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Edgio Reports First Quarter 2023 Results

Q1 2023 revenue of $101.9 million, 84% year over year growth

Applications bookings QTD in 3Q 2023 already ahead of 2Q 2023 levels and up more than 90% from 1Q 2023 bookings

On target to achieve $85-$90 million of run rate savings by YE23

Capital expenditure, net of payments from ISPs, was $3.6 million or 3.6% of revenue

Edgio, Inc. (Nasdaq: EGIO) (Edgio), the platform of choice to power unmatched speed, security and simplicity at the edge, today reported financial results for the first quarter ended March 31, 2023 along with the filing of its Quarterly Report on Form 10-Q for the period ended March 31, 2023. The company expects to file its Quarterly Report on Form 10-Q for the period ended June 30, 2023 (“Q2 2023 Form 10-Q”), in September 2023. Due to the delay in filing the Q2 2023 Form 10-Q, the company expects a notice from The NASDAQ Stock Market LLC (“Nasdaq”) stating that it is not in compliance with the requirements for continued listing under Nasdaq Listing Rule 5250(c)(1) (the “Listing Rule”). The company expects to remedy this deficiency with the filing of the Q2 2023 Form 10-Q in September 2023.

“In the first quarter, we took substantial steps to accelerate progress in each of our product offerings. In Applications, we strengthened our security offering by adding DDoS scrubbing and enhanced WAAP capabilities, further establishing Edgio as a leading security company. In Media, we brought on streaming industry pioneer, Eric Black, as GM/ CTO to spearhead growth of our entire media portfolio,” said Bob Lyons, President and CEO of Edgio. "These enhanced products, new leadership, and improved execution are resulting in reduced churn, increased pipeline conversion, higher attach rates, and increased cross sell/upsell opportunities. This is reflected in our quarter-to-date Applications bookings, which are already ahead of second quarter levels. We expect this momentum to continue, and combined with our cost savings plans, we believe we have established a strong foundation for profitable growth in 2024."

Recent Business Highlights:

  • Continued new product momentum with API Security solution in General Availability
  • Recognized as a leader in Content Delivery Networks and Edge Computing by technology research firm Frost & Sullivan
  • QTD Applications bookings already ahead of second quarter levels with new client wins and existing client expansion
  • QTD Applications bookings are up 90% from total bookings in 1Q 2023
  • On track to operationalize approximately $85-90 million of expected run rate cost savings, by end of 2023 and forecasted higher by end of 2024

First Quarter Financial highlights:

Revenue

  • Revenue of $101.9 million, 84.2% year over year growth due to the inclusion of the Edgecast acquisition. Sequential decline of 6.3% was driven by seasonality and previously communicated churn.

Gross margin

  • GAAP gross margin was 30.4%, compared to 30.4% year over year and 36.6% quarter over quarter.
  • Non-GAAP gross margin was 31.2%, compared to 31.1% year over year and 38.1% quarter over quarter.
  • Cash gross margin was 34.7%, compared to 41.7% year over year and 42.3% quarter over quarter.

Operating expenses

  • GAAP operating expenses, including share-based compensation of $4.5 million, restructuring charges of $0.5 million to achieve cost synergies, restatement related expenses of $2.2 million, and acquisition and legal related expenses of $1.0 million, were 62.4% of revenue versus 78.9% in the fourth quarter of 2022.
  • Non-GAAP operating expenses, excluding share-based compensation, restructuring charges, restatement related expenses, and acquisition and legal related expenses, were 54.3% of revenue versus 57.3% in the fourth quarter of 2022.
  • Cash operating expenses, excluding share-based compensation, restructuring charges, restatement related expenses, and acquisition and legal related expenses, depreciation and amortization were 48.8% of revenue versus 51.6% in the fourth quarter of 2022. Sequential decline in cash operating expenses was primarily due to realization of cost savings.

Adjusted EBITDA

  • Adjusted EBITDA for the quarter was a loss of $14.4 million, compared to a loss of $10.1 million in the fourth quarter of 2022 due to lower gross profit partially offset by realization of cost savings.

Capital Expenditure

  • Capital expenditure, net of payments from ISPs, during the quarter was $3.6 million, or 3.6% of revenue.
  • We expect to continue 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 were $48.2 million for the quarter, compared to $74.0 million for the fourth quarter of 2022.
  • Cash flow used by operations during the quarter was $24.1 million.

2023 Guidance:

"With our new products and refined go-to-market, combined with the execution on our target run rate cost savings of approximately $85-90 million by year-end 2023, we remain optimistic about our profitable growth prospects in 2024,” said Stephen Cumming, CFO. “As we detailed last quarter, we expect to deliver mid to high single digit sequential decline in the second quarter of 2023 and then expect the normal increase due to seasonality in the fourth quarter. We expect cash gross margin to keep pace with revenue trends consistent with having a high fixed cost structure. We expect second quarter 2023 Adjusted EBITDA loss to be the bottom for the year with reduced losses in the third quarter and break even in the fourth quarter."

For 2023, our guidance is unchanged and we are currently 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%.
  • 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)

 

March 31,

2023

 

December 31,

2022

 

(Unaudited)

 

 

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

32,787

 

 

$

55,275

 

Marketable securities

 

15,396

 

 

 

18,734

 

Accounts receivable, net

 

82,461

 

 

 

84,627

 

Income taxes receivable

 

373

 

 

 

105

 

Prepaid expenses and other current assets

 

36,987

 

 

 

36,374

 

Total current assets

 

168,004

 

 

 

195,115

 

Property and equipment, net

 

72,976

 

 

 

73,467

 

Operating lease right of use assets

 

5,053

 

 

 

5,290

 

Deferred income taxes

 

2,388

 

 

 

2,338

 

Goodwill

 

168,961

 

 

 

169,156

 

Intangible assets, net

 

86,348

 

 

 

91,661

 

Other assets

 

2,586

 

 

 

5,353

 

Total assets

$

506,316

 

 

$

542,380

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

48,312

 

 

$

52,776

 

Deferred revenue

 

10,500

 

 

 

9,286

 

Operating lease liability obligations

 

4,483

 

 

 

4,557

 

Income taxes payable

 

3,286

 

 

 

3,133

 

Financing obligations

 

6,839

 

 

 

6,346

 

Other current liabilities

 

76,947

 

 

 

76,160

 

Total current liabilities

 

150,367

 

 

 

152,258

 

Convertible senior notes, net

 

122,849

 

 

 

122,631

 

Operating lease liability obligations, less current portion

 

8,066

 

 

 

9,181

 

Deferred income taxes

 

602

 

 

 

596

 

Deferred revenue, less current portion

 

2,333

 

 

 

2,949

 

Financing obligations, less current portion

 

12,738

 

 

 

13,784

 

Other long-term liabilities

 

721

 

 

 

1,658

 

Total liabilities

 

297,676

 

 

 

303,057

 

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; 222,702 and 222,232 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively

 

223

 

 

 

222

 

Common stock contingent consideration

 

16,300

 

 

 

16,300

 

Additional paid-in capital

 

811,571

 

 

 

807,507

 

Accumulated other comprehensive loss

 

(11,430

)

 

 

(11,665

)

Accumulated deficit

 

(608,024

)

 

 

(573,041

)

Total stockholders’ equity

 

208,640

 

 

 

239,323

 

Total liabilities and stockholders’ equity

$

506,316

 

 

$

542,380

 

 

Edgio, Inc.

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

Three Months Ended

 

March 31,

 

Dec. 31,

 

Percent

 

March 31,

 

Percent

 

 

2023

 

 

 

2022

 

 

Change

 

 

2022

 

 

Change

Revenue

$

101,948

 

 

$

108,841

 

 

(6

)%

 

$

55,339

 

 

84

%

Cost of revenue:

 

 

 

 

 

 

 

 

 

Cost of services (1)

 

67,353

 

 

 

64,356

 

 

5

%

 

 

32,673

 

 

106

%

Depreciation — network

 

3,610

 

 

 

4,629

 

 

(22

)%

 

 

5,848

 

 

(38

)%

Total cost of revenue

 

70,963

 

 

 

68,985

 

 

3

%

 

 

38,521

 

 

84

%

Gross profit

 

30,985

 

 

 

39,856

 

 

(22

)%

 

 

16,818

 

 

84

%

Gross profit percentage

 

30.4

%

 

 

36.6

%

 

 

 

 

30.4

%

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

General and administrative (1)

 

16,836

 

 

 

23,367

 

 

(28

)%

 

 

15,833

 

 

6

%

Sales and marketing (1)

 

19,622

 

 

 

15,894

 

 

23

%

 

 

7,627

 

 

157

%

Research and development (1)

 

21,016

 

 

 

29,441

 

 

(29

)%

 

 

9,577

 

 

119

%

Depreciation and amortization

 

5,607

 

 

 

6,258

 

 

(10

)%

 

 

1,032

 

 

443

%

Restructuring charges

 

500

 

 

 

10,894

 

 

(95

)%

 

 

698

 

 

(28

)%

Total operating expenses

 

63,581

 

 

 

85,854

 

 

(26

)%

 

 

34,767

 

 

83

%

Operating loss

 

(32,596

)

 

 

(45,998

)

 

NM

 

 

 

(17,949

)

 

NM

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest expense

 

(1,577

)

 

 

(1,660

)

 

NM

 

 

 

(1,431

)

 

NM

 

Interest income

 

397

 

 

 

310

 

 

NM

 

 

 

27

 

 

NM

 

Other, net

 

(809

)

 

 

(1,315

)

 

NM

 

 

 

(713

)

 

NM

 

Total other expense

 

(1,989

)

 

 

(2,665

)

 

NM

 

 

 

(2,117

)

 

NM

 

Loss before income taxes

 

(34,585

)

 

 

(48,663

)

 

NM

 

 

 

(20,066

)

 

NM

 

Income tax expense

 

398

 

 

 

(2,137

)

 

NM

 

 

 

206

 

 

NM

 

Net loss

$

(34,983

)

 

$

(46,526

)

 

NM

 

 

$

(20,272

)

 

NM

 

 

 

 

 

 

 

 

 

 

 

Net loss per share:

 

 

 

 

 

 

 

 

 

Basic

$

(0.16

)

 

$

(0.21

)

 

 

 

$

(0.15

)

 

 

Diluted

$

(0.16

)

 

$

(0.21

)

 

 

 

$

(0.15

)

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares used in per share calculation:

 

 

 

 

 

 

 

 

 

Basic

 

222,462

 

 

 

222,026

 

 

 

 

 

135,528

 

 

 

Diluted

 

222,462

 

 

 

222,026

 

 

 

 

 

135,528

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes share-based compensation (see supplemental table for figures)

 

 

Edgio, Inc.

Supplemental Financial Data

(In thousands)

(Unaudited)

 

Three Months Ended

 

March 31,

 

Dec. 31,

 

March 31,

 

2023

 

2022

 

2022

Share-based compensation:

 

 

 

 

 

Cost of services

$

679

 

$

854

 

$

408

General and administrative

 

1,416

 

 

2,190

 

 

2,103

Sales and marketing

 

617

 

 

552

 

 

1,181

Research and development

 

2,488

 

 

4,341

 

 

3,320

Total share-based compensation

$

5,200

 

$

7,937

 

$

7,012

 

 

 

 

 

 

Acquisition and legal related charges:

 

 

 

 

 

Cost of services

$

111

 

$

709

 

$

General and administrative

 

589

 

 

4,013

 

 

5,107

Sales and marketing

 

42

 

 

93

 

 

Research and development

 

410

 

 

1,370

 

 

Total share-based compensation

$

1,152

 

$

6,185

 

$

5,107

 

 

 

 

 

 

Depreciation and amortization:

 

 

 

 

 

Network-related depreciation

$

3,610

 

$

4,629

 

$

5,848

Other depreciation and amortization

 

294

 

 

181

 

 

246

Amortization of intangible assets

 

5,313

 

 

6,077

 

 

786

Total depreciation and amortization

$

9,217

 

$

10,887

 

$

6,880

 

 

 

 

 

 

End of period statistics:

 

 

 

 

 

Approximate number of active clients

 

900

 

 

954

 

 

577

 

 

 

 

 

 

Number of employees and employee equivalents

 

893

 

 

980

 

 

556

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, impairment of private company investment, and restatement related expenses. 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, acquisition and legal related expenses, and restatement 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

(In thousands)

(Unaudited

 

Three Months Ended

 

March 31, 2023

 

December 31, 2022

 

March 31, 2022

 

Amount

 

Per Share

 

Amount

 

Per Share

 

Amount

 

Per Share

U.S. GAAP net loss

$

(34,983

)

 

$

(0.16

)

 

$

(46,526

)

 

$

(0.21

)

 

$

(20,272

)

 

$

(0.15

)

Share-based compensation

 

5,200

 

 

 

0.02

 

 

 

7,937

 

 

 

0.04

 

 

 

7,012

 

 

 

0.05

 

Non-cash interest expense

 

218

 

 

 

 

 

 

215

 

 

 

 

 

 

209

 

 

 

 

Restructuring and transition related charges

 

500

 

 

 

 

 

 

10,894

 

 

 

0.05

 

 

 

698

 

 

 

0.01

 

Acquisition and legal related expenses

 

1,152

 

 

 

0.01

 

 

 

6,185

 

 

 

0.03

 

 

 

5,107

 

 

 

0.04

 

Amortization of intangible assets

 

5,313

 

 

 

0.02

 

 

 

6,077

 

 

 

0.03

 

 

 

786

 

 

 

0.01

 

Restatement related expenses

 

2,175

 

 

 

0.01

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment of private company investment

 

 

 

 

 

 

 

1,275

 

 

 

0.01

 

 

 

 

 

 

 

Non-GAAP net loss

$

(20,425

)

 

$

(0.09

)

 

$

(13,943

)

 

$

(0.06

)

 

$

(6,460

)

 

$

(0.05

)

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares used in per share calculation:

 

 

 

222,462

 

 

 

 

 

222,026

 

 

 

 

 

135,528

 

 

Edgio, Inc.

Reconciliation of U.S. GAAP Net Loss to EBITDA to Adjusted EBITDA

(In thousands)

(Unaudited)

 

Three Months Ended

 

March 31,

 

Dec. 31,

 

March 31,

 

 

2023

 

 

 

2022

 

 

 

2022

 

U.S. GAAP net loss

$

(34,983

)

 

$

(46,526

)

 

$

(20,272

)

Depreciation and amortization

 

9,217

 

 

 

10,887

 

 

 

6,880

 

Interest expense

 

1,577

 

 

 

1,660

 

 

 

1,431

 

Interest and other (income) expense

 

412

 

 

 

1,005

 

 

 

686

 

Income tax expense

 

398

 

 

 

(2,137

)

 

 

206

 

EBITDA

$

(23,379

)

 

$

(35,111

)

 

$

(11,069

)

Share-based compensation

 

5,200

 

 

 

7,937

 

 

 

7,012

 

Restructuring and transition related charges

 

500

 

 

 

10,894

 

 

 

698

 

Acquisition and legal related expenses

 

1,152

 

 

 

6,185

 

 

 

5,107

 

Restatement related expenses

 

2,175

 

 

 

 

 

 

 

Adjusted EBITDA

$

(14,352

)

 

$

(10,095

)

 

$

1,748

 

 

Edgio, Inc.

Reconciliation of U.S. GAAP Financial Measures to Non-GAAP Financial Measures

(In thousands)

(Unaudited)

 

Three Months Ended

 

March 31, 2023

 

December 31, 2022

 

March 31, 2022

GAAP gross profit

$

30,985

 

 

$

39,856

 

 

$

16,818

 

Share-based compensation expense

 

679

 

 

 

854

 

 

 

408

 

Acquisition and legal related charges

 

111

 

 

 

709

 

 

 

 

Non-GAAP gross profit

$

31,775

 

 

$

41,419

 

 

$

17,226

 

Non-GAAP gross margin

 

31.2

%

 

 

38.1

%

 

 

31.1

%

 

 

 

 

 

 

GAAP general and administrative expense

$

16,836

 

 

$

23,367

 

 

$

15,833

 

Share-based compensation expense

 

1,416

 

 

 

2,190

 

 

 

2,103

 

Acquisition and legal related charges

 

589

 

 

 

4,013

 

 

 

5,107

 

Restatement related expenses

 

2,175

 

 

 

 

 

 

 

Non-GAAP general and administrative expense

$

12,656

 

 

$

17,164

 

 

$

8,623

 

 

 

 

 

 

 

GAAP sales and marketing expense

$

19,622

 

 

$

15,894

 

 

$

7,627

 

Share-based compensation expense

 

617

 

 

 

552

 

 

 

1,181

 

Acquisition and legal related charges

 

42

 

 

 

93

 

 

 

 

Non-GAAP sales and marketing expense

$

18,963

 

 

$

15,249

 

 

$

6,446

 

 

 

 

 

 

 

GAAP research and development expense

$

21,016

 

 

$

29,441

 

 

$

9,577

 

Share-based compensation expense

 

2,488

 

 

 

4,341

 

 

 

3,320

 

Acquisition and legal related charges

 

410

 

 

 

1,370

 

 

 

 

Non-GAAP research and development expense

$

18,118

 

 

$

23,730

 

 

$

6,257

 

 

 

 

 

 

 

GAAP depreciation and amortization

$

5,607

 

 

$

6,258

 

 

$

1,032

 

Amortization of intangibles

 

(5,313

)

 

 

(6,077

)

 

 

(786

)

Non-GAAP depreciation and amortization

$

294

 

 

$

181

 

 

$

246

 

 

 

 

 

 

 

GAAP operating loss

$

(32,596

)

 

$

(45,998

)

 

$

(17,949

)

Share-based compensation expense

 

5,200

 

 

 

7,937

 

 

 

7,012

 

Amortization of intangibles

 

5,313

 

 

 

6,077

 

 

 

786

 

Restatement related expenses

 

2,175

 

 

 

 

 

 

 

Acquisition and legal related charges

 

1,152

 

 

 

6,185

 

 

 

5,107

 

Restructuring charges

 

500

 

 

 

10,894

 

 

 

698

 

Non-GAAP operating (loss) income

$

(18,256

)

 

$

(14,905

)

 

$

(4,346

)

 

 

 

 

 

 

GAAP pre-tax loss

$

(34,585

)

 

$

(48,663

)

 

$

(20,066

)

Share-based compensation expense

 

5,200

 

 

 

7,937

 

 

 

7,012

 

Amortization of intangibles

 

5,313

 

 

 

6,077

 

 

 

786

 

Acquisition and legal related charges

 

1,152

 

 

 

6,185

 

 

 

5,107

 

Restructuring charges

 

500

 

 

 

10,894

 

 

 

698

 

Non-cash interest expense

 

218

 

 

 

215

 

 

 

209

 

Restatement related expenses

 

2,175

 

 

 

 

 

 

 

Impairment of private company investment

 

 

 

 

1,275

 

 

 

 

Non-GAAP pre-tax (loss) income

$

(20,027

)

 

$

(16,080

)

 

$

(6,254

)

 

 

 

 

 

 

GAAP net loss

$

(34,983

)

 

$

(46,526

)

 

$

(20,272

)

Share-based compensation expense

 

5,200

 

 

 

7,937

 

 

 

7,012

 

Amortization of intangibles

 

5,313

 

 

 

6,077

 

 

 

786

 

Acquisition and legal related charges

 

1,152

 

 

 

6,185

 

 

 

5,107

 

Restructuring charges

 

500

 

 

 

10,894

 

 

 

698

 

Non-cash interest expense

 

218

 

 

 

215

 

 

 

209

 

Restatement related expenses

 

2,175

 

 

 

 

 

 

 

Impairment of private company investment

 

 

 

 

1,275

 

 

 

 

Non-GAAP net (loss) income

$

(20,425

)

 

$

(13,943

)

 

$

(6,460

)

Non-GAAP fully weighted-average basic shares

 

222,462

 

 

 

222,026

 

 

 

135,528

 

Non-GAAP fully weighted-average diluted shares

 

222,462

 

 

 

222,026

 

 

 

135,528

 

Non-GAAP net (loss) income per Non-GAAP basic share

$

(0.09

)

 

$

(0.06

)

 

$

(0.05

)

Non-GAAP net (loss) income per Non-GAAP diluted share

$

(0.09

)

$

(0.06

)

 

$

(0.05

)

 

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

 

March 31, 2023

 

December 31, 2022

 

March 31, 2022

GAAP gross profit

$

30,985

 

 

$

39,856

 

 

$

16,818

 

Share-based compensation expense

 

679

 

 

 

854

 

 

 

408

 

Acquisition and legal related charges

 

111

 

 

 

709

 

 

 

 

Non-GAAP gross profit

 

31,775

 

 

 

41,419

 

 

 

17,226

 

Non-GAAP gross margin

 

31.2

%

 

 

38.1

%

 

 

31.1

%

 

 

 

 

 

 

Depreciation

 

3,610

 

 

 

4,629

 

 

 

5,848

 

Cash gross profit

$

35,385

 

 

$

46,048

 

 

$

23,074

 

Cash gross margin

 

34.7

%

 

 

42.3

%

 

 

41.7

%

Conference Call

Management will host a conference call for investors when it files the Q2 2023 Form 10-Q for the period ended June 30, 2023, which is expected in September 2023. Access details will be provided at a later date.

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, including the impacts of seasonality, 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 period ended 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.edg.io and on the SEC website at www.SEC.gov. All information provided in this release and in the attachments is as of August 15, 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 TwitterLinkedIn 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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