Expects Preliminary Q4 2023 Revenue of $93 -
$95 Million
Total Cash and Cash Equivalents Balance of
Approximately $47 Million as of December 31, 2023
Annual Report Delayed due to Change in
Auditor
Edgio, Inc. (Nasdaq: EGIO) (the “Company”), today announced
unaudited financial results for the three months ended December 31,
2023.
Todd Hinders, CEO, said, “Customer focus and a steadfast
commitment to innovation and fiscal discipline are drivers of
sustained shareholder value creation. At Edgio, we have built a
solid foundation with market leading solutions across
Security/Applications and Media, leveraging our highly performant
global edge network. Our strong and differentiated technological
foundation combined with focused go-to-market motions, improving
unit economics, and optimized cost structure gives me confidence in
our ability to drive profitable growth.”
Unaudited Fourth Quarter 2023 Financial and Operational
Highlights:
Based on information currently available to the Company for the
fourth quarter 2023, the Company expects:
- Q4 2023 revenue in the range of $93-$95 million and Adjusted
EBITDA in the range of negative $2 Million to breakeven.
- Bookings in the second half of 2023 grew more than 30% versus
the first half with Security/Applications bookings growth almost
doubling in the same period.
- Operationalized run-rate cost savings at end of 2023 of
approximately $84 million, within the expected range of $80 - $90
million.
- Cash, cash equivalents and short-term investment balance as of
December 31, 2023, of approximately $47 million, versus $27.6
million as of September 30, 2023.
- Q4 2023 capital expenditures of approximately $5 million or
$2.5 million, net of proceeds from financing receivables.
In addition, in November 2023, the Company received
approximately $50 million of new financing, net of transaction
costs and fees, and exchanged 95% of 2025 Convertible Notes for New
2027 Convertible Notes.
The financial results for the three months ended December 31,
2023, included in this release are preliminary, have not been
reviewed or audited, are based upon the Company’s estimates, and
were prepared prior to the completion of the Company's financial
statement close process. As a result, these preliminary financial
results could be subject to change as the Company’s independent
registered public accounting firm completes its audit of these
periods. These limited preliminary financial results should not be
viewed as a substitute for the Company’s full fourth quarter
results and do not present all information necessary for an
understanding of the Company’s financial performance as of and for
the three months ended December 31, 2023. Accordingly, undue
reliance should not be placed on this preliminary data.
Business Highlights:
- New client wins over the last few months include a major Korean
ecommerce company, a domestic fashion label, the Asian subsidiary
of a major hardware company, a domestic auto-parts ecommerce
company, and a large fashion ecommerce company in China.
- Launched enterprise-level Protect and Perform Applications
Bundles, combining web performance, full-spectrum web security
suite and Security Operations Center (SOC) support services – all
in a single, comprehensive package.
- Won “Overall Web Security Solution of the Year” award in the
7th annual CyberSecurity Breakthrough Awards program conducted by
CyberSecurity Breakthrough.
Files Form 12b-25 with the Securities and Exchange
Commission:
The Company also announced today that it expects to file a
notification of late filing on Form 12b-25 with the Securities and
Exchange Commission with respect to the Company’s Annual Report for
2023 on Form 10-K (“Annual Report”), which provides an automatic
15-day extension of the filing deadline for the Annual Report to
April 1, 2024. As previously disclosed, on December 18, 2023, the
Company received notice that the Company’s previous independent
registered public accounting firm had decided to resign as
independent registered public accounting firm of the Company,
effective that day. The Audit Committee of the Board of Directors
of the Company accepted the resignation and engaged in a thorough
search for a new independent registered public accounting firm, and
on January 26, 2024, the Company entered into an engagement with a
new independent registered public accounting firm.
The onboarding of a new audit team takes considerable time as
the new audit firm familiarizes itself with the Company’s
accounting and financial processes. Due to the engagement of a new
independent registered public accounting firm in the first quarter
of 2024, which is late in the normal auditing process, the
completion of the Company’s public company audit is delayed, and
the Company does not expect the audit to be completed in time to
file the 2023 Form 10-K on or before the extended deadline. The
Company is working diligently to complete and file the 2023 Form
10-K as soon as practicable.
The Company has obtained a waiver from the lenders under its
senior secured credit facility related to delayed reporting through
June 30, 2024. The Company may incur certain additional interest
under its senior secured convertible notes if its SEC filings are
not made on or before May 14, 2024.
Use of Non-GAAP Financial Measures
To evaluate its business, the Company considers and uses
non-generally accepted accounting principles (“non-GAAP”),
including Adjusted EBITDA as contained in this press release, as
supplemental measures of operating performance. EBITDA is defined
as U.S. GAAP net loss, adjusted to exclude interest expense,
interest and other (income) expense, income tax expense, and
depreciation and amortization. Adjusted EBITDA is defined as EBITDA
adjusted to exclude share-based compensation, restructuring
charges, acquisition and legal related expenses, and expenses
related to the 2023 restatement and other significant non-recurring
gains or losses. These measures include some of the same
adjustments management considers when it reviews and assesses
operating performance on a period-to-period basis. The Company’s
management uses these non-GAAP financial measures because,
collectively, they provide valuable information on the performance
of the Company’s on-going operations and assist management in
making decisions regarding the Company’s strategic priorities and
areas for future investment and focus. The Company believes these
measures also provide similar insights to investors and enable
investors to review the Company’s results of operations “through
the eyes of management.”
The terms 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.
Adjusted EBITDA has limitations as an analytical tool, and when
assessing the Company’s operating performance, 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:
- Adjusted EBITDA does not reflect the Company’s cash
expenditures or future requirements for capital expenditures or
contractual commitments;
- This measure does not reflect changes in, or cash requirements
for, the Company’s working capital needs;
- This measure does not reflect the cash requirements necessary
for litigation costs, including provision for litigation and
litigation expenses;
- This measure does not reflect the interest expense, or the cash
requirements necessary to service interest or principal payments,
on the Company’s debt;
- This measure does 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 Adjusted EBITDA does not reflect any
cash requirements for such replacements;
- While share-based compensation is a component of operating
expense, the impact on the Company’s 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 the
Company’s common stock; and
- Other companies may calculate Adjusted EBITDA differently,
limiting its usefulness as a comparative measure.
The Company compensates for these limitations by relying
primarily on the Company’s U.S. GAAP financial results and using
Adjusted EBITDA only as supplemental support for management’s
analysis of business performance.
Because the preliminary Adjusted EBITDA ranges presented in this
release represent the Company’s expectations with respect to the
final financial results for the fourth quarter of 2023, these
forward-looking non-GAAP financial measures are presented without
reconciliations to the most directly comparable U.S. GAAP financial
measure because these GAAP figures cannot be reconciled at this
time due to ongoing closing and auditor review and without
unreasonable effort due to the inherent difficulty in forecasting
and quantifying certain amounts that are necessary for such
reconciliations, including amounts that, based on historical
experience, could be material. The Company believes these open GAAP
financial items could affect items that would be adjusted for, and
therefore do not affect the calculation of Adjusted EBITDA.
Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of the federal securities laws. All statements
contained in this press release that do not relate to matters of
historical fact should be considered forward-looking, including
statements regarding the Company’s financial condition, anticipated
financial performance, achieving profitability, business strategy
and plans, market opportunity and expansion and objectives of the
Company’s management for future operations. These forward-looking
statements generally are identified by the words “anticipate,”
“believe,” “contemplate,” “continue,” “could,” “estimate,”
“expect,” “forecast”, “future”, “intend,” “may,” “might”,
“opportunity”, “plan,” “possible”, “potential,” “predict,”
“project,” “should,” “strategy”, “strive”, “target,” “will,” or
“would”, the negative of these words or other similar terms or
expressions. The absence of these words does not mean that a
statement is not forward-looking. Forward-looking statements are
predictions, projections and other statements about future events
that are based on current expectations and assumptions and, as a
result, are subject to risks and uncertainties. All forward-looking
information should be evaluated in the context of these risks,
uncertainties and other factors, including specifically changes to
the preliminary results presented in this release in connection
with completion of the closing and audit review of the financial
statements for 2023, and those factors disclosed in the Company’s
SEC filings, including in its most recent reports on Form 10-K and
10-Q, particularly under the heading “Risk Factors.”
All forward-looking statements in this press release are based
on information available to the Company as of the date hereof. The
Company undertakes no obligation to revise or publicly release the
results of any revision to these forward-looking statements, except
as required by law. Given these risks and uncertainties, readers
are cautioned not to place undue reliance on such forward-looking
statements.
About Edgio
Edgio (NASDAQ: EGIO) helps companies deliver online experiences
and content faster, safer, and with more control. Our
developer-friendly, globally scaled edge network, combined with our
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, boosting overall revenue and business value. To
learn more, visit edg.io and follow us on Twitter,
LinkedIn and Facebook.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240315539898/en/
Investor relations: Sameet Sinha 602-850-4973
ir@edg.io
Media relations: Patti Moran, Edgio
pmoran@edg.io
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