Greetings. Welcome to Brightcove Third Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the format presentation. [Operator instructions] I'll now turn the conference over to Brian Denyeau from ICR. Thank you. You may begin..

Good afternoon, and welcome to Brightcove's third quarter 2021 earnings call. Today, we will discuss the results announced in our press release issued after market close. With me on the call are Jeff Ray, Brightcove's Chief Executive Officer; and Rob Noreck, Brightcove's Chief Financial Officer.

During the call, we will make statements related to our business that may be considered forward-looking and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements concerning our financial guidance for the fourth fiscal quarter of 2021 and the full year 2021, expected profitability and positive free cash flow, our position to execute on our go-to-market and growth strategy, our ability to expand our leadership position, our ability to maintain and upsell existing customers, as well as our ability to acquire new customers.

Forward-looking statements may often be identified with the words such as we expect, we anticipate, upcoming, or similar indications of future expectations. These statements reflect our views only as of today and should not be reflected upon as representing our views as of any subsequent date.

These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations, including the effect of the COVID-19 pandemic on our business operations, as well as the impact on general, economic and financial market conditions.

For a discussion of material risks and other important factors that could affect our actual results, please refer to those contained in our most recently filed annual report on Form 10-K and as updated by our other SEC filings. Also during the course of today's call, we will refer to certain non-GAAP financial measures.

There is a reconciliation schedule showing GAAP versus non-GAAP results currently available on our press release issued after market close today, which can be found on our website at www.brightcove.com.

In terms of the agenda for today's call, Jeff will provide a summary review of our financial results, an update on our operations and a review of our strategy. Rob will finish with additional details regarding our third quarter 2021 results, as well as our outlook for the fourth quarter and full year 2021.

With that, let me turn the call over to Jeff..

Thanks, Brian, and thank you to everyone for joining today. I hope you and your families are well. We had a very productive third quarter. We prepared for and executed our Annual Virtual User Conference PLAY 2021 made multiple innovation announcements and continued to execute on our retention strategies.

We also signed an agreement to acquire technology that will enhance video interactivity. PLAY 2021 was a resounding success as our largest user event to date with almost 6,000 registrants from 100 countries.

In a testament to the power of virtual events, we grew the event by nearly three times that of PLAY 2020, attracting new companies to witness the power of Brightcove with half of the registrations being new to our community.

During our primary promotion time in the six weeks leading up to play, we saw a 4000% increase in viewing volume of Brightcove videos, driving massive growth in awareness and new contacts for Brightcove.

Over two days, we served up 60 plus sessions, 35 of them by customers and partners, including AMC Network, Akamai, South by Southwest, Academy of Motion Picture Arts and Sciences, HubSpot New South Wales Department of Education, Tennis Australia, the LPGA, Revry, and the Metropolitan Opera.

We're thankful to all of our customer speakers for sharing their success stories. If you couldn't attend PLAY live, you can tune into Brightcove Play TV, our very own corporate TV channel to view all the content. So with that, let's start with an overview of our results.

For the third quarter, revenue was $52.2 million, up 6.3% year-over-year and above the high end of our guidance of $51.5 million. Adjusted EBITDA was $4.2 million, ahead of the high end of our guidance. While we had a solid performance relative to our guidance, our sales performance in the quarter was below expectations.

In particular, our Asia Pacific and Japan regions underperformed, and we saw lower than anticipated levels of upselling activity across our customer base. As a result, we're adjusting our full year revenue guidance, which Rob will provide more detail on later.

We've made several changes to address the challenges from the quarter, including making sales leadership changes in Asia Pacific and doubling down on the positive sales execution and enablement strategies such as value selling methodology, standardized proposal formats, and deal coaching that have proven successful in driving significant bookings growth in North America over a two-year period.

We are moving quickly to implement the proven and successful sales tactics from North America, not just in Asia Pacific, but globally. It will take several quarters for these changes to impact our results fully. Additionally, we continue to work on our renewals business and make good progress in the quarter.

We remain confident our product and go-to-market strategy will generate the revenue growth we know this business can deliver. I would like to spend a few minutes highlighting the significant progress in our strategic focus areas, innovation, customer success, and retention, and go-to-market. Let me give you some detail on each of these areas.

First, innovation, we have heavily invested in R&D and it is paying off with innovative products coming to market. This quarter, we have multiple product announcements that add considerable value to our customers and help them better engage with their audiences, monetize their content and sell their product and services.

Let's start with Brightcove Marketing Studio, a new video communication solution that allows marketers to drive more significant results from their digital campaigns using video across all communication mediums, typically marketing professionals search multiple systems to find ideal videos for their initiatives.

Often lacking insight into which videos perform best or which valuable assets exist. Brightcove Marketing Studio provides role-based access to video assets through a team's preferred social platforms, marketing automation, digital asset management and content management tools. Brightcove Marketing Studio will be available early next year.

And current video marketing suite customers can all automatically be upgraded to marketing studio. We also announce Brightcove CorpTV, a solution designed for companies to serve content to their audiences, a more compelling and engaging format.

Brightcove CorpTV enables organizations to create channel similar to Netflix or Hulu that stream content to customers and employees each with their own audience specific branded content. This dynamic engaging solution empowers companies using video to forge stronger connections with their customers, partners and employees.

We're proud to be serving NetApp, a global cloud led data centric software company with this solution. NetApp launched its CorpTV channel, NetApp TV at its insights virtual conference on October 22.

James Whitmore, EVP and CMO of NetApp said, “There's no denying the ever increasing popularity of streaming content to entertain, educate, and influence audiences, even in a B2B world. It's why we recently launched NetApp TV, a new always on video channel powered by Brightcove.

With NetApp TV, we're providing customers, partners, and employees with a rich seamless experience when accessing the content they want, when and where and how they want, 365 days of the year. We keep them thinking of NetApp all year.

Brightcove CorpTV has enabled us to maximize the return on our content creation costs while serving our audiences through a highly engaging channel and “another exciting announcement highlights our open platform, extensive technology integrations, and use of APIs.” The Brightcove marketplace enables Brightcove customers to add powerful functionality to their video solutions directly from the Brightcove platform without the need to go to other third-party sites.

We launched the Brightcove marketplace with over 40 technology solutions and this ecosystem will continue to grow. And last, we recently announced our intent to acquire a significant portion of the assets of HapYak, including its existing global customer base, commercial interactive video technology, IP, brand and marketing assets.

HapYak is a leader in the video interactivity market and was a long time partner of Brightcove. With the integration of the HapYak technology Brightcove customers can quickly and easily incorporate interactivity into any video. Our team has successfully sold HapYak for years, and it's a natural fit to bring the technology into our portfolio.

We expect this deal to close before the end of the year. We also continue to focus on bringing added value specifically to our media customers, evidence by our enhancements to rights management, add insertion performance and low latency for live streaming all also released last quarter. For retention, let's move on to these efforts.

Retention has always been a critical focus for us, as you know. And I'm delighted that we are making excellent progress and improving the customer experience. Some highlights from the past quarter include Brightcove continues to have an award-winning 24/7 in-house support team.

This month the TSIA recognized the team for support staff excellence for the eighth consecutive year. Our support has long been and continues to be a true differentiator for Brightcove. Our revamped onboarding program includes free and paid onboarding options, ensuring that all customers have a successful launch on Brightcove.

And we recently implemented our roadmap initiative to engage with our customers regularly and solicit their feedback on our product roadmap and the latest customer requests. We're pleased with our improvements to drive customer attention towards best-in-class levels for a SaaS company.

We still have more work to do, but we're clearly on the right path. Example of our retention progress is seven network, a media customer. We've had a close strategic relationship with since 2015. During the recent renewal, we were at risk of losing seven for a do it yourself and competitive solution.

Throughout the renewal process, we demonstrated the value of the Brightcove platform and instilled confidence in ongoing innovation, technology improvements and Brightcove support. We retained and grew our VOD business with seven, as it signed a new agreement. Turning to our go-to-market highlights.

We're proud that customers worldwide select Brightcove as their video provider of choice for our reputation in reliability, scalability, security, innovation, and the return on investment we can deliver to them. Let's look at a few examples from this past quarter that demonstrate how we are helping customers succeed with video.

Football Co is a new Brightcove customer serving a global audience of 400 million people across their digital destinations and syndication partners.

The organizational will use Brightcove to power video on demand soccer content on its own and operated websites, including goal.com, one of the world's more as popular digital football destinations and its syndication partners.

Football Co will increase its flexibility by leveraging Brightcove’s unrivaled ability to allow content creators, to distribute and monetize content at scale on a global level. Mars is a new customer.

That's selected Brightcove as its video platform to host, manage and deliver Mars video content to its external consumer facing properties globally and its internal audience over 133,000 employees across six continents.

Brightcove will be used by Mars associates, agency partners and content managers to organize, approve and manage Mars owned content with support from multiple languages, regions and formats. Mars came to Brightcove for our unrivaled security when its previous vendor couldn't meet Mars demanding security requirements.

A long time Brightcove customer ITV is a broadcaster that creates owns and distributes high quality content on multiple platforms globally. Brightcove powers ITV short form websites and apps for shows including Good Morning Britain, Love Island, news and sports content.

ITV renewed, and grew its contract at Brightcove to continue to deliver flawless video to its millions of viewers. GameStop is a video game, consumer electronics and gaming merchandise retailer and longtime Brightcove customer. The organization uses Brightcove video across its primary web properties and recently renewed its engagement with us.

GameStop continues to use Brightcove to engage with its customers and deliver a seamless video experience across its digital properties. In the third quarter, we added 16 partners globally. We continue to add partners in the events and production space, including Lenos [indiscernible].

We also added new partners in India, Latin America, and EMEA to expand our geographical reach. These partners add value for our customers using Brightcove’s world class streaming technology.

Our referral partner program and master license program allow Brightcove to fit into our partners business models, enabling us to expand our reach through our partners, existing customer bases.

Several of these partners, shifted from competing platforms to the Brightcove platform this past quarter, not only due to our superior technology and global reach, because we recognize the importance of a highly responsive support team. Debbie Chong, Lenos Software CEO said, “A video player and streaming service can make or break an event.

We integrated Brightcove’s broadcast quality video capabilities into our hybrid event marketing platform to guarantee our client's reliability, high fidelity and a scalable video solution.

Lenos customers can now power up branded event engagement for employees, customers, partners, and prospects seamlessly incorporating video to engage, inspire and deliver sales ready lead generation enterprise wide.” We know video drives business, and we know our customers benefit from deploying Brightcove video to better help our sales organization show Brightcove’s total economic benefits, we commissioned Forester consulting to conduct two total economic impact or TEI studies.

One focused on media organizations and the other on enterprise companies. For the enterprise study, the decision maker interviews and financial analysis found that a composite enterprise organization using Brightcove technology experiences an ROI of 225% over three years.

The interviewed decision makers shared that in their organization's legacy state, they had limited visibility and control over their video content. Organizations struggled to syndicate video for consumption on multiple platforms in a timely manner. And it took several weeks to process the content and they could not transcode fast enough.

These decision makers now use Brightcove as an asset in their customer journey to drive increased sales and additional revenue. Turning to the media study, the composite media organization using Brightcove technology experiences an ROI of 226% over three years.

Interviewee shared that their organizations expanded their delivery to new markets and new devices using Brightcove. Brightcove allowed these organizations to quickly dub content to reach expanded geographies, offering their services to entirely new audiences. Legacy solutions did not provide an easy path to entering new markets.

We know we have the best technology. But now our sellers have further evidence to demonstrate this. Before I hand it off to Rob to cover the financials in depth, I want to reiterate that we made progress this quarter, even though we are not satisfied with the sales execution challenges we experienced.

We hosted our best play ever ramped up innovation with the announcement of multiple new products, increased our retention rates and signed many new partners worldwide. We continue to make progress on our key focus areas and are quickly addressing the areas that need additional improvement.

I'm confident in the team we have in place and our strategy and that we will achieve our long-term financial goals. I'd also like to take a moment to address the other news we released today relating to my eventual retirement from Brightcove.

I came out to retirement to join Brightcove in 2018 to facilitate the transformation of Brightcove and to put the right team in place to lead the company to the next chapter in its growth. While we are not fully satisfied with our current results and we know we have more work to do.

I have every confidence in our strategy and the great team we have built. My plan as announced today is to retire from Brightcove. I will serve a CEO until a successor is on board and thereafter we'll remain in an advisory capacity with the company until the end of 2022.

This approach ensures that our Board will have enough time to find the right leader to continue and build upon this company's amazing opportunity. This approach gives the company the ability to continue to focus on execution and deliver the expected results to our shareholders. While also having the time to find the ideal next CEO for Brightcove.

The Board has retained an executive search firm and has launched the search process for the new CEO. With that, let me turn the call over to Rob to walk you through the numbers.

Rob?.

Thanks, Jeff. As you mentioned, we still have a lot of work to do and now more than ever we need to focus on execution. So with that, I would like to begin with a detailed review of our third quarter, and then I will finish with our outlook for the fourth quarter and the full year 2021.

Total revenue in the third quarter was $52.2 million, which was above our guidance range. Breaking revenue down further, subscription and support revenue was $49.2 million and professional services revenue was $2.9 million.

12-month backlog, which we defined as the aggregate amount of committed subscription revenue related to future performance obligations in the next 12 months was $115 million. This represents a 5% year-over-year increase. On a geographic basis, we generated 56% of our revenue in North America during the quarter and 44% internationally.

Breaking down international revenue a little more, Europe generated 19% of our revenue and Japan and Asia Pacific generated 25% of revenue during the quarter. Let me now clear into the supplemental metrics we share on a quarterly basis. Recurring dollar retention rate in the third quarter was 92.8%, which was within our target range of low to mid 90s.

While we are pleased by the improvement over the first half performance, we would like to see a few quarters in a row in our target range before we are satisfied. Net revenue retention in the quarter was 95%, which compares to 98% in the second quarter of 2021 and 98% in the third quarter of 2020.

Since the beginning of 2019, net revenue retention has ranged from 92% to 100%. As a reminder, we introduce net revenue retention last quarter to better align our reporting with most leading SaaS companies.

We calculate net revenue retention by comparing the current annualized recurring revenue to the annualized recurrent revenue from 12 months prior for those premium customers that existed 12 months prior. As Jeff mentioned, we have made significant progress in our effort to rebuild our renewals business.

We saw clear signs of improvement in the third quarter and are confident we are on the right track. Since net revenue retention is calculated on a trailing 12-month basis, there will be a natural lag before the improvements we are making will be reflected in this metric.

We expect that as we continue to make improvements in our renewals business, this metric will consistently be over 100% over time. Our customer count at the end of the third quarter was 3,205, of which 2,265 were classified as premium customers.

Looking at our ARPU within our premium customer base, our annualized revenue for premium customer was $93,000, which was up 5% year-over-year and excludes our entry level pricing for starter customers, which averaged $4,400 in annualized revenue.

Looking at our results on a GAAP basis, our gross profit was $33.5 million .Operating loss was $233,000 and net income per share was a loss of $0.02 for the quarter. Turning to our non-GAAP results.

Our non-GAAP gross profit in the third quarter was $34.1 million, compared to $31.5 million in the year ago period, and represented a gross margin of 65%, which was up from 64% in the third quarter of 2020.

Subscription and support revenue represented approximately 94% of our total revenue and generated a 68% gross margin in the quarter, compared to a 67% gross margin in the third quarter of 2020. The improvement in gross margin throughout this year has been an area of strength for the business.

Through the first nine months of the year, we have grown subscription revenue by $12 million, while reducing the cost of subscription revenue [indiscernible] million. Reducing our COGS has been one of our areas of focus for our R&D organization in 2021.

The success we have had scaling subscription growth margin is providing additional resources to invest in our growth initiatives in the near term, it will drive greater improvement in profitability as revenue and growth accelerates in the future.

Non-GAAP income from operations was $2.9 million in the third quarter compared to $4.5 million in the third quarter of 2020. Adjusted EBITDA was $4.2 million in the third quarter compared to $5.9 million in the year ago period and above the high end of our guidance range. Adjusted EBITDA margin was 8% in the quarter.

Non-GAAP diluted net income per share was $0.05 based on 41.7 million weighted average shares outstanding. This compares to net income per share of $0.11 on 40.6 million weighted average shares outstanding in the year ago period. Turning to the balance sheet and cash flow. We ended the quarter with cash and cash equivalent of $45.3 million.

We generated $7.4 million in cash flow from operations and free cash flow was $4.9 million. After taking into account $2.5 million in capital expenditures and capitalized internally use software. I would like to finish by providing our guidance for the fourth quarter and the full year 2021.

For the fourth quarter, we are targeting revenue of $51 million to $52 million, including $1.6 million of overages and approximately $2.2 million of professional services revenue. From a profitability perspective, we expect non-GAAP operating income to be $1 million to $2 million and adjusted EBITDA to be between $2.2 million and $3.2 million.

Non-GAAP net income per share is expected to be in the range of $0.02 cents to $0.04 based on 41.9 million weighted average shares outstanding. For the full year, we are revising our full year outlook.

We are now targeting revenue of $209.5 million to $210.5 million, including $7.7 million of overages and approximately 12 million of professional services revenue. This is down from our previous guidance of $211 million to $213 million.

From a profitability perspective, we expect non-GAAP operating income of $15.3 million to $16.3 million and adjusted EBITDA to be between $20.5 million and $21.5 million. These are both within our previously provided guidance of $14 million to $17 million for non-GAAP operating income and $19.1 million to $22.1 million for adjusted EBITDA.

Non-GAAP net income per share is expected to be in the range of $0.32 to $0.35 based on 42 million weighted average shares outstanding. For the full year, we are now targeting free cash flow of $6.5 million to $7.5 million, down from our previous guidance of $7 million to $10 million.

To wrap up, we made progress in many of our key focus areas in the third quarter, but more work is to be done. We are addressing the sales challenges that occurred and our confident we'll begin to see positive impact of those changes in the coming quarters.

Our belief in the long-term opportunity has not changed and we are committed to delivering better top and bottom-line performance for our shareholders. With that, we'll now take your questions. Operator, we are ready to begin Q&A..

Thank you. [Operator Instructions] Our first question is from Steve Frankel with Colliers. Please proceed..

Good afternoon. Jeff, I'd like to dig in a little bit in the lower expectations for Q4. So how much of that was sales disappointment in Q3 versus higher churn.

And then on the sales front, maybe you could define for us, is this a new account issue? Is this an upsell, cross sell issue? What's leading to this poor sales productivity, especially in AsiaPac?.

Right. Thanks, Steve. Good to hear from you. Looking at all the aspects of this, I think you've hit that which impacted us the most this quarter with sales. As Rob noted, we are progress with the renewals business in the right direction. And I feel good about the progress that team is making and the nature of the kinds of deals that we're renewing.

I'm also thrilled that we have a lot more insight downstream on the renewals business. So that is on demand. The big challenge with sales is, I know it oversimplifies it, but it's consistent predictable execution. It's one of the key reasons why I'm happy that we promoted Brian Froehling, who ran America's sales into the global job.

He's introducing that same rigor and discipline into AsiaPac that he did for the Americas. As he crawled through the pipeline and interviewed and spent time with literally each sales rep and looked at every deal. He just discovered that we weren't demonstrating the same rigor and discipline that we are in Americas.

So, in his words, it's a problem, but it is imminent fixable. I think the other thing I'm encouraged by is the team there is really embracing this. They also want to see the business grow and succeed. And so we're not really getting any pushback from the Asia-Pac sales teams in getting this done. So that's the most important one.

Certainly we can improve around the world and I'm never satisfied, but we've got a real disciplinarian now running sales and we are doing a much, much deeper level of investigation and inspection of deals. We've also introduced a new technology that literally lets us track the number of customer touches and prospect touches.

And so we know we have the data that demonstrates that if you have touched the prospect n number of times over a period of weeks or months, you have a correlating much, much higher opportunity to win that deal.

The other thing he did was he inspected every proposal that has been delivered in the last six months, every proposal that went out and he sees great opportunity for changing the dynamic of how we're delivering proposals.

So it's consistent and predictable execution on the sales side that will drive expansion, but it'll also drive new logo acquisitions..

And in North America, are you satisfied with your ability to upsell and cross-sell on the enterprise side of the business? Or is there still a lot of work that needs to be done there?.

Yes, again, I'm never satisfied, but I feel that the America's team is in pretty good control of their destiny, that the predictability, the insight, the hard data that we have to support that puts us in a much, much better position..

Yes. And Steve, just add to that – Steve, this is Rob, just to add to that real quick. We mentioned in the script that the challenges really came on the upsell side. We actually had a really strong quarter on the new business acquisition.

So while you don't necessarily see it roll through the customer count from a dollar perspective, we had a really strong new business in the quarter..

Okay. That's good. And then walk us through the divergence between the two retention metrics, kind of would have thought they would directionally go the same way, but they divert this quarter. So help us understand that..

Yes. I think Steve, the big difference there is the calculation. And if you recall the recurring dollar retention rate that came in at the 1993, that is actually for those contracts that happened in the quarter, right.

Those contracts that were up for renewal and what happened in the quarter, the second metric that net revenue retention rate looks at the ACV of every customer that was a customer 12 months ago.

Now what the retention of that is, so it includes upsells throughout the time, of course, the contract, any deals that up sold or downgraded throughout, so that, that net revenue retention rate will catch up. It's just a lagging indicator and I'll take a couple of quarters to catch up..

Okay. Jeff, Steve, fundamentally still believe this is a business that can grow double-digits..

Absolutely. I've never felt better about it. I don't like the performance right now, any better than anyone else.

But when you look at the underlying strength of the business and the work that we've done, especially in the last six months to reconfirm and revalidate, that we have the right target market, that it's a sizeable target market and that we're bringing really new innovative products to that market. I feel great about it.

I also just see it in the energy and excitement of the core staff, that team that works directly for me, we are putting more products out, more innovation out than ever before. Obviously, we would love to be able to ship everything tomorrow.

It will take a little while to get those out the door, but everything that we see says that we're heading in the right direction. I'll give you just one example of why I feel good about that. We noted NetApp and their launch of NetApp TV. And what they're doing is, is not unlike what Salesforce did with their TV.

In this case, the NetApp took a true OTT approach. So it will send videos to any device anywhere. So it's much more robust and open than what Salesforce is doing, but they get it.

They understand what the future of connections is video, that the days of people sitting and reading static screens are looking at graphics or images are fast going behind and they get it. And so when they first approached us about this back in the spring, it was a perfect time for us to talk because we were well underway in developing CorpTV.

So it's a great affirmation that this is the way companies will communicate. There are certainly a lot of challenges. Probably the biggest challenge is the ability to capture and use interesting sticky content. But that problem will get solved. We don't – we're not worried about that whatsoever.

We also are thrilled with the work that we've been done that has been done for our marketing studio product because it literally was built up from scratch by watching how users who are not video experts, try to get their job done.

And this will be a sea change because up until this point, everyone who's out there, no matter what say about ease of use, basically companies go to the video expert to get help, to do things.

And what we're doing with marketing studio will make it easy for anyone who needs to deploy video, to do marketing campaigns and communication, to be able to do that. It will no longer be in the hands of the video expert. And then certainly we announced prior to PLAY TV the developers marketplace.

And I was just – I was so encouraged by the fact that we had 40 developers around the world sign up on day one to be participants in that marketplace. So great traction came out of PLAY TV, also the numbers were dramatically up, so I've never felt better.

I am not satisfied with our performance at this moment, but I've never felt more confident about the future..

Okay, great.

And then one last quick one for Rob, what were overages in the quarter?.

Yes, overages were about $1.7 million..

Great. Thank you..

Our next question is from Eric Martinuzzi with Lake Street Capital Markets. Please proceed..

Yes. I wanted to focus on the Q4 outlook here. If I have this right, it looks like the subscription business relatively flat, given the services guidance. And I would have expected that given your color there, Rob, on the new sales, going up, help me understand why the subscription would be relatively flat at the mid point between the two quarters..

Yes, Eric, there's two pieces there. One is a small headwind on overages. We're bringing that down to $1.6 million. And the second piece is, my comment around new business was net new customers and selling a net new logos where we were challenged in the quarters on the upsell side.

So from a dollar perspective as the upsells that gave us the challenge in the quarter..

Okay. As I look at your premium customer count though, I've got that actually. And I guess it is a net number, but I see that declining sequentially.

I guess, it's just a question of not all customers created equal, is that the color here?.

Yes, that's a 100%, right. When you think about it and you put it in conjunction with our ARPU, we continue to drive stronger customers and the ability to grow our customers. So you see that growth happening on the ARPU side. Again, customer count is not something we focused on.

We understand that it's critical over time to get that number moving in the right direction, but we're really focused on maximizing dollars in share of wallet from our existing customers and from those customers that do come on..

Okay.

And then Jeff, you talked a little bit about your kind of moving on here at the end of the year and test driving retirement again, I can't remember if it was golfing or fishing that you did or didn't do, but I know you got to relieve – leaving that summer grads, given what you saw the potential as you came aboard back a little over three years ago, but just kind of, if you could get retrospect a little bit introspective for a moment one or two things that maybe you would have focused on more intently or done differently.

You've been in the seat now for three and a half years.

What is it that’s kind of kept this company from realizing that full potential that you talked about coming out of play 2021?.

It's pretty – it's a great question. Thanks. I try not to spend too much time looking over my shoulder, it’s kind of dangerous to do. And I live in Florida and quite frankly, when you go out with people around here, they spend a lot of time talking about the past, and it's a freaky place to be.

I'll just stay with what I shared in the last quarter, and that is I should have jumped on the renewals much more aggressively the day I walked in the door, more than anything else that has been, I think a real source of frustration.

That being said, awesome team running it, like I said, just TSIA recognized again, great insight into the underlying health of the relationships with our customers that we just didn't have before. I sit in on a lot of those reviews with customers. And I feel very good about that.

And I'm just kicking myself because I should have just been much more aggressive. I was paying attention to it but I think I was a little too trusting and I just didn't move fast enough on the renewals business. On innovation, I feel great about it.

We've dramatically grown the R&D engineering headcount around the world, and we're putting out more innovation each quarter than I would challenge that we did in a year's time before I arrived. And you certainly saw the evidence of that with what we delivered it at PLAY TV. Sorry, this is the joy of doing this at home.

We have a dog that barks at everyone who walks in the door. So I feel great about that, sales execution, consistency, I think is the biggest challenge there, consistent and predictable. And as I said, Brian definitely has that under control and we'll see that deliver the counter results we need. And I'm not going anywhere.

I've given the world's longest notice period. Telling the board it's 14 months..

Okay. And you're going to be a consultant for all of 2022. So I definitely picked up on that. Lastly, that the shares are weak here after hours. It looks like they're a little below $10. Does the balance sheet is there – is a board talking all about perhaps using the balance sheet on a buyback more aggressively? I can't recall.

I think you have one in place, but what's the thinking on use of cash for the money that you've got on the balance sheet?.

It never comes up. It never comes up. Rob, let me go first, man..

Yes, go ahead..

No, it does not come up period. And we just had our board meeting yesterday. It does not come up. We're now in a position where we're in an enviable position where we're EBITDA positive, cash low positive, generating cash, building a bigger war chest.

I want to see the equity go up, of course, because that's the gear effect for the war chest that lets us do a lot more M&A but that is absolutely not in the cards whatsoever. We want to invest in the things that will grow the business, not just taking shares off the street. And I just want to clarify, you said that I'll be on the sidelines in 2022.

I want to make sure that we all understand. I will stay in this role through the end of 2022, sometime between now and then, if and when the new CEO is appointed, I will step out of this role. I'll be reporting to the CEO in whatever capacity I can help that person. And I'll continue to be an employee of the business through the end of 2022.

This gives the board all the time in the world to get exactly the right person into the job..

Understand. I appreciate that clarification..

Okay. Rob, do you want to jump in and correct anything I said..

No, you said it all, Jeff..

Our next question is from [indiscernible] with Northland Capital. Please proceed..

Hi, I'm Sharon on behalf of Mike Latimore. Well, I have two questions for you today.

One, how has the demand for events related to the last nine or 12 months ago? And is the media segment, the main focus of your revenue retention effort?.

Great. I'll start with that. Rob, feel free to break in. So the first is, where is the evolution of events, especially as we're thankfully, finally starting to wind down from COVID and where is that going, I'll be happy to comment on that. And the second is media in terms of its priority in retention.

Did I cover that correctly?.

Yes, that's right..

Great. Thanks. And please give Mike our best. Events a year ago and we were discussing this in last year's earnings calls, COVID compress the adoption cycle. And so we saw things happening in a fraction of the time that we normally saw it. And certainly, we benefited from that. We saw significant improvement in growth in events.

We were careful to make sure that the kind of events business that we were doing would give us an opportunity to have an ongoing relationship with customers as we come out of COVID. And that has not changed one debt.

Certainly the events activity has calmed down quite a lot, but we've got a much, much larger set of candidates now and prospects for going back into and building more relationships. And that's one of the reasons why I'm so excited about the new products that we'll be bringing to market early next year.

The second, on media and retention, quite frankly, we focus on both media and enterprise. We don't play favorites. We know that our customers be they media or enterprise every day count on video to help them grow their business, do a better job of engaging. That's mission critical for them.

And we enjoy the fact that we are kind of on that high end of when it really has to be perfect and flawless and broadcast quality. We're the ones to do business with. So we take that very seriously for both media and enterprise. What I love about the media market is it does, there's no tolerance for anything less than perfection.

There's no tolerance for anything less than perfect security, scalability, reliability. Those things are great because by building technology that satisfies big media companies, we know we can handle anything that an enterprise may want to throw at us, and we see that over and over again in our wins..

Okay. Thank you. And my next question is on the churn rate, so I believe sometimes media customers give you a full warning in third quarters about whether they will churn in the next year.

Did you get any notable ones this year?.

No, I haven't seen anything notable that changes anything. Again, I feel good about the fact that we have more insights than we've ever had before, and that it's earlier insight so that we can act preemptively. And certainly we saw that with the renewal of seven network, that was a great example of a really, really big renewal.

They signed up for two years instead of the traditional one and an ITV, which was another really big renewal that was very, very competitive. So I feel very, very good about the progress we've made there. Again, we need to do a lap so that we know that we're back in control of the recurring revenue business. We're not there yet..

Okay. Thank you..

We have reached the end of our question-and-answer session. I would like to turn the conference back over to Jeff Ray for closing comments..

Thank you, operator. Thank you everyone for joining us. Again, I'm grateful that you're safe and sound. As I said, the job is not done.

If there's anything that you should take away from the announcement of my departure in 14 months, it is that we will act with even greater urgency at driving top line growth, improving our renewals business and getting these exciting new products to market. Thank you, and stay safe..

Thank you. This does conclude today's conference. You may disconnect your lines at this time and thank you for your participation..