- Earnings call transcript Q3 2022

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Operator

Good day ladies and gentlemen. Welcome to the EGIO 2022 Third Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] I will now turn the call over to Sameet Sinha, VP, Investor Relations, and Corporate Development.

Sameet Sinha

Good afternoon. the quarter joining conference financial for call. you EGIO XXXX third results Thank being X, days. today, be call recorded This is November our for archived website XXXX approximately XX on will and

non-GAAP safe our Let future by are trends, statements remind that our statements this acquisition will expectations, statements plans, me we operational contributions and include, acquired of activities, not results, not on priorities, undue would making statements Except functionalities, quickly from the but everyone business strategies, forward-looking start be call. like harbor. covering historical and to them. to We should product are feature secular place not limited performance our for forward-looking businesses. reliance on be These guarantees and of facts,

based considered are actual believes of are an statements forward-looking reasonable from contemplated management be what could future results and by upon not as and statements, should those our materially differ indication performance. results assumptions reported Forward-looking

please forward-looking risk Annual Form to information, are as recent quarterly Form reports to For the and available on most in The this information XX-Q. X, factors our United any filings, States XXXX its of America. required the based call date, disclaim today's to our in we accordance update XX-K, more us refer results statements financial periodic including on of November law. The obligation generally principle forward-looking in accepted any as except prepares discussed statements and by company with accounting

measures. The non-GAAP are profit, presentation measures and And the operating better performance measures In EBITDA, gross financial substitutes and non-GAAP measures does gross performance. EBITDA, company supplemental also margin. GAAP net or of adjusted of for to as directly GAAP. results should indicators financial may present certain non-GAAP addition the most presentation GAAP in including important company’s then of company non-GAAP financial measures non-GAAP financial in financial not the company’s of the considered that accordance measures, non-GAAP with The measures the be replace comparable not believes company’s financial non-GAAP income, the

today Joining an will with then our start the CEO; our guidance. on of and Stephen and solutions results business new and call call me Lyons, structure. a on and review financial are Stephen brief the CFO. update our Cumming, discussion Bob today's Bob results will

that, Bob Following initiatives the corporate the will our going now floor and yours. of will turn the forward. I use over call to call remainder the Bob. strategy Bob, is to summarize

Bob Lyons

and welcome, you, Thank everyone. Sameet,

We this quarter Solutions. scale was profitability diversified The improve first Edgecast. combination, of excited growth. very quarter to with has the third expanded which about blocks key transformational building our remain full accelerate our Both combination Edge-Enabled our and further and

of strong speed, value. at the a quarter, shareholder I leading led company a CFO. as of quarter-over-quarter. XXXX, previous the momentum $XXX.X of finance our a exemplary four plan We build good positive our with our to in as third quarter synergies. jump XXX% of has into utilization planned an drove revenue of continue anticipated to make experience a joined solutions and we're security, excess increasing of was operational we Edgecast loss XXX basis points up quarters want $X.X EBITDA platform career Edgio, creating and by million, depth gross with Before from which Adjusted Stephen on quarter, second of of impact edge. made addressing million, I increase to the now progress history the largely driven critical year-over-year. a of capacity non-GAAP has that the powering who margin our [indiscernible] the us at simplicity it's Cumming, and to executive a Stephen He welcome company In details an brings technology

from highlights the Let's of review some quarter. the

across solutions First, industry. we continue the building Edgio our awareness and about

after to are Asia CyberSec Rising of help practitioners. recognized in recognition industry as and us will security of cybersecurity capture continue a survey We commercial Star Since building starting week, last its us that hundreds momentum. people

continue and it. build proud on to are will this We of achievement

Our robustly for more revenue high pipeline beginning year. high-double-digits in growth of the And solutions. grown the has recurring, our even strategic application

to Our deploy pipeline brands of Bookings solutions ability security of value understand by in solutions. and that to the number These a Security application the date we offer. at edge. highest includes demonstrative driven customers this grow major leading our world's enabled and signed competitor. to our seamlessly one and security, opportunities to major solution many fintech deal active our various stages, meaningfully proof on also Applications our were our are at a due are quarter quarter, unique with global fourth concept. displacing solutions including track scale that These largest programmability integrate chose the and company the performance, our We our into figure Edgio first eight companies of

from of further wins efficacy savvy large the to companies, strategy our We solutions. excited and our are tech validating the early our see

our going commercial in Given accelerating pipeline bookings trajectory, momentum forward. to our growth we ongoing confident continue ability remain and our

meaningful on are making profitability. we improving progress Second,

our are second rate over plan. the $XX million estimate this have $XX annualized ahead to we On against To million. quarter estimate well $XX from million achieved and call, run synergy date, we increased of

gross in we'll operationalize run on continue rate into well will synergies further them. nature to focused profitability operating updates and and provide we next identify year. These improvements continue synergies expenses We margin both to are and are support as additional

right and to continue a LayerX solutions to Third, combined more of Edgecast our much We the capabilities acquisitions. win. a complete set have now of integrate we with credible

some minutes few a highlights. take me share and Let

applications outcomes rise, shop distributed need the the protection size, provide tax secure This that properties. build and and definitely. highly generation one-stop our sites web on for failing [ph] of the third Our to a second meets increased that Internet business performance for sophistication complexity, to suite offer attack looking productivity performance, have the [Indiscernible] core sub Google's and architectures, wireless products of and offers improve benchmark] the solutions continues and Most which are leading pace [web surfaces. the our customers. latency, developers industry websites improve and platform a across

of these the cybersecurity companies market their and with the around services. investments. verticals and We DDoS, These protection become highly focus larger relevant and on strategy automation such year, from plan to financial in are a get machine handling on vital as are cyber more digital sensitive we learning. for tax modern appropriate Management to WAF, any properties Bot world Last outlined e-commerce across are and some required capabilities and to our

provider API protection enabled web leading we a and products. and that Our on us execute acquisitions are application Edgecast LayerX of strategy to have a and credible now of

to we the two advanced We a us rapidly with pipeline expand [indiscernible] of platform currently [ph]. wins approach launch us value in upcoming will this enables and the to has for by growing further market and proven of This solution take the have share evidenced differentiator be our highlighted. as [beta]

security, fast. In performance on than maintenance Today, application addition are spent budgets and development of more to allows plumbing solutions shift XX% and on initiatives. twice growth rather focused IT our as teams to than

We the the the allowing developers strategy outlined world, things builders properties. of most associated platform In enable all web pillars our with more value. with while [indiscernible], create the surface, well on attack time them we today. to that the for way of a becoming customers. a to the fastest choice spend pillars remain the solution ago value and solutions were reduces of productively secure to we power year proposition our existing short, fastest are believe cost eliminate business lowering powers agency application our building the Performance costs in protection operational productivity websites to and Our and

platform largest network than approximately the hops and media most us performing XXX capacity in have world. to across second second Our XXX globe, per the to the making the deliver terabytes more

broadcast. continue at non-pay the According first streaming secular eMarketer, cut benefit surpass Our Nielsen as new tailwinds where, to households products most XXXX. for indicates time, to report where that expected the cable consumers pay an The and media TV are milestone are of minutes in inflection to a from we exceeded TV households from recent have cord. point

toward media streaming all from major the worth we your would and UpLink, streaming available for entrenching platform further critical did of workflows. companies, leading of is in provides consoles. solution our events now, industry our we COVID-driven an media quickly of if who we Thursday to to that current the that sporting moving by it we platform complexity value have tasks us. we customer gaming Night best support with set is are the Additionally, recent XXx for articulated abate said, as a our leading the Football. need mentioning The XXX% content not their mission continue of platform constraints features staff feedback now reduces start also that received

there value standard. with forward utilization. look and to as solution its returning an is better in invest its gold shares UpLink through to created simultaneously new believe to the that place continue customer improve will platform We and model economic shareholder benefits to pricing quickly opportunity the We

transforming model reduces performance better viewer, We supports This improves for energy ISP some quality the be also embedded and delivered of capacity from networks. and our directly are margins the to and consumption, overall.

doing These actions maniacally growing will earn customer and client improving allow on and of continue are while spend. know to ability cash that us all our our focused more support so performance profitability share We and our to support flow.

from align our and taken solutions edge-enabled secular company see, simplicity. platform an natively speed, to can that continue have with power steps we security, tailwinds you benefit As and take strategically that to

in go-to-market to of supported the and and efficacy We competitive percentage sophisticated this a companies is of shines technology, I funnel win aggressively the with to our a disproportionate e-commerce, a is bottom. that top team product and of have say by targeting concepts fintech. proud established and we at win some am right most the that proof during valuations

teams partners. call logo this will to I fine-tuning further both our and to Stephen channel to continue financials. share will accelerate quarter time, new market our cross-sells direct over turn up-sells the go and win, third to sales motions to We At

Stephen Cumming

the Thank and you, XX% quarter-over-quarter. of This for the XXX% of was XXXX the quarter revenues full contributed of Bob. from acquisition. up Revenues million, from third quarter third quarter $XXX.X Edgecast first includes XXXX the

best Our driving very and into booking momentum quarter quarter. pipeline be solutions continues achieved the strong our application our to fourth

related of XXX gross ago to stock-based basis excluding operating and expanded an were XX% in quarter. flat percent from XX.X% versus increase operating acquisition, quarter and to stock leverage full legal to depreciation excludes saw XX.X% year first XX.X% revenues, expenses, SG&A, the quarter XX% the quarter-over-quarter. a from restructuring to due in included realization. synergy XXXX, in $XX.X which we The declined compensation, increased as quarter compensation, the XX% charges, additional hiring margin, improvement to up of headcount the from XX% depreciation Edgecast, of quarter sequential of well as drive third based up was impact R&D increased of product or the XX.X%, non-GAAP in as and second and sequential revenues points the capacity We acquisition-related Moving to second the revenue of XXXX utilization new margin, to gross innovation. and Non-GAAP million from revenue as second of expenses, from due expenses, which primarily Edgecast of expenses. in from quarter,

Edgecast $X.X which We synergies, second anticipate million, the charges quarters. based expenses transaction included charges was $XX.X for cost of $X.X including operating $X.X connection expect million to quarter. the quarter. XXXX. compared million, operating operating next Share to few the expenses for materialize in $X.X to second the legal Acquisition Restructuring related compared will compared for compensation from million, approximately were the $X in to over and million benefit with expenses continue to second quarter were we million

of from a the the of EBITDA XXXX to XXXX, of Third quarter loss to XXXX, Edgecast. adjusted loss $X.X of of of in and second expenses primarily full adjusted a million quarter a in was EBITDA due $XXX,XXX million, quarter $X.X quarter third compared operating

focused was Capital balance to and cash during decrease quarter of $X.X Moving quarter flow. margin or on million cash sheet spending of a Cash $XX.X equivalents marketable revenues, million $X.X primarily the more and expenditure from to business. higher and XXXX. of totaled due X.X% million, second securities the the

are In mentioned for benefiting we from capacity increased network continued earlier network, addition, reducing we minimizes the our build-out our which requirements. capital have need in expenditure

of million facility. the credit to borrowing advantage incremental an taken million the from $XX acquisition $XX our undrawn Additionally, scale, and have increased have collateral increased Edgecast recently from capacity we previously our

sheet growth. and drive Our liquidity it future business strengthened acquisition. and a position company to now continued handle ability stronger than in was We've the have macroeconomic balance become before challenges the the to scale discipline is our today investments now to our with

integrating our busy all integration. Now, on of an We've benefits aspects in offer for improved Limelight seeing we and the can customers. the Edgecast already capacity update are been and the

progress new the to processes more long-term goal good materialize of and us grow double-digit On favorable would our further also rates to task scale platform compute and of and scale building to unifying into working IT and and leverage systems will that well and buying operations, providers adjusted the with requirement. increased power ongoing the on front, re-engineering We're to is bandwidth further EBITDA some made provide will efficiencies center using driving process the organization profitably. on which all as our reduce assess spend network our in cash as we're XXXX, network, areas spend on third-party This On allowing operators. to CapEx we've data negotiate our continue margin. pursuing consolidation, us that

on made has investments companies We fundamentals Having in that, to anticipate us the story which impact ISP This cautious creation for clients. the bullish ability could near-term. drive more depend value our Now deployment, moving from The capital long-term our guidance. are our will Edgio’s on shareholders. our environment business in quarter. our or current transformation the capital in to We strong. remain of and spending fourth defer macro said delay

of expect acquisition With more Additionally, both while not our we measured of address seen a have have temporal backdrop, some the we line and of integration across in are quarters. Edgecast see progressing this smaller we few these unusual well group the over taken nature on steps in an a churn this as QX. top during is This customers. of magnitude. to next already them acquisition, We

Given X.X% million we guidance to these clear our integration we we a between Incorporating quarter, further Edgecast. fourth are margin, $XXX in $X.X X%. sight million to as range range of for $X.X synergies EBITDA of into are the revenue will improving a EBITDA Adjusted negative us, our as to line an range CapEx implies negative and million. X.X%, complete and EBITDA, of loss adjusted flow our where million. to million. $XXX expenditure revenue a and gross the to $X efficiencies to of and $X prioritize adjusted This of expecting implies million loss of available trends capital percent between of of the of cash between This margin X%

announce call, our We closing I'll fourth back will that, guidance we the next in year. the some which of XXXX February provide call turn With on to earnings quarter for expect to Bob remarks.

Bob Lyons

as In summary, the anticipated. third quarter played out

provides transform continue that productivity to Edgio and unmatched security, at We of into edge. speed, platform the the choice

we fundamentals Our an must but risk. in discipline shared front business my as company, are then, in the improving. of the capturing I When us. I of in asymmetric focused philosophy strong investing have upside remain Today, joined opportunities and unlimited and

Our ourselves us and integration diversify efforts quarter over credible security vendor. enabled establish this our revenue have as past to meaningfully a

from well tailwinds. sales secular positioning planned us improved improvements benefit to product combined positions Our with

our are further with laser opportunities. remain focused synergies capturing we on and We tracking plan ahead acquisition of

strengthen through from continue Board management. team to our the We

excited are stages further [fiscal the three on Board added new three [ph]. have week added and of to Marketing Officer experienced C-level a are this Building Accounting Chief We progress, executives. and to last in hiring we rigor] we our bolster final an Chief Officer members

execute required on on our these build [ph], Beyond we [rules] plan. successfully bench strength the to to continue transformative

grow uniquely that achieve the all gives to adjusted while XXXX. operator, together EBITDA for us. of the improving our know support look thank gross our investors us working question-and-answer for All continued confidence up to and their what possible With We open ability please into and this we in session. lines for to be to margins forward

Operator

Instructions] Louthan [Operator from question first with comes Raymond Frank James. The Absolutely.

may You proceed.

Frank Louthan

you of at more see Great. Thank at we Can there can And point run in of the Thanks. losses positive come? the you. EBITDA this end customer we terms revenue? quantify annual is a rate? to And are or what

Stephen Cumming

you through for in Yes, here. on QX. me let – the little This for of is our happened guidance bit what's Stephen Frank. talk Hey, dynamics a

like Firstly, large it's make this a uncommon Edgecast. type acquisition think when noting of not I worth it's we

amount churn. customer some experience you So, of

some It's show Limelight is I in acquisition. our We of a healthy are in seeing to would top contained of Edgecast our smaller worth strategic in noting accounts, dollar group, the tail very within this accounts. that net and fact And longer accounts say, that both retentions. Edgecast

the We're many in corrected expect also we So, smaller as that deploying not years basically this coverage serve IFPs more Verizon. programs and network. is fairly our different short infrastructure Yahoo directly retention contained and a attention deep a that we which into they that have networks, had directly account it given But like I CDN we're of, we've over and really network. secondly, between the where deploy order. to into ASP guess, increased within from we've have base deserve few EdgeXtend, to our been this can result initiative because strategic last now our call traffic a addressing they their owners account

the share] we [ph] share performance and economics. so with the is a can So, better do [rev we them

to current and get scrutinized. it's more say, and sort capacity a given environment, [indiscernible] all we I of lumpy, would win-win macro ASPs tightened CapEx business round. a But little being and expand are budgets is, So, the this bit

in try guidance. to our I de-risk that So,

and I to note think it's sort that before of seen back anything important we've quickly. snap this

guiding In We’ve Normally, an good that great we see I the you and given in account somewhere mean, to that our range. we came were into to QX It's to note etcetera. of large momentum QX, also holiday feel slightly seasonality in is about we XXX. quantifying to sort to terms we be of the pretty gives up so I about But million, our the of as opportunities sort in rate. think down of where where you'd in of expect rough AppOps business important we guided XXXX. idea go around I a numbers, at XXX sort think now from run patterns, we're

In up of we I to with QX any a you terms to a after of we're our comprehensive Bob, further want after give get EBITDA, going the know through that. if don't acquisition. another full update come you guys have consolidating Edgecast comments results and days plan to XX

Bob Lyons

we had just I qualitative more Yes. of a approach this. other to one piece, took

any year. all control. didn't we're that in mean, One break next surprises of have Fed into under the for given to the simulation that to is, reasons living in, do environment of the where stated want the I we're bring right going know we things to [indiscernible] a they've that inflation we nature now economy they're And going

given what I've seen can to turnarounds is we're And make tough regardless everything's a the nature sure that the that CapEx [indiscernible] environment, front fine is cost us. for deliver we could so of And the structure things we If convince do to six and environment. road opportunity you do. so, that. our of in able headwind it a deal more been that next companies want of focus if from see nine I've to getting driving that business, it end normally for to fact match better thought soft more a we year, that we we this the accordingly we us that the really as the make in And all that's great, to synergies going would then positioned and that costs be for things whole the doing But to let's of our a be be prudent Stephen on, was next number having themselves, landing, out, up let's we and assume pointed career. I, the know, the much adjustments the to my one months, lot oriented and carry so

So, be we decided and aggressive. jump in it to front of

Frank Louthan

need decline, you picked Okay, driving was level with quick for Edgecast is what's announced normal [What forward QX, R&D? that it a additional deal when for follow-up. of this in great. [ph] and part] longer-term up going R&D this One sort going of new the sort of guidance spend to the

Bob Lyons

just it's timing anything. No, more than

R&D spent have then out normalize you being a where we on, itself were over adding security, brought new in example. time. lot areas I And and brought in that'll think you people for R&D a of

Frank Louthan

Great. Okay. Alright. you. Thank

Operator

you. Thank

You next question comes from…

Bob Lyons

quarters might was for system. recall, to take those couple of going to other one Edgecast Yes, wasn't out really you the get going one really we us to costs I was profitability. said say point, it a of

ability So feel – of and to we're our pretty ahead plan on so. that. tracking We confident do with

Operator

Thank you.

Elias Cowen comes question next Our from with & Co. Michael

You may proceed.

Michael Elias

Great. taking the questions. Thanks for

Just sense It place? visibility that, comments of like could And a this might one, it took among actually event like just moments what your sounds churn First, some when few potential future then churn? you for into have a what there you us give visibility two, is based essentially ago, customer churn? sounds pent-up future been your into on do frustration have that base? part

Bob Lyons

Yes. then – you and BDMS, mind, things and they Edgecast, of into keep with both in take got carved Yahoo! in if then they Stephen, Verizon, The – that was then take Michael, couple I'll got out. a and went of that part think they Edgecast in you jump in. about

is quite gone last up of focused There's that, Most XXX churn they've add on a a been for on result rather a this to bit of bigger nothing been And faster just all. accounts little accounts. It's big been have small they So, that a bit. two and years, as down number. distracted. they’ve the at

less churns, moving of Some with using other using them of where and us them really aren't to aren't multi-CDNs. just they're more some maybe

the are track. as you Limelight. say We happens take quarters And similar So, here a we Limelight, a By demonstrated beginning it And with We had we that that. a did recall said They to when of problem that insight the under now. us lot thing couple in year, do back control. that every we we at growing the get actually accounts, I think joined And might getting I the to those I talking distracted. end We're it one same didn't of have would of would pace. of rather Edgecast XXXX. were of on into that. probably

playbook, to talking we're coverage, doing changes the them and so So, the have all things. [ph], run feel that those they that, same sure uncertain with, you understand need better story] customer, Edgecast all on they making we're don't know, account gone [tell you to going know, with the with to every

Stephen Cumming

Yes. And it's would tail Limelight not just within sort Edgecast I contained I issues that. larger is and similar I within very and a It's add mid-market to retention certainly said we're seeing Limelight. And really long And accounts. strategic as the mean, net purely Edgecast, of same any the within the Edgecast accounts, dollar accounts. earlier, healthy.

In to get organization. your my around ability align improve drive finance in of to predictability – and the time other and that business? job, that's I've improving our and systems, a terms I've the the terms arms it, the of arms key do getting optimize better and and tools, of my the of our on question, our forecast of EBITDA. a now that of go people And around assessing market of cost months time predictability lot arrived how spent Since company investments overall structure two to to we a sort and lot we component spent within to

revenue generated up sales more So, systems perfect to work as driving forecast, but we're still There's not well. bottoms done, yet. forecast be certainly

get can better handle a points we on multiple of the to the get So, predictability business.

Michael Elias

a more legacy the question, as just maybe follow-up for on side. right. Thanks that. All Limelight And

has of declining growth. been One Internet about traffic talking peers your

terms seeing anything of call think out growth what wondering to traffic compares, in as you're of Thanks. there? Just we year-over-year

Bob Lyons

not Yes. We're that. seeing

at revenue In retention we've that fact, got we and when net metrics look well. you as as healthy the both track Stephen you positive our they're our – above traffic all at know, XXX. our, retention, track and added accounts, you our now, is look very mentioned, one when net we large of And which

we conversation a in have about pretty pipeline to good pretty having and adding – So good also that. a

the the So, are of from smaller sound. we well macro the I impacts with see environment oriented just part of on got these why monitor and fundamentals CapEx tell running focus and and business think would will how accounts that. We say revenue business to that's that time then our very that and that's this

Michael Elias

Thanks.

Operator

you. Thank

question next Eric Our Street. with comes from Lake Martinuzzi

proceed. may You

Eric Martinuzzi

down? I Yeah. know, I revision Edgecast. is revisit understanding of, of of accounts this smaller an were downward and seeing the And then ASPs wondering go they're have to that given indication any back to just part of kind the secondly, nature down, bunch to do don't business of how dramatic to just wanted XX% poorly kind step of CapEx in understand our get XX/XX treated guide usual? as of before willing this you you macro, base the the XX% that, by long

Stephen Cumming

Yes.

we also as the and strengthen ability said, operations And have both to and joined made the and since visibility spent of the [guarantee our of really hires I So, I in a time started at new business. some sales lot better new I processes. these Edgio, looking We've forecast [ph]. drive key systems get to business] the of to IT of processes understanding build-out finance some

the along model patterns with sort in now of to we’ll events guidance it sporting tighter what So, continue feel impact we little today. and this a downloads, in is season to and always going to of, judgment bit of There's guide. shipping it's evolving, holiday but reflective and is tighter, of our but I reflective I software our know think make be appropriately things

I'd the that's In the and meaningful and have And more terms you because it's overall a to out than traffic. tough the so in any fashion. we've traffic, say, quantifiable on number, break splits probably we largely that on of between it the capital really de-risked give the capital side

Eric Martinuzzi

gross for QX? about is where expectations the What Alright. revenue Okay. margin outlook given the

Stephen Cumming

gross we QX, made summarize margins. on To Yes. good progress our

from XXX up points basis to saw reported our we You QX sequentially numbers, XX.X.

on of we've weigh the business, QX, high gross sequential got decline cost obviously into in a so will our Going fixed revenue amount margins.

temporary we expect we while through be challenge, points XXX sequentially. and our gross to QX between this to work roughly margins So, down basis basis points XXX

as it's like, that on them cost scale, And go we kicking of and working appearing that expect margin in XXXX. of the vendors I we've bandwidth. in renegotiation gross for we're got a line. to are our Things our those increased synergies up noting lot with our lot synergies into a worth think through be we've

We in space gross as opportunities strong see our in and momentum prepared you've will rents. software that we to nice have very [Colo] well reducing sales from [ph] time. as – for our lift remarks, mix and a have our rack And over our margins heard favorable lowering

acquisition. having these pretty levers at a my side scale So, little are that the margin our given EBITDA a coming to a Edgecast disposal [doing] of to And lower to into gross company, CFO with we're up think my QX see positioned costs going synergies exciting as from this drive this a that sequentially and uniquely drive [ph] But from we out I company from in headwind expansion. and revenue. multiple bit it's

Eric Martinuzzi

Okay. was deal, figure use eight displacement was Edgio? that an to or And chose that internal then last question, a that solution the

Bob Lyons

displacements. Well, yeah, figure was deals that both deal. other that and One eight one was both They're the of the was those fintech mentioned. the we

Eric Martinuzzi

Got it. Congratulations.

Bob Lyons

machine learning really – is and differentiate Thank working. – having you. our security actually using of as been been winning to analytics pointed lot traction, strategy and very value good Steve proposition our we've We've around proof-of-concepts out, a

So, excited that. about we're pretty

Operator

Thank you.

Our comes from with Rhee Jeff Craig-Hallum. question next Van

proceed. may You

Jeff Van Rhee

Great.

one, Number in the me. revenue And from guide? Several revenue importantly, Okay. more Limelight in quarter? Limelight was what's QX what the

Stephen Cumming

business becoming the Limelight combined separately. combine And overall talk we've to I'd Jeff, the moved integrate We've say products. efforts. market and is Edgecast tougher sales to go fast and and and tougher rationalization to of Yes, again. and networks motions it's this to started about Stephen

companies combining as long-run, more blurred going So, allow we've as really to and as amalgamated we one company. now structured those quickly even but these operate as this the how in the achieve break it to effective us very lines and business are we synergies out given have companies. going efficiency getting manner ultimately, in But we is things can't forward an

Jeff Van Rhee

reduction extent forecast the for the Other that than you QX, you the base have ISP discern? to Limelight can reduced

Stephen Cumming

terms of dollar the is good Limelight, with earlier overall and pretty shape. both strategic tail Limelight in said I accounts both No. accounts larger Edgecast and the strong net accounts, to longer the in large the in and but our remarks for retention regards is

Jeff Van Rhee

Okay.

ISP to Limelight for So sensitive have the standalone outside been no there's QX? the basically, you're factor would guide what in change forecast

Stephen Cumming

as best say a the fair the putting together, two would see blurriness given of assessment. we the can that's – I Yes, companies

Jeff Van Rhee

the was estimate And the it? what is for ISP stream QX? internally in revenue What

Stephen Cumming

as comments, said all earlier de-risk Well, activity. that my in much I we pretty of

number. So, now. immaterial break but don't number it's QX QX nominal. our It's I We for would it's very specifically, for say, our nonmaterial out

Jeff Van Rhee

prior and Now, to de-risking was you it it? what

Stephen Cumming

that it don't we at level. Yes, out break

Jeff Van Rhee

general a sales look not how Okay. on sales mean, in I – hear not If sort going magnitude And at wide of hear comments heard figure the to loss, of sales other I of issues? churn, those, point? at what's me. haven't the I you this comments, quantifying leads I process, that discern do What execution is here. last execution, of Can sales evidence out you about fact or execution related this ISP and and about I question have talk there. lack talk a competitive lot whether for do about precision the we open in Sales, it the but it

Bob Lyons

Yes, I'll you give couple a points. data of

XX% in QX Our to be QX plan bookings XX% XX% we and I over believe numbers. over in QX, another general was to

organic any of up majority pipeline, is not just of that, Our year. on pipeline XX%. the XX% Edgecast up that from is the Of pipeline. the the security growth beginning which focused This is is of applications, triple added digits including

see. number expected got to sales concept we of traction deals actually pipeline. So, the we're the in proof a seeing on bookings of that and We've and large

are obvious reasons. deals taking now a for little I think longer probably

trying with and think tracking with we're deals, bookings people all to their sales. do generally, are but what they decide I

feel to pretty that. it good about and expect We

Jeff Van Rhee

there. Okay. you. Thank I'll leave it

Operator

Thank with The question comes next Breen from Blair. James William you.

Your line is open.

James Breen

And the over quarters? in cost side, quarter, the to forward, think of stabilize you're Thanks. then, Can how then that help you've may just in with you're concentration will synergies on the reduction base what seeing your step there, you Edgecast is Thanks. as accelerate you going the the the based to? margins cost be talk top about couple in there changed revenue side, often customers down next way and quarter-to-quarter amongst have on fourth growth your customer a the referred seeing XX the on that to secondly and larger customer revenue

Stephen Cumming

of what was Let large percent] lower was overall Bob historically But some which is which were accounts, the concentration in I acquisition the terms concentration, down XXs and benefits customer [ph], and mean, expecting. lower so then in-line me before to I think of we the we take high nearer many the with that's end. in of now [XXs towards come those in can this one said weigh of

we of this how offset improving do of EBITDA. terms decline some in In

of spoken just got As to touched a materialize to amount cost going we've million on only number and surface portion of XXXX. already the we've I some about the up think, and that of $XX that's these, tremendous synergies large a to We've scratch into on. I started

drive leverage do our that but environment in we can not a gross that into overall XXXX? sense uniquely So, we're tougher margins, positioned even we quite EBITDA only revenue help our

James Breen

I at XXs high I basically you close? of you shouldn't before customers significantly large concentration company, because where those be doubled customer the mean, Yeah. the lower guess, I'm pre-deal was little and were if the it confused size a than the of

Stephen Cumming

customers acquired similar of customers those larger we sizes. Well, also were

Operator

Thank you.

Davidson. Rudy Please with question proceed. next from comes Kessinger D.A. Our

Rudy Kessinger

taking Thanks for questions. my

the for were away as just to just leaving took spread cause having uncertain the maybe customers churn, So, or the back churn just change much mean, to on had they go being who [plan back closed they because was out the it and really How the got the is that or mean, and then CDNs to of you and traffic they the weren't treated the have once [ph] the another who of poorly? from the treated reducing you're and deal four in churn previously some customers to much the how opposed of it's of] saying traffic I they guys but so I of future CDNs best CDN? Edgecast, wanted customers CDNs, of business

Bob Lyons

[in little it's – [ph]. a probably there's I think this] bit of that a lot of

to If anybody, need you're you where else. somewhere going to if company or the just uncertain multiple you you track going, is CDNs, had to wondering and it have new to you're were talk

of those there. in questions numbers most about, no there's So, large talked we've

doing they're know, that like, just, less [indiscernible] they're stuff doing kind still us with You And thing. or us. just with

account another going by back moved account And one, or that it's understanding scenario and CDNs if using so, of because their other actually and cases, get we're on hyperscalers they're their they're some where if a to you multiple rates doing can consolidate of meeting know, be for better each one understanding to we traffic they've In CDN. not the they things. it where they they some might get minimums

are playing factors well. that as of kind in those So,

choice a previously really to it's having number we they front place conversations but things, tactical weren't essentially a like feel best there's know, you So, in those. just to then traffic, interest. in making a it's get different of to of And of the enough those enough where move

Rudy Kessinger

million Okay. the numbers the for point. you're the And take the LayerX XXX would that look I million. [ph] now you're so step substantially. versus back, taking [ph] I initial out preliminary mid-point [X] the last midpoint of did at prior then revenue last I a XXX for if for is versus completely year the at This revenue, year of you of outlook assume gave guiding if this quarter [XXX] just down XXX at year [XXX] like window guide at you [ph],

months of comfort do why the X you guidance should forward any investors say, confidence business relative would going that what we improved in that so get position of you how your visibility mean, isn't XX knowing give? any to And or I ago? future place And degree

Bob Lyons

Yes.

you of And transparent there's We're that. didn't or couple larger have size look, been match we've things. size and visibility we those finance a weigh in, to know, department things, think, I that's working anytime require and be Stephen to going challenges, same think trying do free I you to some feel of [indiscernible] but there’s through a company those. about

a pointed in from of transformations. people But large up is. what to to turn do been spend the did details that, with best we that could that this these of very Stephen behind the it best to we relying out, behind all need out As we for to want guidance kind on you work we've we it. doing and February substantial with arounds point, the and and to that That's do. us we degree, didn't to put It's the get nature know, and is models come information these way that time why the [indiscernible] with

Stephen Cumming

a say just this mean, full that, of on lot And in that I first Yes. we've acquisition months, I add few on to with my quarter to joining this company. Obviously, focus but the been acquisition. going there's the part think consolidated this is

we arms systems three lot So, been in investing of we in than both don't that around now then a we with months the more and ago. fashion business. did predictability coupled our and people, that, And forecast ability better to have get processes, a

behind do to XXXX what on more that we a be we're XXXX, for confidence of So, give QX results like. in and lot a our equipped sight better lot guide going looks when clear to a line

Operator

Latimore is It question Northland from next with you. our Thank Capital. Mike like looks

You may proceed.

Unidentified Analyst

behalf might positive free [Adithya] Mike expect [ph] operating on give of some XQ? level you cash flow in see of you what Hi. Latimore. This flow on XQ? Do in Could you cash is color

Stephen Cumming

cash look The but good to as going the somewhere be EBITDA XX% next into CapEx we're think X together, the overall have XXXX. year, into expect a of number of think is, you in – to has two type No, whether mean, and of cash. reduced that EBITDA our good that result think model sort XX a around yes, indication these historically for see operated I continuing realms we I a we we networks will that certainly I the flow. putting on be operating indication substantially and company can CapEx landed to be we a has as of we the

Unidentified Analyst

Alright. it how Could pricing the environment, compared you year? in give CDN some to color was current earlier on the

Bob Lyons

anticipated Yes. We're way anything for not in what outside seeing of much we pricing. the of

it's think consistent I largely what plan. anticipated been our in we with

As [ph] on and true about performing where we're [pricing front] as well. Limelight, that's we talked with expected the perform we to

performance. good we So continue to and have –

up Edgecast Limelight, we're normally we the we great that not we've things that we did got we there, up what challenged on same same any the know all so, turning last seeing and the with were into now and at And with in outside but expect headwinds – year, of situation effort industry. that focus to cleaned the cleaning you

Unidentified Analyst

Alright. you. Thank

Operator

It no the to you. the closing remarks. questions will I like no Thank time, in team management back this over for there further further at are With it Instructions] looks pass questions queue. [Operator any

Bob Lyons

and our our sharing Thank look continuing progress forward to and you, operator. investors. We analysts conversations with

XX, conferences joining Investors Thank We Security, Select November Communications on Conference this Technology on quarter, November X. Networking on everyone three Needham Alpha and and you Conference us the will James Raymond XX, Craig-Hallum be participating December Conference the the in for today.

Operator

you concludes your Edgio This results the for participation. Thank third XXXX call. quarter conference financial

You may now your line. disconnect

Edgio (EGIOQ) 9 Nov 222022 Q3 Earnings call transcript