Edgio, Inc.

Third-quarter 2023 revenue was $97 million, up 1.3% sequentially. Cash gross margin was 32.1%, up 130 basis points sequentially, and adjusted EBITDA was a loss of $9.5 million versus a loss of $13.4 million in Q2. Cash operating expenses were $40.7 million, down from $42.9 million in Q2, and cash and marketable securities totaled $27.6 million at quarter end. For Q4 2023, management guided to revenue of $96 million to $98 million and adjusted EBITDA of negative $1 million to positive $1 million; full-year revenue is expected to be $391 million to $393 million, implying 15.5% to 16% year-over-year growth, and full-year adjusted EBITDA is expected to be negative $38 million to negative $36 million. Full-year 2023 capex is expected to be $10 million to $13 million, or about 2.6% to 3.3% of revenue.

Bob Lyons framed the quarter as part of a multiyear transformation from a first-generation CDN provider into a third-generation edge solutions company. He said the refinancing and board changes strengthen the balance sheet and remove near-term uncertainty, while the business mix shift toward app security and video should support growth. His tone was confident but still focused on execution, especially around profitability, asset-light operations, and improving return on invested capital.

Stephen Cumming emphasized that Q3 benefited from higher revenue, lower churn, and cost savings. He cited cash gross margin of 32.1%, cash operating expenses of $40.7 million, adjusted EBITDA loss of $9.5 million, and capex of $2.3 million, or 2.4% of revenue. He also noted that cash and marketable securities were $27.6 million at quarter end, pro forma cash after the financing was about $88 million, and pro forma debt was around $183 million; he expects roughly 400 basis points of sequential cash gross margin expansion in Q4 and said the company is on track for Q4 adjusted EBITDA breakeven.

Analysts focused on the path to 2024 EBITDA and free cash flow, the impact of StackPath and Lumen leaving the CDN market, the refinancing, and how much more cost can come out. Management said EBITDA should continue to expand in 2024 as OpEx reductions roll through and COGS improvements start to matter more, while free cash flow should turn positive later, helped by EBITDA improvement and working-capital normalization. On the CDN exits, Bob Lyons said they validate Edgio’s repositioning and may create more opportunity, but only if the company keeps improving unit economics through an asset-light strategy. On costs and revenue quality, management said most OpEx reductions are largely done, while future improvement will come more from COGS, traffic optimization, and being more selective about lower-quality revenue.