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Edgio Reports Fourth Quarter 2022 Financial Results

Q4 2022 revenue of $108.8 million, 90% year over year growth

Applications pipeline increase of approximately 80% for 2023, to date

$85-$90 million of run rate savings expected by YE23, forecasted higher by YE24

Capital expenditure, net of payments from ISPs, was $4.5 million or 4% of revenue

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

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