Brightcove Announces Financial Results for Fourth Quarter and Fiscal Year 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, 2019.

Brightcove made significant progress on its strategic priorities in the fourth quarter, highlighted by the release of Brightcove Beacon, our new OTT platform and the first of our purpose-built applications. Together with Brightcove Campaign, our new demand generation marketing application, and other upcoming releases, we have developed the strongest product portfolio in our history, said Jeff Ray, Brightcove's Chief Executive Officer.

Ray added, 2019 was an important year for Brightcove. We stabilized the business, developed exciting new applications and revamped our go-to-market team. We have now substantially completed the work needed to position the company for success. We believe 2020 is the year we will bring this hard work together and start to drive faster growth and improved profitability.

Fourth Quarter 2019 Financial Highlights:

Revenue for the fourth quarter of 2019 was $47.6 million, an increase of 16% compared to $40.9 million for the fourth quarter of 2018. Subscription and support revenue was $44.6 million, an increase of 18% compared to $37.8 million for the fourth quarter of 2018.

Gross profit for the fourth quarter of 2019 was $28.8 million, representing a gross margin of 61% compared to a gross profit of $24.4 million for the fourth quarter of 2018. Non-GAAP gross profit for the fourth quarter of 2019 was $29.7 million, representing a non-GAAP gross margin of 62%, compared to a non-GAAP gross profit of $24.8 million for the fourth quarter of 2018. 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 $6.9 million for the fourth quarter of 2019, compared to a loss from operations of $2.5 million for the fourth quarter of 2018. Non-GAAP operating income, which excludes stock-based compensation expense, the amortization of acquired intangible assets and merger-related expense, was $2.2 million for the fourth quarter of 2019, compared to non-GAAP operating income of $237,000 during the fourth quarter of 2018.

Net loss was $6.7 million, or $0.17 per diluted share, for the fourth quarter of 2019. This compares to a net loss of $2.6 million, or $0.07 per diluted share, for the fourth quarter of 2018. Non-GAAP net income, which excludes stock-based compensation expense, the amortization of acquired intangible assets and merger-related expense, was $2.4 million for the fourth quarter of 2019, or $0.06 per diluted share, compared to non-GAAP net income of $147,000 for the fourth quarter of 2018, or $0.00 per diluted share.

Adjusted EBITDA was $3.5 million for the fourth quarter of 2019, compared to adjusted EBITDA of $1.4 million for the fourth quarter of 2018. 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 $2.1 million for the fourth quarter for 2019, compared to $2.8 million for the fourth quarter of 2018.

Free cash flow was negative $336,000 after the company invested $2.4 million in capital expenditures and capitalization of internal-use software during the fourth quarter of 2019. Free cash flow was $2.1 million for the fourth quarter of 2018.

Cash and cash equivalents were $22.8 million as of December 31, 2019 compared $22.6 million at September 30, 2019.

Full Year 2019 Financial Highlights:

Revenue for the full year 2019 was $184.5 million, an increase of 12% compared to $164.8 million for 2018. Subscription and support revenue for 2019 was $173.8 million, an increase of 15% compared to $150.9 million for 2018.

Gross profit was $109.0 million for 2019, representing a gross margin of 59%, compared to $98.2 million for 2018. Non-GAAP gross profit was $111.6 million for 2019, representing a non-GAAP gross margin of 60%, compared to $100.6 million for 2018. 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 $21.1 million for 2019, compared to a loss from operations of $13.1 million for 2018. Non-GAAP income from operations, which excludes stock-based compensation expense, the amortization of acquired intangible assets, merger-related expense and executive severance and restructuring expense, was $3.6 million for 2019, compared to non-GAAP loss from operations of $2.2 million for 2018.

Net loss was $21.9 million, or $0.58 per diluted share, for 2019. This compares to a net loss of $14.0 million, or $0.39 per diluted share, for 2018. Non-GAAP net income, which excludes stock-based compensation expense, the amortization of acquired intangible assets, merger-related expense and executive severance and restructuring expense, was $2.8 million for 2019, or $0.07 per diluted share, compared to non-GAAP net loss of $3.1 million for 2018, or $0.09 per diluted share.

Adjusted EBITDA was $8.8 million for 2019, compared to an adjusted EBITDA of $2.3 million for 2018. Adjusted EBITDA excludes stock-based compensation expense, merger-related expense, executive severance and restructuring expense, the amortization of acquired intangible assets, depreciation expense, other income/expense and the provision for income taxes.

Cash flow from operations was $2.7 million for 2019, compared to cash flow from operations of $2.6 million for 2018.

Free cash flow was negative $4.6 million after the company invested $7.3 million in capital expenditures and capitalization of internal-use software during 2019. Free cash flow was negative $2.0 million for 2018.

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