Brightcove Inc (BCOV) Q3 2024 Earnings Call Highlights: Navigating Growth Amidst Revenue Challenges

GuruFocus News
4 min read

In This Article:

  • Total Revenue: $49.9 million, up 1% sequentially, down 2% year over year.

  • Revenue Excluding Overages: $48.4 million, up 1% sequentially, down 2% year over year.

  • Adjusted EBITDA: $5.1 million, up 34% sequentially, representing a 10% margin.

  • Free Cash Flow: $1.6 million, contributing to a cash balance of $27 million.

  • Gross Margin: 63%, up from 62% in Q3 2023.

  • Net Loss: $3 million, or $0.07 per share.

  • Non-GAAP Gross Margin: 65%, up from 64% in the year-ago period.

  • Non-GAAP Operating Income: $860,000.

  • Non-GAAP Net Income Per Share: $0.02.

  • 12-Month Backlog: $122.4 million, up 1% year over year.

  • Total Backlog: $183.2 million, up 5% year over year.

  • Recurring Dollar Retention Rate: 80%, down from 83% in the previous quarter.

  • Net Revenue Retention Rate: 94%, up from 93% in the previous quarter.

  • Premium Customer ARPU: $101,400, up 6% over Q3 2023.

  • Cash and Cash Equivalents: $27 million, debt-free.

  • Q4 Revenue Guidance: $48 million to $49 million.

  • Full Year Revenue Guidance: $197.7 million to $198.7 million.

  • Full Year Adjusted EBITDA Guidance: $16.8 million to $17.8 million, reflecting 40% to 50% growth.

  • Full Year Free Cash Flow Guidance: $5.6 million to $8 million.

Release Date: November 04, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Brightcove Inc (NASDAQ:BCOV) reported Q3 revenue of $49.9 million, exceeding the high end of their guidance range.

  • Adjusted EBITDA for Q3 was $5.1 million, significantly above the guidance range and up 34% sequentially.

  • The company generated $1.6 million in free cash flow, contributing to a cash balance increase to $27 million.

  • Brightcove Inc (NASDAQ:BCOV) raised its full-year guidance for both revenue and adjusted EBITDA, reflecting strong performance.

  • The company launched Brightcove's AI suite, which is expected to be a significant growth driver in the coming years.

Negative Points

  • Total revenue was down 2% year over year, indicating a decline compared to the previous year.

  • Recurring dollar retention rate dropped to 80% from 83% in the previous quarter, impacted by entitlement reductions.

  • A significant down-sell from a large international media customer affected revenue retention.

  • Professional services revenue decreased by 18% year over year.

  • The company anticipates a sequential decline in revenue for Q4 due to a reduction in overage revenue and a large down-sell.

Q & A Highlights

Q: Marc, how much of the Q3 performance do you think is repeatable, and how much was due to bringing in good business in Q3? A: Marc DeBevoise, CEO: The Q3 performance is a result of the business we've developed over previous quarters, indicating durability. The cost structure changes made over the past 18 months are now yielding benefits. The new business performance was strong, and the add-on business reflects our customers' business dynamics. We feel confident about our ability to upsell and cross-sell with multiple product sets and suites, and our AI suite and new use cases will support future growth.

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