BRIGHTCOVE INC MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (type 10-Q)

BRIGHTCOVE INC MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

(in 1000's, besides share and per share information, except in any other case famous)
The next dialogue and evaluation of our monetary situation and outcomes of
operations ought to be learn along with our condensed consolidated
monetary statements and associated notes showing elsewhere on this Quarterly
Report on Type
10-Q
and our Annual Report on Type
10-Ok
for the 12 months ended December 31, 2020.
Firm Overview
We're a number one international supplier of cloud-based providers for video. We had been
integrated in Delaware in August 2004. With our Emmy
®
-winning expertise and award-winning providers, we assist our prospects notice
the potential of video to deal with business-critical challenges. Prospects rely
on our suite of merchandise, providers, and experience to scale back the price and
complexity related to publishing, distributing, measuring and monetizing
video throughout gadgets.
We promote 5 core video merchandise that assist our prospects use video to additional
their companies in significant methods: (1) Video Cloud, our flagship product and
the world's main on-line video platform, permits our prospects to shortly and
simply distribute high-quality video to Web-connected gadgets;
(2) Brightcove Reside, our industry-leading resolution for reside streaming, delivers
high-quality viewer experiences at scale; (3) Brightcove Beacon, a purpose-built
utility that allows firms to launch premium OTT video experiences
shortly and cheaply, throughout gadgets and with the pliability of
a number of monetization fashions; (4) Brightcove Participant, an exceptionally quick,
cloud-based expertise for creating and managing video experiences; and
(5) Zencoder, a strong, cloud-based video encoding expertise.
Prospects can complement their use of our core merchandise with modular
applied sciences that present enhanced capabilities corresponding to (1) progressive advert
insertion and video stitching by Brightcove SSAI; (2) environment friendly publication
of movies to Fb, Twitter, and YouTube by Brightcove Social; (3) an
app for creating advertising and marketing campaigns with insightful information and {industry}
benchmarks by Brightcove Marketing campaign; (4) easy streaming of video
communications to an app by Brightcove Have interaction; and (5) create branded video
expertise by accessing templates with
built-in
finest practices by Brightcove Gallery.
We've got additionally dropped at market a number of video options, that are comprised of a
suite of video applied sciences that tackle particular buyer
use-cases
and wishes: (1) Digital Occasions Expertise helps manufacturers to rework occasions into
custom-made digital experiences; (2) Brightcove Video Advertising and marketing Suite, permits
entrepreneurs to make use of video to drive model consciousness, engagement and conversion; and
(3) Brightcove Enterprise Video Suite, supplies an enterprise-class platform for
inner communications, worker coaching, reside streaming, advertising and marketing and
ecommerce movies.
Our philosophy for the following few years will proceed to be to spend money on our
product technique and improvement, gross sales,
and go-to-market actions
to assist our long-term income progress. We consider these investments will assist
us tackle among the challenges dealing with our enterprise corresponding to demand for our
merchandise by current and potential prospects, speedy technological change in our
{industry}, elevated competitors and ensuing worth sensitivity. These
investments embody assist for the enlargement of our infrastructure inside our
internet hosting amenities, the hiring of further technical and gross sales personnel, the
innovation of recent options for current merchandise and the event of recent
merchandise. We consider this technique will assist us retain our current prospects,
enhance our common annual subscription income per premium buyer and lead
to the acquisition of recent prospects. Moreover, we consider buyer progress
will allow us to attain economies of scale which can cut back our price of products
offered, analysis and improvement and basic and administrative bills as a
proportion of whole income.
As of September 30, 2021 and 2020 we had 693 and 616 workers, respectively.
We generate income by providing our merchandise to prospects on a
subscription-based, software program as a service, or SaaS, mannequin. Our income grew from
$143.7 million within the 9 months ended September 30, 2020 to $158.5 million in
the 9 months ended September 30, 2021, as a consequence of a rise within the common
annual subscription income per premium buyer.
Included within the consolidated internet earnings for the 9 months ended September 30,
2021 was stock-based compensation expense and amortization of acquired
intangible property of $7.2 million, and $2.3 million, respectively. Included in
the consolidated internet loss for the 9 months ended September 30, 2020 was
merger-related expense, stock-based compensation expense, and amortization of
acquired intangible property of $5.8 million, $6.7 million, and $2.6 million,
respectively.

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For the 9 months ended September 30, 2021 and 2020, our income derived from
prospects situated exterior North America was 44% and 45%, respectively. We anticipate
the share of whole internet income derived from exterior North America to
enhance in future intervals as we proceed to develop our worldwide
operations.
Key Metrics
We usually evaluate a variety of metrics, together with the next key metrics, to
consider our enterprise, measure our efficiency, establish tendencies affecting our
enterprise, formulate monetary projections and make strategic choices.
The next desk contains our key metrics for the intervals introduced:

                                                        9 Months Ended September 30,
                                                        2021                       2020
Prospects (at interval finish)
Premium                                                      2,265                      2,267
Quantity                                                         940                      1,114

Complete prospects (at interval finish)                              3,205                      3,381

Web income retention price                                    97.1 %                     93.8 %
Recurring greenback retention price                                 88 %                       88 %
Common annual subscription income per
premium buyer,
excluding Starter version prospects (in
1000's)                                         $          93.9            $          87.3
Common annual subscription income per
premium buyer
for Starter version prospects solely (in
1000's)                                         $           4.6            $           4.5
Complete backlog, excluding skilled
providers engagements (in hundreds of thousands)                 $         148.6            $         144.2
Complete backlog to be acknowledged over subsequent 12
months, excluding
skilled providers engagements (in
hundreds of thousands)                                          $         115.0            $         109.6



•    Variety of Prospects

. We outline our variety of prospects on the finish of a specific quarter because the

variety of prospects producing subscription income on the finish of the

quarter. We consider the variety of prospects is a key indicator of our market

penetration, the productiveness of our gross sales group and the worth that

our merchandise convey to our prospects. We classify our prospects by together with

them in both premium or quantity choices. Our premium choices embody our

premium Video Cloud prospects (Enterprise and Professional editions), our Zencoder

     prospects (aside from Zencoder prospects on
     month-to-month
     contracts and
     pay-as-you-go

contracts), our SSAI prospects, our Participant prospects, our OTT Circulation prospects

(OTT Circulation is our partner-based OTT platform, which preceded Brightcove

Beacon), our Digital Occasion Expertise prospects, our Video Advertising and marketing Suite

prospects, our Enterprise Video Suite prospects, our Brightcove Beacon

prospects, Brightcove Have interaction prospects and our Brightcove Marketing campaign prospects.

     Our quantity choices embody our Video Cloud Categorical prospects and our
     Zencoder prospects on
     month-to-month
     contracts and
     pay-as-you-go
     contracts.


Our

go-to-market

focus and progress technique is to develop our premium buyer base, as we consider
our premium prospects symbolize a better alternative for our options. Premium
prospects decreased in comparison with the prior interval as a consequence of some prospects deciding
to modify to
in-house
options or different third-party options and a few prospects acquired within the
Ooyala acquisition deciding to not swap to our resolution. Quantity prospects
decreased in latest intervals primarily as a consequence of our discontinuation of the
promotional Video Cloud Categorical providing. Because of this, we've got skilled
attrition of this base stage providing with no corresponding addition of
prospects. We anticipate prospects utilizing our quantity choices to proceed to
lower in 2021 and past as we proceed to focus available on the market for our
premium options.

• Web Income Retention Price

. We assess our means to retain and develop prospects utilizing a metric we

check with as our internet income retention price. We calculate the online income

retention price by dividing: (a) the present annualized recurring income for

premium prospects that existed twelve months prior by (b) the annualized

recurring income for all premium prospects that existed twelve months prior.

We outline annualized recurring income for premium prospects as the combination

annualized contract worth from our premium buyer base, measured as of the

finish of a given interval. We usually calculate our internet income retention price

on a quarterly foundation. For annual intervals, we report internet income retention

price as the typical of the online income retention price for all fiscal quarters

included within the interval. By dividing the retained recurring income by the

base recurring income, we measure our success in retaining and rising

     put in income from the particular cohort of consumers we served on the
     starting of the interval. The recurring greenback retention price focuses on
     contracts up for renewal in a given quarter and solely captures

enlargement/upsells at time of renewal, and is extra prone to swings than

the online income retention price. Accordingly, we plan to proceed to report

the online income retention price and discontinue reporting recurring greenback

     retention price after December 31, 2021.



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•    Recurring Greenback Retention Price

. We assess our means to retain prospects utilizing a metric we check with as our

recurring greenback retention price. We calculate the recurring greenback retention

price by dividing the retained recurring worth of subscription income for a

interval by the earlier recurring worth of subscription income for a similar

interval. We outline retained recurring worth of subscription income because the

dedicated subscription charges for all contracts that renew in a given interval,

together with any enhance or lower in contract worth. We outline earlier

recurring worth of subscription income because the recurring worth from dedicated

subscription charges for all contracts that expire in that very same interval. We

usually calculate our recurring greenback retention price on a month-to-month foundation.

Recurring greenback retention price supplies visibility into our ongoing income.

• Common Annual Subscription Income Per Premium Buyer

. We outline common annual subscription income per premium buyer because the

whole subscription income from premium prospects for an annual interval,

excluding skilled providers income, divided by the typical variety of

premium prospects for that interval. We consider that this metric is essential

in understanding subscription income for our premium choices as well as

to the relative dimension of premium buyer preparations. As our Starter version

has a worth level of $199 or $499 per thirty days, we disclose the typical annual

subscription income per premium buyer individually for Starter version

     prospects and all different premium prospects.



•    Backlog
     . We outline backlog as the combination quantity of transaction worth that's
     allotted to efficiency obligations that haven't but been glad,

excluding skilled service engagements. We consider that this metric is

essential in understanding future enterprise efficiency.


COVID-19
Replace
Whereas the implications of
the COVID-19 pandemic
stay unsure, we plan to proceed to make investments to assist enterprise
progress. We consider that the expansion of our enterprise relies on many elements,
together with our means to develop our buyer base, enhance adoption of our
product choices inside current prospects, develop new merchandise and
functions to increase the performance of our merchandise and supply a excessive
stage of customer support. We anticipate to spend money on gross sales and advertising and marketing to assist
buyer progress. We additionally anticipate to spend money on analysis and improvement as we
proceed to introduce new merchandise and functions to increase the performance
of our merchandise. We intend to keep up a excessive stage of customer support and
assist which we think about essential for our continued success. We additionally anticipate to
proceed to incur basic and administrative bills to assist our enterprise
and to keep up the infrastructure required to be a public firm. We anticipate to
use our money circulate from operations and, if essential, our credit score facility to fund
operations.
Parts of Consolidated Statements of Operations
Income
Subscription and Assist Income
 - We generate subscription and assist income from the sale of our merchandise.
Video Cloud is obtainable in two product strains. The primary product line is comprised
of our premium product editions. All premium editions embody performance to
publish and distribute video to Web-connected gadgets, with larger ranges
of premium editions offering further options and performance. Buyer
preparations are usually
one-year
contracts, which embody a subscription to Video Cloud, fundamental assist
and a pre-determined
quantity of video streams, bandwidth, transcoding and storage. We additionally provide gold,
platinum and platinum plus assist to our premium prospects for a further
charge. The pricing for our premium editions is predicated on the worth of our software program,
in addition to the variety of customers, accounts and utilization, which is comprised of video
streams, bandwidth, transcoding and storage. Ought to a buyer's utilization exceed
the contractual entitlements, the contract will present the speed at which the
buyer should pay for precise utilization above the contractual entitlements. The
second product line is comprised of our quantity product version. Our quantity
editions goal
small and medium-sized companies, or
SMBs. The quantity editions present prospects with the identical fundamental performance
that's provided in our premium product editions however have been designed for
prospects who've decrease utilization necessities and don't usually require
superior options and performance. We discontinued the decrease stage pricing
choices for the Categorical version of our quantity providing and anticipate the entire
variety of prospects utilizing the Categorical version to proceed to lower. Prospects
who buy the quantity editions typically
enter into month-to-month agreements.
Quantity prospects are typically billed on a month-to-month foundation and pay by way of a credit score
card.
Digital Occasions Expertise, Brightcove Reside and Brightcove Participant are provided to
prospects on a subscription foundation. Buyer preparations are
usually one-year contracts,
which embody a subscription to Digital Occasions Expertise, Brightcove Reside or
the Brightcove Participant, fundamental assist and
a pre-determined quantity
of video streams, bandwidth, transcoding, and storage and solely video streams for
Brightcove Participant. We additionally provide gold, platinum, and platinum plus assist to
our Digital Occasions Expertise, Brightcove Reside and Brightcove Participant prospects
for a further charge. The pricing for these merchandise is predicated on the worth of
our software program, in addition to, the variety of customers, accounts and utilization. Ought to a
buyer's utilization exceed the contractual entitlements, the contract will present
the speed at which the shopper should pay for precise utilization above the contractual
entitlements.

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Zencoder is obtainable to prospects on a subscription foundation, with both dedicated
contracts or
pay-as-you-go
contracts. The pricing is predicated on utilization, which is comprised of minutes of video
processed. The dedicated contracts embody a hard and fast variety of minutes of video
processed. Ought to a buyer's utilization exceed the contractual entitlements, the
contract will present the speed at which the shopper should pay for precise utilization
above the contractual entitlements. Zencoder prospects are thought-about premium
prospects aside from Zencoder prospects
on month-to-month contracts
or pay-as-you-go contracts,
that are thought-about quantity prospects.
Brightcove Beacon and Brightcove Marketing campaign are every provided to prospects on a
subscription foundation, with various ranges of performance, utilization entitlements and
assist primarily based on the scale and complexity of a buyer's wants. Buyer
preparations are usually
one-year
contracts.
Video Advertising and marketing Suite and Enterprise Video Suite are provided to prospects on a
subscription foundation in Starter, Professional and Enterprise editions. The Professional and
Enterprise buyer preparations are usually
one-year
contracts, which usually embody a subscription to Video Cloud, Gallery,
Brightcove Social (for Video Advertising and marketing Suite prospects) or Brightcove Reside (for
Enterprise Video Suite prospects), fundamental assist and a
pre-determined
quantity of video streams or performs (for Video Advertising and marketing Suite prospects), viewers
(for Enterprise Video Suite prospects), bandwidth and storage or movies. We additionally
typically provide gold assist or platinum assist to those prospects for an
further charge, which incorporates prolonged telephone assist. The pricing for our Professional
and Enterprise editions is predicated on the variety of customers, accounts and utilization,
which is comprised of video streams or performs, viewers, bandwidth and storage or
movies. Ought to a buyer's utilization exceed the contractual entitlements, the
contract will present the speed at which the shopper should pay for precise utilization
above the contractual entitlements, or would require the shopper to improve its
bundle upon renewal. The Starter version supplies prospects with the identical fundamental
performance that's provided in our Professional and Enterprise editions however has been
designed for patrons who've decrease utilization necessities and don't usually
search superior options and performance. Prospects who buy the Starter
version might enter into
one-year
agreements or
month-to-month
agreements. Starter prospects with
month-to-month
agreements are typically billed on a month-to-month foundation and pay by way of a bank card.
All Brightcove Beacon, OTT Circulation, Brightcove Marketing campaign, Brightcove Reside, SSAI,
Participant, Digital Occasions Expertise, Video Advertising and marketing Suite and Enterprise Video
Suite prospects are thought-about premium prospects.
Skilled Providers and Different Income
- Skilled providers and different income consists of providers corresponding to
implementation, software program customizations and venture administration for patrons who
subscribe to our premium editions. These preparations are priced both on a
fastened charge foundation with a portion due upon contract signing and the rest due
when the associated providers have been accomplished, or on a time and supplies foundation.
Value of Income
Value of subscription, assist {and professional} providers income primarily
consists of prices associated to supporting and internet hosting our product choices and
delivering our skilled providers. These prices embody salaries, advantages,
incentive compensation and stock-based compensation expense associated to the
administration of our information facilities, our buyer assist staff and our skilled
providers workers. Along with these bills, we incur third-party service
supplier prices corresponding to information middle and content material supply community, or CDN,
bills, allotted overhead, depreciation expense and amortization of
capitalized internal-use software program
improvement prices and bought intangible property. We allocate overhead prices
corresponding to lease, utilities and provides to all departments primarily based on relative
headcount. As such, basic overhead bills are mirrored in price of income
along with every working expense class. The prices related to
offering skilled providers are considerably larger as a proportion of
associated income than the prices related to delivering our subscription and
assist providers as a result of labor prices of offering skilled providers.
Value of income elevated in absolute {dollars} from the primary 9 months of 2020
to the primary 9 months of 2021. In future intervals we anticipate our price of
income will enhance in absolute {dollars} as our income will increase. Value of
income as a proportion of income may fluctuate from interval to interval
relying on the variety of our skilled providers engagements and any
related prices referring to the supply of subscription providers and the
timing of serious expenditures. To the extent that our buyer base grows,
we intend to proceed to speculate further sources in increasing the supply
functionality of our merchandise and different providers. The timing of those further
bills may have an effect on our price of income, each when it comes to absolute {dollars} and
as a proportion of income, in any explicit quarterly or annual interval.
Working Bills
We classify our working bills as follows:
Analysis and Growth
. Analysis and improvement bills consist primarily of personnel and associated
bills for our analysis and improvement workers, together with salaries, advantages,
incentive compensation and stock-based compensation, along with the prices
related to contractors and allotted overhead. We've got targeted our analysis
and improvement efforts on increasing the

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performance and scalability of our merchandise and enhancing their ease of use,
in addition to creating new product choices. We anticipate analysis and improvement
bills to extend in absolute {dollars} as we intend to proceed to
periodically launch new options and performance, develop our product
choices, proceed the localization of our merchandise in varied languages,
improve and prolong our service choices, and develop new applied sciences. Over the
long run, we consider that analysis and improvement bills as a proportion of
income will lower, however will range relying upon the combination of income from new
and current merchandise, options and performance, in addition to adjustments within the
expertise that our merchandise should assist, corresponding to new working methods or new
Web-connected gadgets.
Gross sales and Advertising and marketing
. Gross sales and advertising and marketing bills consist primarily of personnel and associated
bills for our gross sales and advertising and marketing workers, together with salaries, advantages,
incentive compensation, commissions, stock-based compensation and journey prices,
amortization of acquired intangible property, along with prices related to
advertising and marketing and promotional occasions, company communications, promoting, different
model constructing and product advertising and marketing bills and allotted overhead. Our gross sales
and advertising and marketing bills have elevated in absolute {dollars} in every of the final
three years. We intend to proceed to spend money on gross sales and advertising and marketing and develop
the sale of our product choices inside our current buyer base, construct model
consciousness and sponsor further advertising and marketing occasions. Accordingly, we anticipate gross sales
and advertising and marketing expense to proceed to be our most vital working expense
in future intervals. Over the long run, we consider that gross sales and advertising and marketing
expense as a proportion of income will lower, however will range relying upon
the combination of income from new and current prospects and from
small, medium-sized and
enterprise prospects, in addition to adjustments within the productiveness of our gross sales and
advertising and marketing packages.
Common and Administrative
. Common and administrative bills consist primarily of personnel and associated
bills for government, authorized, finance, info expertise and human
sources capabilities, together with salaries, advantages, incentive compensation and
stock-based compensation. Common and administrative bills additionally embody the
prices related to skilled charges, insurance coverage premiums, different company
bills and allotted overhead. Over the long run, we consider that basic and
administrative bills as a proportion of income will lower.
Merger-related
. Merger-related prices include bills associated to mergers and acquisitions,
integration prices and basic company improvement actions.
Different (Profit) Expense
. Displays different working advantages, prices that don't straight relate to the
working actions listed above.
Different Revenue (Expense), internet
Different earnings (expense) consists primarily of curiosity earnings earned on our money,
money equivalents, and international change features and losses.
Revenue Taxes
As a part of the method of making ready our consolidated monetary statements, we
are required to estimate our taxes in every of the jurisdictions wherein we
function. We account for earnings taxes in accordance with the asset and legal responsibility
technique. Below this technique, deferred tax property and liabilities are acknowledged
primarily based on momentary variations between the monetary reporting and earnings tax
bases of property and liabilities utilizing statutory charges. As well as, this technique
requires a valuation allowance towards internet deferred tax property if, primarily based upon
the out there proof, it's extra seemingly than not that some or the entire
deferred tax property won't be realized. We've got offered a valuation allowance
towards our current U.S. internet deferred tax property at December 31, 2020. We
keep internet deferred tax liabilities for momentary variations associated to our
Japanese subsidiary.
Inventory-Primarily based Compensation Expense
Our price of income, analysis and improvement, gross sales and advertising and marketing, and basic
and administrative bills embody stock-based compensation expense.
Inventory-based compensation expense represents the grant date truthful worth of
excellent inventory choices and restricted inventory awards, which is acknowledged as
expense over the respective inventory possibility and restricted inventory award service
intervals. For the three months ended September 30, 2021 and 2020, we recorded
$2.3 million and $2.0 million, respectively, of stock-based compensation
expense. We anticipate stock-based compensation expense to extend in absolute
{dollars} in future intervals.

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Overseas Forex Translation
With regard to our worldwide operations, we often enter into
transactions in currencies aside from the U.S. greenback. Because of this, our income,
bills and money flows are topic to fluctuations as a consequence of adjustments in international
forex change charges, significantly adjustments within the euro, British pound,
Australian greenback, and Japanese yen. In intervals when the U.S. greenback declines in
worth as in comparison with the foreign currency wherein we conduct enterprise, our
international currency-based income and bills typically enhance in worth when
translated into U.S. {dollars}. We anticipate the share of whole internet income
derived from exterior North America to extend in future intervals as we proceed
to develop our worldwide operations.
Important Accounting Insurance policies and Estimates
Our consolidated monetary statements are ready in accordance with accounting
ideas typically accepted in the USA. The preparation of those
monetary statements requires us to make estimates and assumptions that have an effect on
the reported quantities of property and liabilities and the disclosure of contingent
property and liabilities on the date of the monetary statements and the reported
quantities of income and bills through the reporting intervals. We base our
estimates on historic expertise and on varied different assumptions which might be
believed to be affordable beneath the circumstances, the outcomes of which type the
foundation for making judgments concerning the carrying values of property and liabilities
that aren't readily obvious from different sources. Our precise outcomes might differ
from these estimates beneath completely different assumptions or circumstances.
We think about the assumptions and estimates related to income recognition,
earnings taxes, enterprise mixtures, intangible property and goodwill to be our
essential accounting insurance policies and estimates.
For an in depth rationalization of the judgments made in these areas, check with
"Administration's Dialogue and Evaluation of Monetary Situation and Outcomes of
Operations" in our Annual Report on Type
10-Ok
for the 12 months ended December 31, 2020, which we filed with the Securities and
Change Fee on February 24, 2021.
Outcomes of Operations
The next tables set forth our outcomes of operations for the intervals
introduced. The information has been derived from the unaudited condensed consolidated
monetary statements contained on this Quarterly Report on Type
10-Q
which, within the opinion of our administration, replicate all changes, consisting
solely of regular recurring changes, essential to current pretty the monetary
place and outcomes of operations for the interim intervals introduced. The
period-to-period
comparability of monetary outcomes just isn't essentially indicative of future outcomes.
This info ought to be learn along with the consolidated monetary
statements and notes thereto included in our Annual Report on Type
10-Ok
for the 12 months ended December 31, 2020.

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                                      Three Months Ended September 30,             9 Months Ended September 30,
                                         2021                   2020                  2021                   2020

                                                    (in 1000's, besides share and per share information)
Income:
Subscription and assist
income                            $         49,226         $      46,338       $        148,667         $    136,613
Skilled providers and
different income                                 2,937                 2,746                  9,785                7,050

Complete income                                52,163                49,084                158,452              143,663
Value of income:
Value of subscription and
assist income                              16,406                15,735                 46,840               50,290
Value {of professional} providers
and different income                             2,247                 2,363                  8,205                6,349

Complete price of income                        18,653                18,098                 55,045               56,639

Gross revenue                                 33,510                30,986                103,407               87,024
Working bills:
Analysis and improvement                      7,902                 8,215                 24,041               26,199
Gross sales and advertising and marketing                          18,451                14,813                 52,730               42,370
Common and administrative                    7,345                 6,694                 21,822               19,633
Merger-related                                   45                    -                     300                5,768
Different (profit) expense                          -                     -                  (1,965 )                 -

Complete working bills                     33,743                29,722                 96,928               93,970

(Loss) earnings from operations                  (233 )               1,264                  6,479               (6,946 )
Different (expense) earnings, internet                    (319 )                 204                   (937 )               (291 )

(Loss) earnings earlier than earnings
taxes                                          (552 )               1,468                  5,542               (7,237 )
Provision for earnings taxes                      468                   154                    562                  597

Web (loss) earnings                  $         (1,020 )       $       1,314       $          4,980         $     (7,834 )
Web (loss) earnings per
share-basic and diluted
Primary                              $          (0.02 )       $        0.03       $           0.12         $      (0.20 )
Diluted                            $          (0.02 )       $        0.03       $           0.12         $      (0.20 )
Weighted-average shares-basic
and diluted
Primary                                    40,934,689            39,682,337             40,570,817           39,319,703
Diluted                                  40,934,689            40,645,982             42,237,438           39,319,703


Overview of Outcomes of Operations for the Three Months Ended September 30, 2021
and 2020
Complete income elevated by 6%, or $3.1 million, within the three months ended
September 30, 2021 in comparison with the three months ended September 30, 2020 as a consequence of
a rise in subscription and assist income of 6%, or $2.9 million,
primarily as a consequence of a rise in common income per premium buyer of 6.9%.
Skilled providers and different income additionally elevated by 7% or $191.
Skilled providers and different income will range from interval to interval
relying on the variety of implementations and different tasks which might be in
course of. As well as, our income from premium choices grew by $3.3 million,
or 7%, within the three months ended September 30, 2021 in comparison with the three months
ended September 30, 2020. Our means to proceed to supply the product
performance and efficiency that our prospects require will probably be a significant factor
in our means to proceed to extend income.
Our gross revenue elevated by $2.5 million, or 8%, within the three months ended
September 30, 2021 in comparison with the three months ended September 30, 2020,
primarily as a consequence of a rise in income and our transition of acquired Ooyala
prospects to our expertise throughout 2020, which resulted in decreased prices. Our
means to proceed to keep up our total gross revenue will rely primarily
on our means to proceed controlling our prices of supply.
Loss from operations was $0.2 million within the three months ended September 30,
2021 in comparison with a loss from operations of $1.3 million within the three months
ended September 30, 2020. That is primarily as a consequence of a rise in income of
$3.1 million and the advance of gross revenue on subscription and assist
income within the three months ended September 30, 2021 in comparison with the three
months ended September 30, 2020.

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Income

                                                            Three Months Ended September 30,
                                                         2021                                2020                        Change
                                                             Proportion of                     Proportion of

Income by Product Line                       Quantity            Income     

Quantity Income Quantity %


                                                                       (in 1000's, besides percentages)
Premium                                     $   51,466                   99 %    $ 48,175                  98 %    $ 3,291          7 %
Quantity                                             697                    1           909                   2         (212 )      (23 )

Complete                                       $   52,163                  100 %    $ 49,084                 100 %    $ 3,079          6 %



In the course of the three months ended September 30, 2021, income elevated by
$3.1 million, or 6%, in comparison with the three months ended September 30, 2020,
primarily as a consequence of a rise in income from our premium choices. The rise
in premium income of $3.3 million, or 7%, is primarily the results of elevated
premium subscription choices to our prospects as the typical annual
subscription income per premium buyer elevated 6.9% in comparison with the prior
interval. Within the three months ended September 30, 2021, quantity income decreased
by $212, or 23%, in comparison with the three months ended September 30, 2020, as we
proceed to focus available on the market for our premium options.

                                                      Three Months Ended September 30,
                                                   2021                                2020                      Change
                                                       Proportion of                     Proportion of

Income by Sort                         Quantity            Income           Quantity          Income          Quantity       %

                                                                (in 1000's, besides percentages)
Subscription and assist              $   49,226                   94 %    $ 46,338                  96 %    $ 2,888       6 %
Skilled providers and different            2,937                    6         2,746                   4          191       7

Complete                                 $   52,163                  100 %    $ 49,084                 100 %    $ 3,079       6 %



In the course of the three months ended September 30, 2021, subscription and assist
income elevated by $2.9 million, or 6%, in comparison with the three months ended
September 30, 2020. The rise was primarily associated to a rise within the
common annual subscription income per premium buyer of 6.9% through the
three months ended September 30, 2021 in comparison with the three months ended
September 30, 2020. As well as, skilled providers and different income
elevated by $191, or 7%, in comparison with the corresponding quarter within the prior
12 months. Skilled providers and different income will range from interval to interval
relying on the variety of implementations and different tasks which might be in
course of.

                                                          Three Months Ended September 30,
                                                       2021                                2020                        Change
                                                           Proportion of                     Proportion of

Income by Geography                        Quantity            Income       

Quantity Income Quantity %


                                                                     (in 1000's, besides percentages)
North America                             $   29,420                   56 %    $ 27,515                  56 %    $ 1,905          7 %

Europe                                         9,689                   19         8,435                  17        1,254         15
Japan                                          6,185                   12         5,688                  12          497          9
Asia Pacific                                   6,746                   13         7,211                  15         (465 )       (6 )
Different                                            123                   -            235                  -          (112 )      (48 )

Worldwide subtotal                        22,743                   44        21,569                  44        1,174          5

Complete                                     $   52,163                  100 %    $ 49,084                 100 %    $ 3,079          6 %



For functions of this part, we designate income by geographic areas primarily based
upon the places of our prospects. North America is comprised of income from
the USA, Canada and Mexico. Worldwide is comprised of income from
places exterior of North America. Relying on the timing of recent buyer
contracts, income combine from a geographic area can range from interval to interval.
In the course of the three months ended September 30, 2021, whole income for North
America elevated $1.9 million, or 7%, in comparison with the three months ended
September 30, 2020. Within the three months ended September 30, 2021, whole income
exterior of North America elevated $1.2 million, or 5%, in comparison with the three
months ended September 30, 2020. The rise in income from worldwide
areas is primarily associated to will increase in income in Europe.

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Value of Income

                                                     Three Months Ended September 30,
                                                  2021                                 2020                       Change
                                                       Proportion of                     Proportion of

                                                          Associated                           Associated

Value of Income                       Quantity              Income           Quantity          Income          Quantity        %

                                                                (in 1000's, besides percentages)
Subscription and assist            $    16,406                    33 %    $ 15,735                  34 %    $   671         4 %
Skilled providers and different           2,247                    77         2,363                  86         (116 )      (5 )

Complete                               $    18,653                    36 %    $ 18,098                  37 %    $   555         3 %



Within the three months ended September 30, 2021, price of subscription and assist
income elevated by $671, or 4%, in comparison with the three months ended
September 30, 2020. The rise resulted primarily from the 6% enhance in
subscription and assist income within the three months ended September 30, 2021
in comparison with the three months ended September 30, 2020. Within the three months ended
September 30, 2021, price {of professional} providers and different income decreased by
$116, or 5%, in comparison with the three months ended September 30, 2020. This
lower corresponds to a lower in contractor bills of $216 within the three
months ended September 30, 2021, in comparison with the three months ended
September 30, 2020.
Gross Revenue

                                                    Three Months Ended September 30,
                                                 2021                                 2020                       Change
                                                      Proportion of                     Proportion of

                                                         Associated                           Associated

Gross Revenue                         Quantity              Income           Quantity          Income          Quantity       %

                                                              (in 1000's, besides percentages)
Subscription and assist           $    32,820                    67 %    $ 30,603                  66 %    $ 2,217        7 %
Skilled providers and different            690                    23           383                  14          307       80 %

Complete                              $    33,510                    64 %    $ 30,986                  63 %    $ 2,524        8 %



The general gross revenue proportion was 64% for the three months ended
September 30, 2021 in comparison with 63% for the three months ended September 30,
2020. Subscription and assist gross revenue elevated $2.2 million, or 7%,
in comparison with the three months ended September 30, 2020. The rise in gross
revenue {dollars} for subscription and assist income was as a consequence of incremental prices
from the acquisition of Ooyala within the three months ended September 30, 2020
which didn't recur within the three months ended September 30, 2021.
Working Bills

                                                          Three Months Ended September 30,
                                                       2021                                 2020                        Change
                                                            Proportion of                     Proportion of

Working Bills                         Quantity              Income      

Quantity Income Quantity %


                                                                     (in 1000's, besides percentages)
Analysis and improvement                 $     7,902                    15 %    $  8,215                  17 %    $  (313 )       (4 )%
Gross sales and advertising and marketing                           18,451                    35        14,813                  30        3,638         25
Common and administrative                     7,345                    14         6,694                  14          651         10
Merger-related                                    45                    -             -                   -            45        N/A

Complete                                    $    33,743                    65 %    $ 29,722                  61 %    $ 4,021         14 %



Analysis and Growth
.
 Within the three months ended September 30, 2021, analysis and improvement expense
decreased by $313 or 4%, in comparison with the three months ended September 30, 2020
primarily as a consequence of a lower in lease and contractor bills of $315 and $292
respectively. These decreases had been offset by a rise in stock-based
compensation of $267, in addition to varied different bills that, within the mixture,
elevated by roughly $27. We anticipate our analysis and improvement expense
as a proportion of income to stay comparatively unchanged.

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Gross sales and Advertising and marketing
.
Within the three months ended September 30, 2021, gross sales and advertising and marketing expense
elevated by $3.6 million, or 25%, in comparison with the three months ended
September 30, 2020, primarily as a consequence of a rise in advertising and marketing campaigns,
employee-related, and fee bills of $1.8 million, $1.6 million, and
$1.2 million, respectively. These will increase had been offset by a lower in lease
and contractor bills of $435 and $627, respectively. The remaining lower
was as a consequence of varied different bills that, in mixture, decreased by roughly
$46. We anticipate that our gross sales and advertising and marketing expense will enhance in absolute
{dollars} for the rest of 2021 as in comparison with the prior interval as we'll
proceed to spend money on these actions to assist income progress.
Common and Administrative
.
Within the three months ended September 30, 2021, basic and administrative expense
elevated by $651, or 10%, in comparison with the three months ended September 30,
2020, primarily as a consequence of will increase in exterior skilled providers, employee-
associated, and stock-based compensation bills of $244, $193, and $176,
respectively. The remaining enhance was as a consequence of varied different bills that, in
mixture, elevated by roughly $38. In future intervals, we anticipate basic
and administrative expense to stay comparatively unchanged.
Merger-Associated
.
 Within the three months ended September 30, 2021, merger-related bills remained
comparatively unchanged, in comparison with the three months ended September 30, 2020.
Overview of Outcomes of Operations for the 9 Months Ended September 30, 2021
and 2020
Complete income elevated by 10%, or $14.8 million, within the 9 months ended
September 30, 2021 in comparison with the 9 months ended September 30, 2020 as a consequence of
a rise in subscription and assist income of 9%, or $12.1 million,
primarily as a consequence of a rise in income from our premium choices. Skilled
providers and different income additionally elevated by 39%, or $2.7 million, in comparison with
the corresponding interval within the prior 12 months. Skilled providers and different
income will range from interval to interval relying on the variety of
implementations and different tasks which might be in course of. Our income from premium
choices grew by $15.3 million, or 11%, within the 9 months ended September 30,
2021 in comparison with the 9 months ended September 30, 2020. Our means to
proceed to supply the product performance and efficiency that our prospects
require will probably be a significant factor in our means to proceed to extend income.
Our gross revenue elevated by $16.4 million, or 19%, within the 9 months ended
September 30, 2021 in comparison with the 9 months ended September 30, 2020, as a consequence of
a rise in income and an enchancment in subscription and assist gross
revenue. The rise in income is because of a rise in our common income per
premium buyer. The advance in subscription and assist gross revenue was
primarily as a consequence of transition of acquired Ooyala prospects to our expertise
throughout 2020, which decreased prices. Our means to proceed to keep up our
total gross revenue will rely totally on our means to proceed
controlling our prices of supply.
Revenue from operations was $6.5 million within the 9 months ended September 30,
2021 in comparison with a loss from operations of $6.9 million within the 9 months ended
September 30, 2020. That is primarily as a result of aforementioned enhance in
income of $14.8 million and reduces in prices of income of $1.6 million in
the 9 months ended September 30, 2021 in comparison with the 9 months ended
September 30, 2020.
Income

                                          9 Months Ended September 30,
                                      2021                               2020                         Change
                                         Proportion of                      Proportion of

Income by Product Line    Quantity           Income           Quantity       
   Income           Quantity         %

                                                     (in 1000's, besides percentages)
Premium                   $ 156,182                  99 %    $ 140,904                  98 %    $ 15,278         11 %
Quantity                        2,270                   1          2,759                   2          (489 )      (18 )

Complete                     $ 158,452                 100 %    $ 143,663                 100 %    $ 14,789         10 %



In the course of the 9 months ended September 30, 2021, income elevated by
$14.8 million, or 10%, in comparison with the 9 months ended September 30, 2020,
primarily as a consequence of a rise in income from our premium choices, which
consists of subscription and assist income in addition to skilled providers.
The rise in premium income of $15.3 million, or 11%, is primarily the
results of an 8% enhance in common annual subscription income per premium
buyer through the 9 months ended September 30, 2021 in comparison with the 9
months ended September 30, 2020. This enhance in common annual subscription
income per premium buyer is primarily as a consequence of premium prospects ordering extra
of our merchandise.

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In the course of the 9 months ended September 30, 2021, quantity income decreased by
$489 or 18%, in comparison with the 9 months ended September 30, 2020, as we
proceed to focus available on the market for our premium options.

                                                      9 Months Ended September 30,
                                                  2021                               2020                        Change
                                                     Proportion of                      Proportion of

Income by Sort                        Quantity           Income           Quantity           Income           Quantity       %


                                                                (in 1000's, besides percentages)
Subscription and assist              $ 148,667                  94 %    $ 136,613                  95 %    $ 12,054        9 %
Skilled providers and different           9,785                   6          7,050                   5         2,735       39

Complete                                 $ 158,452                 100 %    $ 143,663                 100 %    $ 14,789       10 %



In the course of the 9 months ended September 30, 2021, subscription and assist
income elevated by $12.1 million, or 9%, in comparison with the 9 months ended
September 30, 2020. The rise was primarily associated to an 8% enhance in
common annual subscription income per premium buyer.
As well as, skilled providers and different income elevated by $2.7 million,
or 39%, in comparison with the corresponding interval within the prior 12 months. This enhance
was pushed by one explicit venture that was accomplished within the three months
ended March 31, 2021. Skilled providers and different income will range from
interval to interval relying on the variety of implementations and different tasks
which might be in course of.

                                                         9 Months Ended September 30,
                                                     2021                               2020                         Change
                                                        Proportion of                      Proportion of

Income by Geography                      Quantity           Income           Quantity           Income           Quantity         %

                                                                    (in 1000's, besides percentages)
North America                            $  89,204                  56 %    $  78,553                  55 %    $ 10,651         14 %

Europe                                      28,159                  18         25,323                  18         2,836         11
Japan                                       19,263                  12         17,344                  12         1,919         11
Asia Pacific                                21,421                  14         21,795                  15          (374 )       (2 )
Different                                          405                  -             648                  -           (243 )      (38 )

Worldwide subtotal                      69,248                  44         65,110                  45         4,138          6

Complete                                    $ 158,452                 100 %    $ 143,663                 100 %    $ 14,789         10 %



In the course of the 9 months ended September 30, 2021, whole income for North America
elevated $10.7 million, or 14%, in comparison with the 9 months ended September 30,
2020. The rise was as a consequence of income from our premium choices.
In the course of the 9 months ended September 30, 2021, whole income exterior of North
America elevated $4.1 million, or 6%, in comparison with the 9 months ended
September 30, 2020. The rise in income from worldwide areas is
primarily associated to elevated gross sales of our premium choices to current
prospects in Japan and Europe.
Value of Income

                                                     9 Months Ended September 30,
                                                  2021                                2020                        Change
                                                      Proportion of                     Proportion of

                                                         Associated                           Associated

Value of Income                       Quantity             Income           Quantity          Income           Quantity        %

                                                                (in 1000's, besides percentages)
Subscription and assist            $   46,840                    32 %    $ 50,290                  37 %    $ (3,450 )      (7 )%
Skilled providers and different          8,205                    84         6,349                  90         1,856        29

Complete                               $   55,045                    35 %    $ 56,639                  39 %    $ (1,594 )      (3 )%



Within the 9 months ended September 30, 2021, price of subscription and assist
income decreased $3.5 million, or 7%, in comparison with the 9 months ended
September 30, 2020. The lower resulted primarily from incremental prices from
the acquisition of Ooyala within the 9 months ended September 30, 2020 which did
not recur within the 9 months ended September 30, 2021.

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Within the 9 months ended September 30, 2021, price {of professional} providers and
different income elevated $1.9 million, or 29%, in comparison with the 9 months ended
September 30, 2020. This enhance corresponds to a rise in contractor
bills of $1.7 million within the 9 months ended September 30, 2021 in comparison with
the 9 months ended September 30, 2020.
Gross Revenue

                                                   9 Months Ended September 30,
                                                2021                                2020                        Change
                                                    Proportion of                     Proportion of

                                                       Associated                           Associated

Gross Revenue                        Quantity             Income           Quantity          Income           Quantity        %

                                                              (in 1000's, besides percentages)
Subscription and assist          $   101,827                   68 %    $ 86,323                  63 %    $ 15,504        18 %
Skilled providers and different         1,580                   16           701                  10           879       125

Complete                             $   103,407                   65 %    $ 87,024                  61 %    $ 16,383        19 %



The general gross revenue proportion was 65% and 61% for the 9 months ended
September 30, 2021 and 2020, respectively. Subscription and assist gross revenue
elevated $15.5 million, or 18%, in comparison with the 9 months ended September 30,
2020. It's seemingly that gross revenue, as a proportion of income, will fluctuate
quarter by quarter as a result of timing and mixture of subscription and assist income
{and professional} providers and different income, and the sort, timing and length
of service required in delivering sure tasks.
Working Bills

                                                          9 Months Ended September 30,
                                                       2021                                2020                        Change
                                                           Proportion of                     Proportion of

Working Bills                         Quantity             Income           Quantity          Income           Quantity         %

                                                                     (in 1000's, besides percentages)
Analysis and improvement                 $   24,041                    15 %    $ 26,199                  18 %    $ (2,158 )       (8 )%
Gross sales and advertising and marketing                          52,730                    33        42,370                  29        10,360         24
Common and administrative                   21,822                    14        19,633                  14         2,189         11
Merger-related                                  300                     0         5,768                   4        (5,468 )      (95 )
Different (profit) expense                      (1,965 )                  (1 )          -                   -         (1,965 )      N/A

Complete                                    $   96,928                    61 %    $ 93,970                  65 %    $  2,958          3 %



Analysis and Growth
.
 Within the 9 months ended September 30, 2021, analysis and improvement expense
decreased by $2.2 million, or 8%, in comparison with the 9 months ended
September 30, 2020 primarily as a consequence of a lower in employee-related and lease
bills of $1.6 million and $1.0 million, respectively. These decreases had been
partially offset by a rise in stock-based compensation expense of $423.
Gross sales and Advertising and marketing
.
Within the 9 months ended September 30, 2021, gross sales and advertising and marketing expense
elevated by $10.4 million, or 24%, in comparison with the 9 months ended
September 30, 2020 primarily as a consequence of will increase in advertising and marketing campaigns, fee
and employee-related bills of $4.7 million, $4.1 million, and $3.8 million,
respectively. These will increase had been offset by decreases in lease, contractor and
journey bills of $1.2 million, $550 and $404, respectively.
Common and Administrative
.
Within the 9 months ended September 30, 2021, basic and administrative
elevated by $2.2 million or 11%, in comparison with the 9 months ended
September 30, 2020 primarily as a consequence of will increase in exterior accounting and authorized
charges, employee-related, stock-based compensation, and contractor bills of
$995, $669, $330 and $297, respectively.
Merger-Associated
.
 Within the 9 months ended September 30, 2021, merger-related bills decreased
$5.5 million as a consequence of prices incurred in reference to basic merger and associated
actions in 2020 which didn't recur within the present interval.
Different (profit) expense
.
 On March 27, 2020, in response to the
COVID-19
pandemic, the U.S. authorities enacted the Coronavirus Help, Reduction, and Financial
Safety Act, which was amended by the Consolidated Appropriations Act in
December of 2020 (the "CARES Act"). The CARES Act supplies quite a few tax
provisions and different stimulus measures, together with the creation of sure
worker retention credit. Within the first quarter of 2021, we acknowledged a
advantage of $1,965 from the CARES Act associated to worker retention credit. The
profit was recorded as Different (profit) expense.

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Liquidity and Capital Sources
Money and money equivalents.
Our money and money equivalents at September 30, 2021 had been held for working
capital functions and had been invested primarily in money. We don't enter into
investments for buying and selling or speculative functions. At September 30, 2021 and
December 31, 2020, we had $14.5 million and $17.1 million, respectively, of money
and money equivalents held by subsidiaries in worldwide places, together with
subsidiaries situated in Japan and the United Kingdom. These earnings will be

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