Brightcove Inc.

Greetings. Welcome to the Brightcove third quarter 2020 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Brian Gagnon. You may begin.

Good afternoon, and welcome to Brightcove's third quarter 2020 earnings call. Today, we will discuss the results announced in our press release issued after market close. With me on the call are Jeff Ray, RYCO's Chief Executive Officer, and Rob Norick, RYCO's Chief Financial Officer. During the call, 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 fourth fiscal quarter of 2020 and the full year of 2020, expected profitability and positive free cash flow, our position to execute our go-to-market and grow strategy, our ability to expand our leadership position, our ability to maintain and upsell 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 as of any subsequent date. These statements are subject to a variety of risks and uncertainties that cause actual results to differ materially from expectations, including the effect of the COVID-19 pandemic on our business operations, as well as the impact on general economic and financial market conditions. For discussion of 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-K and as updated by our other SEC filings. Also, during the course of today's call, 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 closed today, which can be found on our website at www.britecode.com. In terms of the agenda for today's call, Jeff will provide a summary review of our financial results, an update on our operations, and a review of our strategy. Rob will finish with additional details regarding our third quarter 2020 results, as well as our outlook for the fourth quarter and full year 2020. With that, let me turn the call over to Jeff.

Thanks, Brian, and thanks to all of you for joining today. I hope all of you and your families remain healthy and safe. Brightcove had an exceptional third quarter, which built upon and exceeded our record sales results in the second quarter. The strategic decisions and investments made across every aspect of the business over the past two and a half years are all coming together and delivering the performance we've long known this business is capable of achieving. The incredible customer wins we achieved this quarter demonstrate that video has become an essential tool for organizations who need to connect and communicate with their customers, employees, and partners. Our best-in-class platform and product portfolio, combined with our deep video technology expertise, is delivering the promise of video to enterprises and media companies alike, which is driving faster, more profitable growth in our business. Rob will provide the details later, but based on our third quarter performance and outlook for the fourth quarter, we are raising our guidance for the full year. In fact, our updated guidance is within the original range we provided at the beginning of the year, which is a remarkable achievement given the retention rate issues earlier this year in the overall economic uncertainty related to the COVID pandemic. Turning to our financial results briefly for the third quarter, we delivered revenue of $49.1 million, up 3% year-over-year and well ahead of our guidance. Adjusted EBITDA was $5.9 million, which was also well ahead of our guidance. I would like to spend some time highlighting what's driving our success in the market, why we are confident it is sustainable, and what we are doing to drive top-line performance. Brightcove, at its core, is a product-driven company. Over the past 15 years, we have developed the most scalable, high-performing video platform on the market. The recent introduction of solutions like Brightcove Beacon, Brightcove Campaign, Brightcove Engage, and Brightcove Virtual Event Experiences leverage the sophistication of our video platform with elegant, purpose-built apps that drive critical business value for our customers. With customers using video in new and exciting ways across their operation, they're looking for a partner they can trust with proven experience and easy-to-use products that can scale to meet all their needs. Brightcove's mission is to simplify the complexity of video so that any enterprise or media company can deliver exceptional video experiences to its audience. We believe our market momentum over the past six months demonstrates that Brightcove is the video partner of choice for enterprises and media companies. From a sales perspective, the changes we have discussed on prior earnings calls are paying off. This begins with a more targeted and bold demand generation strategy. With a focus on global field marketing and custom virtual events, like our recent Brightcove three-day virtual summit, we have enjoyed a robust pipeline to fuel growth in every region. Within our sales team, the significant number of new reps we have brought into the company this past year are quickly becoming productive, thanks to our comprehensive onboarding and sales engagement processes. We are seeing great success with our strategy of having dedicated reps focused on acquiring new logos, while others are responsible for selling back into our install base. We've developed a proactive and skilled sales organization that strategically engages customers to identify how Brightco can solve specific business problems. The changes to our product portfolio and go-to-market efforts are generating great improvement in sales activity. Our third quarter results were notable for the strong performance among new customers, existing customers, and by geography, with each region well ahead of plan. I would like to spend some time highlighting a few of the key drivers of our performance in the quarter. The first is the tremendous success we continue to have with Brightcove Beacons. Both our deal volume and average deal size for Brightcove Beacon are exceeding our expectations. We are transforming the delivery of an OTT service from a bespoke development project into a technology-rich platform deployment with leading capabilities in shorter timeframes. Brightcove Beacon has opened up several exciting opportunities due to its ease of use and flexibility to enable any organization to maintain an OTP offering. This gives customers greater freedom to use video in new ways that truly drive value. The second is our ability to deliver exciting live events with the best brands and partners in the world. We're seeing continued strength with our live events offering. The growing number of successful live virtual events is reinforcing the belief that hybrid model events increase ROI expand audience reach, and open up new opportunities to engage with customers and prospects. We are signing key wins in several different industries, including technology, fitness, sports, and media. Through the end of September, we have already helped more than 170 organizations pivot how they connect with their customers, employees, and fans. And we have a growing list of events that will be powered by Brightcove in the near future. Our virtual events momentum is just getting started, and we are honored to have partners with brands like Inbound 2020, HubSpot's annual user conference, AnitaBee.org's annual Grace Hopper Gala, and the USGA's US Open over the past few months. I'd like to highlight a few recent wins. South by Southwest is a recent win we are particularly proud of. For over 30 years, South by Southwest has gathered the world's most innovative minds in Austin, Texas. In 2019, the event had 280,000 attendees. This coming year will be an incredible pivot for the organization as it goes truly virtual for the first time. Using Brightco, South by Southwest will expand its reach to broader audiences in new and innovative ways using video to deliver its 2021 festival. We recently partnered with VMware to power its VMworld 2020 annual user conference. This event went virtual for the first time, and it was delivered flawlessly. VMworld hosted more than 80,000 attendees from 180 countries. who watched more than 1,000 speakers present at 900 live and on-demand sessions. The number of attendees continues to grow weekly as more customers and prospects engage with the on-demand content. Lastly, the event industry has had to reimagine a new world where virtual is the primary connection. In addition to adding major logos to the Brightco portfolio, our reach will expand with new agreements with the three biggest event planning companies in the world, Cvent, Rainfocus, and Jack Morton. Collectively, these leaders in the event industry have the strongest reputation and deepest understanding of how to build engaging event experiences. The fact that these industry leaders chose Brightcove as their video partner is a strong endorsement of the power and scalability of our platform. And in just a short period of time, we have delivered more than 200 events of all sizes with the help of these partners. All three have a unique approach to connecting with their audiences, and we play an essential role in their video strategy. Each of these partners extends our reach in the marketplace and provides us access to far more potential customers than we could target on our own. The future of events will certainly be a hybrid model, and video will remain a key component for connecting audiences. We believe virtual events will be a long-term demand driver for Brightco. In addition, we delivered a balanced mix of new customer wins and existing customers who continue to expand their engagement with Brightco. Some of the customer wins and renewals we signed in the quarter included Kupang Corporation, DAR Communications, Get After It Media, Hitachi, Boston Consulting Group, Chick-fil-A, Chipotle, Le Figaro, and Time USA. I would like to highlight a few of our key wins in the quarter. Among the more than 40 logos in our fitness portfolio is ClassPass, an online fitness brand that connects its customers with exercise classes from numerous geographically dispersed studios. Once COVID put a halt to traditional in-person fitness instruction, ClassPass pivoted its business by uploading BOD content from previous classes, as well as posting new live classes so that its members can continue to work out from home. We partnered with them as they experienced incredible growth over the past year and continue to be a reliable source for their content. Another growing vertical for us is faith-based organizations. Lifeway Christian Resources is a nonprofit ministry focused on the Southern Baptist Convention, which has 14 million members across 47,000 churches in the U.S. It needed to quickly transform its operations as COVID restrictions required its Bible study and church services be conducted virtually. This past quarter, Lifeway expanded its relationship with Brightcove because we are the only one to deliver on scale and exceptional viewer experiences. Lastly, we have all watched sports evolve dramatically during the pandemic. The Football Federation of Australia, a Brightcove customer since 2017, learned firsthand what it meant to deliver a new experience to fans. The FFA is the governing body of soccer futsal and beach soccer within Australia and uses Brightcove for all video on-demand content of A-League matches. Each club has its own Brightcove account to upload snackable content to engage with their grassroots audience. Besides the event partnerships I mentioned previously, we also had encouraging early traction with our recently launched Master License Partner Program. which allows partners to deliver our video technology and solutions as part of a broader managed service offering. We have already signed five partners to this program and are pleased with the level of interest for embedding Brightco into third-party services. We continue to believe a robust channel program will be an important contributor to growth by expanding our market reach and increasing our sales velocities. As we look to the future, we are mindful of the uncertainty in the economy. However, we feel the need for video will remain a focus for brands who understand the power it can deliver to unite, engage, and communicate. We are confident current market trends are sustainable and that video has reached an inflection point that will continue after COVID goes away. We've had much success this year, but acknowledge we still have work to do. As Rob will discuss, we had a good retention rate this quarter, but our goal is to build a stronger, more predictable renewal business. This is an area that I am intensely focused on, and our Chief Revenue Officer, Rick Hansen, is leading a comprehensive process to build a best-in-class renewals business. Just as we have successfully rebuilt our product development and go-to-market efforts, We will do the same with our renewal business in future quarters. The combination of our strong sales dynamic and an improved retention rate will be a powerful catalyst for improved, more profitable revenue growth. Before I turn it over to Rob, I'd like to welcome our two new board members, Dr. Tadal Neely and Richa Gupta Ranjan. Tadal is a Harvard Business School professor and member of Rakuten's advisory board. And Richa is the Director of Product Management for Google Finance. Their forward-thinking ideas and expertise will help shape the future of Brightco from a technology, leadership, and organizational perspective. We're excited to have them on board and look forward to their ongoing insight and guidance. To wrap up, I am excited by how the business is performing. The third quarter demonstrates that our strategy is working. and that we are on the right track to achieve our long-term strategic objectives. I am amazed by the dedication and passion of Brightcoats employees who have worked tirelessly to get us to this point. Facing tremendous personal challenges as they adapted to life during COVID, our team has always remained focused on ensuring our customers' success. We have a great team, And I know we have the right people to take this company to the next level. We're building a new chapter in the history of Brightco. One we are confident will generate significant value for shareholders as we continue to successfully execute on our strategy. With that, let me turn the call over to Rob to walk you through the numbers. Rob?