Brightcove Announces Financial Results for First Quarter 2014 April 30, 2014 / Brightcove Press Release First quarter revenue of $31.1 million up 26% year-over-year
BOSTON, MA (April 30, 2014) Brightcove Inc. (Nasdaq: BCOV), a leading global provider of cloud services for video, today announced financial results for the quarter ended March 31, 2014.
"Brightcove delivered strong first quarter results that exceeded expectations from both a revenue and profitability perspective," said David Mendels, Chief Executive Officer of Brightcove. "The consumption of digital content continues to move rapidly towards online and mobile platforms, which is driving digital content providers to increasingly focus on ways to monetize these emerging distribution channels. The combination of Video Cloud and Brightcove Once cloud services will help our customers capitalize on this trend by delivering personalized, targeted online video content and advertising. We believe Brightcove is uniquely positioned to be the cloud services vendor of choice for companies looking to expand and better monetize their online digital content presence.
First Quarter 2014 Financial Highlights:
Revenue: Total revenue for the first quarter of 2014 was $31.1 million, an increase of 26% compared to $24.7 million for the first quarter of 2013. Subscription and support revenue was $29.4 million, an increase of 24% compared with $23.8 million for the first quarter of 2013. Professional services and other revenue was $1.7 million, compared to $944,000 for the first quarter of 2013.
Gross Profit: Gross profit for the first quarter of 2014 was $19.8 million, compared to $16.3 million for the first quarter of 2013, and gross margin was 64% for the first quarter of 2014. Non-GAAP gross profit for the first quarter of 2014 was $20.4 million, representing a year-over-year increase of 22% and a non-GAAP gross margin of 65%. Non-GAAP gross profit and non-GAAP gross margin exclude stock-based compensation expense and the amortization of acquired intangible assets.
Operating Loss: Loss from operations was $4.7 million for the first quarter of 2014, compared to a loss of $3.9 million for the first quarter of 2013. Non-GAAP loss from operations, which excludes stock-based compensation expense, the amortization of acquired intangible assets and merger-related expenses, was $322,000 for the first quarter of 2014, an improvement compared to a non-GAAP loss of $1.2 million during the first quarter of 2013.
Net Loss: Net loss was $4.8 million, or $0.16 per basic and diluted share, for the first quarter of 2014. This compares to a net loss of $4.2 million, or $0.15 per basic and diluted share, for the first quarter of 2013.
Non-GAAP net loss, which excludes stock-based compensation expense, the amortization of acquired intangible assets, and merger-related expenses, was $500,000 for the first quarter of 2014, or $0.02 per basic and diluted share, compared to a non-GAAP net loss of $1.6 million for the first quarter of 2013, or $0.06 per basic and diluted share.
Balance Sheet and Cash Flow: As of March 31, 2014, Brightcove had $21.4 million of cash, cash equivalents and investments, compared to $36.1 million at December 31, 2013. Brightcove used $4.9 million in cash from operations and invested $777,000 in capital expenditures and capitalization of internal-use software costs, leading to negative free cash flow of $5.7 million for the first quarter of 2014. Negative free cash flow was $2.9 million for the first quarter of 2013.
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 First Quarter and Recent Highlights
Ended the quarter with 6,126 customers, which included a net increase of 61 premium customers. New customers added during the quarter included: Hallmark Channel, Yelp, RLJ Entertainment, TV Tokyo, Nippon Television Network, Northern Trust and Molson Coors.
Zencoder has added support for the next generation of Web and mobile playback, as well as advanced codecs that will allow content providers to distribute video in broadcast and other professional workflows. This release includes support for HEVC (H.265), the successor to H.264, and MPEG-DASH, an emerging adaptive streaming standard. Adding to existing Web and mobile encoding formats, Zencoder has added capabilities to address the diverse needs of broadcasters and other professional content providers, with codecs such as MPEG-2, MPEG-TS, JPEG 2000 and AVC-Intra.
Content providers developing apps for Google Chromecast can now use Brightcove Once to quickly deliver and monetize feature-rich video content, including personalized advertising, to Chromecast viewers.
Business Outlook
Based on information as of today, April 30, 2014, the Company is issuing the following financial guidance:
Second Quarter 2014*: The Company expects revenue to be $29.7 million to $30.2 million, and non-GAAP loss from operations to be $3.1 million to $3.4 million. Assuming approximately 32.1 million shares outstanding, Brightcove expects its non-GAAP net loss per basic and diluted share to be $0.11 to $0.12.
Full Year 2014*: The Company expects revenue to be $126.0 million to $130.0 million, and non-GAAP loss from operations is expected to be $5.0 million to $7.0 million. Assuming approximately 32.0 million shares outstanding, Brightcove expects its non-GAAP net loss per basic and diluted share to be $0.19 to $0.25.
*With respect to the Company's expectations under Business Outlook above, the Company has not reconciled non-GAAP loss from operations or non-GAAP net loss per share to GAAP loss from operations and GAAP net loss per share, respectively, because the Company does not provide guidance f
