Continued Execution of Transformational Cloud
Growth Strategy Drives 15% Increase in Quarterly SaaS Revenue and
10% Increase in SaaS Annual Recurring Revenue (ARR)
SaaS Revenue Accounted for 54% of Total Q1
Revenue
Qumu Corporation (Nasdaq: QUMU), a leading provider of
cloud-based enterprise video technology, today reported financial
results for the first quarter ended March 31, 2022.
Q1 2022 and Recent Operational Highlights
- Partnered with AT&T to launch managed unified streaming for
the enterprise.
- Secured several new business and key expansions, marketing the
company’s new customer and expansion sales to large enterprises
located in the U.S., Asia-Pacific and EMEA.
- Appointed Chief Operating Officer and SaaS veteran Rose Bentley
as the Company’s new President and Chief Executive Officer.
- Teamed up with LiveU to expand enterprise live video
capabilities.
- Named a “Top Streaming Engine” by Wainhouse Research.
Q1 2022 Financial Highlights
- SaaS revenue increased 15% to $2.7 million in Q1 2022, compared
to $2.3 million in Q1 2021
- SaaS Annual Recurring Revenue (SaaS ARR) grew to $13.0 million,
up 10% year-over-year
- Operating expenses decreased 3% sequentially and 10%
year-over-year
- Strong balance sheet with $15.5 million of cash and cash
equivalents at quarter end
Q1 2022 Key Performance Indicators
- SaaS revenue accounted for 60% of recurring revenue, up from
56% in Q4 2021 and 46% in Q1 2021
- SaaS ARR increased to $13.0 million in Q1 2022 from $12.8
million in Q4 2021 and $11.8 million in Q1 2021
- SaaS customer retention metrics:
- Gross Retention Rate (GRR): 88% at end of Q1 2022 compared to
81% at end of Q1 2021
- Net Retention Rate (NRR): 107% at end of Q1 2022 compared to
151% at end of Q1 2021
Management Commentary
“Our first quarter results show the continued execution of our
strategy to grow our cloud business and scale our SaaS revenue
base,” said Qumu President and CEO Rose Bentley. “Our ongoing
success is highlighted by the 15% SaaS revenue growth we generated
in the first quarter, bringing our total SaaS revenue as a
percentage of our total revenue to 54%. During Q1, we landed
several new wins and key customer expansions, both of which support
our view that Qumu’s transformation is well underway. Our
partner-led sales motions are working, demonstrated by the fact
that 75% of our wins in Q1 were through channel partners, including
Kollective, BT, and Socialive. The traction we realized also
demonstrates our execution against our strategy around customers,
product adoption, innovation, and partners.”
Qumu CFO Tom Krueger commented: “Our commitment to driving our
cloud business and scaling our SaaS revenue base continues to
translate to robust growth across our key metrics, a trend we
expect to continue in 2022 and beyond. Our encouraging SaaS and
recurring revenue growth is supported by our solid balance sheet,
including $15.5 million of cash, a level that provides sufficient
runway to execute our growth strategy. In addition to diligently
managing our cash, we are continually looking to further optimize
our cost structure and drive greater efficiencies.”
Bentley continued: “As we continue to transform our business, we
remain committed to generating robust SaaS revenue growth through
new customer and expansion bookings sourced through the channel.
Looking ahead, the progress we’re making with partners and
strategic alliances is gaining traction. We entered the second
quarter with a robust pipeline that we look to capitalize on
throughout the year. Our plan is supported by a solid cash position
and available resources that provide sufficient runway to execute
our growth strategy.
“The leadership team and Board remain highly 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.”
First Quarter 2022 Financial Results
Revenue for Q1 2022 was $4.9 million, compared to $5.9 million
in Q4 2021 and $5.8 million in Q1 2021. The sequential and
year-over-year decrease was 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 Q1 2022 was $4.8 million, compared to $5.8
million in Q4 2021 and $5.7 million in Q1 2021. The year-over-year
decrease resulted from customer contracts sunsetting, impacting
maintenance revenue associated with the company’s on-premise
solution. Subscription and support revenue, which is included in
service revenue and comprises the company's SaaS revenue, was $2.7
million for Q1 2022, compared to $2.8 million in Q4 2021 and $2.3
million in Q1 2021. The slight sequential decrease in subscription
revenue was expected. Going forward, the company expects
subscription revenue will grow as Qumu continues to execute on its
cloud transformation strategy.
Gross margin in Q1 2022 was 71.5%, compared to gross margin of
74.5% for Q4 2021 and 73.1% for Q1 2021. The gross margin
percentage was lower due to lower services margin and lower overall
revenue relative to the comparative periods. The company expects
quarterly consolidated gross margin for the remainder of 2022 to
return to the mid-70% range, which is consistent with 2021
levels.
Net loss in Q1 2022 totaled $(4.6) million, or $(0.26) loss per
basic and diluted share. This compares to net loss of $(3.8)
million, or $(0.21) loss per basic and diluted share, for Q4 2021
and net loss of $(4.5) million, or $(0.27) loss per basic share and
$(0.29) loss per diluted share, in Q1 2021.
Adjusted EBITDA loss, a non-GAAP measure, in Q1 2022 was $(4.1)
million, compared to $(3.1) million in Q4 2021 and $(4.1) million
in Q1 2021.
As of March 31, 2022, the company had cash and cash equivalents
of $15.5 million.
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’s management reiterated its expectation 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 (May
12, 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, and other non-operating income and 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, 2022 and
2021.
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 success of go-to-market strategies or the other
initiatives in the company’s strategic plan, the company's ability
to continue as a going concern, the expected use and adoption of
video in the enterprise, the ability to obtain additional capital
as needed, the ability to attract and retain necessary personnel,
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, or 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
Annual Report on Form 10-K for the year ended December 31, 2021,
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,
2022
2021
Revenues:
Software licenses and appliances
$
111
$
108
Service
4,829
5,712
Total revenues
4,940
5,820
Cost of revenues:
Software licenses and appliances
31
64
Service
1,379
1,503
Total cost of revenues
1,410
1,567
Gross profit
3,530
4,253
Operating expenses:
Research and development
1,825
2,030
Sales and marketing
3,808
4,476
General and administrative
2,443
2,527
Amortization of purchased intangibles
156
162
Total operating expenses
8,232
9,195
Operating loss
(4,702
)
(4,942
)
Other income (expense):
Interest expense, net
(70
)
(54
)
Decrease in fair value of derivative
liability
—
37
Decrease in fair value of warrant
liability
66
357
Other, net
(28
)
62
Total other income (expense), net
(32
)
402
Loss before income taxes
(4,734
)
(4,540
)
Income tax benefit
(94
)
(90
)
Net loss
$
(4,640
)
$
(4,450
)
Net loss per share – basic:
Net loss per share – basic
$
(0.26
)
$
(0.27
)
Weighted average shares outstanding –
basic
18,014
16,443
Net loss per share – diluted:
Loss attributable to common
shareholders
$
(4,640
)
$
(4,807
)
Net loss per share – diluted
$
(0.26
)
$
(0.29
)
Weighted average shares outstanding –
diluted
18,014
16,679
QUMU CORPORATION
Condensed Consolidated Balance
Sheets
(unaudited - in thousands)
March 31,
December 31,
Assets
2022
2021
Current assets:
Cash and cash equivalents
$
15,464
$
20,563
Receivables, net
3,679
3,709
Contract assets
563
446
Income taxes receivable
653
556
Prepaid expenses and other current
assets
2,538
2,184
Total current assets
22,897
27,458
Property and equipment, net
284
337
Right of use assets – operating leases
96
146
Intangible assets, net
1,223
1,388
Goodwill
7,180
7,388
Deferred income taxes, non-current
17
17
Other assets, non-current
351
362
Total assets
$
32,048
$
37,096
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and other accrued
liabilities
$
3,063
$
2,742
Accrued compensation
2,329
1,725
Deferred revenue
10,122
10,862
Operating lease liabilities
435
597
Financing obligations
5,350
5,502
Warrant liability
735
801
Total current liabilities
22,034
22,229
Long-term liabilities:
Deferred revenue, non-current
1,167
1,507
Income taxes payable, non-current
636
630
Operating lease liabilities,
non-current
—
21
Financing obligations, non-current
100
113
Total long-term liabilities
1,903
2,271
Total liabilities
23,937
24,500
Stockholders’ equity:
Common stock
179
178
Additional paid-in capital
105,993
105,655
Accumulated deficit
(95,333
)
(90,693
)
Accumulated other comprehensive loss
(2,728
)
(2,544
)
Total stockholders’ equity
8,111
12,596
Total liabilities and stockholders’
equity
$
32,048
$
37,096
QUMU CORPORATION
Condensed Consolidated Statements of
Cash Flows
(unaudited - in thousands)
Three Months Ended
March 31,
2022
2021
Operating activities:
Net loss
$
(4,640
)
$
(4,450
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
216
243
Stock-based compensation
356
589
Accretion of debt discount and issuance
costs
4
33
Decrease in fair value of derivative
liability
—
(37
)
Decrease in fair value of warrant
liability
(66
)
(357
)
Changes in operating assets and
liabilities:
Receivables
12
1,344
Contract assets
(117
)
(3
)
Income taxes receivable / payable
(105
)
(105
)
Prepaid expenses and other assets
(334
)
(353
)
Accounts payable and other accrued
liabilities
214
(379
)
Accrued compensation
611
(467
)
Deferred revenue
(1,014
)
(1,614
)
Net cash used in operating activities
(4,863
)
(5,556
)
Investing activities:
Purchases of property and equipment
(8
)
(29
)
Net cash used in investing activities
(8
)
(29
)
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
(165
)
(118
)
Payment of debt issuance costs
(25
)
—
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
(16
)
(3
)
Net cash provided by (used in) financing
activities
(206
)
21,273
Effect of exchange rate changes on
cash
(22
)
9
Net increase (decrease) in cash and cash
equivalents
(5,099
)
15,697
Cash and cash equivalents, beginning of
period
20,563
11,878
Cash and cash equivalents, end of
period
$
15,464
$
27,575
QUMU CORPORATION Supplemental Financial Information
(unaudited - in thousands)
A summary of revenue is as follows:
Three Months Ended
March 31,
2022
2021
Software licenses and appliances
$
111
$
108
Service
Subscription and support
2,655
2,315
Maintenance and support
1,793
2,664
Subscription, maintenance and support
4,448
4,979
Professional services and other
381
733
Total service
4,829
5,712
Total revenue
$
4,940
$
5,820
A reconciliation from GAAP results to Adjusted EBITDA is as
follows:
Three Months Ended
March 31,
2022
2021
Net loss
$
(4,640
)
$
(4,450
)
Interest expense, net
70
54
Income tax benefit
(94
)
(90
)
Depreciation and amortization expense:
Depreciation and amortization in operating
expenses
60
54
Total depreciation and amortization
expense
60
54
Amortization of intangibles included in
cost of revenues
—
27
Amortization of intangibles included in
operating expenses
156
162
Total amortization of intangibles
expense
156
189
Total depreciation and amortization
expense
216
243
EBITDA
(4,448
)
(4,243
)
Decrease in fair value of derivative
liability
—
(37
)
Decrease in fair value of warrant
liability
(66
)
(357
)
Other expense (income), net
28
(62
)
Stock-based compensation expense:
Stock-based compensation included in cost
of revenues
19
15
Stock-based compensation included in
operating expenses
337
574
Total stock-based compensation expense
356
589
Adjusted EBITDA
$
(4,130
)
$
(4,110
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220512005727/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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