2020 Revenue Up 15% to $29.1 Million and
Subscription ARR Up 29% to $11.6 Million; Management Reaffirms 20%+
Revenue Growth Target for 2021
Qumu Corporation (Nasdaq: QUMU), a leading provider of
cloud-based enterprise video technology for organizations of all
sizes, today reported financial results for the fourth quarter and
full year ended December 31, 2020.
Q4 2020 and Recent Operational Highlights
- Hosted 32 million viewers on Qumu Cloud during the quarter, up
6% from Q3 2020 and up 880% from Q4 2019.
- Implemented a “Work from Wherever, Forever” policy for Qumu
employees, phasing out dedicated office space in Minneapolis,
London and Hyderabad and significantly reducing financial overhead
in future years.
- Leveraged new geography-agnostic policy to attract major
executive talent, strengthening and diversifying leadership team
across sales, marketing, and customer success.
- Named a leader in 2021 Aragon Research Globe for Enterprise
Video for the sixth time.
- Launched new Diversity, Equity and Inclusion Committee focused
on increasing internal and third-party diversity and helping ensure
a fully inclusive work environment.
- Solidified the balance sheet with the closing of a public
offering of common stock on January 29, 2021, which provided
approximately $23.1 million in cash to accelerate the company’s
strategic roadmap.
- Secured a $10 million revolving credit facility with Wells
Fargo Bank with availability determined by recurring revenue,
maturing January 15, 2023; the company received an advance of $1.8
million and repaid the face amount of the note payable to ESW
Holdings, Inc.
- Reiterated financial guidance for 2021 of at least 20% revenue
growth compared to 2020.
Q4 2020 Financial Highlights
- Subscription, maintenance, and support revenue in Q4 2020
increased 23% to $5.4 million, compared to $4.4 million in Q4
2019.
- Total revenue in Q4 2020 increased 10% to $6.9 million,
compared to $6.2 million in Q4 2019.
- Gross margin improved to 76% in Q4 2020 from 69% in Q4
2019.
Q4 2020 Key Performance Indicators
- Subscription Annual Recurring Revenue (ARR) increased 29% to
$11.6 million in Q4 2020 from $9.0 million in Q4 2019.
- Software-as-a-Service (SaaS) customer retention:
- Gross Renewal Rate (GRR): 94% at end of Q4 2020 compared to 90%
at end of Q4 2019.
- Net Renewal Rate (NRR): 128% at end of Q4 2020 compared to 115%
at end of Q4 2019.
- Dollar Value Retention: 103% at end of Q4 2020 compared to 90%
at end of Q4 2019.
Management Commentary
“In a transformative period for our business and the world, we
finished the year strong and are well-positioned to meet our
long-term growth goals,” said Qumu President and CEO TJ Kennedy.
“Our improved quarterly and annual financial results demonstrate
traction that is driving high-margin subscription ARR, which
increased 29% to a record $11.6 million in 2020. Growing this
valuable revenue base is a key priority within our long-term
strategic roadmap, which is designed to position Qumu as a leader
in cloud-first enterprise video. Combined with our healthy increase
in gross and net renewal rates, we are setting the course for
sustainable growth and high-margin, recurring SaaS revenues. Our
team has been consistently executing the long-term strategic
roadmap and delivering improved performance heading into 2021.
“Qumu continues to benefit from the continuing shift to remote
and permanent hybrid work, and the increasing need for businesses
to manage large scale streaming video and video content libraries.
As a leading provider of cloud-based enterprise video technology,
we expect to play a vital role in the ongoing transformation for
how organizations communicate and work.
“These market dynamics have been favorable to Qumu and put us on
track to achieve our financial and operational objectives in 2021.
We are confident that the investments we have made in our long-term
strategic roadmap will accelerate the evolution of Qumu’s
subscription business model and expansion into new market
opportunities. Longer term, we believe our building momentum and
the successful execution of our strategic roadmap will translate to
improved, high-margin long term recurring revenues.”
Fourth Quarter 2020 Financial Results
Revenue for Q4 2020 was $6.9 million compared to $6.2 million
for Q4 2019. The increase in revenue was primarily due to higher
subscription, maintenance, and support revenue as well as higher
subscription bookings.
Subscription, maintenance, and support revenue for Q4 2020
increased 23% to $5.4 million from $4.4 million in Q4 2019, which
was driven by new cloud and term license 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 daily operations through the efficient use
of video.
Gross margin in Q4 2020 was 75.7% compared to 68.8% for Q4 2019.
The gross margin percentage increase was primarily due to a
favorable sales mix and an increase in higher-margin SaaS
revenue.
Net loss in Q4 2020 was $(4.0) million, or $(0.29) loss per
basic and diluted share, compared to $(1.7) million, or $(0.14)
loss per basic share and $(0.17) loss per diluted share, for Q4
2019. Net loss for Q4 2020 was negatively impacted by $1.1 million
in non-cash expense associated with an increase in the warrant
liability fair value primarily due to the company’s higher stock
price in the fourth quarter 2020. The company incurred
approximately $917,000 in non-cash office lease costs related to
the enactment of the company’s remote work policy and surrender of
office space, expenses associated with the initial implementation
of initiatives within the company’s long-term strategic roadmap,
and higher commissions.
Adjusted EBITDA loss, a non-GAAP measure, in Q4 2020 was $(1.1)
million, compared to an adjusted EBITDA loss of $(1.2) million for
Q4 2019.
Cash and cash equivalents totaled $11.9 million as of December
31, 2020, an increase of $1.2 million from December 31, 2019. On
January 29, 2021, the company’s underwritten public offering
closed, raising approximately $23.1 million. As of January 31,
2021, the company’s cash and cash equivalents totaled $32.6 million
with $1.8 million outstanding on the company’s credit facility. The
proceeds from the offering will allow the company to accelerate
many key initiatives within its long-term strategic roadmap and
keep it well-positioned to execute against its cloud-first
vision.
Full Year 2020 Financial Highlights
- Subscription, maintenance, and support revenue for 2020
increased 7% to $19.6 million, compared to $18.2 million in
2019
- Revenue increased 15% to $29.1 million in 2020, compared to
$25.4 million in 2019
- Gross margin was 71.3% in 2020, compared to 72.2% in 2019
Full Year 2020 Financial Results
Revenue for the full year of 2020 increased 15% to $29.1 million
from $25.4 million for the full year of 2019. The increase in
revenue was primarily due to a large customer order received at the
end of Q1 2020.
Subscription, maintenance, and support revenue for the full year
of 2020 increased 7% to $19.6 million from $18.2 million for the
full year of 2019. The increase in subscription, maintenance and
support revenue was due to a large order received at the end of Q1
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 full year of 2020 was 71.3% compared to
72.2% for full-year 2019. The gross margin decrease was primarily
due to a higher mix of appliance revenue in the first half of 2020,
which generally carries lower margins compared to term license
revenue, and lower term license revenue in the 2020 period.
Net loss for full-year 2020 was $(9.2) million, or $(0.68) loss
per basic share and $(0.70) loss per diluted share, compared to
$(6.4) million, or $(0.62) loss per basic share and $(0.63) loss
per diluted share, for the full year of 2019. Net loss for 2020 was
favorably impacted by higher gross profit driven by higher revenue
in 2020 and lower interest expense given the company’s repayment of
its term loan in Q4 2019. These favorable impacts were offset in
2020 by $664,000 in severance charges; approximately $917,000 in
non-cash office lease costs relating to the adoption of the
company’s remote work policy and surrender of office space in Q4
2020; additional expense associated with the initial implementation
of initiatives within the company’s long-term strategic roadmap;
higher commissions and annual company bonus accruals; $1.8 million
in unfavorable impact from changes in the warrant liability fair
value; and $1.6 million in transaction expense associated with the
company’s now terminated merger with Synacor, Inc.
Adjusted EBITDA loss, a non-GAAP measure, for the full year of
2020 was $(2.3) million, compared to an adjusted EBITDA loss of
$(2.9) million for the full year of 2019.
Business Outlook
Qumu provides revenue guidance based on current market
conditions and expectations, including the unknown financial impact
that COVID-19 and related recovery will have on economies and
enterprises around the world. Based on the company’s Q4 2020
financial results, business pipeline, and strategic roadmap
implementation progress, Qumu management expects at least 20%
revenue growth, or total revenue of approximately $35 million in
2021 compared to 2020. As Qumu continues to expand its SaaS
salesforce, the company’s operating expenses will increase in the
first half of 2021 compared to the first half of 2020, and the
company expects its revenue growth rate to accelerate in the second
half of 2021 as compared to the first half of 2021.
Conference Call
Qumu executive management will host a conference call today
(March 4, 2021) 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, non-cash office
lease surrender costs 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 12 months ended December 31,
2020 and 2019.
About Qumu
Qumu (Nasdaq: QUMU) is a leading provider of best-in-class tools
to create, manage, secure, distribute and measure the success of
live and on-demand video for the enterprise. Backed by the most
trusted and experienced team in the industry, the Qumu Cloud
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
December 31,
Year Ended December
31,
2020
2019
2020
2019
Revenues:
Software licenses and appliances
$
613
$
1,247
$
6,762
$
4,903
Service
6,268
4,981
22,310
20,459
Total revenues
6,881
6,228
29,072
25,362
Cost of revenues:
Software licenses and appliances
184
545
2,528
1,911
Service
1,488
1,401
5,825
5,148
Total cost of revenues
1,672
1,946
8,353
7,059
Gross profit
5,209
4,282
20,719
18,303
Operating expenses:
Research and development
2,279
1,999
8,252
7,360
Sales and marketing
2,612
2,062
9,055
8,709
General and administrative
3,004
1,789
10,059
6,787
Amortization of purchased intangibles
165
170
657
757
Total operating expenses
8,060
6,020
28,023
23,613
Operating loss
(2,851
)
(1,738
)
(7,304
)
(5,310
)
Other income (expense):
Interest expense, net
(35
)
(100
)
(73
)
(754
)
Decrease (increase) in fair value of
derivative liability
(1
)
—
103
—
Decrease (increase) in fair value of
warrant liability
(1,096
)
611
(1,826
)
(141
)
Gain on sale of BriefCam, Ltd.
—
—
—
41
Loss on extinguishment of debt
—
(348
)
—
(348
)
Other, net
(154
)
(157
)
(406
)
(125
)
Total other income (expense), net
(1,286
)
6
(2,202
)
(1,327
)
Loss before income taxes
(4,137
)
(1,732
)
(9,506
)
(6,637
)
Income tax benefit
(159
)
(61
)
(306
)
(194
)
Net loss
$
(3,978
)
$
(1,671
)
$
(9,200
)
$
(6,443
)
Net loss per share – basic:
Net loss per share – basic
$
(0.29
)
$
(0.14
)
$
(0.68
)
$
(0.62
)
Weighted average shares outstanding –
basic
13,781
12,096
13,612
10,395
Net loss per share – diluted:
Loss attributable to common
shareholders
$
(3,978
)
$
(2,134
)
$
(9,494
)
$
(6,548
)
Net loss per share – diluted
$
(0.29
)
$
(0.17
)
$
(0.70
)
$
(0.63
)
Weighted average shares outstanding –
diluted
13,781
12,392
13,627
10,414
QUMU CORPORATION Condensed Consolidated
Balance Sheets (unaudited - in thousands)
December 31,
Assets
2020
2019
Current assets:
Cash and cash equivalents
$
11,878
$
10,639
Receivables, net
5,612
4,586
Contract assets
467
1,089
Income taxes receivable
479
338
Prepaid expenses and other current
assets
2,302
1,981
Total current assets
20,738
18,633
Property and equipment, net
249
596
Right of use assets – operating leases
332
1,746
Intangible assets, net
2,143
3,075
Goodwill
7,455
7,203
Deferred income taxes, non-current
19
21
Other assets, non-current
490
442
Total assets
$
31,426
$
31,716
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and other accrued
liabilities
$
2,705
$
2,816
Accrued compensation
2,145
1,165
Deferred revenue
12,918
10,140
Operating lease liabilities
735
587
Financing obligations
406
157
Note payable
1,800
—
Derivative liability
37
—
Warrant liability
2,910
2,939
Total current liabilities
23,656
17,804
Long-term liabilities:
Deferred revenue, non-current
3,488
1,449
Income taxes payable, non-current
608
585
Operating lease liabilities,
non-current
554
1,587
Financing obligations, non-current
75
83
Other liabilities, non-current
160
—
Total long-term liabilities
4,885
3,704
Total liabilities
28,541
21,508
Stockholders’ equity:
Common stock
138
136
Additional paid-in capital
79,489
78,061
Accumulated deficit
(74,328
)
(65,128
)
Accumulated other comprehensive loss
(2,414
)
(2,861
)
Total stockholders’ equity
2,885
10,208
Total liabilities and stockholders’
equity
$
31,426
$
31,716
QUMU CORPORATION Condensed Consolidated
Statements of Cash Flows (unaudited - in thousands)
Year Ended December
31,
2020
2019
Operating activities:
Net loss
$
(9,200
)
$
(6,443
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization
1,518
1,526
Stock-based compensation
1,178
857
Accretion of debt discount and issuance
costs
85
471
Loss on debt extinguishment
—
348
Gain on sale of BriefCam, Ltd.
—
(41
)
Gain on lease modification
—
(21
)
Decrease in fair value of derivative
liability
(103
)
—
Increase in fair value of warrant
liability
1,826
141
Deferred income taxes
2
31
Changes in operating assets and
liabilities:
Receivables
(938
)
1,720
Contract assets
645
(604
)
Income taxes receivable / payable
(102
)
13
Prepaid expenses and other assets
157
522
Accounts payable and other accrued
liabilities
682
174
Accrued compensation
972
(389
)
Deferred revenue
4,688
181
Other non-current liabilities
160
(24
)
Net cash provided by (used in) operating
activities
1,570
(1,538
)
Investing activities:
Proceeds from sale of BriefCam, Ltd.
—
41
Purchases of property and equipment
(128
)
(168
)
Net cash used in investing activities
(128
)
(127
)
Financing activities:
Proceeds from issuance of common stock
—
8,201
Proceeds from issuance of common stock
under employee stock plans
440
46
Principal payments on term loan
—
(4,000
)
Payment of debt issuance costs
—
(250
)
Principal payments on financing
obligations
(372
)
(320
)
Common stock repurchases to settle
employee withholding liability
(188
)
(75
)
Net cash provided by (used in) financing
activities
(120
)
3,602
Effect of exchange rate changes on
cash
(83
)
66
Net increase in cash and cash
equivalents
1,239
2,003
Cash and cash equivalents, beginning of
period
10,639
8,636
Cash and cash equivalents, end of
period
$
11,878
$
10,639
QUMU CORPORATION Supplemental Financial
Information (unaudited - in thousands)
A summary of revenue is as follows:
Three Months Ended
December 31,
Year Ended December
31,
2020
2019
2020
2019
Software licenses and appliances
$
613
$
1,247
$
6,762
$
4,903
Service
Subscription, maintenance and support
5,373
4,366
19,555
18,249
Professional services and other
895
615
2,755
2,210
Total service
6,268
4,981
22,310
20,459
Total revenue
$
6,881
$
6,228
$
29,072
$
25,362
A reconciliation from GAAP results to
adjusted EBITDA is as follows:
Three Months Ended
December 31,
Year Ended December
31,
2020
2019
2020
2019
Net loss
$
(3,978
)
$
(1,671
)
$
(9,200
)
$
(6,443
)
Interest expense, net
35
100
73
754
Income tax benefit
(159
)
(61
)
(306
)
(194
)
Depreciation and amortization expense:
Depreciation and amortization in operating
expenses(1)
344
71
575
314
Total depreciation and amortization
expense
344
71
575
314
Amortization of intangibles included in
cost of revenues
74
115
286
455
Amortization of intangibles included in
operating expenses
165
170
657
757
Total amortization of intangibles
expense
239
285
943
1,212
Total depreciation and amortization
expense
583
356
1,518
1,526
EBITDA
(3,519
)
(1,276
)
(7,915
)
(4,357
)
Gain on sale of BriefCam, Ltd.
—
—
—
(41
)
Loss on extinguishment of debt
—
348
—
348
Increase (decrease) in fair value of
derivative liability
1
—
(103
)
—
Increase (decrease) in fair value of
warrant liability
1,096
(611
)
1,826
141
Other expense (income), net
154
157
406
125
Stock-based compensation expense:
Stock-based compensation included in cost
of revenues
14
6
36
26
Stock-based compensation included in
operating expenses
544
207
1,142
831
Total stock-based compensation expense
558
213
1,178
857
Non-cash office lease surrender costs
637
—
637
—
Transaction-related expenses
—
—
1,623
—
Adjusted EBITDA
$
(1,073
)
$
(1,169
)
$
(2,348
)
$
(2,927
)
_________________________________________________
(1) Includes $280 of non-cash office lease
surrender costs for both the three months and year ended December
31, 2020.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210304005977/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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