Continued Execution of Cloud Growth Strategy
Drives 35% Increase in SaaS Revenue and 16% Increase in SaaS Annual
Recurring Revenue (ARR)
Qumu Corporation (Nasdaq: QUMU), a leading provider of
cloud-based enterprise video technology, today reported financial
results for the fourth quarter and full year ended December 31,
2021.
Q4 2021 and Recent Operational Highlights
- Recognized by Aragon Research in the “Leader” category of the
2022 Aragon Research Globe for Enterprise Video.
- Partnered with Kollective, a provider of enterprise content
delivery networking, and introduced the new Qumu Partner Program to
meet growing enterprise video needs of global organizations.
- Unveiled the latest capabilities for the Qumu Video Engagement
Platform that provides system administrators with improved
monitoring and management capabilities.
- Named a finalist in the 2021-2022 Cloud Awards, the
international cloud computing awards program.
- Strengthened the leadership team with the appointment of Tom
Krueger as the company’s new CFO to drive success of Qumu’s
continued SaaS transformation.
- Partnered with GovSmart to bring Qumu’s Video Engagement
Platform to government agencies as they work to modernize IT
systems and communicate via video with their wide networks.
Q4 2021 and Full Year 2021 Financial Highlights
- Software-as-a-Service (SaaS) ARR growth from 2019 to 2021
resulted in a 40% compound annual growth rate (CAGR).
- SaaS revenue increased 35% to $10.2 million in 2021, compared
to $7.6 million in 2020.
- SaaS Annual Recurring Revenue (SaaS ARR) grew to $12.8 million,
up 16% year-over-year.
- Q4 2021 operating expenses decreased 4% compared to Q3
2021.
- $20.6 million of cash and cash equivalents at quarter end.
Q4 2021 Key Performance Indicators
- SaaS revenue accounted for 56% of recurring revenue, exceeding
the company’s guidance of 50% for 2021.
- SaaS ARR increased 16% to $12.8 million in Q4 2021 from $11.1
million in Q4 2020.
- SaaS customer retention metrics:
- Gross Retention Rate (GRR): 91% at end of Q4 2021 compared to
80% at end of Q4 2020.
- Net Retention Rate (NRR): 114% at end of Q4 2021 compared to
141% at end of Q4 2020.
Management Commentary
“Our results for the fourth quarter and full year demonstrate
the continued execution of our strategic roadmap, which emphasizes
growing our cloud business and scaling our SaaS revenue base,” said
Qumu President and CEO TJ Kennedy. “Highlighting this success is
the 35% SaaS revenue growth we delivered in 2021, bringing our
total SaaS revenue to a record $10.2 million at year end.
Additionally, SaaS revenue accounted for 56% of our recurring
revenue and 48% of our total revenue in Q4 2021, with the percent
of total recurring revenue metric exceeding our guidance for the
year-end and giving us encouraging momentum as we begin 2022. SaaS
annual recurring revenue also grew by 16% in 2021, bringing the
growth rate for SaaS ARR over the last two years to 40%, which we
expect to serve as a strong benchmark going forward.”
Qumu CFO Tom Krueger commented: “As expected, our overall
topline was down for the year, which was a direct result of certain
legacy, on-prem contracts sunsetting as we focus our attention on
higher margin, recurring revenue deals. Our partner-led sales
motions and customer success efforts are gaining momentum and
driving new customers, deeper relationships, and cloud conversions.
In 2021, we completed five on-prem to SaaS conversions and expect
to complete a similar number this year. Partner generated revenue
grew 25% compared to 2020 and accounted for more than 30% of our
total revenue in 2021. Looking at our costs, the optimization
measures we implemented in the second half of 2021 have made us a
more nimble and efficient organization, reflected by strong margins
and reduced operating expenses, which we expect to further reduce
in 2022.”
Kennedy continued: “2021 was a transformative year for our
organization, and I am incredibly proud of what the team
accomplished. We scaled our cloud offerings, expanded our partner
network, converted key on-prem customers, and delivered robust SaaS
revenue growth, all of which allowed us to enter 2022 with solid
momentum.
“Looking ahead, the progress we’re making with partners and
strategic alliances is gaining traction, which we believe will
translate to even more results starting in the second quarter of
this year. As we continue to transform our business, we are focused
on delivering robust SaaS revenue growth, which will be driven by
new customer and expansion bookings sourced through the channel in
2022. Based on our success driving SaaS revenue and ARR in 2021, we
are increasing our goals for 2022. We now expect our SaaS recurring
revenue as a percentage of our recurring revenue to be at least 65%
by the end of 2022 and 75% by the end of 2023. Longer term, we are
confident that Qumu will emerge as a subscription-driven growth
company operating at scale, benefiting from high-margin recurring
revenues, sustainable and growing cash flow and Adjusted EBITDA and
net income profitability.”
Fourth Quarter 2021 Financial Results
Revenue for Q4 2021 was $5.9 million, compared to $6.4 million
in Q3 2021 and $6.9 million in Q4 2020. The year-over-year decrease
was expected and due to the company’s strategic shift away from
perpetual license sales, where revenue is recognized upon delivery,
and toward SaaS sales, which results in ratable recognition of
revenue through subscription terms.
Service revenue for Q4 2021 was $5.8 million, compared to $5.7
million in Q3 2021 and $6.1 million in Q4 2020. The year-over-year
decrease resulted from customer contracts sunsetting, impacting
maintenance revenue associated with the company’s on-premise
solution.
Gross margin in Q4 2021 was 75%, compared to gross margin of 76%
for both Q3 2021 and Q4 2020. The gross margin percentage was
impacted by lower overall revenue relative to the comparative
periods.
Net loss in Q4 2021 totaled $(3.8) million, or $(0.21) loss per
basic and diluted share. This compares to net loss of $(3.7)
million, or $(0.21) loss per basic and diluted share, for Q3 2021
and net loss of $(4.0) million, or $(0.29) loss per basic and
diluted share, in Q4 2020.
Adjusted EBITDA loss, a non-GAAP measure, in Q4 2021 was $(3.1)
million, compared to $(3.5) million in Q3 2021 and $(1.1) million
in Q4 2020.
As of December 31, 2021, the company had cash and cash
equivalents of $20.6 million and borrowings of $5.0 million on the
company’s revolving credit facility.
Full Year 2021 Financial Results
Revenue for full year 2021 was $24.0 million, compared to $29.1
million in full year 2020. The decrease was expected and due to a
large on-premise deal recognized in 2020 as well as the company’s
strategic shift away from perpetual license sales, which revenue is
recognized upon delivery, and toward SaaS sales, which results in
ratable recognition of revenue through subscription terms.
Service revenue for full year 2021 was $22.8 million, compared
to $21.5 million in 2020. The year-over-year increase resulted from
shifting customers to the cloud and growing SaaS ARR and SaaS
revenue.
Gross margin in 2021 was 74%, an improvement from gross margin
of 71% for 2020.
Net loss in 2021 totaled $(16.4) million, or $(0.93) loss per
basic and $(1.01) loss per diluted share. This compares to net loss
of $(9.2) million, or $(0.68) loss per basic and $(0.70) loss per
diluted share in 2020.
Adjusted EBITDA loss, a non-GAAP measure, in 2021 was $(15.2)
million, compared to $(2.3) million in 2020.
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 plan,
transition to SaaS recurring revenue through channel partners, and
the COVID-19 pandemic, such as trends in distributed remote and
hybrid work impacting enterprise technology adoption and
procurement.
To give insight into the progress of Qumu’s SaaS business
transformation, the company provides a business outlook based on
the percentage of recurring revenue comprised of SaaS revenue. Qumu
management now expects that SaaS recurring revenue will comprise
approximately 65% of its overall recurring revenue mix by the end
of 2022, with targeted growth to approximately 75% of recurring
revenue mix by the end of 2023.
Conference Call
Qumu executive management will host a conference call today
(March 17, 2022) 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 derivative and 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 months and year ended December 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. 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 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 plan. 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 December
31,
Year Ended December
31,
2021
2020
2021
2020
Revenues:
Software licenses and appliances
$
95
$
811
$
1,186
$
7,547
Service
5,815
6,070
22,836
21,525
Total revenues
5,910
6,881
24,022
29,072
Cost of revenues:
Software licenses and appliances
32
184
222
2,528
Service
1,476
1,488
5,946
5,825
Total cost of revenues
1,508
1,672
6,168
8,353
Gross profit
4,402
5,209
17,854
20,719
Operating expenses:
Research and development
1,907
2,279
8,426
8,252
Sales and marketing
4,339
2,612
18,478
9,055
General and administrative
2,046
3,004
8,596
10,059
Amortization of purchased intangibles
161
165
649
657
Total operating expenses
8,453
8,060
36,149
28,023
Operating loss
(4,051
)
(2,851
)
(18,295
)
(7,304
)
Other income (expense):
Interest expense, net
(19
)
(35
)
(100
)
(73
)
Decrease (increase) in fair value of
derivative liability
—
(1
)
37
103
Decrease (increase) in fair value of
warrant liability
80
(1,096
)
1,549
(1,826
)
Gain on sale of BriefCam
—
—
50
—
Other, net
25
(154
)
2
(406
)
Total other income (expense), net
86
(1,286
)
1,538
(2,202
)
Loss before income taxes
(3,965
)
(4,137
)
(16,757
)
(9,506
)
Income tax benefit
(116
)
(159
)
(392
)
(306
)
Net loss
$
(3,849
)
$
(3,978
)
$
(16,365
)
$
(9,200
)
Net loss per share – basic:
Net loss per share – basic
$
(0.21
)
$
(0.29
)
$
(0.93
)
$
(0.68
)
Weighted average shares outstanding –
basic
17,978
13,781
17,514
13,612
Net loss per share – diluted:
Loss attributable to common
shareholders
$
(3,849
)
$
(3,978
)
$
(17,913
)
$
(9,494
)
Net loss per share – diluted
$
(0.21
)
$
(0.29
)
$
(1.01
)
$
(0.70
)
Weighted average shares outstanding –
diluted
17,978
13,781
17,650
13,627
QUMU CORPORATION
Condensed Consolidated Balance
Sheets
(unaudited - in thousands)
December 31,
December 31,
Assets
2021
2020
Current assets:
Cash and cash equivalents
$
20,563
$
11,878
Receivables, net
3,709
5,612
Contract assets
446
467
Income taxes receivable
556
479
Prepaid expenses and other current
assets
2,184
2,302
Total current assets
27,458
20,738
Property and equipment, net
337
249
Right of use assets – operating leases
146
332
Intangible assets, net
1,388
2,143
Goodwill
7,388
7,455
Deferred income taxes, non-current
17
19
Other assets, non-current
362
490
Total assets
$
37,096
$
31,426
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and other accrued
liabilities
$
2,742
$
2,705
Accrued compensation
1,725
2,145
Deferred revenue
10,862
12,918
Operating lease liabilities
597
735
Financing obligations
5,502
406
Note payable
—
1,800
Derivative liability
—
37
Warrant liability
801
2,910
Total current liabilities
22,229
23,656
Long-term liabilities:
Deferred revenue, non-current
1,507
3,488
Income taxes payable, non-current
630
608
Operating lease liabilities,
non-current
21
554
Financing obligations, non-current
113
75
Other liabilities, non-current
—
160
Total long-term liabilities
2,271
4,885
Total liabilities
24,500
28,541
Stockholders’ equity:
Common stock
178
138
Additional paid-in capital
105,655
79,489
Accumulated deficit
(90,693
)
(74,328
)
Accumulated other comprehensive loss
(2,544
)
(2,414
)
Total stockholders’ equity
12,596
2,885
Total liabilities and stockholders’
equity
$
37,096
$
31,426
QUMU CORPORATION
Condensed Consolidated Statements of
Cash Flows
(unaudited - in thousands)
Year Ended December
31,
2021
2020
Operating activities:
Net loss
$
(16,365
)
$
(9,200
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization
983
1,518
Loss on disposal of property and
equipment
5
—
Stock-based compensation
2,067
1,178
Accretion of debt discount and issuance
costs
40
85
Gain on sale of BriefCam, Ltd.
(50
)
—
Decrease in fair value of derivative
liability
(37
)
(103
)
Increase (decrease) in fair value of
warrant liability
(1,549
)
1,826
Deferred income taxes
2
2
Changes in operating assets and
liabilities:
Receivables
1,911
(938
)
Contract assets
21
645
Income taxes receivable / payable
(50
)
(102
)
Prepaid expenses and other assets
752
157
Accounts payable and other accrued
liabilities
(530
)
682
Accrued compensation
(419
)
972
Deferred revenue
(4,029
)
4,688
Other non-current liabilities
(160
)
160
Net cash provided by (used in) operating
activities
(17,408
)
1,570
Investing activities:
Proceeds from sale of BriefCam, Ltd.
50
—
Purchases of property and equipment
(239
)
(128
)
Net cash used in investing activities
(189
)
(128
)
Financing activities:
Proceeds from line of credit
6,840
—
Payment on line of credit
(1,840
)
—
Principal payments on term loan
(1,833
)
—
Principal payments on financing
obligations
(445
)
(372
)
Payment of debt issuance costs
(25
)
—
Net proceeds from common stock
issuance
23,085
—
Proceeds from issuance of common stock
under employee stock plans
545
440
Common stock repurchases to settle
employee withholding liability
(51
)
(188
)
Net cash provided by (used in) financing
activities
26,276
(120
)
Effect of exchange rate changes on
cash
6
(83
)
Net increase in cash and cash
equivalents
8,685
1,239
Cash and cash equivalents, beginning of
period
11,878
10,639
Cash and cash equivalents, end of
period
$
20,563
$
11,878
QUMU CORPORATION
Supplemental Financial
Information
(unaudited - in thousands)
A summary of revenue is as follows:
Three Months Ended December
31,
Year Ended December
31,
2021
2020
2021
2020
Software licenses and appliances
$
95
$
811
$
1,186
$
7,547
Service
Subscription, maintenance and support
5,036
5,175
20,074
18,770
Professional services and other
779
895
2,762
2,755
Total service
5,815
6,070
22,836
21,525
Total revenue
$
5,910
$
6,881
$
24,022
$
29,072
A reconciliation from GAAP results to
Adjusted EBITDA is as follows:
Three Months Ended December
31,
Year Ended December
31,
2021
2020
2021
2020
Net loss
$
(3,849
)
$
(3,978
)
$
(16,365
)
$
(9,200
)
Interest expense, net
19
35
100
73
Income tax benefit
(116
)
(159
)
(392
)
(306
)
Depreciation and amortization expense:
Depreciation and amortization in operating
expenses
58
344
228
575
Total depreciation and amortization
expense
58
344
228
575
Amortization of intangibles included in
cost of revenues
26
74
106
286
Amortization of intangibles included in
operating expenses
161
165
649
657
Total amortization of intangibles
expense
187
239
755
943
Total depreciation and amortization
expense
245
583
983
1,518
EBITDA
(3,701
)
(3,519
)
(15,674
)
(7,915
)
Gain on sale of BriefCam, Ltd.
—
—
(50
)
—
Increase (decrease) in fair value of
derivative liability
—
1
(37
)
(103
)
Increase (decrease) in fair value of
warrant liability
(80
)
1,096
(1,549
)
1,826
Other expense (income), net
(25
)
154
(2
)
406
Stock-based compensation expense:
Stock-based compensation included in cost
of revenues
27
14
71
36
Stock-based compensation included in
operating expenses
637
544
1,996
1,142
Total stock-based compensation expense
664
558
2,067
1,178
Non-cash office lease surrender costs
—
637
—
637
Transaction-related expenses
—
—
—
1,623
Adjusted EBITDA
$
(3,142
)
$
(1,073
)
$
(15,245
)
$
(2,348
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220317005822/en/
Company Contact: Tom Krueger Chief Financial Officer Qumu
Corporation Tom.Krueger@qumu.com +1.612.638.9100
Investor Contact: Matt Glover or Tom Colton Gateway
Investor Relations QUMU@gatewayir.com +1.949.574.3860
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