Brightcove Inc.

Greetings and welcome to Brightcove first quarter 2022 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 a 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, Investor Relations for Brightcove. Thank you. You may begin.

Good afternoon. And welcome to Brightco's first quarter 2022 earnings call. Today we'll discuss the results announced in our press release issued after the market closed. With me on the call are Mark DeBlois, 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 second fiscal quarter of 2022 and the full year 2022, 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 an existing customer, 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 if 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 macroeconomic conditions currently affecting the global economy. 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. Here's 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. With that, let me turn the call over to Mark.

Thanks, Brian, and thank you all for joining today. I am delighted to be here hosting my first earnings call with Brightcove. We're going to spend the first part of my time with you today introducing myself and sharing why I'm so excited to be leading Brightcove at this moment in our industry's evolution. I'll also give you an overview of our Q1 performance, including execution highlights, before handing it over to Rob to go through the detailed financial results. So this is my fifth week on the job, 30th calendar day, actually. I've spent my first month here diving in and getting to better know our customers, products, and our teams. Frankly, I did a lot of diligence prior to taking this role, and while I plan to go much deeper in the coming weeks, I already have a strong understanding of where we are. With my deeper learning and listening process underway, we are developing a plan with a clearly defined vision and strategy for the future, one that will continue to see Brightcove deliver tremendous value to its customers and enable us to generate meaningful growth. I look forward to sharing this plan with investors during the third quarter. For today, I will simply say that I'm even more excited and optimistic about the long-term future of Brightcove than I was when I accepted this job back in February, and I'd like to talk a little bit about why. I am inspired by technology's power to change industries and businesses. I've spent over 20 years at the intersection of technology, media, direct-to-consumer, and streaming. I helped finance and drive value for numerous digital media and software companies as a technology investment banker during the Web 1.0 era. As we moved towards Web 2.0, I helped launch some of the earliest digital and streaming teams at NBCUniversal and Starz. Stars is actually my introduction to Brightco as an early customer prior to 2010. Brightco helped me do what it still does for many customers, build a high-growth, direct-to-consumer streaming business quickly, at scale, and without requiring massive internal resources. In Stars' case, building a multimillion-dollar digital business from effectively nothing. More recently, as we moved from Web 2.0 to 3.0, I served as the Chief Digital Officer of ViacomCBS and CEO and President of CBS Interactive. In these roles, I led the company's unified streaming, digital, and technology operations globally. I was responsible for the company's direct-to-consumer streaming services, many of which I led the founding of, including Paramount+, CBS All Access, CBSN, and CBS Sports HQ. It was an incredible nearly 10-year journey where I led a tremendous team responsible for transforming CBS and CBSi through the mobile and social and streaming revolutions, for growing the digital businesses from a few hundred million in revenue to multiple billions, exceeding a 50% year-over-year growth rate for numerous years, for driving an overwhelmingly desktop-based business to a diversified mix of connected TV, mobile, and web traffic, and diversifying it from a majority advertising business to a balanced subscription and advertising revenue generator. Ultimately, we transformed a legacy broadcaster into a leading streaming and content company. I have led teams that developed some of the largest global streaming services and digital businesses, produced major television shows and films, marketed these using small and large budgets, and created meaningful strategic partnerships across the technology and video distribution ecosystem. I've also managed transformations and, most importantly, built and developed great teams to achieve real growth driven by delivering exceptional customer value. I intend to do the same here at Brightcoast. These experiences have shaped my point of view on the future of the industry as well. I firmly believe we are still in the early days of the streaming and connected device revolution. Still early in empowering everyone from enterprises to marketers to content creators and producers to generate and distribute video content on their own terms. We're especially early in companies and brands, including those outside the media business, owning and operating their own media channels. I believe all companies will need to distribute video to connect with their audiences and customers because there is no more powerful medium than video to tell their story and deliver their messages. We believe this is a huge and growing market with video generating over three-quarters of the world's Internet traffic today, and it's not slowing down. Brightfield has a long history of being a leader in video technology and pushing the industry forward. We streamed over 51 billion minutes or 860 million hours in the first quarter of 2022. That's incredible. It's massive, bigger than many of the major media companies. We have a platform that can scale to handle almost any streaming volume and do it in the most secure way, and we're proving that every day. Before taking this role, I did a deep dive into Braco's products, performance, and customers, and I know that we have some of the most advanced technology on the market. This puts us in in a great position, especially when it's combined with our thousands of global customers, hundreds of the most talented people in the industry, 90 plus patents, and numerous industry recommendations and awards. Put simply, I joined Braco because of where we have been, who we are, and the opportunity in front of us. We are at a true inflection point for the industry and this company. The world has transformed. Almost every entertainment and information source has moved to streaming. Streaming is the future. And it's not just for media organizations, but other enterprises, too. We live in a world where people now expect video in all aspects of their journey as consumers and employees. Every organization now needs to think and act like a media company. And when I say every organization, I mean it. All companies will use video to monetize, sell products and services, and engage with their audiences. These trends provide RICO with an incredible opportunity. The proven power of our platform and history of delivering massive amounts of video reliably and securely for a broad array of enterprises gives us great insight. My focus in the months ahead is to ensure that Breakthrough is completely aligned from a product and solution, go-to-market, and talent perspective so that we can become one of the primary winners in the streaming market. I am very confident Breakthrough can become a much larger, faster-growing, and profitable business in the years ahead. I'm thrilled to be leading this great team and I am excited for its future. So hopefully that gives you a sense of who I am, my background, why I chose to join Brightco and where I believe we will take it. With that, let's shift gears to Q1. Revenue was $53.4 million above the high end of our guidance of $51.5 million. Adjusted EBITDA was $5.1 million also ahead of the high end of our guidance. We had a solid first quarter. I thank the team for keeping their eye on the ball and exceeding expectations during a time of real transition. That said, our current financial performance is not indicative of the long-term potential I see for this business. My priority as CEO is returning this company to meaningful growth, and I absolutely believe Brightcove has the capacity and the capability to do so. With that, I'd like to share some additional highlights from the quarter. As I mentioned earlier, one of the reasons I joined is our incredible customer base. We serve a broad range of companies, from leading global media companies, to digital publishers, to broadcasters, to leading sports and event distributors, to major enterprises and numerous verticals. To give you some context for just how impressive our customer base is, and forgive me that due to certain customer agreements, we're not always able to give specific names, Breco powers video for more than 25% of the companies in the Fortune 1000, three of the top 10 automotive brands worldwide, two of the top five luxury retail brands by revenue. one of the top e-commerce and video platforms in Asia Pacific, a leading venture-backed edutainment platform, one of the largest home improvement retailers, and we powered one of the largest live stream concerts reaching over a million concurrent viewers. And for the past two years, Breakover has helped customers stream some of the largest sporting events from Japan and China that showcase amazing athletes from around the world and major golf tournaments in the U.S. as well. What you also see from this list is we have plenty of room to grow. So let's cover some customers I can talk about. I'm delighted with this highlight mix of new business and expansion wins from fantastic brands from around the world in Q1. After a successful pure virtual event in 2021, we helped South by Southwest deliver its hybrid experience in 2022, enabling it to deliver their content to expanded audiences across numerous device platforms, including Apple TV, Android TV, Fire TV, iOS, and Roku. Yamaha Music Japan moved to Brightcove to provide viewers an exceptional experience after dealing with security and content playback issues from the free service it used previously. Supplier of energy-efficient technology Danfoss is now leveraging Brightcove to streamline workflows, access actionable viewer insights, and reach new geographical markets. Marketing software provider HubSpot needed a reliable, scalable, and secure platform to deliver its global hybrid event series to attendees worldwide, and they turned to Brightcove as well. And long-time customer Sky Network Television in New Zealand will continue to leverage Breakup to reach and engage its audiences while having the confidence to scale as viewer base grows with our latest privacy and security solutions in place. One of the other highlights in my first few weeks has definitely been seeing us leveraging our own technology and how we operate. I'm proud to highlight that Play TV by Breakup was named the 2022 Webby Honoree in the apps and software category for best OTT service. Thank you to the International Academy of Digital Arts and Sciences for this recognition and to the team behind us at Braco. Being recognized as a Webby honoree by this judging body composed of over 2,000 industry experts and tech innovators and among the likes of Disney+, Sling, Apple TV+, and ITV in this category is a significant achievement for Play TV. And it's also an achievement for Braco Corp TV, which is the technology solution powering Play TV. I'm excited to add this to the two Emmys we won last year. Before I hand it off to Rob, I want to reiterate how excited I am to be leading this company, a true leader in streaming video and its broadest application, especially at this exciting juncture in our industry. There is no better time to be a distributed, decentralized video platform, especially for companies, brands, creators, and individuals looking to capture their own streaming futures. With that, I'll turn it over to Rob now to walk you through the numbers, and I'll be back for the Q&A.