QUMU - Earnings call transcript Q4 2017

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Operator

Good day, ladies and gentlemen, and welcome to the Qumu Fourth Quarter 2017 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] I would now like to introduce your host for today’s conference, Mr. David Ristow, CFO.

sir. begin, may You

David Ristow

thank call. joining and XXXX fourth earnings conference you morning our for quarter Good

our today include based comments this that Any features and on or and or delivered currently to Our XX-Q. Form on uncertainties may at presentation prospects. expectations, services this that to may us in nature, available services These time plans and, our presentation or I reports that by statements involve time on should are the public on their intend are available forward-looking products information of statements the do statements risks unreleased relating our Annual purchase now could or results to our and in at be currently references on decisions features Risks all. statements. obligation assume forward-looking associated not statements. other and sure cause not filed differ who call We to with Customers their described Hanzlik. based forward-looking any recent actual periodic that and are business will most no Form XX-K any are in described available. the are Report Vernon materially to from current over uncertainties subsequently turn those to update make

Vernon Hanzlik

would I for Dave reviews our a like the welcome, and few Thanks numbers fourth the year make to comments quarter. before end and

quarter of million Fourth we’re quarter our X.X results financial fourth XXXX. XXXX. QX was compared release, year with our disappointed of I press end in the As commented of our $X.X in and to revenue million

year. million Partners. $X goes Adjusted term strength last $X.X Capital of loan with a agreement was $XX.X negative X.X The million cash a with million Company’s this Capital For of to credit credit million our adjusted ESW full in million the million year, replacing a negative the it agreement position XXth Hale compared on revenue $XX was year last EBITDA XX.X EBITDA year. compared to XXXX

a as churn in deals challenges the magnified sale by into Our normal execution slipping and customer degree clearly were of quarter. next

revenue recurring call. IBM accomplished we million even far and have forward. contract In XXXX annual customers, previous forward with we’ve in from and these look what and $X.X pride significant a excitement with what But both addition, a so accomplish we’ll Qumu which disappointments, I to lost mentioned going

continue we customers and global a partner as seek are trusted strategy maintain First, investing because headed. our in to with loyal fits XXXX blue-chip a it organizations who are their Qumu

cloud. encompassing solution full providing addition, and on-premise Qumu offers hybrid the only cloud, industry the In is in deployment of provider currently models a range

now for investing We achieve this company's single full able the have been and every stack years enterprise to solution. needs are to video address with

Qumu, I organizations and with we for significant deliver and tools of align can in our November see sales, use underway also introduced Business workforce. joined to and to opportunities the minute. changes Worldwide our discuss to Chance worked the been used content for changes taking leaders, with as plan together balance success on our We've are a has CFO NGS development. continues who that our develop market. expenses the with advantage making new opportunity. entire Also the Development, team leadership Dave execute new speed Along with will sheet, and in Ristow made Mason, we our in the EVP these executive tenacity already Sales by finance, impressive our capability front in am device impact our the market our support and noted I us, significant new in business call in already on expert a specifically visionary also Company's to about intelligent excited and at video any almost We creation

on planned is four pillars strategic Our for XXXX. focus

opportunities our to and experience direct position their effectively day opportunities. impacts under are and the sales enterprise the more Chance sales capability operation committed overhauling execution growth industry. resellers and on group is lead and effort more pillar we've processes, the Chance one provide will new quickly, channel first uncovering the The close job, new stack and RFPs. access and their and channel immediate video plan, in this the direct helping business with made select of is our we'll full efficiency up stepping drive identified who contacts new has to and plans From growth, applying customer he customers

and talk example, XX one Under we identified Chance's we the our tell partner prospects how the new prospects. story. For to we alone guidance, changing way already are

innovative we XXXX the addition, a applications verticals. in beyond of are high global In on looking companies, number end select focusing

strategy health example, that the we use the already because with in regional more for a of and cases example the service verticals recently Qumu an XX,XXX and parts expand as organization. our is great seeing fit perfect employees. is and also landed over other clinics underscores of organization opportunity select land for customers XXX a than hospitals video in a This As

and second top customers the our not It of The priority. our loyal customer happy keeping is is competitiveness Qumu. for and strategy is retention, pillar success existing only the

success Our customer undertaking third-party sales reviews among by verified in the efforts the industry includes the that. consistently is alignment prove Gartner, Part teams. rate top which of Chance

collaborate community, form with to addition customers in we to active are online person. also a In our us giving

partners we and are next innovative and their U.S. weeks, in highlighting industries holding of own the and through prospects the leaders Europe annual Over video. customer summits in who the are use customers, XX both

Qx elements that applications. true pillar years no The no today. for Qx enterprise competitor is grade needs, a third build for innovation. that attractive as have a customers the solution extensions their The stands we us in when video and solution two our to our the or Qx of launched in XXXX, real-time or provides, an We platform open x platform. designed now architecture every fits extensible key other what it the last IPTV that such enterprise solution analytics. deployment big May strategies, is half crystallize developers making efforts third-party convergence strategy right architecting matter most market product scalable Those focused better service-based market. makes video with in We invested in for of and small

First, a it's intelligent best technology. that hybrid works solution, firewall or solution the and delivery with inside only both outside of providing the combined as worlds, to the flexibility cloud

open partner our software Second, end-to-end delivery single solution management provides of friendly platform video. a and capture,

provides end-user sources, capture, video including our or network WebEx. Skype IPTV dynamically for for mobile to and management platform to the terms at point In tool. approach. intelligent of With means adapt communications the dependent delivery our or on our virtual finally, Qx customers videoconferencing no large entry and our video platform, every And for with supports unified either new such use easy larger available scale to video the or secure opportunities in bandwidth new unlimited is video desktops. are existing new content of content assets business with prospect robust as NGS Intelligent device and this

solution where their Qx the needs customer exist. Our meets

new sheet The example, is balance can secured under us especially capital gives one less up of external credit communication a and more internal financials, way. Dave, communications and the investing facility as our the during pillars while future. our in on-premise it that guidance restrictive showing we’re XXXX We For covenants. Qx the content deploy for made as in we be all four should strengthening cloud with

reduce our year. work. leveraging actions also operating platform the to included XXXX future leadership success us position These several for new last over We significant dramatically capabilities our and in expense goes Meanwhile successes.

customers demonstrated wins new has Campbell's, customers. hold, including company Hitachi, of that XX British our plan the blue-chip and major are the resulting in industries taken landed these Heidi, across CIT, consumer, Telecom we line healthcare, including new with wide financial, largest our of broadcasting in tech, names Qx customers. Europe. manufacturing, directly in First, mix SunTrust, Many

including channel, our Another igniting Pinnacle. mentioned extensible AT&T, success partners significant opportunities I as and our such in platform British friendly wins Telecom is with is as highly earlier partner

Next, on-prem we bring secure cloud solution intelligent the hybrid solutions video making installations, deployed in dependable multiple into making and our cloud more special the user-friendly. and environment delivery more our sauce, hybrid

APAC provider. is cloud cloud steadily effort of In our our to learning Qumu our working, product stepped now as momentum on particularly development of well growing platform efforts we system a management in is the XXXX, half new our iStudy, addition, as component approach representing new on with customers our of build our during unique marketing sales to partner refocus up our existing offerings. Also product

enterprises. pipeline base during his improvement engine additional excited efficiency marketing are markets need quantity industry that five Our and efforts marketing, Under customer and illustrate biotech service relationships quality new healthcare media, generation today's XXXX, highlight advantage targeting minimal manufacturing, growing optimization marketing direct based capabilities. our VP in steadily new space. video and and We over developed outbound digital digital to rapidly with more in Marketing, growing programs the Eric enterprise. the to space. Rudolf, our of is media capturing I'd second this leadership, outreach, which see joined primary and and us placement, like increased the with we competition improved our leads recent is I'm distinct we promoted built lead refining searching including we the who managing banking and aggressively several technology, and five analysts the cover no There our and that as of strong question very enterprise We've spending. growing XXXX. our large dramatically consulting wins mid-year. frequent dramatically cadence telecom has In and social footprint. three half marketing, vertical content increased We and and within leading and targeted on marketing finance, features and in

company RP multicast footprint we providing beat giant The thousands hybrid the was which the a leading computer competition our employees. countries. and of first global is delivery. global example We expanding unique by a with combination a with intelligent a of in This organization cloud different competitive XX technology won memory process connectivity, customer

plug-ins the initial hybrid highlight euro customer big mobile solutions. Qumu and The however, moving customer multiple producer the product including our a event. is to the employees and Data. customers Qx solution; to Qumu's the all around as intelligent town plus product very solutions because XX,XXX cloud to Qumu SharePoint, network business, choose expand branding on underscores XX,XXX with Yammer as saved The for and to use next brought The managed integration noble of platform jewellery on world, and client Microsoft solution from dollar was enterprise on-premise sale their the and of positions from supports crystalline in training, international and by all meetings, Qumu, multibillion happening client Skype left solution sees With partner The installed capability are our like because already as us our Microsoft powerhouse I'd which being Dimension our desktops launches, and routing support. still Our having their their devices. such plans customer solutions the of forward strong well Outlook. also opportunities. hall Qumu service example This their shop a us is all-hands final applications cases with

solution, the to in three planning, driving concept into acquired for the their XX,XXX convergence events involved as case the employment in In provide large the the institutions, world. requirements, cycle large of broadcast long security despite workforce, needs with days. Our a branches. of billion video distributed one have reach institution complex large was to partner Like cycle only this distinct in in firm a financial most transfer. X,XXX very and education, assets Qumu's sales installation ability environments the able they summary, engagement team result every this the banking two AT&T us knowledge sales months proof significant over jobs XX with achieved delivery XXX leadership employee underlying requiring drive massive Qumu years was a high XX to work our technologies brought extensive U.S. across and With just employees customer enterprise a

on enterprise on-prem are Qumu for streaming and video, video. We the demand cloud converging and this delivery, is future input why and is

open and market turn then come will and to over before review Dave we for some Now for questions. up comments the I strategies back and commentary, financial call I'll

David Ristow

fourth on related Thank to financial items a quarter. quarter for additional Vern. compared provide and comment last our XXXX. few Total the results was million will guidance revenue X.X X.X for I you, to million

revenue Subscription, X.X quarter compared X.X and the Software license software for quarter. million appliance fourth maintenance was and X.X last million the to and software and for support expect quarter. to revenue continue XXX,XXX XXX,XXX and other is last support revenue million fourth earlier. quarter last we for the Vern Professional which dependent fourth attributable on-premise be million at revenue quarter. are that quarter. In sales. large significant X.X the to from compared XXXX, and the base X.X approximately that end subscription, last margin primarily will quarter sales, license was on due million a maintenance Gross the in steadily was increase revenue difficult for to appliance the forecast XXXX. loss was the revenue of will The appliance license fourth compared and software quarterly increased license shared compared to The to decrease was customer grow by to services to quarter XX.X% XX.X% of

ended respectively. EBITDA although million three million year in total and decreased to the results EBITDA, adjusted size continue X.X decreased months -- the and and mix Compared months resulted which We’ll measure. three EBITDA. large adjusted our corresponding XX, operating expenses expenses XXXX, significantly non-GAAP XX% operating with XXXX, Due XX, to EBITDA adjusted adjusted which to for ended timing a X.X improved the X% ended December the on XXXX. structure December and operating on-premises right for to XX, of improved in XX last results Moving sales, for period the December expense year

and and and Moving quarter of were December changes fourth losses capital. both balance cash million impact working XXXX X.X of the reflecting and in as investments sheet, on XX, to cash operating XXXX, XX, our September

with the $XX As January Capital mentioned ESW loan closed which term we Vern with cash strengthen credit Company's position, on $X credit of Partners. had agreement agreement Hale this to year, our million a replaced XXth Capital million

investment very result, our net take reflects the from to for $X.XX for loan interest costs diluted to related fourth XXXX loss moment results full share financing diluted amortization a deferred to quarter a a year I of of the per BriefCam. $X.X the $X.X also in million As the per or and mention share million want modification. expense positive incremental

and new captured and developing traction. BriefCam's adding surveillance reported company video XXX% technology those to year-over-year. for by Company For is analyzing a XXXX customers BriefCam of in call, and by like new security you We revenue The reviewing the Israeli held privately the XXX systems. grew

XXX, going into I of briefly model, the I'd our impact guidance like and speak business guidance approach about Before go forward. our to to

The parties providing growth This our expectations large Qx, with many of saw Our resonating is unpredictable purchases Qx predict long-term perpetual Qx able are hybrid markets. deploy business platform. will our lumpy contracting and often offering in and the to of involve processes order be company the Therefore, and a to perspective. of the to them align deal forward. make difficult cloud, interest guidance with in timing moving realities only our strategy sales from both revenue. any shareholder three the decision only licenses, sold tense better plans best contribute the we to be with marketplace model which We're reality annual cycles and in Within enterprise as holistically we types, on-premises on-premises. these are long making

results and to we’re Our to year's as this guidance. a to continue team deliver delivering operations absolutely our and a goal and leadership committed as again financial business into transparency is annual

material licensing our relates ASC X% me treatment arrangements. recognition new This previously $X.X guidance standard XXXX, XXX XXX-XXXX of not be will is commission of under revenue a booked revenue do on term Let touch impact relating ASC XXX anticipate for ASC to or revenues. impacting reduced XXXX by presently million our expenses. to the approximately the We under

reflect XXXX, XX-K changes. Our our and these guidance filing

approximately revenue year Moving factors. prior two estimated because to guidance is XXXX guidance $XX significant to revenue is The of results year million. for be on the below

expected EBITDA to $X.X the new mid XX% a loss sales XXXX resulting As $X.X we we recognition Adjusted is the grow margin million previously expected to Total lost platform. gross the approximately approximately is for be XXX. to negatively ASC million, are expect core year. the $X.X for be the growth contract bookings results impacting the of value plus XXXX, from of XXs Qx of an adoption to with in the annual customer million emphasizing significant noted, standard high revenue in

EBITDA achieve Vern smartly second you. of the to adjusted in deployed is are positive four through growth initiatives the plan half communicated Vern, earlier. savings the objective to year that that to back in support cost pillars Our

Vernon Hanzlik

offers platform of an in environments conversion are Thanks, thousands customers hybrid of enterprise platform. brings provider cloud, deployments video opportunity complex only Jeff. industry outstanding, Qumu’s dependable helping the model into video a stack Qx user their we that experience the to one employees, and intelligent security the on-premise under that now in of full solution

and innovation XXXX, focus financials. execution, that are on success retention, filler for four sales strategic strengthening product position market on We customer our capitalizing focused and pillars

into of We competitive base. loyal moving unmatched strengths XXXX with several are customer major blue-chip

is and future. and with Our product in customers today need proven in strategy platform the line the

leadership program advantages development a and our to we behind making take on marketing the and implemented is full strengths. substantial strong business new Our business plan advantage already team it season have and rightfully impact these set a of financial finally, stability

questions. will call we Now, open the for

Operator

first [Operator Craig-Hallum. with question Jeff Van Instructions] Our Rhee comes from

Jeff Van Rhee

First for the actual was XXXX? bookings of what bookings, growth all XXXX

Vernon Hanzlik

about Jeff, XXXX. Year-over-year, XX% it's XXXX for and

Jeff Van Rhee

Okay, in sounds the are then? Talk what's QX million the The some and and a line lumpy, think churn post-Qumu between you've we that's base in running then this about X given certainly there the steady had here guide customer of 'XX some the is churn IBM signings subscription, 'XX. back what it for but like outside signings. I had rate about loss,

David Ristow

beyond event this and on We to really hadn’t business, customer able business. really the We to that who tie with of are expectations churn in Dave. see those legacy XXXX quarter is versions migrated. I is churn are and some ordinary on-premises one-time cloud what our offer Normal our back additional are. was on within fourth we of have the Jeff, did this for would expectations track normal those a as suggest

of essentially XXXX each will one every customer and out the the QX had adding is unique into those look Going those of target opportunities it's today, ahead even broaden business. move as majority minimize on-premises hand-in-hand as of part we're we footprint the finding this marcom deploy which success technology go resources the And of and haven't as deployed, upgraded, customers to customer and for the as finding upgrade already and/or a what who going we've to ahead go believe any platform the upgrade eliminate commitments churn to and to coming we're legacy because at vast as us maybe also platform we got have and side into our now initiatives, and discussions on significantly opportunities on-perm strategy. with human cloud base but we with or

So what as we're QX, we suffered XXXX. opportunity seeing an going into actually in

Vernon Hanzlik

to for point is if to add on churn just we minute some of was cloud focus is a churn. on Jeff, normal that stuff the the just the today's is,

the didn't transition and other is, going to what acquisition transactions. the the to are is were older, there and Valley think those probably those thing new smaller I we people Qumu call

cloud we example of ASPs, adding that some Europe. would company in gave that on-premise on QX, I point things. as and we're going today's the their more we're saw say So with those were types and stuff the are large But normal mentioned, smaller which we is I grow like customers in There obviously -- but adding to it's customers. focused of

Jeff Van Rhee

referenced makes then it's the script in QX. some half profit. EBITDA achieve And the adjusted just that I in second you'll EBITDA said the positive think And EBITDA, call the release on clarification

the also where reconciliation will the in positive is two the QX positive? point just those, EBITDA QX that of reconcile Is to be go saying and So combination of you those comments? QX is that and

Vernon Hanzlik

conservatism the lumpiness what be an release. is this we from There's we're what that QX, business. really about this from that's go script the toe see Jeff will pulled and QX, built release, line as the is the to back reason but into like difference QX gets into and possibility so ahead where so of to it a comes it the that Yes, we've entire the therefore standpoint, certainty for QX a to talking relates of it

Jeff Van Rhee

on the their? what's of And cash between then expectation that in usage terms and your timeline

Vernon Hanzlik

where X from we’ll effectively 'XX at probably So, and about we burn. million are wrap to absolute landing positions

Jeff Van Rhee

rates swing growth for underlying how and last assume Talk specifically then get a can function just respect larger with does within me one in you you to in much that Just then initial it play to see came saw assumptions, sort it And How you conviction growth. 'XX? to XX% sense from now? right -- the like looks coming me much you to the bookings the to of there? conclusion here 'XX? -- 'XX that mainly guide everything and close of just could versus that about is your give does the pipe what out? the of Is of a How the us how see XX% you the similar visibility

David Ristow

think I key pipeline, the Yes, there it's is Jeff. the one

commented some I think which starting they of the are and of just pipe we're maturity out the where the pipeline. these the some second of energy getting of I size to partners, the hold, take the in are is of then on, which

where it's in the kind on we I set thing we right but As of we've bar we're is conviction double but just of this footprint. the we've industry digit things a think the I growth kind where the can slip think right it's with the the us seeing And so now that some opportunities of global see exceed year-over-year think I piece. seen growth gives that it's, that

Operator

Our next Thalmann. Mattson question comes with from Ladenburg Glenn

Glenn Mattson

term? relationship you their have how any they've solution for in-house the chance perhaps business they're back any that maybe now and over to IBM The that you win doing do used medium referenced sense earlier,

David Ristow

Glenn mean think how that don’t' doing what around promotion -- specifically there's actually they're we I I some know Yes, on there.

into they've multiple a business moving we bought companies. back, lot not we I some competitively -- on opportunities to of this there think dollars be but we are that might counting coming space, are and IBM out invested get just ahead, that went

landscape this thing, we of are we IBM, then successful that are the competitive space just they're at definitely point but competitive other marketing them with we in seeing there are not on are mean that, we seeing basing a out. the to So, more I be focused

Glenn Mattson

mentioned how at when they sense a Is And this Can more well opportunity an a you that's point? monetize were? that what for that for carried BriefCam, what becoming can said there on you you the You you give asset, sense books to think do doing. relevant are you forward? perhaps assets give

Vernon Hanzlik

we It's kind I of well, -- can't disclose mean that.

Dave's to little -- comments what IP over to think that, bit starting the on we take hold. I that six we a invested in is ago years

You selling monetize press just can that books as there it opportunities think the pay of going and it because the see of of do value they how doing. to that. off we as -- have to are patients far they're in would in we And their that be this more technology they so. potentially success on acquiring I more as some our will their -- just releases people great success, see what that, get intrinsic are we We having deal

sense comes, before they us we I be would make going that think that. for it in as to position and good stated a monetize we that are opportunity

Glenn Mattson

that or been year down and two question here you for ’XX? in other hundred that what ones, run like Is something. sustainable thousand the now dollars has million and significantly later to to running you’re the last level several is Two used CapEx expect

Vernon Hanzlik

been a to back of in-house cloud. haven't the a fundamentally this up us platform that in lot a doing and things in we've the initiating moving CapEx tied technology essentially years couple I of lot getting the if been down result to launch which, comes you rationalizing cloud to two prior the is cloud go think as it

plans technology is we with will some plan but CapEx the second based component of plan. to ability plan, second within refresh have our the which rationalized year, deployed deliver this The half for it is our that do be on

Glenn Mattson

just, do year. be expect Last interest this you what to expense

Vernon Hanzlik

at looking million. approximately X.X We’re

Operator

any will call [Operation at to Instructions] this not the questions Vernon, back over And time, turn I’m showing further I

Vernon Hanzlik

today. again you joining us Thank for

follow question, to us any a you have If please call feel day. us a and free up directly. give great Have contact

Operator

presentation. and Ladies gentlemen today’s concludes that

You a now may and wonderful day. have disconnect

Qumu (QUMU) 7 Mar 182017 Q4 Earnings call transcript