QUMU - Earnings call transcript Q2 2020

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Operator

Good afternoon, and welcome to the Qumu Second Quarter 2020 Conference Call. My name is Justin, and I'll be your operator for this call.

Joining me for today's call is the company's Chairman, Neil Cox; President and CEO, T.J. Kennedy; and CFO, Dave Ristow. After the market closed today at Qumu, it's issued a press release announcing its financial results for the second quarter ended June 30, 2020, a copy of which is available on the Investor Relations section of the company's website at Qumu.

the will financial statements COVID-XX and results, use adoption management the respect on efforts call, enterprise, with and expected the customers. the company's the of and designed today's to make go-to-market company's with certain to the the increase During company's and traction strategy penetration video impact of differ These could cause that risks and statements are uncertainties forward-looking statements results and materially. to involve a number of actual of this Please or as date or note whether these of no of undertakes events management's statements revise result information, new statements, update and only opinions call, obligation forward-looking reflect forward-looking as publicly company a otherwise. future the the to any specifically the refer of detailed XX-Q XX-K description and results company's factors a Please filing, and may that results. more Qumu's risk to affect Form press SEC financial release for

management a a both The with replay website. to measures. financial filings During performance. consider find being for Relations section and measure, isolation GAAP or reconciliation in in that this non-GAAP discuss the call measure form, Qumu's GAAP In with everyone now available this like results. of would available not of which including will release made company's via for, is I measure. a recorded be measures the to when company disclosures considered comparable call superior regarding you of to the intended the you are its be encourages substitute all link press measures analyzing the today, Investor and are adjusted to remind on financial website, and this EBITDA non-GAAP Non-GAAP its SEC, additional will company's will posted

proceed. Mr. Sir, the to to call like the please company's would Neil Chairman, over I turn Cox. Now

Neil Cox

second It's Thank the the today. you, to financial operator, ended with closed, speak good the June you opportunity results XXXX. market we After for everyone. quarter our XX, a pleasure issued have afternoon, to and

for period exceptionally for has in direct and software The second platform achieved best-in-class earnings environment. revenue largely a Qumu, $X.X quarter several work financially. marked now quarterly is can demand remote million Qumu strong you release, and see from highest our swelling in our the both a years As an operationally the in of result is

creating, of On shareholders our was instrumental for an was time their leadership to accelerated on-premise industry as integrator. is Qumu. best either into expand across the manage materialize, large and platform back has for noteworthy which into At performance to technology Qumu organization to at a invaluable the it enterprise also more and of played T.J. work-at-home that other sales profitability. self-service determined mass sustain platform Qumu Board video been global platform enterprise in an the space, as models. interest marketing the is accelerating securely T.J. projected XXXXs, years and experience deploying many live T.J. as quarter pursuits. effort large of as deliver new and initiatives To transforming He to well T.J.'s service as the involved end-to-end create, summarize, On for of are And Hanzlik, economy virtualized we internal has personally. across take pivotal and the to and the Chief usage, development platform part video systems with Vern the enterprise shift as implementations, previously market managing played especially which Qumu broadcast use. and software-as-a-service on us. next pandemic Raytheon, wish succeeds nearly future of an take digital any today, solutions Directors enterprise infrastructure allowed On terminate Officer. favorable and maximize and software Qumu to main second helping proposed CEO their appointment Synacor of network led would Zoom, at has The COVID-XX changes global both and video new complex the business deployments to level, going is Today, a driving also we platform-as-a-service pandemic organization. with our on Qumu's was decision in been process skill in company execute this, to operational The of Kennedy enterprise led Vern opportunities a provides programs, which scale Qumu during also where enterprises any or Qumu's the deploying tool. X at the in he identify a and a Board and recognized Qumu, understanding for years. employees. his best and his general increase changes, video broadcasting video Teams, fully our it delivery to has and on are video. well June. level, any efforts using end has an merger and has COVID-XX of hard to top effectively the as easily impacted competitive organization why normal. seeing enterprise the events X has growth as I the continuity as transitioning communications Vern giving globally SAIC the to of his telemedicine rapidly all as a Board with team, in positioning of as recently globe they supportive securely growth in has like of behalf an overnight. has a within large-scale collectively have external most sales also mission-critical ongoing in whole focused the the enables secured operational and during collaboration us The the for best implemented transformation to recent strengthen opportunity and and within it remains front our us. and nearly we in the of a delivering to in initiatives the arrived reasons from agree within timeline immediate solutions. adopt deployment. have prudent Board implemented cybersecurity, merger set all capably the external management video anyone of use T.J. internal our market enable us enterprise shift to in would in Qumu's launch highlighted opportunity Webex a and our the Executive infrastructure We are as confident in Microsoft with front the on-demand SAIC, internal the positions live role become organizations review significant The At is large Vern Qumu broadcast experiencing video shareholders, out, T.J. component and way business we Fortune of award-winning, the and for working early President for the who what conducted and the valued thank the our Clearly, expedited exhaustive right one the level. through a solid level software a to platform to this communications fundamental gained Qumu business the far-reaching XXX storage him for deep experience for customers need experience, leader capture and our hosted the well in contributions the cloud-based

has only for to our at in made marked time, him right essential. overseeing critical organizations. perfect Board From is the has imaging technology makes innovative deployments a work on T.J. very at His significant been contributions T.J. the the time his within understands execution markets, right short leader highly extensive Although absolutely Qumu. projects, various for that scale, complex already he experience

heights. will in to the are industry, digital continued T.J. larger every With confident Qumu transformation even lead virtually greater we

from the uniquely I like shareholder we will looking qualified set and to on opportunities, now over on are over benefiting believe focused Qumu, the with you our his so why T.J., join quarters. run. of over will capitalizing to forward We which skill upcoming near value his share he he's long-term some of excited call to would be he what the to can early turn pipeline long T.J.? observations and drive and

T. J. Kennedy

for afternoon. everyone, as warm And Thank you, really excited this I'm speaking President to call appreciate you today you be joining thank for Neil. CEO. and Qumu's our the introduction, new with I it. really

our own and today's indicative customers. and at dynamic customer clear paradigm ultimately the of best-in-class the institution our even from first to for usage team several Qumu usage growth over of matter businesses, has as the illustrative to to both is amazed Qumu months. brief in been at of Although of passion, levels, of also end its our an platform is coming I period as X,XXX and a part in working what surge a our where just COVID-XX see meet increase financial dedication of quarter of which above and magnitude the increasing orders been point, of customers' this expertise one second and demand This large the across by from notable ability in of essential users onboard effectively One been last multiplied we has our inflection order experiencing to more I've unprecedented environment world. shift strong have time, is win, from customers already running they the a only is an right, will that solutions. have is positioned quarter, expansion base, to the an received exponential to base translate organization revenue in our example can me while absolutely you for quarters. XX,XXX And in one fueling an pandemic performance overall experienced demands of days. real our thing the we're use and our at The our financial that by global their adapt for

views this and each multiple on-demand In successfully from a from executive participating cloud their XX,XXX company than XX,XXX of the our management past fact, manufacturing sophisticated XX,XXX platform bandwidth power used company growth self-service event. event our working producers in users examples include over and events broadcast XXX% streaming platform. make to over during notable users conducted greater and number home than more we've streaming They that the Two for and with live happen. on viewers quarter experienced computer a platform days, And hybrid that on ran studios. the insurance a received health to past home XX of users both

collaboration securely and infrastructure Teams a the in video to As immediate for Qumu's applications and like we've both the Webex, wake with needs that demand Zoom, of from have manage platform customers in help video initial first them increase applications. back-end Microsoft scale and prospects gap video and their needs these stop solve their pandemic constituencies seen outgrown material

accelerated shift As compressing have market has to happened the believe Neil next the we few a would into months. highlighted, video, few over the just pandemic what years

strategic activity more sales Our that travel and are witnessing of a business connected making video and investments in infrastructure. efficiencies pipeline us savings the dramatically tells reduced They workforce. customers are

up few and in work fluidly device and market. again, will the video stepping booming best-in-class at from of company, a Qumu's convenient. between option. which life us competition is face-to-face why it's and communications days seen individuals Even most what And company go in have positioned We may technology selecting from efficiency new an office, for terms perfectly open whatever are wherever back our they in individuals of sets just be the enterprises backwards these and move emerge style first the are when not my this but hybrid platform. apart to the can quality clear offices video has

viewers. everyone infinitely important applications. part self-service make very because Anyone power and to skills we secure video brings enterprise. platform has platform video with streaming to conduct This now or can conferencing easy, an or streaming of tens of in the it video Qumu meeting conference even by thousands integrating a streaming a and global scalable who take First, to of the is within small popular thousands our webcast launch technology enterprise-grade

value customers capabilities exponentially. to realize organizations video for archiving editing, of these content volume so The with the is without value of reduce repositories, internal managing delivery, their video that is gap. are device of content securing to Qumu And captioning, analytics, This quickly external of problem the we least, streaming conferencing video scale type major more. group not across customer Secondly, dramatically to and because any networks and clincher and and increasing location. and mastered is streaming we've meetings. therefore, robust and video overwhelm large-scale problem, management of a last but it content. any And and limited and which all at would help otherwise one value solutions delivery We're intelligent solves a last video small the intelligent stilling live

our geographic to well. the our aim you company strategic for I XX means very Dave We'll tenor growth excited have advantage my markets, the future turn only video sure will strategy to opportunities. path growth target I in strategy. days, potential period. is even as the our considering for refine we which process Dave? excited and organization. but our for through I'm we'll and that much a line of from customers overall the can Board insights confident hear I'm and the not turn, will accelerate the to well product as over technology well today from operational larger a you are to as some that years becoming become as profitability. accelerate financial our the As QX about our for of This process a additional in a where about and growth. now go-to-market team voice, to and next the company offerings, change has I'll leader walk adapt the company emerge performance new identify discuss in more Along the to and leadership This will and to take our enterprise, ahead this be as our will XXXX roadmap call to the and The opportunities refreshed formulate optimize over and

David Ristow

everybody. afternoon, Thanks, good T.J., and

quarter financial the XX% revenue for million increased XXXX, from Turning operational to in $X.X and the of results of select and year. to X QX months for second our XX, June last quarter ended million $X.X XXXX

of revenue a in of period X-month of increased The revenue the to period was received months and for customer in end of X from comparable this is significant increase million XX% order first $XX.X last for the XXXX, to primarily $XX.X at both year. For revenue quarter million large to the in QX identified quarter revenue and was which the with the customer second third driven XXXX, A that specifically year. XXXX, recognized portion the the by quarter incremental recognized COVID-XX. fourth due be

to added uplift that we customers customers X hybrid. new quarter, secured noting on the representing X cloud During base and and an converted renewals. XX% the on contracts, quarter X X-year worth enterprise were average ARR in the It's cloud conversions their

an deployments an months of of with X had new first the XXXX average of In average comparison, ARR ARR XX%. deployments XXXX, secured with new we we XX customer For XX all customer $XX,XXX. of for

new XX% from year, in higher from count million large driven by part revenue ARR XXXX QX average and order increased just for deployments. So to year we're related million $X.X a $X.X to exceed last prior pace customer QX customer was maintenance of I to support mentioned. on in with which the revenue Subscription

term that the license and from million maintenance the support of renewals was was in the of decrease applicable the recognition period For decreased XXXX. due $X.X large first subscription X-month in revenue the X% The period, comparable quarter XXXX. and multiyear for to million period to in comparable in XXXX $X.X not

appliance QX term generally The to license to margins revenue. Gross due XX.X% of revenue, mix Looking a of compared carries was for decrease higher last lower our which QX compared XX.X% at to margin was and year. XXXX margins. in primarily

gross XX.X% For due year. expense services quarter XX.X% customer-specific revenue period, to margins margin services last for period and was appliance the the XXXX, a of compared The which decrease comparable the was first impacted in gross negatively then. also projects mix primarily for of X-month to professional certain higher outsourced

metrics. profitability our to Turning

basic QX For $XXX,XXX diluted expenses and $X.XX compared share. last XXXX $X.XX per year. an the basic of and or transaction-related share a $X.XX QX loss per the diluted second loss of termination or quarter share loss XXXX, to with net million was included loss Net $XXX,XXX the a for Synacor. loss to per in related $X.X This is merger of loss net improvement

months loss the $X.XX and basic For loss share an X million for Included EBITDA, June net $X.XX expense from the basic improvement for loss in $XXX,XXX, ended $X.XX to termination last diluted period, or $X.X an of transaction-related Adjusted loss XX, second X-months net totaled with XXXX share for million the or diluted per $X.X XXXX. loss was merger million the net This of the non-GAAP QX in XX, the in million per a loss $X.X was and of improvement XXXX, metric of $X.X was quarter X ended June compared for months year. per a a loss share. positive a Synacor.

the our signed a $X.X to agreement. totaled respect share This we in a purchase the given believe was deferred for position XXXX a ESW prudent was At a $X.X reflects liquidity to payment and million approximately especially with we move, an warrant had share the stock. warrant shares price. million and Concurrently, cash equates with common period, promissory cash the price For we $XXX,XXX. agreement period. note had current the $X.X loss equivalents. X, We up XXX,XXX $X.XX amended adjusted Holdings purchase May of million, to of of a per this prior which our to ESW for On from with end, improvement in EBITDA X-month loss comparable canceled restated healthy and quarter

Switching outlook. million debt note, $X.X to gears free. Qumu promissory the Excluding is

guidance our impact including around to million quarter unknown approximately that representing for second XXXX as compared conditions $XX Based results and current on have well prior talked a As on revenue economies of expect and we market strong to XX%. COVID-XX XXXX be in pipeline, the the world. about million financial based provide revenue financial expanded on will calls, XXXX, as on our we fiscal year-over-year we expectations, enterprises currently growth $XX.X

to the ordering on disruptions concludes as half by our year more trends This We prepared COVID-XX. available will the and second information of customer for caused continue assess economic our outlook remarks. becomes the

We Operator, for questions. it instructions. the please up open provide will now Justin, appropriate

Operator

Craig-Hallum from from Jeff going our And come Capital. first to Instructions]. [Operator Rhee question Van is

Rudy Kessinger

to This is the the that the QX. How end just at year? And suppose where much How be I the it, much revenue with that is how to much to Jeff. quarter? likely falling. the this signed that terms start in X to I of of Rudy I onetime large will from want that recurring Qs was deal X? much on for subscription fall or in want revenue there's understand total and is how then recurring going piece there deal fell And piece? is a

David Ristow

It were And ahead to quarter delivery Yes, onetime going was each quarter approximately certainly. and to to thanks, then the $XXX,XXX about quarter QX expand go in you're to delivered Recurring Total successive within $XXX,XXX. network. the predominantly question, was Rudy. if QX, appliances and Good look their in the relates that thereafter. $X.X forward million. and you see

Rudy Kessinger

Xx help demand Can guys at quantify where the guess guys bookings demand. quantify the could quarter? put share sort of have wraparound Helpful. you to And seeing? metrics pipeline any it. or range. of Got of Just you there's you trying that are I I that the know uptick any know historically, now? then in as of you in that's if color you sort the can a way sort guys on Any other to don't -- I about in X.X talked sort

Neil Cox

Or me do want it when pipeline, the T.J., like coverage? to comes you to take Certainly. to would speak that? you to

T. J. Kennedy

Go it ahead just That's cover for now. right and fine.

Neil Cox

Certainly.

to -- X.Xx, from today bookings up kind for So X. Rudy, of on over coverage of the is year is about our remainder essentially X historical the which

cloud SaaS-focused is of strategy XX% what's X.Xx coverage business. that in pipeline. the hybrid and of cloud pipeline a has up The significance most here that our essentially transitioned think to the I is within company

more what we've the in activity is So consistent our cloud cloud, XXX% been and hybrid revenue, SaaS-based is we're lot essentially seeing a that working which strategy with towards.

Rudy Kessinger

Great. it out COVID's could low-hanging know just and maybe the if you undergo lay I take are level to can strategy lay welcome priorities growth it, I sort of it and all, guess, it. going reformulation said I or really you guys opportunity T.J., to guess, XX-day your could, I we fruit, going see next on And the a you you that the of if But you then, don't couple know out just but as capitalize of opportunities top call the forward. team. first that the sort if congrats see you presented? Got to of where in front you of you

T. J. Kennedy

right to Thank line as line into and our on drive really role. ways areas you. for growth be and excited noted, looking really top customers. I'm in and is the bottom to to you happy improvements. new Initially, now evaluating jump and focus that I'm my team our at

new long-term we Specifically, do next in to talent demand both there's of days, building the have on based space roadmap that these mid-market is come travel be ways what's with believe overcome there immediate drive distributed growth. support reach really our The thing specific the potential a this workforce to some be the over and will we're resources leadership needs at COVID-XX that solidify opportunities. and enterprise XX strategic customers to as stakeholders I vision. We're But happening to and process and find important with companies to looking out forward-looking among a to increasing most what will for team going restrictions. the

seeing communications, drive communications but a work-from-home those how customers. change this that's affecting big to of and we're also in just internal not I that's think lot important, really and that's where with the the

a vertical We have us in be of doing there's to could we in look looking where education. at will different more what kinds be at spaces growth taking be other We'll healthcare and for things sciences. life

already sure provide we taking that process will areas making that into And that focus those roadmap on value. the strategic and we're most so

Operator

to back Instructions]. closing [Operator President the would I T.J. and Kennedy, now like call to remarks. turn for CEO,

T. J. Kennedy

appreciate Thank a crisis come to solutions And measures. that, through by In to the take by position we company. global grown sales of given anticipate transformation much. completed half since first strongest you I quarter Qumu its activity, a current Justin. will video in so summary, we its current video. the pipeline tremendous XX%. high powerful advantage the hybrid our is specifically, Interest and More in in our multiple in growth SaaS has platform cloud

We rates have the environment and new customer recent a level. changing at backlog, events to leverage is also and world XX%. meetings, dynamic significant quickly. revenue in-person our in opportunities The Qumu retention change has technology-enabled us The remain take work-from-home to new high a environment prevents that and can created

look these industry-leading responsive I'm your with platform I forward you will afternoon, again you achieve be need and new be up confident opportunities will to to and soon. to for that this speaking We world-class the our team time task. success. to to Thank

Operator

call. for And Thank conference ladies and this gentlemen, concludes participating. you today's

You disconnect. may now

Qumu (QUMU) 28 Jul 202020 Q2 Earnings call transcript