Brightcove Announces Financial Results for Fourth Quarter and Fiscal Year 2018

-- BOSTON, MA (February 13, 2019) Brightcove Inc. (Nasdaq: BCOV), the leading provider of cloud services for video, today announced financial results for the fourth quarter and fiscal year ended December 31, 2018.

In the fourth quarter Brightcove continued to execute on the strategic priorities it has targeted to generate stronger, more consistent revenue growth and profitability. The Company has accomplished much in 2018 and is in a far stronger position to achieve its long-term objectives than when we entered the year, said Jeff Ray, Brightcove's chief executive officer.

Ray added, Brightcove enters 2019 with a clear market focus, a robust product development pipeline and a new go-to-market strategy focused on driving faster sales velocity. Our clear leadership in a dynamic, fast-growing, multi-billion dollar marketplace provides ample opportunity for the company to be successful.

Fourth Quarter 2018 Financial Highlights:

Revenue for the fourth quarter of 2018 was $40.9 million, an increase of 2% compared to $40.1 million for the fourth quarter of 2017. Subscription and support revenue was $37.8 million, an increase of 2% compared to $36.9 million for the fourth quarter of 2017.

Gross profit for the fourth quarter of 2018 was $24.4 million, representing a gross margin of 60% compared to a gross profit of $23.8 million for the fourth quarter of 2017. Non-GAAP gross profit for the fourth quarter of 2018 was $24.8 million, representing a non-GAAP gross margin of 61%, compared to a non-GAAP gross profit of $24.5 million for the fourth quarter of 2017. 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 $2.5 million for the fourth quarter of 2018, compared to a loss from operations of $1.3 million for the fourth quarter of 2017. Non-GAAP operating income, which excludes stock-based compensation expense, the amortization of acquired intangible assets and merger-related expense, was $237,000 for the fourth quarter of 2018, compared to non-GAAP operating income of $1.3 million during the fourth quarter of 2017.

Net loss was $2.6 million, or $0.07 per diluted share, for the fourth quarter of 2018. This compares to a net loss of $1.4 million, or $0.04 per diluted share, for the fourth quarter of 2017. Non-GAAP net income, which excludes stock-based compensation expense, the amortization of acquired intangible assets and merger-related expense, was $147,000 for the fourth quarter of 2018, or $0.00 per diluted share, compared to non-GAAP net income of $1.3 million for the fourth quarter of 2017, or $0.04 per diluted share.

Adjusted EBITDA was $1.4 million for the fourth quarter of 2018, compared to adjusted EBITDA of $2.3 million for the fourth quarter of 2017. Adjusted EBITDA excludes stock-based compensation expense, merger-related expense, the amortization of acquired intangible assets, depreciation expense, other income/expense and the provision for income taxes.

Cash flow from operations was $2.8 million for the fourth quarter for 2018, compared to $5.2 million for the fourth quarter of 2017.

Free cash flow was $2.1 million after the company invested $682,000 in capital expenditures and capitalization of internal-use software during the fourth quarter of 2018. Free cash flow was $4.2 million for the fourth quarter of 2017.

Cash and cash equivalents were $29.3 million as of December 31, 2018 compared $26.9 million at September 30, 2018.

Full Year 2018 Financial Highlights:

Revenue for the full year 2018 was $164.8 million, an increase of 6% compared to $155.9 million for 2017. Subscription and support revenue for 2018 was $150.9 million, an increase of 5% compared to $143.2 million for 2017.

Gross profit was $98.2 million for 2018, representing a gross margin of 60%, compared to $91.3 million for 2017. Non-GAAP gross profit was $100.6 million for 2018, representing a non-GAAP gross margin of 61%, compared to $94.0 million for 2017. 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 $13.1 million for 2018, compared to a loss from operations of $19.7 million for 2017. Non-GAAP loss from operations, which excludes stock-based compensation expense, the amortization of acquired intangible assets, executive severance and merger-related expense, was $2.2 million for 2018, compared to non-GAAP loss from operations of $9.0 million for 2017.

Net loss was $14.0 million, or $0.39 per diluted share, for 2018. This compares to a net loss of $19.5 million, or $0.57 per diluted share, for 2017. Non-GAAP net loss, which excludes stock-based compensation expense, the amortization of acquired intangible assets, executive severance and merger-related expense, was $3.1 million for 2018, or $0.09 per diluted share, compared to non-GAAP net loss of $8.8 million for 2017, or $0.26 per diluted share.

Adjusted EBITDA was $2.3 million for 2018, compared to an adjusted EBITDA loss of $4.5 million for 2017. Adjusted EBITDA excludes stock-based compensation expense, executive severance, merger-related expense, the amortization of acquired intangible assets, depreciation expense, other income/expense and the provision for income taxes.

Cash flow from operations was $2.6 million for 2018, compared to cash flow used in operations of $6.4 million for 2017.

Free cash flow was negative $2.0 million after the company invested $4.5 million in capital expenditures and capitalization of internal-use software during 2018. Free cash flow was negative $10.6 million for 2017.

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 head

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