Brightcove Announces Financial Results for Third Quarter 2014 October 30, 2014 / Brightcove Press Release Third quarter revenue of $31.5 million up 11% year-over-year
BOSTON, MA (October 30, 2014) Brightcove Inc. (Nasdaq: BCOV), a leading global provider of cloud services for video, today announced financial results for the quarter ended September 30, 2014.
"Brightcove delivered solid third quarter results that exceeded our expectations on both the top and bottom line," said David Mendels, Chief Executive Officer of Brightcove. "We made progress aligning our go-to-market organization to capitalize on the exciting opportunities to help digital media and digital marketing companies increase their ability to monetize their digital assets. We believe we have the right people and products in place and I am confident the changes we have introduced within our organization will drive improved performance and growth over the long term."
Third Quarter 2014 Financial Highlights:
Revenue: Total revenue for the third quarter of 2014 was $31.5 million, an increase of 11% compared to $28.5 million for the third quarter of 2013. Subscription and support revenue was $30.5 million, an increase of 15% compared to $26.5 million for the third quarter of 2013. Professional services and other revenue was $1.1 million, compared to $2.0 million for the third quarter of 2013.
Gross Profit: Gross profit for the third quarter of 2014 was $20.7 million, compared to $19.3 million for the third quarter of 2013, and gross margin was 66% for the third quarter of 2014. Non-GAAP gross profit for the third quarter of 2014 was $21.3 million, representing a year-over-year increase of 8% 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 Loss: Loss from operations was $3.1 million for the third quarter of 2014, compared to a loss of $1.3 million for the third 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 $134,000 for the third quarter of 2014, compared to non-GAAP income of $1.1 million during the third quarter of 2013.
Net Loss: Net loss was $3.8 million, or $0.12 per basic and diluted share, for the third quarter of 2014. This compares to a net loss of $1.3 million, or $0.04 per basic and diluted share, for the third quarter of 2013.
Non-GAAP net loss, which excludes stock-based compensation expense, the amortization of acquired intangible assets, and merger-related expenses, was $829,000 for the third quarter of 2014, or $0.03 per diluted share, compared to non-GAAP net income of $1.1 million for the third quarter of 2013, or $0.04 per diluted share.
Balance Sheet and Cash Flow: As of September 30, 2014, Brightcove had $21.7 million of cash and cash equivalents, compared to $20.8 million at June 30, 2014. Brightcove generated $2.6 million in cash from operations and invested $1.1 million in capital expenditures and capitalization of internal-use software costs, leading to free cash flow of $1.5 million for the third quarter of 2014. Free cash flow was $3.4 million for the third 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 Third Quarter and Recent Highlights:
Ended the quarter with 5,899 customers, which included a net increase of 14 premium customers. New customers added during the quarter included: The Nation, MediaWorks NZ, Excite Japan, IBC, One Fighting Championship, Tesla, Lenovo, Maxim Integrated Products, Baker and McKenzie, Eaton Corporation, Delhaize and Waters Corporation.
Launched Brightcove Perform, a high performance service that powers cross-platform video playback through a full set of management APIs, performance optimization services, and the leading HTML5-first Brightcove Player. Perform also supports HTTP Live Streaming video playback across devices.
Announced that media companies and publishers now have the ability to choose from a client-side, server-side, or hybrid ad insertion solution. Using Brightcove Perform, publishers will be able to optimize the monetization of ad-supported video and generate more views and ad completions while avoiding the challenge of ad blockers.
Business Outlook
Based on information as of today, October 30, 2014, the Company is issuing the following financial guidance:
Fourth Quarter 2014*: The Company expects revenue to be $30.3 million to $30.8 million, and non-GAAP loss from operations to be $2.2 million to $2.5 million. Assuming approximately 32.4 million shares outstanding, Brightcove expects its non-GAAP net loss per basic and diluted share to be $0.08 to $0.09.
Full Year 2014*: The Company now expects revenue to be $123.9 million to $124.4 million, and non-GAAP loss from operations is expected to be $3.8 million to $4.1 million. Assuming approximately 31.9 million shares outstanding, Brightcove expects its non-GAAP net loss per basic and diluted share to be $0.17 to $0.18.
*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 for stock-based compensation expense, merger-related expenses, or amortization of acquired intangible assets, which are reconciling items between those Non-GAAP and GAAP measures. As the items that impact GAAP loss from operations and GAAP net loss per share are out of the Company's control and/or cannot be
