Brightcove Q1 2024 Earnings Call Transcript

Quartr
Provided by Quartr
May 8, 2024

There are 4 speakers on the call.

Operator

Good afternoon, and welcome to Brightcove's First Quarter 2024 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 2nd fiscal quarter of 2024 and the full year 2024 expected revenue, 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 up sell 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 on Form 10 ks and as 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, which can be found on our website at www.brightcove.com.

Speaker 1

Thank you all for joining today to discuss our Q1 results. I'm Marc DeBevoix, Brightcove's CEO, and with me today is Brightcove's new CFO, John Wagner. First, I'd like to say we're thrilled to welcome John to Brightcove. He's a seasoned executive with more than 2 decades of experience in the technology industry, most recently as the CFO of Online Insurance Marketplace, EverQuote. Has an impressive track record delivering improvements in growth and profitability, and I'm excited to add his expertise to our leadership team.

Speaker 1

You'll hear more on the numbers from John in a few moments, but I'll begin with a quick overview of our high level financial results for q represents 3% year over year revenue growth. Revenue excluding overages, which we believe is the most helpful way for investors to evaluate our performance, was 49,400,000 dollars and grew even faster at 3.6%. Adjusted EBITDA was $5,000,000 at the high end of our guidance and delivered the 3rd consecutive quarter of double digit adjusted EBITDA margin. And finally, we ended the quarter with $22,900,000 in cash and cash equivalents, up $4,300,000 sequentially. This reflects better than expected operating cash flow performance in our typically seasonally lowest quarter, and the proceeds from a strategic decision to monetize a portion of our patent portfolio.

Speaker 1

Going a little deeper on this strategic transaction, during the quarter we successfully monetized a portion of our patent portfolio with a leading publicly traded firm for $6,000,000 This included approximately 40% of our 150 plus patents and approximately 30% of our patent families. We believe this was a meaningful value enhancing transaction for several reasons. First, by monetizing this portion of our patent portfolio, we meaningfully increased the amount of cash on our balance sheet, an attractive way for us to realize previously unrealized and typically unrealizable value. 2nd, we received a perpetual license back to all of our patents as part of the deal. This enables us to continue using all of the technology covered by these patents in our products for all of our current and future U.

Speaker 1

S. Market. We are also seeing a significant uptick in our licensing and or enforcement activities in the market with our competitors and or non Brightcove users, which, like most companies in our position, we have not previously pursued historically. So this transaction effectively serves as a way to realize the value of a portion of our patent portfolio up front, while also potentially providing the benefits of patent enforcement in the marketplace that we would not otherwise pursue. Finally, we continue to have an extensive remaining patent portfolio and an R and D team that generates new products and patents, all that we believe continue to differentiate us, can generate additional business opportunities, help defend our recurring revenue base and may deliver us more capital and return on investment in the future.

Speaker 1

We believe this transaction is a great example of how we will pursue creative opportunities to unlock value for shareholders, while also strengthening our business. We also believe it is yet another factor in demonstrating the continued rationality of our current market valuation. With the stock currently trading at less than 0.4x enterprise value to forward revenue and below 4x enterprise value to forward adjusted EBITDA, we believe our market capitalization is completely disconnected from our intrinsic value. We believe the core asset value of our intellectual property, our customer base and our software alone exceeds our current market value. And add to that our nearly $200,000,000 of annual revenue, the overwhelming majority of it recurring, a record backlog of over $185,000,000 and an efficient and profitable business model, and this disconnect becomes even more apparent.

Speaker 1

With a resilient operating plan that we expect will deliver on our profitability targets for 2024 in any conceivable scenario, we continue to strongly believe our shares reflect a very compelling investment opportunity. Turning to our performance in the quarter. We had strong financial performance while also seeing a continuation of some of the business trends we saw throughout much of 2023. First, we had a relatively strong revenue quarter. We topped the high end of our guidance on revenue and saw 3% growth in overall revenue and 3 point 6% growth in revenue excluding overages.

Speaker 1

The recurring revenue portion of our business has strengthened as we've continued to see overages at their lower than historically typical levels, and our backlog hit a record high. While we don't expect to maintain this type of revenue growth in each quarter this year, our goal remains to drive more consistent revenue growth in the future, especially with regards to the recurring subscription revenue we drive. We also had another strong profitability quarter. We hit 10% adjusted EBITDA margins for the 3rd straight quarter. Maintaining cost discipline across our business while continuing to opportunistically invest in our key growth initiatives is our top priority this year.

Speaker 1

We will continue to look for ways to improve productivity and efficiency in all aspects of our operations. I'm pleased with the results so far and believe we are well on track to deliver our goal of 25% or greater adjusted EBITDA growth and 40% to 50% free cash flow conversion of that adjusted EBITDA in 2024. We also had a solid new business quarter. With quality new logo wins with both media and enterprise customers, new business tracked above the average of the trail of the last 3 quarters and we saw continued improvement in overall deal value and average deal sizes versus last quarter. North America remains our best performing region, and we continue to work on driving similar results globally.

Speaker 1

We continue to grow and expand our large deal pipeline with an impressive cross section of traditional media, large and midsized streaming services and large enterprises as well. Our new CRO, Jim Norton, is laser focused on shepherding these types of larger opportunities through our pipeline over the course of 2024. On that last point, we had a meaningful 6 figure win in the quarter entities outsourcing at least a part of their streaming technology stack to us as a compelling operational and financial investment, but also continue to see these sales cycles longer and less predictable in their nature. However, our retention and add on business remained a drag to growth due to the same dynamics that we experienced over the course of 2023. As we mentioned last quarter, we had a meaningful customer in Japan churn in Q1 as expected due to an M and A event and subsequent consolidation on the acquirers do it yourself streaming stack.

Speaker 1

We also saw continued historically muted add on demand with our existing customers. As we have discussed previously, an important part of our strategy is to develop a number of purpose built solutions that will provide customers multiple upgrade paths to expand their spend with Brightcove. This is a more sustainable and value added approach than our traditional entitlement based add on business. We continue to see positive signs of customer interest in Marketing Studio, where more existing video cloud enterprise customers are upgrading each quarter, and we still have more work to do to develop a consistent demand flywheel for marketing and communications studio, but we believe we're headed in the right direction. It is still too early to predict the timing of sustained improvement in our add on business, but returning it to growth remains a key priority.

Speaker 1

On the customer front, we signed a number of new business add on and renewal transactions in Q1 across a wide range of industries and geographies. This included media companies like Ampass, the home of the Oscars Acun Media, a leading Turkish media company Watch It, a leading streamer in Egypt and CNET Sky Mexico, New Zealand with Sky New Zealand and Brazil with SBT. We also closed deals with sports organizations like Ironman, Netball Australia and Little League Baseball and added more to our deals with the NHL, MLS and MotoAmerica. On the enterprise side, we closed deals with finance, health care, auto and consulting companies like Apollo, AARP, Booz Allen, Cigna, Franklin Templeton, General Motors, HSBC, McKinsey, Mizuho, Navy Federal Credit Union, PIMCO, Prudential Life Insurance, TD Bank, and UnitedHealthcare. And also technology companies like Dell, Intel, Motorola and Swisscom.

Speaker 1

We also had a meaningful 6 figure win in the quarter with a leading media group in Japan and APAC that expanded their engagement with Breakout in preparation for this summer's Olympics. We are set to support numerous companies' streaming needs for the Olympics this year, and we believe this is a great indication of the opportunity for live content on our platform and showcases our ability to scale reliably and in mission critical situations, and we will look to translate this success into other sports and live centric opportunities. On the product side, we had a highly productive quarter in terms of partnerships and innovation. Each of these things expands the value we can deliver to customers and our growth opportunities. Accelerating the pace of innovation is a core priority for us, and this quarter's announcements are a strong indication we are delivering on that goal.

Speaker 1

Our recent product announcements included a new strategic partnership with Google Ad Manager to enhance ad monetization service. Through this partnership, Brightcove's customers will be able to utilize Google Ad Manager as their ad management platform fully integrated as part of Brightcove, monetize content, expand the number of impressions Brightcove can serve on monetize content, expand the number of impressions Brightcove can serve on behalf of our customers and ultimately increase competition and the value delivered for our consumer facing the market. We also launched our a great example of delivering purpose built solutions that address the specific, high value needs of certain customers. We launched Cloud Playout 2.0 as well, which enhances customers' ability to build new fast light channels in minutes with their existing content catalog and live stream portfolio. Building upon the initial success of cloud playout, version 2.0 will help media companies consumer experience.

Speaker 1

We are also seeing a lot of growth in our digital transformation and platform. This is a simplifies content creation on our platform, including concepts like repurposing existing long form video content into snackable content for specific audiences, it simple to create and package employee generated content and ease the development of promotional video content for sales and marketing campaigns. We have a number of initiatives underway that are specifically focused on additional new solutions and expanded use cases in the enterprise space and on the continued development of our live VOD OTT and monetization solutions for media customers. We're also making a larger push into AI. Our overall strategy continues to focus on how we can help our customers grow revenue, reduce costs and connect better with more audiences, both internally and externally.

Speaker 1

We do that today with the most scaled, trusted and insightful platform that infers actions you can take with your content to improve your business. But with Gen AI, we are ramping up that strategy, evolving from inferring actions to automating them and making our systems truly intelligent, seeking to exponentially drive customer value. Our AI strategy focuses on 2 core concepts, optimization and efficiency. First, our goal is to 1st, our goal is to transform the products and solutions we deliver to optimize our customers' businesses think driving more revenue, more audience or more content. And we also want to find the right tools and solutions to optimize our own business.

Speaker 1

2nd, we are focused on delivering meaningful efficiencies for our customers through our solutions. Think reducing costs on content delivery or maximizing quality of that delivery or minimizing downtime. And we want to find the right tools and solutions to find both cost savings and time efficiencies in our own business as well. Our intention is not to build AI engines. The market has demonstrated to us that there are hundreds out there and more coming every day.

Speaker 1

Our strategy is rather to partner with the best in class AI engines and apply them to support our strategy. Our differentiators will be first in how we strategically include our data and our customers' data and content securely and responsibly in those AI engines and build solutions that give our customers control about what data goes into those AI models and when. We believe the data and content managed in our systems will continuously inform and improve our AI enabled solutions to make them more unique and specialized for our customers' businesses over time. 2nd, we will not just be delivering insights that enable our customers to take the right actions, but ultimately automate those actions as our systems continually learn, delivering an effectively intelligent platform of efficiency in our own business, including having recently announced advancements to our knowledge base, utilizing Amazon's Q technology. As Amazon CEO Andy Jassy mentioned in his release last week, we partnered with AWS to evolve opportunity to deliver the best of our customers.

Speaker 1

We're also excited about the even faster, making our teams more responsive, productive and efficient. We believe AI will make our products and overall capabilities meaningfully better and ultimately has the potential to be transformative for our business. We believe AI can be a game changer for our customers in terms of delivering solutions around things like content generation and creation, monetization, search and discovery, audience engagement, recommendations more. We also believe it can be a game changer for the optimization of our business too. I'm very excited about our strategy here and with numerous pilots currently underway, you should expect to hear more and more from us here going forward.

Speaker 1

Before I turn things over to John, let me wrap up by reiterating that we are off to a solid start in 2024. In Q1, we grew revenue, we delivered meaningful adjusted EBITDA margins and added 1,000,000 in cash to our balance sheet. We are executing with operational rigor around expenses and are confident in our ability to deliver strong growth in profitability and real cash generation. We are working diligently to build a more predictable and consistent go to market engine, and we have a market leading product suite and a clear vision of where we need to take it to deliver for our customers, especially in an AI driven future. We believe these steps will deliver improved financial results over time.

Speaker 1

And at our current valuation, we continue to believe Breakhill represents an incredibly attractive investment opportunity. Finally, with the addition of John, we have completed the build out of our new management team, and I've been incredibly pleased with the passion and purpose this team is instilling across the company and where we believe we can take it together. I'm also personally excited to partner specifically with John and believe he is an excellent addition to this team. So with that, let me turn things over to him to introduce himself, walk through the financials and our guidance in a little bit more detail. John?

Speaker 2

Thank you, Mark. And let me start by saying I am thrilled to be joining Brightcove. As I considered opportunities for my next role, Brightcove checked each of the boxes I was most focused on. As a recognized leader in the streaming industry, Brightcove is well positioned in a large and growing market with 2 decades of technical innovation and an incredible roster of media and enterprise customers. I strongly believe Brightcove is in a great position to build upon this history with a management team that is now laser focused on a strategy to deliver better operational and financial results.

Speaker 2

And as a new shareholder myself, I see substantial value and upside in our stock at these levels. I'd now like to provide a detailed review of our Q1 results and then finish with our outlook for the Q2 and full year 2024. Total revenue in the Q1 was $50,500,000 above the high end of our guidance range and up 3% year over year. Breaking revenue down further, if we exclude overages of $1,100,000 in the quarter, revenue was $49,400,000 up 3.6 percent year over year. Subscription and support revenue, which includes overages, was $48,000,000 and professional services revenue was 2,500,000 dollars up 2% and 28% year over year respectively.

Speaker 2

12 month backlog we define as the aggregate amount of committed subscription revenue related to future performance obligations in the next 12 months, was $127,300,000 flat over the prior quarter and a decrease of 1.6% year over year. Total backlog was $185,400,000 up 2.3% year over year and our highest total backlog ever. Our record backlog reflects our success capturing multi year commitments from our customers, which in turn improves our customer retention in the future periods and the predictability and visibility of our business. On a geographic basis, we generated 61% of our revenue in North America in the quarter and 39% internationally. Breaking down international revenue a bit more, Europe generated 16% of our revenue and Japan and Asia Pacific generated 23% of revenue in the quarter.

Speaker 2

Let me now turn to the supplemental metrics we share on a quarterly basis. Recurring dollar retention rate in the Q1 was 85%, which was down from 94% in the previous quarter due primarily to the loss of a large media customer as a result of their company's acquisition that we previewed last quarter. As a reminder, this metric only captures renewals in the quarter and up sells at the time of renewal and does not factor in the impact of add ons during the contract term or multi year agreements, both of which meaningfully improve our dollar retention. Net revenue retention in the quarter was 92%, which compares to 95% in the previous quarter and 94% in the Q1 of 2023. This decline was primarily due to the previously mentioned acquisition related loss of a large customer, as well as lower add on sales performance in the prior year.

Speaker 2

Net revenue retention did benefit from a growing number of multiyear customer commitments, essentially locking in renewals at each contract anniversary. Our customer count at the end of Q1 was 2,502, of which 1992 were classified as premium customers. Looking at our ARPU within customer base, our annualized revenue per premium customer was $98,000 and excludes our entry level pricing for starter customers, which averaged $4,300 in annualized revenue. This represented growth of 2% over the previous quarter and 10% compared to the Q1 of 2023 and tied an all time quarterly record. The strong growth in ARPU reflects a combination of our strategy to focus on super serving larger customers and that attrition is mostly concentrated amongst lower quarter, giving us a gross margin of 61.1 percent, which is an improvement over 58.7% in the Q1 of 2023.

Speaker 2

Operating and net income were both positive for the quarter at $2,000,000 $1,600,000 was $0.04 for the quarter based on 44,100,000 weighted average shares outstanding. Turning to our non GAAP results, which exclude the positive impact of our patent sale in addition to our traditional add backs. Our non GAAP gross profit in the quarter was $31,700,000 compared to $29,600,000 in the Q1 of 2023 and represented a gross margin of 63% compared to 60% in the year ago period. Non GAAP operating income was $1,000,000 in the Q1 compared to non GAAP operating loss of 5 $600,000 in the Q1 of 2023. Adjusted EBITDA was $5,000,000 representing adjusted EBITDA margin of 10% at the high end of our guidance range provided last quarter.

Speaker 2

This is our 3rd consecutive quarter of double digit adjusted EBITDA margins. The ongoing strength in adjusted EBITDA reflects our continued benefit of prior cost savings actions and our ongoing expense and our ongoing expense discipline. Profitability in the quarter was stronger than a typical first quarter due in part to shifting our annual employee merit pay increase to Q2 this year. Non GAAP diluted net income per share was $0.01 based on 44,100,000 weighted average shares outstanding. This compares to net loss per share of $0.15 based on 42,500,000 weighted average shares outstanding in the year ago period.

Speaker 2

Turning to the balance sheet and cash flow. We ended the quarter with cash and cash equivalents of $22,900,000 which is up from $18,600,000 at December 31, reflecting a net increase of cash of $4,300,000 in the quarter, driven by $6,000,000 of proceeds from our patent sale. Free cash flow for the quarter was negative $3,000,000 in capital expenditures and capitalized internal use software and excludes the proceeds from our patent sale. This free cash flow performance was better than expected, and we would have generated positive free cash flow if you exclude the portion of our restructuring paid in the quarter. I'd like to finish by providing our guidance for the Q2 and the full year 2020 4.

Speaker 2

For the Q2, we are targeting revenue of between $47,500,000 $48,500,000 including approximately $800,000 of overages and approximately $1,800,000 of professional services revenue. From a profitability perspective, we expect non GAAP operating loss to be between $2,000,000 $1,000,000 and positive adjusted EBITDA to be between $2,000,000 $3,000,000 Non GAAP net income per share is expected to be in the range of a loss of $0.05 to $0.03 based on 44,600,000 weighted average shares outstanding. For the full year, we are maintaining our revenue guidance we provided last quarter of $195,000,000 to $198,000,000 which includes an estimate of $3,500,000 of overage revenue, approximately $8,000,000 of professional services revenue. We are also maintaining our full year guidance from a adjusted EBITDA to be between $14,000,000 $16,000,000 Non GAAP net loss per share is expected to be in the range of $0.10 to 0 point 0 $5 $5 based on 44,600,000 weighted average shares outstanding. Lastly, we are maintaining our full Lastly, we are maintaining our full year free cash flow guidance, which is expected to be between $5,600,000 $8,000,000 And we note this does not include the additional $6,000,000 we received this year.

Speaker 2

In addition, we expect to be free cash flow positive for each of the remaining quarters of the year, building modestly in Q2 and Q3 and further improving in Q4. A few things to keep in mind as you think about our guidance. 1st, foreign exchange rates have moved against us since the beginning of the year. On a constant currency basis, our revenue and adjusted EBITDA guidance would have both been more than $1,000,000 higher for the full year. 2nd, there are a couple of points I would like to make specifically as it relates to Q2.

Speaker 2

The sequential decline in quarterly revenue is driven by a few factors, including lower subscription revenue due to the Q1 M and A related customer loss referenced earlier, a $700,000 decrease in professional services revenue and headwinds from unfavorable FX and lower revenue overages, both of which are expected to be several $100,000 In terms of Q2 profitability, the sequential decline from Q1 is driven by a combination of lowered revenue as well as an increase in expenses related to the timing of our annual employee merit pay increase. To wrap up, we had a solid start to the year in Q1. We delivered revenue growth, double digit adjusted EBITDA margins and we strengthened our balance sheet with additional cash. We are focused on executing on our key strategic priorities that we expect will result in consistent revenue growth in the future. We're off to a strong start against our profitability and free cash flow targets, and we are confident we will deliver significant improvement in both these metrics for the full year 2024 as outlined in our guidance.

Speaker 2

Please give us a moment to transition to Q and A and we'll be back to

Speaker 3

We'll take our first set of questions from Steve Frankel of Rosenblatt Securities. Despite a better than expected performance in Q1, you're guiding for revenue declines in the Q2. Does this decline a function of the lost customer you discussed in the 4Q call or have you seen additional customer churn?

Speaker 2

So I guess I'd start by saying we had a strong revenue quarter in Q1. We were pleased with the fact that we were able to deliver some upside against our guidance. As you look at Q2, we are guiding for a sequential decline in revenue. I think you've got the first major piece of that if we walk through the from Q1 to Q2. First component is that large media customer that churned in Q1 related to their own M and A.

Speaker 2

I'd say the second component is within professional services. Our guide implies about $700,000 less in professional services in Q2. And then lastly, I would mention 2 components, which would be the headwinds we're seeing within FX, as well as lower overages. Q1 was a relatively strong quarter for overage. We expect a few $100,000 less in Q2.

Speaker 3

Steve's next question is, can you provide an update on the company's large deal pipeline, particularly in media?

Speaker 1

Yes. I think we feel very good about the pipeline and how it's been building over time. We've certainly closed a number of what I would call high 100,000 annual value deals in Q1. I think we see more of those coming down the pike. I think we also see numerous, let's call them, 7 figure plus 1,000,000 of dollars types of deals in each of the next potentially few quarters.

Speaker 1

As we've always said, the challenge is knowing exactly when we can bring those deals to conclusion because it's not always effectively within our control the same way sort of smaller deals can be. But we feel really good about how that's been building. I think you'll hear more from us in from Q2 and into Q3 and in Q4 for the rest of the year, and that's going to be really the upside potential we see to our guidance if we can land more of those in those sequential quarters.

Speaker 3

And Steve's final question is, what will it take to get the business to a point where it can consistently grow revenue?

Speaker 1

Yes. I believe getting that add on business back to sort of the historical levels we've seen and we're doing a lot of things, as we've said on the call, to go after that, right? That's about building our muscle and our enablement with our sales team to go sell those existing products up and into our existing customer base rather than the entitlement fueled growth we had over those previous years. And then if that entitlement growth does come back, you'll really start to see that growth kick in. But we believe we're doing the right things on the add on side to bring that back.

Speaker 1

I feel pretty confident in the new business side. I think we're doing well there. I think if those big deals also can come in more than 1 or 2 a quarter but really start to cook at a higher rate per quarter, I think we start to see some really consistent growth there. So that is our goal to get back to that consistent growth. You've seen us do a couple of quarters here of 3 ish percent.

Speaker 1

Obviously, we're going to take that back here in a quarter, but I believe the goal here is to get to that back to that type of growth, if not greater, by the end of the year.

Speaker 3

We'll take our next set of questions from Eric Martinuzzi of Lake Street Capital Markets. Your prior outlook did not anticipate any recovery in add on or usage business in 2024. Have you seen any green shoots either in Q1 or in the month of April?

Speaker 1

I think we have seen some. I think as we've said, sort of that entitlement business has not come rowingbrac, and we've sort of said that from the beginning and that was implied in our guidance for 2024. We have seen some meaningful success in upgrading our enterprise customer base from what I would call existing video cloud accounts into Marketing Studio. And now that we have Comm Studio fully complete rolling that out as an upgrade potential for many of our customers, and I think we're going to see more there, nothing we want to sort of let out at this point. We're sort of early days in terms of the number of quarters we've had to go in and sell that to our existing customer base, but I do believe there's going to be a greater opportunity to up that add on business with those products on the enterprise side.

Speaker 1

And then on the media side, it's going to be about those existing pitches of total cost of ownership and really the excellence we deliver from a quality perspective to try to grow those add ons with our existing customer base on that front.

Speaker 3

Eric's next question. Can you compare and contrast the demand environment in your pipeline between media accounts and your traditional enterprise accounts?

Speaker 1

Yeah, I think the demand environment in media is very big deal driven for us. We have a decent number of customers in the space, especially on a global stage, But it's really going to be about which big ones can we really upsell into either in big new things they're doing or in big new customers we can bring on. So that's where that big customers we can bring on. So that's where that big deal pipeline that was asked about earlier really comes into play. On the enterprise side, you know, much more volume based.

Speaker 1

We have a great customer base, you know, 1500 enterprise customers. You know, we're really trying to figure out how we can build those add ons into that business. And so like I talked about earlier, as we built these products to be those upsell use cases, can we get customers into those? And I think that will build from there. Again, from a new business perspective on enterprise, I think we feel relatively good.

Speaker 1

We've got some decent throughput on volume. We'd always love to see relatively good. We've got some decent throughput on volume. We'd always love to see more. If I were critiquing one area, it's really that North America is doing relatively well for us.

Speaker 1

And as soon as we can get international up to that sort of same speed, which I believe we can, that's when you'll start to see that growth come. And that's how those pipelines will build even more.

Speaker 3

And Eric's final question is you rolled through a 5% reduction in force in the Q1. Are you done with cost cuts or are there still fine tuning to the cost structure to be done?

Speaker 2

I'd say we have no plans to make further take further actions like we did in Q1 of this year or Q1 of last year. I would say I think we are seeing the benefit of those actions, both in our adjusted EBITDA this quarter at 10%, as well as our guidance for a 25% year over year improvement in adjusted EBITDA. But I think we feel pretty confident where we are in terms of the business and making sure that we're resourced and right sized for both our strategy and our go to market. So I think you wouldn't see anything such as that, but I think you would continue to see us be very judicious about resources in the business, continue to be very disciplined about the way we manage operational expenses. If there was one area that we would call out, it would probably be our technology spend within cost of goods sold where we've made progress in the past.

Speaker 2

We think there's probably more impact that we can have in that area. That would be an area that we will probably try to optimize further. But generally, I think we feel pretty good about where we are in the business and our ability to meet our financial targets that we've laid out this year.

Speaker 1

Great. Well said, John. So with that, I don't think we have any further questions. First, I want to thank you all for joining us. We hope to takeaways we're leaving you with today are that we had a strong start to 2024, growing revenue and EBITDA, meeting or beating the high end of our guidance and strengthening our debt free balance sheet all through Q1.

Speaker 1

But our recurring revenue model is secure as ever, with the highest backlog in our history at the end of the quarter, that we are reiterating our full year guidance and commitment to executing with operational rigor and delivering strong growth and profitability and real cash generation each quarter going forward and that we have a market leading product suite and a clear innovation path for an AI driven future that we believe can deliver more consistent growth going forward and lastly, that we believe our current market capitalization is disconnected from the fundamentals and intrinsic value and believe Brightcove represents an incredibly attractive investment opportunity at this level. With that, I'll thank my partner, John, here for closing out his first earnings call with us here at Brightcove. And with that, we'll both look forward to speaking with you next quarter.

Powered by Quartr
Earnings Conference Call
Brightcove Q1 2024
00:00 / 00:00