Brightcove Meets 3Q Estimates - Analyst Blog

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Brightcove Inc. ( BCOV ) reported a loss of 11 cents in the third quarter of 2012, in line with the Zacks Consensus Estimate. However, this was much better than a loss of 81 cents reported in the year-ago quarter.

Quarter Details

Revenue jumped 32.4% from the year-ago quarter to $22.1 million, meeting the consensus mark. The year-over-year surprise was primarily driven by a 35.2% surge in Subscription and support revenue, which fully offset a 26.0% plunge in Professional services and other revenue.

Gross profit (including stock-based compensation) soared 33.6% from the year-ago quarter to $15.2 million, while gross margin increased 250 basis points boosted by a favorable revenue mix.

Operating expenses soared 28.0% year over year to $18.8 million due to 19.8% year-over-year increase in research & development expenses, 26.5% year-on-year rise in sales & marketing expenses and an 18.2% jump in general & administrative expenses.

Loss from operations (including stock-based compensation) was $2.7 million, narrower than $3.3 million reported in the year-ago quarter on higher revenue base.

Net loss (including stock based compensation) of $3.0 million was narrower than the loss of $4.0 million in the prior-year quarter.

Exiting the third quarter, Brightcove had cash, cash equivalents and investments of $30.8 million, down from $58.6 million reported in the second quarter.

Outlook

For the fourth quarter, the company expects revenues in the range of $22.8 million to $23.3 million. Non-GAAP operating loss is expected to be 1.9 million to $2.2 million. Non-GAAP net loss is expected in the range of 7 cents to 8 cents.

For fiscal 2012, management expects revenue to be in the range of $86.5 million to $87.0 million. Non-GAAP operating loss is expected to be 7.5 million to $7.8 million. Non-GAAP net loss per share is expected in the range of 35 cents to 36 cents per share.

Recommendation

We believe that strong demand for cloud-based solutions, security and mobile products, and online videos along with strategic acquisitions are the positives for the stock over the long term.

However, intense competition from Akamai Technologies Inc. ( AKAM ) and Limelight Networks, Inc. ( LLNW ) coupled with sluggish macro-economic environment are the near-term headwinds.

We maintain our Neutral recommendation on a long-term basis (6-12 months). Currently, Brightcove has a Zacks #3 Rank, which implies a Hold rating on a short-term basis.



AKAMAI TECH (AKAM): Free Stock Analysis Report

BRIGHTCOVE (BCOV): Free Stock Analysis Report

LIMELIGHT NETWK (LLNW): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: AKAM , BCOV , LLNW

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