Brightcove(BCOV) - 2024 Q2 - Quarterly Report

Revenue Performance - Revenue decreased from $100.1 million in the six months ended June 30, 2023, to $99.7 million in the same period of 2024, primarily due to a decrease in subscription and support revenue [73]. - Total revenue decreased by 3%, or $1.7 million, to $49.247 million for the three months ended June 30, 2024, compared to $50.988 million for the same period in 2023 [102]. - Subscription and support revenue decreased by 3%, or $1.616 million, to $47.397 million for the three months ended June 30, 2024, primarily due to a decrease in revenue from premium offerings [105]. - Total revenue for North America decreased by $0.4 million, or 1%, while total revenue outside of North America decreased by $1.3 million, or 6% for the three months ended June 30, 2024 compared to the same period in 2023 [107]. - Total revenue for North America increased by $1.4 million, or 2%, while total revenue outside of North America decreased by $1.7 million, or 4% for the six months ended June 30, 2024 compared to the same period in 2023 [122]. Customer Metrics - Premium customers decreased from 2,131 to 1,958, while total customers declined from 2,691 to 2,444 during the same period [78]. - Net revenue retention rate fell from 94.5% in 2023 to 92.7% in 2024, indicating a decline in customer retention [78]. - Average annual subscription revenue per premium customer increased from $92.1 thousand to $98.5 thousand, reflecting improved revenue per customer [78]. Profitability and Expenses - Gross profit decreased by $2.6 million, or 8%, to $29.840 million for the three months ended June 30, 2024, compared to $32.487 million for the same period in 2023 [103]. - Loss from operations improved to $5.037 million for the three months ended June 30, 2024, compared to a loss of $6.342 million for the same period in 2023 [103]. - The overall loss from operations was $3.0 million for the six months ended June 30, 2024, a significant improvement from a loss of $17.1 million in the same period in 2023 [117]. - Total operating expenses decreased by $14.6 million, or 19%, with significant reductions in research and development, sales and marketing, and general and administrative expenses [127][128][129]. Cash Flow and Financial Position - Cash provided by operating activities was $6.0 million for the six months ended June 30, 2024, compared to a cash outflow of $1.8 million in the prior period [132][134]. - The company reported a gain on the sale of assets amounting to $6.0 million during the six months ended June 30, 2024 [130][135]. - As of June 30, 2024, the company had $12.2 million in cash and cash equivalents held by international subsidiaries, which can be repatriated tax-free [131]. - The company believes its existing cash and cash equivalents, along with its credit facility, will be sufficient to meet working capital and capital expenditures for at least the next 12 months [143]. - As of June 30, 2024, the company had $24.2 million in cash and cash equivalents, primarily held for working capital purposes [155]. International Revenue and Currency Risks - Revenue derived from customers outside North America was 38% for the six months ended June 30, 2024, down from 40% in 2023 [74]. - Revenues generated outside the United States accounted for 44% for the three months ended June 30, 2024, consistent with the same period in 2023 [150]. - A 20% unfavorable movement in foreign currency exchange rates could decrease revenues by $4.7 million and operating income by $1.0 million for the six months ended June 30, 2024 [154]. - The company is exposed to foreign currency exchange risks, particularly with the euro, British pound, and Japanese yen [149]. Future Outlook and Strategic Plans - The company plans to continue investing in product strategy, sales, and market activities to support long-term revenue growth [72]. - The company expects to achieve economies of scale that will reduce costs as the customer base grows [72]. - Geopolitical events and macroeconomic conditions may impact future spending on software products and demand for video services [81]. - The company expects stock-based compensation expense to increase in absolute dollars in future periods [94]. - The company expects general and administrative expenses to increase modestly during the remainder of 2024 [115]. - The company may need to raise additional funds for future activities or acquisitions if cash flow from operations is insufficient [145]. - Market volatility and rising interest rates could adversely impact the company's ability to access capital [145].