Executive Summary

Q1 2024 revenue was $50.5M (+3% y/y) at or above the high end of guidance; Adjusted EBITDA was $5.0M (10% margin) and non-GAAP diluted EPS was $0.01, while GAAP diluted EPS was $0.04 driven in part by a $6M patent sale gain .
Backlog reached an all-time high: total backlog $185.4M (+2.3% y/y) and 12‑month backlog $127.3M; ARPU per premium customer hit a record $98,000 (+10% y/y) .
FY 2024 guidance was maintained (revenue $195–$198M; Adjusted EBITDA $14–$16M; free cash flow $5.6–$8M), but mix was updated: overages raised to ~$3.5M (from ~$3.0M) and professional services lowered to ~$8.0M (from ~$9.0M); management flagged >$1M FX headwinds on a constant currency basis .
Q2 2024 guide implies sequential revenue decline ($47.5–$48.5M) due to a large M&A-driven churn, lower professional services (-$0.7M q/q), FX, and lower overages; management emphasized a growing pipeline of large deals as potential upside catalysts .

What Went Well and What Went Wrong

What Went Well

Record backlog and improving mix: total backlog $185.4M (record) with increasing multiyear commitments, enhancing visibility and retention .
Cost discipline drove third straight quarter of double‑digit Adjusted EBITDA margin (10% in Q1); non-GAAP operating income turned positive vs a loss in prior year .
Management highlighted strategic product progress and AI initiatives (Google Ad Manager integration, Publisher Insights, Cloud Playout 2.0, cloud-based video editing) with quote: “Accelerating the pace of innovation is a core priority…this quarter’s announcements are a strong indication we are delivering on that goal.” .

What Went Wrong

Add-on demand remained historically muted, and recurring dollar retention fell to 85% due to an M&A-related large customer loss; net revenue retention declined to 92% .
Q2 revenue guide down sequentially ($47.5–$48.5M) on churn, lower services (-$0.7M q/q), FX headwinds, and lower overages .
International regions lagged North America; management cited longer and less predictable sales cycles in media and a need to build add-on motions in enterprise outside the U.S. .

Financial Results

Quarterly Performance vs Prior Periods

Metric	Q3 2023	Q4 2023	Q1 2024
Revenue ($USD Millions)	$50.98	$50.16	$50.48
Revenue ex Overages ($USD Millions)	$49.6	$49.3	$49.4
Subscription & Support Revenue ($USD Millions)	$48.57	$47.78	$47.97
Professional Services Revenue ($USD Millions)	$2.41	$2.38	$2.51
Overages ($USD Millions)	$1.40	$0.90	$1.10
Gross Margin % (GAAP)	62%	61%	61%
Adjusted EBITDA ($USD Millions)	$5.55	$5.49	$4.98
Adjusted EBITDA Margin %	11%	11%	10%
GAAP Net Income (Loss) ($USD Millions)	$(2.42)	$(2.51)	$1.57
GAAP Diluted EPS ($USD)	$(0.06)	$(0.06)	$0.04
Non-GAAP Diluted EPS ($USD)	$0.05	$0.04	$0.01
Cash & Cash Equivalents ($USD Millions)	$16.42	$18.62	$22.87

Segment/Revenue Breakdown

Revenue Component ($USD Millions)	Q3 2023	Q4 2023	Q1 2024
Subscription & Support	$48.57	$47.78	$47.97
Professional Services & Other	$2.41	$2.38	$2.51
Total Revenue	$50.98	$50.16	$50.48

KPIs and Operational Metrics

KPI	Q3 2023	Q4 2023	Q1 2024
12-Month Backlog ($USD Millions)	$121.1	$127.3	$127.3
Total Backlog ($USD Millions)	$174.2	$183.0	$185.4
Net Revenue Retention (%)	93%	95%	92%
Recurring Dollar Retention (%)	85%	94%	85%
Total Customers	2,618	2,559	2,502
Premium Customers	2,077	2,028	1,992
ARPU (Premium) ($USD)	$95,900	$96,200	$98,000
Geographic Mix: North America (%)	60%	60%	61%
Geographic Mix: Europe (%)	16%	17%	16%
Geographic Mix: Japan/APAC (%)	24%	23%	23%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	FY 2024	$195–$198	$195–$198	Maintained
Overages ($USD Millions)	FY 2024	~$3.0	~$3.5	Raised
Professional Services ($USD Millions)	FY 2024	~$9.0	~$8.0	Lowered
Adjusted EBITDA ($USD Millions)	FY 2024	$14–$16	$14–$16	Maintained
Non-GAAP Operating Income (Loss) ($USD Millions)	FY 2024	($3)–($1)	($3)–($1)	Maintained
Non-GAAP Diluted EPS ($USD)	FY 2024	($0.10)–($0.05)	($0.10)–($0.05)	Maintained
Free Cash Flow ($USD Millions)	FY 2024	$5.6–$8.0	$5.6–$8.0 (excludes $6M patent proceeds)	Maintained
Revenue ($USD Millions)	Q2 2024	N/A	$47.5–$48.5	Initiated
Overages ($USD Millions)	Q2 2024	N/A	~$0.8	Initiated
Professional Services ($USD Millions)	Q2 2024	N/A	~$1.8	Initiated
Adjusted EBITDA ($USD Millions)	Q2 2024	N/A	$2–$3	Initiated
Non-GAAP Diluted EPS ($USD)	Q2 2024	N/A	($0.05)–($0.03)	Initiated
FX Commentary	FY 2024	N/A	>$1M headwind to revenue and EBITDA on CC basis	New disclosure

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2023 and Q4 2023)	Current Period (Q1 2024)	Trend
AI/Technology Initiatives	Emphasis on AI across analytics, encoding (25–50% cost savings) and workflow; expanded partnerships (Socialive) . Product push in ad insights, FAST/Playout .	“Larger push into AI…partner with best-in-class engines” and AWS Q for customer support; product launches: Google Ad Manager integration, Publisher Insights, Cloud Playout 2.0, cloud video editing .	Improving innovation cadence .
Add-on Sales	Historically muted due to lower overages; early signs of recovery (marketing studio upgrades) .	Still muted; building purpose-built upgrade paths in enterprise; entitlement growth not yet back .	Gradual rebuilding .
Overages	Major 2023 headwind (~$7M y/y decline); Q3 $1.4M; Q4 $0.9M .	Q1 $1.1M; FY 2024 overages guidance raised to ~$3.5M .	Stabilizing modestly .
Large Deal Pipeline	Pipeline of $750k+ deals growing; long cycles; Yahoo, NHL live .	Multiple seven‑figure opportunities; timing uncertain; potential upside if closed .	Building, timing uncertain .
Regional Trends	Americas leading; need to scale enterprise internationally .	North America strongest; working to improve globally .	Mixed—US strong, international lagging .
Patent Monetization	N/A	Monetized ~40% of 150+ patents for $6M with perpetual license back; potential enforcement benefits .	One‑off capital injection; strategic optionality .
FX/Macro	Macro caution embedded in guidance .	FX headwinds reduce FY revenue/EBITDA by >$1M vs CC; longer, less predictable media cycles .	Mild headwind .
Live Events/Olympics	Sports vertical momentum (PGA, MotoAmerica, Saudi Pro League) .	Wins tied to Olympics preparation in APAC; broader live opportunity .	Opportunity expanding .
Cost Discipline/COGS Optimization	Cost structure actions in 2023 drove margin improvement .	Third straight double‑digit EBITDA margin; focus on tech spend within COGS for further optimization .	Ongoing efficiency .

Management Commentary

“Total revenue for Q1 was $50.5 million…Adjusted EBITDA was $5 million…we ended the quarter with $22.9 million in cash…from a strategic decision to monetize a portion of our patent portfolio.” .
“Our record backlog…over $185 million…and an efficient and profitable business model…we believe our shares reflect a very compelling investment opportunity.” .
“We’re making a larger push into AI…partner with best-in-class AI engines…build solutions that give our customers control about what data goes into those AI models…” .
CFO guidance framing: “For the second quarter, revenue between $47.5 million and $48.5 million…Adjusted EBITDA between $2 million and $3 million…we are maintaining our full year guidance…Adjusted EBITDA $14 million to $16 million; FCF $5.6 million to $8 million.” .
FX and sequential dynamics: “Sequential decline in quarterly revenue…lower subscription revenue due to Q1 M&A-related customer loss…$700,000 decrease in professional services…FX and lower overages.” .

Q&A Highlights

Sequential Q2 revenue down: management cited the large media churn in Q1, lower PS revenue by ~$0.7M, FX headwinds, and lower overages; clarified Q2 profitability decline is timing-related (merit increases) plus revenue mix .
Pipeline and deal timing: CEO pointed to numerous 7‑figure deals over coming quarters but emphasized longer, less predictable cycles as the gating factor; upside to guidance if more close sequentially .
Add‑on strategy: shifting from entitlement-led growth to purpose-built upgrades (Marketing Studio, Communications Studio) to drive enterprise upsell; entitlement growth in media would be incremental if it returns .
Cost actions/tuning: no plans for further restructuring; focus on optimizing technology spend in COGS while maintaining discipline broadly .
Investor messaging: reiterated disconnect between enterprise value and fundamentals; record backlog, recurring base, and profitability trajectory .

Estimates Context

Wall Street consensus from S&P Global was unavailable for BCOV at the time of this analysis due to a missing Capital IQ mapping. As a result, we cannot provide definitive beat/miss versus Street estimates for Q1 2024. However, results were above company guidance ranges (revenue and Adjusted EBITDA) and full-year guidance was reiterated despite FX headwinds .
Where estimates may need to adjust: mix (overages raised; PS lowered), FX drag, continued double‑digit EBITDA margins, and sequential Q2 revenue decline drivers (churn, PS, FX, lower overages) suggest Street models should revisit quarterly cadence and mix assumptions .

Key Takeaways for Investors

Top-line and profitability resilience: Q1 revenue and Adjusted EBITDA exceeded guidance, with three consecutive quarters of double‑digit EBITDA margins—supportive for valuation and FCF delivery in 2024 .
Visibility strengthened: record backlog and increased multiyear commitments improve retention and predictability; ARPU per premium customer at all-time high .
Near-term caution: Q2 guide down q/q on discrete churn, services mix, FX, and overages; monitor add‑on recovery and the pace of large-deal closings for upside optionality .
Strategic product and AI ramp: integrations (Google Ad Manager), new analytics (Publisher Insights), Cloud Playout 2.0, and AI-enabled workflows could drive enterprise and media upsell over time .
Patent monetization adds capital and optionality without impairing product capabilities; perpetual license-back preserves technology usage .
Model updates: adjust FY overages up, FY professional services down, retain FY revenue and EBITDA ranges; incorporate FX headwinds and merit timing in quarterly profitability .
Trading implications: constructive on profitability and backlog; watch Q2 print for confirmation of add‑on trajectory and any large deal closures that could catalyze near-term upside .

Note: We searched for Q1 2024 press releases beyond the 8-K exhibit and found none additional in the period requested [ListDocuments 2024-01-01 to 2024-06-30 returned none].

BRIGHTCOVE INC (BCOV)·Q1 2024 Earnings Summary