Brightcove Announces Third Quarter Fiscal 2022 Financial Results

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Brightcove Inc. (Nasdaq: BCOV), the trusted leader in streaming technology, today announced its financial results for the third quarter ended September 30, 2022.

“In the third quarter, Brightcove made meaningful progress on each of our strategic priorities while delivering revenue and profitability that exceeded the high end of our guidance range. The investments in innovation we are making to expand our solutions and services offering will make Brightcove an essential partner for any business, brand or creator looking to take ownership of their digital future,” said Marc DeBevoise, CEO of Brightcove.

DeBevoise added, “We are confident that by executing our strategy, we will deliver greater value to customers and position Brightcove to deliver faster, more consistent and more meaningful revenue growth and profitability in the years to come.

Third Quarter 2022 Financial Highlights:

  • Revenue for the third quarter of 2022 was $53.9 million, a 3% increase from $52.2 million for the third quarter of 2021. Subscription and support revenue was $51.8 million dollars, an increase of 5% compared to $49.2 million for the third quarter of 2021.

  • Gross profit for the third quarter of 2022 was $33.9 million, or a gross margin of 63%, compared to gross profit of $33.5 million, or a gross margin of 64% for the third quarter of 2021. Non-GAAP gross profit for the third quarter of 2022 was $34.5 million, representing a non-GAAP gross margin of 64%, compared to a non-GAAP gross margin of $34.1 million, representing non-GAAP gross margin of 65% for the third quarter of 2021. non-GAAP earnings and gross margin exclude stock-based compensation expense and amortization of acquired intangibles.

  • Operating loss was $821,000 for the third quarter of 2022, compared to an operating loss of $233,000 for the third quarter of 2021. Non-GAAP operating income, which excludes stock-based compensation expense, l amortization of acquired intangibles, merger-related and other charges (benefits), was $2.8 million for the third quarter of 2022, compared to non-GAAP operating income of 2.9 million in the third quarter of 2021.

  • Net loss was $1.7 million, or a loss of $0.04 per diluted share, for the third quarter of 2022. This compares to a net loss of $1.0 million, or $0.02 per diluted share , for the third quarter of 2021. Non-GAAP net income, which excludes stock-based compensation expense, amortization of acquired intangibles, merger-related charges and other (benefit) charges, s was $2.0 million for the third quarter of 2022, or $0.05 per diluted share, compared to non-GAAP net income of $2.1 million for the third quarter of 2021, or 0, $05 per diluted share.

  • Adjusted EBITDA was $4.9 million for the third quarter of 2022, compared to adjusted EBITDA of $4.2 million for the third quarter of 2021. Adjusted EBITDA excludes stock-based compensation expense, related to the merger, other expenses (benefits), amortization of acquired intangible assets, amortization expense, other income/expenses and the provision for income taxes.

  • Cash flow from operations was $10.5 million for the third quarter of 2022, compared to cash flow from operations of $7.4 million for the third quarter of 2021.

  • Free movement of capital was $4.5 million after the company invested $6.0 million in capital expenditures and capitalization of software for internal use during the third quarter of 2022. Free cash flow was 4.9 dollars for the third quarter of 2021.

  • Cash and cash equivalents were $31.3 million as of September 30, 2022, compared to $45.7 million as of December 31, 2021.

A reconciliation of GAAP and non-GAAP results has been provided in the tables to the financial statements 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 third quarter and recent highlights:

  • Average annual subscription revenue per premium customer was $95,900 in Q3 2022, excluding entry-level customers who had an average annualized revenue of $3,800 per customer. Average annual subscription revenue per premium customer compares to $93,400 in Q3 2021.

  • The recurring retention rate for the dollar was 95% in the third quarter of 2022, compared to our historical target of the low-to-mid range of 90%.

  • Net revenue retention in the quarter was 93%, compared to 95% in Q2 2022 and 95% in Q3 2021.

  • Ended the third quarter of 2022 with 2,900 customers, including 2,271 premium.

  • New customers and customers who expanded their relationship during the third quarter of 2022 include: Coupang, Television New Zealand, This Old House Ventures, Sky Mexico, Gladius Global and Nexus Multimedia, among others.

  • Announcing an expanded partnership with Evergent, the leader in customer management and monetization for streaming and digital subscription businesses. The new integration will see the introduction of Evergent’s agile monetization solution into the Brightcove Beacon for over-the-top video streaming, allowing Brightcove customers to test and implement flexible monetization approaches within the platform.

Business Outlook

Based on information as of today, November 2, 2022, the Company is issuing the following financial guidance.

Third quarter 2022:

  • Revenue is expected to be between $49.2 and $50.2 million, including approximately $1.8 million in professional services revenue.

  • Non-GAAP operating profit/(loss) is expected to be between ($0.8) million and $0.2 million, which excludes stock-based compensation of approximately $4.0 million and amortization of acquired intangibles of approximately $0.8 million.

  • Adjusted EBITDA is expected to be in the range of $1.3 million to $2.3 million, which excludes stock-based compensation of approximately $4.0 million, amortization of intangible assets acquired from approximately $0.8 million, depreciation expense approximately $2.1 million, and other income/expenses and provision for income taxes approximately $0.3 million.

  • Non-GAAP net loss per diluted share expected to be ($0.03) to $0.00, which excludes stock-based compensation of approximately $4.0 million, amortization of acquired intangibles of approximately $0.8 million and assumes that there are approximately 42.2 million weighted average shares outstanding.

Full year 2022:

  • Revenue is expected to be between $211.0 and $212.0 million, including approximately $7.1 million in professional services revenue.

  • Non-GAAP operating profit is expected to be between $11.1 and $12.1 million, which excludes stock-based compensation of approximately $13.7 million, amortization of acquired intangibles of approximately $3.2 million dollars, merger-related expenses of approximately $0.7 million and other expenses of $1.1 million. million.

  • Adjusted EBITDA expected to be between $18.0 and $19.0 million, which excludes stock-based compensation of approximately $13.7 million, merger-related costs of approximately $0.7 million , other expenses of $1.1 million, amortization of acquired intangibles of approximately $3.2 million, amortization expense of approximately $6.9 million, and other income/ expense and provision for income taxes of approximately $1.8 million.

  • Diluted non-GAAP earnings per share is expected to be $0.22 to $0.24, which excludes stock-based compensation of approximately $13.7 million, amortization of acquired intangibles of approximately $3.2 million, merger-related expenses of approximately $0.7 million, other expenses of $1.1 million and assumes approximately $42.1 million weighted-average shares outstanding.

Revenue stream information

Brightcove’s earnings release will be released on November 2, 2022 at 5:00 p.m. EST to discuss the company’s financial results and current business outlook. To access the live stream, visit the “Investors” page of the Company’s website, http://investor.brightcove.com. Once the live stream has ended, an on-demand recording will be available on Brightcove’s investor page for a limited time at http://investor.brightcove.com.

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