Earnings call transcript Q2 2023

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Operator

Good afternoon. My name is Krista, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Edgio 2023 Earnings Call. [Operator Instructions] Thank you.

I will now turn your conference over to Sameet Sinha, Vice President of Investor Relations.

conference. your begin may You

Sameet Sinha

on Good the the afternoon. XXXX being Edgio's quarter press be our be joining today, days. can approximately A release copy Relations quarter you results conference along section for of of archived will financial and is XX-Q XX, the website call. our for September XX Investor for second website. Form XXXX Thank in our second This recorded today's found call with

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

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

the Bob to CEO. is now Lyons, I'll President Bob, over the turn and yours. floor call

Robert Lyons

welcome Thank of quarter to second earnings afternoon, for the and call Good you, our XXXX. Sameet.

customer report quarterly and outstanding applicable us. this connected this NASDAQ show entire issues and and behind preferred the continued to laser-focused our process, that is be partner the addresses filing This compliance we digital feedback experiences. put on filing, to valuable compliance issues restatement more have the creating rules. executing Edgio associated can the XX-Q continues listing now Throughout with we strategy With for

their are that With organization. each ones and and Edgio seeing reaffirming value existing passing month, brings we to trust customers new the adding the

built of motivated but a the us. available very equally work to recognizes have opportunity capable is team We us, in front who leadership the by

have several for industry innovative awards We recent experts accumulated from quarters in solutions. and industry analysts

We seen a of notable whom to customer also from wins, have us of competitors. switched growing number many

Let on momentum. we us capitalizing the and highlights me believe enable operating on this will building to share that continue

industry for the redesign of back the turned commercial Churn norms, reduced the into in of corner. business churn motions acquisition. improvement fact, line revenue the our enablement our acquired demonstrate applications expect year the First, team, of our rates to to sales client since has have the in first in expansion exceed time we been and a of begun with implementation that teams successful we to success half the has, and the

momentum is have end sequential success, our growth. quarter, and now are we more year. that importantly, had grow, of motions With we into bookings third of historically. quarters pipeline bookings for three Our we continues building converting qualified to the will positioned more have that than at the commercial higher to pipeline rates we By next of believe the

continue $XX cash track XXXX plans our reduced million costs for the fourth to our of we and quarter run reducing XX% by by aggressively to are $XX costs. of rate operating by Second, cost this expense to operating we to second successfully roadmap manage million our quarter, compared committed remain year-end. We to complete In the on year.

globally continues network Edgio releasing of security strategy and and with product Applications of delivered our our native protected strategy Third, X by enterprise solution as deep The to received applications, having edge-enabled products a leading powered in Version after number streaming. validates security scaled establish our edge class with expertise. provider best-in-class awards

stake and high web have solution enterprise properties. recognized credible security Edgio We as for established a

complete We have in streaming suite the capabilities of most the continue to industry.

the committed All XXXX will of a that we aggressively remain year. August for profitable we the We improving profitability laying usage-based believe from growing low-margin We for edge-enabled happy with that behind have pivots to in point inflection solutions heavy be profile to on and company, the recurring reliance us XXXX, that this strategy away revenue margin. prove while us. that to high strategy an growth a outlined on next to of the this and is are year, revenue foundation builds distractions a both and

a more me take milestones unpack important minutes few each Let in detail. these to of

support revenue The XXXX. takeaway, revenue first we now clear expansion key have stabilized for with in

X% a was customer business. recent two compared in quarter last year. quarters in is X% significant previously significant Churn line in discussed now is in with and norms. our quarter first as the made applications progress X% industry This have in of acquired quarter approximately the in to the We improvement and most fourth churn reducing

quarter. versus support will churn in up of progress in for Our since renewal and year back the half reducing grow double bookings this our quarter-to-date improving are to renewals second the continue expansion that churn close outpacing revenue digits time We acquisition. of believe the the first and the

to of growth by DemandGen of from rate rate both organization quality conversion and improvements the in XX%, marketing in an has the our implemented first qualified This Our our XXXX. pipeline phase with first speaks into growth our has resulted going X% and Xx than to meaningful line to more rebuilt of norms. plans. XX-day our in in pipeline now This than more improvement industry

Edgio joined as productivity Officer into improved and Sales model the during territory quarter. commercial Todd the Hinders implemented productive sales promptly second number a a organized Xx enablement year-over-year. Todd improvements. more by teams has Revenue of Chief

Our a customer acquisition cost more to ratio bookings quickly X:X industry line and SaaS trending ratio is with to in norms.

than have logos across and are with As This application bookings ahead and a of the renewals. more our quarter levels of ago. from first for the end second new been August, of quarter already broad-based month solutions has improvement doubled

of restatement of that rates in and the growth surrounding As conversion uncertainty subsequent our qualified improvements pipeline, wanes, expect we pipeline bookings. continued the

partner. In market expand objectives. anticipate AWS expansion of will with we our prove a our meaningful to the quarter, continued with be a routes channel relationship channel-enabled as this partnership We to contributor to to growth the our

of to to into the partners high-quality year balance this explore opportunities continue additional next. throughout add will We and

indicators suggest foundation Key our strong we for laying motion performance for fact, commercial growth. are, in a

qualified Our improved quality. faster is with growing and pipeline

Our is new routes add improving, productivity to we continue and sales high-quality to market.

plenty we improvements slightly to is of demonstrate work XXXX into sequential revenue the with half and net second XXXX. of continued expect there While positive to growth retention do, additional

as objectives. execute The planned second flow continue to positive free takeaway, we cash profitability on key and our

plans execute year-end. by on achieve continue reductions million our $XX We cost million $XX and between of rate to to run

well beyond number that committed XXXX. a solid to have profitability to roadmap number that remain into improve We continuously and

largely post-acquisition, our cash XX% completed the declining We of year. in first resulting operating operating have of by months implementation model this in expenses six synergies

and detailed bandwidth, that costs. pairing We economics unit reduce our continue hosting, with to focus plans on improving our

to While we have we early had notable multiple will of success are prove year, in the improvements. this be what of quarters stages

our to XXXX capital for guidance. the Edge under asset-light X% in sales are Leveraging at midpoint have more of and XXXX we intensity XX% becoming than of in Open platform, more reduced

applications We will becoming business. on edge to remain software our asset-light we and a more company expand high-margin focused as continue security

savings, to well We in savings expect XXXX. sequential and year-over-year our cost to adjusted fourth flow cost additional in EBITDA we the in cash substantial with the the margin quarter have expansion gross of will executed EBITDA year execute adjusted reach should accelerate in free and breakeven deliver revenue continue back Progress to half anticipated initiatives. and improvements growth, against

The make company. utility we continue solutions ARR-based to an edge-enabled third transforming technology usage-based progress, a from company meaningful CDN our to key takeaway,

we quarter, we speed, is second properties outcomes start some stack stake X. the a with me highlighting technology that costs security. by unmatched with fully the operating workflow and media Version This our business lower orchestration Applications of enables progress made integrated our have meaningfully high award-winning and applications, exciting sub-second Let to released In with security companies solutions. deliver web release and better

associated and enterprise protected with class powered enables seamlessly our by Our unmatched our platform securities our cost and point customers. latency operating next-generation complexity removes globally costs Edgio architecture by solutions. capabilities for the monetization, security native now and scaled traditional integrated edge

a to compelling more we unabatedly XXXX, cybersecurity we In stated would have much tell. story that

We continue on rates and solution, Management double-digit can base. company that was Edgio now received security is In as and compelling resulted to QX, Advanced existing recognized a Bot enterprises. that launched build for in customer which for say our our we promise well trials attach across

that application contracted secured. validated endpoints content converted leverages ensure be machine and discovered, API solution, and traffic API our in to and managed inspect importantly, More into could patterns customers. recently successfully both security released trials learning we paying QX, which to We are

more a partner Having increasingly protect is applications. essential critical our as becomes to Edgio exceptional security customers' operations critical

unmatched expanded with enabled can recently services deliver products. that have new bundle operations leadership ensure Best-in-class with and our our with We our expert services security we security customers. products Edgio to protection center

awards Edge continue Best Strategy quarter. & the Edgio leader won coveted with awarded firms a recognize Radar in by Award Sullivan InfoSec Frost at Report. in to Award We research Independent the RSA early GigaOm recent in its Global strong rankings. Competitive recognized Conference Practices Edgio Leadership as the published Edgio Platform and were

competitor. directly competitive that supply attainable who large X Our over Edgio EGO's North American were to architecture. achieve a not Applications levels time a on suite Version able retailer, incumbent takeout architecture very pet enabled performance short chose the was from existing within advanced their a

safety include the in company a semiconductor solutions security Asian a X largest Applications and and world's Other resulted notable also the Version company. AI consumer of solution Europe, leading global wins webtoon our brand. a within expansion XX,XXX product in employee

new which company. upsell releasing bank better personalize we Our be contract a advanced have experience and at drove of our to more renewal soon security over a Asian user on with the with a and control large key regional and success, developers performance a Building more this features improve version bot hardware edge advanced will airline functions, edge. with content, by empowers an the

making weeks, coming of by we consume other is to will acquire offer the making a than accessible industry. Today, will so experience, addressing pricing the most integrations product continue set modular top largest companies. that. the ecosystem of This more In difficult companies are a a Our streaming the the companies, prebuilt expanded simplify and product capabilities model. of buying more they in what for suite media the to we design, integration can APIs solutions easy so to media robust will include and simplified complete the media be need, more third-party streaming that X,XXX improvements the

to In vendors companies streaming streaming yesterday, an announced the fact, workflow. entire of the we manage alliance complexity other leading with help

solutions of entire part act will Edgio partnership, workflow as for provider, As customers. streamlining primary the the this

to to streaming excited enterprise-class capabilities broader able out-of-the-box market. to We be complete offer are a

We flattish future. foreseeable remain expect to business for delivery the our

pricing growth, further slowdown but industry consolidation, volume begin post-COVID seen to trends rates in stabilize. and seen a have We have also subscription lower

We to return and are capital. profitability this invested business on managing prioritize

business to support asset will economics Edge our intensity product, our improved roadmap profitability with XXXX. by leveraging and delivery improve in to Open for capital reduce our Our our unit commitment coupled

restatement with plan and executing is the us, full transition initially associated articulated XXXX. requirements our summary, In the attention in reporting behind on

the on place make we growth. plan in for profitable of multiple put We continue believe years to that and notable blocks have progress building

profitability Our on the suggest are a XXXX. leading and established foundation indicators track we have and improvement right for growth in

Stephen? to to results. I will call turn over second Stephen quarter discuss Now the

Stephen Cumming

Bob. you, Thank

seasonality to second quarter sequential Revenues XXXX was communicated for million, on and XX.X% XXXX. XXXX $XX.X due primarily previously from decline up saw summer the acquisition June expected Edgecast of completed quarter the of inclusion churn business. the than Edgecast driven by associated of the X.X%, the We stronger at with XX, second normal a

growing are point year conversion be new quarter qualified product the commercial second as our adoption for to expect motions revitalized driving and the and We low sales reducing churn, increasing pipeline. of revenue

having seasonal margin. by margin, the offset previously the Cash acquisition-related basis Moving from to containment consistent Cash impact structure, savings announced was XX.X%, gross high partially efforts. impacted was and stock-based expenses cost compensation, traffic, gross excludes gross margin with decline a in down depreciation points which cost XXX sequentially. fixed from by

to share-based million restructuring depreciation legal-related down million first charges, from revenue, of quarter expenses. and were compensation, XX.X% XX.X% Turning and $XX.X Cash operating acquisition the expenses, in of XXXX. excluding $XX.X charges, or operating amortization or

to continue our make We initiatives. in reduction cost significant progress

We acquisition product new are operational efficiency Bob synergies marketing motions, executing sales and and earlier. introductions and well revitalized programs our investing planned in on highlighted while has as

decreased from XX.X% $X.X of approximately million reduction due XX.X% revenue savings containment variable to the Cash of and XX.X% of or from revenue containment $X.X previously of efforts, by in $XX.X previously decreased million savings sequentially from million, spend. $XX $XX.X million XX.X% million cost to expenses compensation announced from Cash discretionary R&D cost revenue expenses to or sequentially million revenue marketing efforts. $XX.X due the announced sales and to or

$XX.X expense revenues decreased savings due the revenue services or as of cost XX.X% $XX.X of other or and reduction announced from Edgecast well $X.X G&A million the to from in for to conclusion discretionary sequentially containment the acquisition XX.X% efforts, expenses as transition Cash of million million previously by agreement

Share-based the million to quarter and in XXXX. transaction below Restructuring first charges included first million operating $X.X million expenses for expenses million million charges compared connection compared was to COGS the first with for in million. $X.X $X $X.X of Edgecast quarter. related $X were $X.X the compensation the included quarter and were approximately Acquisition operating in at

$XX.X a the in to quarter in first initiatives, operating quarter expense across-the-board of cost-saving Adjusted to continuous of compared XXXX of loss was a due loss in EBITDA which for million million the and execution declines $XX.X have of second resulted XXXX line all items. sequential

management XXXX. sheet $XX flow. marketable balance decrease about balance to $XX.X cash of from the and very disciplined equivalents Moving similar our We've first maintain half second of and in quarter the million been expect and year. level the cash and totaled cash million, the Cash to cash of a securities of a

half XXXX expenditure, net million was or of capital $X.X revenues. of First from payments ISPs X.X%

have was the CapEx continue than process. the XX levels. first we customers lower significantly months, and resulted historical X second CapEx spending streamlining in the DSO XX last initiated we integrating quarter accelerate the to which days, Edgecast for Over tighter days have controls, our below efforts quarter collections as

have environment. macro Strong guidance. continued helped and the execution in go-to-market softness product Now improved moving overcome motions the to

are our Our focused broad to product leading portfolio customers, with million to and improvements year-end. by indicators. solutions We opportunities rate and deliver track are the savings value seeing are in savings our on $XX $XX resonating proposition we and on run the of million remain executing on cost of

implies $XXX $XX of X.X%. negative to CapEx million million. to EBITDA we revenue range $XX the and of reaffirming our to which now, million of business million about range to negative a million, implies expenditure This For in $XX to capital a as between percent with of the of for million X% of adjusted $XX growth XX%, year are guidance between range revenue XX% $XXX

between ISPs to $XX $X We expect million million from payments of

more me churn to context on of the the you quarter. a in seasonality, and increase uptick revenue in Based XXXX, in in sequential by fourth our a let Now guidance. we third followed around in bookings, slight sequentially provide flat improvements quarter expect reduction

year-over-year first Our the pro meaningful improvement half. implies forma revenue half trajectory second revenue versus a

consistent trajectory synergies. sequentially, additional and margin expect from to with cost savings benefits gross improving with start We cash the revenue

adjusted The first even quarter. the we quarter expect break was EBITDA, fourth to the in bottom for and

loss half the million it in of versus about To approximately guidance of first the million $X of into perspective, year. loss second adjusted our to EBITDA midpoint half in put $XX implies a be the

was the second quarter balance $XX.X million. at cash the of Our end

remain of our the expect similar to levels on our XXXX second be half in and of cash undrawn We line credit.

In our I financial summary, key want to priorities. reiterate

reconfigured direct to in Our structure our great driven revenue on cost revenue in reduced leveraging by the rightsizing solutions stabilization go-to-market by is focus made channel We've align in product to initiatives, our new progress churn, return growth revenue and assumptions. and XXXX team. XXXX, and with growth sales our new

of and cost efficiency expect operating our on and next through year continue improving and through profitability initiatives year savings managing in into driving rest model. We economics unit the client this to our focusing network

we capacity initiatives. organizational productivity focused year, tools this For remain and CapEx optimization, rationalization, on

to cost-saving result which revenue we optimization cost-saving network, $XX continue highlighted. growth our of initiatives savings explore more should drive expected being would operational rate additional We million incremental XXXX as of growth. and opportunities The the to of $XX to combination profitable in and have efficiency be a year million run we

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

Robert Lyons

you, Thank Stephen.

first to high transforming a generation served our historically into security. stakes edge helps CDN that for services with monetization, We Edgio third-generation way better utility and that the efficiency solutions customers on at digital properties my platform are edge commodity-like well platform manage

and and mission-critical of blue-chip to companies and networks, largest for elsewhere. the software drive many continue develop entrust fintech, largest Edgio We company semiconductor social capable in holistic the even some AI unmatched serving of streaming companies that solutions solutions workloads for outcomes the the of world, business largest

Having expand structure our enables while solutions revenue extended cost to and us market, and profitability. our aggressively reach to of managing our the improving rose all

As are beyond. profitable positioned process, focused with in revenue we we XXXX increasingly growth created transformation and on better to leverage our are we have continue what and

engaged Steven with and our I look to forward again. investor actively being community

week throughout We be New the will we'll in York with cities participating of in and rest the meeting the be investors Conference year. City at Lake this other Street

and unpack leadership we we content posted also are team are we further video going. started, our have where from delivered We that where where helps

and take progress Please a and of can in Homepage a few About website of minutes the it on plans. our edg.io understanding strategy, section. review to deeper find gain the You our at

you your for website profitable you of building on to throughout to for is this balance Thank uniquely add continue content year. patience we work will We to the continue while we for believe what our us.

up that, session. for please the question-and-answer the With open lines operator,

Operator

from first of Your comes line Street. from Please question the go Lake Instructions] [Operator Eric ahead. Martinuzzi

Eric Martinuzzi

Yes.

First than the was wanted expected, but you took the off, color to-date. that congratulations on that I churn gave. it's to SEC a getting mirror. project focus on to have that, filings know longer I up that rearview With a lot in good the it

could period. there? churn the versus the then when You talked talked also QX QX XX% say it period? XX% layer churn take What about I QX. just And X% wonder, that you But me in down a same deeper of is X% about Is you logo customer of in same versus in you QX? in

Stephen Cumming

Stephen I'll take and Eric, Bob this is one then any here. that color. additional add

at Now QX. And you is there that turn release, metric that we values earnings have showing in And we're versus can that reduced the substantially absolute - it's that. It's reported churn, of XX%. two XX% actually on customer results logo looking see number the that by the around was out the then dollar our QX metrics customers there. our

And I we that I our well. gave when QX think update gave data as point

certainly pleased We're around this got the arms our with substantially. results. So, we've

know, dedicated asset. that put targeting a a as churning been resources lot around specifically Edgecast we us substantially the leadership were company. for We've As team, with a you major senior customers when really focus has that this it, acquired the and of along

helping plan. churn we've introduction simpler of solutions I It's think seen add also with environment. our to VX our pricing and that product substantially expanded a - offerings just also an that

Eric Martinuzzi

given I Are quarter. we addressed - know - major off turn major renew exposures in we exposures or customer So are either them base have all the we our a them? our renewed have and doesn't

Robert Lyons

Yes.

thereof, areas, we were you that We had had. towering two was gaps basics. some we churn root So were or release had had Version but X are where is closed did gaps this feature doing? some Eric, certain that feature strengths competitors missing some with the we - Application XX Bob. that Yes, those we the features. in you we client that recall might the and primary one engagement second lack So of causes How

the early And net that. QX, then, the and results result down. churn is is team of course, late success see the to we implemented client The starting QX, of

direction even use at an more cold renewals we're more importantly, we where seeing importantly, versus are to. And renewal. them in As want going the expansion of just up renewal, typically a

where the start churn, first second the that's we SaaS believe to want company, renewals, since revenue So a why you'll you outpaced in of which see time the acquisition half obviously. year, for and is the in expansion what

Eric Martinuzzi

Yes.

health customers, you the two could then and largest And your Amazon comment relationships? Okay. Verizon, on of those

Robert Lyons

Application that They're Version Yes, big very And happier Verizon. features couldn't renew all able about there We that of partner be agreement again, also the X they ours. recently, and have. capabilities, positive of strong, we were of we fronts reseller with on well. their a - portion to and expansion conversations as because

So very strong relationship there.

And about. us, and has we're and partner, Amazon, a which with growing as with actually consistent excited been we're them, always, great a partner

have So as mix - pretty third, up I'd well. in is add Disney feel as relationship strong well. that and that very a we happy a about And there relationship and

Eric Martinuzzi

but QX where was or higher from I the forecasting what being, bit last granularity you -- a Okay. is guess, me. little about range QX. you for we it expectation a QX. pretty I in And your The gross below that? was the substantial talked QX, for around Obviously, XXXX? either have can step-up some I sequentially put more maybe in a then XX.X% question for get cash around margins, Can them

Stephen Cumming

is I'll this Eric, Yes, a elaborate bit more. little Stephen.

company, our the pressured in network certainly out margins. first we from that even being So structure - cost came year, gross in more a operations have of remarks, and this fixed as so quarter. half mentioned prepared our the QX seasonally a weaker I high a has the That

As our margins you I expect said, sequentially cash improve. gross to should

and line. the somewhere initiatives, to we towards that it we're go to the go type million we've quarter. realms XXX-plus sort those cost basis working in million on to synergies lot as lot and of Obviously, $XX third a that would cost $XX the I into cost-saving of takeout a points of liken of of got

to through some work of time takes those. it But

run that then towards rate materialize lot and the of year you'll very nicely a for perspective, the of a end up tee see XXXX. more from us So

Eric Martinuzzi

good taking Understand. my and luck. Thanks for questions

Stephen Cumming

Thanks.

Robert Lyons

Thank you, Eric.

Operator

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

Unidentified Analyst

Thank churn guys guys. you seen And from for churn before. existing related of Rob customers This pricing curiosity, segment is Thank in Great. Out you. were Hi characterizing any just to delivery the How you. holding the you share up? is Frank. on have price? the

Robert Lyons

Yes. No problem. Bob. Hi it's Rob,

We of So with churn. actually, business talked in churn we've the the part about acquired start I'll that the acquisition. as the -- applications always was

not churn in We have seen our kind of our business. legacy

net metrics our our XX of retention, - is fact traffic year-over-year net get In one we is the year-over-year. which we clients, up traffic use that's that top from and

So, positive we're one that's there. actually factor. seeing Obviously, pretty

historically that The which revenue down drives times. for is at compression, is We're reasons. of actually that other settle there couple bids seeing a factor pricing

had you're the I seeing not grow as as in the think, it market one, past. fast

think at I put low industry X% pundits it most single-digits, to overall growth. maybe X%

the subscribers. further And you out seen the that's in market. have recently less the players you the yet they less some we've companies when see of also, other falling out of that, then have have leverage, consolidation media news industry, And where

with and things that we performance think business and pretty true, fact being those of the our is support, stably. part I our maintain all that high quality So, run the

share it to to come to to to because is partly, grow else, We're market which take got means not going grow you somebody try way in it the lower from price. the

more really prudent business, a on on now we return better and is think we what how right on do move -- more we is which focus on for earn what capital performance take and shareholders. invested And for so we're our a based that instead, have focused

Unidentified Analyst

Great. That's helpful. Thanks guys.

Robert Lyons

you. Thank Yes.

Operator

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

Jeff Van Rhee

getting $XXX Yes. a all given questions the couple some obviously, and worth taking original business. to I the you on the Bob. coming around there's the relationships the I A then, is it of look - kind be since think from for the when all if of you're questions. of revenue the were on, been Thanks just bringing mid-'XX this heavy how like of second back ISP that Edgecast Edgio take that million noise, for the me, would lot out out. think, lifting see sure. reemergence of of a taking expectations restate for feel Congrats noise, And from Maybe to

of lot happened It's, churn a what had business. You there. the in guess, maybe I base unclear

three minute disappointments Just in and - a what came? clarity now from a the the there where -- sense of of revenue talk give on little components to what that here got numbers, us about of the happened to those miss spend each or a are more you've where bulk

Robert Lyons

Yes. And for Sure. this it I'll frame free Stephen, early but to jump in, comment feel And Jeff. thanks way, that on.

reset, we than way compression, they I call the with of So revenue some one, factors. higher the to we were wouldn't of the had who pricing looked were it couple call it much at pricing even think Number when is market. there about business, customers a compression I large -

in and on And them so opened to reduce come up renegotiate prices. put paper when we that door our the and

to was back a to do of were unreasonable So, to customer one-time to for media who so that. customer cut multiple it them have we but renew very to actually that - we had we're reset. had and one we better It wanted was able social growth But kind hair large price. with take a that ask, today, years, but

So, were a on larger of that customers. couple customers we had that

out - growing to turned side. customers those the of and other be All on

one-time was less quality that we wanted. revenue was a what had We thought So some than we it revenue reset.

as as of you do that course, you when took do well, normally And then, we the so, equation And an we of acquisition. out had churn. the

three that's drivers. So probably really the

that been do quarters. set something out. take with they're the done. wasn't we has and three we and are of us going we up revenue good then, year, gotten revenue that resets said, taken to was It's all past you now couple it the look, to through we're those those, renewals, those. When churn to of We're out, because in relationships. of at last get quality multiyear look a The growth And things. course, wanted two We've customers going

client industry. what to together a in done. and us It's sure team, success we things bring half, now build two to an taken land that the exactly at normal would product, run to up going assess expect shore churn that's those to you into we're company. a be about SaaS three two and rates what And make We're a but we've - going we're rates well-run and that would have quarters,

the overall. way that's it I'd So frame

I have corner the see that any turning think From We we're point don't the and those churn. it. top fair say on line, the our arms revenue we gotten this around forward, headwinds. resets And don't We've stability. it's to

Jeff Van Rhee

Yes.

You referenced...

Stephen Cumming

to hesitancy when just sales. there's compliance. Jeff, but customer sales our I'll substantial the one and wind fear, certainly, of comment, that cycle, and out from Certainly, does to Yes. that think important that, some uncertainty, a of restatement unfortunately, fairly sort we went elongated through note, and natural you're not our it's I doubt base of add sort take a - in just

point the starting that's see I a now. of results, the more second this And more created in very Obviously, from this came we're think for sequentially. as to us into half So, that year. half sort much for our we you behind churns get of contained, to little and can us headwind inflection first growth bit our

Jeff Van Rhee

do how you Okay. split, worth how the taking about is of media other sectors? not break the And on if second the you mentioned And the It you side a the Got media flattish, up then do growth to in think general of just revenue, CDN the revenue be it. about business. might talk business. or out expect

Robert Lyons

you to do Stephen? Yes, take that, want

Stephen Cumming

Yes. Yes.

in activities remarks, very saw right, really strong you our a from think and and apps certainly our seeing pipeline, bookings side. I security some commentary in strong prepared we're So, our seeing we're

this we've fact, sequential the of seen since booking In beginning year. increases

and those we're growth company. we so, now, So, the machine be engines that building the expect do of will

well bookings of seasonality strong Uplynk. second certainly half But in this of side security the of and because partly, year, some I we second don't see business. want very rates as just this little a point for to in to But time. uptick put at get in around bit of point inflection as half, delivery we see this we'll activity our growth as apps the the in the

Jeff Van Rhee

the of is And side revenue? what roughly a delivery as percent

Stephen Cumming

take. XX%, It's give about or roughly

Jeff Van Rhee

And last one...? then Okay.

Robert Lyons

add We Jeff, it talking lot the to Hi us easiest can time expand it's the delivery, for and it also comment of margin, that. one way requires do to more fast, about because go with and growth I to lowest out also to capacity just but you that. get a can the spent if turn CapEx is certainly

other that's the the because a answer time. got longer better of little part takes other the and it business, think where the the for lead growth, that's well business is bit we're profile to you the better much so, XX% We to long-term of and drive so a the And focused.

Jeff Van Rhee

rate the $XX expense? million think then the reiterated Understood. And of that end by end of the I you guess, you much target that last, the the side. taken million of $XX for on me I how cost As have million out know run you year. of are million, I Where of cut to just $XX $XX QX, of now?

Stephen Cumming

the a number I Yes. But from on of you've to say has line. out a would specific numbers, tough OpEx from it, seen as that, Jeff. our come lot put

items the while are to COGS takes fairly substantial and renegotiations of with Some vendors, our unwind contracts. a

as down for OpEx. sales just what, now of of XXXX, what, $XX were at XX.X% million a at, reference, our exiting and $XX we're So we're to we OpEx, frame million now

of of rate savings. sort we've million seen $XX run So,

behind in that portion our was year other of on cost-saving large initiatives, previous a Some us. of that but the is

happen XX-ish-plus the So, and the in less there, COGS to sort second probably obviously, probably more more line we're of the half, and OpEx. million in lot a in

Jeff Van Rhee

it. Got

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

Robert Lyons

Thanks, Jeff.

Operator

Your comes the go Belanger from of Cowen. line Instructions] question from Please next ahead. Cooper TD [Operator

Cooper Belanger

Hi, everyone. Thank you.

due provide be to Belanger. could that convertible was part see your that? refinancing name color on address you XXXX. want is to refinance that, leverage hoping I you. mentioned, that as Cooper some guys for able plans my debt you level is in a to Thank of there As banks to And

Robert Lyons

Yes. Thanks, Cooper.

frame me let weigh Stephen in Let then as it up, I'll and well.

- look actually we our when at our four the of one strategy. say of pillars we things So the

improved first The is profitability.

extend ARR the we talk The publicly to second areas. structure really strategy. our our much and capital support third products the ARR fourth, The is expand is is revenue, align don't too into about

horizon. same we So the have time

sure focuses. are you to we as and we significant ranging on spend of we're the is venues from tell very, liquidity I those And want range Stephen - have that, full focused of that very can a One I convert, possibilities. second to both topics, a time on things. number those there making that you obviously, we amount of the two of in to exploring a growth is have. in And that fund out, able the point adequate really be

much that what something tell that of all targets getting lead to a continue path else. hitting into back us is that XXXX. going to I successful we it gives can it that hit lot EBITDA optionality have on, our we're converting will But roads on EBITDA ranging from we retiring to targets - as EBITDA If the and the you

explore And options while so today. we - certainly

into path, to that and line ourselves EBITDA The bottom is on make we give best path this the optionality. sure adequate putting XXXX, us for we're on going continue profitability most the so that

Stephen Cumming

that, got quarters think I Cooper, expect And our Bob's model and progress over and the really just to changes -- in side. be re-profile have to to mean, add a significant already made obviously, the to structure, the we And just at the next Yes. I cost in given to to we on financial that. place few the better we've look time our much point, given

that refinancing option. I one think is it's - adding worth

be But well. options we to into need other that. to looking order at as where know we we as we're XXXX many come in do And

options, at So not them. obviously we're just many but them, a a one refi being can't but looking of about number of refi, of talk

Cooper Belanger

you. Thank

Operator

from comes line from next go D.A. Your Davidson. Rudy question the of ahead. Kessinger Please

Unidentified Analyst

clarify Rudy. question. we for free for free Does on positive Thanks see equal [Lucky] is to positive that positive taking not, this a in might expect if flow? does when cash in Can our Hi, QX? And Thanks. also EBITDA you cash QX? flow

Stephen Cumming

We Yes, positive actually haven't guided to QX. this EBITDA Stephen. in is

made break progress Our QX. we've plan already the in with even. to I'm pleased is

we better Our EBITDA improvements than break-even really we're at was EBITDA half. guided, But sequential of throughout and second we looking a expect number. the see sort to

You catching Edgecast the payables where with events. can and see on have up some acquisition one-time of balance we our nicely associated from been some sheet,

timing to flow our exact we the So, cash into pinpoint will takeout. bit little with XXXX. be a behind as cost I of exactly progress - - go the certainly, I an But think we're it. don't want that making on

'XX. be in as So, we into should good we go shape

Operator

the And no remarks. for presenters at turn back we the will in the closing over further have I this queue time. to call questions

Robert Lyons

today. us you, everybody, joining thank Well, for

points I difficult. six that is last that think quick share of want a certainly been I to couple while months incredibly have the difficult,

fact, and have, In team. in think fair of gotten leadership really that we fact, of products strengthened we to strengthened say I time, in it's the we have, the front that that were some the headwinds that during we have challenged We've with.

set this set the go that positive can we a a company back direction, and of up And really strong half into up the so year, for moving back into XXXX.

focused Management pretty So front us. that's in what's excited what we're on. is of about team

patience. But stay So, got still everybody's we we've that. a we'll on and do, appreciate focused to lot

of as to this move -- Steve our distraction actively looking in the behind as year are start happy much investors we back we and I to with forward. to half both forward engaging and this very have us, more

much, I to look very So soon. and thank forward to you speaking everybody

Operator

today's Thank now concludes conference. participation, for your you you and may this disconnect. And

Edgio (EGIOQ) 12 Sep 232023 Q2 Earnings call transcript