Q4 2021 Brightcove Inc Earnings Call
Greetings.
Speaker 1: Welcome to the Brightco 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...
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.
Speaker 1: 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 Bent tenure from ICR. Thank you you may begin.
Speaker 1: I'd like to turn the conference over to Brian DeNue from ICR. Thank you. rolls out audio
Good afternoon, and welcome to the Brightcove fourth quarter 2021 earnings call.
Speaker 2: Good afternoon and welcome to Bright Coast fourth quarter 2021.
Speaker 2: Today we will discuss the results announced in our press release issued after the market closed.
We will discuss the results announced in our press release issued after the market closed.
Speaker 2: With me on the call are Jeff Wright, Bright Coast Chief Executive Officer, and Rob Norrick, Bright Coast Chief Financial Officer.
On the call are Jeff Ray breaks Us Chief Executive Officer, and Rob Nork, Brightcove Chief Financial Officer.
Speaker 2: 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 1994.
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 of 2022 expected profitability and positive free cash flow our position.
Speaker 2: 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 on 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.
To execute on our go to market and growth strategy.
To expand our leadership position.
Our ability to maintain and upsell existing customers as well as our ability to acquire new customers.
Forward looking statements may often be identified with words, because we expect we anticipate upcoming or similar indications of future expectations.
Speaker 2: Four-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 as representing our views as of any subsequent date.
Speaker 2: 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 could cause actual results to differ materially from expectations.
Speaker 2: These statements are subjects of a variety of risks and uncertainties that cause actual results to differ materially from expectations.
Speaker 2: including the effect of the COVID-19 pandemic on our business operations, as well as the impact on general economic and financial market conditions.
The effect of the COVID-19 pandemic on our business operations as well as the impact on general economic and financial market conditions.
Speaker 2: 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.
For a 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 refer to certain non-GAAP financial measures.
Speaker 2: Also during the course of today's call, we will refer to certain non-GAAP financial measures.
Speaker 2: There is a reconciliation schedule showing gap versus non-gap results currently available in our press list issued after Margaret closed today, which can be found on our website at www.brightcode.com.
There is a reconciliation schedule showing GAAP versus non-GAAP results currently available in our press release issued after market close today, which can be found on our website at www Dot Brightcove dot com.
Speaker 2: 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.
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.
Speaker 2: Rob will finish with additional details regarding our fourth quarter 2021 results, as well as our outlook for the first quarter in the full year of 2022. With that,
Rob will finish with additional details regarding our fourth quarter 2021 results as well as our outlook for the first quarter and a 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.
Speaker 2: 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 replacement. Last week, we announced the appointment of Mark Devevois as CEO and Board Director effective March 20th.
You know I announced that I would be retiring this year and that we had launched the search for my replacement lack.
Last week, we announced the appointment of Mark difficult laws as CEO and board director effective March 28.
Speaker 2: Mark is an accomplished media and technology executive with exceptional leadership experience at BiocomCBS.
Mark is an accomplished media and technology executive with exceptional leadership experience at Viacom C. B S C.
Speaker 2: CBS Interactive, Starz, and NBC Universal. He has spent his career in our domain, fled large, diverse teams, and delivered outsized growth.
B S Interactive stars and NBC Universal. He has spent his career in our domain led large diverse teams and delivered outsized growth as a previous brightcove customer Mark has created monetized and distributing content and as a result, he brings a unique understanding of what our customers are true.
Speaker 2: As a previous Brightcove customer, Mark 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 Brightcove.
Lying to achieve so we can now say that a customer is running brightcove.
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.
Speaker 2: 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 teams 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.
Speaker 2: 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.
I will summarize our financial results in a moment.
Speaker 2: 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...
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.
Speaker 2: As you know, video is the most powerful medium for capturing hearts and minds and connecting with audiences.
Speaker 2: 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 purpose.
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.
Speaker 2: 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.
Speaker 2: 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.
Tension 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 per.
Speaker 2: We were particularly proud to be announced a leader in the Aragon Research Globe for Enterprise Video 2022.
<unk> 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 and is the only annual ranking in the enterprise.
Speaker 2: The report, the only such ranking for the online video industry, evaluated 15 video vendors deemed to improve customer and employee experiences, and is the only annual ranking in the enterprise video industry.
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 valley.
Speaker 2: 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.
Speaker 2: 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.
<unk> of our position against competitors.
Speaker 2: 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.
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.
Speaker 2: 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 guide.
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 $900000 year over year, but ahead of the high end of our guidance and for the full year 'twenty 'twenty. One we delivered revenue of $211 $1 million up 7% year over year, and adjusted EBITDA was $24 2 million.
Speaker 2: 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.
Or an 11, 5% EBITA margin for the year, our best adjusted EBITDA performance on both a dollar and margin basis in our history and free cash flow was $10 $7 million, while we beat financial guidance for the quarter. We continued to experience some challenges with sales execution.
Speaker 2: free cash flow is $10.7 million. While we beat financial guidance for the quarter, we continued 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.
Speaker 2: As we noted in the third quarter call, we have challenges with performance in our Asia-Pacific and the Japan region.
Speaker 2: 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've hired a strong sales later in Japan, and our searches ongoing for an Asia Pacific leader, we're taking this opportunity to bring in a much more experienced sales later, we continued to see significantly lower than expected results in both of these regions in the fourth quarter.
We also experienced some challenges in the timely conversion of new business in North America.
Speaker 2: We also experienced some challenges in the timely conversion of new business in North America.
Speaker 2: Other focused initiatives to address these execution challenges include
Other focused initiatives to address these execution challenges include.
Speaker 2: Investment and 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.
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.
Speaker 2: investing heavily in building our ideal customer profile, researching our potential markets, customers purchasing habits and future needs.
Investing heavily in building, our ideal customer profile researching our potential markets customers' purchasing habits and future needs.
Speaker 2: 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.
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 <unk>.
Speaker 2: 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.
2022 demand generation and improved our chances for success.
Speaker 2: 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 2021.
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.
Speaker 2: 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
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 Iraq.
Tober, we announced two new solutions. The first was Brightcove marketing studio, our new video communication solution to enable marketers to drive stronger results from digital campaigns.
Speaker 2: 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 Brightcove Marketing Studio to better find and utilize video assets right from within the marketing technology systems they use every day.
Total marketing roles across the company can use brightcove marketing studio to better find and utilize video assets right from within the marketing technology systems. They use every day.
Speaker 2: Integrations with major marketing technology vendors such as Eloqua, Marketo, HubSpot, Sitecore, and Hootsuite will bring unmatched value to marketing studio customers.
Integrations with major marketing technology vendors, such as Ala Coop Mercado hub spot sidecar, and whose suite 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.
Speaker 2: 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.
Speaker 2: Brightcove Marketing Studio will be offered as limited availability in the second quarter with the general availability launch in Q3.
Speaker 2: 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.
The second new solution, we announced was Brightcove court TV for.
For enterprises getting audience attention in this overcrowded digital landscape is extremely difficult.
Coke Corp television allows enterprises to create their own always on Netflix like channels to more effectively distribute content to customers partners and employees.
Speaker 2: Last quarter we discussed NetApp launching NetApp TV using Brightcove Corp TV. And we're also excited to see long time customer Barrow Neurological expand its offering with Brightcove Corp TV.
Last quarter, we discussed net app launching net Apple TV using Brightcove Court TV and we're also excited to see long time customer.
<unk> neurological expand its offering with Brightcove Court TV.
Speaker 2: Baroneurological 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 neurological was under pressure to launch a more user friendly experience, while undergoing an initiative to make content more accessible and available to physicians and patients and growing regions specifically in parts of East Africa barrel will now deliver an unparalleled video experience and a mobile app and a fresh new way.
Speaker 2: Barrow will now deliver an unparalleled video experience in a mobile app and a fresh new web experience to its audience globally.
Experience to its audience globally in.
Speaker 2: 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.
In addition to those two new product launches, we're making significant progress on our work with video intelligence to help customers gain deeper insight into how they are connecting with viewers.
Today Brightcove intelligent video platform enables customers to deliver broadcast quality video to viewers and measure its effectiveness with comprehensive real time analytics, including video and fewer insights.
Speaker 2: 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.
These analytics help customers understand video performance viewer engagement and return on investment.
Speaker 2: On February 2nd, Brightcove announced the acquisition of Wicket Labs, an audience insights company. This acquisition is another step in offering the most powerful analytic solution.
On February 2nd Brightcove announced the acquisition of wicket labs and audience insights company. This acquisition is another step in offering the most powerful analytics solution.
Speaker 2: Let me give you one example of the kind of value this acquisition allows us to offer.
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 our harmonized data store disparate data pulled from a variety of sources billing data C. M. S's in access systems 50, plus data integrations and all presented in a daily dashboard.
Speaker 2: 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...
Speaker 2: billing data, CMSs, and access systems, 50 plus data integrations in all, presented in a daily dashboard that provides trend data and benchmark for performance.
Provides trend data and benchmarks for performance.
Speaker 2: Customers will have deep actionable insight into content and subscriber analytics.
Customers will have deep actionable insight into content and subscriber analytics.
Speaker 2: They will make business decisions to improve subscriber acquisition, conversions, engagement and retention.
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.
Speaker 2: 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...
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 bright.
Speaker 2: subscriber journey, and how to increase subscription revenue through data visualizations and dashboards.
Speaker 2: 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 Brightcove, bringing some of the industry's best media analytics talent into our country.
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 Brightcove.
Bringing some of the industry's best media analytics talent into our company.
Speaker 2: 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.
But this deal we will accelerate getting products to market. This year is this gives us an opportunity to sell into existing accounts acquired new customers and strengthen our retention efforts.
We're proud to serve customers worldwide and thank them for their partnership here are some examples of fourth quarter customer activity.
Speaker 2: We're proud to serve customers worldwide and thank them for their part.
Speaker 2: Here are some examples of fourth quarter customer activity.
Speaker 2: ForUs Bios Network, popularly known as FUBU, has joined Brightcove as a new Brightcove Beacon customer. In a joint venture with UrbanFlicks 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 life.
For us by US network popularly known as Fugu has joined Brightcove as the new Brightcove Beacon customer and a joint venture with urban Flix TV Fubu network will launch its new OTT strategy building on its already existing audience and vision to develop quality.
Intent around topics people and trends related to hip hop culture and lifestyle Fubu chose brightcove for our superior technology strengthen a bot and our exceptional support service.
Speaker 2: FUBU chose Brightco for our superior technology, strengthen AVOD, and our exceptional support service.
Speaker 2: 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 to $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.
Speaker 2: Blue Buffalo will use Brightcove to power the next phase of its digital transformation, in particular its website performance, to engage with more customers.
In particular, its website performance to engage with more customers.
Speaker 2: Veracity, a blockchain platform for eSports and digital content, will now be using BrightCode to deliver its high-profile eSports events in 2022.
Veracity of blockchain platform for E sports and digital content will now be using brightcove to deliver its high profile esports events in 2022.
Speaker 2: Veracity turned to Brightcove because it needed a reliable and scalable platform to deliver its high-profile events to audiences in 100 countries.
<unk> turned to brightcove, because it needed a reliable and scalable platform to deliver its high profile events to audiences in 100 countries.
Speaker 2: 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.
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.
Speaker 2: Ford has deployed Brightco technology on its websites in over 60 countries and uses Brightco 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 this audience's both internally and externally.
Ford is 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 this 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 a 23% of our business come through our partner team as we move into 2022.
Speaker 2: We continue to add channel partners to strengthen our ability to deliver reliable, scalable, and secure video technology.
Speaker 2: We added 18 partners in the fourth quarter and saw 23% of our business come through our partner.
Speaker 2: As we move into 2022, our partner program remains a strategic focus area as we build momentum.
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 and renewals and have made significant progress in that area.
Speaker 2: told you a year ago that we were committed to fixing our challenges in renewals and have made significant progress in that area.
Speaker 2: We took the necessary steps to create a strong customer success team to improve our renewal business and overall customer experience.
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 were seeing are evidence of our focused strategy and execution over the past 12 months, we have successfully built our global customers.
Speaker 2: 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.
Excess organization with Representatives regional offices customers now have local contacts to better support their needs and growth we've implemented cross team processes for best practices and sharing data.
Speaker 2: Customers now have local contacts to better support their needs and growth. We've implemented cross-team processes for best practices in sharing data.
Speaker 2: This resulted in consistent internal conversations so anyone across the globe can help a customer at any time.
This resulted in consistent internal conversations so anyone across the globe can help a customer at anytime.
Speaker 2: 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 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.
Speaker 2: 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.
We initiated monthly and quarterly business reviews, with our customers, giving them a place to voice their needs direction and definition success, we're focusing on our customer strategy and how we can best support their path to growth.
Speaker 2: 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.
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.
Speaker 2: To conclude, we've made significant progress in key areas, and we're working to improve our go-to-market expectations.
Speaker 2: 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.
Yeah.
With that let me turn the call over to Rob to walk you through the numbers Rob.
Speaker 2: With that, let me turn the call over to Rob to walk you through the numbers. Rob?
Thank you, Jeff and good afternoon, everyone before I start I'd like to add my warm welcome to Mark as the new CEO of Brightcove I'd.
Speaker 2: Thank you, Jeff, and good afternoon, everyone. Before I start, I'd like to add my warm welcome to Mark as the new CEO of Brico. I'd also like to wish Jeff all the best for his retirement. I've thoroughly enjoyed working together for the past four years.
I'd also like to wish Jeff all the best for his retirement I've thoroughly enjoyed working together for the past four years.
Speaker 2: I will begin with a detailed review of our fourth quarter, and then I will finish with our outlook for the first quarter and the full year 2022.
I will begin with a detailed review of our fourth quarter, and then ill finish with our outlook for the first quarter and the full year 2022.
Speaker 2: Total revenue was $52.6 million, which was above our guidance range. Breaking revenue down further, subscription and support revenue is $50.3 million, and professional services revenue was $2.4 million.
Total revenue was $52 $6 million, which was above our guidance range breaking revenue down further subscription and support revenue was $53 million and professional services revenue was $2 $4 million.
Speaker 2: 12-month backlog, which we define as the aggregate amount of committed subscription revenue related to future performance obligations in the next 12 months, was $121.2 million. This represents a 6% year-over-year increase.
12 months backlog, which we define as the aggregate amount of committed subscription revenue related to future performance obligations. In the next 12 months was $121.2 million. This represents a 6% year over year increase.
Speaker 2: On a geographic basis, we generated 57% of our revenue in North America during the quarter, and 43% internationally.
On a geographic basis, we generated 57% of our revenue in North America during the quarter and 43% internationally.
Speaker 2: Breaking down international revenue a little more, Europe generated 19% of our revenue, and Japan and Asia-Pacific generated 24% of revenue.
Breaking down international revenue, a little more Europe generated 19% of our revenue and Japan, and Asia Pacific generated 24% of rabbit.
Speaker 2: Let me now turn to the supplemental metrics we share on a quarterly basis.
Let me now turn to the supplemental metrics, we share on a quarterly basis.
Speaker 2: Recurring dollar retention rate was 94.4%, which is within our target range of low to mid-90s.
Recurring dollar retention rate was 94, 4%, which is within our target range of low to mid nineties.
Speaker 2: Net revenue retention was 93%, which compares to 95% in the third quarter of 2021 and 100% in the fourth quarter of 2020. Since the beginning of 2019, net revenue retention has ranged from 92% to 100%.
Net revenue retention was 93%, which compares to 95% in the third quarter of 2021 and 100% in the fourth quarter of 2020.
Since the beginning of 2019 net revenue retention has ranged from 92% to 100%.
Speaker 2: As a reminder, we introduced net revenue retention to better align our reporting with most leading SaaS companies. We calculate net revenue retention by comparing the current annualized recurrent revenue to the annualized recurrent revenue from 12 months prior to those premium customers that existed 12 months prior.
As a reminder, we introduced net revenue retention to better align our reporting with most leading SaaS companies, we calculate net revenue retention by comparing the current annualized recurring revenue to the annualized recurring revenue from 12 months prior to those premium customers that exist at 12 months prior.
Speaker 2: We are pleased with the improvements we have made to strengthen our renewals business in recent quarters. While there is still more to do, we are beginning to see the benefits of these efforts in our renewals. It is important to keep in mind that since net revenue retention is calculated on a trailing 12-month basis, there will be a natural lag before the improvements we are making will be reflected in this metric. We expect this metric will consistently be over 100% over time.
We are pleased with the improvements we have made to strengthen our renewals business in recent quarters, while there's still more to do we are beginning to see the benefits of these efforts in our renewals. It is important to keep in mind that since net revenue retention is calculated on a trailing 12 month basis, there will be a natural lag before the improvements we are making will be reflected in this metric. We expect this metric will.
Instantly be over 100 per cent overtime.
Our customer count at the end of the fourth quarter was 3135.
Speaker 2: Our customer count at the end of the fourth quarter was 3,135, of which 2,227 were classified as premium customers.
Which 2227 were classified as premium customers.
Speaker 2: Looking at our art booth within our premium customer base, our annualized revenue for premium customers was $95,000 and excludes our entry-level pricing for starter customers, which averaged $4,100 in annualized revenue.
Looking at our ARPA within our premium customer base, our annualized revenue per premium customer was $95000 and excludes our entry level pricing for starter customers, which averaged $4100 in annualized revenue.
Speaker 2: Our ARPU is down year over year from $97,000 to $95,000.
Our ARPA was down year over year from $97000 to $95000.
Speaker 2: due to the impact of one-time events in Japan last fourth quarter.
Due to the impact of one time events in Japan last fourth quarter.
Speaker 2: Excluding these events, our fourth quarter 2020 ARPU was $92,300 and we are up 3% year-over-year.
These events, our fourth quarter 2020, our booth with $92300 and were up 3% year over year.
Speaker 2: Looking at our results on a gap basis, our gross profit was $34.7 million, operating income was $1.1 million, and net income per share was one cent for the quarter.
Looking at our results on a GAAP basis, our gross profit was $34 $7 million operating income was $1 $1 million and net income per share was one <unk> for the quarter.
Speaker 2: Turning to our non-GAAP results, our non-GAAP gross profit was $35.3 million compared to $34.8 million in the year-ago period and represented a gross margin of 67%, which is up from 65% in the fourth quarter of 2020.
Turning to our non-GAAP results, our non-GAAP gross profit was $35 $3 million compared to $34 $8 million in a year ago period and represented a gross margin of 67%, which is up from 65% in the fourth quarter of 2020.
Speaker 2: Subscription and support revenue represented approximately 95% of our total revenue and generated a 69% gross margin, compared to a 68% gross margin in the fourth quarter of 2020.
Subscription and support revenue represented approximately 95% of our total revenue and generated a 69% gross margin compared to a 68% gross margin in the fourth quarter of 2020.
Speaker 2: The improvement in gross margin throughout this year has been an area of strength for the business. This benefits us in two ways. It provides additional capital to invest in the product initiatives Jeff referenced earlier, and it sets the foundation for meaningful improvement in overall profitability when revenue growth improves in the future.
The improvement in gross margin throughout this year has been an area of strength for the business.
This benefits us in two ways.
Provides additional capital to invest in the product initiatives, Jeff referenced earlier and it sets the foundation for meaningful improvement in overall profitability when revenue growth improves in the future.
Speaker 2: non-GAAP income from operations was $4.7 million compared to $5.4 million in the fourth quarter of 2020.
non-GAAP income from operations was $4 $7 million compared to $5 $4 million in the fourth quarter of 2020.
Speaker 2: Adjusted EBITDA was $5.9 million, compared to $6.8 million in the year-ago period, and above the high end of our guidance range. Adjusted EBITDA margin was 11%.
Adjusted EBITDA was $5 $9 million compared to $6 $8 million in the year ago period and above the high end of our guidance range adjusted EBITDA margin was 11%.
Speaker 2: non-GAAP diluted net income per share was $0.10 based on 41.7 million weighted average shares outstanding. This compares to net income per share of $0.14 on 41.7 million weighted average shares outstanding in the year-ago period.
non-GAAP diluted net income per share was 10 cents based on $41 7 million weighted average shares outstanding. This compares to net income per share of 14th and.
And $41 7 million weighted average shares outstanding in the year ago period.
Looking at our full year 2021 results.
Speaker 2: Looking at our full-year 2021 results, total revenue was $211.1 million, up 7% year-over-year. On a gap basis, gross profit was $138.1 million, operating income was $7.6 million, and net income per share was $0.13, based on 42.2 million weighted average shares outstanding.
Revenue was $211 $1 million up 7% year over year on a GAAP basis gross profit was $138 $1 million operating income was $7 $6 million and net income per share was 13 cents based on $42 2 million weighted average shares outstanding.
Speaker 2: On a non-GAAP basis, gross profit was $140.5 million. Income from operations was $18.9 million. Adjusted EBITDA was $24.2 million. And net income per share was $0.40, based on 42.2 million weighted average shares outstanding.
On a non-GAAP basis gross profit was $145 million income from operations was $18 $9 million.
And EBITDA was $24 $2 million and net income per share was 40 cents based on 42.2 million weighted average shares outstanding.
Speaker 2: Turning to the balance sheet and cash flow, we ended the quarter with cash and cash equivalents of $45.7 million. We generated $4.8 million in cash flow from operations and free cash flows $2.3 million after taking into account $2.6 million in capital expenditures and capitalized internal use costs.
Turning to the balance sheet and cash flow, we ended the quarter with cash and cash equivalents of $45 $7 million, we generated $4 $8 million in cash flow from operations and free cash flow was $2 $3 million after taking into account $2 $6 million in capital expenditures and capitalized internal use software.
Speaker 2: I would like to finish by providing our guidance for the first quarter and the full year 2022.
I'd like to finish by providing our guidance for the first quarter and the full year of 2022.
Speaker 2: For the first quarter, we are targeting revenue of $50.5 million to $51.5 million, including $2 million of overages and approximately $2 million of professional services revenue. From a profitability perspective, we expect non-GAAP operating income to be $1 million to $2 million and adjusted EBITDA to be between $2.3 million and $3.3 million. non-GAAP net income per share is expected to be in the range of 2 cents to 4 cents based on 42 million weighted average shares outstanding.
For the first quarter, we are targeting revenue of $55 million to $51 $5 million, including $2 million of Overages and approximately $2 million of professional services revenue.
From a profitability perspective, we expect non-GAAP operating income to be $1 million to $2 million and adjusted EBITDA to be between $2 $3 million and $3 $3 million non-GAAP net income per share is expected to be in the range of two <unk> based on 42 million weighted average shares outstanding.
For the full year, we are targeting revenue of $207 million to $215 million, including $8 million of Overages and approximately $9 $3 million of professional services revenue.
Speaker 2: For the full year, we are targeting revenue of $207 million to $215 million, including $8 million of overages and approximately $9.3 million of professional services revenue.
Speaker 2: From a profitability perspective, we expect non-GAAP operating income of $7 million to $11 million and adjusted EBITDA to be between $15 million and $19 million. non-GAAP net income per share is expected to be in the range of $0.14 to $0.23 based on 42.6 million weighted average shares outstanding.
From a profitability perspective, we expect non-GAAP operating income of $7 million to $11 million and adjusted EBITDA to be between $15 million and $19 million non-GAAP net income per share is expected to be in the range of 14 says 23 cents based on $42 6 million weighted average shares outstanding for.
Speaker 2: For the full year, we are now targeting through cashflow of $5 million to $10 million. There are a few things I would keep in mind.
For the full year, we're now targeting free cash flow of $5 million to $10 million.
There are a few things I would keep in mind with regards to our guidance our.
Speaker 2: Our outlook for the year, and in particular the first quarter, reflects the impact of the new business challenges Jeff described earlier, as well as the cumulative impact of the retention challenges we have discussed over the past year. As we move through the year, and the full impact of the changes we have made take hold, we expect to return to consistent positive revenue growth in the middle of the year.
Our outlook for the year and in particular, the first quarter reflects the impact of the new business Challenge as Jeff described earlier as well as the cumulative impact of the retention challenges we have discussed over the past year as we moved through the year and the full impact of the changes we have made take hold we expect to return to consistent positive revenue growth in the middle of the year.
We believe our outlook for the year appropriately balances our continued commitment to profitable growth were.
Speaker 2: We believe our outlook for the year appropriately balances our continued commitment to profitable growth. We are making targeted investments in high ROI areas of the business, particularly product development that we believe will set the stage for improved top and bottom line.
We are making targeted investments in high ROI areas of the business, particularly product development that we believe will set the stage.
For improved top and bottom line growth over time.
Speaker 2: Finally, our fundamental belief in the long-term potential of this business has not changed. We are confident that over time we can deliver a consistent blend of attractive revenue growth and meaningful margin expansion that can generate substantial value for shareholders.
Finally, our fundamental belief in the long term potential of this business has not changed were confident that overtime. We can deliver a consistent blend of attractive revenue growth and meaningful margin expansion that can generate substantial value for shareholders.
Speaker 2: I'm looking forward to partnering with Mark and the entire team here at Brightcove on this next evolution as a business. We have much work to do to get the company performing at the level we believe it is capable of. We look forward to introducing Mark to the investment community once he joins us at the end of March so he can provide you with his perspective and strategy for the future of Brightcove. With that, we will now take your questions. Operator, we are ready to begin Q&A.
I'm looking forward to partnering with Marc and the entire team here at Brightcove on this next evolution as a business we have much work to do to get the company performing at the level. We believe it is capable of and we look forward to introducing mark to the investment community. Once he joined US at the end of March. So he can provide you with his perspective and strategy for the future of Brightcove.
With that we'll now take your questions operator, we are ready to begin Q&A.
Speaker 1: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star to...
Thank you at this time, we will be conducting a question answer session.
He would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the question queue. You May press star two if he would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.
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Speaker 1: Our first question comes from the line of Stephen Frankel with Colliers. You may proceed with your question.
Our first question comes from the line of Steven Frankel with Colliers you May proceed with your question.
Good afternoon, I, just dig into guidance, a little bit and maybe get.
Speaker 3: Good afternoon, I just dig into guidance a little bit and maybe get some insight in.
Some insight into the sea.
Speaker 3: The headwinds from customer losses and maybe some insight into how the media versus the enterprise performed in 21 and how that outlook looks like for 22. So, let's start there.
The headwind from.
Customer losses.
And maybe some insight into how the media versus the enterprise performed in.
In 'twenty, one and how that.
Looks like for 'twenty, two so let's start there.
Yeah.
Speaker 2: Sorry, Steve, I had myself on mute. This is Rob. So, in terms of, you know, the first part of your question around customer losses, customer losses were really in line with what we've seen for the last four quarters. As we talked about on the call, we had some challenges on the new booking side. And that's really what you saw in the customer count quarter over quarter.
Sorry, Steve I had myself on mute. This is rob so in terms of you know the first part of your question around customer losses customer losses were really in line with what we've seen for the last four quarters as we talked about on the on the call. We had some challenges on the new bookings side and that's really what you saw on the customer.
Our count at quarter over quarter.
And then from a you know from an enterprise and media standpoint, both segments of the business performed well over the course of the year and right now is as we've discussed we're sitting at about 50 50 in terms of the revenue split between the two.
Speaker 2: And then from an enterprise and media standpoint, both segments of the business performed well over the course of the year. And right now, as we've discussed, we're at about 50-50 in terms of the revenue split between the two.
Okay.
Speaker 3: Okay, and how about some insight into...
How about some insight into.
Speaker 3: what these problems in Japan and Asia pack are costing you in terms of revenue. How material is that to the forecast that you laid out? Hey Steve, it's Jeff.
What these problems in Japan, and Asia Pac are costing you return to that.
Revenue how material is that to the forecast that you laid out.
Hey, Steve It's Jeff.
Yes.
Yeah, certainly if it's significant enough to where we wanted it to report to you that's why we flagged it and highlighted it.
Speaker 4: Yeah, certainly it's significant enough to where we wanted it to report to you, that's why we flagged it and highlighted it. We started to see those indicators in Asia-Pac in the third quarter, we stepped in, we started making leadership changes.
We started to see those indicators in Asia Pac in the third quarter, we stepped in we started making leadership changes.
Speaker 4: Japan, we've got a fantastic new sales leader on board, comes from salesforce.com, brings a strong Rolodex, gets it on enterprise and media. In my early discussions with him, he's only been on the ground for a few weeks.
Japan, We've got a fantastic new sales leader on board comes from Salesforce Dot Com.
Our strong rolodex gets it on enterprise and media.
In my early discussions with him he's he's only been on the ground for a few weeks, but he is very very fired up about the opportunities that he sees there Korea healthy Australia, a fantastic new sales manager there who had reported to me in the past and I know he will do great things there.
Speaker 4: but he is very, very fired up about the opportunities that he sees there. Korea healthy, Australia fantastic new sales manager there who had reported to me in the past.
Speaker 4: and I know he'll do great things there. The gap at this moment is getting the regional VP landed into Singapore. We have interviewed lots and lots of people and we're not gonna rush this. We're gonna take our time and find the right person for the opportunities there.
The GAAP at this moment is getting the regional VP landed into Singapore.
Singapore, we have interviewed lots and lots of people.
And we're not going to rush. This we're going to take our time and find the right person for the for the opportunities there.
Speaker 3: We spent a lot of the last year talking about growth and investing for growth.
Okay and you know we spent a lot of the last year, we're talking about growth and investing for growth.
Yeah, obviously hasnt come through in the numbers on a consolidated basis can you give us any examples of where things could maybe work domestically and so it proves out the theory that this is a good growth business because the numbers so far.
Speaker 3: obviously hasn't come through in the numbers on a consolidated basis. Can you give us any examples of where things that maybe work domestically and so it proves out the theory that this is a good growth business because the numbers so far.
The bear that out.
Sure I'll start Rob can certainly jump in.
Speaker 4: Sure. I'll start. Rob can certainly jump in. We had some good wins in both media and enterprise. You had asked about North America.
We had some good wins in both media and enterprise. If you had asked about North America.
Speaker 4: Our big challenge in North America was also headcount. We
Our Big Challenge in North America was also head count.
We promoted the individuals who was running enterprise because it was extremely successful to run all of Americas.
Speaker 4: the individual who was running enterprise because it was extremely successful to run all of America's.
Speaker 4: when we promoted Brian up to run sales for the worldwide job. And it took a while for her to find her backfill to run enterprise.
When we promoted Brian up to run sales for for cause the worldwide job and it took a while for her to find her backfill to run enterprise.
Speaker 4: And we've also been a little bit challenged with getting really high quality enterprise salespeople on board. You know, we're just not going to compromise just to fill a seat. We're going to continue to focus on getting the best possible talent. We have a lot of very, very cool new products coming out this summer.
And we've also been a little bit challenged with getting really high quality enterprise salespeople on board were just not going to compromise.
Just to fill out a seat we're going to continue to focus on getting the best possible talent. We have a lot of very very cool new products coming out. This summer. They are absolutely in line with what we see enterprises as well as media looking for and we know that we're doing the right steps now to make sure that we've got the right number.
Speaker 4: They're absolutely in line with what we see enterprises as well as media looking for. And we know that we're doing the right steps now to make sure that we've got the right number of salespeople and leaders.
<unk> of salespeople and leaders.
Speaker 4: And equally as important that they are well trained. And you heard me talk about the fact that we focused on the ICP, the ideal customer profile, because we know precisely what these solutions will do. We know the kinds of decision makers that we will be calling on. And so we focused our training and enablement and certification program along those lines to make sure that they speak the language that those decision makers are facing.
And equally as important that they are well trained and you've heard me talk about the fact that we've focused on the ICP the ideal customer profile, because we know precisely what these solutions will do we know the kinds of decision makers that we will be calling on it until we focused our training and enablement and certification program along those.
Your lines to make sure that they speak the language that those decision makers are facing.
Speaker 4: Enterprises are seeing the power of video in communicating and connecting, just as media has done for years, just as we've done very well for big media. We're taking those skills and those credentials and helping enterprise do that. And on the media side, we're investing heavily in analytics, machine learning, and AI to help our media customers reveal the data and get everything that they can out of the content that they're putting up there. Microsoft Mechanics www.microsoft.com.com
Enterprises are seeing the power of video and communicating and connecting just as media has done for years, just as we've done very well for big media, we're taking those skills and those credentials and helping enterprise due to that and on the media side, we're investing heavily in analytics machine learning and <unk>.
AI to help our media customers see that reveal the data and get everything that they can out of all of the content that they're putting up there.
Yeah, and Steve said.
Speaker 2: Just Steve, real quick to add on to that. Jeff mentioned some of the headcount challenges we're having in North America. And what we've seen though, where we have had stability in leadership and stability in the team, particularly in Europe , we're seeing real success and growth in the double digits. So we know that once we get those teams in place, those leaders in place and get some stability, we can drive that kind of growth.
Just Steve real quick to add on to that Jeff.
Jeff mentioned some of the head count challenges, we're having in North America, and what we've seen though where we have had stability and leadership instability and team, particularly in Europe , we're seeing real success and growth in the double in the double digits. So.
So we know that once we get those teams in place those leaders in place and get some stability, we can drive that kind of growth.
Speaker 3: And then when you look at the renewables business, have you made any success around upsells? Or are you still facing headwinds where upsells are not as high as you had hoped?
Okay, and then when you look at the.
The renewables business have you made.
Made any success around upsells.
Or are you still facing headwinds were upsells are not as high.
Yeah.
Yeah, we saw a little bit of a recovery in the fourth quarter with those upsells are growing off of the third quarter. So we're pretty comfortable with with the director that's what we get.
Speaker 2: Yeah, we saw a little bit of a recovery in the 4th quarter with those upsells growing off of the 3rd quarter, so we're pretty comfortable with with the direction that's moving in. Okay, and then what were overages in Q4 overages were just over 2Million dollars.
Okay, and then what were Overages in Q4.
Overages were just over $2 million.
At that to point to.
Yes.
Yeah.
Thank you I'll jump back in queue.
Thanks, Steve.
Thanks, Steve.
As a reminder, if you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the question queue and you May Press Star two if you would like to remove that question from the queue.
Speaker 1: As a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. And you may press star 2...
Our next question comes from the line of Eric Martin <unk> with Lake Street Capital You May proceed with your question.
Speaker 1: Our next question comes from the line of Eric Martinuzzi with Lake Street Capital. You may proceed with your question.
Yes, a question regarding Wicked labs curious to know what revenue comes along with Wicked Labs, and then also what expenses come with the acquisition.
Speaker 5: Yes, a question regarding WCID Labs. Curious to know what revenue comes along with WCID Labs and then also what expenses come with the acquisition.
Speaker 2: Yeah, Eric, it's not really material revenue at this point. We're not going to be breaking it out, but our expectation is that for the first year, it's not going to be dilutive at all.
Yeah, Eric it's not really material revenue at this point, we're not going to be breaking it out but our expectation is that for the first year, it's not going to be dilutive at all to be about breakeven.
Okay, and then as I look at the guidance for 2022 for me I guess.
Speaker 5: Okay, and then as I look at the guidance for 2022.
Speaker 5: For me, I guess, and I'm talking about the midpoints here for the revenue and the adjusted EBITDA, but it looks like we're talking about roughly flat at the midpoint on the revenue. And then about a $7 million delta to the downside on the adjusted EBITDA. I'm assuming gross margins aren't going to change too much. So, on flat REVs and flat gross margin, where is that $7 million of incremental expense being pointed at in 2020?
And I'm talking about the mid points here for the revenue and the adjusted EBITDA, but it looks like we're talking about roughly flat at the midpoint on our revenue and then about a $7 million delta to the downside on the adjusted EBITDA I'm, assuming gross margins aren't going to change too much so on flat rather than flat.
Gross margin, whereas the $7 million of incremental expense being pointed out in 2022.
Speaker 2: Yeah, so it's a combination of where we can see ROI on the R&D side, as you know, we've got new products being launched in the back half of the year, and then those point high ROI sales heads.
Yeah. So it's a combination of where we can see ROI on the R&D side as you know, we've got new products being launched in the back half of the year and then those point her hot high ROI sales heads.
Speaker 2: And it's not, and Eric, it's not, you know, as you look at it, it's not a material growth over our OPEX based on our Q4 run rates.
Okay.
And Eric it's not.
As you look at it it's not a material growth over our Opex based on our Q4 run rates.
Speaker 5: Okay, so look at it versus Q4 as opposed to 2020.
Okay. So look at it versus Q4.
<unk> 2021 .
Yes, that's right.
Uh huh.
Speaker 5: And I did kind of assume it, but the gross margins that we had, I think we were 67% non-GAAP in Q4. What's, is that an appropriate number for the full year in 2022? Yeah, that's about right.
Kind of assume it but the gross margins.
I think we're 67% and non-GAAP in Q4.
Is that an appropriate number for the full year in 2022.
Yeah, that's about right.
Okay.
And then the.
Uh huh.
Speaker 5: I'm trying to understand the, we had a step up in the capitalized software. And I'm wondering if in Q4, because we've been running about a million, 5 million, 6 for the first nine months, and then we're up about 2 million of capitalized software in Q4. Is this kind of a one-time, hey, the project got complete, and that's going to go back down? Or is this kind of a new run rate?
I'm trying to understand the we had a step up in the capitalized software and I'm wondering if in Q4, because we've been running about 1 million 5 million six for the first nine months and then we're up about $2 million of capitalized software. In Q4 is this kind of a one time the project is complete.
And that's going to go back down or is this kind of a new run rate.
Speaker 2: Yeah, it'll be a little bit higher, closer to that level for the first part of the year, then it'll step back down as we launch the new product.
Yeah, it'll be a little bit higher closer to that level for the first part of the year, then I'll step back down as we launch the new products.
Okay. Thanks for taking my question.
Thanks Sarah.
Speaker 1: At this time, we have reached the end of the question and answer session, and I would now like to turn the call back over to Jeff Wright.
At this time, we have reached the end of the question and answer session and I would now like to turn the call back over to Jeff Ray for any closing remarks.
Speaker 4: Thank you, John . Thanks everyone for joining us. I also want to take a note and thank this amazing leadership team for the journey we've been on. I'm very, very excited about the positioning of this business.
Thank you John and thanks, everyone for joining us I also want to take a note and think this amazing leadership team for the journey we've been on.
I am very very excited about the positioning of this business.
Speaker 4: for Mark and the skills that he brings in. It's a great time to write the next chapter. As disappointed as I am in the fourth quarter results, I am equally as excited about the Foundation for Growth. And I know that Mark will do great things for us. And I thank all of you for your engagement over the last four years. Thank you everyone, goodbye.
For for Mark.
And the skills that he brings in it's a great time to write the next chapter as disappointed as I am in the fourth quarter results I am equally as excited about the foundation for growth.
And I know that that Mark will do great things for us and I. Thank all of you for your engagement over the last four years. Thank you everyone Goodbye.
This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation and have a great day.
Speaker 1: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation and have a great day.
[music].
[music].
Speaker 1: Welcome to the Brightco 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...
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.
Speaker 1: If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad.
And please note that this conference is being recorded I would now.
Speaker 1: I would now like to turn the conference over to Brian Denue from ICR. Thank you.
Like to turn the conference over to Bryan Deneve when tenure from ICR. Thank you you may begin.
Speaker 3: Good afternoon and welcome to Branko's fourth quarter 2021 earnings.
Good afternoon, and welcome to the Brightcove fourth quarter 2021 earnings call.
Speaker 3: Today we will discuss the results announced in our press release issued after the market closed.
Today, we will discuss the results announced in our press release issued after the market closed with me.
Speaker 3: With me on the call are Jeff Fry, Brightcove Chief Executive Officer, and Rob Norick, Brightcove Chief Financial...
On the call are Jeff Ray Brightcove, Chief Executive Officer, and Rob Nork, Brightcove Chief Financial Officer.
Speaker 3: 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 1994.
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 1095, including statements concerning our financial guidance for the first fiscal quarter of 2022, and the full year of 2022 expected profitability and positive free cash flow our.
Speaker 3: 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.
To execute on our go to market and growth strategy.
To expand our leadership position.
Our ability to maintain and upsell existing customers as well as our ability to acquire new customers.
Speaker 3: Poor looking statements may often be identified with words such as we expect, we anticipate, upcoming, or similar indications of future expectations.
Forward looking statements may often be identified with words, because we expect we anticipate upcoming or similar indications of future expectations.
Speaker 3: 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 reflect our views only as of today and should not be reflected upon as representing our views as of any subsequent date.
Speaker 3: These statements are subject to a variety of risks and uncertainties that cause actual results to differ materially from expectations.
These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations.
Speaker 3: the effect of the COVID-19 pandemic on our business operations as well as the impact on general economic and financial market conditions.
The effect of the COVID-19 pandemic on our business operations as well as the impact on general economic and financial market conditions.
For a 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.
Speaker 3: 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.
Speaker 3: Also during the course of today's call, we will refer to certain non-GAAP financial measures.
Also during the course of today's call, we will refer to certain non-GAAP financial measures.
Speaker 3: There is a reconciliation schedule showing GAAP versus non-GAAP results currently available in our press list issued after market close today, which can be found on our website at www.brightcove.com.
There is a reconciliation scheduled showing GAAP versus non-GAAP results currently available in our press release issued after market close today, which can be found on our website at www Dot Brightcove dot com.
Speaker 3: 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.
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.
Speaker 3: Rob will finish with additional details regarding our 4th quarter 2021 results, as well as our outlook for the first quarter and the full year of 2022. With that,
Rob will finish with additional details regarding our fourth quarter 2021 results as well as our outlook for the first quarter and a full year of 2022.
With that let me turn the call over to Jeff.
Speaker 4: 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 my replacement. Last week, we announced the appointment of Mark DeBevoise as CEO and board director, effective March 28.
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 my replacement.
Last week, we announced the appointment of Mark difficult laws as CEO and board director effective March 28.
Speaker 4: Mark is an accomplished media and technology executive with exceptional leadership experience at ViacomCBS.
Mark is an accomplished media and technology executive with exceptional leadership experience at Viacom CBS .
Speaker 4: CBS Interactive, Starz, and NBC Universal. He has spent his career in our domain, fled large, diverse teams, and delivered outsized growth.
Evs Interactive stars and NBC Universal. He has spent his career in our domain led large diverse teams and delivered outsized growth as a previous brightcove customer Mark has created monetized and distributed content and as a result, he brings a unique understanding of what our customers are true.
Speaker 4: As a previous Brightcove customer, Mark 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 Brightcove.
Lying to achieve so we can now say that a customer is running brightcove.
Speaker 4: 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.
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.
Speaker 4: 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.
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 teams 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.
Speaker 4: 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...
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.
Speaker 4: As you know, video is the most powerful medium for capturing hearts and minds and connecting with audiences.
So 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.
Speaker 4: 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...
<unk> 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.
Speaker 4: 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.
Speaker 4: We are specifically focused on advancing our strategic initiatives in the areas of 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
<unk> 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 50.
Speaker 4: We were particularly proud to be announced a leader in the Aragon Research Globe for Enterprise Video 2022.
Speaker 4: The report, the only such ranking for the online video industry, evaluated 15 video vendors deemed to improve customer and employee experiences, is the only annual ranking in the enterprise video industry.
<unk> video vendors deemed to improve customer and employee experiences and 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.
Speaker 4: 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.
Speaker 4: 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.
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.
Speaker 4: 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.
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.
Speaker 4: 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.
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 $900000 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.
Speaker 4: 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.
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 free cash flow was $10 $7 million, while we beat financial guidance for the quarter. We continued to experience some challenges with sales execution.
Speaker 4: free cash flow is $10.7 million. While we beat financial guidance for the quarter, we continued to experience some challenges with sales execution.
Speaker 4: As we noted in the third quarter call, we have challenges with performance in our Asia-Pacific and the Japan region.
As we noted in the third quarter call, we have challenges with performance in our Asia Pacific and the Japan regions.
Speaker 4: 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've hired a strong sales later 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 later, we continued to see significantly lower than expected results in both these regions in the fourth quarter.
Speaker 4: We also experienced some challenges in the timely conversion of new business in North America.
We also experienced some challenges in the timely conversion of new business in North America.
Speaker 4: Other focused initiatives to address these execution challenges include
Other focused initiatives to address these execution challenges include.
Speaker 4: 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.
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.
Speaker 4: investing heavily in building our ideal customer profile, researching our potential markets, customers purchasing habits and future needs.
Investing heavily in building, our ideal customer profile researching our potential markets customers' purchasing habits and future needs.
Speaker 4: 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.
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 <unk>.
Speaker 4: Because of this new work, our people know precisely where to target our marketing and sales efforts. This has enabled a quick start to 2022 demand generation and improved our chances for success.
<unk> thousand 22 demand generation and improved our chances for success.
Speaker 4: 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.
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.
Speaker 4: 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 —
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 Iraq.
Tober, we announced two new solutions. The first was Brightcove marketing studio, our new video communication solution to enable marketers to drive stronger results from digital campaigns.
Speaker 4: 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 Brightcove Marketing Studio to better find and utilize video assets right from within the marketing technology systems they use every day.
<unk> marketing roles across the company can use brightcove marketing studio to better find and utilize video assets right from within the marketing technology systems. They use every day.
Speaker 4: Integrations with major marketing technology vendors such as Eloqua, Marketo, HubSpot, Sitecore, and Hootsuite will bring unmatched value to marketing studio customers.
Integrations with major marketing technology vendors, such as Ala Coop Mercado hub spot sidecar in Hood suite 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.
Speaker 4: We're working with several customers who are early adopters and we're encouraged by their confidence in this new solution.
Speaker 4: Brightcove Marketing Studio will be offered as limited availability in the second quarter with the general availability launch in Q3.
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 court TV for.
Speaker 4: 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.
For enterprises getting audience attention in this overcrowded digital landscape is extremely difficult.
Coke Corp television allows enterprises to create their own always on Netflix like channels to more effectively distribute content to customers partners and employees.
Speaker 4: Last quarter, we discussed NetApp launching NetApp TV using Brightcove Corp TV, and we're also excited to see long-time customer Barrow Neurological expand its offering with Brightcove Corp TV.
Last quarter, we discussed net app launching net Apple TV using Brightcove Court TV and we're also excited to see long time customer <unk>.
<unk> neurological expand its offering with Brightcove Court TV.
Speaker 4: 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 neurological was under pressure to launch a more user friendly experience, while undergoing an initiative to make content more accessible and available to physicians and patients and growing regions specifically in parts of East Africa barrel will now deliver an unparalleled video experience and a mobile app and a fresh new way.
Speaker 4: Barrow will now deliver an unparalleled video experience in a mobile app and a fresh new web experience to its audience globally.
Experience to its audience globally in.
Speaker 4: 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.
In addition to those two new product launches, we're making significant progress on our work with video intelligence to help customers gain deeper insight into how they are connecting with viewers.
Today Brightcove intelligent video platform enables customers to deliver broadcast quality video to viewers and measure its effectiveness with comprehensive real time analytics, including video and fewer insights.
Speaker 4: 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.
<unk> analytics help customers understand video performance viewer engagement and return on investment.
Speaker 4: On February 2nd, Brightcove announced the acquisition of Wicket Labs, an Audience Insights company. This acquisition is another step in offering the most powerful analytic solution.
On February 2nd Brightcove announced the acquisition of wicket labs and audience insights company. This acquisition is another step in offering the most powerful analytics solution.
Speaker 4: Let me give you one example of the kind of value this acquisition allows us to offer.
Let me give you. One example of the kind of value. This acquisition allows us to offer.
Speaker 4: 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
By using analytics and machine learning customers will now be able to see insights across our harmonized data store.
Disparate data pulled from a variety of sources billing data CMS is in access systems 50, plus data integrations and all presented in a daily dashboard that provides trend data and benchmark for performance.
Speaker 4: 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.
Speaker 4: Customers will have deep, actionable insight into content and subscriber analytics.
Customers will have deep actionable insight into content and subscriber analytics, they will make business decisions to improve subscriber acquisition conversions engagement and retention.
Speaker 4: They will make business decisions to improve subscriber acquisition, conversions, engagement, and retention.
Speaker 4: 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 features, and the
They'll pick the right prospects to close grow those customers and retain them all through the power of the scorecard. These.
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 bright.
Speaker 4: subscriber journey, and how to increase subscription revenue through data visualizations and dashboards.
Speaker 4: 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 Brightcove, bringing some of the industry's best media analytics talent into our country.
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 Brightcove.
Bringing some of the industry's best media analytics talent into our company.
Speaker 4: 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.
But this deal will accelerate getting products to market. This year is this gives us an opportunity to sell into existing accounts acquired new customers and strengthen our retention efforts.
Speaker 4: We're proud to serve customers worldwide and thank them for their partnership.
We're proud to serve customers worldwide and thank them for their partnership here are some examples of fourth quarter customer activity.
Speaker 4: Here are some examples of fourth quarter customer activity.
For us by US network popularly known as Fugu has joined Brightcove as the new Brightcove Beacon customer and a joint venture with urban Flix TV Fubu network will launch its new OTT strategy building on its already existing audience and vision to develop quality.
Speaker 4: For Us, By Us 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 life.
Intent around topics people and trends related to hip hop culture and lifestyle Fubu chose brightcove for our superior technology strength in Avon and our exceptional support service.
Speaker 4: FUBU chose Brightco for our superior technology, strength in AVOD, and our exceptional support service.
Speaker 4: 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, 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.
Speaker 4: Blue Buffalo will use Brightcove to power the next phase of its digital transformation, in particular its website performance, to engage with more customers.
In particular, its website performance to engage with more customers.
Veracity of blockchain platform for esports and digital content will now be using brightcove to deliver its high profile esports events in 2022.
Speaker 4: Veracity, a blockchain platform for esports and digital content, will now be using Brightcove to deliver its high-profile esports events in 2022.
Speaker 4: Veracity turned to Brightcove because it needed a reliable and scalable platform to deliver its high-profile events to audiences in 100 countries.
<unk> turned to brightcove, because it needed a reliable and scalable platform to deliver its high profile events to audiences in 100 countries and.
Speaker 4: And Ford Motor Company, a long-time Brightcove customer, renewed its relationship with us to continue to delivering an exceptional viewing experience to internal and external stakeholders.
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.
Speaker 4: Ford has deployed Brightco technology on its websites in over 60 countries and uses Brightco 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 this audience both internally and externally.
<unk> has deployed Brightcove technology on its website at over 60 countries and uses Brightcove video internally for global customer service training and dealer Communications no. Other solution brings the scalability and security board needs to be able to connect with this audiences both internally.
And externally.
Speaker 4: We continue to add channel partners to strengthen our ability to deliver reliable, scalable, and secure video technology.
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 a 23% of our business come through our partner team as we move into 2022.
Speaker 4: We added 18 partners in the fourth quarter and saw 23% of our business come through our partners.
Speaker 4: As we move into 2022, our partner program remains a strategic focus area as we build momentum.
Our partner program remains a strategic focus area as we build momentum.
Speaker 4: I told you a year ago that we were committed to fixing our challenges in renewal and have made significant progress in that area.
I told you a year ago that we were committed to fixing our challenges and renewals and have made significant progress in that area.
Speaker 4: 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.
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 support.
<unk> organization with Representatives regional offices customers now have local contacts to better support their needs and growth we've implemented cross team processes for best practices and sharing data. This.
Speaker 4: Customers now have local contacts to better support their needs and growth. We've implemented cross-team processes for best practices in sharing data.
Speaker 4: This resulted in consistent internal conversations so anyone across the globe can help a customer at any time.
This resulted in consistent internal conversations so anyone across the globe can help a customer at anytime we.
Speaker 4: 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 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 a 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 success, we're focusing on our customer strategy and how we can best support their path to growth.
Speaker 4: 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.
Speaker 4: 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.
Speaker 4: To conclude, we've made significant progress in key areas, and we're working to improve our go-to-market expectations.
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.
Speaker 4: 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.
Speaker 4: With that, let me turn the call over to Rob to walk you through the numbers.
Speaker 4: Thank you, Jeff, and good afternoon, everyone. Before I start, I'd like to add my warm welcome to Mark as the new CEO of Brightcove. I'd also like to wish Jeff all the best for his retirement. I've thoroughly enjoyed working together for the past four years.
Thank you, Jeff and good afternoon, everyone.
Before I start I'd like to add my warm welcome to Mark as the new CEO of Brightcove I'd.
I'd also like to wish Jeff all the best for his retirement I've thoroughly enjoyed working together for the past four years.
Speaker 4: I will begin with a detailed review of our fourth quarter, and then I will finish with our outlook for the first quarter and the full year 2022.
I will begin with a detailed review of our fourth quarter, and then I will finish with our outlook for the first quarter and the full year 2022.
Speaker 4: Total revenue was $52.6 million, which was above our guidance range. Breaking revenue down further, subscription and support revenue is $50.3 million, and professional services revenue was $2.4 million.
Total revenue was $52 $6 million, which was above our guidance range breaking revenue down further subscription and support revenue was $53 million and professional services revenue was $2 $4 million.
Speaker 4: 12 month backlog, which we define as the aggregate amount of committed subscription revenue related to future performance obligations in the next 12 months was $121.2 million. This represents a 6% year over year.
12 months backlog, which we define as the aggregate amount of committed subscription revenue related to future performance obligations. In the next 12 months was $121 $2 million. This represents a 6% year over year increase.
Speaker 4: On a geographic basis, we generated 57% of our revenue in North America during the quarter, and 43% internationally.
On a geographic basis, we generated 57% of our revenue in North America during the quarter and 43% internationally.
Speaker 4: Breaking down international revenue a little more, Europe generated 19% of our revenue, and Japan and Asia Pacific generated 24% of revenue.
Breaking down international revenue, a little more Europe generated 19% of our revenue and Japan, and Asia Pacific generated 24% of rabbit.
Let me now turn to the supplemental metrics, we share on a quarterly basis.
Speaker 4: Let me now turn to the supplemental metrics we share on a quarterly basis.
Speaker 4: Recurring gallery retention rate was 94.4%, which is within our target range of low to midnight.
Recurring dollar retention rate was 94, 4%, which is within our target range of low to mid nineties.
Speaker 4: Net revenue retention was 93%, which compares to 95% in the third quarter of 2021 and 100% in the fourth quarter of 2020. Since the beginning of 2019, net revenue retention has ranged from 92% to 100%.
Net revenue retention was 93%, which compares to 95% in the third quarter of 2021 and 100% in the fourth quarter of 2020.
Since the beginning of 2019 net revenue retention has range from 92% to 100%.
Speaker 4: As a reminder, we introduced net revenue retention to better align our reporting with most leading SAS companies. We calculate net revenue retention by comparing the current annualized recurring revenue to the annualized recurring revenue from 12 months prior for those premium customers that existed 12 months prior.
As a reminder, we introduced net revenue retention to better align our reporting with most leading SaaS companies, we calculate net revenue retention by comparing the current annualized recurring revenue to the annualized recurring revenue from 12 months prior to those premium customers that exist at 12 months prior.
Speaker 4: We are pleased with the improvements we have made to strengthen our renewables business in recent quarters. While there is still more to do, we are beginning to see the benefits of these efforts in our renewals. It is important to keep in mind that since net revenue retention is calculated on a trailing 12-month basis, there will be a natural lag before the improvements we are making will be reflected in this metric. We expect this metric will consistently be over 100% over 10 years.
We are pleased with the improvements we have made to strengthen our renewals business in recent quarters. While there is still more to do we are beginning to see the benefits of these efforts in our renewals. It is important to keep in mind that since net revenue retention is calculated on a trailing 12 month basis, there will be a natural lag before the improvements we are making will be reflected in this metric. We expect this metric will.
Instantly be over 100% overtime.
Speaker 4: Our customer count at the end of the fourth quarter was 3,135, of which 2,227 were classified as premium customers.
Our customer count at the end of the fourth quarter was 3135.
With 2000, and 227 were classified as premium customers.
Speaker 4: Looking at our ARPU, within our premium customer base, our annualized revenue per premium customer was $95,000 and excludes our entry-level pricing for starter customers, which is $4,100 in annualized revenue.
Looking at our <unk> within our premium customer base, our annualized revenue per premium customer was $95000 and excludes our entry level pricing for starter customers, which averaged $4100 in annualized revenue.
Speaker 4: Our ARPU is down year over year from $97,000 to $95,000.
Our ARPA was down year over year from $97000 to $95000.
Speaker 4: due to the impact of one-time events in Japan last fourth quarter.
Due to the impact of one time events in Japan last fourth quarter <unk>.
Speaker 4: Excluding these events, our fourth quarter 2020 ARPU was $92,300 and we are up 3% year-over-year.
Excluding these events our fourth quarter 2020, our booth was $92300 and were up 3% year over year.
Speaker 4: Looking at our results on a gap basis, our gross profit was $34.7 million, operating income was $1.1 million, and net income per share was one cent for the quarter.
Looking at our results on a GAAP basis, our gross profit was $34 7 million operating income was $1 $1 million and net income per share was <unk> <unk> for the quarter.
Speaker 4: Turning to our non-GAAP results, our non-GAAP gross profit was $35.3 million, compared to $34.8 million in the year-ago period, and represented a gross margin of 67%, which is up from 65% in the fourth quarter of 2020.
Turning to our non-GAAP results, our non-GAAP gross profit was $35 $3 million compared to $34 $8 million in a year ago period and represented a gross margin of 67%, which is up from 65% in the fourth quarter of 2020.
Speaker 4: Subscription and support revenue represented approximately 95% of our total revenue and generated a 69% gross margin, compared to a 68% gross margin in the fourth quarter of 2020.
Subscription and support revenue represented approximately 95% of our total revenue and generated a 69% gross margin compared to a 68% gross margin in the fourth quarter of 2020.
Speaker 4: The improvement in gross margin throughout this year has been an area of strength for the business. This benefits us in two ways. It provides additional capital to invest in the product initiatives Jeff referenced earlier, and it sets the foundation for meaningful improvement in overall profitability when revenue growth improves in the future.
The improvement in gross margin throughout this year has been an area of strength for the business.
This benefits us in two ways.
The additional capital to invest in the product initiatives, Jeff referenced earlier and it sets the foundation for meaningful improvement in overall profitability when revenue growth improves in the future.
Speaker 4: non-GAAP income from operations was $4.7 million compared to $5.4 million in the fourth quarter of 2020.
non-GAAP income from operations was $4 $7 million compared to $5 $4 million in the fourth quarter of 2020.
Speaker 4: Adjusted EBITDA was $5.9 million, compared to $6.8 million in the year-ago period, and above the high end of our guidance range. Adjusted EBITDA margin was 11%.
Adjusted EBITDA was $5 $9 million compared to $6 $8 million in the year ago period and above the high end of our guidance range adjusted EBITDA margin was 11%.
non-GAAP diluted net income per share was 10 cents based on $41 7 million weighted average shares outstanding. This compares to net income per share of 14 cents on.
Speaker 4: non-GAAP diluted net income per share was $0.10, based on 41.7 million weighted average shares outstanding. This compares to net income per share of $0.14 on 41.7 million weighted average shares outstanding in the year-ago period.
And $41 7 million weighted average shares outstanding in the year ago period.
Speaker 4: Looking at our full-year 2021 results, total revenue was $211.1 million, up 7% year-over-year. On a gap basis, gross profit was $138.1 million, operating income was $7.6 million, and net income per share was $0.13, based on 42.2 million weighted average shares outstanding.
Looking at our full year 2021 results.
Total revenue was $211 $1 million up 7% year over year on a GAAP basis gross profit was $138 $1 million operating income was $7 $6 million and net income per share was <unk> 13 cents based on $42 2 million weighted average shares outstanding.
Speaker 4: On a non-GAAP basis, gross profit was $140.5 million. Income from operations was $18.9 million. Adjusted EBITDA was $24.2 million. And net income per share was $0.40, based on 42.2 million weighted average shares outstanding.
On a non-GAAP basis gross profit was $145 million income from operations was $18 $9 million.
And EBITDA was $24 $2 million and net income per share was <unk> 40 cents based on $42 2 million weighted average shares outstanding.
Speaker 4: Turning to the balance sheet and cash flow, we ended the quarter with cash and cash equivalents of $45.7 million. We generated $4.8 million in cash flow from operations, and free cash flow is $2.3 million after taking into account $2.6 million in capital expenditures and capitalized internal use stocks.
Turning to the balance sheet and cash flow, we ended the quarter with cash and cash equivalents of $45 $7 million, we generated $4 $8 million in cash flow from operations and free cash flow was $2 $3 million after taking into account $2 $6 million in capital expenditures and capitalized internal use software.
Speaker 4: I would like to finish by providing our guidance for the first quarter and the full year 2022.
I would like to finish by providing our guidance for the first quarter and the full year of 2022.
For the first quarter, we are targeting revenue of $50 5 million to $51 $5 million, including $2 million of Overages and approximately $2 million of professional services revenue.
Speaker 4: For the first quarter, we are targeting revenue of $50.5 million to $51.5 million, including $2 million of overages and approximately $2 million of professional services revenue. From a profitability perspective, we expect non-GAAP operating income to be $1 million to $2 million and adjusted EBITDA to be between $2.3 million and $3.3 million. non-GAAP net income per share is expected to be in the range of 2 cents to 4 cents based on 42 million weighted average shares outstanding.
<unk> ability perspective, we expect non-GAAP operating income to be $1 million or $2 million and adjusted EBITDA to be between $2 $3 million and $3 $3 million non-GAAP net income per share is expected to be in the range of <unk> <unk> based on 42 million weighted average shares outstanding.
Speaker 4: For the full year, we are targeting revenue of $207 million to $215 million, including $8 million of overages and approximately $9.3 million of professional services revenue.
For the full year, we are targeting revenue of $207 million to $215 million, including $8 million of Overages and approximately $9 $3 million of professional services revenue.
Speaker 4: From a profitability perspective, we expect non-GAAP operating income of $7 million to $11 million and adjusted EBITDA to be between $15 million and $19 million. non-GAAP net income per share is expected to be in the range of $0.14 to $0.23 based on 42.6 million weighted average shares outstanding.
From a profitability perspective, we expect non-GAAP operating income of $7 million to $11 million and adjusted EBITDA to be between $15 million and $19 million non-GAAP net income per share is expected to be in the range of 14 to 20 <unk> based on $42 6 million weighted average shares outstanding.
Speaker 4: For the full year, we are now targeting through cash flow of $5 million to $10 million. There are a few things I would keep in mind.
For the full year, we're now targeting free cash flow of $5 million to $10 million.
There are a few things I would keep in mind with regards to our guidance.
Speaker 4: Our outlook for the year, and in particular the first quarter, reflects the impact of the new business challenges Jeff described earlier, as well as the cumulative impact of the retention challenges we have discussed over the past year. As we move through the year, and the full impact of the changes we have made take hold, we expect to return to consistent positive revenue growth in the middle of the year.
Our outlook for the year and in particular, the first quarter reflects the impact of the new business Challenge as Jeff described earlier as well as the cumulative impact of the retention challenges we have discussed over the past year as we move through the year and the full impact of the changes we have made take hold we expect to return to consistent positive revenue growth in the middle of the year.
Speaker 4: We believe our outlook for the year appropriately balances our continued commitment to profitable growth. We are making targeted investments in high ROI areas of the business, particularly product development that we believe will set the stage for improved top and bottom line.
We believe our outlook for the year appropriately balances our continued commitment to profitable growth.
We are making targeted investments in high ROI areas of the business.
Particularly product development that we believe will set the stage.
For improved top and bottom line growth over time.
Speaker 4: Finally, our fundamental belief in the long-term potential of this business has not changed. We are confident that over time we can deliver a consistent blend of attractive revenue growth and meaningful margin expansion that can generate substantial value for shareholders.
Finally, our fundamental belief in the long term potential of this business has not changed we are confident that overtime, we can deliver a consistent blend of attractive revenue growth and meaningful margin expansion that can generate substantial value for shareholders.
Speaker 4: I'm looking forward to partnering with Mark and the entire team here at Brico on this next evolution as a business. We have much work to do to get the company performing at the level we believe it is capable of. We look forward to introducing Mark to the investment community once he joins us at the end of March, so he can provide you with his perspective and strategy for the future of Brico. With that, we will now take your questions. Operator, we are ready to begin Q&A.
I'm looking forward to partnering with Mark and the entire team here at Brightcove on this next evolution of the business. We have much work to do to get the company performing at the level. We believe it is capable of and we look forward to introducing mark to the investment community. Once he joined US at the end of March. So he can provide you with his perspective and strategy for the future of Brightcove.
With that we'll now take your questions operator, we are ready to begin Q&A.
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Our first question comes from the line of Steven Frankel with Colliers you May proceed with your question.
Speaker 1: Our first question comes from the line of Steven Frankel with Collier. You may proceed with your...
Speaker 5: Good afternoon, I just dig into guidance a little bit and maybe get some insight into
Good afternoon, I, just dig into guidance, a little bit and maybe get.
Some insight into this.
Speaker 5: the headwinds from customer losses and maybe some insight into how the media versus the enterprise performed in 21 and how that outlook looks like for for 22. So let's start there.
The headwind from.
Customer losses.
And maybe some insight into how the media versus the enterprise performed in.
In 'twenty, one and how that.
Looks like for 'twenty, two so let's start there.
Okay.
Sorry, Steve I had myself on mute. This is rob so in terms of you know the first part of your question around customer losses customer losses were really in line with what we've seen for the last four quarters as we talked about on the on the call. We had some challenges on the new bookings side and that's really what you saw on the customer.
Speaker 4: Sorry Steve, I had myself on mute. This is Rob. So in terms of the first part of your question around customer losses, customer losses were really in line with what we've seen for the last four quarters. As we talked about on the call, we had some challenges on the new booking side. And that's really what you saw in the customer account, quarter over quarter.
Our count at quarter over quarter.
Speaker 4: And then from an enterprise and media standpoint, both segments of the business performed well over the course of the year. And right now, as we've discussed, we're at about 50-50 in terms of the revenue split between the two.
And then from a from an enterprise and media standpoint, both segments of the business performed well.
Over the course of the year and right now is as we've discussed we're sitting at about 50 50 in terms of the revenue split between the tips.
Speaker 5: Okay, and how about some insight into.
Okay.
How about some insight into.
Speaker 5: what these problems in Japan and Asia-Pacific are costing you in terms of revenue. How material is that to the forecast that you laid out?
What these problems in Japan, and Asia Pac are costing you return to that.
Revenue how material is that to the forecast that you laid out.
Hey, Steve It's Jeff.
Yes.
Speaker 2: Yeah, and certainly it's significant enough to where we wanted it to report it to you. That's why we flagged it and highlighted it. We started to see those indicators in Asia-Pac in the third quarter. We stepped in. We started making leadership changes.
Yeah, and certainly it's significant enough to where we wanted it to report to you. That's why we flagged it highlighted it.
We started to see those indicators in Asia Pac in the third quarter, we stepped in we started making leadership changes.
Speaker 2: Japan, we've got a fantastic new sales leader on board, comes from salesforce.com, brings a strong Rolodex, gets it on enterprise and media. And in my early discussions with him, he's only been on the ground for a few weeks.
Japan, We've got a fantastic new sales leader on board comes from Salesforce Dot Com.
<unk> has a strong rolodex gets it on enterprise and media.
And by early discussions with him he's he's only been on the ground for a few weeks, but he is very very fired up about the opportunities that he sees there Korea healthy.
Speaker 2: But he is very, very fired up about the opportunities that he sees there. Korea healthy. Australia fantastic new sales manager there who had reported to me in the past.
Dalia Fantastic New sales manager there who has reported to me in the past and I know he will do great things there. The gap at this moment is getting the regional VP landed into Singapore.
Speaker 2: And I know he'll do great things there. The gap at this moment is getting the regional VP landed into Singapore. We have interviewed lots and lots of people and we're not gonna rush this. We're gonna take our time and find the right person for the opportunities there.
Singapore, we have interviewed lots and lots of people.
And we're not going to rush. This we're going to take our time and find the right person for the for the opportunities there.
Can we spend a lot of the last year in talking about growth and investing for growth.
Speaker 5: You know, we spent a lot of the last year talking about growth and investing for growth and
Speaker 5: obviously hasn't come through in the numbers on a consolidated basis. Can you give us any examples of where things have maybe worked domestically and so it proves out the theory that this is a good growth business? Because the numbers so far...
Obviously hasnt come through in the numbers on a consolidated basis can you give us any examples of where things that maybe work domestically and so it proves out the theory that this is a good growth business because the numbers so far.
The bear that out.
Speaker 2: Sure, I'll start. Rob can certainly jump in. We had some good wins in both media and enterprise. You had asked about North America.
Sure I'll start Rob can certainly jump in.
We had some good wins in both media and enterprise you had asked about North America.
Speaker 2: Our big challenge in North America was also headcount.
Our Big Challenge in North America was also head count.
We promoted the individual who was running enterprise because it was extremely successful to run all of Americas.
Speaker 2: the individual who was running enterprise because it was extremely successful to run all of America's.
Speaker 2: when we promoted Brian up to run sales for the worldwide job. And it took a while for her to find her backfill to run enterprise.
When we promoted Brian it up to run sales for for.
Worldwide job.
And it took a while for her to find her backfill to run enterprise.
Speaker 2: And we've also been a little bit challenged with getting really high quality enterprise salespeople on board. You know, we're just not going to compromise just to fill a seat. We're going to continue to focus on getting the best possible talent. We have a lot of very, very cool new products coming out this summer.
We've also been a little bit challenged with getting really high quality enterprise salespeople on board. We were just not going to compromise just to fill out a seat we're going to continue to focus on getting the best possible talent. We have a lot of very very cool new products coming out this summer their absolute.
Speaker 2: They're absolutely in line with what we see enterprises as well as media looking for. And we know that we're doing the right steps now to make sure that we've got the right number of salespeople and leaders.
In line with what we see enterprises as well as media looking for.
And we know that we're doing the right steps now to make sure that we've got the right number of salespeople and leaders.
Speaker 2: And equally, it's important that they are well-trained. And you heard me talk about the fact that we focused on the ICP, the Ideal Customer Profile, because we know precisely what these solutions will do. We know the kinds of decision makers that we will be calling on. And so we focused our training and enablement and certification program along those lines to make sure that they speak the language that those decision makers are facing.
And equally as important that they are well trained and you heard me talk about the fact that we've focused on the ICP the ideal customer profile, because we know precisely what these solutions will do we know the kinds of decision makers that we will be calling hot and so we focused our training and enablement and certification program along those.
Lines to make sure that they speak the language that those decision makers are facing.
Speaker 2: You know, enterprises are seeing the power of video in communicating and connecting, just as media has done for years, just as we've done very well for big media. We're taking those skills and those credentials and helping enterprise do that. And on the media side, we're investing heavily in analytics, machine learning, and AI to help our media customers reveal the data and get everything that they can out of the content that they're putting up there. Thank you.
Enterprises are seeing the power of video and communicating and connecting just as media has done for years, just as we've done very well for big media, we're taking those skills and those credentials and helping enterprise due to that and on the media side, we're investing heavily in analytics machine learning and <unk>.
AI to help our media customers see that reveal the data and get everything that they can out of out of the content that they are putting up there.
Yeah, and Steve that.
Just Steve real quick to add onto that Jeff.
Speaker 4: Just Steve, real quick to add on to that. Jeff mentioned some of the headcount challenges we're having in North America. And what we've seen though, where we have had stability in leadership and stability in the team, particularly in Europe , we're seeing real success and growth in the double digits. So we know that once we get those teams in place, those leaders in place and get some stability, we can drive that kind of growth.
Jeff mentioned, you know some of the head count challenges, we're having in North America, and what we've seen though where we have had stability and leadership and stability in the team, particularly in Europe , we're seeing real success and growth in the double in the double digits.
So we know that once we get those teams in place of leaders in place and get some stability, we can drive that kind of growth.
Speaker 5: And then when you look at the renewables business, have you made any success around upsells? Or are you still facing headwinds where upsells are not as high as you had hoped?
Okay and then when you look at the renewables business have you.
[laughter] made any success.
Round Upsells.
Or are you still facing headwinds were upsells are not as high as.
Speaker 4: Yeah, we saw a little bit of a recovery in the fourth quarter with those upsells growing off of the third quarter. So we're pretty comfortable with the direction that's moving in. OK, and then what were overages in Q4? Overages were just over two million dollars.
Yes, we saw a little bit of a recovery in the fourth quarter with those upsells are growing off of the third quarter. So we're pretty comfortable with with the director that's what we get.
Okay, and then what were Overages in Q4.
Overages were just over $2 million.
And at that 2.2.
Yeah.
Thank you I'll jump back in the queue.
Thanks, Steve.
Thanks, Steve.
Speaker 1: As a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. And you may press star 2 if you have any questions.
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Our next question comes from the line of Eric Martin Easy with Lake Street Capital You May proceed with your question.
Speaker 1: Our next question comes from the line of Eric Martinuzzi with Lake Street Capital. You may proceed with your question.
Speaker 6: Yes, a question regarding WCID Labs. Curious to know what revenue comes along with WCID Labs and then also what expenses come with the acquisition.
Yes, a question regarding what could land just curious to know what revenue comes along with Wicked Labs, and then also what expenses come with the acquisition.
Yeah, Eric it's not really material revenue at this point, we're not going to be breaking it out but our expectation is that for the first year, it's not going to be dilutive at all to be about breakeven.
Speaker 4: Yeah, Eric, it's not really material revenue at this point. We're not going to be breaking it out, but our expectation is that for the first year, it's not going to be dilutive at all. It's going to be about breakeven.
Okay, and then as I look at the guidance for 2022 for me I guess.
Speaker 6: Okay, and then as I look at the guidance for 2022,
Speaker 6: For me, I guess, and I'm talking about the midpoints here for the revenue and the adjusted EBITDA, but it looks like we're talking about roughly flat at the midpoint on the revenue, and then about a $7 million delta to the downside on the adjusted EBITDA. I'm assuming gross margins aren't gonna change too much. So on flat REBS and flat gross margin, where is that $7 million of incremental expense being pointed at in 2022?
And I'm talking about the mid points here for the revenue and the adjusted EBITDA, but it looks like we're talking about roughly flat at the midpoint on our revenue and then about a $7 million delta to the downside on the adjusted EBITDA I'm, assuming gross margins aren't going to change too much so on flat revenues and flat.
<unk> gross margin.
The $7 million of incremental expense being pointed out in 2022.
Yes, so it's a combination of where we can see ROI on the R&D side as you know we've got a new.
Speaker 4: Yeah, so it's a combination of where we can see ROI on the R&D side. As you know, we've got new products being launched in the back half of the year. And then those point high ROI sales head.
New products being launched in the back half of the year and then those point.
Hi, Roy sales heads.
Speaker 4: And it's not, and Eric, it's not, you know, as you look at it, it's not a material growth over our OPEX based on our Q4 run rates.
Okay.
And Eric it's not you know as.
As you look at it it's not a material growth over our Opex based on our Q4 run rates.
Okay. So look at it versus Q4.
Speaker 6: Okay, so look at it versus Q4 as opposed to 2020.
Gas through 2021.
Yes, that's right.
Speaker 6: And I did kind of assume it, but the gross margins that we had, I think we were 67% non-GAAP in Q4. What's, is that an appropriate number for the full year in 2022? Yeah, that's about right.
And then it did kind of assume it but the gross margins.
I think we're 67% non-GAAP in Q4 is that an appropriate number for the full year in 2022.
Yeah, that's about right.
Okay.
And then the.
Okay.
Speaker 6: I'm trying to understand the, we had a step up in the capitalized software and I'm wondering if in Q4, because we've been running about a million, 5 million, 6 for the first nine months and then we're up about 2 million of capitalized software in Q4. Is this kind of a one-time, hey the project got complete and that's going to go back down or is this kind of a new run rate?
I'm trying to understand the we had a step up in the capitalized software and I'm wondering if in Q4, because we had been running about $1 $5 million six for the first nine months and then we're up about $2 million of capitalized software. In Q4 is this kind of a one time the project is complete.
And Thats going to go back down or is this kind of a new run rate.
Speaker 4: Yeah, it'll be a little bit higher, closer to that level for the first part of the year. Then I'll step back down as we launch the new product.
Yeah, it'll be a little bit higher closer to that level for the first part of the year, then I'll step back down as we launched the new products.
Okay. Thanks for taking my question.
Thanks, Eric.
At this time, we have reached the end of the question and answer session and I would now like to turn the call back over to Jeff Ray for any closing remarks.
Speaker 1: At this time, we have reached the end of the question and answer session, and I would now like to turn the call back over to Jeff Wright.
Thank you John and thanks, everyone for joining us.
Speaker 2: Thank you, John . Thanks everyone for joining us. I also want to take a note and thank this amazing leadership team for the journey we've been on. I'm very, very excited about the positioning of this business.
Also wanted to take a note and think this amazing leadership team for the journey we've been on.
Im very very excited about the positioning of this business.
Speaker 2: for Mark and the skills that he brings in. It's a great time to write the next chapter. As disappointed as I am in the fourth quarter results, I am equally as excited about the Foundation for Growth. And I know that Mark will do great things for us. And I thank all of you for your engagement over the last four years. Thank you everyone, goodbye.
Or for Mark.
The skills that he brings and it's a great time to write the next chapter as disappointed as I am in the fourth quarter results I am equally as excited about the foundation for growth.
And I know that that Mark will do great things for us and I. Thank all of you for your engagement over the last four years. Thank you everyone Goodbye.
This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation and have a great day.
Speaker 1: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation and have a great day.