10-Q

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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 March 31, 2022

☐	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.

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 April 25

, 2022, there were 41,552,088 shares of the registrant’s common stock, $0.001 par value per share, outstanding.


	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021		4
Condensed Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021		5
Condensed Consolidated Statements of Comprehensive (Loss) Income for the three months ended March 31, 2022 and 2021		6
Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2022 and 2021		7
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 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		28

Item 4. Controls and Procedures		29

PART II. OTHER INFORMATION		29

Item 1. Legal Proceedings		29

Item 1A. Risk Factors		29

Item 5. Other Information		30

Item 6. Exhibits		31

Signatures		32


	March 31, 2022			December 31, 2021

	(in thousands, except share and per share data)
Assets
Current assets:
Cash and cash equivalents	$	26,705		$	45,739
Accounts receivable, net of allowance of $379 and $353 at March 31, 2022 and December 31, 2021, respectively		34,037			29,866
Prepaid expenses		10,740			7,792
Other current assets		11,099			10,833

Total current assets		82,581			94,230
Property and equipment, net		26,317			20,514
Operating lease right-of-use asset		23,655			24,891
Intangible assets, net		12,881			9,276
Goodwill		74,838			60,902
Other assets		6,612			6,655

Total assets	$	226,884		$	216,468

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	14,027		$	11,039
Accrued expenses		22,851			20,925
Operating lease liability		2,950			2,600
Deferred revenue		64,110			62,057

Total current liabilities		103,938			96,621
Operating lease liability, net of current portion		21,920			22,801
Other liabilities		932			786

Total liabilities	$	126,790			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; 41,685,163 and 41,384,643 shares issued at March 31, 2022 and December 31, 2021, respectively		42			41
Additional paid-in capital		304,506			298,793
Treasury stock, at cost; 135,000 shares		(871	)		(871	)
Accumulated other comprehensive loss		(905	)		(662	)
Accumulated deficit		(202,678	)		(201,041	)

Total stockholders’ equity		100,094			96,260

Total liabilities and stockholders’ equity	$	226,884		$	216,468


	Three Months Ended March 31,
	2022			2021

	(in thousands, except share and per share data)
Revenue:
Subscription and support revenue	$	51,601		$	50,839
Professional services and other revenue		1,778			3,978

Total revenue		53,379			54,817
Cost of revenue:
Cost of subscription and support revenue		16,982			15,678
Cost of professional services and other revenue		1,998			3,490

Total cost of revenue		18,980			19,168

Gross profit		34,399			35,649
Operating expenses:
Research and development		8,237			8,284
Sales and marketing		18,288			16,149
General and administrative		8,089			7,059
Merger-related		594			—
Other expense (benefit)		1,149			(1,965	)

Total operating expenses		36,357			29,527

(Loss) income from operations		(1,958	)		6,122
Other (expense), net		(387	)		(735	)

(Loss) income before income taxes		(2,345	)		5,387
(Benefit) provision for income taxes		(708	)		257

Net (loss) income	$	(1,637	)	$	5,130
Net (loss) income per share—basic and diluted
Basic	$	(0.04	)	$	0.13
Diluted	$	(0.04	)	$	0.12
Weighted-average shares—basic and diluted
Basic		41,436			40,154
Diluted		41,436			42,480


	Allowance for Credit Losses
	(in thousands)
Balance as of December 31, 2021	$	353
Current provision for credit losses		106
Write-offs against allowance		(80	)
Recoveries		—

Balance as of March 31, 2022	$	379


	Accounts Receivable, net		Contract Assets (current)		Deferred Revenue (current)		Deferred Revenue (non- current)		Total Deferred Revenue
Balance at December 31, 2021	$	29,866	$	2,375	$	62,057	$	114	$	62,171
Balance at March 31, 2022		34,037		2,498		64,110		299		64,409


	March 31, 2022
Description	Contracted Maturity		Cost		Fair Market Value
Cash		Demand	$	26,664	$	26,664
Money market funds		Demand		41		41

Total cash and cash equivalents			$	26,705	$	26,705


	Three Months Ended March 31,
(shares in thousands)	2022		2021
Options outstanding		1,607		34
Restricted stock units outstanding		4,589		68


	Number of Shares			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (In Years)		Aggregate Intrinsic Value (1)
Outstanding at December 31, 2021		1,681,477		$	9.59
Granted		—			—
Exercised		(15,900	)		6.31			$	33,483
Canceled		(58,236	)		11.78

Outstanding at March 31, 2022		1,607,341		$	9.54		5.72	$	461,756

Exercisable at March 31, 2022		1,195,855		$	9.05		5.14	$	456,686


	S-RSU Shares			Weighted Average Grant Date Fair Value		P-RSU Shares			Weighted Average Grant Date Fair Value		Total RSU Shares			Weighted Average Grant Date Fair Value
Unvested at December 31, 2021		2,915,720		$	11.66		1,021,172		$	11.04		3,936,892		$	11.50
Granted		1,943,905			7.24		—			—		1,943,905			7.24
Vested and issued		(72,113	)		10.33		—			—		(72,113	)		10.33
Canceled		(198,389	)		10.62		(188,732	)		12.96		(387,121	)		11.76

Unvested at March 31, 2022		4,589,123		$	8.34		832,440		$	10.61		5,421,563		$	9.97

Cash	$	53
Accounts receivable and other assets		782
Identifiable intangible assets		4,382
Goodwill		13,936
Deferred revenue		(1,033	)
Deferred tax liabilities		(1,009	)
Other liabilities		(96	)

Total estimated purchase price	$	17,015


	Three Months Ended March 31,
	2022			2021

	(in thousands)
Operating activities
Net (loss) income	$	(1,637	)	$	5,130
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		2,061			2,163
Stock-based compensation		3,479			2,292
Provision for reserves on accounts receivable		106			71
Changes in assets and liabilities:
Accounts receivable		(3,802	)		(1,585	)
Prepaid expenses and other current assets		(1,550	)		(1,390	)
Other assets		54			(919	)
Accounts payable		347			(425	)
Accrued expenses		(1,980	)		(5,797	)
Operating leases		705			(626	)
Deferred revenue		1,527			482

Net cash used in operating activities		(690	)		(604	)
Investing activities
Cash paid for acquisition, net of cash acquired		(13,176	)		—
Purchases of property and equipment		(1,884	)		(468	)
Capitalized internal-use software costs		(2,882	)		(1,054	)

Net cash used in investing activities		(17,942	)		(1,522	)
Financing activities
Proceeds from exercise of stock options		100			1,095
Deferred acquisition payments		—			(475	)
Other financing activities		—			(87	)

Net cash provided by financing activities		100			533
Effect of exchange rate changes on cash and cash equivalents		(502	)		(727	)

Net decrease in cash and cash equivalents		(19,034	)		(2,320	)
Cash and cash equivalents at beginning of period		45,739			37,472

Cash and cash equivalents at end of period	$	26,705		$	35,152


	Three Months Ended March 31,
	2022		2021
Revenue:
North America	$	29,461	$	30,386
Europe		9,105		8,923
Japan		7,261		7,708
Asia Pacific		7,436		7,659
Other		116		141

Total revenue	$	53,379	$	54,817


	Amount		Useful Life
Developed technology	$	4,200		6
Customer relationships		182		5

Total	$	4,382


Year Ending December 31,	Amount
2022	$	614
2023		736
2024		736
2025		736
2026		736
2027 and thereafter		824

Total	$	4,382


Balance as of January 1, 2022	$	60,902
Wicket acquisition		13,936

Balance as of March 31, 2022	$	74,838

SEC Form 10-Q filed by Brightcove Inc.