10-Q 1 bcov-20220930.htm 10-Q 10-Q
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Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2022

OR

Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number: 001-35429

 

BRIGHTCOVE INC.

(Exact name of registrant as specified in its charter)

 

Delaware

 

20-1579162

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

281 Summer Street

Boston, MA 02210

(Address of principal executive offices)

(888) 882-1880

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001 per share

BCOV

The NASDAQ Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

Smaller reporting company

Emerging growth company

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

As of October 28, 2022, there were 42,072,217 shares of the registrant’s common stock, $0.001 par value per share, outstanding.

 

 

 


Table of Contents

 

BRIGHTCOVE INC.

Table of Contents

 

 

 

Page

PART I. FINANCIAL INFORMATION

 

4

Item 1. Financial Statements (Unaudited)

 

4

Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021

 

4

Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021

 

5

Condensed Consolidated Statements of Comprehensive (Loss) Income for the three and nine months ended September 30, 2022 and 2021

 

6

Condensed Consolidated Statements of Stockholders’ Equity for the three months ended September 30, 2022 and 2021

 

7

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021

 

8

Notes to Condensed Consolidated Financial Statements

 

9

 

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

17

 

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

31

 

 

 

Item 4. Controls and Procedures

 

33

 

 

 

PART II. OTHER INFORMATION

 

33

 

 

 

Item 1. Legal Proceedings

 

33

 

 

 

Item 1A. Risk Factors

 

33

 

 

 

Item 5. Other Information

 

34

 

 

 

Item 6. Exhibits

 

35

 

 

 

Signatures

 

36

 

2


Table of Contents

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q contains “forward-looking statements” that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The statements contained in this Quarterly Report on Form 10-Q that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or Exchange Act. Such forward-looking statements include any expectation of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; factors that may affect our operating results; statements related to adding employees; statements related to potential benefits of acquisitions; statements related to future capital expenditures; statements related to future economic conditions or performance; statements as to industry trends and other matters that do not relate strictly to historical facts or statements of assumptions underlying any of the foregoing. Forward-looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “will,” “plan,” “project,” “seek,” “should,” “target,” “will,” “would,” and similar expressions or variations intended to identify forward-looking statements. These statements are based on the beliefs and assumptions of our management based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included in Item 1A of Part I of this Quarterly Report on Form 10-Q, and the risks discussed in our other Securities and Exchange Commission, or SEC, filings. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. However, any further disclosures made on related subjects in our subsequent reports filed with the
SEC should be consulted. Forward-looking statements in this Quarterly Report on Form 10-Q may include statements about:

our ability to achieve profitability;
our competitive position and the effect of competition in our industry;
our ability to retain and attract new customers;
our ability to penetrate existing markets and develop new markets for our services;
our ability to retain or hire qualified accounting and other personnel;
our ability to successfully integrate acquired businesses;
our ability to protect our intellectual property and operate our business without infringing upon the intellectual property rights of others;
our ability to maintain the security and reliability of our systems;
our estimates with regard to our future performance and total potential market opportunity;
our estimates regarding our anticipated results of operations, future revenue, bookings growth, capital requirements, our needs for additional financing and broader economic challenges, including interest rate fluctuations; and
our goals and strategies, including those related to revenue and bookings growth.

 

3


Table of Contents

 

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Brightcove Inc.

Condensed Consolidated Balance Sheets

(unaudited)

 

 

 

September 30, 2022

 

 

December 31, 2021

 

 

 

(in thousands, except share
 and per share data)

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

31,348

 

 

$

45,739

 

Accounts receivable, net of allowance of $355 and $353 at September 30, 2022 and December 31, 2021, respectively

 

 

31,891

 

 

 

29,866

 

Prepaid expenses

 

 

8,976

 

 

 

7,792

 

Other current assets

 

 

10,338

 

 

 

10,833

 

Total current assets

 

 

82,553

 

 

 

94,230

 

Property and equipment, net

 

 

36,579

 

 

 

20,514

 

Operating lease right-of-use asset

 

 

19,387

 

 

 

24,891

 

Intangible assets, net

 

 

11,296

 

 

 

9,276

 

Goodwill

 

 

74,859

 

 

 

60,902

 

Other assets

 

 

6,564

 

 

 

6,655

 

Total assets

 

$

231,238

 

 

$

216,468

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

13,060

 

 

$

11,039

 

Accrued expenses

 

 

23,730

 

 

 

20,925

 

Operating lease liability

 

 

4,028

 

 

 

2,600

 

Deferred revenue

 

 

65,067

 

 

 

62,057

 

Total current liabilities

 

 

105,885

 

 

 

96,621

 

Operating lease liability, net of current portion

 

 

21,073

 

 

 

22,801

 

Other liabilities

 

 

963

 

 

 

786

 

Total liabilities

 

$

127,921

 

 

 

120,208

 

Commitments and contingencies (Note 8)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Undesignated preferred stock, $0.001 par value; 5,000,000 shares authorized;
   
no shares issued

 

 

 

 

 

 

Common stock, $0.001 par value; 100,000,000 shares authorized; 42,193,504 and 41,384,643 shares issued at September 30, 2022 and December 31, 2021, respectively

 

 

42

 

 

 

41

 

Additional paid-in capital

 

 

311,283

 

 

 

298,793

 

Treasury stock, at cost; 135,000 shares

 

 

(871

)

 

 

(871

)

Accumulated other comprehensive loss

 

 

(2,478

)

 

 

(662

)

Accumulated deficit

 

 

(204,659

)

 

 

(201,041

)

Total stockholders’ equity

 

 

103,317

 

 

 

96,260

 

Total liabilities and stockholders’ equity

 

$

231,238

 

 

$

216,468

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

4


Table of Contents

 

Brightcove Inc.

Condensed Consolidated Statements of Operations

(unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(in thousands, except share and per share data)

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Subscription and support revenue

 

$

51,814

 

 

$

49,226

 

 

$

156,403

 

 

$

148,667

 

Professional services and other revenue

 

 

2,130

 

 

 

2,937

 

 

 

5,367

 

 

 

9,785

 

Total revenue

 

 

53,944

 

 

 

52,163

 

 

 

161,770

 

 

 

158,452

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of subscription and support revenue

 

 

18,247

 

 

 

16,406

 

 

 

52,172

 

 

 

46,840

 

Cost of professional services and other revenue

 

 

1,816

 

 

 

2,247

 

 

 

5,575

 

 

 

8,205

 

Total cost of revenue

 

 

20,063

 

 

 

18,653

 

 

 

57,747

 

 

 

55,045

 

Gross profit

 

 

33,881

 

 

 

33,510

 

 

 

104,023

 

 

 

103,407

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

7,931

 

 

 

7,902

 

 

 

24,540

 

 

 

24,041

 

Sales and marketing

 

 

19,023

 

 

 

18,451

 

 

 

55,272

 

 

 

52,730

 

General and administrative

 

 

7,748

 

 

 

7,345

 

 

 

24,391

 

 

 

21,822

 

Merger-related

 

 

 

 

 

45

 

 

 

747

 

 

 

300

 

Other expense (benefit)

 

 

 

 

 

 

 

 

1,149

 

 

 

(1,965

)

Total operating expenses

 

 

34,702

 

 

 

33,743

 

 

 

106,099

 

 

 

96,928

 

Loss (income) from operations

 

 

(821

)

 

 

(233

)

 

 

(2,076

)

 

 

6,479

 

Other (expense) income, net

 

 

(668

)

 

 

(319

)

 

 

(1,880

)

 

 

(937

)

(Loss) income before income taxes

 

 

(1,489

)

 

 

(552

)

 

 

(3,956

)

 

 

5,542

 

Provision (benefit) for income taxes

 

 

191

 

 

 

468

 

 

 

(338

)

 

 

562

 

Net (loss) income

 

$

(1,680

)

 

$

(1,020

)

 

$

(3,618

)

 

$

4,980

 

Net (loss) income per share—basic and diluted

 

 

 

 

 

 

 

 

 

 

 

 

         Basic

 

$

(0.04

)

 

$

(0.02

)

 

$

(0.09

)

 

$

0.12

 

         Diluted

 

$

(0.04

)

 

$

(0.02

)

 

$

(0.09

)

 

$

0.12

 

Weighted-average shares—basic and diluted

 

 

 

 

 

 

 

 

 

 

 

 

         Basic

 

 

41,972

 

 

 

40,935

 

 

 

41,712

 

 

 

40,571

 

         Diluted

 

 

41,972

 

 

 

40,935

 

 

 

41,712

 

 

 

42,237

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

5


Table of Contents

 

Brightcove Inc.

Condensed Consolidated Statements of Comprehensive (Loss) Income

(unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(in thousands)

 

Net (loss) income

 

$

(1,680

)

 

$

(1,020

)

 

$

(3,618

)

 

$

4,980

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(716

)

 

 

(238

)

 

 

(1,816

)

 

 

(412

)

Comprehensive (loss) income

 

$

(2,396

)

 

$

(1,258

)

 

$

(5,434

)

 

$

4,568

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

6


Table of Contents

 

Brightcove Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

(in thousands, except share data)

 

Shares of common stock issued

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

 

42,029,575

 

 

 

40,946,572

 

 

 

41,384,643

 

 

 

40,152,021

 

Issuance of common stock upon exercise of stock options and vesting of restricted stock units

 

 

163,929

 

 

 

229,282

 

 

 

808,861

 

 

 

1,023,833

 

Balance, end of period

 

 

42,193,504

 

 

 

41,175,854

 

 

 

42,193,504

 

 

 

41,175,854

 

Shares of treasury stock

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

 

(135,000

)

 

 

(135,000

)

 

 

(135,000

)

 

 

(135,000

)

Balance, end of period

 

 

(135,000

)

 

 

(135,000

)

 

 

(135,000

)

 

 

(135,000

)

Par value of common stock issued

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

42

 

 

$

41

 

 

$

41

 

 

$

41

 

Common stock issued upon acquisition

 

 

 

 

 

 

 

 

1

 

 

 

 

Balance, end of period

 

$

42

 

 

$

41

 

 

$

42

 

 

$

41

 

Value of treasury stock

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

(871

)

 

$

(871

)

 

$

(871

)

 

$

(871

)

Balance, end of period

 

$

(871

)

 

$

(871

)

 

$

(871

)

 

$

(871

)

Additional paid-in capital

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

308,314

 

 

$

292,775

 

 

$

298,793

 

 

$

287,059

 

Issuance of common stock upon exercise of stock options and vesting of restricted stock units, net of tax

 

 

(8

)

 

 

194

 

 

 

91

 

 

 

825

 

Stock-based compensation expense

 

 

2,977

 

 

 

2,495

 

 

 

10,412

 

 

 

7,580

 

Common stock issued upon acquisition

 

 

 

 

 

 

 

 

1,987

 

 

 

 

Balance, end of period

 

$

311,283

 

 

$

295,464

 

 

$

311,283

 

 

$

295,464

 

Accumulated deficit

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

(202,979

)

 

$

(200,438

)

 

$

(201,041

)

 

$

(206,438

)

Net (loss) income

 

 

(1,680

)

 

 

(1,020

)

 

 

(3,618

)

 

 

4,980

 

Balance, end of period

 

$

(204,659

)

 

$

(201,458

)

 

$

(204,659

)

 

$

(201,458

)

Accumulated other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

(1,762

)

 

$

(362

)

 

$

(662

)

 

$

(188

)

Foreign currency translation adjustment

 

 

(716

)

 

 

(238

)

 

 

(1,816

)

 

 

(412

)

Balance, end of period

 

$

(2,478

)

 

$

(600

)

 

$

(2,478

)

 

$

(600

)

Total stockholders’ equity

 

$

103,317

 

 

$

92,576

 

 

$

103,317

 

 

$

92,576

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

7


Table of Contents

 

Brightcove Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

 

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

 

(in thousands)

 

Operating activities

 

 

 

 

 

 

Net (loss) income

 

$

(3,618

)

 

$

4,980

 

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

7,141

 

 

 

6,284

 

Stock-based compensation

 

 

9,969

 

 

 

7,234

 

Provision for reserves on accounts receivable

 

166

 

 

 

246

 

Changes in assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(1,871

)

 

 

710

 

Prepaid expenses and other current assets

 

 

(1,351

)

 

 

(914

)

Other assets

 

 

38

 

 

 

(1,273

)

Accounts payable

 

 

863

 

 

 

79

 

Accrued expenses

 

 

(242

)

 

 

(4,402

)

Operating leases

 

 

5,202

 

 

 

(903

)

Deferred revenue

 

 

3,452

 

 

 

2,707

 

Net cash provided by operating activities

 

 

19,749

 

 

 

14,748

 

Investing activities

 

 

 

 

 

 

Cash paid for acquisition, net of cash acquired

 

 

(13,215

)

 

 

 

Purchases of property and equipment

 

 

(8,617

)

 

 

(1,625

)

Capitalized internal-use software costs

 

 

(9,678

)

 

 

(4,657

)

Net cash used in investing activities

 

 

(31,510

)

 

 

(6,282

)

Financing activities

 

 

 

 

 

 

Proceeds from exercise of stock options

 

 

142

 

 

 

2,200

 

Deferred acquisition payments

 

 

 

 

 

(475

)

Other financing activities

 

 

(50

)

 

 

(1,375

)

Net cash provided by financing activities

 

 

92

 

 

 

350

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(2,722