BCOV - Earnings call transcript Q4 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings and welcome to the Brightcove Fourth Quarter and Fiscal Year 2019 Earnings Call. At this time, all participants are in a listen-only mode. The question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded.

I will now turn the conference over to your host, Brian Denyeau of ICR.

Brian Denyeau

Brightcove's XXXX to Call. welcome afternoon, Fourth Earnings Quarter Good our results issued Today, the in press we'll discuss announced release close. after market With Jeff are and Chief the Chief Officer. on Financial Officer; Brightcove's Rob Ray, Executive Noreck, me Brightcove's call

including year related XXXX, Private During that our statements Act Securities are execute pursuant Litigation financial may make full Harbor XXXX Safe for and cash XXXX, first free that business to the forward-looking Reform on to the the to considered provisions market will to of profitability call, made concerning and quarter we expected statements flow, grow our be of guidance go of position positive and strategy. the our our the

upsell acquire Our our well ability to customers. our new position, expand and customers, ability existing as leadership to our maintain as to ability

Forward-looking our identified statements we These upon of date. views as anticipate upcoming words future only any similar should subsequent representing expect, our be views statements and as we because expectations. may indications today not of be or reflect as with often reflecting of

risks subject from of results a variety to that expectations. uncertainties statements are cause These differ could to materially and actual

that the to annual of filings. discussion XX-K, report important actual affect recently factors risk refer and results. Form Please For updated those our most by other as in and contained material filed SEC on other

to we Also non-GAAP financial certain during call, measures. the refer of course today's

press in be a issued versus found There's available www.brightcove.com. website results market our our at release GAAP close reconciliation schedule which on showing after currently today, can non-GAAP

strategy. as for XXXX. as an our quarter year will financial for regarding with the a of Jeff full quarter update review Rob the summary well operations results, additional finish results agenda and fourth details terms on outlook In will our and our first provide of our call, of today's

me let turn to Jeff. over the that, call With

Jeff Ray

milestone with us quarter to full the And Brian. important thanks Beacon. Brightcove The marked year fourth fourth results. joining of discuss all for and you our an to today Thanks, of quarter release

joined business Brightcove The customers in the and we designed our the plan for am markets. have purpose-built greater target I to delivering our to for value more products first deliver focused other and aligned and portfolio I growth. our on since team working of in And strategic enhance the new of we Beacon XXXX of applications the company. these rollout user proud profitable the to experience on execution to go on faster drive initiatives. been enter market our Brightcove

revenue XX% reviewing $X.X $X.X Let's XXXX. is financial of results quarter year-over-year the $XX.X million, start quarter fourth adjusted for briefly up EBITDA and We fourth in the by up of our was million from delivered quarter. which million,

fourth While our sales line financial we experienced guidance challenging expectations quarter, in with our results were in quarter. the

in to product earnings As We on reorganization go a an our team invest decided on half to of the discussed in our quickly to fully market certified as we we XXXX with order we the enter could the year. executed as team. in reorganization second trained call, and last aggressive of

necessary long they growth all these of but term But our later impact the walk term overall year. are we recognize we X% in completed changes, deliver will XXXX market the through X% the will second Brightcove's impacted to financial the our challenging for quarter the the had with on improve you details call, were plan. for revenue targeting XXXX operating and successfully We on best to believe to strategic aligned our go results. in and sales to this will actions growth. sales near performance half changes growth Rob fully performance. now staff These and of fourth performance our We've XXXX. outlook impact The our enter organization, revenue

digit double deliver In to XXXX, we expect backlog reported growth.

we that drive confidence Let can me sales gives growth improved year. this what us explain

enter with we year product First, history. best our the in portfolio this

are is investments our applications platform, players. core value. meaningful designed which years the an made with believe is the being quick in to for delivers the This to the video at us which invest business we exciting has performance drive strengthen in standard think specific for of fast have become in early Brightcove enabled democratized adoption to user strong that presents in for to throughout most five time foundation for of use mind the in the our enterprise nines cases opportunity to applications. enterprise, Video We stages we reliability recent market, and

the for launched that with OTT have custom-built video experiences the October SaaS code across new new are any applications of at the Brightcove OTT requires Brightcove that to engagements. our was growing extensive these platforms extensive historically Beacon Brittle to services enable premium professional cost been experience our game first of companies Beacon, and OTT rapidly. time-consuming by they leveraging end effectively quickly changes Demand we applications. deliver device. But

that cases across and models they update adapt their SVoD customers AVOD devices. models to changes our use configuration as business all their example, For settings automatically monetization simple evolve, to from can through

Beacon, to customers in viewers. the already one content hit class fourth the product use, successful OTT to sales world allow which to history. point is an looking to the positioned that powerful provider We've most for and any exciting quarter, yet ground a deliver number our of solutions that success early easy of experience in Beacon are proof be launches running their has generated it's with Brightcove Brightcove

offerings. to their Tele-Quebec, language television a consumer Beacon new One They is Brightcove OTT of network. educational early public help will use these Canadian adopters direct French to launch

position to Brightcove ability a of range leadership target the the broad was our reach as reliability, devices. well audiences and market, selected on as of in because our

also Beacon, Brightcove In addition this quarter. we Brightcove campaigns to introduce earlier

to data campaigns built ability purpose Brightcove insightful driven easily benchmarks. generation yield new Our compare marketers against demand the create applications performance focused variety video a of marketing. industry marketing video campaign that with enables to on

seamlessly daily workflows, tools. campaigns maintain team from overall business from app existing optimize user and their on generate, then fit our now how principles, a built experience all their and efficiency, the locations mind. Brightcove with first campaign marketing needs can that built product into designed boost product and and is our meaning to Marketers specific to one understand with went ground in up work, they to design site our thinking customer

new phase result the everything the customers performing The examples any of is cited have a video ever built. These with Airstream technologies a of it. do. product to unlike customer example is with see of critical of out integration use, how the early how is their capabilities Both is product. is product understand campaign adopters at box and this Brightcove who quickly are such of enablement marketing campaigns we center great Brightcove and demand content HubSpot, of and and we analytics ease engaging as success

Overall, will optimistic on Brightcove drive XXXX. through product been early feedback growth the it as move we positive, and campaign has additional we're very

Our of the impending innovation commitment coming application months. to continues purpose-built our with third release in the

to the XXXX push additional our We with value innovation of beyond capabilities for create will and in customers. that pace continue

certifications six months. to least these invested revenue We've We've The have at with nine second complete, is officer thing and XXXX software leadership leverages and build past team enterprise reps a our new selling heavily the business products. attracted decade over chief frame, experience. contributing sales, of of many company understanding the is bring our value a to to sales the have training strong in under upgraded in Brightcove organization We've sales sales growth we new deep out a to Hansen Rick new the reps implemented time that capabilities. who sales that that our substantially in now foundation our of

instituted We're cases on compared But our expand seeing comprehensive department video use account also rapidly driving within strategic traditional a department. enterprises. that will of to date, team approach We've by selling focus to customer more engagements

be in most company are will position their XXXX. focus in video not choice sales the for believe a unique enterprises this is for Brightcove at needs, video partner our and We of looking be key organization a wide. to deployments

sales the the of transactions that drive more that users approach multiyear confident multiproduct, will are within enterprise. strategic, increases number Brightcove We

exciting joined progress build launch we excited across on all gains portfolio on a the this program. to we is important solutions we opportunity meaningful us first how the also make quarter, productivity new true believe that to Marketo's of it our We profitability. there's drive and Last AWS on time, And we out channel marketplace. recently, parts available spend. also increase Our At generate to opportunity time. return were talked organization about for Brightcove strategy significant make a we the application an the points gives existing

profitable new We the continue scale at growth. to we We're have can investing innovation spending generate maturity, where and accelerate product the in consistent, at levels. growth ability exciting current revenue and

our rapidly reflect business I fourth some a that great solution the would the video leading world's now positive DocuSign, in and choice. needed Brightcove the growing flawlessly that highlight the market. internally wins e-signature scale could quarter momentum from video obvious externally with and was this distribute company, provider to and like

needed DocuSign of Brightcove because events. scalability. its old our look company to its the reliable momentum and and a to Additionally, DocuSign partner live global trusted provider stream replacing reliability

their Instagram a cookery looking them new Brightcove cost is player based highly experience started help will websites. and content. for Brightcove the for for Kitchen viewing and also recipes. customizable Mob low on that the and new brand improve healthy of our success would students chose UK that reliable They originally judge fast on growing their analytics

subsidiary strategy engaging cultural monetization a destination has who revenue in a Format online Video is Format the to its launches, of by is new expertise and set travel, up needed Format experiences. food streams. for content their across After reliable a a will diversify partner region. ASEAN AirAsia user and is part be and key it and

across Rakuten video Brightcove's the role their and that Japanese its online local API's played a across stream shopping Incorporated manage Brightcove been in and retail is company Japan. long a uses enabled number extensive large videos online choice. company commerce a a electronic properties customer support Additionally, including standing in we the has to as Rakuten its largest websites. of and platform of

have further financial with team. across properties. go-to-market To year applications revamped they their up, another three Brightcove, was Brightcove for videos renewal, our years digital expand use the business, XXXX we an exciting and to commitment their stabilized with increased wrap new of for important developed recent this the With Brightcove

now completed work We needed position substantially have company the the for success. to

start profitability. hard to I the to that year our this more is opportunity you for forward and faster have progress bring together and improved throughout on XXXX the never I drive year. our updating confident look about will felt work growth success. we

that, With turn over Rob. walk to through you the numbers. the call me let Rob, to

Rob Noreck

afternoon, subscription first with review the full and our good of outlook everyone. And quarter year our I and the within with revenue will revenues and the will our was quarter. I fourth million, range, And million. Jeff. fourth begin $X revenue you, $XX.X Total further million which support was then a Thank $XX.X revenue XXXX. in finish detailed for quarter down services guidance breaking professional was

metric subscription aggregate XX-month backlog, the XX% We performance performance On committed to next investors define the generated we XX-month believe XX% $XXX.X track our internationally. was X% basis, backlog during in geographic amount useful which an quarter for a million. related in our overall, we America strategic obligations a North future our represents to XX XX% This initiatives. as revenue is on increase organically. the and of months, year-over-year of

a and during more, generated Asia Breaking of of Japan XX% little revenue revenue Europe revenue quarter. XX% down international generated and our the Pacific

me quarterly basis. metrics a on supplemental to the turn we Let share now

low below changes retention driver part, of was the retention renewal. Our of The at rate of in Jeff our rate was recruiting which earlier. is lower fourth sales target mid some the largest range time the of dollar quarter XX%, lower referenced in upsells to the Reflecting XXs.

of fourth end as which of X,XXX was customer Our customers. the the at classified premium X,XXX quarter were count

Looking at customer our ARPU, within base. our premium

averaged premium Our starter annualized our year-over-year, for per in entry excludes which $XX,XXX, up which annualized level was revenue. $X,XXX customer revenue and pricing XX% was customers,

a at quarter. million our gross was result a loss $X.XX Looking the million, basis, was and was on GAAP $X.X for $XX.X loss operating profit share per

in ago in and revenue our period quarter and Subscription generated XX% represented to in margin million from support non-GAAP gross the a in of represented was quarter, of quarter of to the in $XX.X non-GAAP XX% a fourth the gross Non-GAAP million from was XXXX. XX% income gross compared the $XXX,XXX million compared quarter of fourth operations XX%. and of profit results, year margin our approximately fourth in $XX.X income total gross margin quarter the XXXX. Turning revenue to to non-GAAP a operations $X.X fourth compared the

$X.XX Non-GAAP in million the EBITDA outstanding. breakeven share $X.X weighted based quarter. in million within fourth Adjusted on quarter, on net average average million ago to weighted ago for the range compares year year XX.X period, was the shares our XX.X outstanding compared guidance shares in per $X.X was income and This to the million period.

On full $XXX.X basis, gross year outstanding. was and $XX.X GAAP $XXX.X our was was operating on $XX shares share $XXX income at shares XXXX was up total per million million was was revenue weighted On year-over-year. Looking average million. million, was a XX% loss a $X.XX, based XX.X weighted on basis, Income results, million, profit based million in $X.X million EBITDA net was $X.XX average operations million share $X.X profit from non-GAAP gross outstanding. adjusted loss per

cash to with Turning sheet equivalents cash flow. and We and cash million. quarter the the of ended balance $XX.X

internal software. taking flow account $X.X quarter million $X.X cash fourth into expense cash in use and capital capitalized in generated the we in operations outflows During from million $XXX,XXX.After free interest

the and year. our for XXXX. guidance to the I'd now to our would for I providing start like quarter first with year full finish like full by outlook

Jeff mentioned, to the in revenue in on the changes our we half made proactive XXXX. growth will organization sales XXXX of our As weigh second

reported our metric. revenue changes see in Given the ratable first made we our business backlog to the of investors recognition have positive the model, impact will

and mentioned, we position us digit XXXX reported will in backlog are beyond. growth As to growth revenue drive Jeff which XXXX, faster double targeting in

For we million of $XXX approximately million. of $XX to services includes million the are targeting full year revenue revenue. This XXXX, professional $XXX

million quarter, in approximately to million anticipating are compares overage We year. or $X.X million revenue This of per $X.X XXXX. $X.X a

$X.X million non-GAAP $XX million adjusted operating million. In of million to of and $XX profitability, terms we of $XX.X EBITDA to expect income

In expect million XXX reflects At share EBITDA midpoint $X.XX XX.X non-GAAP based per expansion. income points we margin to weighted on adjusted of the average of shares addition, net outstanding. $X.XX, our guidance basis

full million. free flow, to of flow in year $X range cash expect For $X cash we a million

services adjusted and to the share $X.XX are $X.XX of $X.X $X.X EBITDA per to to From of $X.X perspective, on $X.X the approximately in million a million average $XX.X be million is to revenue. income million million, income non-GAAP including of weighted shares Non-GAAP Turning first of net million outstanding. professional quarter, targeting million expected to to million. we we revenue based $X.X expect profitability $XX.X range of operating XX.X

continue initiatives. to product we up history. executing wrap strategic the progress XXXX To enter make strongest our We in portfolio our with on

year, profitable we and begin revenue growth are set delivering driving we We that better focus the have the and time, for products same go-to-market on bookings performance place this committed the stage team in At faster in meaningful can to XXXX delivering adjusted beyond. and growth. as consistent in improvements EBITDA margin

take that With will Operator, questions. to we we are ready now Q&A. your begin

Operator

[Operator FBR. Instructions] Krowl Lee the line B. question comes of of first The Riley from

Lee Krowl

taking and turn, just and guys Just you improve out are of to Maybe, perhaps on maybe executional of like reorganize, you kind had kind a mix want you of between then retention? of dynamics as the loss kind looks just the an outright maybe just customer of start reiterate issues about steps some retention, overall maybe roll customers, in to first talk off year-end kind the there.

Rob Noreck

the is question. This for Thanks Rob.

In about team. was to that the I script with it rate, terms making that it sales kind renewal, the related time on of a talked at bit. retention of execution the the in The little real and the a upsells retention we're was changes the rate of sales issue issue

up we're to get. place execution end Going the to the XXs for expect as mid we've for that range, got forward the in year team in to looking that we that sales low model

Lee Krowl

QX? Ooyala, most housekeeping cycle Ooyala through then work earlier Got us, your do And you first just while as or lap around renewal comparison customers, those the in item kind of then, we remind just it. or this on then can of as laughed also a comparisons revenue of the contract execute as you we perhaps And the quarter? face we

Rob Noreck

Yes, so lap. about $X we're terms then million for of we and for the where we're the quarter, are, Ooyala in through mostly just

for on our Brightcove either the factored the be point into Most on at just within this point. QX. guidance or paper at are this customers So they're revenue of year will

Lee Krowl

then it. me. from last just Got question And

newer something elements three Do shifting tend year have highlighted around new? thoughts Just curious one products. contracts of year the they that your month Rakuten you and that to cycle a beyond XX extending on as is kind or, a renewal these you contract. maybe about duration Are planning that of to just talk Is you on ARPU? about the monetization onto think

Jeff Ray

a One think is the little be Yeah, about as we there. tend do stickier. aspects bit couple to a there's of products it,

emphasis So, retention we're that from standpoint. going real through for second with the a higher need down on of a then And the what a execution is expecting move that to if multiyear we towards deal those back get and going the always we to They add as put those forward, sales win piece value starting customers rate conversation year that's working And in one deal. real to products. be really to customer.

it's with and of going start. the sales deal that combination So kind in of leading multiyear of execution stickier a products to

Lee Krowl

Thanks my Got for taking it. guys. questions,

Operator

[Operator Instructions] of Frankel & Company. Please Our of your with comes from questions. proceed question Steven the next line Dougherty

Steven Frankel

other a the the losing, kind decent Good you rate it churn, for sequential terms lack equation? insights losing last but terms afternoon. drove of retention that a go into the understand of the bit customers question. I'd in number there you're in of of like characterize added, of of on to upsells customers of looked little any you you're drop. customers could size premium part the the the that I like was back And Maybe us or

Rob Noreck

thanks, Yeah, Steve.

the of there's happening the of losing, customers. customers those with that size unusual we're terms In nothing

last with flat roughly quarter. were we that ARPU our from see can You

the revenue customers. to and we as as don't overall for on So driving bookings customer really customers. through the we much on focus the we're account And maintaining ARPU that the focus $XX,XXX $XX,XXX

Steven Frankel

was Again mostly the up decent that? to that base retaining to a legacy Ooyala you've And customers? a then job Ooyala opposed the base churn, it follow done of as in those

Jeff Ray

terms to no Yeah, plan. in be of we're we Ooyala need where in terms customers of

Steven Frankel

on. one And last those to get you to Is happen subscription was a everybody going dry and didn't there's the was something support. in couple going margin Ooyala expansion which or I platform, that not of in going about getting And QX. talked the on quarters things were you of over know else to function customers that cut Brightcove

Rob Noreck

everyone that's Now, getting of a not really question yet. over cut just

expect by QX. Brightcove via fully We of the platform the customers majority on end of the the

Jeff Ray

Ray. those Jeff to it's plan Steve, tracking We're on migrating customers.

In a were fact, back bit the model was to a put when of more liked the a business stable we in before. And they product the ahead of And features little initial that to committed and it that support pleased told plan together. satisfy that and migrated we functions a They have good experience. customers us being lot the I'm engineering the has enhancements environment. delivered those to to also needs. team We've had our core with work come

Steven Frankel

keep you as I new it this script. another numbers. some not be? tough Or year it's these contracts start the relative going in be half maybe of do Is a transition Jeff need year? to this to times we a in through that the slog a backlog in until committed And thinking seeing term kick probably know, to how acceleration XXXX and in. patient But growth insight using growth us we to some to should but we you just is get dozen give acceleration it Okay, digit use into we're backlog double drive

Jeff Ray

hot fair. with was of topic time it. week. we last a It's on And Board believe it the a And lot spent me,

and be The putting into Guadalajara. DevOps, enablement back done, the can and new of offshore engineering been launch haven't. the about we step have new sales putting and first sales successfully we of models, in management and into in leadership structure, CloudOps we ourselves, training, good and and completion looked anything all of we new one We touched everything. asked kind one acquisitions, gen impacted has at and certification, bringing step missed global organizational feel build site back into products As look Everything done product marketing right that and to models, team, one demand team, out that. team, our global team,

We results. are with not the satisfied

everything look touching. are also we at touch we that can the that We fact

go-to-market to news the right we good The is in that the year other together deliver segmentation of planning reassess and one work thing was that results, market going strategy. right were we was we for our the our segments back for And the as everything we putting thought to opportunity and the took better the year, to this on be. indeed was did still us fall 'XX are markets

was this, complete The us sales transformation. let's right. again, thing it that consciously hurt we let's the But do said,

the we we've and well Let's bringing go Year not excited New We band about with rip that the to grow very we half a get in strategy. work let's into ready believe aid, market. products working product complete me, right we hard way in hearted you done, the do identified to the the believe this we're And community. it are know beyond the let's in all the to off grow. the segments, investor We're set expectations that

Steven Frankel

module you And you incremental this think prebuilt. going quarter about that? go-to-market investment or with forward another last you Are do announced

Jeff Ray

it we done and to into do. new up things there's evidence the that enough validation. with which strategic that sell into Board something opportunities. focus higher and It's we Number definitely because can overnight, deliver material a good, the won't a the outcome Board two gave Because will in and go back focus And much we right as it were I one. number it's going pretty that but Yes, that. pleased to the will and business, time see it's of a that thumbs Again, will it's And the It's we the the impact research facts ROI not thing strategy two, up, spent it expansion OVP. are, don't stickiness. that markets XXXX. we new it's to profound on on the base. is open drive believe support also. that just we having with a get on through the But

Steven Frankel

VAR Jeff, where that or channel? are is another out that on that's pushed that's in gotten item contributes something further? Is XXXX, a little you the to revenue

Jeff Ray

found the specifically needed can VARs reseller work on that that we to market, products as value sell. We said did and what we add the have you fit

know, Beacon sell that with can a relationship to consumers sophisticated And is resellers relatively And on we're have VAR product so opportunity fact, and can sell. of. something AWS definitely give an Launching that in something advantage with is encouraged resellers. by because we so Campaign, you be take the engage the to now community a that marketplace, marketplace, us and of the is opportunity definitely something their can to it AWS Campaign

sure just really that So make for and resellers recruit transactions we products wanted immediate and deliver sustainable them. that to out not didn't have go we

Steven Frankel

What And baked for kind low growth in rate single rate op OpEx? of a Rob couple forecast? digit expense you. Is questions is growth into this a

Rob Noreck

on flat OpEx. guidance basically the is year-over-year Yeah

Steven Frankel

again? backlog missed Okay, Could month I and to XX me the you then number. that give

Rob Noreck

this the For of end year?

Steven Frankel

Yes.

Rob Noreck

$XXX.X the month XX on million subscription. backlog for

Steven Frankel

XXX.X. All you. thank right,

Operator

turn any Jeff reached call over have a remarks. now with the the question will back We answer I session. to and closing Ray end for

Jeff Ray

everyone. profitable tough, know evening. have consciously got our deliver position growth. right good breakout for All that we've one joining It year. And results. made in. We we've to this finish to me, Thanks, the challenging Bye. thank was right, operator for everyone made. a this and But year. feel is the good And the focus And decisions we believe for you, number to ourselves you about and we've thank again, a the decisions

Operator

concludes conference. This today's

a lines at Thank You for time. day. this may your disconnect And your great you have participation.

Brightcove (BCOV) 19 Feb 202019 Q4 Earnings call transcript