Executive Summary

Q1 2023 revenue was $101.9M, up 84% YoY on Edgecast inclusion but down 6.3% QoQ on seasonality and churn; GAAP gross margin fell to 30.4% (Q4: 36.6%) and Adjusted EBITDA loss widened to $14.4M .
Guidance for FY2023 was maintained: revenue $392–$398M, Adjusted EBITDA −$37M to −$31M, capex $10–$13M; management reiterated a path to Adjusted EBITDA breakeven in Q4 2023 .
Execution themes: cost reductions tracking toward $85–$90M run-rate savings by YE23, improved Applications bookings momentum, and product rollouts in security/API; cash, cash equivalents and marketable securities declined to $48.2M .
Stock reaction catalysts: restoration of Nasdaq filing compliance (achieved with Q2 10‑Q), reaffirmed FY guidance, continued cost actions, and commentary that Q2 loss would be the trough with sequential improvements thereafter .

What Went Well and What Went Wrong

What Went Well

Maintained FY2023 guidance and reiterated Adjusted EBITDA breakeven in Q4 2023, signaling confidence in cost actions and pipeline conversion .
Applications momentum: quarter‑to‑date Q3 bookings were already ahead of Q2 and up 90% vs Q1; CEO: “enhanced products, new leadership, and improved execution are resulting in reduced churn, increased pipeline conversion” .
Transformation savings: on track to operationalize ~$85–$90M run‑rate cost savings by YE23 and forecasted higher by YE24 .

What Went Wrong

Sequential revenue decline (−6.3% QoQ) and margin compression (GAAP gross margin 30.4% vs 36.6% in Q4), widening Adjusted EBITDA loss to −$14.4M; cash and securities fell to $48.2M with operating cash outflow of $24.1M .
Continued reporting delays created near‑term overhang; company had disclosed Nasdaq notices tied to late filings and bid‑price deficiency before regaining compliance with Q2 filing .
Workforce reduction and restructuring charges announced in June (12% RIF; ~~$3.7M charges), underscoring cost pressure despite targeted long‑term savings (~~$23.7M net annual) .

Financial Results

Metric	Q3 2022	Q4 2022	Q1 2023
Revenue ($USD Millions)	$110.8	$108.8	$101.9
GAAP Gross Margin (%)	29.6%	36.6%	30.4%
Non-GAAP Gross Margin (%)	31.4%	38.1%	31.2%
Cash Gross Margin (%)	41.2%	42.3%	34.7%
GAAP EPS ($/sh)	$(0.06)	$(0.21)	$(0.16)
Adjusted EBITDA ($USD Millions)	$(5.7)	$(10.1)	$(14.4)
Cash, Cash Equivalents & Marketable Securities ($USD Millions)	$70.8	$74.0	$48.2

Estimates vs Actual: S&P Global consensus EPS and revenue for Q1 2023 were unavailable for EGIO due to mapping constraints; therefore a beat/miss determination cannot be provided.

Segment breakdown: Not disclosed in the Q1 2023 press release and accompanying materials .

KPIs

KPI	Q3 2022	Q4 2022	Q1 2023
Approx. Active Clients	994	954	900
Employees & Equivalents	1,057	980	893
Capex (net of ISP payments, $USD Millions)	N/A	$4.5 (Q4)	$3.6

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2023	$392–$398M	$392–$398M	Maintained
Adjusted EBITDA	FY 2023	−$37M to −$31M (−9.5% to −8%)	−$37M to −$31M (−9.5% to −8%)	Maintained
Capex	FY 2023	$10–$13M (2.5%–3.5% of revenue)	$10–$13M (2.5%–3.5% of revenue)	Maintained
Adjusted EBITDA breakeven	Q4 2023	Breakeven expected Q4 2023	Reiterated breakeven in Q4 2023	Maintained

Earnings Call Themes & Trends

Note: Edgio did not hold a Q1 2023 earnings call; management planned a July 19 business update call and later scheduled a call upon the Q2 10‑Q filing .

Topic	Q3 2022 Mentions	Q4 2022 Mentions	Q1 2023 Current Period	Trend
Transformation & Cost Savings	Integration and restructuring in progress (implied by higher opex and restructuring)	Targeting $85–$90M run-rate savings by YE23; focus on margin/cash flow	On track for $85–$90M savings; reiterated breakeven in Q4	Improving execution
Applications/Product Momentum	New launches (Apps v7, security) highlighted subsequently; pipeline growth vs Q3	Award-winning products; pipeline/bookings rising	QTD Q3 bookings ahead of Q2; +90% vs Q1; API Security GA	Strengthening
Nasdaq Compliance/Filings	Late filings disclosed Mar 23 notice	10‑K filed Jun 29; Q1/Q2 10‑Qs slated Aug/Sep	Q1 10‑Q filed with Q1 PR; Q2 10‑Q filed; compliance regained	Resolved with Q2 filing
Seasonality & Churn	Traffic seasonality; opex pressures	Commentary on elongated cycles; aim to reduce churn	Q1 revenue down on seasonality and churn; expect Q2 to be trough	Near-term headwind, easing

Management Commentary

CEO (Q1 PR): “Enhanced products, new leadership, and improved execution are resulting in reduced churn, increased pipeline conversion, higher attach rates, and increased cross sell/upsell opportunities.”
CFO (Q1 PR): “We expect to deliver mid to high single digit sequential decline in the second quarter of 2023 and then… break even in the fourth quarter.”
CEO (Q4 PR): “Our goal is to achieve Adjusted EBITDA breakeven by year-end on the back of $85–90 million of expected run rate savings, churn reduction and higher pipeline conversion.”
Q2 PR: “With 10‑Q filed, Company regains compliance… We expect sequential revenue growth for the rest of the year, with associated improvements in cash gross margins.”

Q&A Highlights

No Q1 2023 earnings call or Q&A transcript; company scheduled a July 19 business update call and indicated a call upon Q2 10‑Q filing in September. Guidance clarifications were delivered via press releases rather than Q&A .

Estimates Context

S&P Global consensus for EGIO Q1 2023 EPS and revenue was unavailable due to SPGI mapping constraints; therefore we cannot quantify beats/misses versus Street. We will update estimates once S&P Global mapping is available.

Key Takeaways for Investors

Near-term metrics weaker QoQ (revenue, margins, Adj. EBITDA), but FY2023 guidance maintained and Q4 breakeven reiterated—narrative centers on execution of cost reductions and pipeline conversion .
Structural savings ($85–$90M run-rate by YE23) and improved Applications bookings provide visibility to margin recovery into Q4 and FY2024, contingent on churn reduction and sales cycle normalization .
Liquidity tightened (cash and securities to $48.2M; operating cash outflow $24.1M in Q1), necessitating disciplined capex and continued lender covenant management; amendments and waivers secured in June/September underscore focus on compliance .
Filing/compliance overhang abated with Q2 10‑Q—potential stock catalyst alongside reiterated guidance and sequential improvement commentary .
Short-term trading: watch for proof points—Q2 trough confirmation, sequential revenue/margin improvement, and progress toward Q4 breakeven; monitor any additional restructuring or covenant updates .
Medium-term: thesis depends on sustaining Applications growth, monetizing security/API capabilities, and converting pipeline while maintaining reduced fixed cost base to expand cash gross margins .

Sources: Edgio Q1 2023 press release and 8‑K, Q2 2023 press release and 8‑K, Q4 2022 press release; restructuring and Nasdaq notices as cited .

Edgio, Inc. (EGIO)·Q1 2023 Earnings Summary