- Fourth quarter revenue of $29.7 million, up 22% year-over-year
- Fiscal year 2013 revenue of $109.9 million, up 25% year-over-year
- Non-GAAP fourth quarter operating income of $1.7 million
- Generated $7.3 million in operating cash flow, $3.4 million in free cash flow for fiscal year 2013
BOSTON, MA. (January 30, 2014) – 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, 2013.
"We are pleased to report a strong finish to the 2013 financial results, with quarterly results that exceeded our guidance on both the top and bottom line," said David Mendels, Chief Executive Officer of Brightcove. "We believe we are at the very early stages of a fundamental disruption of the television market as the trends in consumer viewing move sharply towards online consumption. With our recently announced acquisition of Unicorn Media, we will be able to dramatically improve the ability of media companies to effectively target, personalize and monetize their online video content across the broadest range of devices."
Fourth Quarter 2013 Financial Highlights:
Revenue: Total revenue for the fourth quarter of 2013 was $29.7 million, an increase of 22% compared to $24.3 million for the fourth quarter of 2012. Subscription and support revenue was $27.2 million, an increase of 17% compared with $23.2 million for the fourth quarter of 2012. Professional services and other revenue was $2.5 million, compared to $1.1 million for the fourth quarter of 2012.
Gross Profit: Gross profit for the fourth quarter of 2013 was $19.8 million, compared to $16.7 million for the fourth quarter of 2012, and gross margin for the fourth quarter of 2013 was 67%. Non-GAAP gross profit for the fourth quarter of 2013 was $20.1 million, representing a year-over-year increase of 18% and a non-GAAP gross margin of 68%. Non-GAAP gross profit and non-GAAP gross margin exclude stock-based compensation expense and the amortization of acquired intangible assets.
Operating Income (Loss): Loss from operations was $1.0 million for the fourth quarter of 2013, compared to a loss of $4.6 million for the fourth quarter of 2012. Non-GAAP income from operations, which excludes stock-based compensation expense, the amortization of acquired intangible assets and merger-related expenses was $1.7 million for the fourth quarter of 2013, an improvement compared to a non-GAAP loss from operations of $1.4 million during the fourth quarter of 2012.
Net Income (Loss): Net loss attributable to common stockholders was $1.2 million, or $0.04 per diluted share, for the fourth quarter of 2013. This compares to a net loss attributable to common stockholders of $4.7 million, or $0.17 per diluted share, for the fourth quarter of 2012.
Non-GAAP net income attributable to common stockholders, which excludes stock-based compensation expense, the amortization of acquired intangible assets, merger-related expenses and merger-related tax adjustments was $1.5 million for the fourth quarter of 2013, or $0.05 per diluted share, compared to a non-GAAP net loss attributable to common stockholders of $1.5 million for the fourth quarter of 2012, or a loss of $0.05 per diluted share.
Balance Sheet and Cash Flow: As of December 31, 2013, Brightcove had $36.1 million of cash, cash equivalents and investments, an increase from $34.1 million at September 30, 2013. Brightcove generated $2.5 million in cash from operations and invested $1.5 million in capital expenditures, leading to free cash flow of $1.0 million for the fourth quarter of 2013. Free cash flow was $2.5 million for the fourth quarter of 2012. Subsequent to the end of the quarter, the company will use approximately $9.0 million of cash and cash equivalents as part of the consideration paid for the acquisition of Unicorn Media.
Full Year 2013 Financial Highlights:
Revenue: Total revenue was $109.9 million for 2013, an increase of 25% compared to $88.0 million for 2012. Subscription and support revenue was $103.1 million, an increase of 22% compared with $84.3 million for 2012. Professional services and other revenue was $6.8 million, an increase compared to $3.7 million for 2012.
Gross Profit: Gross profit was $73.1 million for 2013, compared to $60.6 million for 2012, and gross margin was 67% for 2013. Non-GAAP gross profit was $74.5 million for 2013, representing a year-over-year increase of 22% and a non-GAAP gross margin of 68%. Non-GAAP gross profit and non-GAAP gross margin exclude stock-based compensation expense and the amortization of acquired intangible assets.
Operating Income (Loss): Loss from operations was $9.5 million for 2013, compared to a loss of $15.4 million for 2012. Non-GAAP income from operations, which excludes stock-based compensation expense, the amortization of acquired intangible assets and merger-related expenses was $694 thousand for 2013, an improvement compared to a non-GAAP loss from operations of $7.1 million for 2012.
Net Loss: Net loss attributable to common stockholders was $10.3 million, or $0.36 per diluted share, for 2013. This compares to a net loss attributable to common stockholders of $13.9 million, or $0.57 per diluted share, for 2012.
Non-GAAP net loss attributable to common stockholders, which excludes stock-based compensation expense, the amortization of acquired intangible assets, merger-related expenses and merger-related tax adjustments, was $76 thousand for 2013, or $0.00 per diluted share, compared to a non-GAAP net loss attributable to common stockholders of $8.3 million for 2012, or $0.34 per diluted share.
Cash Flow: Brightcove generated $7.3 million in cash from operations and invested $3.9 million in capital expenditures, leading to free cash flow of $3.4 million for the full year 2013. Free cash flow was $(7.5) million for 2012.
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
- New customers added in the fourth quarter included Boston Globe Media Partners, Cubist Pharmaceuticals, Dick Clark Productions, Rosetta Stone, TVN SA and VERITAS.
- Entered into a definitive agreement to acquire Unicorn Media, a leading provider of cloud video ad insertion technology, for $49 million. With the acquisition of Unicorn, Brightcove will enable media companies to more effectively monetize their growing array of online video content across the broadest range of devices. Unicorn’s product line, which includes its flagship product Once, will be rebranded as Brightcove Once.
- Derek Harrar, former Comcast senior vice president and general manager of video and entertainment services, joined the Brightcove Board of Directors.
Fiscal Year 2014 Financial Highlights:
Business Outlook
Based on information as of today, January 30, 2014, the Company is issuing the following financial guidance:
First Quarter 2014*: The Company expects revenue to be $28.8 million to $29.5 million, and non-GAAP operating loss to be $2.5 million to $2.9 million. Assuming approximately 31.1 million shares outstanding, Brightcove expects its non-GAAP net loss per basic and diluted share to be $0.09 to $0.10, which excludes stock-based compensation expense, the amortization of acquired intangible assets and merger-related expenses.
Full Year 2014*: The Company is reiterating the guidance issued on January 6th for revenue to be $126.0 million to $130.0 million, and non-GAAP operating loss to be $9.0 million to $12.0 million. Assuming approximately 32.1 million shares outstanding, Brightcove expects its non-GAAP net loss per basic and diluted share to be $0.31 to $0.40, which excludes stock-based compensation expense, the amortization of acquired intangible assets and merger-related expenses.
*With respect to the Company's expectations under "Business Outlook" above, the Company has not reconciled non-GAAP loss from operations or non-GAAP loss per share to GAAP loss from operations and GAAP loss per share because at this time the Company is unable to forecast the amortization of intangible assets related to the anticipated acquisition of Unicorn Media, which is a reconciling item between those Non-GAAP and GAAP measures. Accordingly, a reconciliation to GAAP loss from operations and GAAP loss per share is not available at this time.
Conference Call Information
Brightcove will host a conference call today, January 30, 2014, 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 13574378. A replay of the webcast will also be available for a limited time at http://investor.brightcove.com.
About Brightcove
Brightcove Inc. (NASDAQ: BCOV), a leading global provider of cloud services for video, offers a family of products that revolutionize the way organizations deliver video experiences. The company's products include Video Cloud, the market-leading online video platform and Zencoder, a leading cloud-based media processing service and HTML5 video player technology provider. Brightcove has more than 6,300 customers in over 70 countries that rely on Brightcove cloud content services to build and operate video experiences across PCs, smartphones, tablets and connected TVs. For more information, visit http://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 2014 and full year 2014, our position to execute on our growth strategy, our ability to expand our leadership position and market opportunity and the successful completion of our acquisition of Unicorn Media. 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, risks associated with the successful completion of the acquisition of Unicorn Media, difficulties integrating the techonologies, products, operations, existing contracts and personnel of Unicorn Media and realizing the anticipated benefits of the combined business; 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; 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) attributable to common stockholders and non-GAAP basic and diluted net income (loss) per share attributable to common stockholders. 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, merger-related costs and merger-related income tax adjustments. Merger-related costs include fees incurred in connection with closing an acquisition in addition to fees associated with the retention of key employees. Merger-related income tax adjustments include one-time charges or benefits that are 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.
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
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