- Total Revenue: $49.2 million, down 3% year-over-year.
- Revenue Excluding Overages: $47.9 million, down approximately 4% year-over-year.
- Adjusted EBITDA: $3.8 million, representing an 8% margin.
- Free Cash Flow: $1.8 million for the quarter.
- Subscription and Support Revenue: $47.4 million, down 3% year-over-year.
- Professional Services Revenue: $1.8 million, down 6% year-over-year.
- 12-Month Backlog: $123.3 million, a decrease of 1% year-over-year.
- Total Backlog: $182.2 million, up 3% year-over-year.
- Recurring Dollar Retention Rate: 83%, down from 85% in the previous quarter.
- Net Revenue Retention Rate: 93%, up from 92% in the previous quarter.
- Customer Count: 2,444, with 1,958 classified as premium customers.
- Annualized Revenue Per Premium Customer (ARPU): $99,000.
- Gross Profit (GAAP): $29.8 million, with a gross margin of 61%.
- Operating Loss (GAAP): $5 million.
- Net Loss Per Share (GAAP): $0.12 based on 44.7 million weighted average shares outstanding.
- Non-GAAP Gross Profit: $30.6 million, with a gross margin of 62%.
- Non-GAAP Operating Loss: $477,000.
- Non-GAAP Diluted Net Loss Per Share: $0.02 based on 44.7 million weighted average shares outstanding.
- Cash and Cash Equivalents: $24.2 million, with no debt.
- Q3 Revenue Guidance: $48 million to $49 million.
- Q3 Adjusted EBITDA Guidance: $2.5 million to $3.5 million.
- Full Year Revenue Guidance: $195.5 million to $198 million.
- Full Year Adjusted EBITDA Guidance: $14.5 million to $16 million.
- Full Year Free Cash Flow Guidance: $5.6 million to $8 million.
Release Date: August 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Brightcove Inc (BCOV, Financial) exceeded its Q2 revenue guidance, reporting $49.2 million, above the high end of their range.
- Adjusted EBITDA for Q2 was $3.8 million, significantly above the high end of their guidance range.
- The company generated nearly $1 million in free cash flow in the first half of 2024 and added $5.5 million in cash to their balance sheet.
- Brightcove Inc (BCOV) saw a 25% increase in add-on sales in Q2, with average deal sizes being the largest in six quarters.
- The company is making significant progress in AI integration, with plans to announce a broad AI suite later in Q3 2024.
Negative Points
- Total revenue for Q2 was down 3% year-over-year, and revenue excluding overages was down approximately 4% year-over-year.
- Recurring dollar retention rate dropped to 83% in Q2 from 85% in the previous quarter.
- The new business environment was challenging, with longer sales cycles and an increase in deals being pushed out of the quarter.
- Non-GAAP operating loss was $477,000 in Q2, compared to non-GAAP operating income of $537,000 in the same quarter of 2023.
- Gross margin decreased to 62% in Q2 from 66% in the year-ago period.
Q & A Highlights
Brightcove Inc (BCOV) Q2 2024 Earnings Call Highlights
Q: What was the pipeline growth for new business deals in Q2, and do you think you have the pipeline in place for 2025 to potentially return to revenue growth?
A: Marc DeBevoise, CEO: While we don't disclose specific pipeline growth, the big deal pipeline has maintained or grown in recent quarters. We are optimistic about these larger deals driving us back to growth. Additionally, new product innovations and the upcoming AI portfolio could provide upgrade paths for existing customers and attract new ones. We aim to build this pipeline over the next couple of quarters to guide towards growth in 2025.
Q: What is the sales cycle length for larger deals, and has it gotten longer recently?
A: Marc DeBevoise, CEO: Larger media deals can take up to 9 to 12 months, while new business deals typically take four to six months. Add-on deals can be completed in less than 30 days. The sales cycles have not significantly lengthened, but predicting exact close dates remains challenging.
Q: What steps can the company take between now and year-end to position for a return to growth?
A: Marc DeBevoise, CEO: Returning to growth is our focus. We need to align bookings, add-on business, and retention. We are working on new use cases, product innovations, and improving customer value to drive consistent growth. We aim to stabilize entitlements and align our go-to-market motions for growth in the back half of the year.
Q: Where are you in the process of working through the excess entitlements that have been creating downward pressure on renewals?
A: Marc DeBevoise, CEO: We are seeing a decline in the impact of downgrades over the past three to four quarters. Our goal is to dissipate these downgrades over the rest of the year and return to consistent growth.
Q: What is your outlook for the third quarter and full year 2024?
A: John Wagner, CFO: For Q3, we target revenue between $48 million and $49 million, with positive adjusted EBITDA between $2.5 million and $3.5 million. For the full year, we are increasing our revenue guidance to $195.5 million to $198 million and expect positive adjusted EBITDA between $14.5 million and $16 million. We aim to be free cash flow positive for each remaining quarter of the year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
