PHOENIX--(BUSINESS WIRE)--Edgio, Inc. (Nasdaq: EGIO), the platform of choice to power unmatched speed, security and simplicity at the edge, today reported financial results for the fourth quarter ended December 31, 2022. The company expects to file its Quarterly Reports on Form 10-Q for the period ending March 31, 2023, in August, and for the period ending June 30, 2023, shortly thereafter.
"With the restatement behind us, I am pleased to be announcing our Q4 2022 results, reconnecting with our analysts and investors, and providing an update on the significant progress we have made to become an edge solutions company. Since our last earnings call, we have launched award winning products, bolstered our leadership team with industry experts, revitalized our sales and marketing efforts, and expanded our channel partnerships," said Bob Lyons, President and CEO of Edgio. "We are already seeing tangible benefits in pipeline, bookings and new customer interactions. For 2023, 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, which we believe should provide the foundation for profitable growth in 2024."
Recent Business Highlights:
- New product momentum accelerates with launches of Edgio Applications v7, Advanced Bot Management and DDoS scrubbing.
- Notable wins for Applications solutions include a large mattress retailer in the U.S., a fast fashion retailer in China, a global sporting event association, a premium automaker from Europe and a leading premier league football club.
- Won the Web Application Security award from Cyber Defense Magazine (CDM), at the RSA Conference 2023 and, "Best of Show Award" for Uplynk at National Association of Broadcasters 2023.
- Recognized as a leader by technology research firms such as IDC, Frost & Sullivan and GIGAOM.
- Achieved Amazon Web Services (AWS) Retail Competency designation with Edgio's Applications Platform and Uplynk now available in AWS Marketplace.
- Grew Applications pipeline by approximately 80% from the beginning of the year, with Applications bookings up nearly 100% sequentially in 2Q23
- On track to operationalize approximately $85-90 million of expected cost savings on a run rate basis, by end of 2023.
- Bolstered leadership team with the appointment of Eric Black as CTO/ GM of Media and Todd Hinders as Chief Revenue Officer.
- Launched API Security solution in General Availability
Fourth Quarter Financial Highlights:
Revenue
- Revenue of $108.8 million, 90% year over year growth.
Gross margin
- GAAP gross margin was 36.6%, compared to 35.7% year over year and 29.6% quarter over quarter.
- Non-GAAP gross margin was 38.1%, compared to 36.1% year over year and 31.4% quarter over quarter.
- Cash gross margin was 42.3%, compared to 46.4% year over year and 41.2% quarter over quarter.
Operating expenses
- GAAP operating expenses, including share-based compensation of $7.9 million, restructuring charges of $10.9 million to achieve cost synergies, and acquisition and legal related expenses of $6.2 million, were 78.9% of revenue versus 71.3% in the third quarter of 2022.
- Non-GAAP operating expenses, excluding share-based compensation, restructuring charges, and acquisition and legal related expenses, were 57.2% of revenue versus 50.8% in the third quarter of 2022.
- Cash operating expenses, excluding share-based compensation, restructuring charges, acquisition and legal related expenses, depreciation and amortization were 51.6% of revenue versus 46.4% in the third quarter of 2022.
Adjusted EBITDA
- Adjusted EBITDA for the quarter was a loss of $10.1 million, compared to a loss of $5.7 million in the third quarter of 2022.
Capital Expenditure
- Capital Expenditure, net of payments from ISPs, during the quarter was $4.5 million, or 4% of revenue and for 2022 was $23.0 million or 7% of revenue.
- We expect to be efficient with our capital expenditure as a result of stronger operational discipline, leveraging our excess capacity and due to higher revenue contribution from software solutions that have lower capital requirements.
Cash, Cash Equivalents, and Marketable Securities
- Cash, cash equivalents, and marketable securities was $74.0 million for the fourth quarter ended December 31, 2022, compared to $70.8 million for the third quarter ended September 30, 2022, and $79.3 million for the fourth quarter ended December 31, 2021.
- Cash flow provided by operations during the quarter was $8.1 million and cash flow used in operations year-to-date was $11.7 million.
2023 Guidance:
"We remain optimistic on Edgio's transformation and our ability to generate long-term value for our shareholders. During the first half of the year, we experienced a lengthening of sales cycles due to softening macroeconomic conditions and natural uncertainty that comes with a restatement," said Stephen Cumming, Chief Financial Officer. "However, with the restatement behind us, new best-of-breed products in the market and refined go-to-market strategies exhibiting positive results, we expect to build on our pipeline and improve conversion in the coming quarters. Moreover, we continue to align our cost structure with our revenue baseline and prioritize our margins and cash flow in the near-term. We believe this structure will reduce the fixed cost in the business, further moderating our breakeven point and increasing our cash flow potential."
For 2023, we are expecting:
- Revenue between $392 million and $398 million.
- Adjusted EBITDA range of negative $37 million to negative $31 million, implying Adjusted EBITDA margin between negative 9.5% and negative 8%. We expect Adjusted EBITDA to breakeven in 4Q23.
- Capital expenditure between $10 million and $13 million, implying 2.5% and 3.5% of revenue.
Financial Tables
| Edgio, Inc. | ||||||||||||
| Consolidated Balance Sheets | ||||||||||||
| (In thousands, except per share data) | ||||||||||||
| December 31, | September 30, | December 31, | ||||||||||
2022 | 2022 | 2021 | ||||||||||
| As Restated | As Restated | |||||||||||
| (Unaudited) | ||||||||||||
| ASSETS | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 55,275 | $ | 59,306 | $ | 41,918 | ||||||
| Marketable securities | 18,734 | 11,444 | 37,367 | |||||||||
| Accounts receivable, net | 84,627 | 102,963 | 33,528 | |||||||||
| Income taxes receivable | 105 | 59 | 61 | |||||||||
| Prepaid expenses and other current assets | 36,374 | 35,799 | 17,810 | |||||||||
| Total current assets | 195,115 | 209,571 | 130,684 | |||||||||
| Property and equipment, net | 73,467 | 105,528 | 40,511 | |||||||||
| Operating lease right of use assets | 5,290 | 6,680 | 6,338 | |||||||||
| Deferred income taxes | 2,338 | 2,745 | 1,893 | |||||||||
| Goodwill | 169,156 | 171,065 | 114,511 | |||||||||
| Intangible assets, net | 91,661 | 67,738 | 14,613 | |||||||||
| Other assets | 5,353 | 7,820 | 5,525 | |||||||||
| Total assets | $ | 542,380 | $ | 571,147 | $ | 314,075 | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
| Current liabilities: | ||||||||||||
| Accounts payable | $ | 52,776 | $ | 38,155 | $ | 10,624 | ||||||
| Deferred revenue | 9,286 | 7,048 | 4,034 | |||||||||
| Operating lease liability obligations | 4,557 | 4,396 | 1,861 | |||||||||
| Income taxes payable | 3,133 | 433 | 873 | |||||||||
| Financing obligations | 6,346 | 6,314 | 4,648 | |||||||||
| Other current liabilities | 76,160 | 86,645 | 19,511 | |||||||||
| Total current liabilities | 152,258 | 142,991 | 41,551 | |||||||||
| Convertible senior notes, net | 122,631 | 122,416 | 121,782 | |||||||||
| Operating lease liability obligations, less current portions | 9,181 | 10,511 | 9,616 | |||||||||
| Deferred income taxes | 596 | 95 | 308 | |||||||||
| Deferred revenue, less current portion | 2,949 | 2,938 | 116 | |||||||||
| Financing obligations, less current portion | 13,784 | 14,243 | 7,851 | |||||||||
| Other long-term liabilities | 1,658 | 710 | 777 | |||||||||
| Total liabilities | 303,057 | 293,904 | 182,001 | |||||||||
| Commitments and contingencies | ||||||||||||
| Stockholders' equity: | ||||||||||||
| Convertible preferred stock, $0.001 par value; 7,500 shares authorized; no shares issued and outstanding | - | - | - | |||||||||
| Common stock, $0.001 par value; 300,000 shares authorized; 22,232, 221,583, and 134,337 shares issued and outstanding at December 31, 2022, September 30, 2022 and December 31, 2021, respectively | 222 | 222 | 134 | |||||||||
| Common stock contingent consideration | 16,300 | 16,300 | - | |||||||||
| Additional paid-in capital | 807,507 | 800,697 | 576,807 | |||||||||
| Accumulated other comprehensive loss | (11,665 | ) | (13,462 | ) | (8,345 | ) | ||||||
| Accumulated deficit | (573,041 | ) | (526,514 | ) | (436,522 | ) | ||||||
| Total stockholders' equity | 239,323 | 277,243 | 132,074 | |||||||||
| Total liabilities and stockholders' equity | $ | 542,380 | $ | 571,147 | $ | 314,075 | ||||||
| Edgio, Inc. | |||||||||||||||||||||||||||||
| Consolidated Statements of Operations | |||||||||||||||||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||||
| December 31, | September 30, | Percent | December 31, | Percent | December 31, | December 31, | Percent | ||||||||||||||||||||||
2022 | 2022 | Change | 2021 | Change | 2022 | 2021 | Change | ||||||||||||||||||||||
| As Restated | As Restated | As Restated | |||||||||||||||||||||||||||
| Revenue | $ | 108,841 | $ | 110,832 | -2 | % | $ | 57,178 | 90 | % | $ | 338,598 | $ | 201,115 | 68 | % | |||||||||||||
| Cost of revenue: | |||||||||||||||||||||||||||||
| Cost of services (1) | 64,356 | 67,140 | -4 | % | 30,876 | 108 | % | 202,887 | 122,687 | 65 | % | ||||||||||||||||||
| Depreciation - network | 4,629 | 10,903 | -58 | % | 5,876 | -21 | % | 28,171 | 24,106 | 17 | % | ||||||||||||||||||
| Total cost of revenue | 68,985 | 78,043 | -12 | % | 36,752 | 88 | % | 231,058 | 146,793 | 57 | % | ||||||||||||||||||
| Gross profit | 39,856 | 32,789 | 22 | % | 20,426 | 95 | % | 107,540 | 54,322 | 98 | % | ||||||||||||||||||
| Gross profit percentage | 36.6 | % | 29.6 | % | 35.7 | % | 31.8 | % | 27.0 | % | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||
| General and administrative (1) | 23,367 | 22,138 | 6 | % | 9,147 | 155 | % | 88,150 | 40,091 | 120 | % | ||||||||||||||||||
| Sales and marketing (1) | 15,894 | 14,448 | 10 | % | 8,341 | 91 | % | 48,803 | 29,960 | 63 | % | ||||||||||||||||||
| Research and development (1) | 29,441 | 32,462 | -9 | % | 5,149 | 472 | % | 83,652 | 21,669 | 286 | % | ||||||||||||||||||
| Depreciation and amortization | 6,258 | 5,943 | 5 | % | 976 | 541 | % | 14,741 | 2,794 | 428 | % | ||||||||||||||||||
| Restructuring charges (1) | 10,894 | 4,070 | 168 | % | 2,627 | 315 | % | 20,030 | 13,425 | 49 | % | ||||||||||||||||||
| Total operating expenses | 85,854 | 79,061 | 9 | % | 26,240 | 227 | % | 255,376 | 107,939 | 137 | % | ||||||||||||||||||
| Operating loss | (45,998 | ) | (46,272 | ) | NM | (5,814 | ) | NM | (147,836 | ) | (53,617 | ) | NM | ||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||||||||
| Interest expense | (1,660 | ) | (1,546 | ) | NM | (1,432 | ) | NM | (6,094 | ) | (5,423 | ) | NM | ||||||||||||||||
| Interest income | 310 | 140 | NM | 30 | NM | 510 | 134 | NM | |||||||||||||||||||||
| Other, net | (1,315 | ) | (1,005 | ) | NM | (242 | ) | NM | (4,179 | ) | (1,106 | ) | NM | ||||||||||||||||
| Total other expense | (2,665 | ) | (2,411 | ) | NM | (1,644 | ) | NM | (9,763 | ) | (6,395 | ) | NM | ||||||||||||||||
| Loss before income taxes | (48,663 | ) | (48,683 | ) | NM | (7,458 | ) | NM | (157,599 | ) | (60,012 | ) | NM | ||||||||||||||||
| Income tax (benefit) expense | (2,137 | ) | 440 | NM | 436 | NM | (21,080 | ) | 1,154 | NM | |||||||||||||||||||
| Net loss | $ | (46,526 | ) | $ | (49,123 | ) | NM | $ | (7,894 | ) | NM | $ | (136,519 | ) | $ | (61,166 | ) | NM | |||||||||||
| Net loss per share: | |||||||||||||||||||||||||||||
| Basic | $ | (0.21 | ) | $ | (0.22 | ) | $ | (0.06 | ) | $ | (0.75 | ) | $ | (0.48 | ) | ||||||||||||||
| Diluted | $ | (0.21 | ) | $ | (0.22 | ) | $ | (0.06 | ) | $ | (0.75 | ) | $ | (0.48 | ) | ||||||||||||||
| Weighted-average shares used in per share calculation: | |||||||||||||||||||||||||||||
| Basic | 222,026 | 220,194 | 134,023 | 182,381 | 127,789 | ||||||||||||||||||||||||
| Diluted | 222,026 | 220,194 | 134,023 | 182,381 | 127,789 | ||||||||||||||||||||||||
| (1) Includes share-based compensation and acquisition and legal related expenses (see supplemental table for figures) | |||||||||||||||||||||||||||||
| Edgio, Inc. | ||||||||||||||||
| Supplemental Financial Data | ||||||||||||||||
| (In thousands) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||
2022 | 2022 | 2021 | 2022 | 2021 | ||||||||||||
| As Restated | As Restated | As Restated | ||||||||||||||
| Share-based compensation: | ||||||||||||||||
| Cost of services | $ | 854 | $ | 855 | $ | 243 | $ | 2,443 | $ | 1,385 | ||||||
| General and administrative | 2,190 | 2,200 | 2,311 | 8,659 | 12,514 | |||||||||||
| Sales and marketing | 552 | 727 | 915 | 3,836 | 2,513 | |||||||||||
| Research and development | 4,341 | 4,571 | 788 | 15,655 | 2,435 | |||||||||||
| Restructuring charges | - | - | (254 | ) | - | 1,633 | ||||||||||
| Total share-based compensation | $ | 7,937 | $ | 8,353 | $ | 4,003 | $ | 30,593 | $ | 20,480 | ||||||
| Acquisition and legal related charges: | ||||||||||||||||
| Cost of services (1) | $ | 709 | $ | 1,106 | $ | - | $ | 1,885 | $ | - | ||||||
| General and administrative (1) | 4,013 | 6,898 | 199 | 30,540 | 2,640 | |||||||||||
| Sales and marketing | 93 | 292 | - | 385 | - | |||||||||||
| Research and development (1) | 1,370 | 2,975 | - | 4,367 | - | |||||||||||
| Total acquisition and legal related charges | $ | 6,185 | $ | 11,271 | $ | 199 | $ | 37,177 | $ | 2,640 | ||||||
| Depreciation and amortization: | ||||||||||||||||
| Network-related depreciation | $ | 4,629 | $ | 10,903 | $ | 5,876 | $ | 28,171 | $ | 24,106 | ||||||
| Other depreciation and amortization | 181 | 1,026 | 249 | 1,789 | 1,746 | |||||||||||
| Amortization of intangible assets | 6,077 | 4,917 | 727 | 12,952 | 1,048 | |||||||||||
| Total depreciation and amortization | $ | 10,887 | $ | 16,846 | $ | 6,852 | $ | 42,912 | $ | 26,900 | ||||||
| End of period statistics: | ||||||||||||||||
| Approximate number of active clients | 954 | 994 | 570 | 954 | 570 | |||||||||||
| Number of employees and employee equivalents | 980 | 1,057 | 552 | 980 | 552 | |||||||||||
(1) For the three months ended December 31, 2022 and September 30, 2022, and the twelve months ended December 31, 2022, acquisition and legal related charges included $359, $430, and $859 recorded in cost of services, $1,821, $2,175, and $4,351 recorded in general and administrative, and $115, $137, and $274 recorded in research and development, respectively, for non-cash transition service expenses which were credited from College Parent and its related affiliates and recorded as capital contributions in the consolidated statements of stockholders' equity. |
Use of Non-GAAP Financial Measures
To evaluate our business, we consider and use non-generally accepted accounting principles ("Non-GAAP") net loss, EBITDA, and Adjusted EBITDA as supplemental measures of operating performance. These measures include the same adjustments that our management takes into account when it reviews and assesses operating performance on a period-to-period basis. We consider Non-GAAP net loss to be an important indicator of our overall business performance. We define Non-GAAP net loss to be U.S. GAAP net loss, adjusted to exclude share-based compensation, non-cash interest expense, restructuring charges, acquisition and legal related expenses, amortization of intangible assets, and impairment charges. We believe that EBITDA provides a useful metric to investors to compare us with other companies within our industry and across industries. We define EBITDA as U.S. GAAP net loss, adjusted to exclude interest expense, interest and other (income) expense, income tax expense, and depreciation and amortization. We define Adjusted EBITDA as EBITDA adjusted to exclude share-based compensation, restructuring charges, and acquisition and legal related expenses. We use Adjusted EBITDA as a supplemental measure to review and assess operating performance. Our management uses these Non-GAAP financial measures because, collectively, they provide valuable information on the performance of our on-going operations, and they also enable us to compare against our peer companies and against other companies in our industry and adjacent industries. We believe these measures also provide similar insights to investors, and enable investors to review our results of operations "through the eyes of management."
Furthermore, our management uses these Non-GAAP financial measures to assist them in making decisions regarding our strategic priorities and areas for future investment and focus. The terms Non-GAAP net loss, EBITDA and Adjusted EBITDA are not defined under U.S. GAAP, and are not measures of operating income, operating performance or liquidity presented in accordance with U.S. GAAP. Our Non-GAAP net loss, EBITDA and Adjusted EBITDA have limitations as analytical tools, and when assessing our operating performance, Non-GAAP net loss, EBITDA and Adjusted EBITDA should not be considered in isolation, or as a substitute for net income (loss) or other consolidated income statement data prepared in accordance with U.S. GAAP. Some of these limitations include, but are not limited to:
- Non-GAAP net loss, EBITDA, and Adjusted EBITDA do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;
- These measures do not reflect changes in, or cash requirements for, our working capital needs;
- Non-GAAP net loss, EBITDA, and Adjusted EBITDA do not reflect the cash requirements necessary for litigation costs, including provision for litigation and litigation expenses;
- These measures do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt;
- These measures do not reflect income taxes or the cash requirements for any tax payments;
- Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will be replaced sometime in the future, and EBITDA, and Adjusted EBITDA do not reflect any cash requirements for such replacements;
- While share-based compensation is a component of operating expense, the impact on our financial statements compared to other companies can vary significantly due to such factors as the assumed life of the options and the assumed volatility of our common stock; and
- Other companies may calculate Non-GAAP net loss, EBITDA, and Adjusted EBITDA differently than we do, limiting their usefulness as comparative measures.
We compensate for these limitations by relying primarily on our U.S. GAAP financial results and using Non-GAAP net loss, EBITDA, and Adjusted EBITDA only as supplemental support for management's analysis of business performance. Non-GAAP net loss, EBITDA, and Adjusted EBITDA are calculated as follows for the periods presented in thousands.
Reconciliation of Non-GAAP Financial Measures
In accordance with the requirements of Item 10(e) of Regulation S-K, we are presenting the most directly comparable U.S. GAAP financial measures and reconciling the unaudited Non-GAAP financial metrics to the comparable U.S. GAAP measures. Per share amounts may not foot due to rounding.
Forward-looking non-GAAP financial measures are presented without reconciliations of such forward-looking non-GAAP measures because the GAAP financial measures are not accessible on a forward-looking basis and reconciling information is not available without unreasonable effort due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations, including adjustments reflected in our reconciliation of historic non-GAAP financial measures, the amounts of which, based on historical experience, could be material.
| Edgio, Inc. | ||||||||||||||||||||||||||||||||||||||||
| Reconciliation of U.S. GAAP Net Loss to Non-GAAP Net (Loss) Income | ||||||||||||||||||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||||||||||||||
| December 31, 2022 | September 30, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||||
| As Restated | As Restated | As Restated | ||||||||||||||||||||||||||||||||||||||
| Amount | Per Share | Amount | Per Share | Amount | Per Share | Amount | Per Share | Amount | Per Share | |||||||||||||||||||||||||||||||
| U.S. GAAP net loss | $ | (46,526 | ) | $ | (0.21 | ) | $ | (49,123 | ) | $ | (0.22 | ) | $ | (7,894 | ) | $ | (0.06 | ) | $ | (136,519 | ) | $ | (0.75 | ) | $ | (61,166 | ) | $ | (0.48 | ) | ||||||||||
| Share-based compensation | 7,937 | 0.04 | 8,353 | 0.04 | 4,257 | 0.03 | 30,593 | 0.17 | 18,847 | 0.15 | ||||||||||||||||||||||||||||||
| Noncash interest expense | 215 | 0.00 | 214 | 0.00 | 207 | 0.00 | 849 | 0.00 | 811 | 0.01 | ||||||||||||||||||||||||||||||
| Restructuring charges | 10,894 | 0.05 | 4,070 | 0.02 | 2,890 | 0.02 | 20,030 | 0.11 | 13,688 | 0.11 | ||||||||||||||||||||||||||||||
| Acquisition and legal related expenses | 6,185 | 0.03 | 11,271 | 0.05 | 199 | 0.00 | 37,177 | 0.20 | 2,640 | 0.02 | ||||||||||||||||||||||||||||||
| Amortization of intangible assets | 6,077 | 0.03 | 4,917 | 0.02 | 727 | 0.01 | 12,952 | 0.07 | 1,048 | 0.01 | ||||||||||||||||||||||||||||||
| Impairment of private company investment | 1,275 | 0.01 | - | - | - | - | 1,275 | 0.01 | - | - | ||||||||||||||||||||||||||||||
| Non-GAAP net (loss) income | $ | (13,943 | ) | $ | (0.06 | ) | $ | (20,298 | ) | $ | (0.09 | ) | $ | 386 | $ | 0.00 | $ | (33,643 | ) | $ | (0.18 | ) | $ | (24,132 | ) | $ | (0.19 | ) | ||||||||||||
| Weighted-average basic shares used in per share calculation: | 222,026 | 220,194 | 134,023 | 182,381 | 127,789 | |||||||||||||||||||||||||||||||||||
| Edgio, Inc. | |||||||||||||||||||||
| Reconciliation of U.S. GAAP Net Loss to EBITDA to Adjusted EBITDA | |||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||||||||
2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||
| As Restated | As Restated | As Restated | |||||||||||||||||||
| U.S. GAAP net loss | $ | (46,526 | ) | $ | (49,123 | ) | $ | (7,894 | ) | $ | (136,519 | ) | $ | (61,166 | ) | ||||||
| Depreciation and amortization | 10,887 | 16,846 | 6,852 | 42,912 | 26,900 | ||||||||||||||||
| Interest expense | 1,660 | 1,546 | 1,432 | 6,094 | 5,423 | ||||||||||||||||
| Interest and other expense | 1,005 | 865 | 212 | 3,669 | 972 | ||||||||||||||||
| Income tax (benefit) expense | (2,137 | ) | 440 | 436 | (21,080 | ) | 1,154 | ||||||||||||||
| EBITDA | $ | (35,111 | ) | $ | (29,426 | ) | $ | 1,038 | $ | (104,924 | ) | $ | (26,717 | ) | |||||||
| Share-based compensation | 7,937 | 8,353 | 4,257 | 30,593 | 18,847 | ||||||||||||||||
| Restructuring charges | 10,894 | 4,070 | 2,890 | 20,030 | 13,688 | ||||||||||||||||
| Acquisition and legal related expenses | 6,185 | 11,271 | 199 | 37,177 | 2,640 | ||||||||||||||||
| Adjusted EBITDA | $ | (10,095 | ) | $ | (5,732 | ) | $ | 8,384 | $ | (17,124 | ) | $ | 8,458 | ||||||||
| Edgio, Inc. | |||||||||||||||||||||
| Reconciliation of U.S. GAAP Financial Measures to Non-GAAP Financial Measures | |||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||||||||
2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||
| As Restated | As Restated | As Restated | |||||||||||||||||||
| GAAP gross profit | $ | 39,856 | $ | 32,789 | $ | 20,426 | $ | 107,540 | $ | 54,322 | |||||||||||
| Share-based compensation expense | 854 | 855 | 243 | 2,443 | 1,385 | ||||||||||||||||
| Acquisition and legal related charges | 709 | 1,106 | - | 1,885 | - | ||||||||||||||||
| Non-GAAP gross profit | $ | 41,419 | $ | 34,750 | $ | 20,669 | $ | 111,868 | $ | 55,707 | |||||||||||
| Non-GAAP gross margin | 38.1 | % | 31.4 | % | 36.1 | % | 33.0 | % | 27.7 | % | |||||||||||
| GAAP general and administrative expense | $ | 23,367 | $ | 22,138 | $ | 9,147 | $ | 88,150 | $ | 40,091 | |||||||||||
| Share-based compensation expense | 2,190 | 2,200 | 2,311 | 8,659 | 12,514 | ||||||||||||||||
| Acquisition and legal related charges | 4,013 | 6,898 | 199 | 30,540 | 2,640 | ||||||||||||||||
| Non-GAAP general and administrative expense | $ | 17,164 | $ | 13,040 | $ | 6,637 | $ | 48,951 | $ | 24,937 | |||||||||||
| GAAP sales and marketing expense | $ | 15,894 | $ | 14,448 | $ | 8,341 | $ | 48,803 | $ | 29,960 | |||||||||||
| Share-based compensation expense | 552 | 727 | 915 | 3,836 | 2,513 | ||||||||||||||||
| Acquisition and legal related charges | 93 | 292 | - | 385 | - | ||||||||||||||||
| Non-GAAP sales and marketing expense | $ | 15,249 | $ | 13,429 | $ | 7,426 | $ | 44,582 | $ | 27,447 | |||||||||||
| GAAP research and development expense | $ | 29,441 | $ | 32,462 | $ | 5,149 | $ | 83,652 | $ | 21,669 | |||||||||||
| Share-based compensation expense | 4,341 | 4,571 | 788 | 15,655 | 2,435 | ||||||||||||||||
| Acquisition and legal related charges | 1,370 | 2,975 | - | 4,367 | - | ||||||||||||||||
| Non-GAAP research and development expense | $ | 23,730 | $ | 24,916 | $ | 4,361 | $ | 63,630 | $ | 19,234 | |||||||||||
| GAAP depreciation and amortization | $ | 6,258 | $ | 5,943 | $ | 976 | $ | 14,741 | $ | 2,794 | |||||||||||
| Amortization of intangibles | (6,077 | ) | (4,917 | ) | (727 | ) | (12,952 | ) | (1,048 | ) | |||||||||||
| Non-GAAP depreciation and amortization | $ | 181 | $ | 1,026 | $ | 249 | $ | 1,789 | $ | 1,746 | |||||||||||
| GAAP operating loss | $ | (45,998 | ) | $ | (46,272 | ) | $ | (5,814 | ) | $ | (147,836 | ) | $ | (53,617 | ) | ||||||
| Share-based compensation expense | 7,937 | 8,353 | 4,257 | 30,593 | 18,847 | ||||||||||||||||
| Amortization of intangibles | 6,077 | 4,917 | 727 | 12,952 | 1,048 | ||||||||||||||||
| Acquisition and legal related charges | 6,185 | 11,271 | 199 | 37,177 | 2,640 | ||||||||||||||||
| Restructuring charges | 10,894 | 4,070 | 2,890 | 20,030 | 13,688 | ||||||||||||||||
| Non-GAAP operating (loss) income | $ | (14,905 | ) | $ | (17,661 | ) | $ | 2,259 | $ | (47,084 | ) | $ | (17,394 | ) | |||||||
| GAAP pre-tax loss | $ | (48,663 | ) | $ | (48,683 | ) | $ | (7,458 | ) | $ | (157,599 | ) | $ | (60,012 | ) | ||||||
| Share-based compensation expense | 7,937 | 8,353 | 4,257 | 30,593 | 18,847 | ||||||||||||||||
| Amortization of intangibles | 6,077 | 4,917 | 727 | 12,952 | 1,048 | ||||||||||||||||
| Acquisition and legal related charges | 6,185 | 11,271 | 199 | 37,177 | 2,640 | ||||||||||||||||
| Restructuring charges | 10,894 | 4,070 | 2,890 | 20,030 | 13,688 | ||||||||||||||||
| Noncash interest expense | 215 | 214 | 207 | 849 | 811 | ||||||||||||||||
| Impairment of private company investment | 1,275 | - | - | 1,275 | - | ||||||||||||||||
| Non-GAAP pre-tax (loss) income | $ | (16,080 | ) | $ | (19,858 | ) | $ | 822 | $ | (54,723 | ) | $ | (22,978 | ) | |||||||
| GAAP net loss | $ | (46,526 | ) | $ | (49,123 | ) | $ | (7,894 | ) | $ | (136,519 | ) | $ | (61,166 | ) | ||||||
| Share-based compensation expense | 7,937 | 8,353 | 4,257 | 30,593 | 18,847 | ||||||||||||||||
| Amortization of intangibles | 6,077 | 4,917 | 727 | 12,952 | 1,048 | ||||||||||||||||
| Acquisition and legal related charges | 6,185 | 11,271 | 199 | 37,177 | 2,640 | ||||||||||||||||
| Restructuring charges | 10,894 | 4,070 | 2,890 | 20,030 | 13,688 | ||||||||||||||||
| Noncash interest expense | 215 | 214 | 207 | 849 | 811 | ||||||||||||||||
| Impairment of private company investment | 1,275 | - | - | 1,275 | - | ||||||||||||||||
| Non-GAAP net (loss) income | $ | (13,943 | ) | $ | (20,298 | ) | $ | 386 | $ | (33,643 | ) | $ | (24,132 | ) | |||||||
| Non-GAAP fully weighted-average basic shares | 222,026 | 220,194 | 134,023 | 182,381 | 127,789 | ||||||||||||||||
| Non-GAAP fully weighted-average diluted shares | 222,026 | 220,194 | 134,023 | 182,381 | 127,789 | ||||||||||||||||
| Non-GAAP net (loss) income per Non-GAAP basic share | $ | (0.06 | ) | $ | (0.09 | ) | $ | 0.00 | $ | (0.18 | ) | $ | (0.19 | ) | |||||||
| Non-GAAP net (loss) income per Non-GAAP diluted share | $ | (0.06 | ) | $ | (0.09 | ) | $ | 0.00 | $ | (0.18 | ) | $ | (0.19 | ) | |||||||
| Edgio, Inc. | |||||||||||||||||||
| Reconciliation of U.S. GAAP Gross Profit to U.S. Non-GAAP Gross Profit to Cash Gross Profit | |||||||||||||||||||
| (In thousands) | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||||||
2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||
| As Restated | As Restated | As Restated | |||||||||||||||||
| GAAP gross profit | $ | 39,856 | $ | 32,789 | $ | 20,426 | $ | 107,540 | $ | 54,322 | |||||||||
| Share-based compensation expense | 854 | 855 | 243 | 2,443 | 1,385 | ||||||||||||||
| Acquisition and legal related charges | 709 | 1,106 | - | 1,885 | - | ||||||||||||||
| Non-GAAP gross profit | $ | 41,419 | $ | 34,750 | $ | 20,669 | $ | 111,868 | $ | 55,707 | |||||||||
| Non-GAAP gross margin | 38.1 | % | 31.4 | % | 36.1 | % | 33.0 | % | 27.7 | % | |||||||||
| Depreciation | $ | 4,629 | $ | 10,903 | $ | 5,876 | $ | 28,171 | $ | 24,106 | |||||||||
| Cash gross profit | $ | 46,048 | $ | 45,653 | $ | 26,545 | $ | 140,039 | $ | 79,813 | |||||||||
| Cash gross margin | 42.3 | % | 41.2 | % | 46.4 | % | 41.4 | % | 39.7 | % | |||||||||
Conference Call
At approximately 4:30 p.m. EDT (1:30 p.m. PDT) today, management will host a quarterly conference call for investors. Interested parties can access the call by dialing (800) 715-9871 from the United States or (646) 307-1963 internationally, with access code 7892919. The conference call will also be audio cast live from www.edg.io and a replay will be available following the call from the Edgio website.
Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. These statements include, among others, statements regarding our expectations regarding revenue, gross margin, non-GAAP net loss, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, capital expenditures, run-rate savings, churn reductions, and pipeline conversions, our ability to drive long-term value creation for our shareholders, our ability to achieve Adjusted EBITDA profitability, reduce our fixed costs and our breakeven point, and align our cost structure with our revenue baseline, our ability to leverage excess capacity and exercise operational discipline, the integration of Edgecast and our future prospects, areas of investment, product launches, and the anticipated timing of filing our Quarterly Reports on Form 10-Q for the periods ended March 31, 2023 and June 30, 2023. Our expectations and beliefs regarding these matters may not materialize. The potential risks and uncertainties that could cause actual results or outcomes to differ materially from the results or outcomes predicted include, among other things, reduction of demand for our services from new or existing clients, unforeseen changes in our hiring patterns, adverse outcomes in litigation, experiencing expenses that exceed our expectations, and acquisition activities and contributions from acquired businesses. A detailed discussion of these factors and other risks that affect our business is contained in our SEC filings, including our most recent reports on Forms 10-K and 10-Q, particularly under the heading "Risk Factors." Copies of these filings are available online on our investor relations website at investors.edgio.com and on the SEC website at www.SEC.gov. All information provided in this release and in the attachments is as of July 19, 2023, and we undertake no duty to update this information in light of new information or future events, unless required by law.
About Edgio
Edgio (NASDAQ: EGIO) helps companies deliver online experiences and content faster, safer, and with more control. Its developer-friendly, globally scaled edge network, combined with fully integrated application and media solutions, provide a single platform for the delivery of high-performing, secure web properties and streaming content. Through this fully integrated platform and end-to-end edge services, companies can deliver content quicker and more securely, thus boosting overall revenue and business value. To learn more, visit edg.io and follow us on Twitter, LinkedIn and Facebook.
Copyright (C) 2023 Edgio, Inc. All rights reserved. All product or service names are the property of their respective owners.
Contacts
Edgio, Inc.
Investor relations: Sameet Sinha, 602-850-4973
ir@edg.io
