By Sam Quest
Brightcove Inc. (NASDAQ:BCOV) yesterday announced financial results for the second quarter of its fiscal 2014 (2QFY14), after the closing bell. It posted per-share loss (NYSE:LPS) of $0.04, flat year-over-year (YoY), and beat analysts' estimates of $0.11.
Brightcove's revenues were $31 million, up 15.2% YoY, and outstripping the consensus estimate of $30.23 million.
Key Second-Quarter Developments
Revenues grew on the back of a 10% net increase in the premium customers. Total customers were 5,995 for the quarter. As a result, revenue from subscriptions and support services jumped up to $29.9 million, an increase of 17% YoY. On the other hand, revenue from professional services and other sources declined to $1.1 million, a 15.4% decline YoY.
The company also launched Brightcove Video Marketing Suite and Brightcove gallery this quarter. The former is a comprehensive suite of technologies that helps marketers maximize returns on investments, and the latter is a tool that helps its digital marketing customers create unique video portal experiences for their customers.
The company also signed a partnership agreement with Oracle Eloqua in order to launch the Brightcove Cloud Component for Oracle Eloqua. This integration will assist marketers in adding their Brightcove Video Cloud software-powered videos to their Oracle Eloqua campaigns and pages.
Despite the company's growth during the quarter, it issued weak guidance for the ongoing quarter and the full year. Brightcove expects third-quarter revenue to be $30-30.5 million, lower than analysts' estimates of $32.4 million. The company expects to lose $0.08-0.09 per share, also below the consensus estimate of $0.07.
The company also lowered its year-end guidance: revenues are expected to be $122-123.5 million, and per-share loss is expected to come in at $0.24-0.28. These estimates are also lower than the Street's projections of $128.9 million and $0.22, respectively.
There are three reasons as to why company has lowered its future financial outlook. Firstly, it expects that Rovio, one of its largest European customers, will not renew its contract when it expires in August. Rovio has been developing its own internal contact management system for a considerable period of time now. Finland-based Rovio contributed 3.8% of the company's total revenue in the first quarter.
Secondly, the company expects revenue from its "Once" product will drop $1.5 million its original forecasts for 2014; customers haven't implemented the product as fast as the company had expected. The company is also experiencing problems closing out large deals in the pipeline.
Shares of Brightcove are down a whopping 38% in late trading on the Nasdaq.
Disclosure: No positions.