Brightcove Reports Narrower Loss - Analyst Blog

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Cloud-based solutions provider Brightcove Inc. 's ( BCOV ) second quarter 2012 non-GAAP loss of 10 cents per share improved from a loss of 91 cents reported in the previous-year quarter and was narrower than the Zacks Consensus Estimate of a loss of 13 cents. However, including stock-based compensation of 5 cents, the loss per share came in at 14 cents.

Quarter Details

Revenue increased 41.2% from the year-ago quarter to $21.6 million, primarily driven by Subscription and support revenue (42.8% increase year-over-year) and Professional services and other revenue (12.5% increase year-over-year). Reported revenue also beat the Zacks Consensus Estimate of $20.0 million.

Gross profit (including stock based compensation) increased 46.7% from the previous-year quarter to 15.2 million, while gross margin increased 250 basis points boosted by the prudent revenue mix.

Operating expenses increased 23.7% from the previous-year quarter to $19.1 million due to 21.0% year-over-year increase in the Research & development expenses, 15.5% year-on-year rise in Sales & Marketing expenses and 30.3% jump in General & Administrative expenses.

Loss from operations (including stock based compensation) improved from $5.07 million reported in the previous-year quarter to $3.41 million on higher revenue base.

Net loss (including stock-based compensation) of $3.86 million improved from loss of $5.46 million in the previous-year quarter.

Exiting the second quarter, Brightcove had cash, cash equivalents and investments of $58.6 million, down $2.0 million from the previous quarter. The company does not have any long-term debt.

Outlook

For the third quarter, the company expects revenues in the range of $21.1 million to $21.6 million. Non-GAAP net loss is expected in the range of 12 cents to 11 cents. The Zacks Consensus Estimate is pinned at a loss of 10 cents.

For fiscal 2012, management expects revenue to be in the range of $85.3 million to $86.0 million, and non-GAAP net loss per share is expected in the range of 47 cents to 44 cents.

Recommendation

We believe that strong demand for cloud-based solutions, security and mobile products, and online video 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
 
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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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