Brightcove Inc.

Welcome to the Brightcove fourth quarter and fiscal year 2021 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. And please note that this conference is being recorded. I would now like to turn the conference over to Brian Deneau from ICR. Thank you. You may begin.

Good afternoon, and welcome to Brightco's fourth quarter 2021 earnings call. Today, we will discuss the results announced in our press release issued after the market closed. With me on the call are Jeff Ray, Brightco's Chief Executive Officer, and Rob Norick, Brightco'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 2022 and the full year 2022, expected profitability and positive free cash flow, our position to execute in 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. Forelooking 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 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 on 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 list 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 review 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 2021 results, as well as our outlook for the first quarter and the full year of 2022. With that, let me turn the call over to Jeff.

Thanks, Brian, and thank you, everyone, for joining today. I hope you and your families continue to be well. As you know, I announced that I would be retiring this year and that we had launched the search for buy replacements. Last week, we announced the appointment of Marc Devoise as CEO and Board Director, effective March 28th. Marc is an accomplished media and technology executive with exceptional leadership experience at ViacomCBS, CBS Interactive, Starz, and NBC Universal. He has spent his career in our domain. He's led large, diverse teams and delivered outsized growth. As a previous Brightcove customer, Marc has created monetized and distributed content. And as a result, he brings a unique understanding of what our customers are trying to achieve. So we can now say that a customer is running right though. I'm delighted that Mark will be leading the company. And I know Mark is excited to join this talented team. For me, it has been a privilege to lead this exceptional team in this challenging time. And I'm happy for Mark and for the future of this company. Today, I will share our fourth quarter and full year achievements. I'm proud of what we've accomplished as a team last year. Despite the ongoing pandemic and in-person restrictions, our team sourced and developed some impressive new opportunities using the power of video and our own platform to connect with customers, partners, and team members globally. I will summarize our financial results in a moment. But before I do, I want to provide more insight into our recent activities and why we feel they will have a positive impact on the long-term growth prospects for our business. We are the leading SaaS video platform. As you know, video is the most powerful medium for capturing hearts and minds and connecting with audiences. But it's not just connecting with them, it's inspiring them to take action. Those actions in the collection and interpretation of the user data holds the power to change business outcomes. And that is our focus for our customers. All our recent actions have been concentrated on helping customers realize that value and grow their business. We are specifically focused on advancing our strategic initiatives in the areas innovation, retention, and go-to-market execution. Last week, we executed on our commitment to enhancing our artificial intelligence and machine learning capabilities with the acquisition of Wicket Labs. This acquisition provides customers with deeper insights to stay competitive and grow their business. We were particularly proud to be announced a leader in the Aragon Research Globe for Enterprise Video 2022. The report, the only such ranking for the online video industry, evaluated 15 video vendors deemed to improve customer and employee experiences It is the only annual ranking in the enterprise video industry. This ranking builds upon our leadership position in 2021, with our strategy score increasing to the highest ranking while retaining the top ranking in product performance. This report is key to helping us drive greater brand awareness and for our sales team to have third-party validation of our position against competitors. So these developments, coupled with our aggressive rollout of new products this summer, reinforce our leadership while setting the stage for future success. I'll cover more details of our achievements last year during this call. Let me first provide a summary of our financial results. For the fourth quarter, revenue was $52.6 million, down 2% year over year, but above the high end of our guidance of $52 million. Adjusted EBITDA was $5.9 million, down $900,000 year-over-year, but ahead of the high end of our guidance. And for the full year 2021, we delivered revenue of $211.1 million, up 7% year-over-year, and adjusted EBITDA was $24.2 million, or an 11.5% EBITDA margin for the year. Our best adjusted EBITDA performance on both a dollar- and margin basis in our history, and pre-cash flow is $10.7 million. While we beat financial guidance for the quarter, we continue to experience some challenges with sales execution. As we noted in the third quarter call, we have challenges with performance in our Asia Pacific and the Japan regions. We've hired a strong sales leader in Japan, and our search is ongoing for an Asia Pacific leader. We're taking this opportunity to bring in a much more experienced sales leader. We continue to see significantly lower than expected results in both these regions in the fourth quarter. We also experienced some challenges in the timely conversion of new business in North America. Other focused initiatives to address these execution challenges include investment in additional resources for sales enablement, including an extensive multi-day virtual sales kickoff event that took place early January, and a more thorough ongoing sales certification program. Investing heavily in building our ideal customer profile, researching our potential markets, customers' purchasing habits, and future needs. By doing this work prior to the launch of several major product initiatives, our sales teams can now focus on the ideal accounts with content that is relevant to their specific industry needs. Because of this new work, our people know precisely where to target our marketing and sales efforts, and this has enabled a quick start to 2022 demand generation and improved our chances for success. While our fourth quarter results will bring down the revenue growth for 2022, we're seeing progress in improving our sales execution, and we feel confident that the steps we're taking will deliver accelerated revenue growth in the second half of 2022. In addition to our go-to-market initiatives, we continue to focus heavily on innovating to bring our customers greater business value through the platform. Our innovation enhancements span all segments of our business for customers monetizing their content, selling their products, or engaging with internal stakeholders. In October, we announced two new solutions. The first was Brightcove Marketing Studio, a new video communication solution to enable marketers to drive stronger results from digital campaigns. Multiple marketing roles across a company can use Brightco Marketing Studio to better find and utilize video assets right from within the marketing technology systems they use every day. Integrations with major marketing technology vendors such as Eloqua, Marketo, HubSpot, Sitecore, and Hootsuite will bring unmatched value to Marketing Studio customers. We're working with several customers who are early adopters, and we're encouraged by their confidence in this new solution. Brightcove Marketing Studio will be offered as limited availability in the second quarter with the general availability launch in Q3. The second new solution we announced was Brightcove Corp TV. For enterprises, getting audience attention in this overcrowded digital landscape is extremely difficult. Brightcove Corp. TV allows enterprises to create their own always-on Netflix-like channels to more effectively distribute content to customers, partners, and employees. Last quarter, we discussed NetApp launching NetApp TV using Brightcove Corp. TV, and we're also excited to see longtime customer Barrow Neurological expand its offering with Brightcove Corp. TV. Barrow Neurological was under pressure to launch a more user-friendly experience while undergoing an initiative to make its content more accessible and available to physicians and patients in growing regions, specifically in parts of East Africa. Barrow will now deliver an unparalleled video experience in a mobile app and a fresh new web experience to its audience globally. In addition to those two new product launches, we're making significant progress on our work with video intelligence to help customers gain deep insight into how they are connecting with viewers. Today, Brightcode's intelligent video platform enables customers to deliver broadcast-quality video to viewers and measure its effectiveness with comprehensive real-time analytics, including video and viewer insights. These analytics help customers understand video performance viewer engagement, and return on investment. On February 2nd, Brightcove announced the acquisition of Wicket Labs, an audience insights company. This acquisition is another step in offering the most powerful analytics solution. Let me give you one example of the kind of value this acquisition allows us to offer. By using analytics and machine learning, customers will now be able to see insights across a harmonized data store. Disparate data pulled from a variety of sources, billing data, CMSs, and access systems, 50-plus data integrations in all, presented in a daily dashboard that provides trend data and benchmarks for performance. Customers will have deep, actionable insight into content and subscriber analytics. They will make business decisions to improve subscriber acquisition, conversions, engagement, and retention. They'll pick the right prospects to close, grow those customers, and retain them all through the power of the scorecard. These insights will provide our customers greater understanding of audience dynamics, sources of new subscribers, the subscriber journey, and how to increase subscription revenue through data visualizations and dashboards. Brightcove acquired Wicket Labs technology, customers, and experienced engineering talent. And I'm very excited that the entire engineering and founding team members have joined Brightco, bringing some of the industry's best media analytics talent into our company. With this deal, we will accelerate getting products to market this year, as this gives us an opportunity to sell into existing accounts, acquire new customers, and strengthen our retention efforts. We're proud to serve customers worldwide and thank them for their partnerships. Here are some examples of fourth quarter customer activity. 4US BIOS Network, popularly known as FUBU, has joined Brightcove as a new Brightcove beacon customer. In a joint venture with UrbanFlix TV, FUBU Network will launch its new OTT strategy, building on its already existing audience and vision to develop quality content around topics people, and trends related to hip-hop culture and lifestyle. FUBU chose Brightcove for our superior technology, strength in AVOD, and our exceptional support service. Blue Buffalo, a $2.3 billion pet food manufacturer, migrated from YouTube to become a Brightcove customer because Brightcove technology enables them to have more control over their brand and experience. Blue Buffalo will use Brightcove to power the next phase of its digital transformation. In particular, its website performance to engage with more customers. Veracity, a blockchain platform for esports and digital content, will now be using Brightcove to deliver its high-profile esports events in 2022. Veracity turned to Brightcove because it needed a reliable and scalable platform to deliver its high-profile events to audiences in 100 countries. And Ford Motor Company, a longtime Brightcove customer, renewed its relationship with us to continue to delivering an exceptional viewing experience to internal and external stakeholders. Ford has deployed Brightcove technology on its websites in over 60 countries and uses Brightcove video internally for global customer service training and dealer communications. No other solution brings the scalability and security Ford needs to be able to connect with its audiences both internally and externally. We continue to add channel partners to strengthen our ability to deliver reliable, scalable, and secure video technologies. We added 18 partners in the fourth quarter and saw 23% of our business come through our partner teams. As we move into 2022, our partner program remains a strategic focus area as we build momentum. I told you a year ago that we were committed to fixing our challenges in renewals and have made significant progress in that area. We took the necessary steps to create a strong customer success team to improve our renewal business and overall customer experience. While we're not out of the woods yet, the results we are seeing are evidence of our focused strategy and execution. Over the past 12 months, we have successfully built a global customer success organization with representatives in regional offices. Customers now have local contacts to better support their needs and growth. We've implemented cross-team processes for best practices in sharing data. This resulted in consistent internal conversations so anyone across the globe can help a customer at any time. We deployed a new onboarding process focused on getting new customers up and running as quickly as possible to reach their business goals. Onboarding is now customized as needed to fit each customer, resulting in a faster and easier ramp-up time for a new customer and a great first impression. We initiated monthly and quarterly business reviews with our customers, giving them a place to voice their needs, direction, and definition of success. We're focusing on our customer strategy and how we can best support their path to growth. As a result of our efforts over the past 12 months, we have increased our net promoter score by over 14%. This is a significant increase for an enterprise software business. To conclude, we made significant progress in key areas, and we're working to improve our go-to-market execution. We're continuously investing in our product and engineering organization and have a robust roadmap for the year to bring real value to our customers and drive even greater competitive differentiation. With that, let me turn the call over to Rob to walk you through the numbers. Rob?