Brightcove Acquires Cloud Encoding Vendor Zencoder, As Revenues Increase 41% To $21.6 Million In Q2

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Online video platform providers Brightcove released its second quarter earnings report today, posting a net loss of $4.3 million, or $0.16 per diluted share, compared to $6.9 million last in Q2 2011. Revenues for the quarter increased 41 percent to $21.6 million over last year’s second quarter, when it had $15.3 million in sales.

It also announced that it has agreed to acquire cloud encoding vendor Zencoder, creator of the popular Video.js HTML5 video player. Zencoder has more than 1,000 paying customers for its encoding services, including PBS, Scripps Networks Interactive, IGN, SmugMug, Yammer, TwitVid, College Humor, Funny or Die, and others. The open source Video.js player is used on more than 24,000 websites.

Brightcove is paying $30 million for Y Combinator alum Zencoder, and plans to continue to operate the company separate from its core business. Founded in 2010, Zencoder raised just $2 million, mostly through a Series A round raised in April 2011.

While Brightcove posted a net loss, key metrics actually improved from last year. Its gross profit for the second quarter was $15.2 million, compared to $10.3 million in Q2 2011. Non-GAAP loss from operations was $3.9 million for the second quarter of 2012, narrowing from $5.1 million during the second quarter of 2011. Brightcove also announced that it had 4,697 customers at the end of the quarter, up 43 percent compared to the same period last year.

Brightcove raised $54.6 million through its IPO earlier this year. As a result, it now has $58.6 million in cash and cash equivalents, which is up from $17.2 million at the end of 2011.

Looking forward to the third quarter, Brightcove forecast revenue in a range of $21.1 million and $21.6 million, with a non-GAAP operating loss between $3.1 million and $2.8 million. That’s a non-GAAP loss of $0.11 or $0.12 per share. For the full year, it sees revenue between $85.3 million and $86.0 million, with a non-GAAP loss between $10.5 million and $9.5 million, or between $0.47 and $0.44 per share.