Brightcove Q3 2023 Earnings Call Transcript

Quartr
Provided by Quartr
November 1, 2023

There are 6 speakers on the call.

Operator

Good afternoon, and welcome to Brightcove's Third Quarter 2023 Earnings Presentation. Today, we'll discuss the results announced in our press release issued after the market closed. During today's presentation, we will make statements related to our business that may be considered forward looking and are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements concerning our financial guidance for the 4th fiscal quarter of 2023 and discuss the year 2023 expected profitability and free cash flow our position to execute on our go to market and growth strategy our ability to expand our leadership position, our ability to maintain and upsell existing customers as well as our ability to acquire new customers. Forward looking statements may often be identified with words such as we expect, we anticipate, upcoming or similar indications of future expectations. These statements reflect our views only as of today and should not be reflected upon as representing our views of any subsequent date.

Operator

These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations, including the effect of macroeconomic conditions currently affecting the global economy. For a discussion on material risks and other important factors that could affect our actual results, please refer to those contained in our most recently filed Annual Report discuss our Form 10 ks and is updated by our other SEC filings. Also during the course of today's presentation, we will refer to certain non GAAP financial measures. There is a reconciliation schedule showing GAAP versus non GAAP results currently available in our press release issued after market close today, discuss our results, which can be

Speaker 1

found on our website at www.brightcove.com. Thank you all for joining. I'm Mark Debevoise, CEO here at Brightcove and with me today is Rob Norek, Brightcove's CFO. We're pleased to be streaming this to you to discuss our Q3 results, provide an update on our strategic progress and share our view on our future. I begin with a quick overview of the strong financial results we delivered in Q3.

Speaker 1

Total revenue for Q3 was $51,000,000 at the high end of our guidance range. Discuss our results. Adjusted EBITDA was $5,500,000 exceeding the high end of our guidance range, growing 12% year over year and delivering double digit margins at 11%. We are pleased to have delivered financial results that met or exceeded our outlook. Importantly, revenue excluding overages, which represents the vast majority of our discuss the progress we made in Q3 and is expected to do so in Q4 as well.

Speaker 1

This is an important indication that the discuss the strategic plan we have been executing against is headed in the right direction. We are focused on building upon this to deliver improved and more consistent financial results over time. We are equally if not more pleased with our adjusted EBITDA performance in the quarter, which returned to double digit margins and grew double digits year over discuss this performance reflects the structural changes and cost savings initiatives we instituted in Q2 and is a clear demonstration of our commitment to run this business in discuss a consistently profitable manner. We are highly focused on the things that we can control, including identifying ways to improve our cost structure going forward while continuing to invest discuss our results in those key growth areas that we believe can drive consistent results. It is our intention to sustain similar adjusted EBITDA margins discuss our discuss the results which were similar to the trends we saw in the first half of the year.

Speaker 1

I'll break down the positive trends of continued strength in new business, the breadth of that new business across our end markets discuss the continued challenges in overages and add on entitlements discuss the results in those areas as well. As in the first half of twenty twenty three, new business in Q3 continued to be a strength, display more than 65% year over year with average contract values of 2x to 3x versus the year ago quarter. This is consistent with what we have seen throughout the year discuss the results with new business up over 140% overall year to date and 35% excluding the impact of the large Yahoo! Transaction in Q1. I'll note that this new business strength is primarily being driven by performance in our Americas region where we are furthest along in implementing and executing our strategic priorities.

Speaker 1

We're also pleased with the end market breadth of new business performance in the quarter year to date. In particular, we're seeing strength in our enterprise new business discuss the progress we've noted previously. This breadth is important because it reflects strong demand for our enterprise discuss the number of cases which I will discuss in more detail later and positions potentially future larger media wins as a source of upside as we continue to execute on our strategy discuss our strategy to win and superserve strategically large accounts. This strength in new business performance is the catalyst that has returned our revenue excluding overages back discuss growth in the quarter. Not only does this represent the vast majority of our business, but it's also what we have the most control over and it is what we are laser focused discuss our positive results in new business have been offset in the near term largely by the continued weakness in overages discuss the typically associated entitlement business entitlement based add on business that comes with them.

Speaker 1

Overages which are not specifically indicative of the underlying health of our discuss the health of our business and typically reflect our customers' new content strategies, unpredictable consumer demand or conservative customer usage assumptions, discuss the financial results. These remain on track to be approximately $5,000,000 this year. This is over $7,000,000 lower than overages were in 20 discuss our Q2 giving us a meaningful nearly 4% headwind to overall revenue growth in 2023. We're getting closer to working our way through this overhang by partnering with discuss 20% to 25% more multiyear contracts in 2023 than either of the previous 2 years. Discuss.

Speaker 1

We believe this will deliver a better long term financial model for us and our customers, delivering us more predictable revenues and then more predictable costs. Discuss this was for the additional entitlements associated with higher overages. This is similar to what we experienced in the first half of the year and we are continuing to shift we are focused on enabling a customer journey that more effectively enables add on sales of products and services as well. Discuss the results of the year. We expect to see the positive impact of these changes continue over time, especially as we wrap up 2023 and over the course of 2024.

Speaker 1

For example, from a go to market perspective at the beginning of the year, we shifted our approach from individual reps focusing on both existing and new customers in discuss specific territory or end market to now having reps specifically dedicated to new business and other reps specifically dedicated to renewals and discuss both in add on sales as part of our territory or end market approach. We also reallocated resources to expand our strategic sales coverage and demand generation towards strategically large discuss many in media, a market segment the company focused less on in recent years. From a product perspective, we've been focused on increasing the velocity discuss new product introductions. We now have numerous new opportunities for our go to market teams to push to both new and existing customers. For our enterprise customer base, this is delivered via 2 use case focused product suites, Communication Studio and Marketing Studio.

Speaker 1

Discuss the results. We've received terrific feedback from customers on how the enhanced capabilities of these newer offerings can improve efficiency, effectiveness, engagement and results. We have a sizable installed base of customers who use Brightcove Video Cloud, our more general product suite for marketing communication specific use cases that are discuss the obvious candidates to upgrade to these newer offerings over time. We're seeing strong early success with customer adoption of these new products discuss the results and they represented a meaningful portion of our enterprise add on business in Q3. For our media customer base, we focused on the rollout of our analytics and insights suite including subscription and ad monetization, content and engagement and quality of experience.

Speaker 1

Also our ad monetization service, cost discuss the savings, context aware and coding improvements and our play out and fast capabilities and partners. These products are definitely helping have the right conversations with our media customers and as they expand we expect to grow with them in these areas. Discuss our go to market teams to focus on services as an additional form of potential add on sale. Historically, we've done more service discuss new customers, think customizations, new apps, those type of things. This focus has returned our services revenue to growth in 2020 discuss the year to date growth at 18% and Q3 at 13% year over year with an opportunity to hopefully accelerate this going forward.

Speaker 1

We'll discuss the results. We have more work to do to improve our go to market efforts and I am confident our approaches will deliver positive results. During the quarter our CRO left the company. Discuss our results. I am overseeing global sales directly while we search for a new CRO.

Speaker 1

We are actively recruiting for this role and have been pleased with the quality of initial candidates. Filling this role with a world class leader as soon as possible is a top priority. My confidence that improved sales execution will generate faster discuss our results. We have built a strong and resilient enterprise business with a highly differentiated value proposition that gives us the true right to win with these customers. Discuss our 2 primary enterprise use cases, marketing and communications are areas of global business being fundamentally changed by streaming.

Speaker 1

Discuss our results. With Brightcove, enterprises using us for marketing can increase awareness, attract new customers, improve customer engagement and ultimately increase conversions and revenue. Those using us for communications can more deeply engage with employees, partners and other constituents for numerous reasons. Ultimately streaming is at the core of these functions now. Discuss our results.

Speaker 1

Given today's hybrid remote and execute and deliver from anywhere world, our solutions are getting discuss the awareness and credit they deserve now as we were named the winner of the best overall marketing campaign management solution in the 6th annual MarTech Breakthrough Awards program this quarter. Also built an enviable enterprise customer base of more than 1500 logos. One of the most exciting parts of our enterprise opportunity is that much of our discuss the date has been in the Americas where enterprise customers have been early to adopt streaming use cases. We are highly focused on developing our global enterprise business further to help us make it discuss the results of the global opportunity in enterprise was a new customer win this quarter with HDFC, 1 of India's largest discuss the top global financial institution signing up. In media, Brightcove is the clear market leader, discuss the results of our business, especially for leading regional media companies around the globe and streamers that require an outsourced solution versus being large enough to want to rely on a pure do it themselves solution.

Speaker 1

Discuss the breadth and quality of our platform and the long term cost advantages it can provide make Brightcove's value proposition incredibly compelling for any media or content provider discuss the results of our discuss our work, a new OTT company focused on streaming content that showcases black storytellers and culture which we signed in Q3 and has already successfully launched its new streaming discuss the service powered by Brightcove's industry leading technology. In addition, ITBN will be using Brightcove's ad monetization service to help maximize its ad revenue opportunities as well. And our excellence throughout the streaming stack is opening up exciting opportunities for us to win upmarket. I'm thrilled to announce that both Yahoo! And the NHL discuss our results.

Speaker 1

We are in a number of active dialogues with other large streaming providers who are looking to outsource more and more of their streaming technology stack. Discuss the results. And there is a virtuous cycle here that we expect to see as we sign more large deals, which will increase our capabilities and cost advantage as we gain greater scale, discuss the full year results, which in turn will increase the total cost of ownership benefits we can pass along to those large customers. Discuss. I'd now like to spend a moment highlighting some of our other new customer wins and renewals in the quarter.

Speaker 1

In media, we were pleased to sign a number of new mid market discuss our customers in addition to In The Black Network, including DOGTV and Carnegie Hall. Carnegie Hall is a great example of our strength with arts based organizations, including other leading groups discuss the Metropolitan Opera who renewed this quarter, the Melbourne Symphony, the Seattle Symphony and the Lincoln Center Chamber Music Association. Discuss the results. We also signed meaningful wins with larger regional media companies to solve their streaming needs like SBT, one of the largest broadcast media companies in Brazil and JCOM, Japan's largest discuss our cable provider. These ones are also notable because they are more traditional content aggregators and reflect the opportunity we have outside of the typical streaming content discuss our results.

Speaker 1

In enterprise, we're seeing growing traction in the technology vertical, notably Broadcom and Acquia were added during the discuss our Q3. Aclia, the digital experience leader with Drupal at its core selected us to power its video marketing strategy enabling them to better reach current and prospective customers discuss with marketing and technology trends that will increase engagement and ultimately conversion. Other new business wins included Augustine Institute, a faith based streamer discuss Build A Bear, D League, a Japanese professional dance league, CNC Technologies, an aviation technology company, Harmon, a connected device company and also a subsidiary of Samsung, discuss our results and our results. On the renewal front, we had an incredible list of customers that renewed or expanded their business with Brightcove in Q3. Discuss the results of our press release.

Speaker 1

This included leading media entities like the CBS Television Network, Funny or Die, Raycom Sports, the Academy of Motion Picture Arts and Sciences discuss the Q2 and Coupe, which is one of our largest customers and renewed at 100% in the quarter. It's also included tech companies like ServiceNow, Palo Alto Networks, Autodesk, discuss VMware and DocuSign. It included large financial and corporate services entities like Bain and Company, Blackstone and Navy Federal Credit discuss and include consumer and retail companies like Chick Fil A, Estee Lauder and AMC Theaters which increased their entitlement package to support the trailer for Taylor Swift's ARRIS tour release. As mentioned earlier, an important focus and trend in both our new business and renewal signings is the success we're having signing multiyear deals. Discuss the full year backlog is growing this year and that means the percent of our revenue that is committed for 2024 will be greater compared to the start of 2023.

Speaker 1

Discuss this. This should give us a strong and stable quarter for our business to build off of going forward and reduce revenue at risk for downgrades and churn. Discuss our results. Let me close by reiterating that we are pleased with the progress we've made during the quarter, particularly returning growth in revenue excluding overages and delivering growing adjusted EBITDA discuss full digit margins. We believe these changes and investments we are making in our go to market efforts and product development initiatives will position us to further improve our performance and eventually enable us to deliver on our long term targets of double digit revenue growth and 20% plus adjusted EBITDA margins.

Speaker 1

We'll While we operate in somewhat volatile and challenging macroeconomic times, we believe the continued evolution of the streaming market is capitalize on this as soon as possible and increase the value we deliver to our customers and shareholders. We have more work to do to get the business where it needs to be discuss our financial results and we are committed to executing on our strategic priorities and doing so thoughtfully and as quickly as possible. With that, I'm going to turn the call over to Rob for a deeper dive on Q3 and the numbers, and I'll be back for Q and A.

Speaker 2

Thank you, Mark, and good afternoon, everyone. I will begin with a detailed review of our Q3 and then I will finish with our outlook the Q4 and the full year 2023. Total revenue in the Q3 was $51,000,000 which is at the high end of our guidance range. Discuss the results. Breaking revenue down further, if we exclude overages of $1,400,000 in the quarter, revenue was $49,600,000 up 1% year over year.

Speaker 2

Discuss our financial results. Subscription and support revenue, which includes overages, was $48,600,000 and professional services revenue was $2,400,000 discuss the full year 2019 guidance for the Q3 of 2019. We will now begin the Q4 of fiscal 2019. Discuss the full year results. The full year results were $221,100,000 discuss our results.

Speaker 2

This represents a 6% year over year increase. Total backlog was $174,200,000 discuss our results in the Q1 of 2019. As Mark mentioned, we are seeing good success increasing the mix of our new business and renewals towards multiyear contracts. Discuss our results. On a geographic basis, discuss the results.

Speaker 2

We generated 60% of our revenue in North America during the quarter and 40% internationally. Breaking down international revenue a little more, discuss our results. Europe generated 16% of our revenue and Japan and Asia Pacific generated 24% of revenue during the quarter. Let me now turn to the supplemental metrics we share on a quarterly basis. Net revenue retention in the quarter was 93%, which compares to 95% in the Q2 of discuss the Q3 93% in the Q3 of 2022.

Speaker 2

This is largely in line with recent quarters and continues to reflect the impact from the lower add on sales performance in the year. We expect that as we continue to expand our add on sales capabilities, make improvements in our renewals business discuss our financial results and our financial results. This metric will improve over time. Recurring dollar retention rate in the Q3 was 85 discuss our strategic focus on multiyear deals, this metric becomes less meaningful as it only captures renewals in the quarter discuss our results at the time of renewal and does not factor in the impact of multiyear deals. Our customer count at the end of the Q3 was 2,618, discuss our results in

Operator

the Q1 of 2019, of which 2,077 were classified as premium customers.

Speaker 2

Looking at our ARPU within our premium customer base, discuss our annualized revenue per premium customer was $95,900 and excludes our entry level pricing for starter customers, which averaged discuss $3,800 in annualized revenue. This compares to $95,900 in the Q3 of 2022. Discuss. As a reminder, this metric includes overages, which are down $3,300,000 year over year. Looking at our results on a GAAP basis, discuss our financial results.

Speaker 2

Our gross profit was $31,700,000 operating loss was $2,300,000 and net loss per share was $0.06 for the quarter. Discuss our non GAAP results. Our non GAAP gross profit in the 3rd quarter was $32,500,000 compared to $34,500,000 in the year ago period discuss the full year results and represented a gross margin of 64%, which was consistent with the Q3 of 2022. Non GAAP operating income the Q3 of 2019. Our Q3 was $2,300,000 in the Q3 of 2022.

Speaker 2

Adjusted EBITDA was $5,500,000 discuss our

Speaker 3

results in the quarter, representing an adjusted EBITDA margin of 11% and

Speaker 2

an increase of 12% compared to positive $4,900,000 in the year ago period and above our guidance range. Discuss the strong margin performance in the quarter as a reflection of the cost initiatives we undertook in the 2nd quarter and our ongoing commitment to expense discipline. Discuss non GAAP diluted net income per share was $0.05 based on 43,400,000 weighted average shares outstanding. This compares to net income per share of 0 point 5 discuss our balance sheet and cash flow. We ended the quarter with cash and cash equivalents $16,400,000 We generated $2,100,000 in cash flow from operations and free cash flow was negative $2,200,000 after taking into account discuss $4,300,000 of capital expenditures and capitalized internal use software.

Speaker 2

Cash flow performance reflected 2 key factors. Discuss our results. And second, we have seen our large vendors get more aggressive in their collections efforts, lowering our expected AP balance. Discuss our financial results. I would like to finish by providing our guidance for the Q4 and the full year of 2023.

Speaker 2

For the Q4, we are targeting revenue of $49,000,000 to $51,000,000 discuss our financial results, including approximately $900,000 of overages and approximately $2,600,000 of professional services revenue. From a profitability perspective, we expect non GAAP operating income to be $300,000 to $2,300,000 and adjusted EBITDA to be between $4,000,000 6,000,000 Non GAAP net income per share is expected to be in the range of breakeven to $0.05 based on 43,700,000 weighted average shares outstanding. For the full year, we are now targeting revenue of $200,000,000 to $202,000,000 including $4,800,000 of discuss approximately $8,900,000 of professional services revenue. From a profitability perspective, we expect non GAAP operating loss discuss the financial results of the financial results of the financial results of the financial results of the financial results of the financial results of the financial results of the financial results of the financial results of the Non GAAP net loss per share is expected to be in the range of $0.09 to $0.04 based on 43,000,000 weighted average shares outstanding. Discuss.

Speaker 2

We are now targeting positive free cash flow in the 4th quarter and free cash flow of approximately negative $11,000,000 for the full year due to the factors I mentioned previously. Discuss the results. It's important to note that from the Q2 to the Q4 this year, we will have generated approximately $6,000,000 in free cash flow and that on a go forward basis, we would expect trailing 12 month free cash flow to be consistently positive once we anniversary the Q1 of 2023, where the timing of collections we'll discuss the results of our business. Let me close by saying we are pleased that revenue excluding overages returned to growth in the 3rd quarter, discuss our results in the Q4 and into next year. Similarly, we are proud of the significant improvement in adjusted EBITDA we've delivered in the 3rd discuss our financial results and the structural improvements we have made to our cost profile.

Speaker 2

Our current expectation is for modest growth in 2020 discuss the results. We are confident the changes we have made to the business will support faster growth in the long term, but we have limited visibility and then timing discuss the results of the Q3 of

Speaker 1

fiscal 2020. We are taking the steps

Speaker 2

we are taking to increase add on sales or deliver on our large deal pipeline will materially impact the business. Discuss our results. Regardless, it is our intention to grow both adjusted EBITDA and free cash flow year over year discuss our financial results in 2020. We remain committed to running this business in a consistently profitable manner and are confident we can fund our growth priorities discuss our results and expand profitably. With that, we'll now take your questions.

Speaker 2

Please give us a moment to shift to Q and A. Discuss our Q and A with Steve Frankel from Rosenblatt Securities. Steve?

Speaker 3

Discuss our Q3 earnings presentation.

Speaker 4

Good afternoon and congratulations on the progress that we saw on the bottom line. But let's talk about the top line. We're still stuck in this mode where discuss the Q3 results. You do a little better in the quarter, but sequentially, revenue is still going down. Is it so where are we in the add on issue?

Speaker 4

Discuss the Q4. Will we get through most of that by the end of Q4? Or is that something that's going to take a little longer discuss to burn through.

Speaker 1

Why don't I start from a business perspective and Rob jump in on the numbers. I think we're still seeing that same add on discuss a concern that we've had throughout the year, which is a lowering of the overages that typically drives that add on conversation with customers and we're definitely facing that challenge on a discuss a continued basis. We've seen it somewhat improve in certain ways, but we don't have a pure visibility to when we sort of lapped that comp. Discuss the next few quarters, but we certainly don't have a visibility to commit to it at any certain given time. Great news is new business is up discuss the results in a big, big way and especially revenue excluding overages being up marginally year over year, but growing.

Speaker 1

That's a return to growth and something we expect to see in the coming quarters discuss the results as well, but Rob, I don't

Speaker 2

know if you'd add specifics. Yes, Steve. To Mark's point, as we think about when that add on business recovers, we really need to lap discuss that sales cycle where they started coming down. We think that happens in the middle part of next year, Q2, Q3 of next year.

Speaker 4

Okay. And then maybe some color on the 8 ks this afternoon about discuss arranging a $30,000,000 line of credit. What kinds of businesses would

Speaker 1

you think about acquiring if that's what the money is for?

Speaker 2

Yes, Steve, the $30,000,000 line of credit was just really an extension of our existing line of credit with SVB. Discuss it. It's really just an operating safety net as we go forward. That said, we continue to think of M and A discuss the results as a critical part of our strategy going forward.

Speaker 4

Okay. And then I think one last one. How about an update on ad monetization, which discuss the Q3 of 2019. Look promising a few quarters ago, and you said it would take a little longer. So what does it

Speaker 1

look like today? When does that start to generate revenue? Yes. I think we have small amounts of revenue today. What we've learned is that as we dive in with a lot of our, what I would call, mid market customers or international customers, discuss.

Speaker 1

We're being very helpful to them growing their businesses, but it's a challenge to drive enough volume through that customer base to really have an impact on our revenue line, Steve. So discuss where we're focused is how we can support those larger customers and we're having some good dialogues with a few of those now. And then also selling our add support effectively as a services business, right? How do we go in and sell our capabilities, our talent and our discuss knowledge into those companies more like services and we've started that pivot sort of as we've entered here in the second half. We'll have more information on that I would say discuss

Speaker 4

our Q1

Speaker 2

results. And with that, we'll take questions from Mike Latimore, Northland Securities.

Speaker 5

Thanks very much. So on the It seems like you're a little more positive on the enterprise business. Can you just elaborate on kind of what transpired there? I mean, a lot of the focus, sales and discuss new products within media. So why would enterprise be picking up too, whether it's media focused or lesser?

Speaker 1

Yes. Look, I think we did when I I joined the company about 18 months ago and repositioned the strategy about middle of last year, was effectively bring the company back to a more fifty-fifty stance between enterprise and discuss the size and media in terms of our focus on both product development and go to market. I think what we're seeing now early in the year obviously with the larger deal in Q1 discuss the enterprise new business delivery and that's great news. That makes us feel like the end market breadth of that new business discuss the Q3. It's broad.

Speaker 1

It goes through both segments. And so we're very excited about what that means for our long term prospects. You're still going to see I think media be chunkier wins for us. Obviously, there's the potential for larger wins in that space, but we are feeling that the products we've come out with, with Comm Studio discuss on top of Marketing Studio as a second use case and we're thinking about others is really going to help us hunt for new business in the enterprise as well. Discuss.

Speaker 1

And the last point I'll make which I made earlier is, it's really strengthened Americas enterprise and so we think there's a real opportunity to scale that outside of the Americas discuss the results over time, right? We need to transfer that knowledge, how we were able to do those types of things for customers and be able to do those on a broader scale.

Speaker 5

And then, PACE, new business bookings growth looks very strong again. I guess, in a discuss more balanced environment between new and upsells, like what would be a normal bookings mix for you guys?

Speaker 2

What would you like

Speaker 5

to see between new and upsell bookings?

Speaker 1

Not committed I'd like to see it all very growing in a big way. But what I would say is historically our business and Rob you should trick me here has been 70%, 80% add on business and probably 20% to 30% new business. This year we're seeing that probably a little bit more it's not perfectly even, but be seeing in quarters it'd be a little bit more weighted to the new business side and so especially that Q1 where we had a very large new business transaction. So I think what we're hoping is in the long run we get back to real growth on the add on side, which is what held us back. And if we can do that on top of the new business growth we're seeing, I think you're going to have discuss a tremendous story for the future.

Speaker 1

I

Speaker 5

think last quarter you gave a number like discuss a number of deals over $500,000 in the pipeline or something like that or a just kind of a large deal pipeline. Any quantification or update on

Speaker 1

we'll We're not disclosing big quantifications there. What I would say is we have a meaningful large deal pipeline. We qualify to $750,000 or greater. Discuss the results. It is a meaningful portion of our current and future pipeline.

Speaker 1

We're excited about what that means. They are longer sales cycles for sure on those larger deals, but I think we have discuss a number of things that are there that we're excited about that should be there for us in the future. And we continue to build it, right? It's been building over the course of the year.

Speaker 5

Discuss.

Speaker 2

Thanks Mike. And with that, we'll take questions from Max Michalis, Lake Street Capital.

Speaker 3

Hey, guys. Thanks for taking my question. Just quick on the multiyear contracts. I was just wondering given the current macro, discuss if you're facing any pushback from customers about committing to multiyear contracts.

Speaker 2

No, not really. We're actually seeing a good uptick from our customers. I think discuss the results. What they're liking about it is we tend to lock in price over multiple years. So they're able to see some price certainty as Mark talked about discuss the results of the business and they get their cost locked in for a number of years.

Speaker 2

Okay.

Speaker 3

And then gross margin for the quarter down almost 200 basis points. Can you touch on that? Maybe what was the reason for that?

Speaker 2

I think the way you really need to look at those 2 is you need to take a look at those without depreciation and amortization and you need to strip that out because we're actually improving. Discuss a big piece of the dip is related to the incremental depreciation and amortization related to some of the new products that we've been launching over the course of the first half of this year.

Speaker 3

Discuss. Okay. That's it for me. Thanks guys.

Speaker 2

Excellent. Thanks, Max.

Speaker 1

Yes. Thank you, Max. Discuss our financial results. First, we appreciate all of you joining us today. To our investors, we appreciate your support.

Speaker 1

To our customers and partners, we appreciate your business. And to our employees, we really appreciate your incredible smart and hard work. While we operate in challenging times, both in the world and in parts of our industry, we continue to believe deeply in the long term discuss growth opportunity here at Brightcove, and we are committed to delivering on that opportunity and doing so while growing adjusted EBITDA and free cash flow. Believe our current valuation, which is at a meaningful discount to other streaming technology companies and other SaaS companies with similar financial profiles, provide investors a compelling opportunity and we are confident that as we deliver on our strategic goals and improve our financial and operational performance discuss our earnings release and earnings release. With that, we thank you.

Speaker 1

We look forward to seeing you next quarter.

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Earnings Conference Call
Brightcove Q3 2023
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