Brightcove Announces Financial Results for First Quarter Fiscal Year 2020

BOSTON--(BUSINESS WIRE)--Apr. 29, 2020-- Brightcove Inc. (Nasdaq: BCOV), the leading provider of cloud services for video, today announced financial results for the first quarter ended March 31, 2020.

Brightcove is focused on supporting our customers as they adjust their businesses for the impact of the COVID-19 pandemic. The recent release of Brightcove Engage and Brightcove Continuum are the latest examples of how we empower organizations to increase engagement and connectivity with their employees and customers, said Jeff Ray, Brightcove's Chief Executive Officer.

Ray added, We are pleased with the progress we are making on our strategic initiatives and customer response to our new products, particularly Brightcove Beacon . While the near-term outlook is uncertain due to COVID-19, we remain confident the investments we have made in our products and our go-to-market team will deliver strong returns over time.

First Quarter 2020 Financial Highlights:

Revenue for the first quarter of 2020 was $46.7 million, an increase of 12% compared to $41.8 million for the first quarter of 2019. Subscription and support revenue was $44.7 million, an increase of 15% compared to $38.9 million for the first quarter of 2019.

Gross profit for the first quarter of 2020 was $28.0 million, representing a gross margin of 60% compared to a gross profit of $25.1 million for the first quarter of 2019. Non-GAAP gross profit for the first quarter of 2020 was $28.8 million, representing a non-GAAP gross margin of 62%, compared to a non-GAAP gross profit of $25.5 million for the first quarter of 2019. 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 $7.1 million for the first quarter of 2020, compared to a loss of $4.8 million for the first quarter of 2019. Non-GAAP operating income, which excludes stock-based compensation expense, the amortization of acquired intangible assets and merger-related expense, was $2.3 million for the first quarter of 2020, compared to non-GAAP operating income of $19,000 during the first quarter of 2019.

Net loss was $7.9 million, or $0.20 per diluted share, for the first quarter of 2020. This compares to a net loss of $5.0 million, or $0.14 per diluted share, for the first quarter of 2019. Non-GAAP net income, which excludes stock-based compensation expense, the amortization of acquired intangible assets, merger-related expense and restructuring was $1.5 million for the first quarter of 2020, or $0.04 per diluted share, compared to non-GAAP net loss of $211,000 for the first quarter of 2019, or $0.01 per diluted share.

Adjusted EBITDA was $3.7 million for the first quarter of 2020, compared to adjusted EBITDA of $1.3 million for the first quarter of 2019. Adjusted EBITDA excludes stock-based compensation expense, merger-related expense, restructuring, the amortization of acquired intangible assets, depreciation expense, other income/expense and the provision for income taxes.

Cash flow provided by operations was $2.4 million for the first quarter for 2020, compared to $263,000 for the first quarter of 2019.

Free cash flow was negative $252,000 after the company invested $2.7 million in capital expenditures and capitalization of internal-use software during the first quarter of 2020. Free cash flow was negative $927,000 for the first quarter of 2019.

Cash and cash equivalents were $32.1 million as of March 31, 2020 compared to $22.8 million on December 31, 2019.

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:

Average annual subscription revenue per premium customer was $84,600 in the first quarter of 2020, excluding starter customers who had average annualized revenue of $4,500 per customer. This compares to $77,800 in the comparable period in 2019.

Recurring dollar retention rate was 88% in the first quarter of 2020, versus our historical target of the low to mid-90 percent range.

Ended the quarter with 3,498 customers, of which 2,293 were premium.

New customers and customers who expanded their relationship during the first quarter include: Dell, Wendy's Merck, Feel Communications, New England Sports Network and Barbri.

Announced Brightcove Engage, a purpose-built application developed for internal communications professionals to inform employees using the most powerful and effective means of communications ever created: mobile video. With templates for quickly organizing content, analytics for monitoring engagement, and enterprise-grade security and stability, Brightcove Engage streamlines internal communications using the power of video.

Announced Brightcove Continuum, a new business continuity suite to support business communication functions across the enterprise. By leveraging live and on-demand streaming services, organizations can employ the use of video to stay connected to employees and customers. Launching through direct and channel sales, Brightcove Continuum is available to all organizations looking to strategically manage video communications.

Announced the launch of PLAY TV, an innovative over-the-top streaming experience with the most must-watch content focused on video, coming in May. Utilizing Brightcove Beacon, PLAY TV will become a trusted source for viewers on the changing world of video and will include inspiring live keynotes, along with channels offering thought leadership, customer stories, video best practices and more.

Business Outlook

Based on information as of today, April 29, 2020, the Company is issuing the following financial guidance. In light

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