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
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BRIGHTCOVE (BCOV): Free Stock Analysis Report
LIMELIGHT NETWK (LLNW): Free Stock Analysis
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