QUMU - Earnings call transcript Q4 2018

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Operator

Good day, ladies and gentlemen. And welcome to the Qumu Fourth Quarter 2018 Conference Call. [Operator Instructions] I would now like to introduce your host for today's conference, Dave Ristow, Chief Financial Officer. Please go ahead.

David Ristow

Good morning everybody, and thank you for joining us for the fourth quarter and full year 2018 conference call.

customers. statements strategy respect increase and and with certain financial our our make penetration go-to-market results, efforts our will today to with expected traction We designed to number These of cause statements results materially. differ to looking are and actual risks uncertainties that forward and could involve information, Please note forward-looking publicly to new our result update revise any statements looking whether otherwise. opinions the as of of obligation as these undertake events this of no forward statements a date call, reflect or only future and we or to our our factors refer description for SEC Please results. Form filings risk XX-K financial more specifically and that of release our our may affect results press detailed available are SEC's documents website These sec.gov. our at website qumu.com and the on

non-GAAP filings share. and website. earnings press release call to the is with our per adjusted our During we and will In our today each our discuss posted of SEC, which measures EBITDA financial

measures. reconciliation turn You measures measures President with will these Vern to of adjusted and and GAAP find with disclosures Hanzlik, additional CEO including Qumu. these of call non-GAAP over And that EBITDA regarding comparable the I'll

Vern Hanzlik

everyone. Thank And welcome you, Dave.

of XXXX. contract basic great XXXX earnings half a per like contributed strong bookings for year grew to value $X.X quarters positive then am against of annual quarters places $X.X share. adjusted quarter to The to position and financial and and I highlights fourth strategic on review the in two our First, I'd finish progress some Revenue second the for I'll the milestone report consecutive two happy XXXX plan. to million touch marking quarter Qumu key million. solid for was and EBITDA of for positive a

we and year with XX.X% all Qumu XXXX, guidance our revenue the gross at growth, for gross momentum transition million reflecting bookings to was grew the year company as $XX recurring ACV for margins model. revenue, EBITDA. to XX%. targets fiscal Revenue the adjusted bookings $XX.X met For margin million

$X.X million. position strong remains cash Our at

extremely to is at am our ever. happy I highest report retention XX%; In addition, mark customer

to Our and achieved global strategy investment video trends and innovation XXXX us lead We've paying and financial guidance. off, capitalize on enabling are clients.

right We operations. optimized our cost and have sized structure

sales program lines is top grow. channel continuing bottom our and and Our to strong; is contributing pipeline our to

adjustable is enterprise and in video analyst period Our outline ranked joined but industry say will top Kumu XXXX. as this the satisfied guidance an is exciting Dave expanding most market for leader. firm the let I've Qumu all our me and since experienced in I XXXX

realizing transforming Even we our multiple in business to We the and a business are of technology. recurring the while we the revenue pivoted benefit and on now Strategy, model, product. transformed operations levels. invested simultaneously

enterprise announcement new the our in As new a markets. just opening month, in platform create our new that ware years networks. customers, plus partners, opportunities intelligent of helps last experience This we large with highly launched companies platform nimble recent video up new video are some

Let three customer Qumu the was to mix highlight of me serve. demonstrate able examples that deployments

implementation conscious another users. institution continue is a to for customer an desktop already communications enterprise win enterprise that yet organizations. thousands secured First, the acquired This Qumu heavily virtual of financial deployment regulated we and major opportunities on-premise as includes major underway. recently wide large

we're to one financial base key heavily service to the incumbents of unseat the video serve ability user competitor. reasons a Our high-quality is to entrenched able

centric video customer deployments a run computing we we intelligent quarter in and hybrid our are are landed technology. that past. cloud our the as with lot about Second, speak. I bank new San delivery solution software Francisco-based along configurations pathfinder spoke These hybrid edge last deploying as a they a

And an no the exception. security cloud new of performance and benefit customers implementation. on-prem hybrid environment, is Our flexibility this with of from customer the combined

as is account which technology configurations, on-premise number major Whitlock Third, of our I is a well. client our $X.X per Last mentioned annual customers customer value. large $XXX,XXX to The often hybrid. computer quarter, representing from expanding are increase license transitioning hybrid of to migrating $XXX,XXX a million of installation involves year contract from existing a brought the an a partner expansion Qumu maintenance on-premises in its already annual fee SaaS to

Our for platform in video the helps video or evolution they their future where first companies towards no wear position matter are a computing distributed communications.

on of pillars report our to like four I'd against strategic plan. Now the our progress

leads new pillar at more pipeline, growing remains sales growth. team revenue for our and XXXX. Qumu's execution X.Xx sales qualified continues to than which customer consistently of marketing into strong First, deliver our coverage

an globe for video honor XX-X web Research and attention and Qumu like special being in country a to most featured the by firms was and early Frost industry When received leading the During in published of Google notably Sullivan. leader XX to call named received awards, research in XXXX, XXXX. one in I also as industry Aragon contender Qumu articles very analyst recently Gartner, video an would new named annual conferencing. and

been Microsoft, dominated refocusing has firms like is significantly sales Zoom, space paying year. this happy of past sales say sales team only increases is in investment total XXXX reorganizing Qumu's direct talent the and conferencing, Qumu's This a space Google on management, by result top traditionally especially market and I'm process highlights collision time simultaneously intimate streaming team, also sales contender but processes that video beyond. our off. our to for Cisco, first over addressable Qumu's Adobe. of improving focus video not a the Although execution and and as by inclusion and

marketing, base. reach vendor December, strategic streaming were selected company Qumu service resell BT to our monetization a also and as global to and We strategic for a only customers its organization services it is use Amica of outstanding this benefit of high win and sell Fulton on-demand subscription world-class the know understand service roster Revenue our well of And also an its customer agreed our for strong represent ecosystem underway XXXX dynamically big for partners pipeline few iStudy, helps XX Qumu's terms Not our more The will the monetizing and who training, streaming for voice conferencing video XXXX. video support video generation enterprise and Whitlock which course has Cloud sales customers. increased company key customers the on sales events. Financial are represent The and and other live us new seeing are next technology and of Customer Qumu focus span enterprise satisfied solution have a service. in total a programs customers our video year end-to-end market clients AVI-SPL, streaming existing partnership worldwide AmeriHealth, by growing platform is Qumu was seamless, when in countries. like company's place. the its just efforts. a our Insurance $X.X And defined customers will bookings. and expanding guidance than from key like Qumu ensure channel XXX our confidence for and solution partner of channel industry, to in solutions. as within or a new - Telecom level we British for with who looking managed easy having A ACV and million of how video as of integration for service between provider of of customers over XX% technical customer XX% XXXX enterprise Qumu's BT revenue our of of

leading with the that new a immediately began partnership we Middle Finally, our expands in a region. opportunity which integrator East in

partnership thanks in fact, we major Saudi In a the companies new the largest of Arabia. closed implementation to just one of

customer success strategy retention. our is second mentioned and of The pillar XX% the I've already retention.

moved centric customer Our the retention computing. enhanced around reorganization clients and And management of effort the sales actively team distributive our was in customer account a helping our last expansion year key base. to program

Dow involving Toyota grown quarter Chemical. from fourth deals hybrid to customer the expansions X% to of AT&T have customer our six Motors, include deployments. transition During XX% Notably which and

innovation. The product streams, reorganized enhancements mentioned technology the of network XXXX, the This Qumu's true Qumu as I focuses new and platform inbound leader, a and a These dynamically methodology improvements integrations earlier. enterprise. enhancements. third video enterprise announcement partner video optimizes development ware platform our culminated of pillar corporate for pace streamlining recent product creating our manages accelerating under all one and of outbound our video first plus strategy next-generation single development and consistent product product key In

Distributed new two major addresses meaning is it platform putting self-service. going when power and Our computing compute trends where and in enterprise. Distributed most. computing the needed

inbound instantly handles balance Self-service us any sensing to capabilities powerful launch dynamic Our we the streamline would and leaders tremendous ware processing with customers - financials. assets our working health. all major demands in intelligent pillar meetings the done can work drive through and highly known and to great The platform new a a record already team has to operations, solid as position video and because the business. video of tool only Is strengthening collaborating with grow intelligently video streams. distributes from A of already line. areas and making top it to the our existing primarily enterprise network's like financial cost manufacturer company new video and webcast final also device. one great financial and and along our not employees extension natural used. I are in we across key conferencing of example software webcast The us create put communicate sheet, underscore the but from video leading enabling highlighted Essentially, leaders work people adjusts accomplishments. the with pillar the I've a has an reference already in our significant it part is network to by across system video today. video our teams and reductions our automotive how launch fourth put only position a and not the has a

Now for over further to commentary. Dave financial

David Ristow

Total our loss and our million significant all improvements Vern. guidance adjusted This we against and we for our year income and net additional ended XX.X%. items or this quarter of was $X.X financial on improved of exceeded for compared growth fourth all few $X revenue. last EBITDA you, as bookings comment a million the with made committed, $XX,XXX, value of growth, and EBITDA by pillars, I quarter Year-over-year to $X.X and revenue, to guidance financial met We provide million $XXX,XXX and Thank our positive second strategic bookings revenue for related fourth will of margin contract operating adjusted million is $X.X our XXXX. results EBITDA. four of less annual quarter. adjusted XXXX quarter and We gross

was of for the compared approximately quarter quarter steadily due grow revenue at the $XX.X maintenance for XXXX revenue Gross billable increased days to fourth revenue the base reflecting was support was for software to from quarter. million support end to and compared and and an XXXX. the fourth timing $XXX,XXX last license $X.X quarter licenses was annual and fourth increase revenue $X.X the XX%, margin for last million other seasonality. XX% fourth $XXX,XXX will million of due last last guidance Subscription, software in to of XXXX. was Most for to the with primarily was quarter the for revenue license the quarter of year quarter Subscription, our revenue the maintenance appliance under recurring increase X% services $X.X fewer new XX% due adopted compared quarter year-over-year. the ended improvement Software revenue Gross to margin million in to compared of holiday Professional $XXX,XXX sales. the fourth quarter. term

to EBITDA adjusted Moving measure. on expenses non-GAAP and operating and

X for to decrease year ended improving expenses months December operating EBITDA on $XXX,XXX and months compared positive XXst, XX.X% December XXXX. periods Adjusted and the XX for achieving sustainable three ended operating the EBITDA the ended XXst, December $X.X XXXX, and and million improved in adjusted XX.X% results focus XXst, corresponding respectively. XXXX We XXXX for total continue to improved the

of to sheet. working the to of positive million and investments capital capital from XXst, XXXX the at million XXst, XXst, on And aggregate working $X.X of Moving company were $X.X December up negative $XXX,XXX as XXXX. balance December had $X.Xmillion compared XXXX. Cash million December $X.X of as

margin XXXX the Moving in is the company bookings $XX XXXX. following guidance. compared to is XXs financial to for guidance approximately Gross to XXs. expected be are is XXXX year to be issuing Annual expected million. in be contract to for high to full XXXX. XX% expected to low Revenue XX% The value percentage the to

approximately adjusted $X.X XXXX Our loss for be EBITDA to expected is million.

in an Forecasted increase compensation of summary, liability financial Stock approximately our expense intangibles invest $X excludes $XXX,XXX. to through delivered and adjusted for based $XXX,XXX all income to amortization warrant continue In benefit of guidance approximately and interest the solutions. for a million. future $X.X million, XXXX EBITDA be of $X.X we $XXX,XXX. is XXXX will approximately of tax XXXX approximately Depreciation expected approximately of for to approximately loss Net approximately of of $XXX,XXX; expense acquired industry-leading enhancements million.

working We will hard that in now our success shareholders With for XXXX. back to be deliver to continued Vern.

Vern Hanzlik

everybody's operation, XXXX key We multiple appreciate value growth. for of revenue covering XX% board channel contribute customer to basic execution of consecutive rankings positive building analysts the we've achieving our XX%. quarters business leadership including measures contract the of adjusted accomplished Dave. EBITDA two among our patience quarters and Completing and annual to top multiple positive Thanks transition XX% retention which EPS. industry. two a transition on of on terms Monetizing was Qumu and levels year in organic Qumu's of and during across

into have the degree sales the first move a high for optics XXXX, confidence and we our of half of forward we into our pipeline As in year.

to aggressively new also and opportunity evangelize in adjusted our on we partnership momentum in new achieved monetize during achieving momentum, our technology focused seize presented platform We by online. the grow video problems of tough that leadership. our enterprise. focus the comes market the our of our intelligent on laser Build BT with channel video especially this the half our the to financial outstanding relationships Continue as is Remain results. are can solving with EBITDA our positive we've confident towards that so to ability momentum With year. forward going second sustain

Now let's up open for the questions. call

Operator

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

now open. is line Your

Jeff Van Rhee

me hear you Can thanks guys? So, guys. yes,

guess big .talk me. the the potential a couple about at channel. So you me a to distribution in BT, obviously questions for I there. first I is timing look mean

a of feel bookings what of us expectations of and for sense you share have the that are year. percent of you like give kind reasonable in terms what from kind Just of there mine a

Vern Hanzlik

of think I high. well with very mine inside is very, BT share

my some we're that far think platform. that and we piece. script, got Jeff, I I our that so offerings. their opportunities come this QX doing integrations technology lot that. things understand that in We're of will start got us conferencing just experts with the monetize kick video the of thing doing we a as the will We've portal and enablement mentioned We've as to QX generate as off for into and

I figures little grows. for perspective of this seven were trying a be We of think is bookings from to us. north mindful a this pace that

are and teams on just the the from that realistic influence this move expectations second we business more pace as seeing into teams, we're the there's of Our will product year half teams that energy support But there the we're of we people, based optimistic lot activity world. the grow. and the technical a the around then the this that also that XXXX, and cautiously as significantly of will sales be out

it seeing just we're And relationship. us. different exciting more an for characteristics it's valuable So that make

Jeff Van Rhee

it. Got

in two and who execution most you're can often. a about has considered? How satisfied changed respect secondly, context and to you how much it process you're On outlined sales sales you take you're deals win deal more of And about Can specifics? talk so and in your you've talk you the rates executing. think minute changed? motion. that just identification seeing And with getting then I talk has the with how way about the

Vern Hanzlik

couple major mean basically with group different swim created is customers. all Well, is the working strategically lanes. we've I is account One thing our the a of management

quite hand-holding and So and were that's top our working well. expanding XX customers

to that. dedicated are that people have We

are to our we capabilities expanding the So as just that we is. continuing platform premier customers have where expand of mine that our that's

of hunting well I our group, continue in those is an works or percentage that able articulate in I when in ones that a messaging grow we PLC maybe think that Financial, we're We're our will winning and that hybrid the XXXX. So to we're that. and a The that year. came on-premise of digital things where expand have in to the and Fulton going identified to articulate Jeff, AmeriHealth, can piece this above formula XX% high that were a those, we're from marketing we

think of we're to Quadrant from Magic competitive landscape in a XX%. distribution is we're The --when broadcast on that If the are the within it's work. we versus VOD. where best-in-class suspects get normal a we above think win we So PLC, see I that we're rates how hybrid the --where the live a we that it's

We're So I coming a to from think procedural qualifying pipe. more those seeing that we're just opportunities the perspective. well

thing. that's think important most I the

them the the scrub we go because evolution where thing? land the and Where customers, go opportunity? we'll the it? chase it won't lower we pipelines, in is expand, they'll low our value with But but to after that's through want when we type of we'll this we be Are level expanding. a real a we they-- value those. that --is are high sell into That's really So collect limited and from a commodity

And so into resonate them. to us. for we as that with of some get quite they mentioned to opportunities partners seems success to opportunities get And And well bring be seems as us. that with these more we more that they other working

that So at to going pace. continue we're

Jeff Van Rhee

as percent sort then the, one The those from and cloud interested How existing did that how customers. it for end new up And splits hybrid that in for in bookings then that pipe what's respect and about XXXX? does just XXXX versus last I I'm XXXX? percent from prem guess gross also the of with are look the characterizing talk and for opposed the ACV me of forward? just bookings Okay to going to the the

Vern Hanzlik

that area growing Well, I largest our is hybrid. think

cloud vertical a amount education, us with partner think Japanese our bring corporate opportunities I to So that a to continues their that they're of in. but significant

those but So smaller more again are customers. deals

the we're XX% pure hybrid is So SaaS over just XX% .We're cloud balance and on-premise.

new we think in probably regulated that hybrid to customers, the more be are I new These XX%. of be it's are see a but this we'll people I will and that. balance XX% prem, to would be it and say cloud going then I in the people cloud delineation. and going and net hybrid, year of think and it's some XX% from don't have those highly on then have investing the we still

as a mean year-over-year now I Jeff. down hybrid. going to a we movement continue through we'll --there on bit more right report So QX but that that, is to break we're little here, it's get a

grow You hybrid. about it to feed that's into saw a X% And perspective on --from year-over-year our continuing pipe.

Jeff Van Rhee

--what it. Got those then you jumps out about versus are about time? And what that a this at else higher the pipe on months splits, Anything at I level ago at the and other look last actually-- guess you the at differences that during we but what just one talked are pipe. notable point six say would now

Vern Hanzlik

becoming to they want they'll want but go them it's years they'll vet the to it a I've of probably we're more BT seeing for where our security able reality, future down two do it a notable want hybrid front the and talking video video a the to they're but opportunities that about to seeing we're that people a been do transition do the on years and eye things that. conferencing also giving I The we're premise, cloud, that clients. seeing merger The think where they out is be vetting lots now we're that can't want if those is platforms and if road that couple just as mission-critical. and center And to --they are not people to

pipeline. lot are definitely of that that the conversation people we're in So is a in a that the with

We're the to we're on message. platform side message is So holistic starting they inbound the starting like where our intelligent that and strategy to resonating.

in our more May a more both and thinking But a platform EMEA. define corporations. with have summits are that customers So here a customers articulating on more and and in just bigger that seeing there's first US for and with and of intensity that the we out that in these level couple have video will all we're those of and resonate higher news when areas the

Operator

Our the next question comes Magni of who from a Tom line investor. is private

Your line open. now is

Unidentified Analyst

it quarter. million. gentlemen. the to a year is, ended like as morning, question that it of you And Congratulations in possibly number of $XX.X this the XXXX? going think of XXXX? build regard at My recurring business what Where do is end to if continues on great like Good which out revenue the you sounds year see could kind we could in at a annual see

David Ristow

What a do and it guidance just we actually number. on can churn particular focusing this continually So through moving with context with anticipating It's will XXXX through anticipate share total of moving guide and you this revenue of recurring as from of we I fact don't reducing growing. our part for to ,Tom a value annual is on that be , beyond. account the we've the those. perspective model that that to that of retention management over combination We're And process increasing growth folks been strategies. hybrid and recurring

Vern Hanzlik

Yes.

on key larger the are point deals $XXX,XXX. hybrid a --those and our we are are bit Tom, hybrid, one getting I from grew that of little for about we us think in things my a my of examples, earlier larger, that $XXX,XXX on those I bit went little then those we're pipelines. are earlier to and a And maintenance mentioned

think So will probably that we area. in be. better the number XXXX, that it but that get as from it see communicate definitely will definitely But where we grow we'll optics we on growth

Operator

you. Thank

no Vern time. like the have I President Hanzlik, further now CEO for any to and We at this to back further remarks. call would turn questions

Vern Hanzlik

talk you quarter. we'll thank Well, a day. I to next want today. joining to great Have And for everybody

Operator

thank This for and today's gentlemen, in does today's conference. program. conclude participating you Ladies

disconnect. may You great have Everyone all day.

Qumu (QUMU) 6 Mar 192018 Q4 Earnings call transcript