Brightcove Inc. revenue increased on 5.7% and EBITDA Margin increased on 4.2 pp from -8.0% to -3.8%
02/13/2019 • About Brightcove Inc. (
$BCOV) • By InTwits
Brightcove Inc. reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- The company operates at negative EBITDA Margin: -3.8%
- Brightcove Inc. spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2014-2018 is 0.0%. Average EBITDA Margin for the same period was -3.4%
- Brightcove Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.3%. At the same time it's in pair with industry average of 3.6%
- CAPEX is quite volatile: $2m in 2018, $1m in 2017, $1m in 2016, $1m in 2015, $4m in 2014
- The company has unprofitable business model: ROIC is -19.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased on 5.7%. Revenue growth showed slowdown in 18Q4 - it was 1.9% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 4.2 pp from 1.7% to -2.6% in 2018.
Gross Margin increased slightly on 1.0 pp from 58.6% to 59.6% in 2018. Gross Margin declined at -1.8 pp per annum in the last 5 years. SG&A as a % of Revenue decreased on 2.9 pp from 50.8% to 47.9% in 2018.
Net Income margin increased on 4.0 pp from -12.5% to -8.5% in 2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 0.93% in 2018. Brightcove Inc. showed almost no change in CAPEX/Revenue from 2015 to 2018. It's average CAPEX/Revenue for the last three years was 0.84%. During the last 5 years CAPEX as a % of Revenue bottomed in 2017 at 0.71%.
Return on investment
The company operates at negative ROIC (-19.0%) and ROE (-20.4%). ROIC increased on 7.9 pp from -26.9% to -19.0% in 2018. ROE increased on 6.5 pp from -26.9% to -20.4% in 2018.
Leverage (Debt)
Debt level is -1.3x Net Debt / EBITDA and Debt / EBITDA. Debt decreased on 7.1% while cash surged on 12.1%.
Brightcove Inc. has no short term refinancing risk: cash is higher than short term debt (12,417.8%).
Management team
Brightcove Inc.'s CEO Jeff Ray is a founder and has spent 1 year with the company. Brightcove Inc.'s CFO Robert Noreck has spent 1 year with the company.
Financial and operational results
FY ended 12/31/2018
Brightcove Inc. ($BCOV) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 125.0 | 134.7 | 150.3 | 155.9 | 164.8 | 5.7% |
| Gross Profit | 81.3 | 88.2 | 94.4 | 91.3 | 98.2 | 7.6% |
| SG&A | 65.1 | 65.7 | 73.2 | 79.1 | 78.9 | -0.3% |
| EBITDA | -6.6 | 1.8 | -1.2 | -12.4 | -6.3 | |
| Net Income | -16.9 | -7.6 | -10.0 | -19.5 | -14.0 | |
Balance Sheet
|
|---|
| Cash | 22.9 | 27.6 | 36.8 | 26.1 | 29.3 | 12.1% |
| Short Term Debt | 1.2 | 0.9 | 0.8 | 0.3 | 0.2 | -7.1% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 3.5 | 1.4 | 1.3 | 1.1 | 1.5 | 39.6% |
Ratios
|
|---|
| Revenue growth | 13.8% | 7.8% | 11.6% | 3.8% | 5.7% | |
| EBITDA growth | 82.1% | -126.6% | -167.3% | 952.4% | -49.3% | |
|
|---|
| Gross Margin | 65.0% | 65.5% | 62.8% | 58.6% | 59.6% | 1.0% |
| EBITDA Margin | -5.3% | 1.3% | -0.8% | -8.0% | -3.8% | 4.2% |
| SG&A, % of revenue | 52.1% | 48.7% | 48.7% | 50.8% | 47.9% | -2.9% |
| Net Income Margin | -13.5% | -5.6% | -6.6% | -12.5% | -8.5% | 4.0% |
| CAPEX, % of revenue | 2.8% | 1.0% | 0.9% | 0.7% | 0.9% | 0.2% |
|
|---|
| ROIC | -21.3% | -8.6% | -11.3% | -26.9% | -19.0% | 7.9% |
| ROE | -23.9% | -9.5% | -12.8% | -26.9% | -20.4% | 6.5% |
| Net Debt/EBITDA | | -15.3x | | | |
Brightcove Inc. ($BCOV) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 41 | 42 | 41 | 41 | | 9.6% | 7.5% | 4.1% | 1.9% |
| EBITDA | -1 | -3 | -1 | -1 | | | | | -380.6% |
| Net Income | -2 | -6 | -4 | -3 | | | | | |
Balance Sheet
|
|---|
| Cash | 26 | 27 | 27 | 29 | | -9.4% | -3.2% | 21.8% | 12.1% |
| Short Term Debt | 0 | 0 | 0 | 0 | | -82.1% | -94.0% | -64.8% | -7.1% |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 58.2% | 60.1% | 60.3% | 59.7% | | -1.3% | 2.9% | 2.1% | 0.4% |
| EBITDA Margin | -1.9% | -7.7% | -3.4% | -2.2% | | 7.2% | 7.6% | 5.2% | -3.0% |
| Net Income Margin | -5.5% | -13.6% | -8.5% | -6.4% | | 8.0% | 6.2% | 5.1% | -3.0% |
Peers in Internet Services & Infrastruc
Below we provide Brightcove Inc. benchmarking against other companies in Internet Services & Infrastruc industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Liberated Syndication Inc ($LSYN) | | | | 20.4% | 108.0% |
| GTT Communications, Inc. ($GTT) | | 78.1% | 41.3% | 58.7% | 80.1% |
| MongoDB, Inc. ($MDB) | | | | 55.3% | 63.8% |
| Twilio Inc. ($TWLO) | | 87.9% | 66.1% | 43.9% | 62.9% |
| Okta, Inc. ($OKTA) | | | 109.5% | 86.6% | 60.0% |
| |
|---|
| Median (15 companies) | 25.5% | 13.9% | 15.8% | 13.7% | 19.2% |
|---|
| Brightcove Inc. ($BCOV) | | 7.8% | 11.6% | 3.8% | 5.7% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Liberated Syndication Inc ($LSYN) | | | 68.1% | 77.5% | 84.9% |
| VeriSign, Inc. ($VRSN) | 81.3% | 81.8% | 82.6% | 83.4% | 84.2% |
| Wix.com Ltd. ($WIX) | 81.6% | 82.8% | 84.4% | 83.7% | 79.0% |
| MongoDB, Inc. ($MDB) | | | 68.0% | 70.5% | 74.2% |
| Carbonite, Inc. ($CARB) | 68.5% | 71.6% | 70.6% | 70.7% | 71.2% |
| |
|---|
| Median (15 companies) | 48.4% | 54.3% | 59.2% | 65.0% | 66.4% |
|---|
| Brightcove Inc. ($BCOV) | 65.0% | 65.5% | 62.8% | 58.6% | 59.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| VeriSign, Inc. ($VRSN) | 62.2% | 63.0% | 65.2% | 65.0% | 67.1% |
| Liberated Syndication Inc ($LSYN) | | | 32.0% | -29.9% | 32.2% |
| Internap Corporation ($INAP) | 20.0% | 21.0% | -5.4% | 28.4% | 30.5% |
| Akamai Technologies, Inc. ($AKAM) | 37.5% | 34.8% | 33.9% | 27.6% | 29.4% |
| Endurance International Group Holdings, Inc. ($EIGI) | 23.2% | 24.0% | 14.8% | 20.0% | 26.0% |
| |
|---|
| Median (15 companies) | 6.1% | 2.9% | -5.1% | -1.1% | 16.8% |
|---|
| Brightcove Inc. ($BCOV) | -5.3% | 1.3% | -0.8% | -8.0% | -3.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Akamai Technologies, Inc. ($AKAM) | 16.2% | 20.2% | 13.5% | 16.7% | 14.9% |
| 21Vianet Group, Inc. ($VNET) | 32.6% | 29.0% | 15.8% | 11.7% | 12.8% |
| Internap Corporation ($INAP) | 24.0% | 17.5% | 14.9% | 12.7% | 12.1% |
| Limelight Networks, Inc. ($LLNW) | 11.5% | 14.5% | 5.7% | 11.2% | 8.2% |
| GTT Communications, Inc. ($GTT) | 2.8% | 3.8% | 4.6% | 5.1% | 5.2% |
| |
|---|
| Median (15 companies) | 4.4% | 3.8% | 4.0% | 4.1% | 3.3% |
|---|
| Brightcove Inc. ($BCOV) | 2.8% | 1.0% | 0.9% | 0.7% | 0.9% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| VeriSign, Inc. ($VRSN) | 60.6% | 68.7% | 65.2% | 54.3% | 81.9% |
| Liberated Syndication Inc ($LSYN) | | | | -13.2% | 12.1% |
| Akamai Technologies, Inc. ($AKAM) | 15.5% | 12.5% | 11.9% | 7.9% | 8.2% |
| Endurance International Group Holdings, Inc. ($EIGI) | 1.0% | 4.2% | -2.3% | 2.0% | 7.5% |
| GoDaddy Inc. ($GDDY) | -3.3% | -1.7% | 2.9% | 2.7% | 4.6% |
| |
|---|
| Median (16 companies) | -2.4% | -4.4% | -18.5% | -13.2% | 1.4% |
|---|
| Brightcove Inc. ($BCOV) | -21.3% | -8.6% | -11.3% | -26.9% | -19.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| GTT Communications, Inc. ($GTT) | 3.1x | 7.4x | 6.8x | 7.2x | 12.7x |
| Internap Corporation ($INAP) | 5.1x | 5.3x | | 6.5x | 6.9x |
| Endurance International Group Holdings, Inc. ($EIGI) | 7.3x | 6.0x | 11.8x | 7.8x | 5.8x |
| GoDaddy Inc. ($GDDY) | 14.0x | 5.4x | 2.3x | 6.8x | 3.9x |
| VeriSign, Inc. ($VRSN) | 1.9x | 2.5x | 2.2x | 2.6x | 1.8x |
| |
|---|
| Median (10 companies) | 3.1x | 5.3x | 2.2x | 4.5x | 1.4x |
|---|
