Brightcove expects to post first profit in 2013

Reuters News
Posted: Jul 27, 2012 5:20 PM
Brightcove expects to post first profit in 2013

By Chandni Doulatramani

(Reuters) - Online video publisher Brightcove Inc expects to report its first quarterly profit next year, its chief executive said.

"We expect to start generating free cash flow on a positive basis in the fourth quarter of this year, and we expect net income on a positive basis in the second half of next year," Chief Executive Jeremy Allaire told Reuters.

The company on Thursday reported a net loss of $4.3 million, or 16 cents per share, for the second quarter, compared with $6.9 million, or $1.42 per share, a year earlier.

Brightcove, which went public in February, posted a loss of $17.3 million in 2011 and expects to incur operating losses on an annualized basis through at least the end of 2012, according to a regulatory filing.

The eight-year-old Cambridge, Massachusetts-based company provides cloud-based solutions for publishing and distributing videos over the Internet to clients such as BBC Worldwide, The New York Times Co, Bank of America and General Motors.

Allaire expects to add more customers in the third quarter and improve revenue from existing customers. Brightcove added 443 customers in the second quarter, he said.

Brightcove on Thursday bought privately-held Zencoder, the creator of an open source HTML 5 video player, for $30 million in cash, to expand further into cloud services.

Allaire said he also expects the acquisition to add to the company's profit in the fourth quarter of 2013.

Brightcove, which named only Google's YouTube as its rival in its IPO filing, also competes with Ooyala, IAC's Vimeo and Comcast's Platform for a share in the fast-growing video cloud sector.

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Brightcove, whose flagship product Video Cloud gives customers the ability to upload videos, manage advertising and track user viewership, gets its revenue by offering its products to customers on a subscription-based, software-as-a-service model.

Video Cloud was used to deliver an average of about 743 million video streams per month in 2011, the company said in the filing.

Brightcove, which made its debut in February at $11 per share, has since gained 37 percent in market value. Its shares were up 9 percent at $16.40 on the Nasdaq on Friday.

(Reporting by Chandni Doulatramani in Bangalore; Editing by Saumyadeb Chakrabarty)