Sky Networks Television.

 

   

Appointed Diane Hessan as its new Chairman. Diane has served as a Brightcove board member since 2017. She is currently CEO of Salient Ventures, an investment and advisory company with a portfolio of angel investments focused on Boston technology companies. She is also Chairman of C Space, a next-generation market research company that builds online communities to help marketers generate consumer insights, where she was CEO for 15 years. She serves on the boards of Eastern Bank, Panera Bread, The Schlesinger Group, DP Acquisition Corp, Mass Challenge, Tufts University, and the National Association of Corporate Directors – New England, and is also a Special Advisor to Datapoint Capital, a leading early-stage venture capital firm.


Business Outlook

Based on information as of today, April 27, 2022, the Company is issuing the following financial guidance.

Second Quarter 2022:

 

   

Revenue is expected to be in the range of $51.5 million to $52.5 million, including approximately $1.7 million of professional services revenue.

 

   

Non-GAAP income from operations is expected to be in the range of $2.0 million to $3.0 million, which excludes stock-based compensation of approximately $2.9 million and the amortization of acquired intangible assets of approximately $0.7 million.

 

   

Adjusted EBITDA is expected to be in the range of $3.7 million to $4.7 million, which excludes stock-based compensation of approximately $2.9 million, the amortization of acquired intangible assets of approximately $0.7 million, depreciation expense of approximately $1.6 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 $0.04 to $0.06, which excludes stock-based compensation of approximately $2.9 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 $210.0 million to $215.0 million, including approximately $7.7 million of professional services revenue.

 

   

Non-GAAP income from operations is expected to be in the range of $9.0 million to $13.0 million, which excludes stock-based compensation of approximately $11.8 million, the amortization of acquired intangible assets of approximately $2.8 million.

 

   

Adjusted EBITDA is expected to be in the range of $17.0 million to $21.0 million, which excludes stock-based compensation of approximately $11.8 million, merger-related expense of approximately $0.6 million, other expenses of $1.1 million, the amortization of acquired intangible assets of approximately $2.8 million, depreciation expense of approximately $8.0 million, and other income/expense and the provision for income taxes of approximately $0.5 million.

 

   

Non-GAAP earnings per diluted share is expected to be $0.20 to $0.29, which excludes stock-based compensation of approximately $11.8 million, the amortization of acquired intangible assets of approximately $2.8 million, merger-related expense of approximately $0.6 million, other expenses of $1.1 million and assumes approximately 42.4 million weighted-average shares outstanding.


Conference Call Information

Brightcove will host a conference call today, April 27, 2022, at 5:00 p.m. (Eastern Time) to discuss the Company’s financial results and current business outlook. A live webcast of the call will be available at the “Investors” page of the Company’s website, http://investor.brightcove.com. 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 844-512-2921 (domestic) or 412-317-6671 (international). The replay conference ID is 13729129. A replay of the webcast will also be available 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 our business operations, 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. 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.


Investors:

ICR for Brightcove

Brian Denyeau, 646-277-1251

brian.denyeau@icrinc.com

or

Media:

Brightcove

Meredith Duhaime

mduhaime@brightcove.com


Brightcove Inc.

Condensed Consolidated Balance Sheets

(in thousands)

 

     March 31, 2022     December 31, 2021  

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 26,705     $ 45,739  

Accounts receivable, net of allowance

     34,037       29,866  

Prepaid expenses and other current assets

     21,839       18,625  
  

 

 

   

 

 

 

Total current assets

     82,581       94,230  

Property and equipment, net

     26,317       20,514  

Operating lease right-of-use asset

     23,655       24,891  

Intangible assets, net

     12,881       9,276  

Goodwill

     74,838       60,902  

Other assets

     6,612       6,655  
  

 

 

   

 

 

 

Total assets

   $ 226,884     $ 216,468  
  

 

 

   

 

 

 

Liabilities and stockholders’ equity

    

Current liabilities:

    

Accounts payable

   $ 14,027     $ 11,039  

Accrued expenses

     22,851       20,925  

Operating lease liability

     2,950       2,600  

Deferred revenue

     64,110       62,057  
  

 

 

   

 

 

 

Total current liabilities

     103,938       96,621  

Operating lease liability, net of current portion

     21,920       22,801  

Other liabilities

     932       786  
  

 

 

   

 

 

 

Total liabilities

     126,790       120,208  

Stockholders’ equity:

    

Common stock

     42       41  

Additional paid-in capital

     304,506       298,793  

Treasury stock, at cost

     (871     (871

Accumulated other comprehensive loss

     (905     (662

Accumulated deficit

     (202,678     (201,041
  

 

 

   

 

 

 

Total stockholders’ equity

     100,094       96,260  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 226,884     $ 216,468  
  

 

 

   

 

 

 


Brightcove Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

 

     Three Months Ended March 31,  
     2022     2021  

Revenue:

    

Subscription and support revenue

   $ 51,601     $  50,839  

Professional services and other revenue

     1,778       3,978  
  

 

 

   

 

 

 

Total revenue

     53,379       54,817  

Cost of revenue: (1) (2)

    

Cost of subscription and support revenue

     16,982       15,678  

Cost of professional services and other revenue

     1,998       3,490  
  

 

 

   

 

 

 

Total cost of revenue

     18,980       19,168  
  

 

 

   

 

 

 

Gross profit

     34,399       35,649  
  

 

 

   

 

 

 

Operating expenses: (1) (2)

    

Research and development

     8,237       8,284  

Sales and marketing

     18,288       16,149  

General and administrative

     8,089       7,059  

Merger-related

     594       —    

Other expense (benefit)

     1,149       (1,965
  

 

 

   

 

 

 

Total operating expenses

     36,357       29,527  
  

 

 

   

 

 

 

(Loss) income from operations

     (1,958     6,122  

Other (expense), net

     (387     (735
  

 

 

   

 

 

 

(Loss) income before income taxes

     (2,345     5,387  

(Benefit) provision for income taxes

     (708     257  
  

 

 

   

 

 

 

Net (loss) income

   $ (1,637   $ 5,130  
  

 

 

   

 

 

 

Net (loss) income per share—basic and diluted

    

Basic

   $ (0.04   $ 0.13  

Diluted

     (0.04     0.12  
  

 

 

   

 

 

 

Weighted-average shares—basic and diluted

    

Basic

     41,436       40,154  

Diluted

     41,436       42,480  

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

    

Cost of subscription and support revenue

   $ 109     $ 157  

Cost of professional services and other revenue

     119       68  

Research and development

     722       322  

Sales and marketing

     943       737  

General and administrative

     1,337       1,008  

Other expense (benefit)

     249       —    

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

    

Cost of subscription and support revenue

   $ 404     $ 335  

Sales and marketing

     413       431  


Brightcove Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

 

     Three Months Ended March 31,  
Operating activities    2022     2021  

Net (loss) income

   $ (1,637   $ 5,130  

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

    

Depreciation and amortization

     2,061       2,163  

Stock-based compensation

     3,479       2,292  

Provision for reserves on accounts receivable

     106       71  

Changes in assets and liabilities:

    

Accounts receivable

     (3,802     (1,585

Prepaid expenses and other current assets

     (1,550     (1,390

Other assets

     54       (919

Accounts payable

     347       (425

Accrued expenses

     (1,980     (5,797

Operating leases

     705       (626

Deferred revenue

     1,527       482  
  

 

 

   

 

 

 

Net cash provided by operating activities

     (690     (604
  

 

 

   

 

 

 

Investing activities

    

Cash paid for acquisition, net of cash acquired

     (13,176     —    

Purchases of property and equipment, net of returns

     (1,884     (468

Capitalization of internal-use software costs

     (2,882     (1,054
  

 

 

   

 

 

 

Net cash used in investing activities

     (17,942     (1,522
  

 

 

   

 

 

 

Financing activities

    

Proceeds from exercise of stock options

     100       1,095  

Deferred acquisition payments

     —         (475

Other financing activities

     —         (87
  

 

 

   

 

 

 

Net cash provided by financing activities

     100       533  
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     (502     (727
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

     (19,034     (2,320

Cash and cash equivalents at beginning of period

     45,739       37,472  
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 26,705     $  35,152  
  

 

 

   

 

 

 


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

(in thousands, except per share amounts)

 

     Three Months Ended March 31,  
     2022     2021  

GROSS PROFIT:

    

GAAP gross profit

   $ 34,399     $ 35,649  

Stock-based compensation expense

     228       225  

Amortization of acquired intangible assets

     404       335  

Restructuring

     —         —    
  

 

 

   

 

 

 

Non-GAAP gross profit

   $ 35,031     $ 36,209  
  

 

 

   

 

 

 

INCOME (LOSS) FROM OPERATIONS:

    

GAAP (loss) income from operations

   $ (1,958   $ 6,122  

Stock-based compensation expense

     3,230       2,292  

Amortization of acquired intangible assets

     817       766  

Merger-related

     594       —    

Other expense (benefit)

     1,149       (1,965
  

 

 

   

 

 

 

Non-GAAP income from operations

   $ 3,832     $ 7,215  
  

 

 

   

 

 

 

NET INCOME (LOSS):

    

GAAP net (loss) income

   $ (1,637   $ 5,130  

Stock-based compensation expense

     3,230       2,292  

Amortization of acquired intangible assets

     817       766  

Merger-related

     594       —    

Other expense (benefit)

     1,149       (1,965
  

 

 

   

 

 

 

Non-GAAP net income

   $ 4,153     $ 6,223  
  

 

 

   

 

 

 

GAAP diluted net (loss) income per share

   $ (0.04   $ 0.12  
  

 

 

   

 

 

 

Non-GAAP diluted net income per share

   $ 0.10     $ 0.15  
  

 

 

   

 

 

 

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

     41,436       42,480  

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

     41,852       42,480  


Brightcove Inc.

Calculation of Adjusted EBITDA

(in thousands)

 

     Three Months Ended March 31,  
     2022     2021  

Net (loss) income

   $ (1,637   $ 5,130  

Other expense, net

     387       735  

Provision for income taxes

     (708     257  

Depreciation and amortization

     2,061       2,163  

Stock-based compensation expense

     3,230       2,292  

Merger-related

     594       —    

Other expense (benefit)

     1,149       (1,965
  

 

 

   

 

 

 

Adjusted EBITDA

   $ 5,076     $ 8,612