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

(in thousands, except share and per share data, unless otherwise noted)
Company Overview
As of March 31, 2022 and 2021 we had 678 and 652 employees, respectively.
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Key Metrics
The following table includes our key metrics for the periods presented:
3,312
. We define our number of customers at the end of a particular quarter as the
number of customers generating subscription revenue at the end of the
quarter. We believe the number of customers is a key indicator of our market
penetration, the productivity of our sales organization and the value that
our products bring to our customers. We classify our customers by including
them in either premium or volume offerings. Our premium offerings include our
premium Video Cloud customers (Enterprise and Pro editions), our Zencoder
contracts), our SSAI customers, our Player customers, our OTT Flow customers
(OTT Flow is our partner-based OTT platform, which preceded Brightcove
Beacon), our Virtual Event Experience customers, our Video Marketing Suite
customers, our Enterprise Video Suite customers, our Brightcove Beacon
customers, our Brightcove Engage customers, our Brightcove CorpTV

customers, and our Brightcove Campaign customers. Our volume offerings
go-to-market
• Net Revenue Retention Rate
. We assess our ability to retain and expand customers using a metric we
refer to as our net revenue retention rate. We calculate the net revenue
retention rate by dividing: (a) the current annualized recurring revenue for
premium customers that existed twelve months prior by (b) the annualized
recurring revenue for all premium customers that existed twelve months prior.
We define annualized recurring revenue for premium customers as the aggregate
annualized contract value from our premium customer base, measured as of the
end of a given period. We typically calculate our net revenue retention rate
on a quarterly basis. For annual periods, we report net revenue retention
rate as the average of the net revenue retention rate for all fiscal quarters
included in the period. By dividing the retained recurring revenue by the
base recurring revenue, we measure our success in retaining and growing
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We assess our ability to retain customers using a metric we refer to as our
recurring dollar retention rate. We calculate the recurring dollar retention
rate by dividing the retained recurring value of subscription revenue for a
period by the previous recurring value of subscription revenue for the same
period. We define retained recurring value of subscription revenue as the
committed subscription fees for all contracts that renew in a given period,
including any increase or decrease in contract value. We define previous
recurring value of subscription revenue as the recurring value from committed
subscription fees for all contracts that expire in that same period. We
typically calculate our recurring dollar retention rate on a monthly basis.
Recurring dollar retention rate provides visibility into our ongoing revenue.
• Average Annual Subscription Revenue Per Premium Customer
. We define average annual subscription revenue per premium customer as the
total subscription revenue from premium customers for an annual period,
excluding professional services revenue, divided by the average number of
premium customers for that period. We believe that this metric is important
in understanding subscription revenue for our premium offerings in addition
to the relative size of premium customer arrangements. As our Starter edition
has a price point of $199 or $499 per month, we disclose the average annual
subscription revenue per premium customer separately for Starter edition
. We define backlog as the aggregate amount of transaction price that is
allocated to performance obligations that have not yet been satisfied,
excluding professional service engagements. We believe that this metric is
important in understanding future business performance.
Components of Consolidated Statements of Operations
Revenue
Subscription and Support Revenue
– We generate subscription and support revenue from the sale of our products.
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Cost of Revenue
Operating Expenses
We classify our operating expenses as follows:
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Merger-related
. Merger-related costs consist of expenses related to mergers and acquisitions, integration costs and general corporate development activities.
Other (Expense) Income, net
Other (expense) income consists primarily of interest income earned on our cash, cash equivalents, and foreign exchange gains and losses.
Income Taxes
Stock-Based Compensation Expense
Foreign Currency Translation
Critical Accounting Policies and Estimates
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Results of Operations
Overview of Results of Operations for the Three Months Ended March 31, 2022 and 2021
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Merger-Related
In the three months ended March 31, 2022, merger-related expense increased by $594 primarily due to the Wicket Acquisition. There was no merger-related expense in the three months ended March 31, 2021.
Other expense (benefit).
(Benefit) Provision for Income Taxes.
Liquidity and Capital Resources
Cash and cash equivalents.
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