Company to Hold Conference Call Today, June
29th at 5:00 p.m. ET
Qumu Corporation (Nasdaq: QUMU), a leading provider of
cloud-based enterprise video technology for organizations of all
sizes, today announced select preliminary financial results for the
second quarter ending June 30, 2021, which remain subject to
customary quarterly review procedures. The Company also updated its
financial guidance for the full year ending December 31, 2021.
Qumu executive management team will be hosting a conference
call to discuss these results today (June 29, 2021) at 5:00
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.
Preliminary Q2 2021 Financial Results
Based on preliminary unaudited results, the Company expects
revenue for Q2 2021 to range between $5.7 million and $5.9 million.
This compares to revenue of $9.3 million in Q2 2020 and $5.8
million in Q1 2021.
Subscription, maintenance, and support revenue for Q2 2021 is
expected to range between $4.9 million and $5.1 million. This
compares to subscription, maintenance, and support revenue of $4.7
million in Q2 2020 and $5.0 million in Q1 2021.
Subscription annual recurring revenue (ARR) is expected to range
between $12.0 million and $12.2 million for Q2 2021, compared to
$9.7 million in Q2 2020 and $11.9 million in Q1 2021.
Gross margin for Q2 2021 is expected to range between 72.5% and
73.5%. This compares to 68.5% in Q2 2020 and 73.1% in Q1 2021.
Net loss for Q2 2021 is expected to range between $(4.9) million
and $(4.3) million as compared to net loss of $(692,000) in Q2 2020
and $(4.5) million in Q1 2021. Adjusted EBITDA loss, a non-GAAP
measure, for Q2 2021 is expected to range between $(5.1) million
and $(4.8) million. This compares to adjusted EBITDA of $809,000 in
Q2 2020 and adjusted EBITDA loss of $(4.1) million in Q1 2021.
Complete financial results for Q2 2021 will be released in late
July. The details of the conference call will be provided prior to
the event.
Management Commentary on Q2 Financial Results
“Qumu is currently undergoing a significant business
transformation as we continue to focus on developing our SaaS
subscription business in connection with our strategic roadmap,”
noted Qumu President and CEO, TJ Kennedy. “During the first half of
the year, we have navigated through several challenges and
experienced some key learnings that have helped us to refocus our
approach and prompted us to implement key adjustments in our
business planning for the second half of 2021.
“Specifically, our new SaaS sales team, including business
development representatives and sales professionals, ramped more
slowly than expected. At the beginning of 2021, our legacy
salesforce was not directly aligned with our future, SaaS-based,
value-driven sales process. Such a transition requires time to
fully assess and enable the ramp of the sales resources to reach
full productivity, which impacted our ability to grow revenue as
fast as we would have liked in Q2 2021. Given the almost universal
move to a remote work environment accelerated by the pandemic, we
had estimated a quicker ramp in sales productivity than we recently
experienced in selling to our enterprise customers. We currently
believe that the time needed to fully ramp our sales team to reach
our expected sales velocity is approximately 12 months from hiring
due to the complexity of the sale, individual enablement, and
procurement time cycles.”
“In addition, we had expected shorter sales cycles for both new
logos and on-prem conversions as we transitioned more of the
business to our cloud platform,” continued Kennedy. “However, the
reality is these sales cycles lagged our initial estimates based,
in part, on procurement time frames, uncertainty and lack of
definitive decisions on when and if our customers’ workforce may
return to the office, as well as our ability to then effectively
communicate the full value of the Qumu Cloud Platform to both
current on-premise customers and new SaaS prospects.
“Taken together, these transformation challenges have pushed our
anticipated growth inflection point likely into early next year and
impacted our ability to achieve the desired overall revenue growth
for 2021. While we are seeing, and expect to continue to see,
positive trends in the growth of subscription revenues, we believe
our overall revenue will be flat or decrease modestly over the next
several quarters as we work to gain full sales traction in building
the recurring SaaS revenue stream. These temporary growing pains
are part of transforming our business from on-premise services to a
subscription-based mode. Qumu expects a slower ramp of overall
revenue growth this year but we remain focused on maximizing
subscription revenues, ensuring our enterprise customers achieve
their cloud and digital transformation objectives, implementing
product-led initiatives to deliver greater value to our customers,
and building long-term shareholder value.
“In light of these challenges, we have appropriately pivoted to
ensure the healthy, continued growth of our subscription-based
business while still maintaining ardent support for our on-premise
customers. Our key initiatives include:
- simplifying our selling motions with focused messaging and
highlighting our key differentiators, including Qumu’s actionable
insights into the delivery and consumption of enterprise video,
scalability, security and best in class customer support;
- updating our pricing to better align with our value-based
selling approach; and
- simplifying the packaging of our services offerings to focus on
our customers’ key enterprise use cases.”
Dave Ristow, Qumu’s Chief Financial Officer, noted: “Our new
go-to-market motions, targeting both large and medium enterprises
are gaining traction. Our improved customer success efforts are
deepening customer relationships and driving growth in our
subscription annual recurring revenue (ARR) and continued on-prem
to cloud conversions. During our business transformation, we will
remain focused on delivering SaaS revenue growth. These efforts
have had positive effects in growing our subscription business,
with subscription annual recurring revenue up approximately 25%
year-over-year for the first six months of 2021 as compared to the
same period a year-ago, a trend we anticipate will continue through
2021.
Kennedy continued: “This growth in our SaaS business is a key
milestone for Qumu. It demonstrates that our strategic roadmap is
yielding results, and we remain committed to taking the necessary
steps to continue to accelerate our subscription revenue growth as
we fully ramp our sales teams.
“The growth in our SaaS business in the first half of 2021 was
driven by on-premise conversions, new logo SaaS sales, and
expansion sales within our enterprise customers. We will continue
to drive our SaaS business through our direct sales team, our new
customer success and account management organization, and our newly
invigorated channel and partnership ecosystem, which will enable us
to scale and accelerate the value we deliver to our customers.”
Ristow added: “Our proven and unique product offerings will
enable us to capitalize on the ongoing proliferation of hybrid work
and the growing need for daily video-enabled human engagement to
drive business. Longer term, we remain confident that Qumu will
emerge as a growth-oriented subscription-focused company operating
at scale”
Kennedy concluded: “We are fully committed to all of our
enterprise customers, whether they are leveraging current
on-premise installations as employees return to the office, or
utilizing our SaaS cloud platform for both highly distributed
remote and hybrid work environments. We will continue to drive this
transformation, working to grow our customer base and to deliver on
generating long-term value to our shareholders and customers.”
Business Outlook
Qumu provides guidance based on current market conditions and
expectations. The Company emphasizes that its guidance is subject
to various important cautionary factors referenced in the section
entitled "Forward-Looking Statements" below, including risks and
uncertainties associated with the Company’s strategic roadmap and
the COVID-19 pandemic, such as trends in distributed remote and
hybrid work impacting enterprise technology adoption and
procurement.
We are rightsizing our burn rate, slowed our hiring and made
other cost-cutting measures to ensure adequate working capital that
supports our longer transition to SaaS. We will monitor spending
closely to ensure the long-term success of Qumu.
In order to provide better insight into the progress of Qumu’s
SaaS business transformation, the Company is providing a business
outlook based on the percentage of recurring revenue comprised of
SaaS revenue. Qumu management currently anticipates SaaS recurring
revenue to comprise approximately 60% of its overall recurring
revenue mix by the end of 2022, with targeted growth to
approximately 70% by the end of 2023.
This new business outlook approach supersedes Qumu’s revenue
guidance for 2021 issued on April 29, 2021, which was withdrawn,
effective today.
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. The Qumu Cloud
platform enables global organizations to drive human engagement,
increase access to and insights from video use, 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 success of the implementation of the Company’s strategic
roadmap, the impact of COVID-19 on the use and adoption of video in
the enterprise, the Company’s future revenue, future revenue mix,
and operating performance, cash balances, future product mix or the
timing of recognition of revenue and the demand for the Company’s
products or software. 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 most recent Annual Report on Form 10-K,
subsequent Quarterly Reports on Form 10-Q, 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 Supplemental Financial Information
A reconciliation from net loss, a GAAP measure, to adjusted
EBITDA, a non-GAAP measure, is as follows:
Three Months Ended
Six Months Ended
June 30, 2021
(unaudited)
(estimated)
June 30, 2020
(unaudited)
June 30, 2021
(unaudited)
(estimated)
June 30,
2020
(unaudited)
Low End of Range
High End of Range
Actual
Low End of Range
High End of Range
Actual
Net loss
$
(4,860)
$
(4,260)
$
(692)
$
(9,310)
$
(8,710)
$
(3,364)
Interest expense, net
20
15
22
74
69
5
Income tax benefit
(75)
(95)
(54)
(165)
(185)
(104)
Depreciation and amortization expense
245
230
304
488
473
618
EBITDA
(4,670)
(4,110)
(420)
(8,913)
(8,353)
(2,845)
Increase (decrease) in fair value of
derivative liability
—
—
(105)
(37)
(37)
(105)
Increase (decrease) in fair value of
warrant liability
(1,050)
(1,250)
434
(1,407)
(1,607)
398
Other expense (income), net
20
(20)
37
(42)
(82)
197
Stock-based compensation expense
600
580
164
1,189
1,169
409
Transaction-related expenses
—
—
699
—
—
1,510
Adjusted EBITDA
$
(5,100)
$
(4,800)
$
809
$
(9,210)
$
(8,910)
$
(436)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210629006032/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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