Brightcove's Outlook Looks Brighter

Summary

• Under CEO Jeff Ray, Brightcove is strengthening its sales effort, targeting four faster-growing niche markets and investing to identify new opportunities.
• These efforts have temporarily disrupted operations in 19Q3 and 19Q4; but management expects to deliver improved performance beginning in 2020.
• Brightcove's stock price already anticipates improved performance; so further upside requires the company to build upon its market leadership to achieve sustainable revenue and profit growth.
• With Mr. Ray's systematic and comprehensive go-to-market strategies and the addition of several seasoned executives to Brightcove's management team, improved performance looks like a good bet.

A key change at Brightcove (BCOV) since my previous articles has been the turnover at the top. In August 2017, after three consecutive quarters of earnings misses, Dave Mendels, who had served as CEO for more than four years, agreed with the Board to step down. Andrew Feinberg, Brightcove’s COO, stepped in as interim CEO.

In April 2018, Brightcove appointed Hugh Jefferson (Jeff) Ray III as its CEO. Mr. Ray had served successfully in leadership roles at several technology companies, including Ellucian, Ventyx, DS Solidworks, Progress Software and Compuware. Brightcove Chairman Gary Haroian said that Mr. Ray “has demonstrated an ability to enhance go-to-market strategies, scale enterprises and expand business opportunities at global technology companies.” His “deep operational and enterprise sales experience will be instrumental in positioning Brightcove for improved market share and long-term profitable growth.”

Brightcove’s Business. Brightcove is a leading global provider of cloud-based video services. Its flagship product, Brightcove Video Cloud, is the world’s leading online video platform. Video Cloud enables customers to publish and distribute high quality video to all types of internet-connected devices quickly, easily and cost-effectively. It also assists customers in monetizing video offerings and analyzing their performance.

While Video Cloud has historically accounted for substantially all of the company’s revenue, Brightcove has a suite of complementary cloud-based products, These include Brightcove Zencoder, a video encoding service; Brightcove SSAI, an ad insertion and video stitching service; Brightcove Player, which creates and manages web-based video players; Brightcove Video Marketing Suite, a set of video services designed to assist marketers in driving awareness, engagement and conversion among customers accessing video content; and Brightcove Enterprise Video Suite, for internal communications (including live streaming of employee meetings) and employee training.

Brightcove’s newest offerings include Brightcove OTT Flow, powered by Accedo, and Brightcove Beacon, both targeting the

Analyst’s Disclosure:I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.