Name: Edgio, Inc. Q4 2023 Earnings Call
Start: 2024-03-15T06:08:01.000Z

Executive Summary

Q4 2023 preliminary revenue of $93–$95 million and Adjusted EBITDA between -$2 million and breakeven; bookings accelerated in H2 and cash rose to ~$47 million, reflecting improved execution and cost discipline .
Management highlighted a focus on Security/Applications and continued optimization, with operationalized run-rate cost savings of ~$84 million exiting 2023, supporting the path to profitable growth .
2023 guidance (set in Q2) targeted full-year revenue of $392–$398 million and Q4 Adjusted EBITDA breakeven; the Q4 preliminary range (-$2m to breakeven) is broadly consistent, though a formal 10-K update was delayed due to an auditor transition .
Stock-related structural actions and balance sheet moves: 1-for-40 reverse split effective March 1, 2024 , ~95% exchange of 2025 notes for new 2027 convertible notes and ~$50 million new financing in November 2023 , and adoption of a Tax Benefits Preservation Plan to protect ~$300 million federal NOLs .
Near-term risks include delayed SEC filings and related NASDAQ notices of non-compliance; company has plans and waivers in place and intends to file promptly to regain compliance .

What Went Well and What Went Wrong

Bookings momentum: Second-half 2023 bookings grew >30% vs first half; Security/Applications bookings nearly doubled, indicating demand traction in higher-margin offerings .
Cost structure optimization: Operationalized run-rate cost savings of ~$84 million by year-end, within the $80–$90 million range, supporting margin improvement and cash generation potential .
Cash strengthening: Cash, cash equivalents and short-term investments rose to ~$47 million as of 12/31/23 from $27.6 million on 9/30/23, aided by financing and improved working capital .
CEO strategic focus: “Strong and differentiated technological foundation combined with focused go-to-market motions, improving unit economics, and optimized cost structure” positions the company to drive profitable growth (Todd Hinders, CEO) .

SEC filing delay: Annual report filing extended beyond the 15-day period due to auditor resignation and onboarding; company obtained lender waiver through June 30, 2024 but may incur additional interest if filings are not made by May 14, 2024 .
NASDAQ compliance notices: Received expected non-compliance notices for late 10-K and 1Q 2024 10-Q; must execute compliance plan and may face continued listing risk pending resolution .
Organizational actions reflect efficiency needs: Announced ~10% reduction in force (~80 employees), with ~$2.7 million restructuring charges to deliver ~$18.6 million net annual savings—beneficial, but underscores cost pressure .

Metric	Q2 2023	Q4 2023 (Prelim)
Revenue ($USD Millions)	$95.8	$93–$95
Adjusted EBITDA ($USD Millions)	$(13.4)	$(2) to $0
GAAP Gross Margin (%)	26.4%	n/a (not provided)
GAAP Diluted EPS ($)	$(0.16)	n/a (not provided)
Cash, Cash Equivalents & ST Investments ($USD Millions)	$36.2	~$47.0
Capital Expenditures ($USD Millions)	$2.6 YTD through Q2	~$5.0 ($2.5 net) in Q4

Notes:

Q2 revenue grew 51% YoY due to the Edgecast acquisition; margin and EBITDA pressure persisted in Q2 given seasonality and fixed-cost structure .
Q4 preliminary ranges indicate sequential stabilization in revenue with material improvement in Adjusted EBITDA toward breakeven .

KPI	Q2 2023	Q4 2023
H2 Bookings Growth vs H1	n/a	>30%
Security/Applications Bookings Growth (H2 vs H1)	n/a	~2x
Active Clients (Approx.)	888	n/a
Employees/Equivalents	862	~80 reduction announced (10%)

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2023	$392–$398 million (Q2 guidance)	Not updated in Q4 press release; 10-K delayed	Maintained/Not updated
Adjusted EBITDA	Q4 2023	“Break even in Q4” reiterated (Q2)	$(2) to $0 million (prelim)	Maintained/Tightened range
Capital Expenditures	Q4 2023	n/a	~$5 million or $2.5 million net	New disclosure (quarter-specific)
Run-rate Cost Savings	Exit 2023	~$80–$90 million target (prior commentary)	~$84 million operationalized	Achieved within range

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q4 2023)	Trend
Security/Applications focus	Q2: Applications bookings ahead of Q2 levels; API Security GA; leadership additions	H2 Security/Applications bookings ~2x; client wins across Asia/Korea/domestic verticals	Strengthening mix toward higher-margin offerings
Cost savings and OpEx discipline	Q2: On track for ~$85–90m cost savings; OpEx step down	~$84m run-rate savings operationalized; RIF announced for ~$18.6m savings	Executing and monetizing savings
Capital structure & liquidity	Q2: Regained Nasdaq rule compliance; cash $36.2m	Notes exchange (95% of 2025s → 2027s), ~$50m financing; cash ~$47m	Liquidity improved; maturities extended
Reporting & compliance	Q2: On-time 10-Q; regained compliance	10-K delay due to auditor transition; NASDAQ notices; lender waiver	Temporary risk; remediation planned
Leadership & governance	Q2: New CRO appointment	CEO transition to Todd Hinders (Jan 1, 2024); reverse split	Strategic continuity with renewed focus

“Customer focus and a steadfast commitment to innovation and fiscal discipline are drivers of sustained shareholder value creation… strong and differentiated technological foundation combined with focused go-to-market motions, improving unit economics, and optimized cost structure gives me confidence in our ability to drive profitable growth.” — Todd Hinders, CEO .
Q2 CFO: “We reiterate our expectation for Adjusted EBITDA break even in the fourth quarter,” with sequential revenue growth and improved cash gross margins anticipated .

Not available: A Q4 2023 earnings call transcript was not accessible in the documents catalog, so specific Q&A themes and clarifications cannot be cited at this time (press release content only) .

S&P Global Wall Street consensus data could not be retrieved due to a missing CIQ mapping for EGIO; therefore, we cannot formally assess EPS/revenue beats or misses versus consensus for Q4 2023 using S&P Global at this time [GetEstimates error].

Q4 Adjusted EBITDA trajectory improved markedly versus Q2 (-$13.4m to a preliminary -$2m to breakeven), indicating cost actions are translating into earnings momentum .
Bookings strength in H2 (especially Security/Applications) supports a mix shift toward higher-margin segments, a critical lever for sustained margin expansion .
Liquidity and capital structure were fortified via ~$50m financing and the exchange of ~95% of 2025 notes for secured 2027 notes, extending maturities and reducing near-term refinancing risk .
Cash increased to ~$47m by 12/31/23; coupled with operationalized ~$84m run-rate savings, this underpins near-term resilience while investing in growth .
Near-term caution: delayed 10-K and NASDAQ notices introduce headline and compliance risk until filings are complete; lender waiver is in place through June 30, 2024 .
Structural actions (reverse split, rights plan to protect ~$300m NOLs, and RIF) are aligned to maintain listing, preserve tax assets, and streamline operations—supportive of long-term value creation .
Trading lens: Watch for audit filing resolution and any updated FY guidance; continued bookings momentum and evidence of Security/Applications growth should be positive catalysts, while any further filing delays could pressure sentiment .