Company’s Strategic Roadmap Designed to Drive
20%+ Full Year Revenue Growth in 2021, Supported by 18%
Year-over-Year Increase in Q3 2020 Subscription Annual Recurring
Revenue (ARR) and Robust Pipeline
Qumu Corporation (Nasdaq: QUMU), the leading provider of
best-in-class Enterprise Video technology for organizations of all
sizes, today reported financial results for the third quarter and
nine months ended September 30, 2020.
Q3 2020 Operational Highlights
- Launched new Qumu app for Zoom, enabling self-service streaming
of Zoom events to audiences of 100,000+ while adding comprehensive
video content management and enterprise-grade security
- Released the Qumu Cloud Build and Price Tool, which allows
users to customize their own annual cloud video subscription based
on parameters such as storage and bandwidth needs, user counts,
live streams, distribution preferences and so on
- Launched Qumu Cloud for Audio Streaming, a large-scale audio
streaming service that provides enterprises with secure,
high-quality audio-only call delivery and management at a
significantly lower cost than standard audio-conferencing
services
- Hosted 30 million viewers on Qumu Cloud during the quarter, up
28% from Q2 2020 and up 911% from Q3 2019
- Strengthened leadership team with appointment of veteran
technology executive TJ Kennedy as President and CEO
- Introduced Qumu Video Control Center (VCC) version 10.5, the
customer-hosted deployment of Qumu’s intelligent Enterprise Video
platform, adding key features such as the Qumu Analytics Engine
(QAE), which provides comprehensive, real-time and historical usage
reporting of both live and on demand video content
Q3 2020 Financial Highlights
- Subscription, maintenance and support revenue for Q3 2020
increased 28%, or $1.1 million, to $5.3 million, compared to $4.2
million in Q3 2019
- Revenue was $6.6 million in Q3 2020, compared to $6.7 million
in Q3 2019
- Gross margin was 75.1% in Q3 2020, up from 69.8% in Q3
2019
- Cash and cash equivalents totaled $11.4 million at September
30, 2020 compared to $10.6 million at December 31, 2019
- Company reaffirms 2020 revenue outlook of approximately $29.0
million, representing 14% year-over-year growth
Q3 2020 Key Performance Indicators (KPIs) (compared to
the same year-ago period)
- Subscription Annual Recurring Revenue (ARR) increased 18% to
$10.9 million from $9.2 million.
- Software-as-a-Service (SaaS) customer retention:
- Gross Renewal Rate (GRR): 90.5% at end of Q3 2020 compared to
88.6% at end of Q3 2019
- Net Renewal Rate (NRR): 119.2% at end of Q3 2020 compared to
107.5% at end of Q3 2019
- Dollar Value Retention: 94.0% at end of Q3 2020 compared to
93.3% at end of Q3 2019
Management Commentary
“In the third quarter we began the initial implementation phase
of our long-term strategic roadmap, which is designed to position
Qumu as a more focused, cloud-first organization driving improved,
high-margin recurring revenues,” said Qumu President and CEO TJ
Kennedy. “Financially, our success along this path was highlighted
by strong year-over-year growth in several metrics, including a 28%
increase in subscription, maintenance and support revenue along
with a 18% increase in subscription ARR, generating robust gross
margins of 75% for the quarter. From an operational standpoint,
since I joined the company in late July, we have made meaningful
progress in cementing our long-term growth strategy, refining our
product roadmap, and accelerating the evolution of our SaaS-based
business model.
“The global pandemic forced organizations worldwide to rapidly
adopt and expand the use of video, both internally and externally.
While standard video conferencing and collaboration apps were able
to meet the initial need for employees, we are now seeing a second
wave of larger more sophisticated needs, where enterprises are
exceeding the upper limits of what standard video conferencing and
internal collaboration tools can deliver and manage. And this is
where Qumu shines. In direct response to this second wave, we built
and deployed a new app that enables Zoom to be used as the front
end for any large-scale video broadcast, while Qumu handles all
delivery, management and video security—changing the game for
organizations looking to not only scale Zoom events over 10,000
attendees, but record and manage all Zoom meetings across the
organization as secure, searchable, on demand assets. Video content
management is the future for all enterprises to get the most out of
their organizations and Qumu’s market leading content management
capabilities allow video to be securely stored and managed to make
businesses more effective and efficient.
“Beyond launching new innovative products for the current
market, we’re also hard at work implementing longer-term strategic
initiatives to effectively and profitably scale Qumu to the next
level. One of these initiatives is expanding and diversifying our
go-to-market strategy, which will provide more predictable revenues
and long-term, sustainable growth. Consistent with our cloud-first
approach, we have now launched an e-Commerce self-service solution
that enables a highly automated and low-touch sale of Qumu’s
cloud-based solution to small and medium-sized organizations, or
SMBs. Now the SMB space can easily access and benefit from Qumu’s
best-in-class platform for creating, managing and delivering live
and on demand video at scale.
“Today, Qumu is at the forefront of a massive transformation in
the way organizations drive communication. Our strategic roadmap is
designed to capture the opportunities presented by this
transformation. Our successful execution against this plan, which
has already begun and will accelerate in the balance of 2020, is
expected to drive revenue growth in excess of 20% in 2021 as
compared to our current 2020 revenue estimate. Our sales pipeline,
strong deferred revenue and our growing annual recurring revenue
also give us confidence about our prospects for revenue growth in
2021. Looking ahead, we believe our building momentum and the
successful execution of our strategic initiatives will translate to
sustainable adjusted EBITDA profitability and, ultimately, net
income profitability in the years ahead.”
Third Quarter 2020 Financial Results
Revenue for the third quarter of 2020 was $6.6 million compared
to $6.7 million for the third quarter of 2019. The slight decrease
in revenue was primarily due to lower software license and
appliance revenue, offset by higher subscription, maintenance and
support revenue as well as higher subscription bookings.
Subscription, maintenance and support revenue for the third
quarter of 2020 increased 28% to $5.3 million from $4.2 million in
the same year-ago period, which was driven by new cloud and term
deals signed in 2020 as well as an increase in cloud usage
overages. Cloud usage continues to grow with significant increases
being driven by new use cases and enterprises driving their daily
operations through the efficient use of video.
Gross margin in the third quarter of 2020 was 75.1% compared to
69.8% for the third quarter of 2019. The gross margin percentage
increase was primarily due to a favorable sales mix and an increase
in higher-margin cloud Software-as-a-Service (SaaS) revenue.
Net loss in the third quarter of 2020 was $(1.9) million, or
$(0.14) loss per basic and diluted share, compared to $(221,000),
or $(0.02) loss per basic share and $(0.11) loss per diluted share,
for the third quarter of 2019. The greater net loss for the third
quarter of 2020 was primarily due to a combined $1.3 million
unfavorable impact from changes in the warrant liability fair value
during the 2020 and 2019 third quarters, respectively, a one-time
severance charge of $0.4 million related to the CEO transition in
July 2020, as well as $0.1 million of transaction expenses related
to the previously announced terminated merger with Synacor,
Inc.
Adjusted EBITDA loss, a non-GAAP measure, in the third quarter
of 2020 was $(839,000), compared to an adjusted EBITDA loss of
$(535,000) for the third quarter of 2019.
Cash and cash equivalents totaled $11.4 million as of September
30, 2020, compared to $10.6 million as of December 31, 2019.
Nine Month 2020 Financial Results
Revenue for the nine months ended September 30, 2020 increased
16% to $22.2 million from $19.1 million in the same year-ago
period. The increase in revenue was primarily due to a large
customer order received at the end of the first quarter of
2020.
Subscription, maintenance and support revenue for the nine
months ended September 30, 2020 increased 2% to $14.2 million from
$13.9 million in the same year-ago period. The increase in
subscription, maintenance and support revenue was due to a large
order from a single customer as well as a large order received at
the end of the first quarter of 2020, partially offset by the
recognition of large term license renewals in 2019 that were absent
in the comparable period of 2020.
Gross margin for the nine months ended September 30, 2020 was
69.9% compared to 73.3% in the same year-ago period. The gross
margin decrease was primarily due to a higher mix of appliance
revenue in the nine months of 2020, which generally carries lower
margins compared to term license revenue, and lower term license
revenue in the 2020 period.
Net loss for the nine months ended September 30, 2020 was $(5.2)
million, or $(0.39) loss per basic share and $(0.41) loss per
diluted share, compared to $(4.8) million, or $(0.49) loss per
basic and diluted share, for the nine months ended September 30,
2019. The higher net loss for the nine months of 2020 was primarily
due to $1.6 million of transaction expenses related to the
previously announced terminated merger with Synacor, Inc. and a
one-time severance charge of $0.4 million related to the CEO
transition in July 2020.
Adjusted EBITDA loss, a non-GAAP measure, for the nine months
ended September 30, 2020 was $(1.3) million, compared to an
adjusted EBITDA loss of $(1.8) million for the comparable 2019
period.
Business Outlook
Qumu provides revenue guidance based on current market
conditions and expectations, including the unknown financial impact
that COVID-19 will have on economies and enterprises around the
world. Based on the Company’s third quarter 2020 financial results
and pipeline of business, management currently expects revenue for
2020 to be approximately $29.0 million compared to $25.4 million in
2019, representing year-over-year growth of 14%.
For 2021, management anticipates that the successful execution
of its new strategic roadmap has the potential to generate revenue
growth of at least 20% compared to the current 2020 estimates.
Conference Call
Qumu executive management will host a conference call today
(October 27, 2020) at 4:30 p.m. Eastern time.
U.S. Dial-In Number: +1.833.644.0679 International Dial-In
Number: +1.918.922.6755
Investors can also access a webcast of the live conference call
by linking through the investor relations section of the Qumu
website at https://ir.qumu.com. The
webcast will be archived on Qumu’s website for one year.
Non-GAAP Information
To supplement the Company's condensed consolidated financial
statements presented on a GAAP basis, the Company uses adjusted
EBITDA, a non-GAAP measure, which excludes certain items from net
loss, a GAAP measure. Adjusted EBITDA excludes items related to
interest income and expense, the impact of income-based taxes,
depreciation and amortization, stock-based compensation, change in
fair value of warrant liabilities, foreign currency gains and
losses, other non-operating income and expenses, and
transaction-related expenses.
The Company uses both GAAP and non-GAAP measures when planning,
monitoring, and evaluating the Company’s performance. The Company
believes that adjusted EBITDA is useful to investors because it
provides supplemental information that allows investors to review
the Company's results of operations from the same perspective as
management and the Company's board of directors. Non-GAAP results
are presented for supplemental informational purposes only for
understanding our operating results. The non-GAAP results should
not be considered a substitute for financial information presented
in accordance with generally accepted accounting principles and may
be different from non-GAAP measures used by other companies.
See the attached Supplemental Financial Information for a
reconciliation of net loss, a GAAP measure, to adjusted EBITDA, a
non-GAAP measure, for the three and nine months ended September 30,
2020 and 2019.
About Qumu
Qumu Corporation (Nasdaq: QUMU) is the leading provider of
best-in-class tools to create, manage, secure, distribute and
measure the success of live, on-demand and video content management
solutions for enterprises. Backed by the most trusted and
experienced team in the industry, the Qumu platform enables global
organizations to drive employee engagement, increase access to
video, and modernize the workplace by providing a more efficient
and effective way to share knowledge.
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. Forward-looking statements
are subject to various risks and uncertainties that could cause
actual results to differ materially from those expressed or implied
in such statements.
Such forward-looking statements include, for example, statements
about: the expected use and adoption of video in the enterprise,
the impact of COVID-19 on the use and adoption of video in the
enterprise, 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, or the
success of go-to-market strategies or the other initiatives in the
Company’s strategic roadmap. The risks and uncertainties that could
cause actual results to differ materially from those expressed or
implied in these forward-looking statements include the risk
factors described in the Company’s Quarterly Report on Form 10-Q
for the quarter ended June 30, 2020, any subsequently filed Form
10-Q and Current Reports on Form 8-K and other filings with the
Securities and Exchange Commission.
The forward-looking statements in this press release speak only
as of the date of this press release. Except as required by law,
Qumu assumes no obligation to update or revise these
forward-looking statements for any reason, even if new information
becomes available in the future, except as required by law.
QUMU CORPORATION
Condensed Consolidated Statements of
Operations
(unaudited - in thousands, except per
share data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2020
2019
2020
2019
Revenues:
Software licenses and appliances
$
548
$
1,962
$
6,149
$
3,656
Service
6,082
4,709
16,042
15,478
Total revenues
6,630
6,671
22,191
19,134
Cost of revenues:
Software licenses and appliances
219
719
2,344
1,366
Service
1,435
1,294
4,337
3,747
Total cost of revenues
1,654
2,013
6,681
5,113
Gross profit
4,976
4,658
15,510
14,021
Operating expenses:
Research and development
2,105
1,849
5,973
5,361
Sales and marketing
2,044
2,083
6,443
6,647
General and administrative
2,142
1,673
7,055
4,998
Amortization of purchased intangibles
165
168
492
587
Total operating expenses
6,456
5,773
19,963
17,593
Operating loss
(1,480
)
(1,115
)
(4,453
)
(3,572
)
Other income (expense):
Interest expense, net
(33
)
(235
)
(38
)
(654
)
Decrease (increase) in fair value of
derivative liability
(1
)
—
104
—
Decrease (increase) in fair value of
warrant liability
(332
)
973
(730
)
(752
)
Gain on sale of BriefCam, Ltd.
—
41
—
41
Other, net
(55
)
(3
)
(252
)
32
Total other income (expense), net
(421
)
776
(916
)
(1,333
)
Loss before income taxes
(1,901
)
(339
)
(5,369
)
(4,905
)
Income tax benefit
(43
)
(118
)
(147
)
(133
)
Net loss
$
(1,858
)
$
(221
)
$
(5,222
)
$
(4,772
)
Net loss per share – basic:
Net loss per share – basic
$
(0.14
)
$
(0.02
)
$
(0.39
)
$
(0.49
)
Weighted average shares outstanding –
basic
13,579
9,913
13,555
9,822
Net loss per share – diluted:
Loss attributable to common
shareholders
$
(1,858
)
$
(1,194
)
$
(5,516
)
$
(4,772
)
Net loss per share – diluted
$
(0.14
)
$
(0.11
)
$
(0.41
)
$
(0.49
)
Weighted average shares outstanding –
diluted
13,579
10,413
13,575
9,822
QUMU CORPORATION
Condensed Consolidated Balance
Sheets
(unaudited - in thousands)
Assets
September 30,
2020
December 31,
2019
Current assets:
Cash and cash equivalents
$
11,352
$
10,639
Receivables, net
5,699
4,586
Contract assets
802
1,089
Income taxes receivable
289
338
Prepaid expenses and other current
assets
1,882
1,981
Total current assets
20,024
18,633
Property and equipment, net
431
596
Right of use assets – operating leases
1,425
1,746
Intangible assets, net
2,341
3,075
Goodwill
7,036
7,203
Deferred income taxes, non-current
12
21
Other assets, non-current
458
442
Total assets
$
31,727
$
31,716
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and other accrued
liabilities
$
2,104
$
2,816
Accrued compensation
1,777
1,165
Deferred revenue
12,280
10,140
Operating lease liabilities
627
587
Financing obligations
123
157
Note payable
1,767
—
Derivative liability
36
—
Warrant liability
1,814
2,939
Total current liabilities
20,528
17,804
Long-term liabilities:
Deferred revenue, non-current
3,612
1,449
Income taxes payable, non-current
602
585
Operating lease liabilities,
non-current
1,137
1,587
Financing obligations, non-current
18
83
Other liabilities, non-current
264
—
Total long-term liabilities
5,633
3,704
Total liabilities
26,161
21,508
Stockholders’ equity:
Common stock
137
136
Additional paid-in capital
78,758
78,061
Accumulated deficit
(70,350
)
(65,128
)
Accumulated other comprehensive loss
(2,979
)
(2,861
)
Total stockholders’ equity
5,566
10,208
Total liabilities and stockholders’
equity
$
31,727
$
31,716
QUMU CORPORATION
Condensed Consolidated Statements of
Cash Flows
(unaudited - in thousands)
Nine Months Ended
September 30,
2020
2019
Operating activities:
Net loss
$
(5,222
)
$
(4,772
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization
935
1,170
Stock-based compensation
620
644
Accretion of debt discount and issuance
costs
52
403
Gain on sale of BriefCam, Ltd.
—
(41
)
Gain on lease modification
—
(21
)
Decrease in fair value of derivative
liability
(104
)
—
Increase in fair value of warrant
liability
730
752
Deferred income taxes
9
8
Changes in operating assets and
liabilities:
Receivables
(1,107
)
2,038
Contract assets
296
(845
)
Income taxes receivable / payable
70
62
Prepaid expenses and other assets
268
573
Accounts payable and other accrued
liabilities
(629
)
546
Accrued compensation
617
(732
)
Deferred revenue
4,338
(431
)
Other non-current liabilities
264
(24
)
Net cash provided by (used in) operating
activities
1,137
(670
)
Investing activities:
Proceeds from sale of BriefCam, Ltd.
—
41
Purchases of property and equipment
(68
)
(137
)
Net cash used in investing activities
(68
)
(96
)
Financing activities:
Proceeds from issuance of common stock
under employee stock plans
238
46
Principal payments on financing
obligations
(286
)
(242
)
Common stock repurchases to settle
employee withholding liability
(160
)
(54
)
Net cash used in financing activities
(208
)
(250
)
Effect of exchange rate changes on
cash
(148
)
(95
)
Net increase (decrease) in cash and cash
equivalents
713
(1,111
)
Cash and cash equivalents, beginning of
period
10,639
8,636
Cash and cash equivalents, end of
period
$
11,352
$
7,525
QUMU CORPORATION
Supplemental Financial
Information
(unaudited - in
thousands)
A summary of revenue is as follows:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2020
2019
2020
2019
Software licenses and appliances
$
548
$
1,962
$
6,149
$
3,656
Service
Subscription, maintenance and support
5,349
4,166
14,182
13,883
Professional services and other
733
543
1,860
1,595
Total service
6,082
4,709
16,042
15,478
Total revenue
$
6,630
$
6,671
$
22,191
$
19,134
A reconciliation from GAAP results to
adjusted EBITDA is as follows:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2020
2019
2020
2019
Net loss
$
(1,858
)
$
(221
)
$
(5,222
)
$
(4,772
)
Interest expense, net
33
235
38
654
Income tax benefit
(43
)
(118
)
(147
)
(133
)
Depreciation and amortization expense:
Depreciation and amortization in operating
expenses
80
84
231
243
Total depreciation and amortization
expense
80
84
231
243
Amortization of intangibles included in
cost of revenues
72
109
212
340
Amortization of intangibles included in
operating expenses
165
168
492
587
Total amortization of intangibles
expense
237
277
704
927
Total depreciation and amortization
expense
317
361
935
1,170
EBITDA
(1,551
)
257
(4,396
)
(3,081
)
Gain on sale of BriefCam, Ltd.
—
(41
)
—
(41
)
Increase (decrease) in fair value of
derivative liability
1
—
(104
)
—
Increase (decrease) in fair value of
warrant liability
332
(973
)
730
752
Other expense (income), net
55
3
252
(32
)
Stock-based compensation expense:
Stock-based compensation included in cost
of revenues
12
6
22
20
Stock-based compensation included in
operating expenses
199
213
598
624
Total stock-based compensation expense
211
219
620
644
Transaction-related expenses
113
—
1,623
—
Adjusted EBITDA
$
(839
)
$
(535
)
$
(1,275
)
$
(1,758
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201027006163/en/
Company Contact: Dave Ristow Chief Financial Officer Qumu
Corporation Dave.Ristow@qumu.com +1.612.638.9045
Investor Contact: Matt Glover or Tom Colton Gateway
Investor Relations QUMU@gatewayir.com +1.949.574.3860
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