Earnings call transcript Q4 2022

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Operator

Good day, ladies and gentlemen. Welcome to the Edgio 2022 Fourth Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. At the end of the prepared remarks, we will provide instructions for those interested in entering the queue for the question-and-answer session.

I will now turn the call over to Sameet Sinha, VP, Investor Relations and Corporate Development.

Sameet Sinha

afternoon. Good joining quarter for conference financial Edgio call. the you XXXX fourth results Thank being XX, days. today, be call recorded This is July our for archived website XXXX approximately XX on will and the A our June XXXX, section found with copy along of be XXXX press can the Form for XX, release of today's in filed fiscal XX-K our on year IR website.

trending historical financial the site. We restated have statements our also schedule of provided a on

and company's the sections of after on earnings except and which forward-looking events on not disclaims Undue should as filings Factors placed Form as regarding comments today's in included our subject report financial include forward-looking actual be for they impact future year. statement speak disclaimer the only regarding forward-looking integration fiscal Please and as required Risk statements law. are trends, obligation update to implied the uncertainties to forward-looking with and on circumstances statements, materially new these Form factors future the from reflect or are see that statements performance, any information, as involve of the from to events market Edgio's today, reports annual date press expressed by statements. These including cause a note could reliance XX-K and guidance and close statements by any SEC, entitled acquisitions geopolitical macroeconomic well results including of of XXXX the such developments. number quarterly Please any release Edgio the XX-Q. from include differ made. forward-looking statements that on factors issued those The to any our impact risks

are each of be The not reconciliation financial certain measures GAAP our between for substituted call, a of These non-GAAP intended today's the financial measures our to measure are earnings most of to measure referring During measures. section financial to directly provided website. or used and will comparable course discussed in the non-GAAP our GAAP differences IR financial financial be in such results. our release non-GAAP we

the the turn call now I'll to is Bob. floor yours. over Bob,

Robert Lyons

Good our XXXX Sameet. I important would call financials. quarter earnings have our year includes topics today. which and fourth you, like afternoon, welcome fiscal restated that for three Thank discuss and to to I the

First, the restatement expectations completed. initial and dating result line and of through our practice they scale XXXX. has the capacity was the been treatment accounting was scope back The revised with to with adding partners, associated in

adjusted revenue improvement less part have pro for result than in This representing margins forward. XXX forma XXXX to XXX to will a and We margins the gross basis line auditor's improve points of our of small accounting go-forward recommendation. in going our this in X% points business, total practices to basis be with

engaged party matters adjustment accounting Board Our and this restatement no a treatment. concluded running all to there beyond were the of review third issues

and night I finance, want thank process to throughout worked to legal a tirelessly I accounting it proper throughout the understanding and bring and to this for and teams patience day their community want also our thank process. our employees personally this who new to conclusion. investment

commoditized would from continue its the of edge becoming delivery we joined to dependence to company, Back large I solutions a we our XXXX, early competition content Second, when that investors progress company away transformation. make comprehensive the file with to in company we committed transform company. notable sole fundamentally upon the

share but highlights focus that in not a value-creating in most a early delivery Our in late business then of strategy. it made few a is detail this progress. singular CDN historical me let on progress I will our financials, XXXX, XXXX moment, and notably unpack our clear more

savings of last million, $XX achieved we have between $XX of will building run $XX and savings million million year. achieved year, we on rate This the

We improving our unit efficiency well asset XXXX. economics, reducing improving expect to and continue operating into our intensity

of new capabilities including strength the our a and for with Leader. growth channel demand a robust by and the foundation Revenue generation Media of Chief large addition team, have by to strong partners to Business new revenue expanding We Officer, adding Marketing built implementation Chief market our with Officer routes

by expanded Our size with XX%. XX% pipeline average for of applications our has since by the deal beginning almost this year than up more

expansion. supported our Solutions second the by XXX% and quarter, Bookings existing by Application client both sequentially in client for wins new improved

We new approximately that have revenue of our profile. half improved recurring quality have revenue products now associated higher and a with our with a revenue margin

to objective being commoditized our solutions skepticism have security company We CDN beyond defined extended the achievable. include award-winning an becoming that solutions of

clients workflow our million suite proven to than with and business complete experience XXX Version where most solutions. monetization and web capabilities Uplynk hours for XX,XXX speed, than sporting Applications has are fully to media more of up-stack Media X productivity and with orchestration more delivers ad meaningful our and industry's events stakes manages per high their one better Moving of line. annually. outcomes power year costs to power bottom applications launch the The unmatched live security

this pipeline, improvement conservative view Third, top this take growth. has year, a we of line that, more on our with that cycle will natural and elongated right associated higher with and are a indicators has booking prioritize growing The the and a marquee EBITDA supported the of restatement number wins path. quality Despite confirm transformation progress period. during our other we positive uncertainty

have as across large aggressively the media media Additionally, to sector profitability improvement. take streamers pursue softness steps we seen

banking believe our XXXX quarter with a also regional recent along XXXX the our We directly of filing, were XX-K the quarter and uncertainty. We will address that second first couple have banking XX-Qs notable that recent clients by impacted crisis.

Edgecast progress a business, growing however, outlook products foundation have XXXX. the new resulted in recent pipeline, These churn acquired a growth conservative with in in growth and profitable for reducing capabilities strengthened for Our more strong provide factors, XXXX.

Elemental commercial In and the strategic and Todd invest practices. to us our quarter, other second Revenue made improvements from in of powerful objectives. Hinders enhanced across my expand the a me growth transformation completed to notable upon Chief enablement against the implementation of continue Officer. let a We of progress number we Now processes. as second training a point, we teams number our CRM system, our joined key protocols,

currently than We program have including Azure, and newest XX partners, with added Verizon a more Microsoft AWS. work channel and our partner,

combined we enhance clients. deliver can Our further the solutions value to our

to in management company. deals In a range telecom Germany, such our Korea, a us East the of beginning couple value of company in using from in quarters, a international e-commerce The needs our as domestic clients figures few clients streaming investments both demonstrate media In the Delivery, have contract for in value. choose federation to are well. and six their security company South and last portfolio. we the synergistic gaming extended helped These Uplynk newly and sports company, of large partners an these months, win last channel as [indiscernible] us digital seen have Middle product company annual combination a the respectively, seven

We announced are for seeing trials advanced management we about excited base. bot existing are where solution, double-digit with client recently our especially our attach rates

that a Football clients. deploying semiconductor newest have Europe security begun formally we month. In product expect have become this Clients and in company later Club our to announce also fact, paying API a prominent large

innovations, these of in result and product Applications a sequentially. by grew Media both more XXX% upsells As than

build early solutions are management. prospects security, given our synergies, our to success security with innovate around about to continue site consist of performance our advanced bot Continuing excited our our portfolio and now on and We application solutions.

with sub-second Management, the websites holistic Advanced now our launch of award-winning Bot Version like we uniquely Applications With all security, products integrated power from one X and multi-layer platform.

faster XX% decreases our delivers With competitors, the it loads mitigate requests this by platform, of exploits Edgio XX%. malicious locks over takes billions than page to time and

experience eliminating excess In all operational short, enable of costs their unified high stake a industry-leading unique our for digital to monetization, clients console, Edgio operational suite to managed the our [indiscernible]. created Additionally, through and properties. our efficiency deliver capabilities products are by user

business platform and brands, Kate its (ph) we Mattress to and Recently, to Tapestry secure Coach, recently and wins fast on Spade to Stuart global security $XXX continues to e-commerce a web a who competitor we hired solutions security chose their page automobile fashion Edgio conversion Domestically, our with in holistic expand additional ticketing world-class architecture at [Mars Firm, outcomes. with loads MM our its who brands] added large the major system, completed brand brands our [indiscernible] a and in performance solution with business industry-leading its billion competitor league Weitzman platform their China utilizes a in sporting Germany, quarter. modernize displaced football and rates. manufacturer to premium takeout Europe. improve during and a improve

developer We for are productivity performance our that powers security in our strategy outcomes business unmatched and proving clients. unified

IDC, offerings. product and our In months, in exciting primarily GigaOm client these & are In recognizing reports research addition Sullivan. wins, experts have and we featured strong also by Frost analysts industry recent to been

the We Company at security Our Client we as upon Defense establish are the solution received Cyber the as Value vendor. Award Hot Frost commitment as delivering protection, security a our awards. for conference, holistic to up RSA well Edgio web indications Award that & racked two clear high-profile Sullivan credible

end-to-end strategy. seamlessly can integrated recognized the NAB our Uplynk set Conference, that show of a or of media cornerstone as Vessel is advanced Association Uplynk premium National Manager, at ecosystem with recent and to of the delivers drag-and-drop enable it Broadcasters, differentiated capabilities cost. key owners with experience and a Google as true improve positions Uplynk OBP streaming uniquely solution. Ad simplicity as less integration content monetization out-of-the-box such platforms

ecosystem of prodigious Eric this more to with Universal for nine industry growing more industry. in for of In his years March, leadership team Eric a to pioneer work Emmy to at Eric do companies media Black than spent with and business. as streaming improving holds and the XX provide joined platform our the partners continue NBC ability our awards the less. will choice our lead

up organize across on-demand In for plus The XX a Canadian partnership Uplynk help Hockey leagues. and boost CHL announced the create reduce with and workflows, teams, than better the teams their monetize using April, League. spin event manage help desire, our to more operating three games. and teams playing costs. CHL the live their Uplynk CHO streamline performance with experience services we together to scale is streams ads with expert and production fans Uplynk, live X,XXX and their for resources helps

this us improving our growth profitability, year, high-margin through a of In prioritization improved products, strengthened in for recognition integrated EBITDA followed and revenue near-term continued industry of XXXX. positions by portfolio meaningful growing expansion growth team well summary,

over Now XXXX Stephen I will turn to call results. QX discuss to the

Stephen Cumming

Thank you, Bob.

the the want XXXX, practice accounting details while and of restate restatement some over spend we Before XX, time previously partners. to financial related adding statements to March will the announced in revenue we the capacity add that Edgio our the partners. changes capacity we of issued financial its On related going I discuss results, recognition when through

for basis September forma less As a constituted revenue on than XXXX. a pro nine this months of the ended reminder, X% consolidated XX,

previously been misconduct. of published relevant that not conclude the result changes any did being communicated, change controls from As time Since working during process. day, period or we've a the recorded guidance override in our this with auditors to accounting or

the quarter filing we the quarter for shortly With the XX-Q the the file XXXX the and restatement, of August completed of for expect second we and thereafter. have XX-K, to first in

changes. components. as new treated be Now Previously, through let ongoing the the from now from all me accounting Further sale a revenue take treatment, was onetime of share recognized revenue financial this you as solution leases. sale transactions will

equipment as sold be lease to treated as partner financial will opposed sale. an the equipment the Now ISP to a

financing we with financial have result, obligation a will a an As receivables. associated

income revenue from statement. recognizing this sale be not our on will We

Now talk marked recorded as the we purchased about this ISPs Investor CapEx CapEx. CapEx. to is on ISPs let payment statement is the for is a the payment in the an provided trending Relations activated, we The treatment will the flow In section pop our reconciliation and offset website. When as up in from the me the the of of essence, record financing cash schedule we activities. equipment

This basis XXX the portion being accounting, points revenue gross instead XXX share will of obligations margins the the cash a new from from or that I collect recognized expensed, and financial reiterate how points. clients. perspective to For nothing transactions is basis in go is these of between ISPs are financing which simply against ongoing improve commercial in recategorizing should how changing statements. would a our we

performance driven fourth of of inclusion from up previously financial of quarter decline our the for Revenues to fourth the saw the million, due to fourth quarter acquisition. We XXXX communicated a Edgecast $XXX.X moving XXXX. the X.X%, the were sequential of quarter the XX% Now XXXX churn. in by

earlier, we took in of Bob As seen the and a actions immediate mentioned half first of churn have XXXX. reduction

traffic, XX.X%, compensation, synergy stock-based execution solid revenue, in on impact seasonal benefited gross from expanded which to XXX well Cash up and as our Moving to margin, depreciation gross sequential from margin. excludes growth Despite lower acquisition-related basis gross expenses as plan. quarter-over-quarter. the margin cash points cost

acquisition were quarter. Turning to containment of until of Cash the or legal-related up excluding million cost compensation, and operating into XX.X% $XX.X not depreciation in expenses, our stock-based operating XX.X% third million quarter from expenses, XXXX the restructuring charges, later or did expenses. revenue, go plan $XX.X and effect amortization in as

decreased or from $XX.X of million and $X.X to in seasonality $XX.X of discretionary million XX% $XX.X containment revenue approximately or R&D from million, sequentially from XX.X% XX.X% of efforts. to million announced by million revenues $X.X due to marketing to million previously revenues savings or revenue sequentially increased Sales cost due the marketing expenses expenses. XX.X% $XX.X of

XX.X% due XX.X% revenue revenue $XX.X G&A to function million Edgecast to $X.X or increased nature. COGS in from third expenses we our that below included as to expenses some the in at invested slightly G&A was Share-based million sequentially operating $X.X scale of quarter million. by onetime expenses or in $XX acquisition operational were million the compensation of million, and from and $X.X

Acquisition to million for to the XXXX. of charges million approximately $X.X the quarter third and COGS operating charges million XXXX. included compared expenses in compared in million for legal-related $X.X with were of the and Restructuring $XX.X connection were transaction quarter $XX.X Edgecast third

to million loss in Adjusted of discussed EBITDA XXXX, as fourth for loss XXXX the to higher of million SG&A earlier. third was a quarter quarter of a expenses, $XX.X due the $X.X compared

and sheet cash million, totaled million and $X.X from balance increase $XX the revenue. and Cash management working CapEx. XXXX. disciplined net management Capital our Moving lower of cash about third equivalents flow. of to of $X.X quarter payments from was ISPs efficient capital securities very with X% the expenditure, cash cash marketable and the increased or been an million quarter our balance during and of We've

historical six the accelerated in collections the XX CapEx in resulted Over Edgecast quarter as months, customers significantly process. integrating third tighter levels. spending CapEx we the last than was lower fourth quarter streamlining days initiated and efforts, XX below we've has which controls, DSO days, the our

Now moving guidance. to

negative have macro improve outlook a to $XXX of Bob environment range about And not recognizing $XX revenue economics. as the to a to $XX will business $XX challenging to million of Open between Adjusted revenue given XX%. implies experienced our This be percent expenditure of As range to X.X%. cycles elongated factors which implies EBITDA follows: million restatement, discussed, million. $XX in unit to CapEx we sales for our more and between X% $XXX million. revenue. restatement, Based million in Edge million mentioned, range our $XX capital $XX of XX% the is of negative of we've as between we Further million growth on desire XXXX to million, a

$XX We from between million of to $X expect payment ISPs million.

sequential in quarter over-the-top seven decline of due XXXX quarter discussed. the we've me high single-digit a expect around decrease we to let the the Based Now and seasonal to in second further in seasonality, more with provide viewership headwinds decline on the context mid- months guidance. first

quarter. We highlighted. trajectory the the the some seasonality expect to half of increased has based in first Bob on This cadence we as saw the see from normal in the is improvements, operational year benefits with fourth

fourth having cost the in the We from a quarter decline consistent XXXX of structure. the expect half gross cash to seasonal first margin revenue decline with fixed to due high

be quarter. second quarter in the bottom for loss third the We adjusted reduced and breakeven the EBITDA expect with losses year XXXX fourth quarter to the in

we incurred million related the expenses accrued Edgecast second paid cash and approximately restatement to the expenses. down expenses several other restructuring and the was quarter at balance acquisition Our the as from end $XX of

be our the lower reduction than of acquisition. expect needs the actions, agreement half benefits due in service We XXXX half from to first second cash to significantly CapEx saving the transition Edgecast lower of the from and cost

of undrawn our credit. We on are we remain and cash comfortable with line balance, our

churn In go-to-market to XXXX key we We expect direct in new summary, our on stabilizing products in and revenue channel revenue sales by return laser-focused efforts, team. to leveraging reiterate XXXX, financial I our our and to reduction priorities. the our growth due new and initiatives, remain to want

will We with modest to which revenue revenue are rightsizing assumptions, our break cost structure allow with align growth. to even us

to as next. continue of and will year this cost-saving go we through our accelerate We rest initiatives the

and Our XXXX million run XXXX now of year The savings should of areas expected rate of main of in million managing are by initiatives growth. continue being improve focus savings XXXX. to to revenue economics million on to client $XX our approximately to driving We year-end by at expect executed result the profitable combination profitability through and be and $XX unit model. growth year-end a in cost operating cost $XX efficiency

With remarks. Bob? turn that, for I'll call Bob to back some closing the

Robert Lyons

Stephen. you, Thank

to fact, and So integrated into the CDN that edge are. Edgio a path has transition turnarounds a straight really would in and I solutions that remind not conclude, commodity line, everyone of transformation of of been company low-margin provider a from fully

to the integrated We that successfully our growing are with enterprise-class is nonetheless network. company demand repositioning software performance-enhancing world-class scaled edge security and globally participate for powered in seamlessly better the by

we merely recent believe cannot the We awards control reaffirms hurdles the our headed have We own not macroeconomic in that to ago overcome. products the many did that right of two few direction. unforeseeable exist are we years for had of challenges, industry a and

many last identified year We have acquired and indicators acquisition business. stem in seeing the churn are the leading of improvements with the begun to of Edgecast

more new on trajectory initiatives that us this revenue profitability Our proper a focus puts support on diversified and for extending by products improving profitability, revenue year. expanded improvement

revenue profitable with growth build year. will that next foundation We on

the higher-margin to place to edge continue capital our behind far with believe With the disruptive less the a transition solutions commodity-based we restatement building headwinds a in company from business have we blocks us, intensity. addressed,

continue witness and integrate has taken we lower, we drive As already place. to investors product believe shift the mix begin the full ultimately to costs that Edgecast of effect will

In us. closing, we With that, we support and what and to look our for on for operator, thank possible be continued the believe session. up our investors to forward for work please lines question-and-answer their building continuing patience open the uniquely

Operator

The first TD line questions. Elias go from of Please Instructions] Cowen. ahead. question [Operator for comes floor Our from Michael open is your the

Michael Elias

about year. Thanks down us on Great. Since Edgecast start essentially the closed, think bounding off the could revenue is revenue did there? for give to provide taking it revenue from we question, of just kind of metrics churn the a of guys. you any guidance, how us To this kind proxy i.e., Edgecast can you we're could some sense for seeing has evolved, the the what's that on acquisition and there so you step going get

you And then as you think is can just of the we kind give us our as the services about any fees second Thanks. would and be the guidance related question color to models? professional for about there restructuring, we think there

Stephen Cumming

Yes, second then consultants Michael, lot gone in, outside take additional can but of Edgecast of about auditors. not the a talk back I'll has revenues. and to a and sort With work we've used the extent of obviously, restatement, the we one regards circle first, fair just internally, and

the this of done. restating And in terms charges most assume you work to a mid-single digits So year. of going of of costs. is could in roughly lot incur think We're being I first of sort half those

(ph) it's a are things bit of sort and running as [Line unified Edgecast isolate because the With Edgecast to a company regard Light] now. we revenues, tricky to between

good the back acquisition made the to a there. spoken began to campaigns progress of neglected about substantial seeing at efforts teams we We these introduce Edgio I'm And earnings We outreach churn. and that our there. at clients and have the solution. dedicated largely QX last senior with now call the happy their needs from to really say We in specifically targeted lot we've to resources our understand place and took clients leadership over improvements in we're

product that is improved QX obviously of churn with the by the also We've approximately down logo lower performance then that's last from rate network as year. overall helping And got else the good Edgio. to of the XX% offerings know churn. the is -- add. Management fact, the of well VX like really QX In introduction you have Bob, of and Advanced if customers a anything also to allowing Bot those value of I lot understand of don't

Robert Lyons

great. that's think I No,

done the in they're about how of some and add, a of doing we, the of think to built first customers, thing that and we to on all, is only about that success client get talked were we I phenomenal had churn engage the We've we've that. I'd that job. talked Stephen, going team front with things is we and

also product through a secondly, going great root then of standpoint. understanding done we've a and And from the really real job causes

more we'll so anymore. between So XX Application and features There's they're we’re great don't XX that those and meaningful of quarter, but all was in job the a missing we key couple done we have largely in that in R&D any put has Version somewhere largely next gaps X. And the covered product there, identified do place. we a That team the that. in doing of

as ranges, And year. bookings some of expect as we we'll of a next from look in in about numbers good going churn we And those we and off do need to parity hoped we the see and so, well-run this. where market from a that's at a when should be takes of terms we is with What as we probably go into normal progress where kind that would, it and is good there. it start standpoint, think to as you'd a SaaS the be exit company, we're why company all at year this benefits churn approaching is making we -- to XXXX as you be in think of think it we

Michael Elias

actually some radar? that renewals keep should for in have do in Thanks. should renewal terms squeeze have we our for anything up in. one can year, it. I more on there this upcoming If of mind Is you just just customers Got larger we i.e., coming

Robert Lyons

those is, talked conversations very No. we've time. active are and in those we about as all have What before, them. would we with have And of the Michael conversations, all proactive we I say

Tod, -- And the over So of already customers person, most of I'll do obsessed. also we from his he's already any [indiscernible] in that. thing nice customer issues. we really anticipate large little previous don't spoken to He's first our about them don't see super a job. tell all, you straddled to do

I it's would like starting progress "Hey, starting It's in there's any they your we're So And the the customers well. first who to we're really say getting traditional stuff, of like we're for if in security we're conversations to some the see those highlight progress. is have getting being have applications to going. success, seeing of been in set work been and to They there." but where that maybe really signs So that and place, that product team the customer time, we going and do early do products. a say, able lot of CDN customers cross-sell, there place, should get

these but can products we'll sorry, the way, together on way, have say, yes, by your a aggressive these when conversation business on much other one I price, -- you. you to have you and because not to you feel do piece, the look, for bundle things by things need it's And other you CDN easier

to well. we have is working so And as definitely pull, more levers which

Michael Elias

guys. Understood. Thanks,

Robert Lyons

Thank you.

Operator

from comes Lake of the question Our next go ahead. Street. Eric Please Martinuzzi from line

Eric Martinuzzi

Yes.

what's know time amongst current mix the product curious the passed that's offerings. three just the past just XX revenue Given the to over months,

Uplynk three. number being Security The mix then and implied XXXX Delivery guidance. Content in number number App one one, the the So

Stephen Cumming

this is Eric, Yes, Stephen.

directionally the is for actually, around but XX%. broken some out, The haven't delivery give knowledge, so to of business is higher-margin that's that overall what my we're the piece which your Apps a We models. the it you sort of approximately can let and assuming XXXX. content then sort model And me sort in -- Uplynk historically with mix stickier other is the high for growth, the really and XX% think up we is making you

and that business just growth those of do think we a those to years. of so as a and XXXX, I we Uplynk it's look we from do subsequent the high portion opportunities. App to into be of the trajectory we out But as out nature larger expect -- expect markets look

Eric Martinuzzi

Got the QX it. and the on getting Congrats I forward results. look restatement QX XXXX to done.

Stephen Cumming

Eric. Thanks,

Operator

the Our Raymond line from next James. Louthan question Please Frank comes from ahead. of go

Frank Louthan

Great. Thank you.

from as So versus And this is revenue this issue you more some the as a here, just sales sort to a bleed is economy more Edgecast? performance this of restatement sort issue? bit? or give you Or I slowdown of related characterize what a can is the about of I color here. mean a us network little the bit can on far concern mean,

Just to sense revenue have the better back the turning of a of of kind are process where in we around.

Stephen Cumming

to that Yes. Stephen, and add you one. Frank, if I'll then can take is Bob it This like.

natural the their their be that whether on think taking is environment in seeing on the three revenue they cost. And key the I sort just this sort sales and Certainly, given we're of of focus the an customers prepared I think should I of areas: sort remarks. One, and thought outlook for as XXXX mentioned paused is macro to of really cycle. by projects, part elongated where new resources driven

and that we've uncertainty And like from shoots about restatement it's this. I some into a some pipeline then solid factored with natural got secondarily, some I there's growing see encouraging us, think comes think And that's that bookings. to that a we're pretty certainly guidance. that But starting now green behind

headwind we've that's gone I into of something bit Additionally, created that's that a XXXX. substantially the as about we've of but a rate, earlier the while half slowed churn, first commented

as now the Edge. in And no then capacity associated longer Open additionally, our we have zero with revenue partners

the ingredients. that's So

of I very see We revenue this the towards end positions the that come think it as the and we in for that's well seasonal XXXX. driver. we'll feel, uptick certainly year us

Robert Lyons

let then go And add ahead. -- that to Frank, sorry, me

Frank Louthan

No, go ahead.

Robert Lyons

add that forward. going to I we Yes. how to productivity sales about was Okay. going think

selling what -- of even we When there productivity we've of number pointed is, sell we the more trying the last It's to about to But our one out you we're value. that pony a sales look, kind we of are kind product of sale. see very over a needed factors essentially we're have and organization. done and we now one-trick year, portfolio and So to that a and think also used different a out solutions to reality navigate. try selling

we of did. the the changes made that some we that And reasons

of beyond fact. bunch the morning of And very with look land, implemented at those actually conversion had war couple brand-new pipeline. of a our CRM personnel, KPIs, expand a at made those number actually when of but we pipeline, robust revenue of we look all gen And numbers growing. We this We demand we we see investments performing just a the look have set And processes, also capabilities a you interesting marketing. we that frequently. how things. and solution, at that's matter We've room a look you of trends, a at as at look pretty the

of So we're pipeline starting now pipeline same that see for to and grow example, positive. quality grow the the which is the at time,

fully as rate we by us And point. to have conversion we of that is expect a into really QX, it training -- industry be. doing Our job where conversion of slightly should a at only that, would be. people have. put we that are benchmarks which to get go a bringing in We great be lower the people would good needs not also Tod is benchmark shy where to rate to certain than year-end, that we but XXXX,

on want trends get you that seeing monthly to there. track and the we so, a we basis, that we're And

have the generating you channel more fact when actually now that that's combine pipeline, productive. we're also a very So we

and come of improving churn a those There's All wanted but that Our a sets and XXXX, marketing is in to for up together job be right moving to all could do to nice great very a direction. doing demand is thoughtful. do We're the doing gen. motions we sales work lot that.

want for we So this be very to year. thoughtful

Frank Louthan

given churn don't and Okay. names, maybe missed winning if are is you Great. And it, the is Or on the pricing? on what broad-based? past, that won large it back -- your it Or mentioned then some you've business thoughts the in more want this is concentrated a back but you back? in this, I if churn,

Robert Lyons

Yes.

-- feel it's it think bucket in. free to of a maybe and me I couple areas, Stephen, jump let in

big stuff talked revenue you that. put I'd ARR. pop, We've was wasn't call and accounts, we it stand really cats to there a three that just really to put doing far price was buckets. previously people bunch have that churn. think more, then some paper negative small an Any and go ask onetime it in into opportunity contracts I and from of and an renegotiate We new in really and somewhere, that we're onetime dogs also acquisition, situations about dug we They where has time to churn got there. more you good frankly, new had We that job as it a were to did compression. it's always some of revenue. there wasn't it nature. because in but fact, got quite It a had we And it to

together. improving. categorization Maybe reset just bringing real I you that's with stuff is with that So like I two it of a up said, got would then to is it's just companies deal and bit, some associated clean maybe third-ish with. that there's third, And churn, and a a say

Stephen Cumming

Yes.

covered cases, focused profitability add the improving we're you've some a we think and Bob. The margin there on is, on very company churn, we're only and going areas, to prepared in business. negative just I this in I our is remarks, in the accept not for EBITDA touched would intentional and other thing it well, where some

obviously, that. relating to consequences going we built So look into But in there EBITDA as been forward. improved there result hopefully, that's was forecast. some that's our to intended And

Robert Lyons

Frank, address working certain risks We good other mean in previously, this really product We're churn need. where for. mention, got one of know what we now And the what unprecedented we them is from as a real to they this are, engaged partnership thing that were transparency have Yes. have We've and in around about we analysis level those I ongoing are all manner. we've talked about a the features every causes really is we've going things. conversations. root to the what proactively with I'd talked customer, specific

So we more science than we're initiative. like a feel -- our again, it running initiative

Frank Louthan

you much. Thank All right. Great. very

Robert Lyons

Thanks, Frank.

Operator

comes ahead. Our from Van Craig-Hallum. line go Please of the Rhee Jeff from final question

Jeffrey Van Rheet

questions. taking for Thanks the Great.

couple. just So guess I I got on the particular. pricing, a in

put market in getting two? getting to the on be you the you the more clear, Are pricing is weightings sensitive? Just Can difficult? more

Robert Lyons

difficult. opportunity that offer if to more it's probably been, to not is as we it say Yes. not is more which pricing helps. always for I it would In particular, there's the getting It what aggressive now anything, as be been have too, has historically.

things we're a in happened, is in legacy couple particularly traditional have that media seeing of market think the CDM. the I what

you And can they way read out ways you rates to ways. know news, profitable frames of can but sometimes do quality. pretty lot in they're a cut lower are People price, a squeeze can so that don't it the at these their that. also aggressive bit one, figure make that streaming to they -- see they that trying Number the

talk it, for but traffic about less don't You us. that's

happen. thing that So we're seeing kind of

and to of You also might low rates. give you instead might five providers down two them ask having consolidate aggressive consolidate and to very you

things. bit And those of so, little we've both of seen a

think more I nature. in it's temporal

their I far market But that think we're and the proved not as the in profitability. ways which unnatural seeing those that's really just pressure pressure. term any We're seeing manage readjusting. people as near are things, what beyond can is

Jeffrey Van Rheet

on the call, base. in helpful. Okay. than hands still and the That's churn little then this emphasis on going the your was around And products, I you maybe when the on think, prior were a more what getting

really, relationship. there generally care, of just that out no lack I that think explanation some previously reaching was customer no

the out fallen and fact, than I tonight find heard out, Did there you point. at in on product. product the outreach expected? that they got to you emphasis you reached more were you But not had customers more pace from off realized when that, gone or So or in your interested

Robert Lyons

are we it, realized. They're The if to back complicated. back but I I your -- head particularly you important wouldn't features. a to about very have head, (ph). of talk than you where. rolling more say Yes. security. to They number a [CISO[ products rolling question things was these And mean, I really try there they're are your eyes are

success ground did security, in recognized the We a able client we and get what running. that had bring from has I I they my of the is, done we to team that. about talked team. to in front it. So was in brought in this hit we before past

First real were, thing few XX was we a the things. first out days in XX, you were. XX, the the in risks different issues out talked find did that, And find to find every where customer, what

You somebody. to to talk find they just glad that were

"Hey, cases, was feature. Are And we change. as your they And to say, it?" other this enough. sometimes need want we that would In much as have competitors don't

get you If it, don't it's important.

pretty You which think there's something important. like encryption, is

really great things. XX that the built address quickly about things, of those a team Ashley we so, prioritize which our of to that X, release it big did really done and and list And and R&D job XX majority did with the of getting App

And want quite so, customers too, some have to I a And do excited [indiscernible]. we a it. we've we them have came then what story, it to -- conversations get carrying addressed the see clear now would of just that feature basic frankly, and We And with the pretty say just and you understand and a can know and uncertainty, want product understand combination and good we that [indiscernible] sight the don't news Verizon, about some is when gaps feeding. was very and know they this. to we they and to

Jeffrey Van Rheet

one. the And into will call That's you've helpful. But once respect about just after here. implied the I tonight Okay. be more us guess then, what last of cash bottoms? us modeling you the self-evident given get I give to cash a where with balance, details the sense can little a suggest it Stephen,

Stephen Cumming

sure. Yes,

QX balance exiting $XX about on be the mentioned I So million. prepared will in remarks, cash our

down of little we ended there. the accrued that those from to services acquisition, you give context associated transition to June way, [indiscernible], through XX. of paid the a by and the work had We we've expenses Just bit had on which, with lot a all agreement Edgecast

cash. Additionally, of other we've the which incurred nature, in expenses onetime restatement impacted on, that restructuring related we initiatives acted the certainly to and either some

structure as our the and around uptick and this I cost should seasonal think level and year this look going well of I forward second improving of to So positioned. a now line, we lift cost position the with our revenue, of in in think an improved sort be we is structure half bottoming with cash sort

that time. is I worth it's noting, at we credit line of point also undrawn do think have this that in

time. point this So we feel in comfortable with our cash at

Jeff Van Rhee

Thank Okay. Got you. it.

Stephen Cumming

Thanks.

Operator

remarks. turn closing like Lyons over for now the would I call Bob to to

Robert Lyons

add today. I to thanks, script normal Thank some joining just I I wanted thanks just would you, comments. everybody. have and say where for a actually impromptu But

for for and and and shareholders personally six months. the side a first foremost, think, I of months a of It's analysts other the all investors, been start happy us our tough our that. thank our to doubt, getting we're last six to without

but team been I And with the brought the got that, We've Stephen team distraction. going the He as to this recognize said, he great certainly finance We're they're not same team for let in for the also to want a time, and carried management a signed much up rest is phenomenal well, champion. legal got and last they to we're forward shoulders their team. team, while on he's a doing pressing and the his keep pretty what together going at months. X this the of and be transformation. not

apps and move with we how enabled be as context, out we're going going to do said going XXXX, solutions a so that are And In want and company into security company. And this company stack we're of with just company highlight to that to few technology video. that really up important. were to I laid transform things Is that? a August we a we

You a and we set applications jobs. mission-critical broader their and customers blue-chip to us are today, run fast on have of forward relying to that much clients

way. a We meaningful have, company a in fact, become in security

we we're our do and if as intelligence you that's that then, learning effectively. and and we remember leverage were why seeing said faster we the machine for artificial foundation can security we're it back that a so And are. winning exactly we more And that's results awards, to exactly going why

job a that driving of So strategy. great [indiscernible] done

and team sales signs starting we're design for the see progress marketing what to early our and for retooled completely that. becoming, that We've of

there's a drive products we're and value portfolio, with are our portfolio now that lot and and drive Our of able and our differentiation. broad, synergy to

we where pretty are. And excited so, we're about

Stephen of things that, said profitable. $XX out to we we're have going ahead million. into to we have we on also And we become meaningful year. addition took out track take as a in I XX pipeline this In mentioned, to And demonstrated and pretty to we XXXX, And XX XXXX.

move positive and continue as drive to we'll flow well. business of cash cost the EBIT towards out So positive

are all And our profitability course, of expand and together, there. original we extend, that to add the improve making continue to progress improving so, when back definitely and you

portfolio, our ability seeing. think argue there that We redesigned I and it's progress the traction all words job done with our and to the we're have commercial haven't to drive we're definitely hard a great we winning

And those push So back. about lot and really to they're to lost thank we do. still can are are bumpy patience do for really we to and of that recognize a that not But everybody Transformations and sight work forward, of haven't this working what company I I'm continue and hard. their wanted excited really smooth.

and you, So look everybody, in the future. forward today, your I to conversations time further for thank

Operator

Thank and conclude does gentlemen. This call. for you, you Thank participation. today's your ladies

may disconnect. You now

Edgio (EGIOQ) 19 Jul 232022 Q4 Earnings call transcript