Brightcove Inc.

Greetings and welcome to the Bright Cove fourth quarter and fiscal year 2020 earnings call. At this time, all participants are in a listen-only mode. A brief 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. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brian Denue. Thank you, Brian. You may begin.

Good afternoon, and welcome to Brightcoast's fourth 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 Rye, Brightcoast's Chief Executive Officer, and Rob Norick, Brightcoast'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 first fiscal quarter of 2021 and the full year of 2021, expected profitability and positive free cash flow, our position to execute on our go-to-market and growth 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 and cause actual results to differ materially from expectations, including the effect of the COVID-19 pandemic on our business operations, as well as 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's 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.brightcove.com. In terms of the agenda for today's call, Jeff will provide a summary of our financial results, an update on our operations, and a review of our strategy. Rob will finish with additional details regarding our fourth quarter 2020 results, as well as our outlook for the first quarter and full year 2021. 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 continue to remain healthy and safe. The fourth quarter was an excellent finish to a terrific year for Brightcove. We delivered the strongest fourth quarter bookings performance in the company's history, driven by continued momentum across all parts of the business. We are helping drive videos proliferation across global enterprises, enabling better engagement with employees, customers, and partners. We are also benefiting from the growing number of content creators looking for ways to distribute and monetize their content at global scale. These trends are still in the early stages of adoption, which puts Bright Cove in a great position to deliver strong, sustainable, and profitable growth for years to come. Turning briefly to our financial results, for the fourth quarter, we delivered revenue of $53.7 million, up 13% year over year, and well ahead of our guidance. This represents our fastest organic growth rate since the third quarter of 2016. Adjusted EBITDA was $6.8 million, up 92% year-over-year, and also well ahead of our guidance. And free cash flow was $10.9 million, our strongest ever free cash flow quarter. And for the full year 2020, we delivered revenue of $197.4 million, up 7% year-over-year, and adjusted EBITDA was $20.5 million, a 10% margin, that more than doubled from 2019. And free cash flow was $12.6 million. Before looking at the quarter in detail, I would like to spend a moment reviewing some of the highlights from the full year. The pandemic has presented enterprises and content providers with numerous challenges and our team delivered. Some of these challenges included managing and engaging employees in an entirely virtual environment. finding new ways to develop and deepen customer relationships, transitioning in-person events to compelling virtual live event experiences, supporting rapid growth in streaming video content as people stayed home and watched more than ever before, and adjusting to the profound disruption faced by our customers in live sports and those with ad-supported models. Brightcove led the way as organizations around the world used the power of video to address these challenges and capitalize on major changes in the market. One example is how content providers leveraged Brightcove Beacon to quickly launch new OTT solutions to take advantage of the massive shift towards watching long-form content on mobile devices. The growth in video reinforced that scale is one of the most important reasons customers choose Brightcove. We look at scale very differently than most of our competitors. They talk about scale as supporting tens or hundreds of thousands of viewers. At Brightcove, we have built a platform designed to scale to tens of millions of viewers. Our customers tell us all the time that we are the only platform on the market that is close to being capable of providing broadcast quality experiences with 99.95% playback uptime. At the same time, customers also need sophisticated yet easy to use solutions like Brightcove Beacon and Brightcove Virtual Event Experiences to utilize video for very specific business needs. Our success with these products reinforce the growing number of ways to deploy video as a core part of business processes. The combination of a powerful platform and purpose-built applications is unique and a key differentiator for Brightco. Our discussions with customers have made it clear that the product innovations introduced over the past 18 months have significantly increased the value we deliver and Brightco's strategic importance. It's not just our customers who are recognizing the value of our technology. We were thrilled when Brightco was recently recognized by the National Academy of Television Arts and Sciences with two Technology and Engineering Emmy Awards. Brightco was the only online video platform to win, and we were recognized alongside some of the largest streaming companies in the world, including Netflix, Disney, and Google. This is just the latest recognition of our product innovation. We have filed over 175 patent cases and have been awarded more than 85 patents globally. far more than our four closest competitors combined. One of our other major achievements in 2020 was the improved performance of our go-to-market team. We've made significant changes in investments across all aspects of our sales and marketing team to develop a repeatable, predictable go-to-market motion. This delivered terrific results in 2020, and we believe it can generate even better performance in the future. One of the most exciting aspects of our performance in 2020 was our consistency. The fourth quarter was our third straight quarter of significant bookings growth with notable performances in North America and Japan and balanced contribution between new and existing customers. We also delivered on our goal of profitable growth with our second consecutive quarter of double-digit adjusted EBITDA margins. And as I mentioned earlier, Q4 was our fastest organic revenue growth period in years. This is the type of financial performance we expect to deliver on a consistent basis. I'd like to highlight a few of our exciting wins in the quarter. MMA Global Holdings recently launched a new mixed martial arts league to provide fans with studio-based MMA events. to satisfy the exploding global demand for fights and combat sports content. MMA Global signed a three-year Bright Coat Beacon contract to deliver content to its viewers around the world. The OTT platform will be a subscription video-on-demand service for live-streamed MMA content available on iOS, Android, and the web. Rainbow Media Holdings has been a Bright Coat customer for more than a decade, and we built a strong relationship with the company while supporting its SBOT initiatives across multiple channels. Rainbow Media Holdings recently went through a rigorous RFP process to determine which video provider it would use to consolidate AMC Network's tech stack, a channel that Brightcove did not previously support. We were selected to replace the incumbent, one of the world's largest cable providers, due to our new innovations, including cloud play out, enhanced live capabilities, DRM, geo-blocking, offline playback and monetization, among others. Other organizations taking advantage of the scale and reliability of the Brightco platform include Ford Motor Company, Intel, SAP, Salesforce, and Meredith Corporation, among others. We also continue to have great success with live virtual events and are now considered an industry leader. Companies recognize that virtual events can dramatically increase their reach and allow for an ongoing customer relationship that is more engaging than a standalone one to two day live event. The past year has made it clear that a hybrid model will be the standard when the world begins to reopen and live gatherings return. Two significant events happening right now using Brightcove are the annual family reunion event hosted by Keller Williams, the world's largest real estate technology franchise that is expected to have more than 50,000 attendees and the Australian Open, the first Grand Slam of 2021 that is hosted by our customer, Tennis Australia. One particularly notable recent event powered by the Brightcove platform was a live concert for a well-known Japanese music group that was streamed by millions of people. This was a highly publicized event that generated tens of millions of dollars in ticket revenue. We don't believe there is another platform in the world that can come close to supporting this kind of scale. An important part of our success in the quarter was the great momentum in our channel program. Partner bookings more than doubled year over year and represented nearly 20% of total bookings. We also signed more than 20 new partners, including a number of managed service providers that want to leverage the Brightcove platform as part of their solution offerings. From a product perspective, we recently introduced two notable capabilities that increase the value and stickiness of our platform. The first is Brightcove Cloud Playout, which solves the growing challenge customers face when they want to stitch together pre-recorded and live content. Our drag-and-drop functionality allows customers to quickly and easily stitch together different types of video into a high-quality broadcast-like TV experience. When AMC learned about this capability, they decided to adopt it as quickly as possible. Cloud Playout was also one of the capabilities South by Southwest Online was most excited about when they chose Brightcode. And the second is Brightcode's pre-built integration into the Zoom app, now available in the Zoom marketplace. We've received feedback from many customers that for certain events, like a remote town hall, they need the scalability, reliability, and security of the Brightcode platform through the familiarity of the Zoom app. With this new integration, participants can now use the Zoom app to capture video and then broadcast to hundreds of thousands of viewers on the Brightco platform. We also further strengthened our management team with the addition of Jennifer Griffin-Smith as Brightco's new Chief Marketing Officer, focused on scaling our global go-to-market strategy, driving greater brand awareness with thought leadership, and driving incremental pipeline growth. Jennifer has a 20-plus year track record of success working with technology innovators to bring solutions to market that drive customer adoption and advocacy, including most recently as the CMO of Alfresco Software and previously as CMO for Software AG, Avid Technology, and Progress Software. While we accomplished much in 2020, we know the best is still to come for Brightcove. It's important to recognize how far we have already come in the past few years. In 2017, our combined revenue growth and adjusted EBITDA margin was barely above zero. In 2020, that increased to 17. We entered 2021 with a strategy proven to work and a market opportunity that has never been more attractive. Our focus in 2021 is to build upon the success and make significant progress towards our goal of being a rule of 30 and ultimately a rule of 40 company. There are three key initiatives that we are focused on this year. The first is to complete the process of building a best-in-class renewals business. Last summer, I told you that our top strategic priority was building a renewals business that delivered retention rates in line with leading SAS companies. I'm pleased to say that we have hired new leadership for our renewals business and implemented a new organizational structure that will drive better performance. As I've noted previously, it will take time for the impact of these changes to be apparent, but we expect investors will begin to see sustainable improvement in the second half of this year. The second is to continue investing in our partner channel. The launch of a formal channel partner program and new master license program was one of our biggest successes in 2020. We entered the year with no real channel to speak of, And by the fourth quarter, it was an important growth contributor. In 2021, we are expanding this program to accommodate global reach, more partner types, and additional technical support and marketing programs. We estimate partners can represent 30% to 50% of our business over the long term. We believe a mature channel program is the most significant opportunity to accelerate growth and enhance profitability for Brightcove. And the third is to leverage our data assets with machine learning. The breadth, depth, and reach of our platform provides us with an incredibly rich data set that we believe represents untapped potential. We have identified a number of ways to utilize machine learning to leverage our rich data to deliver greater value for our customers. By providing greater insight to content utilization and user and subscriber interests, we will enable our customers to fully maximize the benefits of video in their operations. We have an extensive innovation pipeline focused on machine learning that we will begin to introduce in 2021. I'll finish by saying this is an exciting time for Brightco. 2020 was video's evolutionary moment, and its importance to enterprises will only continue to grow. The hard work of everyone in this company in preparing us for this moment is paying off. Financially, our guidance represents a meaningful step towards our long-term targets. We believe we will generate significant shareholder value by continuing to successfully execute on our strategic plan. With that, let me turn the call over to Rob to walk you through the numbers. Rob?