Breaking News

Lloyds Reaches $370 Million Settlement With Regulators Over Libor
Tweet TWEET

Brightcove Announces Financial Results for Fourth Quarter and Fiscal Year 2012

  Brightcove Announces Financial Results for Fourth Quarter and Fiscal Year
  2012

  *Fourth quarter revenue of $24.3 million, up 31% year-over-year
  *Fiscal year 2012 revenue of $88.0 million, up 38% year-over-year
  *$2.7 million of cash from operations drives positive free cash flow of
    $2.5 million for the fourth quarter
  *Executive transition plan announced; President and COO David Mendels will
    become CEO; Jeremy Allaire will become Executive Chairman of the Board

Business Wire

BOSTON -- January 31, 2013

Brightcove Inc. (Nasdaq: BCOV),  a leading global provider of cloud content
services, today announced financial results for the fourth quarter and fiscal
year ended December 31, 2012.

“Brightcove ended 2012 on a strong note, with our fourth quarter results once
again exceeding our revenue and profitability guidance,” said Jeremy Allaire,
Chairman and Chief Executive Officer of Brightcove. “2012 was an exciting year
for Brightcove. We consistently exceeded our financial objectives, acquired
Zencoder, significantly expanded our product footprint and value proposition,
added over a thousand customers to our Video Cloud platform including some of
the world’s largest media companies, and successfully completed our initial
public offering.”

Allaire added, “We are pushing the pace of innovation in the online digital
content delivery market, as evidenced by both Frost and Sullivan and ABI
Research naming Brightcove the industry’s leading Online Video Platform. We
continue to see a broad cross-section of companies recognizing the compelling
user experience online digital content can offer their customers, and we
believe Brightcove is well positioned to benefit from this growing demand in
an emerging multi-billion dollar market.”

Fourth Quarter 2012 Financial Highlights:

Revenue: Total revenue for the fourth quarter of 2012 was $24.3 million, an
increase of 31% compared to $18.5 million for the fourth quarter of 2011.
Subscription and support revenue was $23.2 million, an increase of 34%
compared with $17.3 million for the fourth quarter of 2011. Professional
services and other revenue was $1.1 million, compared to $1.2 million for the
fourth quarter of 2011.

Gross Profit: Gross profit for the fourth quarter of 2012 was $16.7 million,
compared to $12.9 million for the fourth quarter of 2011, and gross margin for
the fourth quarter of 2012 was 69%. Non-GAAP gross profit for the fourth
quarter of 2012 was $17.1 million, representing a year-over-year increase of
32% and a non-GAAP gross margin of 70%.

Operating Loss: Loss from operations was $4.6 million for the fourth quarter
of 2012, compared to a loss of $3.3 million for the fourth quarter of 2011.
Non-GAAP loss from operations, which excludes stock-based compensation
expense, the amortization of acquired intangibles and merger-related expenses,
was $1.4 million for the fourth quarter of 2012, an improvement compared to a
non-GAAP loss from operations of $2.2 million during the fourth quarter of
2011.

Net Loss: Net loss attributable to common stockholders was $4.7 million, or
$0.17 per basic and diluted share, for the fourth quarter of 2012. This
compares to a net loss attributable to common stockholders of $5.2 million, or
$1.02 per basic and diluted share, for the fourth quarter of 2011.

Non-GAAP net loss attributable to common stockholders, which excludes
stock-based compensation expense, the amortization of acquired intangibles,
merger-related expenses, merger-related income tax adjustments and the
accretion of dividends on redeemable convertible preferred stock, was $1.5
million for the fourth quarter of 2012, or $0.05 per basic and diluted share,
compared to a non-GAAP net loss attributable to common stockholders of $2.7
million for the fourth quarter of 2011, or $0.53 per basic and diluted share.

Balance Sheet and Cash Flow: As of December 31, 2012, Brightcove had $33.0
million of cash, cash equivalents and investments, an increase from $30.8
million at September 30, 2012. Brightcove generated $2.7 million in cash from
operations and invested $0.2 million in capital expenditures, leading to free
cash flow of $2.5 million for the fourth quarter of 2012. Free cash flow was
$(0.1) million for the fourth quarter of 2011.

Full Year 2012 Financial Highlights:

Revenue: Total revenue was $88.0 million for 2012, an increase of 38% compared
to $63.6 million for 2011. Subscription and support revenue was $84.3 million,
an increase of 40% compared with $60.2 million for 2011. Professional services
and other revenue was $3.7 million, an increase compared to $3.4 million for
2011.

Gross Profit: Gross profit was $60.6 million for 2012, compared to $43.3
million for 2011, and gross margin was 69% for 2012. Non-GAAP gross profit was
$61.2 million for 2012, representing a year-over-year increase of 41% and a
non-GAAP gross margin of 70%.

Operating Loss: Loss from operations was $15.4 million for 2012, compared to a
loss of $16.1 million for 2011. Non-GAAP loss from operations, which excludes
stock-based compensation expense, the amortization of acquired intangibles and
merger-related expenses, was $7.1 million for 2012, an improvement compared to
a non-GAAP loss from operations of $11.9 million for 2011.

Net Loss: Net loss attributable to common stockholders was $13.9 million, or
$0.57 per basic and diluted share, for 2012. This compares to a net loss
attributable to common stockholders of $23.3 million, or $4.75 per basic and
diluted share, for 2011.

Non-GAAP net loss attributable to common stockholders, which excludes
stock-based compensation expense, the amortization of acquired intangibles,
merger-related expenses, merger-related income tax adjustments and the
accretion of dividends on redeemable convertible preferred stock, was $8.3
million for 2012, or $0.34 per basic and diluted share, compared to a non-GAAP
net loss attributable to common stockholders of $13.4 million for 2011, or
$2.74 per basic and diluted share.

Cash Flow: Brightcove used $1.2 million in cash from operations and invested
$6.3 million in capital expenditures, leading to free cash flow of $(7.5)
million for the full year 2012. Free cash flow was $(11.6) million for 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 Fourth Quarter and Recent Highlights

  *Added 172 volume customers and 52 premium customers. New customers added
    during the quarter include Allstate, Aflac, Bristol Meyers Squibb,
    Georgetown University, Johnson & Johnson, Merck and Azubu.
  *Brightcove was selected as the leading Online Video Platform (OVP) by both
    Frost & Sullivan and ABI Research in their most recent industry reports.
    This marks the 2^nd consecutive year Frost & Sullivan has named Brightcove
    the leading OVP.

Fiscal Year 2013 Financial Highlights:

Business Outlook

Based on information as of today, January 31, 2013, the Company is issuing the
following financial guidance:

First Quarter 2013*: The Company expects revenue to be $23.5 million to $24.0
million, and non-GAAP operating loss to be $2.0 million to $2.3 million.
Assuming approximately 28.0 million shares outstanding, Brightcove expects its
non-GAAP net loss per basic and diluted share to be $0.08 to $0.10.

Full Year 2013*: The Company expects revenue to be $102 million to $105
million, and non-GAAP operating loss to be $4.5 million to $6.5 million.
Assuming approximately 28.4 million shares outstanding, Brightcove expects its
non-GAAP net loss per basic and diluted share to be $0.18 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
because the Company does not provide guidance for stock-based compensation
expense, merger-related expenses, merger-related income tax adjustments 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 reasonably predicted, the Company is unable to provide such
guidance. Accordingly, a reconciliation to GAAP loss from operations and GAAP
net loss per share is not available without unreasonable effort.

2013 Executive Transition Plan

Brightcove also announced today an executive transition plan for 2013. David
Mendels, currently President and Chief Operating Officer of Brightcove, will
become the Company’s Chief Executive Officer following the completion of the
first quarter 2013. Jeremy Allaire will continue to serve in his role as Chief
Executive Officer during this transition period and will become Executive
Chairman of the Board at the beginning of the second quarter of 2013, at which
time he will continue to be actively involved in the company’s strategic
planning, product development and key customer relationships.

Mendels has served as Brightcove’s President and Chief Operating Officer since
2010. Prior to joining Brightcove, Mendels was Senior Vice President and
General Manager of Adobe’s Business Productivity Unit, where he was
responsible for over $1 billion in revenue from products including Acrobat,
Connect, LiveCycle and Flex. He joined Adobe following their acquisition of
Macromedia, where he had successive executive roles including in Sales,
Marketing, Business Development/Corporate Strategy and as General Manager and
Executive Vice President of Product for the company’s Web Publishing business
unit.

“As a founder of Brightcove, I couldn’t be prouder of the company’s
accomplishments over the last eight years, which has put us in a position to
cross the $100 million in revenue milestone during 2013,” said Jeremy Allaire.
“One of the pillars of our success has been the strength of the team that we
have put in place, including David Mendels, who has played a critical role in
leading Brightcove’s sales, marketing and product development processes as our
President and Chief Operating Officer. David is the right person to lead
Brightcove into its next stage of growth and I am thrilled to have an
executive with his background and experience succeeding me as CEO. I look
forward to continuing to work with David.”

“I’m honored to be named CEO of Brightcove and am excited to lead the company
in its next phase of growth as we work to fulfill its mission of publishing
the world’s professional digital media,” said David Mendels, President, Chief
Operating Officer and Chief Executive Officer-Designate. “I believe we have a
great opportunity to further expand our long-term leadership position in this
dynamic market and to create a very large company over time.”

Conference Call Information

Brightcove will host a conference call today, January 31, 2013, at 5:00 p.m.
(Eastern Time) to discuss the Company's financial results and current business
outlook. To access the call, dial 877-705-6003 (domestic) or 201-493-6725
(international). A replay of this conference call will be available for a
limited time at 877-870-5176 (domestic) or 858-384-5517 (international). The
replay conference ID is 407069. A replay of the webcast will also be available
for a limited time at http://investor.brightcove.com.

About Brightcove

Brightcove Inc. (NASDAQ: BCOV), a leading global provider of cloud content
services, offers a family of products used to publish and distribute the
world’s professional digital media. The company’s products include Video
Cloud, the market-leading online video platform, App Cloud, a pioneering
content app platform, and Zencoder, a leading cloud-based media processing
service and HTML5 video player technology provider. Brightcove has more than
6,350 customers in over 60 countries that rely on Brightcove cloud content
services to build and operate media experiences across PCs, smartphones,
tablets and connected TVs. For more information, visit
http://www.brightcove.com.

Forward-Looking Statements

This press release includes certain “forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995, including
statements concerning our financial guidance for the first fiscal quarter of
2013 and full year 2013, our position to execute on our growth strategy, our
ability to expand our leadership position and market opportunity and the
execution of our executive transition plan. These forward-looking statements
include, but are not limited to, plans, objectives, expectations and
intentions and other statements contained in this press release that are not
historical facts and statements identified by words such as "expects,"
"anticipates," "intends," "plans," "believes," "seeks," "estimates" or words
of similar meaning. These forward-looking statements reflect our current views
about our plans, intentions, expectations, strategies and prospects, which are
based on the information currently available to us and on assumptions we have
made. Although we believe that our plans, intentions, expectations, strategies
and prospects as reflected in or suggested by those forward-looking statements
are reasonable, we can give no assurance that the plans, intentions,
expectations or strategies will be attained or achieved. Furthermore, actual
results may differ materially from those described in the forward-looking
statements and will be affected by a variety of risks and factors that are
beyond our control including, without limitation, risks associated with our
history of losses, our limited operating history; expectations regarding the
widespread adoption of customer demand for our Video Cloud, App Cloud and
Zencoder products; our ability to expand the sales of our products to
customers located outside the U.S., keeping up with the rapid technological
change required to remain competitive in our industry, our ability to retain
existing customers; our ability to manage our growth effectively and
successfully recruit additional highly-qualified personnel; and the price
volatility of our common stock, and other risks set forth under the caption
"Risk Factors" in the Company’s final prospectus related to its initial public
offering filed pursuant to Rule 424b under the Securities Act with the
Securities and Exchange Commission on February 17, 2012, as updated by our
subsequently filed Quarterly Reports on Form 10-Q and our other SEC filings.
We assume no obligation to update any forward-looking statements contained in
this document as a result of new information, future events or otherwise.

Non-GAAP Financial Measures

Brightcove has provided in this release the non-GAAP financial measures of
non-GAAP gross profit, non-GAAP gross margin, non-GAAP loss from operations,
non-GAAP net loss attributable to common stockholders and non-GAAP basic and
diluted net loss per share attributable to common stockholders. Brightcove
uses these non-GAAP financial measures internally in analyzing its financial
results and believes they are useful to investors, as a supplement to GAAP
measures, in evaluating Brightcove's ongoing operational performance.
Brightcove believes that the use of these non-GAAP financial measures provides
an additional tool for investors to use in evaluating ongoing operating
results and trends and in comparing its financial results with other companies
in Brightcove’s industry, many of which present similar non-GAAP financial
measures to investors. As noted, the non-GAAP financial results discussed
above exclude stock-based compensation expense, the accretion of dividends on
redeemable convertible preferred stock, amortization of acquired intangible
assets, merger-related costs and merger-related income tax adjustments.
Merger-related costs include fees incurred in connection with closing an
acquisition in addition to fees associated with the retention of key
employees. Merger-related income tax adjustments include one-time charges or
benefits that are incurred in connection with an acquisition. Non-GAAP
financial measures have limitations as an analytical tool and should not be
considered in isolation from, or as a substitute for, financial information
prepared in accordance with GAAP. Investors are encouraged to review the
reconciliation of these non-GAAP measures to their most directly comparable
GAAP financial measures. As previously mentioned, a reconciliation of our
non-GAAP financial measures to their most directly comparable GAAP measures
has been provided in the financial statement tables included below in this
press release. The Company’s earnings press releases containing such non-GAAP
reconciliations can be found on the Investors section of the Company’s web
site at http://www.brightcove.com.

Brightcove Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
                                                       
                                           December 31,        December 31,
                                           2012                2011
Assets
Current assets:
Cash and cash equivalents                  $  21,708           $  17,227
Short-term investments                        8,264               -
Restricted cash                               102                 -
Accounts receivable, net of allowance         18,956              14,693
Prepaid expenses                              1,497               1,560
Deferred tax asset                            187                 -
Other current assets                         1,490             1,774     
Total current assets                          52,204              35,254
Long-term investments                         3,069               -
Property and equipment, net                   8,400               6,079
Intangible assets, net                        10,387              -
Goodwill                                      22,018              2,372
Deferred initial public offering costs        -                   2,544
Restricted cash                               201                 233
Other assets                                 714               856       
Total assets                               $  96,993          $  47,338    

Liabilities, redeemable convertible
preferred stock and stockholders'
equity (deficit)
Current liabilities:
Accounts payable                           $  619              $  2,026
Accrued expenses                              11,639              8,773
Current portion of long-term debt             -                   833
Deferred revenue                             18,961            13,418    
Total current liabilities                     31,219              25,050
Deferred revenue, net of current              255                 354
portion
Long-term debt                                -                   6,167
Other liabilities                             1,027               77
Redeemable convertible preferred stock       -                 424       
warrants
Total liabilities                             32,501              32,072
                                                               
Redeemable convertible preferred stock        -                   120,351
                                                               
                                                               
Stockholders' Equity (Deficit):
Common stock                                  28                  5
Additional-paid-in-capital                    167,912             -
Accumulated other comprehensive income        572                 1,056
Accumulated deficit                          (105,862  )        (107,254  )
Total stockholders’ equity (deficit)          62,650              (106,193  )
attributable to Brightcove Inc.
Non-controlling interest in                  1,842             1,108     
consolidated subsidiary
Total stockholders’ equity (deficit)          64,492              (105,085  )
Total liabilities, redeemable
convertible preferred stock and            $  96,993          $  47,338    
stockholders' equity (deficit)
                                                                            

Brightcove Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
                                                           
                         Three Months Ended          Twelve Months Ended
                         December 31,                December 31,
                          2012       2011         2012        2011    
Revenue:
Subscription and         $ 23,200     $ 17,293       $ 84,257      $ 60,169
support revenue
Professional
services and other        1,138      1,243        3,716       3,394   
revenue
Total revenue              24,338       18,536         87,973        63,563
Cost of revenue:
(1) (2)
Cost of
subscription and           6,303        4,401          22,553        15,478
support revenue
Cost of
professional              1,300      1,234        4,831       4,744   
services and other
revenue
Total cost of             7,603      5,635        27,384      20,222  
revenue
Gross profit              16,735     12,901       60,589      43,341  
Operating
expenses: (1) (2)
Research and               5,213        4,088          18,725        15,267
development
Sales and                  10,543       8,739          38,725        31,564
marketing
General and                4,968        3,401          16,734        12,640
administrative
Merger-related            617        -            1,852       -       
Total operating           21,341     16,228       76,036      59,471  
expenses
Loss from                  (4,606 )     (3,327 )       (15,447 )     (16,130 )
operations
Other expense, net        -          (332   )      (494    )    (1,054  )
Loss before income
taxes and
non-controlling            (4,606 )     (3,659 )       (15,941 )     (17,184 )
interest in
consolidated
subsidiary
(Benefit from)
provision for             (267   )    (4     )      (3,489  )    90      
income taxes
Consolidated net           (4,339 )     (3,655 )       (12,452 )     (17,274 )
loss
Net income
attributable to
noncontrolling            (312   )    (129   )      (734    )    (361    )
interest in
consolidated
subsidiary
Net loss
attributable to            (4,651 )     (3,784 )       (13,186 )     (17,635 )
Brightcove Inc.
Accretion of
dividends on
redeemable                -          (1,410 )      (733    )    (5,639  )
convertible
preferred stock
Net loss
attributable to          $ (4,651 )   $ (5,194 )     $ (13,919 )   $ (23,274 )
common
stockholders
                                                                   
Net loss per share
attributable to
common                   $ (0.17  )   $ (1.02  )     $ (0.57   )   $ (4.75   )
stockholders—basic
and diluted
                                                                   
Weighted-average
shares —basic and          27,858       5,067          24,626        4,900
diluted
                                                                   
(1) Stock-based
compensation
included in above
line items:
Cost of
subscription and           39           12             125           52
support revenue
Cost of
professional               37           29             116           117
services and other
revenue
Research and               279          80             687           367
development
Sales and                  556          215            1,606         1,008
marketing
General and                1,264        774            3,309         2,653
administrative
                                                                   
                                                                   
(2) Amortization
of acquired
intangible assets
included in the
above line items:
Cost of
subscription and           253          -              380           -
support revenue
Cost of
professional               -            -              -             -
services and other
revenue
Research and               10           -              15            -
development
Sales and                  167          -              250           -
marketing
General and                -            -              -             -
administrative
                                                                             

Brightcove Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
                                                            
                                              Twelve Months Ended December 31,
Operating activities                            2012              2011    
Net loss                                      $  (12,452  )        $ (17,274 )
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization                    4,666               2,992
Stock-based compensation                         5,843               4,197
Deferred tax liabilities                         (3,406   )          -
Change in fair value of warrants                 (28      )          139
Provision for reserves on accounts               137                 52
receivable
Amortization of premium on investments           133                 -
Amortization of deferred financing               44                  12
costs
Loss on disposal of equipment                    83                  46
Loss on sale of investments                      -                   146
Changes in assets and liabilities:
Accounts receivable                              (4,437   )          (5,438  )
Prepaid expenses                                 77                  (311    )
Other current assets                             153                 (1,588  )
Other assets                                     90                  (452    )
Accounts payable                                 (1,321   )          800
Accrued expenses                                 3,732               1,466
Deferred revenue                                5,477             8,014   
Net cash used in operating activities           (1,209   )         (7,199  )
                                                                   
Investing activities
Cash paid for acquisition, net of cash           (27,210  )          -
acquired
Sales of investments                             -                   2,732
Purchases of investments                         (14,063  )          -
Maturities of investments                        2,596               -
Purchases of property and equipment              (6,299   )          (4,064  )
Capitalization of internal-use software          (24      )          (354    )
costs
Decrease in restricted cash                     -                 321     
Net cash used in investing activities           (45,000  )         (1,365  )
                                                                   
Financing activities
Proceeds from exercise of stock options          1,347               475
Proceeds from issuance of common stock
in connection with initial public                56,762              -
offering, net of offering costs
Deferred initial public offering costs           -                   (2,287  )
Borrowings under term loan                       -                   7,000
Repayments under term loan                      (7,000   )         -       
Net cash provided by financing                  51,109            5,188   
activities
                                                                   
Effect of exchange rate changes on cash         (419     )         262     
                                                                   
Net increase in cash and cash                    4,481               (3,114  )
equivalents
Cash and cash equivalents at beginning          17,227            20,341  
of period
Cash and cash equivalents at end of           $  21,708           $ 17,227  
period
                                                                             

Brightcove Inc.
Reconciliation of GAAP Gross Profit, GAAP Loss From Operations, GAAP Net Loss
and GAAP Net Loss Per Share to
Non-GAAP Gross Profit, Non-GAAP Loss From Operations, Non-GAAP Net Loss and
Non-GAAP Net Loss Per Share
(in thousands, except per share amounts)
(unaudited)
                                                        
                         Three Months Ended          Twelve Months Ended
                         December 31,                December 31,
                           2012        2011       2012        2011    
GROSS PROFIT:
GAAP gross profit        $  16,735      $ 12,901     $ 60,589      $ 43,341
Stock-based                 76            41           241           169
compensation expense
Amortization of
acquired intangible        253         -          380         -       
assets
Non-GAAP gross           $  17,064     $ 12,942    $ 61,210     $ 43,510  
profit
LOSS FROM
OPERATIONS:
GAAP loss from           $  (4,606  )   $ (3,327 )   $ (15,447 )   $ (16,130 )
operations
Stock-based                 2,175         1,110        5,843         4,197
compensation expense
Merger-related              617           -            1,852         -
expenses
Amortization of
acquired intangible        430         -          645         -       
assets
Non-GAAP loss from       $  (1,384  )   $ (2,217 )   $ (7,107  )   $ (11,933 )
operations
NET LOSS:
GAAP net loss
attributable to          $  (4,651  )   $ (5,194 )   $ (13,919 )   $ (23,274 )
common stockholders
Stock-based                 2,175         1,110        5,843         4,197
compensation expense
Accretion of
dividends on
redeemable                  -             1,410        733           5,639
convertible
preferred stock
Merger-related              617           -            1,852         -
expenses
Amortization of
acquired intangible         430           -            645           -
assets
Merger-related
income tax                 (93     )    -          (3,406  )    -       
adjustments
Non-GAAP net loss
attributable to          $  (1,522  )   $ (2,674 )   $ (8,252  )   $ (13,438 )
common stockholders
GAAP basic and
diluted net loss per
share attributable       $  (0.17   )   $ (1.02  )   $ (0.57   )   $ (4.75   )
to common
stockholders
Non-GAAP basic and
diluted net loss per
share attributable       $  (0.05   )   $ (0.53  )   $ (0.34   )   $ (2.74   )
to common
stockholders
Shares used in
computing GAAP and
Non-GAAP basic and
diluted net loss per        27,858        5,067        24,626        4,900
share attributable
to common
stockholders

Contact:

Investor Contact:
ICR for Brightcove
Brian Denyeau, 646-277-1251
brian.denyeau@icrinc.com
or
Media Contact:
Brightcove, Inc
Kristin Leighton, 617-245-5094
kleighton@brightcove.com