LLNW - Earnings call transcript Q3 2020

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Operator

Good afternoon and welcome to the Limelight Networks Third Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions]. is event this note being recorded. Please now Dan Boncel, would like to to over conference the Chief turn I Financial Officer. Please go ahead.

Daniel Boncel

thank financial This website for Good third and will on and you XX on the XXXX, joining afternoon our archived Limelight October quarter XX, XXXX is days. results call call. approximately be conference being recorded for Networks

Let like forward-looking that everyone be making to statements me this we start by quickly covering the remind Safe Harbor. We call. on would will

should statements our all of outlook trends, are Forward-looking business impact statements future materially as functionality contemplated statements beyond, by and the results not strictly strategies, results as Actual fact forward-looking that our historical from statements for our are be indication an such priorities, of operational not feature secular performance. considered and of XXXX those differ and our product could our announcements expectations, reported COVID-XX. and plans,

risk including of on to required in The based forward-looking please and more any discussed this call as available our to on report any disclaim we as annual date factors update statements, recent are information filings, by the to periodic Form statements except most on us For refer today's law. forward-looking information, obligation XX-K. our

the today on our Chief Bob Chief Lento, Strategy our Officer; me Joining call Officer. and are Executive Sajid Malhotra,

now available the would the be to like end Bob I Q&A during remarks. turn Lento. will over of We session at prepared the call to

Robert Lento

year-over-year. and imperatives. quarter our new highest strong deals Revenue was strategic marked quarter QX by very afternoon. third quarter us history. progress several good another second line highest ever up $XX.X And million, third significant the across in and grew edge Dan. revenue company XX% was as for Thanks, It XX%, in announced made our we top

initiatives. this in strengthens strong our the also COVID-XX We accelerating XXXX acceleration a growth of and increase transformation remote the we've and and further a delivery along times our these well sheet content million allows services our of for consumption offering of for transformation dramatic with rapid scale executed debt balance flexibility customers Limelight model. is underway already global have and workforce There a seen to adoption the and a $XXX which cases convertible digital in services. successfully from provide increase in its use is content latency The low exciting on dynamic the scale positioned and created sustained direct-to-consumer demand. new demand, now in and

global that significant of growth, are capacity, and Our achieve video have deepening XXXX suite allowed services our investments us expanding only accomplishments edge in driven not our differentiation. most to the of in extending also our capabilities our some but

Three specific five doubling COVID-XX. this are down we excess revisit our a customers, a let example, the focus $XX in by capacity about stage. video, the to media Limelight are spaces. in our have to demand the and scaling, on company moment valued in serve a but our online I'll strategy companies Byju's, set in in is leading doubled largely including talk was quarter, help the alone, driven recently that the year progress me billion. in providers region. As in specific the briefly to gaming meet education Online India our top education growing of India of

to coupled and the through XXXX, have is media are gaming this product With execution, most and customer streaming trend. private robust We a of According strong expected a to benefit we global our service, five media the with unmatched position companies. offerings, rapidly. robust space increasing from video, in our network, three experience global public base CDN growth top healthy customers, IDC, including existing of to with

of the highlights talk let's specific a QX. Now, about few from

new control proactive been which of engineering strong. part down earnings areas, imperative, importantly, QX. Last on management discussed are remain launch games, of and the improved global of community the management, engagement developer around the drive innovation. traffic pillars, global or efforts XXXX enable in one or in in has revenue deliver to is were impact expand expand through a with developer four our steady three strategic customers. control, designed for imperatives past our and as Further, significant center extend quarter, our our Advancements cost, to network priority imperative performance quarter. most of progress announced automated Each during capacity, our we calls, capacity we've – As extend our experiences proactive

high to While daily this changes and we the is better see not new to complexities deployed on capabilities several of manage new a volume us, we basis.

full Limelight We move delivered at a these edge by as and is has which strategy pace, services we origin to CDN. our Limelight expect deepen at the customers' and delivery, rapid a in XXXX. offering. simplifies content from benefits Last innovation XXXX service reduces capabilities costs. expand video push driven live bandwidth advancements Live quarter, servers, video the video into we customers see Push, our to released It is and to Product to allows our protects directly that

our users of one in Live the goals. business it of service of longtime customers, our their helping first Push meet One that BBC the is them is and UK, reports

space very is edge broad and our that know, in is topic As maturity one early we a and hot its adoption. market all in

in edge you with to leading functions hands In our to Limelight's evolving. multiple first global their It edge. of not leverages new, of power run of new connections our locations network we QX, content and edge how at and advantage network with launch pushed functions, that cloud space is and and takes do our necessarily more direct manage, to can innovation rapidly peering market in capability compute flexibility our the being customers providers. were the XXXX delivered the ISPs content our puts is with it While what and deploy serverless is than in public

flexible like target Bare of suites today edge services edge quick the our are customers release functions comprehensive the a and now seeing provide Service available from functions, options With our as and application compute edge most for of we compute ranges actively Metal Several to implementing benefits. that serverless edge of capabilities. one customers

is One of images device. leveraging our any for optimized functions edge deliver to customers

Another year, execute Further, value embedded We secured time. company. announced new is with a deals [ph], watermarking expect video global using edge and piracy detect including OTT edge we and this quarter, high forensic online provider we in last in content record algorithms SimulTV those video Katapi to platform year. edge functions to over to almost formally revenue double several this

manage providing next Our evolution in to tools complex at the edge. is and focuses on workflows now development

next time real Additionally, service. streaming we our are generation weeks away from the of releasing

that our is it Unlike that scale. streaming solution live and sub-second CDN, For unparalleled reliability streaming near market, requires integrated with provides others organizations the performance, real-time is providing global time doing in real a worldwide. delivery

during and product We group services with our and we We gaming are including and Organizationally, operations DevOps in organization one and marketing industries, group into these sports. development of in to live limited challenging times. some foster our currently our into QX with a across multiple strategy organization. availability, events, solidarity consolidated and better designed range changes moving consolidated customers additional into made production our align edge

and our We in very a employees continue of much still work to middle are pandemic, the remotely.

is together how work result, we evolving. a As

quarter. customer our we an surrounded and on was add ways optimize changes, value. another our faster closing, position, outstanding sit extend team we we by opportunity-filled it We value better will With believe In even can collaboration business be these to in delivering and multiple and focused customers.

it our and serve, to all translate heavily our and who value extend performance, are, the capabilities options present they edge know, optimize great the they network, new companies While Limelight execution. and opportunity, through year our provide, through introductions. has expand invested who they unparalleled innovation product this

and tremendous you. positioned optimism I'll call and for gaming video, to turn discuss spaces over the to to We have now Thank the are the details. well financial Dan the media serve future.

Daniel Boncel

Thanks, Bob. And good afternoon.

highest is revenue year our To revenue QX revenue quarter third quarter third and the is $XX.X of generally execution lowest organization. quarterly to highest million quarter revenue demonstrates Due mentioned, further the As of of seasonality, grown sequentially strength our second the strategy an each this and quarter have history revenue the ever. in Bob as our year. reported

dollar lower year larger and customer revenue is have This our customer industry. us our our highest to us services in our services, earlier, been ago. resulting Cash Approximately lower is a currencies. QX Average revenue XX% third compared a this size because non-US International products. per streaming XX.X%. This in gross operating edge XX% slightly compared gross we profile, others to quarter but revenue $XXX,XXX. As denominated driven our industry, EBITDA. the in to the quarter customer important and for models believe over revenue higher allows inched growth in an a XX% total to divided in profitability direct-to-consumer financial an on was our in third as by operating against for base per higher was and focused the of approximately well margin, fewer This our expense margin average of metric been quarter flow margin, noted accept is acceleration through customers. as much has accounted customers in growth is our by and revenue

when volumes. quarter, mandates widespread, stay-at-home the During more second traffic delivered were record we

traffic. quarter accelerated capacity see levels allow us third timeline to an traffic added elevated to continued have this on deliver the We throughout and to

have expense expenses debt compared as quarter. realignments. $XXX,XXX, interest of gross flows to debt organizational the favorable $XXX,XXX $X.XX margins. existing includes in and of execution or and add per of we to Approximately $X.XX impacts to almost see and gross within believe the offering cash traffic million overall the selling We issuance $X.X continuous share due million Operating geographies our in convertible reported year's additions, GAAP a or network expense per plus through in primarily expand As in PoPs, increased $X.XX capacity related This successful result optimize margin. the interest GAAP approximately capacity July. of as in as loss was of quarter we basic third in per one-time capacity debt the costs share amortization or the to year-ago fluctuations loss costs $X million ongoing cash discount. non-cash We work a share $XXX,XXX should of third some $X.X a quarter well new to

over Adjusted $X.X very year. this adjustments, Onto the XX% line is Excluding balance flow. with up Street was million, third was and last these a strong million quarter EBITDA sheet $X.X net estimates. the year. cash income QX EBITDA in

debt earlier, overnight stock quarter, convertible $XXX price. X.X%, successfully mentioned completed premium conversion typical briefly an at our convertible that at limit a during we we to With execution, downward As third were able million to the offering bearing price XX.X%. interest offering on the a pressure with

instrument this to purchased premium confidence third in a we the premium of to performance. million. also the for call or $XX.X million the to $X.X million dilutive We our cap impact We limit future and the building conversion have over $X.X on expand for the based capacity increased XXX% primarily quarter purchased our was paid conversion capital footprint. strong out instrument expenditures, cash in $XX.XX. flow Operating we a This

ended to a within expanding the to million. the range XX cash the our days XX and norms at As of DSO to equivalents returned of XX DSO historical result, we quarter end quarter. $XXX.X continued performance end after cash at We At days. anticipate approximately XX September, of last normal of with days

XXX.X XX, of quarter the count the had was approximately million XXX As end Total of at we shares worldwide. outstanding. employee September

$X.XX to and GAAP to We the have for a Interest GAAP the the EPS, of debt adjusting are guidance additional be quarter interest August. July on $X.XX an leaving adjusted impact to full-year non-GAAP million. and expense is from approximately XXXX be offering for $X.XX loss interest due expense expense. $X.X the impact non-cash ups of except EPS million, in and to cash a debt Non-cash our February our cash will will expense and $X to $X.XX will gain. payable convertible non-GAAP interest loss Annual solely convertible $X.XX and offering unchanged fourth

thereafter expense $XXX,XXX. expected convertible XXXX debt an of change our budgeting in be internal to in We for effective expect January rules annual we non-cash due XXXX, to offerings off interest approximately kicked recently accounting process. However,

now have turn we As past for we'll XXXX the call several guidance at for provide a over questions. for done to later I will the the operator years, date.

Operator

Instructions]. [Operator

first Lee B. Krowl Our with Securities. comes question Riley from

Lee Krowl

and start out QX the the of of implied Maybe to year-over-year. Back-of-the-envelope QX. kind kind through downside implies at wanted to walk flat just just upside midpoint, the assumptions math guidance. I on

Just visibility improved time from where the last since talked. I has we sit, seems like

You some have from year-over-year obviously services, gaming in and contribution the edge launches, streaming acceleration video.

about think kind that backdrop. just guys you to understand how want QX So, of against

Daniel Boncel

Dan. is This

January in And one in their for guidance people guidance. we many were down then, guidance actually competitor this then So, industry in our we raised and our bring had of again February withdrawing when our quarter.

a felt where the and comfortable was where business in we the seeing business we so, throughout were whole edge and with year as And we volumes company moving in going. the were the the

year And best our over so, the on we we revenue growth. numbers. terms ever of to year continue And in be this full will to be focus that year expect And XX%.

go out the the quarter volume highest so, the volume is and fourth watching from approach where see The of content. the staying And seeing new the we here. just the for holidays quarter releases the of home going our we the all numbers generally comfortable revenue, just online in with more and are where leaving people end where felt we we with of We'll guidance with coming year, we're at. as

where we the guidance comfortable And so, the we left here felt for in year.

Lee Krowl

just then, was two again to network capacity processes automation you of kind levels. margin. we're do forward steps gross kind – and Got kind back of quarter guys kind Last on or utilization you one kind question and see of it. guys of gains of guess And I online? from the have step obviously QX realize When the now to better brought second gains the the the of taking expect

Robert Lento

make And Dan. then, some I'll on ahead, that. Go comments

Daniel Boncel

the in is lockdowns effect us that The easy COVID. had margin an quarter. On okay, implications capacity quarter answer we X the in play. the And result add not say, seeing. here's that as over And really third at to reason There's seasonally And QX quarter for geographic we were as margin, generally, we throughout TB have a a just is the third it. with good the just mix on volume of helped play. been to There's full we the product at the continue alone. lowest capacity added of quarter, mix

of And play at things so, those there's a little bit of here. all

caused what And things up I'll play. the trend But So, Bob we engineering a bit traffic as generally that's margin little about margin into to that. quarter-over-quarter. these auto expect let change come talk

Robert Lento

we've for end version years automation our work go – of So, allow that the operations. more started to production been of we've take And in had and how the careful very we to over last use very but July. that spent how new obviously, into development on quickly of and we the and network of we've years, deliberate first it the about network couple more the

version would the And this probably so, by I say out that year. will be completely of rolled end

benefit will full late the XXXX. rolling But start get next year. of real first the quarter we'll the that, which will we anticipate So, with in come improvement version out next

of what point, the but improvement we'll And and through think utilization management the a very asset delivery, our content dependencies, because tends bandwidth to really to our accelerating that, what see I vary. next are will early full-year some parts margin higher. So, edge we terms world other in next year, But year, content be starting in are confident second more versus also product of half. delivery; mix others versus we on are is of within Dan's then services basis, terms our there moving

next we As very to on way show you the margin, we don't year-over-year. reasonable in look give gross believe improvements we a at as know, start will year but guidance that

Lee Krowl

as curious QX, minus? quick how or just you plus the it many third, had. question. In then, QX customers Was it And or same XX% was

Daniel Boncel

It'll the the one customer quarter. but in just Q, be XX% there's for

Operator

question next with Craig-Hallum. Jeff Van from The Rhee is

Jeff Van Rhee

question to on back circle margin. the to want gross prior I

are X. up $XXX,XXX up roughly sequentially, So, revs the were COGS

would crudely speaking I the roughly you into be thought we'd flat. think have coming quarter,

Q, we in the in the COGS? see a your that drove bandwidth increase this Two variance And what the is sequential the was really dive in deeper. little I to When guess, COGS. there. increase there questions what drove just So, the expectations? two,

Robert Lento

realignment our So, those costs and hit I'll in some of opening we combined just that in costs in hit, reminder, But of the Dan of bit development did and organization a the answer some talked question. teams, about little our DevOps a the let group those operations we created a COGS. when we

So, there's that to. beyond And in that some speak structural then there's of Dan can that there. things

Daniel Boncel

don't we significant that's don't but it drives actually our it's we and quarter-over-quarter, so, we point and And structure. for amount margin a of guide a guide year, of emphasis gross know to what the flow given through, to operating

what the footprint. the revenue to colo of all space And there's flow that again, so, way number. for, we're line within in TB need far the to individual bit that's as through X line, little really that continue components the continuing and is looking number and the COGS But through that bottom capacity, get down expand drive as Adding we the rack as power. to a add top you

we've does a locations bit And out traffic longer as there those bit little take So, to geographies, that. little new in of new up. is ramp it put sometimes for that a

you so, as the those to for margins get we that asset traffic have expect the front utilization And expenses better improve. end. ramps, the on And and to

Sajid Malhotra

here. We're as business whole across every this Sajid the on right? more P&L. line trying thing, run to One a

And a line and so, perfect, margin OpEx good think was yes, good while the gross drove I outcome. to really wasn't very

line business the to like exactly was be. was driven good. where top we be. we and exactly where that really The it think like would mix And line was was to would how the I it bottom

I somebody pleased one-time to with were read that's course, headline overall, news, all commented – the the we quarter. of Of but the kind below missed line X, we related that the the numbers by But convert.

to us. invest a how have the not did of as and Let industry this company, now report, we long there look a a for quarter, a very is geography the ever, and to a outcome. And second will to results, focusing really us to a for better as these but that quarter Inside different improve things the have best And of to about in mix outcome was we at third third And the get quarter the line sequential the no very was us are think, outcome. up growth we that in the how the numbers it. for way overall on others good goes in how doubt perfectly, the company. future yes, to

Robert Lento

part while working While out the while completely ever most done, we've big some significant remotely, putting the of a company. reorganizing products of

Jeff Van Rhee

while logistics did, but of touched the on you So, about did you why reorg, it? what the of you and on a the what reorg that few impetus? you're do Talk was

Robert Lento

services, in that Christine seeing start the pleased with what the the a we're business. and amount I revenue initial terms to fact more don't was edge bigger complex doing, pleased The our right special edge have Marketing value that now it's was piece we moving was of it with of there it provide what our smaller we're the to Officer, we're into timing was attention larger momentum. piece it group today the can Cross. the organization that becoming But we really under as because a and larger focus worry We're felt new in sort the both integrate of lost. there And that it's And with getting of about than I'll services and that We what had set which to we sell separate one, a was needed. felt have terms of development. it that of in product we Chief

that technology do common, driving not In the industry not creating organization, to the development a broader the was there. changes faster. and that and and what I that first we're we in say alignment our had that. us the operations industry. force but wouldn't So, implications be in It's, on And were would uncommon closer operations changes a felt that the do that was those it's of basically DevOps the in with and that we group making help to amount better

needed so of group and existing reports across to we that that the the Dan me within have [indiscernible] ones, Carney organization, we reports who everything they we team. not to under just redesign and their were had own teams single plus then groups the so, leadership were And services to able new shared the the able

right get so, at is only And developed efficient, believe faster more timing higher felt not but going we we it be was the quality. for that. we and And product can to

Jeff Van Rhee

I guess last for me.

overall month? how intra did volumes to Just to quarter, traffic month behave month

Daniel Boncel

I say. steady, would Pretty

Robert Lento

holidays planes. of on amount Pretty widely And a QX out a places in taking vacations look know even And we normal of highest, don't in the will first we was, being lot and reported, but right? that like. in fair thing the we'll see they of kind of and in pullback content quarters, in But has despite new this content, weather lack the so, other And people Yeah. not what starts still be three may amount QX the had probably QX in steady. QX, the highest but gotten or didn't great traffic, QX though the new a have typically, coming fall. of there's been the

that this are think Sony in but next QX, really factors, new a PlayStation. of And announced like, shipping low. than was will there normal, then start its That'll be there year, month. other less version at has I

early console until focusing up in buy on terms came because new this As of in manufacturers game the announcement out. the waiting a stuff console we be to light them with year new new of until the year, that to they met consumers expected

little So, this mix predictable the a all otherwise pandemic. have without there's greater in going are little might things just at – and of a what a a are less industry has that the been year, on little mix a than This been swings times.

Operator

Oppenheimer. is question Horan with Tim from next The

Timothy Horan

of like normally quarter getting of pickup on point in weather the colder? on volumes we volumes, you with the typical Just see seeing are that the here kind a fourth

Robert Lento

a starts end runs through of that the Most and of the seasonal early. pickup little Thanksgiving year. It's around

know as that so out And but last mentioned, through PlayStation, to that think November. are territories, out coming October week in But customers in I with weeks there that's the Sony, for coming a six year-over-year so, is then in some and real first example, and definitely of that new of up launching November. the new in the is our I've We And year traffic the in – the of of starts far. in already are come volume middle January. middle tends of the

that is about So, far trend the looking that the think to I same remains so be seen. But

Sajid Malhotra

no have believe be it reason We to will different. any

think traffic I games shows on healthy. are the generally launching, are the coming and are patterns new

As come weather gets at new colder, all board. back get and on home people the shows

Robert Lento

live in couple sports more than did the months in last We we did that. prior to

little wildcards a definitely, years. helpful. than that's in So, But more this past year

Timothy Horan

So, I'm running lower like network tool, four how at guess for me three reasons, wrong, utilization And if you're or but it correct geographies. I new sounds different like the this can a new which better much year? basis is I points think some utilization, you it operate better X,XXX be can of just you're Can utilization – saying? what be like at idea, rough kind next automation

Robert Lento

the on new in better depends maybe DevOps averages, stays we not be with range through that are component basis points. happens several can what management, basis change hundred basis better on can is believe the of But range. within pricing do, But assuming think think That price margin. We automation and It's groups, gross get of side we point all saying operate a which big we it that that our better. we XXXX hundred historical several on points. we the can compression

Sajid Malhotra

know because I that utilization talked Tim, about you a let understand me times. few you've try help and

best in class is on up. our et there us we few us, the is best not of think in and we to have even will XXXX right? et margin, points than move line impact the So, of to huge basis to gross delta But basis in through, be and small between of bottom results, what may movements continue hundred difference assessment a So, class cetera. we a couple to what and think utilization more flow points, cetera, hundred, based

you that with I want utilization a sure just to to understand points driver business results, am also be big there the but isn't So, that X,XXX and go of I business get. you, is basis

Robert Lento

to The area a only sort these an this. is So, of right? over initiatives as identified of like, we for comment weren't other we opportunity blind I'd ago, make of year started this us. Many

As short there don't – you software. fairly gain. term term can great create impact complex by pain we can't for careful customers negatively imagine, that then, the afford term any we long way to be in to want And we grading it's our a short

highest Our to stay has at performance the level.

to a And increase willing more lower than willing we're suffer in so, performance customers. for slower our to margin we are tolerate

Timothy Horan

basis above quarter, below the XXX this But a be probably and you described, basis came given line you you year. couple reasons utilization, might points that trend accurate? in hundred points next Is fairly

Sajid Malhotra

It's range of in outcomes. the

Timothy Horan

Sorry, getting last. just asked a questions. I'm lot last, last, of these

decline ordinary? the brought the right? price main the the margin, of as guess, always it's of so main and up margins I So, you everyone sees kind you gross the concern gross it When much, on a competition, did worry, see out pricing

Robert Lento

what when – our is you of – customers fairly Limelight total. a at I'd negotiating at say, overall, we XX we've I When contracts would in we large say are look it's the the that one that of entire look But are thing portion we seen. know year, fairly month. top every our range

that we average, be That like can normal. get resets And short-term so, and it get, few customer next, that in while two If can line. to us three the one had to to ago, one quarters pricing took up a on from we renegotiates back have like or quarter years large a impact.

we quarter or margins always from range. But And resets the like if they an is at a average, I does to to that for point for can immune that to averages to pre there's customer example think a it's the where stabilize look complete one not that we're happening. So, the where think pricing. a I price historical back I customer something next irrational. quarters two competitor giving But may take year. renegotiation It one within quarter, large to were our is

Daniel Boncel

are from increased And on we'll as saying to our go vendors we pricing them and of get our customers back to that based that these negotiations. volume them job result renegotiate a from it's our get that

Timothy Horan

happen quarter? So, this did that

Daniel Boncel

Happens every quarter.

Robert Lento

we're last and up Every be, that. we're realignment more, saying not costs, it given on just there. some In margin the quarter. bulking don't blaming that had "issue" was capacity, we though, I'm on the we quarter, can automation the fully the the last in It another deal short-term that not one have on anything us. one impact with that have on quarter we size of any can the I'm effect customers results of blaming on and can is a like the short-term them that any customer. have area

Sajid Malhotra

part we is why focused on full-year the stay of reason this Tim, results.

the us, that cash bottom than line, to CapEx better better free Top outcomes, assets. ever, achievement year, and right, utilization so are year best on lower line, of our better big last is flow et did cetera, right? we for on track we delivering have So,

Now are our get competition have in loaded you have within vendors on, customers that are year into on we see you the be when you live traffic traffic, you one-time quarters, events occurring, efforts you spikes have the may network have some network, that the times times incidents in R&D that within have repricing, and times loaded when from and getting have comes when off. efficiency there you going on breakage and are that have you repriced, said, when metrics times the are

to to are move manage the a job And commendable our the reporting simple if we with that next there There and complexity going the that, like just terms is questions. to And we back think you things we results are more commodity in we'll like that are business. is is the not. to of that I'd that are achievement across. progress the right So, through manage business. so is in overall question. achieving complexity. It looks many People to here. I And have it are that come making, say,

Operator

The from William question next Breen is with James Blair.

James Breen

Just fourth comfortable the in that increase, quarter, Was with That quarter. the added there you a million. walk Midpoint what number? quarter? over more million you you of quarter. about respect would the of how given do absolute of terms the just quarter you full where dollars maintain to you guidance from in traffic won't through few to year. were us so, around fourth this in ranges, a fourth in And be need Capacity just And of adding talked EBITDA be obviously, that implies expect volumes? this Can anticipation the $XX guidance for the you're an

Daniel Boncel

of What what in that? quarter? the fourth sorry. We added was last part the I'm

James Breen

you quarter. you added So, this capacity added

Daniel Boncel

Yeah. Yeah. Yeah.

James Breen

That was in anticipation of fourth.

will a help from the that So, perspective margin fourth quarter? in

Daniel Boncel

first EBITDA. So, is on question QX

the that flow given can to lot financial traffic throughout growth get revenue we we the and that get EBITDA a through, will we capacity that that the to our through added if believe of our number. that year come we've model, So,

EBITDA So, up up the with quarter being was year-over-year. year-over-year, XX% revenue XX% in

So, that's flow demonstrating the fact that this to line. bottom through does the

believe get need revenue And we ranges. results the continue to that that so, number those and we we'll get to driving will us

to always we're capacity add capacity as launches. capacity. where with as As far go the locations, are new we their we We day our to add adding customers accordingly. And and see and adds, talk every customers looking new they

Robert Lento

We in can six weeks weeks. six of be last capacity the exception, the try for lockdown to terms adding year. make changes an but in do we try last quarter, the there to – not any fourth of not we The

Operator

The is next Eric Street. with Lake from question Martinuzzi

Eric Martinuzzi

I bit QX? is good number at OpEx QX. little the for wanted a to OpEx did I But that the QX assumption in operating adjusted your a expenses QX. I've got know shrink headcount a over here. from focus million $XX on to little

Daniel Boncel

you Yeah, there. keep can that

Eric Martinuzzi

large your talked a And customer. edge This excitement and you commentary you then, little earnings was the the last July bit call, had signed back a XX. about services over on just

about customers also next in door Can XX large two prospects? to services days. the more You you an hoping those give us couple in a update on talked edge get the

Robert Lento

overall versus just We earlier revenue that the mentioned the doubled year. with view. we've year-to-date for services edge Let last me start

And that to so, sort millions we're single mid of last digit break not tell in going were to But I high we you, separately. out year. can the

till we numbers were starting year company. due that one the the closed we're gone close yard on some about. this some middle that not customer hasn't have so, on into may actually the to get with line next And hopeful closing In that material happy we're we of July of that geopolitical were to things and call,

radar that would on a we news. that's good think The news early didn't screen So, the was accelerated. that our that bad close deal is

sometimes. deals work so, the of way And kind

I'm were edge. is we initial the And at they different because with so, a which be the very looking would that that customers than three pleased our more thought of but that pleased months And importantly, the progress The were with to names I we were the quarter. getting we've from really make. ago, reaction were we're service Push, using made are Live

are us. different really miss well the streaming, be is us, to is needs obviously at somewhat first what that of our that for which function edge edge, real-time version, feedback to are very being our Our received. got And which with reporting was we initial a customers which good using very than really

pleased we're So, with we've got. really what

More we next we over the coming where this think can take years. importantly,

Operator

from Synesael next The and Company. is question Colby Cowen with

Michael Elias

for may. Two I on questions Colby. Michael is if This

expected changes raised First, you your of was geopolitical in capital Should of would can in you that on you that great? give proceeds in including share did then quarter? raised? convert color that any seen third we see M&A one one market via the uses in lower additions, you. any the a your from headcount us they've July, of around be competitors light reasons. of number the traffic second, higher the Broadly, for have customers, Thank usage the allocation some or impacted noted or color that And CapEx? expect of Any the

Robert Lento

share. just me Let to speak market

are that enough I They're exclusive So, two we think so. don't from what is or the there's exceptions, not diversity provider that share them. from one is a to absolutely Maybe our any but perspective, a large they standpoint. largest supplier true in customers, of need market

all most to of still best across they they them. can in quality. are automated we shift the in where the so, mix tools And cases, have, Largely in based them, of all traffic get on

around didn't. some and our next we things and day. did to and a so, the fiber shift country had they tend from in competitor day, didn't; cut We've day And to

like second that in more of and the quarter, second for name in names of positioned market that. opportunity speaking, shifts always don't to largest I there's as some the stands I third we're gain doing Generally with my And to think there's in there's So, loss of the out share our they're mind customer terms well a base, from share us think in pretty any compared industry, well. quarter. to

customers spending not DevOps we're it's of the ways higher say higher So, to hasn't. the that globally going change drive to perform it comes together, – putting are couldn't whole for just it less. idea organization a again, we and time, And time of performance. we and more to not way our for that, consistency, lot really the back with looking And think over traffic, happen,

Daniel Boncel

we're quarters. And for, consistently to the crept of question converts the financing. six whatever, entities right the that getting at over do the felt your over continued up year-and-a-half, looking business our the price And first stock going last various had to our levels to, that what by four wanted back wasn't we last time. and as cash some operate use approached has we year, on with we to we were that to that sort And hand it the on to we

pandemic those cash, now, do as this of second we're to what brand into we to environment right that we beneficiaries were spooked and ton wanted names, really quarter got we year that really But industries and could And had but able companies were strong we decimated happen. strong the us do. a of are knows that And everything a who last the little bit. and so, that in

with be capacity, I R&D it that that a that going adjacencies to was think just and out an something as have internal gives to expenses, so, and us capacity, time cash. all order efficiently that added was, go to market And we convertible whether comes it's basis pick do the moving it flexibility we to wherewithal that. and into be it then M&A around with going appropriate accelerated do operating felt on of something of that that added if sales market with take advantage in we internally then And that. that And that's combination to expenses want improvements, up

Operator

with The James. Majek Raymond next from question is Robert

Robert Majek

streaming on the per you're traction offerings getting your and pricing of some the Can unit impact functions. rates on this with time and these real the touched on you might just gross charge edge talk margins? have the relation to video core of You delivery about in you Thanks.

Robert Lento

way is we margin is higher. different. the The completely price sure, For

of usage, is which largely business than than millisecond concurrent a is stream, which transferred. So, stream, which for which with delivery CPU is per functions, per edge example, it's or minute different RTS gigabytes core our is per different

I The delivery than RTS, higher different. call of what completely business. they're Push, our like edge like like functions, So, services, profile is core margin advanced Live

introduced portion that grow And we've with and so, the the existing is plan of can, them both but as we customers have just to our larger new rapidly them, be as a and total.

we of help And can improve so, automation addition a about better that the assets, terms managing in mix time. believe the we've to in different over tools also talked story

Robert Majek

more I if one can, question. And

any recent capacity? on the might explain share color investments pipeline you Just can your in new that help of potential business

Robert Lento

from a sides been new of deals. pipeline negative business of has the signing a a us of down From slowing perspective COVID one for perspective, of

quarter quarter, terrible. had we a so, second was actually the good And but third

we feel and the behind So, on the deals. forward, where last But look in that that well a as are deals were we we're year-over-year, in are year-to-date basis pipeline positioned larger historical, I we're year. than those

higher revenue In that revenue year, average, on been previous fact, deals though done the year-to-date, down. we've the even deals contract total than number deals, have expected is

revenue. – products that So, look edge But I looks the for encouraging, story of some it's our mixed very especially advanced a the as are driving pipeline there. services forward,

Operator

Capital Mike Markets. question Latimore Northland next from is with The

Michael Latimore

add How do into early year? sort expect how much this year? of you give much any view thinking to next capacity And adding capacity you can about you're

Robert Lento

a bit that. per of added little we second. plan we'll missing issues terabits said, less QX. end And a supplier this little The and by because we than in about largely XX like was bit, QX that XXXX, In year plan up

will learn be our this year end second year I But terabits additional XX terabits capacity. the XX somewhere And per between plans. number between and so, terabits next we're anticipate that from adjusting And and additional XX more customers terabits we'll their about of as capacity. of constantly XX we

Michael Latimore

material? incremental revenue was then, relative quarter it third in fair the have a And million from so, did second? And live to few of you a amount events the

Daniel Boncel

we of revenue video live definitely It's just lot had because to have the events also related on live that say a with break events. customers incremental to out, would that though, are demand. I hard

And so, anecdotally, But we it break was just customer. revenue. out we there believe don't incremental by that

Robert Lento

out. just it We break can don't. We

Sajid Malhotra

seasons that cetera, us, If revenue, yeah, then participating than that those, Bundesliga great translates just live is rest much event, Mike, even series games, MLB these assured, are and events are lived, or traffic into delivering matters. in a good business and better those play, we et for doesn't multiple right? translate into or long anybody that delivering Derby, well of are the for capturing but deal, that kind it and Kentucky when us, just events or though it in constant in and seasons Premier else mind, keep NFL, you have English are live So, League right? it

Michael Latimore

down of a fourth year-over-year. of sequentially hit And just low you couple quarter. last The happen to and the the guess, for have would the lower end I would on have range? to a million wide Kind the end range what implied guidance. guys

Daniel Boncel

What would have to happen is…

Robert Lento

we that Things don't know about.

new to the we major customer and a hit you That's about no And bug Or bad like don't system anything some my hypothetically but they for there's Sony, a we talked saying things from that can you get repricing it. before but in new production I to want report. data, the them as speaking, happen. any we've that to is consoles, There halts event that console. games this shipping are mid-quarter do after find example, not the For be with quoted just customer, old major a event. only have major

of achievable. in for the that know, pretty terms So, do and perfect, you working there we always reasonable to to a are things And you give that always we numbers And job immune of we're good guidance like and but give with as we're happening the not year. can things happen. that meeting you are pretty we're good largely, not

Sajid Malhotra

can way, side, right? those And you by positive the same the hypothetical exist have… So, on

Robert Lento

The range big. is so

Sajid Malhotra

onwards. and We feel range good the of about outcomes

Operator

from with Davidson. D.A. The Rishi is next question Jaluria

Rishi Jaluria

Just two.

could start, to there edge in OTT it for uptick huge you download specifically Is talked them. First, of I what I there? you're bit a also India online there know with some if more software Is I you've delivery? about homegrown the And prepared then, you your like little investments getting in Amazon, even maybe consumption, Bob, with in and the but talk broadening and in that traction because question, about component? the remarks, a a Eros obviously wondering wanted you're environment video India, ZeeX been the pandemic, some stuff was doing they're specifically it seeing in and education. making to now Hotstar while, not we're Now. with Netflix, just Is

about I've follow-up. a then talk got let's maybe So, that. And

Robert Lento

went we've from year, years India, was growing capacity A attention lot invested we that more year. a in the we of the doubled and is time in It we that's that the XXx where about continent, nothing in ago, and capacity, to this since then we've almost India. talked on our I grown also we've interesting. India. addition the pure than just really to few paid team first ground every But in in capacity And think

were the market. that providing in it So, or past, Europe Indian customers in the the was US for largely our in content

we on have in based still that work we our As are India the on that the has that many here done. also sit ground customers team true. But today, is

We it, market. the – just obviously in about one So, we live and events. on of about segment bit prepared very remarks demand, But video education. online mentioned talked the little a good feel that you've

there, And India. some driven Internet of higher service way affordable, content it content widely the now accessibility for and more amount think and than about of in has. characteristics market. market an we're good we quality a And I the that's Internet Latin and hyper by more grow. are the America market ever another is seeing for growing to The same on the will more And of the that there. continue India focusing available, in very grow will feel quality prospects our availability, people we

look America at course, of of into course are years. we're of growing the to for capacity starting capacity India, beginning and it we're Latin I traffic, for a now, this really years So, I European – we've America areas end year, and build of of would year, say, that several but when been trying at America, marketplace. capacity, And we're us for last Western two in focus North Latin and India. traffic lot of growing

Rishi Jaluria

events, to some the NHL, out wanted breaking touch ratings down revenue. really a then, cases that MLB, bit seen NBA, specific all on year-over-year, for all little And I major without in We've live leagues, significantly. NFL,

a So, and OTT case up even just may of is wondering, down having consumption cable Thanks. if is that this impact dragging actually year-over-year, where is be that average consumption those any or down?

Robert Lento

were But seen we've numbers some games looked at of haven't on sort I I'm popular at year-over-year can And the popular of tell Yeah. seen and try the enough to higher same where year. even you, what we've more from I we're less last they we've and numbers, on to expert the the last pretend than year looking of done games some that an as low the of are that. volume some events end, are about

activity the over speaking been that it's top would cable think the reported streaming has ratings down, the or been the as that say I generally are So, or I same higher.

Operator

the conference to Bob remarks. session. Lento question-and-answer back to over I like our would concludes This any closing for turn

Robert Lento

any for and opportunities you in for our questions either to was advancements And anyone again, participation. with we're We customers, incredibly additional questions, continuing It for your And always imperatives. Dan. quarter provide Saj look forward shareholder you, productive our for to Thanks. several has or you If me, and thank to thank your once that's another participation. your available value. important employees create value add and

Operator

Thank The for conference concluded. now you has attending presentation. today's

disconnect. now may You

Edgio (EGIOQ) 22 Oct 202020 Q3 Earnings call transcript