Execution on SaaS Strategy Drives 21%
Year-over-Year Increase in Subscription Annual Recurring Revenue
(ARR); Management Reiterates Revenue Growth Outlook of 20%+ in
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 first quarter ended
March 31, 2021.
Q1 2021 and Recent Operational Highlights
- Strengthened leadership team with the appointment of SaaS
veteran Rose Bentley as Qumu’s new Chief Operating Officer.
- Partnered with a leading video creation platform for
enterprises to make streaming video more accessible for new and
existing Qumu customers.
- Released artificial intelligence-powered live captioning for
enterprise video.
- Solidified the balance sheet with the closing of a public
offering of common stock, which provided approximately $23.1
million in cash to accelerate the company’s strategic roadmap.
- Repaid the note payable to ESW Holdings, Inc. with draw from
the company's new revolving credit facility with Wells Fargo Bank,
which was subsequently repaid, reducing the outstanding balance on
the facility to zero.
- Strategic plan hiring on track with 36 net new hires in Q1
2021.
Q1 2021 Financial Highlights
- Subscription, maintenance, and support revenue in Q1 2021
increased 20% to $5.0 million, compared to $4.2 million in Q1
2020.
- Professional services and other revenue in Q1 2021 increased
39% to $733,000, compared to $527,000 in Q1 2020.
- Gross margin improved to 73% in Q1 2021 from 67% in Q1
2020.
- Strong balance sheet at the end of Q1 2021 with $27.6 million
in cash and no debt.
Q1 2021 Key Performance Indicators
- Subscription Annual Recurring Revenue (ARR) increased 21% to
$11.9 million in Q1 2021 from $9.9 million in Q1 2020.
- Software-as-a-Service (SaaS) customer retention:
- Gross Renewal Rate (GRR): 93% at end of Q1 2021 compared to 88%
at end of Q1 2020.
- Net Renewal Rate (NRR): 126% at end of Q1 2021 compared to 117%
at end of Q1 2020.
- Dollar Value Retention: 104% at end of Q1 2021 compared to 90%
at end of Q1 2020.
Management Commentary
“In Q1 we successfully completed the second phase of our
two-year strategic roadmap, which was designed to improve Qumu’s
position as a leader in cloud-first enterprise video and establish
an infrastructure to support our accelerating future growth plans,”
said Qumu President and CEO TJ Kennedy. “Our continued progress in
transitioning to a more predictable SaaS-based model was evidenced
by the 21% year-over-year growth in SaaS subscription ARR we
delivered during the period; our incremental expansion is building
a solid foundation for more predictable growth in the years ahead.
Additionally, our focus on converting customers to the cloud
continues to produce encouraging results, including a large
conversion deal in Q1 2021 with significant annual contract value
that will be recognized as future revenue. Our customer success
efforts are further deepening relationships and driving solid
retention metrics, including a 104% rolling 12-month SaaS renewal
rate as of quarter end.
“Over the next 12 months, we will be implementing the initial
elements of phase three of our strategic roadmap, which involves
ramping global sales and marketing capabilities as well as
expanding our customer-obsessed culture across our sales and
customer success teams. Success in this phase will mean a further
expanded and diversified customer base, deeper customer and partner
engagements, and a transformed business model, which collectively
should translate to a ‘snowballing’ growth effect for our company
that is reflected in our revenue forecast for 2021.
“Qumu’s position as a leading provider of best-in-class live
streaming and on-demand video technology has us in a great position
to capitalize on several growing and untapped global markets. Our
proven product offerings and unique value proposition set in a
clear market direction have us confident that our growth plans are
well within reach.
“These forceful industry tailwinds and our performance thus far
have us on track to achieve our financial and operational
objectives in 2021. We believe that continued execution against our
plan will position us extremely well to meet our 20% revenue growth
in 2021. Our robust balance sheet will also enable us to accelerate
many of our growth initiatives. We are making great strides toward
the realization of our long-term financial goals, which will
establish Qumu as a growth-oriented company operating at scale,
benefiting from high-margin recurring revenues, sustainable and
growing adjusted EBITDA, and net income profitability.”
First Quarter 2021 Financial Results
Revenue for Q1 2021 was $5.8 million compared to $6.2 million
for Q1 2020. The decrease in revenue was primarily due to the
expected decline of on-premise license and appliance sales, offset
by higher subscription, maintenance, and support revenue.
Subscription, maintenance, and support revenue for Q1 2021
increased 20% to $5.0 million from $4.2 million in Q1 2020, which
was driven by new cloud and term license deals signed in 2020 as
well as moderate 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 Q1 2021 was 73.1% compared to 66.5% for Q1 2020.
The gross margin percentage increase was primarily due to a
favorable sales mix and an increase in higher-margin SaaS
revenue.
Net loss in Q1 2021 was $(4.5) million, or $(0.27) loss per
basic share and $(0.29) loss per diluted share, compared to $(2.7)
million, or $(0.20) loss per basic share and $(0.21) loss per
diluted share, for Q1 2020. The increase in net loss for Q1 2021
compared to Q1 2020 reflects the accelerated implementation of the
company’s strategic roadmap as the company increased its headcount
by 36 employees during the quarter, bringing the total to 138
employees at March 31, 2021, compared to 102 at December 31, 2020
and 105 at March 31, 2020.
Adjusted EBITDA loss, a non-GAAP measure, in Q1 2021 was $(4.1)
million, compared to an adjusted EBITDA loss of $(1.2) million for
Q1 2020.
Cash and cash equivalents totaled $27.6 million as of March 31,
2021, an increase of $15.7 million from December 31, 2020. On
January 29, 2021, Qumu's underwritten follow-on public offering
closed, raising approximately $23.1 million. The company also paid
down $1.8 million on its credit facility during Q1 2021, which was
originally drawn to repay the $1.8 million note payable to ESW
Holdings, Inc. The proceeds from the follow-on 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.
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 Q1 2021
financial results, business pipeline, and strategic roadmap
implementation progress, Qumu management reiterates its
expectations for at least 20% revenue growth as compared to 2020,
or total revenue of approximately $35 million in 2021. 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. The company also 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
(April 29, 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, changes in
fair values of warrant and derivative 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 months ended March 31, 2021 and
2020.
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 Annual Report on Form 10-K for
the year ended December 31, 2020 and other factors set forth in the
Company’s 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 March
31,
2021
2020
Revenues:
Software licenses and appliances
$
108
$
1,540
Service
5,712
4,687
Total revenues
5,820
6,227
Cost of revenues:
Software licenses and appliances
64
648
Service
1,503
1,439
Total cost of revenues
1,567
2,087
Gross profit
4,253
4,140
Operating expenses:
Research and development
2,030
1,780
Sales and marketing
4,476
2,218
General and administrative
2,527
2,593
Amortization of purchased intangibles
162
164
Total operating expenses
9,195
6,755
Operating loss
(4,942
)
(2,615
)
Other income (expense):
Interest income (expense), net
(54
)
17
Decrease in fair value of derivative
liability
37
—
Decrease in fair value of warrant
liability
357
36
Other, net
62
(160
)
Total other income (expense), net
402
(107
)
Loss before income taxes
(4,540
)
(2,722
)
Income tax benefit
(90
)
(50
)
Net loss
$
(4,450
)
$
(2,672
)
Net loss per share – basic:
Net loss per share – basic
$
(0.27
)
$
(0.20
)
Weighted average shares outstanding –
basic
16,443
13,552
Net loss per share – diluted:
Loss attributable to common
shareholders
$
(4,807
)
$
(2,838
)
Net loss per share – diluted
$
(0.29
)
$
(0.21
)
Weighted average shares outstanding –
diluted
16,608
13,589
QUMU CORPORATION
Condensed Consolidated Balance
Sheets
(unaudited - in thousands)
March 31,
December 31,
Assets
2021
2020
Current assets:
Cash and cash equivalents
$
27,575
$
11,878
Receivables, net
4,274
5,612
Contract assets
470
467
Income taxes receivable
592
479
Prepaid expenses and other current
assets
2,685
2,302
Total current assets
35,596
20,738
Property and equipment, net
307
249
Right of use assets – operating leases
288
332
Intangible assets, net
1,959
2,143
Goodwill
7,513
7,455
Deferred income taxes, non-current
19
19
Other assets, non-current
462
490
Total assets
$
46,144
$
31,426
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and other accrued
liabilities
$
2,525
$
2,705
Accrued compensation
1,678
2,145
Deferred revenue
11,993
12,918
Operating lease liabilities
691
735
Financing obligations
313
406
Note payable
—
1,800
Derivative liability
—
37
Warrant liability
1,993
2,910
Total current liabilities
19,193
23,656
Long-term liabilities:
Deferred revenue, non-current
2,817
3,488
Income taxes payable, non-current
613
608
Operating lease liabilities,
non-current
441
554
Financing obligations, non-current
133
75
Other liabilities, non-current
160
160
Total long-term liabilities
4,164
4,885
Total liabilities
23,357
28,541
Stockholders’ equity:
Common stock
176
138
Additional paid-in capital
103,824
79,489
Accumulated deficit
(78,778
)
(74,328
)
Accumulated other comprehensive loss
(2,435
)
(2,414
)
Total stockholders’ equity
22,787
2,885
Total liabilities and stockholders’
equity
$
46,144
$
31,426
QUMU CORPORATION
Condensed Consolidated Statements of
Cash Flows
(unaudited - in thousands)
Three Months Ended March
31,
2021
2020
Operating activities:
Net loss
$
(4,450
)
$
(2,672
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
243
314
Stock-based compensation
589
245
Accretion of debt discount and issuance
costs
33
—
Decrease in fair value of derivative
liability
(37
)
—
Increase in fair value of warrant
liability
(357
)
(36
)
Deferred income taxes
—
8
Changes in operating assets and
liabilities:
Receivables
1,344
(542
)
Contract assets
(3
)
182
Income taxes receivable / payable
(105
)
(113
)
Prepaid expenses and other assets
(353
)
(28
)
Accounts payable and other accrued
liabilities
(379
)
17
Accrued compensation
(467
)
754
Deferred revenue
(1,614
)
(18
)
Net cash used in operating activities
(5,556
)
(1,889
)
Investing activities:
Purchases of property and equipment
(29
)
(27
)
Net cash used in investing activities
(29
)
(27
)
Financing activities:
Proceeds from line of credit
1,840
—
Payment on line of credit
(1,840
)
—
Principal payments on term loan
(1,833
)
—
Principal payments on financing
obligations
(118
)
(93
)
Net proceeds from common stock
issuance
23,085
—
Proceeds from issuance of common stock
under employee stock plans
142
—
Common stock repurchases to settle
employee withholding liability
(3
)
(53
)
Net cash provided by (used in) financing
activities
21,273
(146
)
Effect of exchange rate changes on
cash
9
(212
)
Net increase (decrease) in cash and cash
equivalents
15,697
(2,274
)
Cash and cash equivalents, beginning of
period
11,878
10,639
Cash and cash equivalents, end of
period
$
27,575
$
8,365
QUMU CORPORATION
Supplemental Financial
Information
(unaudited - in thousands)
A summary of revenue is as follows:
Three Months Ended March
31,
2021
2020
Software licenses and appliances
$
108
$
1,540
Service
Subscription, maintenance and support
4,979
4,160
Professional services and other
733
527
Total service
5,712
4,687
Total revenue
$
5,820
$
6,227
A reconciliation from GAAP results to
adjusted EBITDA is as follows:
Three Months Ended March
31,
2021
2020
Net loss
$
(4,450
)
$
(2,672
)
Interest expense (income), net
54
(17
)
Income tax benefit
(90
)
(50
)
Depreciation and amortization expense:
Depreciation and amortization in operating
expenses
54
78
Total depreciation and amortization
expense
54
78
Amortization of intangibles included in
cost of revenues
27
72
Amortization of intangibles included in
operating expenses
162
164
Total amortization of intangibles
expense
189
236
Total depreciation and amortization
expense
243
314
EBITDA
(4,243
)
(2,425
)
Decrease in fair value of derivative
liability
(37
)
—
Decrease in fair value of warrant
liability
(357
)
(36
)
Other expense (income), net
(62
)
160
Stock-based compensation expense:
Stock-based compensation included in cost
of revenues
15
5
Stock-based compensation included in
operating expenses
574
240
Total stock-based compensation expense
589
245
Transaction-related expenses
—
811
Adjusted EBITDA
$
(4,110
)
$
(1,245
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210429006023/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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