- Revenue of $21.6 million, up 41% year-over-year
- 4,697 customers at end of second quarter, up 43% year-over-year
- Announced acquisition of Zencoder, a leading provider of cloud-based video encoding services
Brightcove Inc. (Nasdaq: BCOV), a leading global provider of cloud-based solutions for publishing and distributing professional digital media, today announced financial results for the second quarter ended June 30, 2012. The company also announced the signing of a definitive agreement to acquire privately-held Zencoder, a leading provider of cloud-based video encoding service and creator of the popular Video.js HTML5 video player (see separate release).
"We are pleased with our second quarter results, which exceeded our guidance on both the top and bottom line," said Jeremy Allaire, Chairman and Chief Executive Officer of Brightcove. "Brightcove is benefitting from growing demand as companies across a wide range of industries and size are embracing online digital content as a way to deliver more compelling experiences to their customers. Brightcove is the pioneer of this market, and we continue to extend our technology leadership and ability to meet market demand based on the innovations we are delivering across our Video Cloud and App Cloud platforms."
Allaire added, "The acquisition of Zencoder not only strengthens our Video Cloud online video platform in a key technology area, but it also signals our expansion into standalone cloud services that developers can use as building blocks for custom systems. In addition, Zencoder is also the developer of Video.js, a fast-growing, free HTML5 video player that provides an excellent starting point for organizations that could potentially upgrade to our Video Cloud Express offering. We welcome the Zencoder team, customers, and developer communities and look forward to developing these positive synergies."
Second Quarter 2012 Financial Highlights:
Revenue: Total revenue for the second quarter of 2012 was $21.6 million, an increase of 41% compared to $15.3 million for the second quarter of 2011. Subscription and support revenue was $20.7 million, an increase of 43% compared with $14.5 million for the second quarter of 2011. Professional services and other revenue was $902,000, an increase of 12% compared to $802,000 for the second quarter of 2011.
Gross Profit: Gross profit for the second quarter of 2012 was $15.2 million, compared to $10.3 million for the second quarter of 2011. Non-GAAP gross profit for the second quarter of 2012 was $15.2 million, representing a year-over-year increase of 47% and a non-GAAP gross margin of 70%.
Operating Loss: Loss from operations was $3.9 million for the second quarter of 2012, compared to a loss of $5.1 million for the second quarter of 2011. Non-GAAP loss from operations, which excludes stock-based compensation expense and merger-related costs, was $2.1 million for the second quarter of 2012, an improvement compared to a non-GAAP loss of $4.0 million during the second quarter of 2011.
Net Loss: Net loss attributable to common stockholders was $4.3 million, or $0.16 per basic and diluted share, for the second quarter of 2012. This compares to a net loss attributable to common stockholders of $6.9 million, or $1.42 per basic and diluted share, for the second quarter of 2011.
Non-GAAP net loss attributable to common stockholders, which excludes stock-based compensation expense, the accretion of dividends on redeemable convertible preferred stock, and merger-related costs, was $2.6 million for the second quarter of 2012, or $0.10 per basic and diluted share, compared to a non-GAAP net loss of $4.4 million for the second quarter of 2011, or $0.91 per basic and diluted share.
Balance Sheet and Cash Flow: As of June 30, 2012, Brightcove had $58.6 million of cash, cash equivalents and investments, a decrease from $60.6 million at March 31, 2012. Subsequent to the end of the quarter, we expect to use approximately $30 million for the acquisition of Zencoder.
Brightcove used $1.1 million in cash from operations and invested $927,000 in capital expenditures, leading to free cash flow of ($2.1) million for the second quarter of 2012. Free cash flow was ($1.5) million for the second quarter of 2011.
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 Second Quarter and Recent Highlights
Added 365 Express customers and 78 Premium customers during the quarter, including Parametric Technology, Quintiles, Chrysler and Princeton Review.
Signed a definitive agreement to acquire Zencoder, a leading cloud video encoding service with over 1,000 paying customers and developer of the popular Video.js free HTML5 video player. These offerings enhance and expand the Brightcove product line and create new opportunities for accelerating customer acquisition and upsell performance.
Introduced App Cloud Core, a new free edition of the company's pioneering app platform that empowers Web developers to use HTML5 and JavaScript to develop and operate rich native apps for Apple iOS and Google Android smartphones and tablets. App Cloud Core features an open source software development kit (SDK), powerful testing and debugging tools, unlimited cloud compilation, and real-time analytics for tracking app installations and usage.
Unveiled the App Cloud Dual-Screen Solution for Apple TV. The new solution enables media publishers to develop rich content apps for the iPhone and iPad that simultaneously control content, data and information presented on an HDTV while displaying synchronized content on the iPad or iPhone. The unique dual-screen solution leverages Apple's AirPlay technology, which allows viewers to use applications that simultaneously present content, interactive options and data on both the touch device and an Apple TV.
Announced a series of content management system (CMS) integrations enabling millions of website publishers to capitalize upon the rapid growth of online video. Using the Video Cloud platform to add video to CMS workflows is easy thanks to pre-built Video Cloud integrations available today for Adobe CQ5, Agility, Atex Polopoly, Drupal, Ektron, Microsoft Sharepoint 2010, PaperThin CommonSpot, Sitecore and WordPress.
Welcomed customers and partners from around the world to the Brightcove PLAY global customer conference in Boston. The event was sponsored by 21 partner organizations including Akamai, Adobe, IBM, AOL, and Google Doubleclick, and participation was up 30% over the prior year.
Business Outlook
Based on information as of today, July 26, 2012, the Company is issuing the following financial guidance:
Full Year 2012: The Company expects revenue to be $85.3 million to $86.0 million, and non-GAAP operating loss to be $10.5 million to $9.5 million. Assuming approximately 24.5 million shares outstanding, Brightcove expects its non-GAAP net loss per basic and diluted share to be $0.47 to $0.44.
Third Quarter 2012: The Company expects revenue to be $21.1 million to $21.6 million, and non-GAAP operating loss to be $3.1 million to $2.8 million. Assuming approximately 27.4 million shares outstanding, Brightcove expects its non-GAAP net loss per basic and diluted share to be $0.12 to $0.11.
With respect to the Company's expectations under "Business Outlook" above, the Company has not reconciled non-GAAP loss from operations or non-GAAP loss per share to GAAP loss from operations and GAAP loss per share because at this time the Company is unable to forecast the amortization of intangible assets related to the recent acquisition of Zencoder, which is a reconciling item between those Non-GAAP and GAAP measures. Accordingly, a reconciliation to GAAP loss from operations and GAAP loss per share is not available at this time.
