QUMU - Earnings call transcript Q3 2021

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Operator

Welcome to Qumu's Third Quarter 2021 Conference Call. My name is Kevin and I'll be your operator this afternoon.

Joining us is Qumu's President and CEO, TJ Kennedy; COO, Rose Bentley; and Matt Glover from Gateway Investor Relations. At this time, all participants are in a listen-only mode. After the speakers presentation, there will be a question-and-answer session. now Sir, turn you would to call I Glover, Matt may Instructions] like the to over [Operator begin.

Matt Glover

financial press Thanks, After operator XXXX, website. the announcing a a available which September the company's Investor the everyone. the it's release in market closed copy quarter and today, Qumu XX, good ended results for afternoon, Relations is of third of issued section

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

discuss a the filings financial non-GAAP on will EBITDA, measure, company's adjusted are management SEC, the with and today, both press website. the call release the of During company's posted in which

via from be substitute The this comparable analyzing is GAAP replay to it's you made financial available to are financial that reconciliation Relations section website. this recorded for measure, like would performance. GAAP a it's in measures or Qumu's this to additional of a not available considered Investor of superior being measure measures and remind for everyone link regarding be the find when to Non-GAAP disclosures indication non-GAAP will intended to company results. I will You measure. including call all encourages consider

turn TJ to the to Now, CEO, call I'd President and Qumu's TJ? over like Kennedy.

TJ Kennedy

Matt in good you, and Thank to call. everyone today's afternoon participating

for the which be today. recurring as nimble a XXXX, end of different in in SaaS of in in we further our business during optimization plan, SaaS In relationships even recorded third organization. subscription customer cost our success of growth by expect revenue of QX to Operationally, recurring was SaaS ARR above also percentage in are ARR XXXX, QX operating execution where continued we creating and base. in now than place our focused, on plan SaaS strategic scale the driving our million revenue was taking $XX as QX million effect business were SaaS up regarding way grew QX, in cloud and revenue journey are more In we $XX.X a our XXXX, grow recurring end, measures we by revenue motions revenue we gaining a year. clearly are while Today, efforts Our QX quarter year-over-year. which reflect efficient the QX started partner SaaS ARR XX% a and our that grown was steadily SaaS and percentage we have ARR SaaS full we SaaS we to deepening implemented our business our Put our together, we for at The as revenue we was of growing million XX%. to sequential to financial are XXXX. and results expenses revenue the XXXX million are totaled in direct sales our of quarter traction, XX% cloud strategic an of conversions. and period. the decrease X% very the demonstrated $XX.X to When XX% our have recurring $X.X

video is ARR of into to to enterprise future focus drive continue successfully Our transform Qumu and growth. that drives a company SaaS with work SaaS-first the

strategic to continue driving in our SaaS we will while them we cloud customers execute plan, As on be on growing our the value laser-focused our ARR. for more

an to Now, $X.X before Subscription of our revenue provide XXXX let outlook, in increase and $X.X quarter last $X million, our to a we third of for color an compared compared in QX $X revenue support an of in to further $X.X decrease operational XX% QX. dive year. into of initiatives in million, increase compared QX million of X% was million and and X% on performance QX last to of more maintenance was me million and compared of increase for million financial QX the X% $X.X year. Total XXXX

by quarter the to Looking last at XX% SaaS $XX.X ARR was year. driven XX% at from subscription million $XX.X rate of GRR, our XX% increased cloud or cloud At in and growth SaaS QX end, gross conversions was QX metrics, to retention end last expansion. primarily year. QX The XX% in compared our million

approximately the retention QX end XXXX. the year. SaaS XX% to dollar of SaaS of consistent Our net compared last retention rate, or end XXX% XXX%, NRR, And at finally, was value was with our QX

gross in margin to and year. a XX% subscription cloud to XXXX XX%, XX% QX our last of was an increase gross was compared revenues. margins; in higher-margin at QX primarily Looking margin The larger of due XXXX mix improvement QX

cost as in QX I noted in Looking optimization decrease a our drove we at the my measures operating X% sequential during implemented remarks, earlier costs; our expenses.

across areas we not cost-cutting measures. for implement today further to to look planning to are and going of always are efficiencies improve as we the organization, While ways

diluted cloud-first recurring to the loss a QX loss, $X.X This ended $X.X diluted our with loss revenue loss basic loss was net business. SaaS our $XXX,XXX of million have year. in or negative on or last revolving per was no in and loss million loss $X.X metrics. basic share. and of in the capital and the SaaS business. quarter per $XX.X a the compared Turning plan resources of share company believe cash $X.X per cash Adjusted We to quarter and expected, to year-over-year in transition in per borrowings to negative our profitability loss the a net subscription share of we we share diluted XXXX. of a EBITDA QX loss non-GAAP QX $X.XX as on and million million diluted $X.XX prior to share $X.XX for basic and totaled or subscription and million to shares million loss $X.XX per The measure facility. a execute $X.X credit of cloud quarter a and for loss and strategic We Net compares XXXX sufficient of increase

and traction key financial results, to COO, we highlights it Rose the on covered I've strategic our that plan I'll to have discuss Bentley, and our over of the turn initiatives. implementation the the Now, ongoing Rose?

Rose Bentley

It's TJ. here Good afternoon, with be you, Thank great everyone. to you today.

transformation update let some our Now provide has within on key areas the growth strategy. and an financial details, covered that of TJ SaaS our me this transformation and

marketing and generation our our new business are team an Qumu pipeline. on our around with As Last into a building and subscription centered our emphasis has driving traction. focused our and growth on gaining logo I'll update how increased partners. begin initiatives quarter, strategy and our been customers on transforming are inbound we we reminder,

pipeline uptick website social lead support better search as It's engagement our as to creating the media awareness brand are of already generating evidenced channels by in traffic performance. well which are significant is because transformation. concerted efforts, flow more and and We our we across organic growth these driving

choice, to that experience. all will customer and to Our entire focus deliver customers' our decision-making differentiated of ensure by center for to is continue innovation at listening a marketing sales, the and our are customers success and that customer our we of

our Our continued efforts partners sales also us for marketing prefer focus opportunity signs advocate and and on are Qumu. showing to of choose the to and traction giving inspiring

Another will and us key customers journey for grow cloud are transformation supporting journey. business. our focus us SaaS us cloud support Overtime, customers maintainability. long-term help their reliability they drive on where is towards in meeting our help customers' focus our our This will and our their

grown We have migrating to our which ARR. great success the has cloud SaaS had customers

Some providing professional and professional that more ensure new as successful to and work value tool services customers in initiatives full platform. our our is customers to are services our more of line, they we to environment. and a embrace useful digital expect to of professional grow process. the experienced customers the capabilities ease to Delivering help highly remote hybrid Along deeper with we services maximizing include the most transformation get

value and of we're footprint important most we've alliances. the customers Qumu's on previously, As is to executing extending on noted and strategic partnerships through One initiatives

differentiated a channel out partnerships building We ensure have innovation customers. put and for focus we to deliver and Qumu's scaling our on experience

prime GovSmart, IT customer to federal effectiveness largest augment partner-first demonstrate Partner-led our strategy products and was of Our direct to and the QX of our through in ability partner, it's sales customer our provider contractors. services wins it's win and the a efforts. government

which we because relationship much dynamic and customer even already because Importantly, our QX, help because and needs force placed and create markets. ensure opportunities our emphasis to rapidly. and our more partners innovative to funds frictionless for a accelerated their channel-led the that partner-led more of strategy, process the Qumu large channel contractual further know this sales sales expanding enterprise customers' have us a partner penetrate program is customer partners development and and we To support footprint includes operational further partner partners It's of more in have our benefits, on our incentives, and place. scale in revenue new larger launched attract new we our enable market medium

to Synnex, and us, customers. Qumu's Qumu help critical offers This partner ways. partners addition distribution adoption partnership differentiated to to need Synnex TD enterprise-grade their engaging resellers the ecosystem. it's an announced Synnex organizations rapid to our is to fit leading in ecosystem channel to access ecosystem look among the technology of purchasing large-scale evolving TD exciting is accelerate recently our enterprise to as filling the expertise adoption distributor critical attract and adopt meet the and technology XXX,XXX IT secure to IT for to enhanced video deep their especially TD ecosystem. the helping and with scale, more a employees, more enterprise partnership in solutions, reseller market thanks TD organizations that bring and within a Our solutions technology customers in us program now for perfect the accelerate roots as platform within collaborate business efficiencies needs in Synnex program, with OEMs have solutions than market reseller

and component strategic to mission on-time their renewals. journey, plan. deliver playing, Beyond the NPS yielding important critical customer our product of role remains value been partnerships ongoing This team customer the making an has success usage, are our equally increased team higher along

our previous In fact, had record which just organization in achieved the in we surpassed QX, our on-time best quarter. renewal prior

SaaS Our led to customers we're initiatives for existing has improved retention building. additional and subscription will our ability our drive increased to deliver the engine of customer customers SaaS success value our which

in ways. more we of focused they team are where Our customers the for insurance success the customer but company with this success a good customer renewals, meeting often innovative in their value new cloud. did journey earlier and is customers, to team on-time to consistently creating successfully customer customers' for is migrate our only what which along on to looking not one they example journey our worked are large A approaches delivering engage cloud our of and

Qumu performance, the to who is another town facto they has for to multiple brands. migrated Vodafone cloud they and moving across have use they will example will us improved be continue customer plus us who CEO asyncibrae to seeing de their for that halls, communication -- been a of leverage has to a and cloud gap transitioned the one seven employees and Qumu the a customer and across video platform. asynchronous pandemic. XXX,XXX uses for audiences to both in bridge our synchronous with both internal of to their wake external our Vodafone from successfully years solution solution Now

TJ. turn in ability will commitment we you customers ensure build have maintain us be to and to strategic to you, us that, ongoing to with on value see, to I'll efforts, our providing the our with allowing direct As And our and foundation while give to upon focus our we need it the will marketing turn can sales back partner-led more initiatives. over

TJ Kennedy

of who work is enterprise the clear brands large We It's recognize a of be believe that standard Rose. communications We've days is make we're like Qumu adopters the mission-critical CVS, central video, and their you, of it for video Thank and to is events. customers. the seen transition We've the and enterprises power whenever. still AT&T, transition for where synchronous Toyota cloud. and or hub new abundantly video is early seen the Vodafone, from wherever, innovators in early business whether communications, call revolutionary proud early become asynchronous adopters the to

consolidation rest three innovation next enterprise we're in scale. will years, market opportunity and because in measure experiences the It's rely Over video we space, grade most on seeing seamless Today, implementing begin PeerX. that solutions of Microsoft's purchase the manage, content. their well-known recent massive world's believe secure of deliver trusted that brands market and video the the at including of and Qumu the to this the

sufficient resources plan. execute to We our have the plan on right and

strong to plan our a deliver year. for SaaS the and into executing XXXX have strategic the right experience who growth momentum of The and and focus dedicated leadership strong establish to execution the plan cloud-first build balance successfully us We has of team with next are SaaS enabled the world-class business.

direct As medium are both targeting enterprises partner and large motions, gaining Rose highlighted, and traction. go-to-market our

relationships subscription in success efforts driving are customer Our and deepening to conversions. ARR and on-prem cloud customer growth our

As revenue we growth. continue our to robust remain we transform focused SaaS on business, delivering

our Together, the technology these value We our success. account and success say are we can organization strong people foundations enhanced and will on enable accelerate process, can scaling team, believe ecosystem. our management SaaS deliver businesses foundation long-term and customer our elements business SaaS direct we for built and to the channel us partnership We our our sales have and to confidently of customers. I are through

XXXX and as ARR on achieve track our includes growth revenue continued recurring revenue percentage mix growing we to year, our end in revenue by XX% SaaS SaaS to of recurring This remain of goals. this a ahead, XX% our SaaS Looking high-margin Longer the the confident and growing subscription-driven XXXX. and we that from end term, and sustainable growth profitability. cash recurring scale, net will are benefiting at a EBITDA revenues, XX% adjusted operating flow by company emerge Qumu income of as

Operator, questions. your take please provide instructions. now the appropriate will We

Operator

first Steven with Our Frankel Instructions] [Operator question Colliers. comes from

Steven Frankel

afternoon. looking might this much while a driven give backlog customers at that you I migrations either upgrades or wonder if by How that base, the on channel partner volume or have quarter. installed Good TJ, touches a some this you versus of you from in been had insight cloud us of new was direct maybe the leverage? for

TJ Kennedy

typically work for new like as discussions of going while mix I enterprises definitely of of our It's would X. new those -- that the the large are Rose one take ecosystem logo revenue. a lot talked larger through that depends say, a team work to of general, in Steve. we go. with in those decide from question, in in two of about, here for seeing bit initiatives. more a QX. conversions on as their permanent the from on-prem are large The works more was far that months and more just say A to journey. will to I six SaaS from driven key Great definitely in sometimes XXXX a our these portion wherever wins time are works partner key that, be does our It a saw And accelerating to years. just significant we enterprise where journey seem in amount they hybrid on

made As on-prem a seen upgrade of of had our before or that the far either to XX%. journey, we've and to we're had decision as is we around one our at on-premise cloud the us customers for things on overall about to latest XX% now solution that that go

upgrades we QX. continues in through it to that are saw or either grow driving and that conversions as those So, folks continue

Steven Frankel

a traction might option. you with offering? Could getting on update low-end Okay. had what us out that you of give self-service you be kind an And self-set then, put

TJ Kennedy

not the low-end to directly traction as the more best our Synnex actually working channel had to offering that working that And that than such leverage look now partnership partners drive ourselves. drive hoped. way doing lower-sized we with at channel enterprises capability recently, Yes, TV the much announcement, some best that to key of those through the as did We're way to as drive we're we've offering. and alliances partnerships currently reassessing as grown low-end

Steven Frankel

And would the how this came say, you the quarter from general, much of bookings channel? in

TJ Kennedy

most channel this of of day, in would the a by the channel I almost end general, quarter. In say, influenced focused. of At were the majority new them, the bookings were

Steven Frankel

salespeople? implications sales ramping that our been productivity of does so up journey And you kind do have for in you that productivity, force that 'XX, you've something with to in the of struggling where think are

TJ Kennedy

are seeing go it in sometimes the some Definitely, with into targeted enterprises. value can But what to we impact direct that key large we of indirect with both having hitting medium our more when we unique a are relationships can that end customers customer contracting. customer, we're better focused partners bring we that in of with that is positive and and partner, to our and even some that up us that faster has and on add are the a most channel ability already help into

key really and be So still addition forward as that We have activities would efforts to to not the market. partners that important sales definitely that with is the drive overall for are but us influencing that going only they're way channel But direct you see we key think an part we channel of to our are leading and force mix. we direct. direct going happening our forward in go key

Steven Frankel

deals that quarter. Okay. the cloud there this on And you a then were lot gross mentioned of margin,

Appliance Software shouldn't is that that a we is being of about think that XX% gross the margin we one-off as kind and So that saw business, in and sustainable?

TJ Kennedy

just norm to gross customers, more we and where margins conversions going large the business a it's us XX% as more the neighborhood forward. being won't this cloud continue necessarily at new going more on-premise that for I add our will point. be and or cloud think come still that I to that we Yes. is say would see volume of we being in it's deals some and have the through; hardware not mean

Steven Frankel

I'll back the great. queue. in jump Okay,

TJ Kennedy

Thanks, Steve.

Operator

comes Markets. from Northland Next question Latimore Mike Capital with

Mike Latimore

latest much. said? I to of guess, have TJ, upgrade or said you cloud, very what Thanks mentioned think agreed stat that software Great. you you just your your base either to the I is there, on-premise

TJ Kennedy

That's correct, Mike.

Mike Latimore

And XX cycle Okay. the sales be XX guess, the also said semis that months. going I to you in to

about that is months? XX think upgrade, the that the coming in if guess XX I through revenue -- to next should we So to XX%

TJ Kennedy

the one a mean, -- an of things conversion unique I there's Yes. between and on difference upgrade.

can upgrade, the that period in to months shorter upgrade. it's something On a take of place a few

So it's reconsent on-premise first a an not revenue actually conversion have year, perpetual a that they license as transition. perspective, on solution first in that year. maintain -- if much in from that recognize of still a But we to

will, So XX see won't SaaS as much year you from as through much now. months actually this flowing you that of revenue as

So on drives. deal, or exactly and what two you're that if three a multiyear years could hitting it's that where

So they've of lot conversion see if months of to on-premise they if maintain been through customers they even or may years, that that. license maintain you still for that months perpetual in or a X which on a months that XX some for as still platform choose an X many do coming it

Mike Latimore

that notion? in XX% embedded revenues SaaS much kind How upgrade of

TJ Kennedy

solution. on deal depends was the all their a It it before particular on on-premise and for what size depends also maintenance

then remainder perpetual recognized the of it's value that this at is revenue solution, to contract utilize what of that's and definitely up license the in being ends a the so still they period. And on-premise continue SaaS looking

Mike Latimore

what little quarter? a we for level then, in it that is next Okay, down roughly does should And bit? quarter, the got keep Or it. of kind this OpEx tick

TJ Kennedy

would on don't where able been that going would the additional think would expect flat side. here account optimize I be operational be definitely take downward forward. it you'll OpEx to going I ticks Yes. fairly approximately we I think expect but us It's big forward. flat QX. to in see our we think remain And to expenses I and into have

Mike Latimore

what's interesting educating kind was up Got have training an the I what's help next to of SYNNEX, channel step or get there? with the you that that the it. And resellers step then and to next Do on win. Or running? people? guess,

TJ Kennedy

You Yes, right. had exactly it ahead, go Rose.

Rose Bentley

Yes.

So all because these but question and education the are great that to partnerships Mike, really right, success. enablement sellers for we yes, it of down the know to you're the the comes thanks ensure wins

on retiring we are message we And helping focused SYNNEX ecosystem bring right, proposition the who's have. sales Qumu. quota, TD understand teams with the so delivering a yes, about It's and now they to value the understanding

know we to get can we make them that to individuals execute. sure are and So supporting the

building and understanding now it It is the all joint sellers. So enabling looks solution to an what about market enablement. pipeline like is and that about

Mike Latimore

they of past? enterprise are new that Or And worked have a sort the video technology channel? you to in in

TJ Kennedy

looked This they to bring; this is at offering so things enterprise-grade with and worked and one solution partnering to them of understand ecosystem, with we haven't really the we starting is don't video differentiated their when the them. very that a

Mike Latimore

great. Okay, you. Thank

TJ Kennedy

Thanks, Mike.

Operator

comes Jeff Henry question with from next Craig-Hallum. Our

TJ Kennedy

Jeff. Hey,

Unidentified Analyst

this for and guys, couple Aaron Hey is a [ph] on Jeff here.

just kind you on-premise customers seeing can speak a legacy as what little is concerned? bit first, of churn as you're And there are? on where far your current update So

TJ Kennedy

the continuing offices where things the going board on-premise conditions of churn then into market work hybrid future in overall is But happen. churn to the going and and look and GRR entire As environment, you to and our more far from on-premise is the many something get and and for churn, that at something very we see people to due add remote so business we we to it just SaaS. that you a difference our that that the between our and and that something is GRR. expected combining to centers SaaS in beginning data do than cloud as have COVID on-premise that shift it's if across were We definitely the both that

same when so SaaS, overall. at have at expect continue good our churn on-premise NRR point, our very and we from are to we GRR do to perspective, seeing we the And retention But some slight look the throughout. decline

the be our continue on-premise will to we traditionally what see -- to higher than from seen base. that have turn SaaS we So

Unidentified Analyst

more you've And any what Perfect. of sequentially I maybe or then, a points is maybe couple just looking pipeline some year-over-year? to know given quantify way bounds. but like here

TJ Kennedy

for build build to say our that us, that to So I continues marketing pipeline. will help traction

key a a regular and in built of have are created Qumu. a social website, We awareness lot contributions new last media that positioning, new lot the has awareness with lot quarter more a This more driving around demand.

has have accounts focused flow target lead in key creating QX targeted We grown That program with program. early-stage are those integrated really that marketing and our confidence significantly we the lot on here of accounts. in QX over a engagement have

now our so And engagement. focus is that cultivating on

As typically about buying to we've are cycles. enterprises talked XX-month before, XX- large

more customers so become new and appointments, of cultivating to a driving logos lot discussions end more into Qumu. that the And up we'll more engagement driving future

And in continuing continue program we so on account-based lot today from QX a but that that we which specifics grow was putting marketing on seeing our is are I than leads not it see to saw any to QX more generating significantly build say we will pipeline.

Unidentified Analyst

Got just then, more you, helpful. a couple here. that's And

As quantify trending far any line there give know overtime? and subscription but are I service you is revenue as how the that's concerned, way the base breakouts to

TJ Kennedy

quarters, QX you in can XX% feel at give But we reverse that mean at SaaS and XX% if and recurring on about million do can were look the the previous that. QX. element what we of back in in XX% about being a you $X.X if And that I math the that SaaS, is. look Yes. we we overall for look of

that continued you can of SaaS of that's recurring So the part growth show that. revenue

Unidentified Analyst

just a last then, one CFO? And me. for now search Dave's on you. for update Got the Any new gone that

TJ Kennedy

an going today very focused progressing resource the we announcement very here new for and CFO search. We search on that team well but to us join we're well. key good leadership the make feel very with the that with very and don't Yes, about to have is talented getting

Unidentified Analyst

it Perfect, me, thanks. That's for guys.

TJ Kennedy

so Thanks much.

Operator

At concludes the Thank you. time, session. this company's this question-and-answer

now qumu@gatewayir.com. please like Mr. his at I If Qumu's turn call the your to not IR was to question back closing would team contact remarks. Kennedy taken, over for

TJ Kennedy

to today just and I appreciate appreciate again joining you, forward and want key look soon. all. concludes you I speaking Thank for much, discussion our so Really This the today. Kevin. it. everyone questions all Thank thank to

Operator

gentlemen, does conclude presentation. Ladies and this today's

and disconnect have now day. wonderful may You a

Qumu (QUMU) 30 Oct 212021 Q3 Earnings call transcript