UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
 
 
 
 
 
FORM 8-K
 
 
 
 
 
 
 
CURRENT REPORT
 
 
 
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 
Date of Report (date of earliest event reported): November 5, 2015
 
 
 
Qumu Corporation 
(Exact name of Registrant as Specified in its Charter)
 
 
Minnesota
 
(State Or Other Jurisdiction Of Incorporation)
 
 
 
000-20728
 
41-1577970
(Commission File Number)
 
(I.R.S. Employer Identification No.)
 
 
 
510 1st Avenue North, Suite 305
 
 
Minneapolis, MN
 
55403
(Address Of Principal Executive Offices)
 
(Zip Code)
 
 
 
 
(612) 638-9100
 
Registrant’s Telephone Number, Including Area Code
 
 
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
 
o
Written communications pursuant to Rule 425 under the Securities Act
 
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
 
 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
 
 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
 
 
 




Items under Sections 1 and 3 through 8 are not applicable and therefore omitted.

ITEM 2.02    RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
Qumu Corporation (the “Company”) hereby furnishes as Exhibit 99.1 a press release issued on November 5, 2015 disclosing material non-public information regarding its results of operations for the quarter ended September 30, 2015 and hereby furnishes as Exhibit 99.2 statements of Vern Hanzlik, its President and Chief Executive Officer, and Peter J. Goepfrich, its Chief Financial Officer, made on November 5, 2015 at a telephone conference relating to the quarter ended September 30, 2015 results.
ITEM 9.01    FINANCIAL STATEMENTS AND EXHIBITS.
 
 
 
Exhibit No.
 
Description
99.1
 
Press Release issued on November 5, 2015.
 
 
 
99.2
 
Statements of Vern Hanzlik, President and Chief Executive Officer, and Peter J. Goepfrich, Chief Financial Officer at a telephone conference held on November 5, 2015.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
 
 
QUMU CORPORATION
 
 
 
 
By:
/s/ Peter J. Goepfrich
 
 
Peter J. Goepfrich
 
 
Chief Financial Officer
 
 
 
Date: November 6, 2015
 
 







EXHIBIT 99.1

Qumu Reports Record Quarterly Revenue of $9.6 Million

Quarterly Revenue up 64% Year-Over-Year
$9 Million Annualized Expense Reduction Program Implemented
Reiterate Cash Flow Breakeven During 2016

Conference Call Today at 4:30 p.m. ET

Minneapolis, MN – November 5, 2015 – Qumu Corporation (NASDAQ: QUMU) today reported financial results for the third quarter ended September 30, 2015.

Third quarter revenue was $9.6 million, an increase of 64%, compared to the third quarter 2014. Year-to-date revenue was $24.3 million, an increase of 34%, compared to the same period last year.

Third quarter net loss per share was $(0.79) compared to $(0.33) in the third quarter 2014. Third quarter 2015 results included severance expense of $784,000 or $(0.08) per share, an equipment operating lease loss of $1 million or $(0.11) per share, and a tax benefit of $163,000 or $0.02 per share; and the third quarter 2014 results included a tax benefit of $4.5 million or $0.51 per share. During the third quarter 2015, the Company implemented an expense reduction program that is expected to result in more than $9 million in annualized expense reductions compared to the first nine months of 2015 annualized.

“The third quarter results continue to reflect strong sequential and year-over-year revenue growth,” said Vern Hanzlik, Qumu’s new President and Chief Executive Officer. “I am excited for the opportunity to lead Qumu at this pivotal time in the evolution of the fast growing enterprise video market. I have had the privilege over the past three years to help create the foundation of our winning culture. I am proud of what our employees have accomplished to date and I look forward to increasing Qumu’s leadership advantage in the market. During the quarter we continued to execute our enterprise strategy by providing world class video solutions for the largest companies in the world. We believe we offer the only solution flexible and robust enough to be deployed just as our enterprise customers require, whether on premise, in the cloud or through a hybrid solution. Based on our strong pipeline, we believe video communication and management continues to grow rapidly in all of our target markets.”

“Additionally,” Mr. Hanzlik continued, “we implemented a significant expense reduction program in the third quarter that will allow us to move into next year well positioned to attain our goal of being cash flow breakeven during 2016 without sacrificing our growth objectives.”

Other Quarterly Information
•
Total headcount was 194 as of September 30, 2015 compared to 232 as of June 30, 2015 and 222 as of December 31, 2014.
•
Contracted commitments of $7.5 million for the third quarter of 2015 compared to $6.6 million for the third quarter 2014 and $8.3 million for the second quarter 2015. The decline from the second quarter 2015 was primarily due to the timing of maintenance and support renewals.
•
Backlog was $31.3 million as of September 30, 2015 compared with $33.4 million as of June 30, 2015.
•
Cash, marketable securities and restricted cash were $15.1 million as of September 30, 2015, compared to $21.8 million as of June 30, 2015, reflecting the third quarter operating loss and the impact on cash from changes in working capital primarily related to a $1.5 million customer payment that was anticipated in the third quarter but was received in the fourth quarter. Restricted cash as of September 30, 2015 consisted of $2.3 million in proceeds from the sale of the disc publishing business in July 2014. These funds were released from escrow in October 2015.

1



Guidance
During the balance of 2015, the Company continues to expect significant bookings and revenue growth based on a strong fourth quarter pipeline. As a result, the Company expects:
•
Annual revenue growth in 2015 of approximately 30%,
•
Gross margin in 2015 of approximately 48%, and
•
Cash and marketable securities at the end of 2015 to be approximately $14 million.

Additionally, based on revenue growth and the expense reduction program, the Company continues to anticipate that it will be cash flow breakeven during 2016.

Conference Call
The Company has scheduled a conference call and webcast to review its third quarter results today, November 5, 2015 at 4:30 p.m. Eastern Time. The dial-in number for the conference call is 877-407-8293 for domestic participants and 201-689-8349 for international participants. Investors can also access a webcast of the live conference call by linking through the investor relations section of the Qumu website, www.qumu.com. Webcasts will be archived on Qumu’s website.

Forward-Looking Statements
This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” or “estimate” or comparable terminology are intended to identify forward-looking statements. Such forward-looking statements include, for example, statements about: the Company’s future revenue and operating performance, cash balances, future product mix or the timing of recognition of revenue; the demand for the Company’s products or software; and the success of cost reduction measures. The statements made by the Company are based upon management’s current expectations and are subject to certain risks and uncertainties that could cause the actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include the risk factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 and other factors set forth in the Company’s filings with the Securities and Exchange Commission.

About Qumu
Video is today’s document. Qumu Corporation (NASDAQ: QUMU) provides the tools businesses need to create, manage, secure, deliver and measure the success of their videos. Qumu's innovative solutions release the power in video to engage and empower employees, partners and clients. Organizations around the world realize the greatest possible value from video they create and publish using Qumu. Whatever the audience size, viewer device or network configuration, Qumu solutions are how business does video. Additional information can be found at www.qumu.com.

Investor Contact:                
Peter Goepfrich, CFO                
Qumu Corporation                
612-638-9096

2


QUMU CORPORATION
Condensed Consolidated Statements of Operations
(unaudited - in thousands, except per share data)
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
2015
 
2014
 
2015
 
2014
Revenues:
 

 
 

 
 

 
 

Software licenses and appliances
$
3,267

 
$
2,193

 
$
6,970

 
$
8,103

Service
6,335

 
3,660

 
17,365

 
10,083

Total revenues
9,602

 
5,853

 
24,335

 
18,186

Cost of revenues:
 

 
 

 
 

 
 

Software licenses and appliances
1,057

 
615

 
1,996

 
2,850

Service
3,813

 
2,608

 
11,141

 
7,154

 Total cost of revenues
4,870

 
3,223

 
13,137

 
10,004

Gross profit
4,732

 
2,630

 
11,198

 
8,182

Operating expenses:
 

 
 

 
 

 
 

Research and development
2,848

 
2,321

 
8,508

 
6,609

Selling, general and administrative
9,059

 
7,473

 
26,549

 
21,411

Amortization of purchased intangibles
200

 
157

 
599

 
470

Total operating expenses
12,107

 
9,951

 
35,656

 
28,490

Operating loss
(7,375
)
 
(7,321
)
 
(24,458
)
 
(20,308
)
Other income (expense):
 

 
 

 
 

 
 

Interest, net
(10
)
 
11

 
21

 
33

Loss on currency exchange
(89
)
 
(33
)
 
(157
)
 
(56
)
Other, net
—

 
(28
)
 
—

 
(38
)
Total other income (expense), net
(99
)
 
(50
)
 
(136
)
 
(61
)
Loss before income taxes
(7,474
)
 
(7,371
)
 
(24,594
)
 
(20,369
)
Income tax benefit
(163
)
 
(4,492
)
 
(482
)
 
(5,938
)
Net loss from continuing operations
(7,311
)
 
(2,879
)
 
(24,112
)
 
(14,431
)
Net income (loss) from discontinued operations, net of tax
79

 
11,559

 
(10
)
 
14,365

Net income (loss)
$
(7,232
)
 
$
8,680

 
$
(24,122
)
 
$
(66
)
Net income (loss) per basic and diluted share:
 
 
 
 
 
 
 
Net loss from continuing operations per share
$
(0.79
)
 
$
(0.33
)
 
$
(2.61
)
 
$
(1.65
)
Net income (loss) from discontinued operations per share
$
0.01

 
$
1.32

 
$
—

 
$
1.64

Net income (loss) per share
$
(0.78
)
 
$
0.99

 
$
(2.61
)
 
$
(0.01
)
Basic and diluted weighted average shares outstanding
9,288

 
8,780

 
9,233

 
8,743



3


QUMU CORPORATION
Condensed Consolidated Balance Sheets
(in thousands)
Assets
September 30,
2015
 
December 31,
2014
Current assets:
(unaudited)
 
 
Cash and cash equivalents
$
4,029

 
$
11,684

Marketable securities
8,754

 
23,486

Restricted cash
2,301

 
2,300

Receivables, net of allowance for doubtful accounts
8,401

 
10,090

Finished goods inventories
329

 
168

Prepaid income taxes
700

 
301

Prepaid expenses and other current assets
3,863

 
3,633

Deferred income taxes - current
64

 
64

Current assets from discontinued operations
—

 
1,026

Total current assets
28,441

 
52,752

Property and equipment, net of accumulated depreciation
3,147

 
1,899

Intangible assets, net of amortization
11,669

 
13,384

Goodwill
8,295

 
8,525

Other assets - non-current
3,861

 
3,617

Total assets
$
55,413

 
$
80,177

Liabilities and Stockholders’ Equity
 

 
 

Current liabilities:
 

 
 

Trade accounts payable and other accrued liabilities
$
3,008

 
$
3,529

Accrued compensation
2,947

 
6,222

Deferred revenue
9,953

 
9,015

Deferred income taxes - current
13

 
110

Income taxes payable
—

 
53

Financing obligations - current
279

 
—

Current liabilities from discontinued operations
50

 
448

Total current liabilities
16,250

 
19,377

Non-current liabilities:
 

 
 

Deferred revenue - non-current
1,339

 
1,047

Income taxes payable - non-current
9

 
8

Deferred tax liability - non-current
904

 
1,071

Financing obligations - non-current
519

 
—

Other non-current liabilities
1,114

 
401

Total non-current liabilities
3,885

 
2,527

Total liabilities
20,135

 
21,904

Stockholders’ equity:
 

 
 

Common stock
92

 
91

Additional paid-in capital
65,091

 
63,566

Accumulated deficit
(28,721
)
 
(4,599
)
Accumulated other comprehensive loss
(1,184
)
 
(785
)
Total stockholders’ equity
35,278

 
58,273

Total liabilities and stockholders’ equity
$
55,413

 
$
80,177



4


QUMU CORPORATION
Condensed Consolidated Statements of Cash Flows
(unaudited - in thousands)
 
Nine Months Ended 
 September 30,
 
2015
 
2014
Cash flows used in operating activities:
 

 
 

Net loss
$
(24,122
)
 
$
(66
)
Net (income) loss from discontinued operations, net of tax
10

 
(14,365
)
Net loss from continuing operations
(24,112
)
 
(14,431
)
Adjustments to reconcile net loss to net cash used in continuing operating activities:
 
 
 
Depreciation and amortization
2,292

 
1,411

Stock-based compensation
1,430

 
1,281

Loss on disposal of property and equipment
23

 
31

Deferred income taxes
(235
)
 
85

Current income tax benefit resulting from income generated from discontinued operations
—

 
(5,888
)
Changes in operating assets and liabilities:
 
 
 
Receivables
1,647

 
(4,364
)
Finished goods inventories
(162
)
 
(76
)
Prepaid income taxes / income taxes payable
(407
)
 
310

Prepaid expenses and other assets
(300
)
 
(2,231
)
Trade accounts payable and other accrued liabilities
(524
)
 
175

Accrued compensation
(3,264
)
 
498

Deferred revenue
1,296

 
2,624

Other non-current liabilities
(11
)
 
(91
)
Net cash used in continuing operating activities
(22,327
)
 
(20,666
)
Net cash provided by discontinued operating activities
665

 
1,483

Net cash used in operating activities
(21,662
)
 
(19,183
)
Cash flows provided by (used in) investing activities:
 

 
 

Purchases of marketable securities
(9,500
)
 
(31,250
)
Sales and maturities of marketable securities
24,215

 
14,250

Purchases of property and equipment
(530
)
 
(760
)
Proceeds from sale of property and equipment
43

 
—

Net cash provided by (used in) continuing investing activities
14,228

 
(17,760
)
Net cash provided by (used in) discontinued investing activities
(1
)
 
19,676

Net cash provided by investing activities
14,227

 
1,916

Cash flows provided by (used in) financing activities:
 

 
 

Common stock repurchases to settle employee withholding liability
(46
)
 
(84
)
Principal payments on financing obligations
(241
)
 
—

Proceeds from employee stock plans
142

 
123

Net cash provided by (used in) continuing financing activities
(145
)
 
39

Net cash used in discontinued financing activities
—

 
(59
)
Net cash used in financing activities
(145
)
 
(20
)
Effect of exchange rate changes on cash
(75
)
 
(90
)
Net decrease in cash and cash equivalents
(7,655
)
 
(17,377
)
Cash and cash equivalents, beginning of period
11,684

 
37,725

Cash and cash equivalents, end of period
$
4,029

 
$
20,348


5


QUMU CORPORATION
Non-Cash Charges Included in Continuing Operations
(unaudited - in thousands)
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
2015
 
2014
 
2015
 
2014
Continuing Operations:
 

 
 

 
 

 
 

Depreciation
$
269

 
$
190

 
$
740

 
$
521

Amortization of intangibles
 
 
 
 
 
 
 
Cost of revenues
$
320

 
$
140

 
$
953

 
$
420

Amortization of purchased intangibles
200

 
157

 
599

 
470

Total amortization of intangibles
$
520

 
$
297

 
$
1,552

 
$
890

Equity compensation:
 
 
 
 
 
 
 
Cost of revenues
$
40

 
$
4

 
$
115

 
$
23

Research and development
39

 
52

 
201

 
169

Selling, general and administrative
283

 
441

 
1,114

 
1,089

Total equity compensation
$
362

 
$
497


$
1,430

 
$
1,281


6




Exhibit 99.2
Qumu Corporation
Q3 2015
Conference Call
November 5, 2015
 
 
 
 
 
Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Qumu Corporation Q3 2015 Conference Call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. If you have a question, please press the star followed by the one on your touchtone phone. If you would like to withdraw your question, please press the star followed by the two. If you are using speaker equipment, please lift the handset before making your selection. This conference is being recorded today, Thursday, November 5, 2015.

I would now like to turn the conference over to Vern Hanzlik, President and CEO of Qumu.

Vern Hanzlik

Thank you, Operator. Good afternoon everyone and thank you for joining us for our fiscal third-quarter 2015 earnings conference call.

Some of our comments today may also contain forward-looking statements which are subject to risks, uncertainties and assumptions. Should any of these materialize or should our assumptions prove to be incorrect, actual Company results could differ materially from these forward-looking statements. A description of our risks, uncertainties and assumptions and other factors that could affect our financial results are included in our SEC filings, including our most recent reports on Form 10-K and Form 10-Q.

During our call, we may offer additional metrics to provide further insight into our business or results. This detail may or may not be provided in the future. We may also reference certain unreleased services or features not yet available, and we cannot guarantee the timing or availability of these services or features. So we recommend customers listening today make purchase decisions based on services or features currently available.

To begin, I want to share with everyone how excited I am to be leading Qumu at this pivotal time in the evolution of the fast growing enterprise video market as we drive to expand our leadership and market position. I believe we have the strongest team and the best product in the market today.

With me today is Peter Goepfrich, our CFO. I’m looking forward to working more closely with Peter as he continues to make a positive impact on our operations and financial processes. His experience and capabilities will be key to our success, not just around cost containment but around the entire sale process.

I will begin the call with third quarter financial highlights and our current financial outlook. Peter will then provide additional financial information. From there I will provide other operational highlights and comments on our market. After that we will open the call to questions.

Third Quarter Financial Highlights

•
In the third quarter we delivered excellent revenue growth and implemented a significant expense reduction program.

•
We generated record quarterly revenue of $9.6 million, an increase of 64%, compared to the third quarter 2014 and an increase of 10% sequential growth compared to the second quarter 2015.







•
The year-over-year quarterly growth in license and appliance revenue is primarily attributable to an increase in perpetual license bookings. The year-over-year quarterly growth in services is due to increases in all areas, including maintenance and support, subscription and support, and professional services.

•
Contracted commitments were $7.5 million for the third quarter compared to $6.6 million for the third quarter 2014 and $8.3 million for the second quarter 2015. The decline from the second quarter 2015 was primarily due to the timing of maintenance and support renewals.

•
Geographically, the Americas market continues to show strong adoption of enterprise video. Our Enterprise business performed well and we see strength building in the EMEA region under new leadership. In APAC we closed a transaction with a large manufacturer for live and video on demand applications and we continue to make progress developing a pipeline through our partnership with Fujitsu.

•
One of our Americas wins in the third quarter is a Fortune 500 diversified chemical manufacturer. They have tens of thousands of employees and hundreds of offices distributed around the world. Like many businesses they have invested in an ‘inside the firewall’ video platform to maximize employee engagement and collaboration. This company runs over 300 live events on an annual basis with our video platform and are starting to expand to the next level with mobile and user generated content.

•
Now on to our expense reduction program implemented in the third quarter to align our expense structure with revenue. The expense reduction program is expected to result in more than $9 million in annualized expense savings compared to the first nine months of 2015 when annualized. The expense reductions impacted all functional areas and included both headcount and outside service providers.

Guidance

During the balance of 2015, we continue to expect significant bookings and revenue growth based on a strong Q4 pipeline. As a result, we expect:

•
Annual revenue growth in 2015 of approximately 30%
•
Gross margins in 2015 of approximately 48%, and
•
Cash and marketable securities at the end of 2015 to be approximately $14 million

Additionally, based on revenue growth and the expense reduction program, we continue to anticipate that we will be cash flow breakeven during 2016.

For additional financial information, I will now turn the call over to Peter.

Peter Goepfrich

Thank you Vern.

I will touch on some key highlights not already addressed by Vern.

•
License and appliance revenue will vary quarter to quarter based on the type of contract between Qumu and its customers. Perpetual license and appliance sales generally result in revenue recognized closer to the bookings date.

•
Service revenue, which consists of maintenance and support, subscription and support, and professional services, tends to grow more consistently with the renewal and expansion of existing customers and the addition of new customers. Revenue that is recurring in nature includes maintenance and support, and subscription and support. Recurring revenue represented 77% of service revenue and 50% of total revenue in the third quarter 2015.

•
Gross margin in the third quarter 2015 was 49% compared with 45% in the third quarter last year and 49% in the second quarter 2015. As we generate additional revenue, the leverage on our investments in customer support and professional services will increase and we expect the gross margin to continue to improve.





Moving on to operating expenses.

•
Total operating expenses in the third quarter increased $2.2 million compared with the third quarter last year and $753,000 compared to the second quarter 2015.

•
Third quarter 2015 results included severance expense of $784,000 relating to our expense reduction program and an equipment operating lease loss of $1 million relating to equipment that the we no longer plan to utilize as part of our managed services offering.

Cash, marketable securities and restricted cash were $15.1 million as of September 30, 2015, compared to $21.8 million as of June 30, 2015, the decrease reflects the third quarter operating loss and the impact on cash from changes in working capital primarily related to a $1.5 million customer payment that was anticipated in the third quarter but was received in the fourth quarter. We are confident that, with our anticipated revenue growth and our expense reduction program, we will finish 2015 with approximately $14 million in cash and marketable securities.

Now back to Vern with additional operating highlights and comments on our market.

Vern Hanzlik

Thanks, Peter.

Before I get into the details from the operational highlights, I want to set the table by reviewing our key areas of focus as a company and provide some commentary.

•
Qumu is “how business does video.”-- and only Qumu is capable of securely distributing and controlling video to anyone, on any device, on any network (even if that network was never designed to handle video streaming) and provide it all at enterprise scale.

Further, Qumu’s focus on user experience continues to set the bar high against our competitors -- Through multiple successful customer proof-of-concept engagements this quarter, Qumu has demonstrated once again that we are still the only vendor with technology and solutions available in the market today that are proven to scale to meet the business video challenge – we continue to win deals because customers demand the choice and control and completeness of our offering.

•
Our R&D investments have resulted in significant new product introductions and technology partnerships, furthering our lead in this market, as noted by the 2014 Gartner Report.

•
For example, we provided a suite of new features for our cloud and hybrid platform to enable every desktop in the enterprise with advanced creation and edit capabilities. This means everyone can use video to enhance their work product. Additionally, our highly configurable user portal interface enables all of our customers’ employees to find and consume their content with an exceptional user experience.

•
We also announced a new partnership with Unicon to leverage Qumu’s Video Optimization Pack for Citrix. Through this partnership we can bring the full scope of Qumu’s enterprise video functionality to lower bandwidth VDI desktops. This provides easy-to-use content creation; localized content delivery; and a smaller, customizable, secured OS footprint. Using these video tools, customers will be able to provide or create content for e-learning sessions, product information, product tutorials and video demonstrations to any endpoint in their organization. These are powerful use cases for video in the enterprise and shows how enterprises are advancing video everywhere as the normal way to communication.

•
Qumu announced a technology partnership with Elemental and integration with Elemental’s enterprise class encoding solution which allows our customers to have broadcast quality video for all their studio inputs.

•
We also announced a new partnership in the Middle East with Ixtel, a great partner with reach into focused verticals, such as, Banking and oil and gas in that region and will drive additional opportunities for Qumu.
 




Enterprise Customers

•
We continue to see enterprises acquire their video software platforms in all deployment styles: on-premise, hybrid and cloud. We have a higher percentage of on-premise deployments for both new and existing customers in Q3 and in our pipeline for Q4. Despite this, we continue to have the vision of building our software with a cloud-first approach, while packaging it for all types of deployment options.

•
Our largest enterprise customers are in the Financial Services, Pharmaceuticals and the Industrial verticals. The majority of our deployments in Q3 were either on premise or hybrid, which together represented 75% of deals to date for 2015. On the other hand, our cloud deployments are mainly departmental in large and medium size enterprises, focused on user-generated content and/or external video requirements to integrate with marketing automation tools like Eloqua and Marketo as well as websites, social applications and other enterprise content management applications - like SharePoint and Jive. Our hybrid deployments today are based on upgrades within organizations wanting to change the cost of ownership of video but keep the delivery and user experience on premise. We will continue to see this as a growth area and a competitive differentiator.

•
We continue to expand and upgrade our enterprise customers :
◦
In the quarter, we saw fourteen large enterprises implement an upgrade to the latest release and expand their video platform footprint.
◦
We closed fourteen enterprise deals greater than $200 thousand in total contract value with both existing and new customers and one transaction greater than $1 million in bookings for the quarter.
◦
Our maintenance, support and cloud customers continue to renew at a rate greater than 90%.

•
It was a very productive quarter from an operational standpoint and we are positioned well for the remainder of the year and into 2016.

In summary, I like where we are today. We have a strong product with the right vision, a strong team and the right momentum to carry us into next year well positioned to reach the corporate milestone of being cash flow breakeven during 2016 without sacrificing our growth objectives.

Now, we would like to open the call to questions.

Q&A

Vern Hanzlik

Thank you again for joining us today. We look forward to updating you on our Q4 results in early March. In the meantime, if you have any follow-up questions please contact us directly. Thank you.



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