QUMU - Earnings call transcript Q2 2022

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Operator

Hello, and welcome to Qumu's Second Quarter 2022 Conference Call. My name is Chris, and I will be your operator this afternoon.

Joining us are Qumu's President and CEO, Rose Bentley; CFO, Tom Krueger; and Matt Glover from Gateway Investor Relations. [Operator Instructions] I would now like to turn the call over to Matt Glover. Sir, you may begin.

Matt Glover

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

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

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

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

Rose Bentley

making and Thank investments transformation time afternoon, remain and in quarter we the appreciate To continued months second made to join the call. our execute financial conference XX our The against and team's incredibly the you ability to are to are plan we SaaS. strategic our taking begin, encouraged we've that Matt, strong last you, We good by operational results. everyone. progress driving over

cloud balance the in to beyond. SaaS and our ecosystem continue improve XXXX build we subscription-based quarter XX% to to revenue throughout in model, a was further partner both of our business, SaaS and our increase transition Highlighting our and expect grow As a the ARR. purely performance we success

XXXX and total percentage to line Our track us prior SaaS the in targets in revenue in XXXX. in reoccurring our XX% has XX%, is SaaS QX QX of for a quarter growth well XX% our year. revenue This accounted from last and achieve on for as goals with up and

of million Our of portion SaaS a QX, overall cloud gross a increased we line. transformation our which also being initiatives in top and We to used becomes greater cloud with as margin XX.X our respectively. and and activities million QX Along produce SaaS helped operating cash continue contributions expect during breakeven. transformation marching $X.X progressing to we of towards flow the QX, $X.X cash on target, for are and

QX down come our in significantly ensuring to We have transformation runway expect to operating cash in activities the we complete QX, cloud. we need and used to the

today. cover to lot a have we Now

key turn into detail updates and to SaaS our on our financial I'll provide operations, So it from to now QX before more Krueger, performance I over CFO, metrics. further go Tom? any Tom

Thomas Krueger

we speaking release be by you our to on earnings It's quarter, with and in already a this Rose strategy. continued that the Like Rose. of that reflect to addressed included the will direction afternoon. SaaS our transformation The a to last few right growth continue are execution metrics today. pleasure expand items measure and our our use team's I success move in Thanks, of

Now at them. let's look

recurring revenue XX% million in from XXXX highlighted, in from QX in to Rose up XXXX ARR QX in recurring revenue sequentially X% prior XX% $XX.X increased quarter million XX% increased XXXX. in XXXX. As SaaS QX $X.X SaaS and QX compared SaaS for $XX.X million for QX to for increased for accounted QX and QX $XX.X revenue, XX% million XX% from to XXXX. $X.X of or the annual million revenue

As total and XX%, up of XXXX. from QX unchanged SaaS a XXXX accounted QX in for from revenue, XX% percentage revenue

Our quarter SaaS rate strong rate remained with retention quarter our or NRR retention XXX% GRR at end. retention XX% at net of end of rates gross or and

down Moving the income statement.

XXXX For model. quarter QX and XX.X% our from due margin the for XX.X% a QX through XXXX, gross XX.X%, in improvement XXXX. to margin to continued second shift from business of SaaS-focused The on-premise in was cloud up gross the was

margins expect XXXX. the We gross of mid-XX% for balance maintain to

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

on is realizing cost structures and focused transformation rationalizing efficiencies cash burn. our Our to also reduce

our sequentially onetime second the total important a to XXXX OpEx Our our quarter that expenses XXXX gain CEO's $X fourth compensation approximately related the were non-cash of quarter. and and quarters reflects will We third for OpEx for quarter prior $X.X of rate our XX% operating reversal year-over-year. in the to million, million of note per the XX% second down stock-based It's be anticipate normalized from run departure. that

in million repayment a the decrease an profile line balance million sheet. QX sequential At of of million basic execute loss XXXX. earnings $X.X equivalents and diluted optimize $X.XX QX share XXXX per $X.X $X.X EBITDA adjusted growth loss, compares the included measure, of end, respective non-GAAP XXXX. we in share in $X.X $X.X measure, net to EBITDA, million Adjusted the a loss diluted basic cash QX periods. quarter is a or Net no per for look cash in we plan. borrowed per loss ability million, strategy. reflects XXXX we our our loss and gears loss QX loss was which in releases and ways million QX is to net and on of net diluted internal reconciliation XXXX loss improvement line per QX cash of in of $X.XX totaled without basic for A or $X.X $X share. a This course, further loss $X.XX Of will million debt, million cost had and to to with to of The a XXXX GAAP of our Shifting our sacrificing our or for compared continually $X.XX share loss and loss credit. the to our and of in in $X.X

$X.X $X.X As XXXX. Rose in million and XXXX in compared to mentioned, QX to net improved QX $X.X used activities million in operating cash million

expect in the We net XXXX. in second operating of significant a reduction in half cash used activities

that partnerships my Rose it We resources SaaS to growth, runway cash our provides strategy, discuss available concludes key liquidity and cash I'll back sufficient and remarks. profitability. position continue to That transformation over turn achieve flow and prepared to Rose? to believe strategy our outlook. execute our

Rose Bentley

our performance both reflect as strategy strong their with SaaS Thanks, current increasing video growing and provider momentum key of our asynchronous live partner-led Qumu and investment content. success financial the customers of trusted performance Tom. indicators and and Qumu's their improving sales

For added of the customers QX. context, new at in QX, we twice rate

multinational did only new Additionally, our one chemicals both services than specialty bookings XXXX. half partners, more first QX, of which a a by firm, our or influenced Global XXXX and are of cloud ranked the the In Qumu's global of of not which XX% in solution. were in won company sourced we Fortune professional include

tool. ecosystem. in a Online we thrilled to highlight I'd XX it platform the with in more experience students the the are over our they at that accessible been well educators UK-based of degree easily the leading flexibility QX video resources. learning enables educational is make to Proprep health ability STEM a an as our Proprep, provider was help the Videos included on is students last video win support based and video and customize effective. spotlight like are leverage to with to provider as important study as searchable a a scale. course deliver increasingly X-year high-quality, and has doing top attend already proven and partner ingest, capability to working customer win ranked Proprep of customer they two of And noteworthy learning to customized our and value work need to years. to customer are insurance with tag content be institution based Proprep QX on Qumu's and enhance to best-in-breed sort last materials engagement taking. Another the commitment The

value capital the or opportunity needs. time deliver required and to this We successfully deliver complex. meet were us growing their by to As providing our require enterprise the collective uniquely expense one capabilities care meet solution Qumu build for care virtually Through collaboration integrated qualified of extensive current these health them out network the without was gives more against largest were needs provider's health to customers with our video the future its the company, stabilization solution. requirements video in-house. to customer's incurring to ecosystem new requirements Socialive with able the production, partner they to end-to-end our and Overall, of U.S.' all partners, customer's for for video

the investment Our our us we to that is not we own. on partner leverage every scale. our continued could partner-led our of Simply the in the decision we all heart that on put, do compete and make opportunities pursue customers win solution and keeps and our at at that path video best-in-breed strategy network letting

broadcast capabilities we with video of formed partnership last year, Our agencies. which enterprise government late GovSmart, to hundreds Qumu's

sector understands partner move truly their to about we we through federal needs. unique a are the expand cares season, excited buying the their customers in and continue with our government As footprint to that

of quarter, additional X as with have already Department we're third we've a only deal Although into a unit well. of received the and secured weeks RFPs Defense new

extend complex provide video major provide issues, effectiveness For financial to and insights requirements. why That's consistently compelling to new business. closely help hosting of markets. ability partnership power meetings and differentiating. live our other improve It's is equally working like We're experience the platform. GovSmart of further and our AT&T's services Qumu's across recently several challenges deals large when behind-the-scene enterprise on at build several deliver close with multiple needs executives customers, Qumu positioned to engagement and are to with to pipeline, with regulatory met and it across to our year-end. communications, AT&T and network believe verticals and a encountering senior security turned -- these once partner ways reliable discuss I their of was more complex recently high-quality partner, the address team enterprises that and AT&T, we capabilities or by GovSmart to just a are secure video well compelling And cloud-based to stringent markets our recognize we solve their to not

revived Research achieving AT&T newly During solution. behind-the-firewall top Qumu Qumu right positioned trust QX, seventh vendor the video quadrant been Qumu is the their for XXXX its the landscape landscape. Global quadrant the right goals time for communications Wainhouse scale. top has video placed and at of other business in and organizations This for their in enterprise streaming

digital XX%. from for last authorized an exemplified customers. the new deliver growth increase value of XXX% rethink cloud Triple-digit same over XX% deeper and And views video and XX globally anywhere raw be our the more resources for and ACV momentum video have tech of expand annual growth our through added to our asynchronous from XXXX. period, by more in create Companies they to enterprise. device organizations and labor half or materials contracts. the this, of year-over-year the The customers size demonstrating In any with our we increasingly engage has Internet-accessible with seen cloud, operate in customers and parity additional first corresponds with pandemic, contract the growth customers. up global contract constrained to by their how customers investment time our to demonstrates the critical in stack. customers partners, of new months, footprint a shortages of working connecting video to hybrid ability value acquire in this additional customer how we ACV for realization continue at The is go the substantial making for critical corporate half their to employees, year-ago new views increasing is cornerstone to use average and become by over transformation tool our of It first increased them in the SaaS by challenged cases value XXXX enterprise fact, have any reprioritize with on XXX% by for Furthermore, our our enterprise and our platform. when platform. end helps compared growth our growing on-prem In users users

Our results building here are The the organizational bodes was that enterprise -- capabilities. made validate work, execution. embodies executing theme well our momentum. which Remote XXXX XXXX demand first we've video strategy half the hybrid, it continued fully be progress we entering in or which delivered for and for we and whether is remote to stay, of

is business and new accelerating enterprise-capable. win needed to ability Our an our that validates product at clip

gross transformation is summary, reduced robust margins validated partner transformation Qumu's is Our well be burn. In underway. our proving KPIs, compelling is a and SaaS to our cash improving working, by And ecosystem differentiator.

yielding in XXXX. returns in Our are investments XXXX strong

business hitting its now stride. optimized and Our is

cash Our of escalating by pace. We growth plan that our that to significant at we strategy. our opportunities converting a available position third solid are with execute supported provide runway entered record quarter pipeline an resources and the

new strategy is gaining our in repeatable of confidence creating that sales motion logos. Our partner-led a record to ability and us gives secure sales momentum number

Going expect a of end revenue of to total least be percentage by revenue at forward, end XX% our of by SaaS we continue and reoccurring the the XXXX. XXXX reoccurring to XX% as

a and EBITDA Board subscription-driven The to confident profit operating adjusted will We flow breakeven high-margin at sustainable Qumu net revenue, as over from cash expect recurring and flow leadership net company cross to emerge growing and benefiting profitability. during continue growth to that cash XXXX. scale, -- remain and income

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

Operator

Instructions] will [Operator come Jeff question first from Craig-Hallum. Van Mr. of Our Rhee

Jeffrey Van Rhee

growth. you're of bookings So quantitatively you like in first, outline the also of size questions. happy you then could Can Maybe insights momentum it along any vein, there And on with about share something in a Rose, sense magnitude pipeline? into little the of increase sounds some a of pipeline couple bookings. then Is and the that pipeline, composition the the the the in same pipeline the of more? that

Rose Bentley

enterprise. we question. appreciate are we Jeff. you, specifically pipeline, Thank think the Yes, the the the Yes. we building I of continue as magnitude see grow how to on about need

QX just logo much carry me in in prepared to my and momentum into twice compared we the hitting QX, to spoke around that momentum expect hear growing You QX. as remarks volume in

to it's would you think on coverage If the where about at you but what the pipeline, soon, or I'm would yet able expect our will giving be pipeline you expect position coverage, give a I we're in against of to Jeff. to to plan. not pipeline, be exact I meet that deliver which bookings

the question. appreciate I So

Jeffrey Van Rhee

what some a a think you you the Sounds good. guess, on point cash be of just breakeven within 'XX. And that I flow sense range? Tom, crossover line give at even commented then, that might you've breakeven, revenue point us little you over cross Can in that

Thomas Krueger

not think I I'm -- number. going be to the sure it's The exact --

it's going year. to. -- to -- $XX million reach of to we're at -- next growing need we'll we'll to It some think total may and to ARR to ARR grow, we're have I be close point right to there we continue And now. go will be going

Jeffrey Van Rhee

competitive behavior, degree talk inflation of dynamics all buyer Okay. backdrop COVID, well? relevant sort part on. pressures, the in And coming landscape wage is out that that going just recession of All terms I and the and of you of lastly, about then as right. mean, to Can of obviously, kinds

Rose Bentley

Jeff. certainly, Yes,

we we and cautious sure being make about around for accomplishing When today business very problems optimistic solve the on into plan we the the to that today do -- have is and we how turned we we're business, keeping preparing as the brand delivering we what how to landscape, how are the customers we are look what really and [enterprise] on focused by we as be scaling complex ahead about future. When for I the on we're bookings think competitive So really continue to on our think our we are and I top look and enterprise. them. retaining plan the at focus

you, landscape the remains growth right, in to that enterprise deliver our we we are So specifically. continue to consistent us, competitive continue, on our dedication Jeff. And we the we on for and respect internal is expect expect That in to for #X focus bookings. continue how

Operator

the question-and-answer [Operator Instructions] concludes At session. this company's this time,

not the was to contact Rose please remarks. IR Qumu's I turn Bentley would to question team your over like If for now at conference taken, closing qumu@gatewayir.com.

Rose Bentley

receive call thank and begun highlight Back our Qumu's sharing to underway joining updates. much automatically the I've milestones. look issue to our Please everyone, operational on company's you, ongoing Qumu, you, forward our Chris, to And months. to to afternoon. coming at I in periodic over us social follow so for updates or progress LinkedIn this here Twitter on our about Thanks, and and Chris. weeks With channels these more transformation

Operator

call. today's This participating. you. Thank conference concludes you all Thank for

You now pleasant day. a disconnect, may have and

Qumu (QUMU) 11 Aug 222022 Q2 Earnings call transcript