Brightcove(US:BCOV)2023-02-24 00:50Financial Data and Key Metrics Changes - Total revenue for Q4 2022 was $49.2 million, at the lower end of guidance due to lower-than-expected overages [8] - Full year 2022 total revenue was $211 million, right in the middle of the original guidance range, with a constant currency revenue of approximately $216 million, up 2% year-over-year [9][10] - Adjusted EBITDA for Q4 was $1.2 million, marking the 14th consecutive quarter of positive adjusted EBITDA, but just below guidance due to lower overages and one-time severance costs [8][10] - Full year 2022 adjusted EBITDA was $17.9 million, above the middle of the original guidance range, with a constant currency adjusted EBITDA of approximately $20.9 million [10] Business Line Data and Key Metrics Changes - Subscription and support revenue for Q4 was $47.7 million, while professional services revenue was $1.6 million [28] - Overage revenue in Q4 was approximately $1.3 million, below expectations due to fewer customers exceeding their contracts [28] - The 12-month backlog was $120.1 million, representing a less than 1% decrease year-over-year [28] Market Data and Key Metrics Changes - 60% of revenue was generated in North America, with 40% from international markets [28] - Europe contributed 16% of revenue, while Japan and Asia Pacific accounted for 24% [28] Company Strategy and Development Direction - The company aims to deliver more end-to-end solutions, accelerate customer engagement, and pursue supplemental business models alongside its core SaaS model [14][17] - A strategic partnership with Magnite was announced to enhance ad monetization capabilities for customers [16] - The focus is on larger strategic customers and partnerships to drive growth and efficiency [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to double-digit revenue growth and improving adjusted EBITDA margins in 2023 [26] - The company anticipates that the fourth quarter and first quarter will be the low point for revenue, with expectations for steady growth throughout the year [33][34] - Management highlighted the importance of customer retention and the impact of uncontrollable churn on revenue metrics [54] Other Important Information - The company ended Q4 with cash and cash equivalents of $31.9 million and generated $4.5 million in cash flow from operations [32] - Free cash flow is expected to be breakeven to $5 million for the full year 2023 [33] Q&A Session Summary Question: What drove down premium ARPU in Q4? - The decrease in ARPU was primarily due to a step down in overage revenue as customer counts remained flat [38][39] Question: How much of the professional services revenue guidance is based on pipeline deals? - The increase in professional services revenue is a strategic focus to deepen customer engagement and is expected to continue [41][42] Question: What is the current status of the pipeline for large deals? - There has been a significant increase in six and seven-figure deals, and the company expects this trend to continue [44][45] Question: What factors contributed to the adjusted EBITDA step down in Q1 guidance? - The step down is a balance of gross margin and operating expenses, with some natural increases expected in Q1 [48][49] Question: What caused the recurring dollar retention rate to drop? - The drop was influenced by uncontrollable churn, particularly in the media sector, but improvements in customer success efforts are being made [52][54] Question: What is the expectation for free cash flow in 2023? - The expectation for free cash flow in 2023 is breakeven to $5 million [55][56] Question: Were bookings in Q4 skewed towards media or enterprise? - Bookings were a solid mix, with notable wins on both sides, but larger deals were highlighted in the media sector [56][57]