10-Q
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Table of Contents

 

ne

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2023

OR

Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number: 001-35429

 

BRIGHTCOVE INC.

(Exact name of registrant as specified in its charter)

 

Delaware

20-1579162

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

281 Summer Street

Boston, MA 02210

(Address of principal executive offices)

(888) 882-1880

(Registrant’s telephone number, including area code)

 

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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

 

 

Non-accelerated filer

Smaller reporting company

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

As of July 27, 2023, there were 43,250,780 shares of the registrant’s common stock, $0.001 par value per share, outstanding.

 

 

 


Table of Contents

 

BRIGHTCOVE INC.

Table of Contents

 

 

Page

PART I. FINANCIAL INFORMATION

 

4

Item 1. Financial Statements (Unaudited)

 

4

Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022

 

4

Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022

 

5

Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2023 and 2022

 

6

Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2023 and 2022

 

7

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022

 

8

Notes to Condensed Consolidated Financial Statements

 

9

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

15

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

29

 

 

Item 4. Controls and Procedures

 

30

 

 

PART II. OTHER INFORMATION

 

31

 

 

Item 1. Legal Proceedings

 

31

 

 

Item 1A. Risk Factors

 

31

 

 

Item 5. Other Information

 

32

 

 

Item 6. Exhibits

 

34

 

 

Signatures

 

35

 

2


Table of Contents

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q contains “forward-looking statements” that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The statements contained in this Quarterly Report on Form 10-Q that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or Exchange Act. Such forward-looking statements include any expectation of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; factors that may affect our operating results; statements related to adding employees; statements related to potential benefits of acquisitions; statements related to future capital expenditures; statements related to future economic conditions or performance; statements as to industry trends and other matters that do not relate strictly to historical facts or statements of assumptions underlying any of the foregoing. Forward-looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “will,” “plan,” “project,” “seek,” “should,” “target,” “will,” “would,” and similar expressions or variations intended to identify forward-looking statements. These statements are based on the beliefs and assumptions of our management based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included in Item 1A of Part II of this Quarterly Report on Form 10-Q, and the risks discussed in our other Securities and Exchange Commission, or SEC, filings. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. However, any further disclosures made on related subjects in our subsequent reports filed with the
 

SEC should be consulted. Forward-looking statements in this Quarterly Report on Form 10-Q may include statements about:

our ability to achieve profitability;
our competitive position and the effect of competition in our industry;
our ability to retain and attract new customers;
our ability to penetrate existing markets and develop new markets for our services;
our ability to retain or hire qualified accounting and other personnel;
our ability to successfully integrate acquired businesses;
our ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights of others;
our ability to maintain the security and reliability of our systems;
our estimates with regard to our future performance and total potential market opportunity;
our estimates regarding our anticipated results of operations, future revenue, bookings growth, capital requirements, our needs for additional financing and broader economic challenges, including interest rate fluctuations; and
our goals and strategies, including those related to revenue and bookings growth.

 

3


Table of Contents

 

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Brightcove Inc.

Condensed Consolidated Balance Sheets

(unaudited)

 

 

 

June 30, 2023

 

 

December 31, 2022

 

 

 

(in thousands, except share
 and per share data)

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

19,093

 

 

$

31,894

 

Accounts receivable, net of allowance of $436 and $294 at June 30, 2023 and December 31, 2022, respectively

 

 

29,850

 

 

 

26,004

 

Prepaid expenses

 

 

9,804

 

 

 

8,700

 

Other current assets

 

 

12,476

 

 

 

10,722

 

Total current assets

 

 

71,223

 

 

 

77,320

 

Property and equipment, net

 

 

42,994

 

 

 

39,677

 

Operating lease right-of-use asset

 

 

17,604

 

 

 

18,671

 

Intangible assets, net

 

 

8,244

 

 

 

10,279

 

Goodwill

 

 

74,859

 

 

 

74,859

 

Other assets

 

 

6,285

 

 

 

7,007

 

Total assets

 

$

221,209

 

 

$

227,813

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

15,752

 

 

$

11,326

 

Accrued expenses

 

 

19,960

 

 

 

26,877

 

Operating lease liability

 

 

4,384

 

 

 

4,157

 

Deferred revenue

 

 

69,615

 

 

 

61,597

 

Total current liabilities

 

 

109,711

 

 

 

103,957

 

Operating lease liability, net of current portion

 

 

19,060

 

 

 

20,528

 

Other liabilities

 

 

838

 

 

 

981

 

Total liabilities

 

$

129,609

 

 

 

125,466

 

Commitments and contingencies (Note 8)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Undesignated preferred stock, $0.001 par value; 5,000,000 shares authorized;
   
no shares issued

 

 

 

 

 

 

Common stock, $0.001 par value; 100,000,000 shares authorized; 43,376,006 and 42,449,677 shares issued at June 30, 2023 and December 31, 2022, respectively

 

 

43

 

 

 

42

 

Additional paid-in capital

 

 

321,870

 

 

 

314,825

 

Treasury stock, at cost; 135,000 shares

 

 

(871

)

 

 

(871

)

Accumulated other comprehensive loss

 

 

(1,435

)

 

 

(1,593

)

Accumulated deficit

 

 

(228,007

)

 

 

(210,056

)

Total stockholders’ equity

 

 

91,600

 

 

 

102,347

 

Total liabilities and stockholders’ equity

 

$

221,209

 

 

$

227,813

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

4


Table of Contents

 

Brightcove Inc.

Condensed Consolidated Statements of Operations

(unaudited)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

(in thousands, except share and per share data)

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Subscription and support revenue

 

$

49,013

 

 

$

52,988

 

 

$

96,115

 

 

$

104,589

 

Professional services and other revenue

 

 

1,975

 

 

 

1,459

 

 

 

3,936

 

 

 

3,237

 

Total revenue

 

 

50,988

 

 

 

54,447

 

 

 

100,051

 

 

 

107,826

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of subscription and support revenue

 

 

16,603

 

 

 

16,943

 

 

 

34,868

 

 

 

33,925

 

Cost of professional services and other revenue

 

 

1,898

 

 

 

1,761

 

 

 

3,900

 

 

 

3,759

 

Total cost of revenue

 

 

18,501

 

 

 

18,704

 

 

 

38,768

 

 

 

37,684

 

Gross profit

 

 

32,487

 

 

 

35,743

 

 

 

61,283

 

 

 

70,142

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

10,345

 

 

 

8,372

 

 

 

20,211

 

 

 

16,609

 

Sales and marketing

 

 

19,034

 

 

 

17,961

 

 

 

38,499

 

 

 

36,249

 

General and administrative

 

 

9,405

 

 

 

8,554

 

 

 

19,469

 

 

 

16,643

 

Merger-related

 

 

45

 

 

 

153

 

 

 

190

 

 

 

747

 

Other expense

 

 

 

 

 

 

 

 

 

 

 

1,149

 

Total operating expenses

 

 

38,829

 

 

 

35,040

 

 

 

78,369

 

 

 

71,397

 

(Loss) income from operations

 

 

(6,342

)

 

 

703

 

 

 

(17,086

)

 

 

(1,255

)

Other expense, net

 

 

422

 

 

 

(825

)

 

 

(121

)

 

 

(1,212

)

Loss before income taxes

 

 

(5,920

)

 

 

(122

)

 

 

(17,207

)

 

 

(2,467

)

Provision (benefit) for income taxes

 

 

317

 

 

 

179

 

 

 

744

 

 

 

(529

)

Net loss

 

$

(6,237

)

 

$

(301

)

 

$

(17,951

)

 

$

(1,938

)

Net loss per share—basic and diluted

 

 

 

 

 

 

 

 

 

 

 

 

         Basic

 

$

(0.14

)

 

$

(0.01

)

 

$

(0.42

)

 

$

(0.05

)

         Diluted

 

$

(0.14

)

 

$

(0.01

)

 

$

(0.42

)

 

$

(0.05

)

Weighted-average shares—basic and diluted

 

 

 

 

 

 

 

 

 

 

 

 

         Basic

 

 

43,059

 

 

 

41,723

 

 

 

42,795

 

 

 

41,580

 

         Diluted

 

 

43,059

 

 

 

41,723

 

 

 

42,795

 

 

 

41,580

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

5


Table of Contents

 

Brightcove Inc.

Condensed Consolidated Statements of Comprehensive Loss

(unaudited)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

(in thousands)

 

Net loss

 

$

(6,237

)

 

$

(301

)

 

$

(17,951

)

 

$

(1,938

)

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(30

)

 

 

(857

)

 

 

158

 

 

 

(1,100

)

Comprehensive loss

 

$

(6,267

)

 

$

(1,158

)

 

$

(17,793

)

 

$

(3,038

)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

6


Table of Contents

 

Brightcove Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(unaudited)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

(in thousands, except share data)

 

Shares of common stock issued

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

 

42,992,371

 

 

 

41,685,163

 

 

 

42,449,677

 

 

 

41,384,643

 

Issuance of common stock upon exercise of stock options and vesting of restricted stock units

 

 

383,635

 

 

 

344,412

 

 

 

926,329

 

 

 

644,932

 

Balance, end of period

 

 

43,376,006

 

 

 

42,029,575

 

 

 

43,376,006

 

 

 

42,029,575

 

Shares of treasury stock

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

 

(135,000

)

 

 

(135,000

)

 

 

(135,000

)

 

 

(135,000

)

Balance, end of period

 

 

(135,000

)

 

 

(135,000

)

 

 

(135,000

)

 

 

(135,000

)

Par value of common stock issued

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

43

 

 

$

42

 

 

$

42

 

 

$

41

 

Issuance of common stock upon exercise of stock options and vesting of restricted stock units

 

 

 

 

 

 

 

 

1

 

 

 

 

Common stock issued upon acquisition

 

 

 

 

 

 

 

 

 

 

 

1

 

Balance, end of period

 

$

43

 

 

$

42

 

 

$

43

 

 

$

42

 

Value of treasury stock

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

(871

)

 

$

(871

)

 

$

(871

)

 

$

(871

)

Balance, end of period

 

$

(871

)

 

$

(871

)

 

$

(871

)

 

$

(871

)

Additional paid-in capital

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

318,293

 

 

$

304,506

 

 

$

314,825

 

 

$

298,793

 

Issuance of common stock upon exercise of stock options and vesting of restricted stock units, net of tax

 

 

 

 

 

(1

)

 

 

(226

)

 

 

99

 

Stock-based compensation expense

 

 

3,608

 

 

 

3,809

 

 

 

7,302

 

 

 

7,435

 

Withholding tax on restricted stock

 

 

(31

)

 

 

(7

)

 

 

(31

)

 

 

(7

)

Common stock issued upon acquisition

 

 

 

 

 

 

 

 

 

 

 

1,987

 

Balance, end of period

 

$

321,870

 

 

$

308,307

 

 

$

321,870

 

 

$

308,307

 

Accumulated deficit

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

(221,770

)

 

$

(202,678

)

 

$

(210,056

)

 

$

(201,041

)

Net loss

 

 

(6,237

)

 

 

(301

)

 

 

(17,951

)

 

 

(1,938

)

Balance, end of period

 

$

(228,007

)

 

$

(202,979

)

 

$

(228,007

)

 

$

(202,979

)

Accumulated other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

(1,405

)

 

$

(905

)

 

$

(1,593

)

 

$

(662

)

Foreign currency translation adjustment

 

 

(30

)

 

 

(857

)

 

 

158

 

 

 

(1,100

)

Balance, end of period

 

$

(1,435

)

 

$

(1,762

)

 

$

(1,435

)

 

$

(1,762

)

Total stockholders’ equity

 

$

91,600

 

 

$

102,737

 

 

$

91,600

 

 

$

102,737

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

7


Table of Contents

 

Brightcove Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

 

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

 

 

(in thousands)

 

Operating activities

 

 

 

 

 

 

Net loss

 

$

(17,951

)

 

$

(1,938

)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

8,008

 

 

 

4,227

 

Stock-based compensation

 

 

7,030

 

 

 

7,123

 

Provision for reserves on accounts receivable

 

222

 

 

 

70

 

Changes in assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(4,219

)

 

 

(2,394

)

Prepaid expenses and other current assets

 

 

(1,882

)

 

 

(2,612

)

Other assets

 

 

802

 

 

 

161

 

Accounts payable

 

 

3,376

 

 

 

(834

)

Accrued expenses

 

 

(5,474

)

 

 

(1,183

)

Operating leases

 

 

(174

)

 

 

4,007

 

Deferred revenue

 

 

8,440

 

 

 

2,630

 

Net cash (used in) provided by operating activities

 

 

(1,822

)

 

 

9,257

 

Investing activities

 

 

 

 

 

 

Cash paid for acquisition, net of cash acquired

 

 

 

 

 

(13,176

)

Purchases of property and equipment

 

 

(1,328

)

 

 

(1,884

)

Capitalized internal-use software costs

 

 

(7,233

)

 

 

(2,882

)

Net cash used in investing activities

 

 

(8,561

)

 

 

(17,942

)

Financing activities

 

 

 

 

 

 

Proceeds from exercise of stock options

 

 

 

 

 

100

 

Deferred acquisition payments

 

 

(1,700

)

 

 

 

Other financing activities

 

 

(256

)

 

 

(7

)

Net cash (used in) provided by financing activities

 

 

(1,956

)

 

 

93

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(