- Earnings call transcript Q3 2022

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Operator

Welcome to Qumu's Third Quarter 2022 Conference Call. My name is Curt Wright, I will be your operator this afternoon.

Joining us on Qumu's 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 Curt, everyone. Thanks, of closed After of release September the issued in copy press company's website. Qumu its the XX, Investor financial section a ended market announcing quarter results a third available today, for Relations is which XXXX, the the

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

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

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

Rose Bentley

Thank in start quarter, everyone, the days afternoon, third you I today. early proverbial you, off, good and as for joining our To first completed us CEO. Matt, and Qumu's XXX thank

transformation the team, As saying driving goes, you're in go-to-market continuing value with having delving certainly staff investments XXX for focused customer months on motion. and collaborating last well-known on partner-led our yield we XX our to first time Qumu's ecosystem our business over strategic strategy, down I'm and a our delivering and the when meaningful to flies on partners alike. execute enjoying experience continued The returns. our My made best-in-class days our customers strong customers fun. partner's

from during strong established Birmingham From financial Club especially were QX, renewals County renewals we with the and momentum standpoint, retention PrinsesMáxima of coming Centrum. pediatric half and Football Additionally, we UniCredit, a a as SaaS in quarter our revenue annually X% revenue Most SaaS recurring we or a across top notably, metrics, key SaaS generated SaaS including in revenue, and of revenue and percentage growth recurring solid SaaS SaaS increase on first the the built oncology XXXX X% revenue our ARR. in and during a delivered center, line. increase

results, turn key live sales the content. details increasing provide reflect of OpEx trusted Tom momentum our and strong we of and these were the more Tom? growth financial expanded able on current while I'll well growing to their customers reducing our SaaS Qumu over as of QX dramatically and video percentage our and now cash Overall, performance our usage. their call partner-led improving to to strategy financial with a deliver we as investment XX%. asynchronous SaaS reoccurring provider revenue success As KPIs to revenue results as SaaS Qumu's our and And metrics.

Tom Krueger

Similar that are market I that the SaaS to you Thanks, our be with of our used to direction speaking included last to earnings Rose to right after in our closed. we strategy. quarter, which published The measure also success growth and highlighted, pleasure will of we Rose. metrics in execution few move expand a continue release the reflect It's continued team's today. the metrics transformation on our that a

metrics our the stages and enter of business performance still going most we final these cloud reflect we our As transformation, believe forward. accurately

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

this recurring for percentage to as the of XXXX. We recurring SaaS revenue a of be year, the end XX% are approximately by and on track by end of approximately XX% total revenue

SaaS of As a in QX percentage revenue XX% QX revenue, XXXX. for XX% in to compared and accounted XXXX, XX% total

remained and rate retention at XXX% the was Our net at rate end of our strong with XX% a retention SaaS gross rates QX. of retention quarter end,

the Now moving down statement. income

revenue sales XX.X% due in contributing third revenue utilization XXXX, For compared a XX.X% of gross in compared on QX to higher improvement improved and personnel. services was was professional better XXXX. margin QX XXXX, SaaS the mix QX overall to XXXX margins to up percentage our of recognized QX gross quarter of the to The XX.X%, margin and in SaaS from

to half expect the margins XXXX gross We in first XXXX. the for mid-XXs maintain balance of of and

operating to on expenses. Moving

Qumu's normalized As optimizing and transformation, we've really our OpEx efficiencies in flow We're on structure cost our by third was several Rose these the XXXX quarter that to cash the the Along over able coming rate quarters. line, success key areas highlight in OpEx that achieve drive in be and cash of to been enabling down the quarters from on $X.X to in us been XX% operations XX% approximately has also to, breakeven. that million, of used last in months our We $X.X Proactive but fact cost will quarterly quarter. improve million focused sequentially journey, and per thus quarter our been down the first SaaS a run realizing only encouraged $X.X million QX. not year-over-year. QX, far, anticipate our million each consistent $X.X has XXXX, alluded X and rationalization $X.X million during QX in OpEx in

execute While for operations, we've further great cost optimize will strides continually without to look our growth road in profile ways cash made map. used ability we sacrificing our our to our improving

our net a in improvement from an compares profitability loss and $X.XX to of loss loss $X.X $X.X totaled and QX for our a $X.XX end, per QX measures, to diluted loss, net million, $X.XX basic EBITDA, GAAP QX or $X.X per in A basic or a QX loss cash releases of included in $X.X the the in of measure, share loss and of from line loss adjusted sheet. had is totaled cash at diluted This credit. million loss EBITDA adjusted of gears million diluted $X.X reconciliation a non-GAAP Looking borrowed $X.X XXXX. per for a million Shifting QX we million our and and basic in equivalents, quarter At XXXX of net a and QX to periods. million a respective of or earnings of $X.X share including million share. loss measure, $X.X XXXX, in XXXX Net loss million XXXX, XXXX. balance

over continue cash course and in seen tightly usage manage We the of to cash through XXXX. reduction our

measures to strategy, usage Rose? discuss over key cash net in partner-led I'll reduction over it and benefits continued our our turn concludes and further prepared to sales realize we the That partnerships cost a reduction expect our our model. back We my quarters lower-cost, as Rose outlook. high-velocity, coming remarks. from

Rose Bentley

Thanks, Tom.

Over several through been as quarters, company a the our past has validation execution. theme

us execution SaaS of Our strategy validated transformation of team's journey operational enabled consistent enter final to our phase has our plan. the ahead and

Our channel opportunities new as seeing we rate well has of the which strategy of as validated are been are we business. the closing partner by volume

we exceeds all bookings the in continue new logos over of and fact, XXXX, logo to In X months first to for new our our of the count new secured XX% being year see VQ we security contributors company additions professional such included multinational chemicals services by Telecom which sourced logo a our in firm. key British global QX, a and partners. as and Partners new our were

the sector. We of also unit partnership win through which we Department with Defense within lead of customer, the secured continue will to additional to a with our a believe wins government

the In we secured quarter, we customer wins have partnership advance in continue to with the AT&T. our addition to exciting that

of together with on I'm I excited further with last to we our As channel This will call, services go-to-market functions will platform. product leadership numerous Qumu-powered efforts including and their sales marketing, to be report engagement that to service professional August as AT&T our expand operations multifaceted marketing we management, video working relationships. with strengthen Qumu's explore video the mentioned met with enterprise its opportunities AT&T AT&T communications, to provide launch in offering. value-add program a for

program preliminary the as We to quarter. revenue have within see orders already purchase several next soon and expect for elements resulting received acceptance and as

platform deliver our evolved expect Qumu further engagement obvious with from to mass industry-leading our to an we video customers next Google Marketplace. step we enhanced with Google collaborating derive expertise partnership. Cloud Additionally, combining enterprise By Google's value our to this SaaS by engagement, taking

deliver encouraged the Qumu our but seen and our in ability support of by the days course together are share Google, to over have and XXXX increasing is strength and we XXXX. early the for an targeted that account in exciting trend mapping providing are An We partnership pipeline build with growth brand of initiatives. for trust customers our we

the in being continued going for an pipeline into head renewals QX we platform, internal renewals a of of suit. Qumu our technology their are -- partner-led of enterprise new incredibly as cases forward. and usage Many of multiyear fueled customers new we is and follow use broader strategy. us contracts, As customer for partners we as target our future relationship. in Customers in expect well strong QX include of renewals completed growing number momentum increasingly by network for expansion renewals and in QX, were our renewals QX to and secured A resulting in to building

customer fact, of customers of long-term contracts service. In X reflect These unmatched of XX% our for level for solutions contracts cloud-based months confidence XXXX, renewals. the and our nearly account X-year have in the first our

our testament recent with ourselves care of us to of service let of to here will During statement fail." that one is a not the business our Qumu. This quarterly remarked, "You and clients quality hold they simply at we review standard powerful accountable

expect to the launch accelerating with see QX, of announced December In British from at our Collective. year, value last Collective meaningful contributions the of ahead along and we Looking partners, Telecom with we our partnership are Program. entry synergies blossom and Qumu's partners It competitive Qumu this Partner see repeat our is markets The ongoing the up partnership. positioning to teeing business. exciting into new from right strengthening

further building We The third stage customer that was successfully trust breakeven. transformation usage toward of down our the runway operations, key quarter work as flow brought engagements. the we final cloud and from our stabilizing complete our cash in cash our fuels

rest that momentum our Cloud Going marquee platform of customers of seamlessly Qumu the plan last strategy. to on our forward, partner-led is to and our for the the from ensure the transitioned XXXX are down double

We reflected our and in partner that line be to our expect to continue bottom will synergies monetize discover relationships results. ultimately

recent investments shared revenues and into years and Qumu through made of predictable to the in several become partners over XXXX. end strategic the million us our a increasingly company year for we scaling revenue business and evident promoting growth by network of as X-year I this collaborators. to profitable The vision now platform the in transformation into and is CEO our most later past $XX dispatch, have my benefits of focus achieve our As XXXX. reoccurring will outwardly The in on position our

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

Operator

question our will Group. from with Rhee Van [Operator Instructions] Hallum come Craig first Capital Jeff And

Daniel Kapke

This is Daniel for on Jeff.

Just on a pipeline. question the quick

the you're or in give X, as how X versus, curious, the about any Just with evolved partnership, and pipeline has opportunities can scope ago. us sense months talking size if you say,

Rose Bentley

invest Yes, that. we're what around about Thank the in answer to we enterprise video. as think the to wanting to you Yes, pipeline, as brands see for certainly. we enterprise, Happy we and question. explore explore continue the building

we of see. continuing we expectation consuming grown enterprise had video still a When our and ago, over pipeline the that continuing back pipeline, are we're if pipeline that So the XX%. to year we reflect even XXXX. even And over to months, for the us at set look success QX just you in up X and evolve growing that see into past and

Daniel Kapke

on my versus recurring the Excuse me. Got on are here, X that just between notes revenues then -- And splits lost sorry. second.

you on moving Just thinking versus subscription we just broader about us be of sense should subscription give broadly? growth, sort forward, growth on can a how

Rose Bentley

certainly. Yes,

growth, been -- be subscription So will SaaS for growth you the the overall priority like growth look us. at us, focus has if subscription for it in just #X

been So business. we're SaaS, of think we're and it's transformation, because those seeing if you it but cloud converting we've going into the decline, subscription-based through

would expect a subscription We growth. decline I business it So moderately to to as been. see don't expect the grow based in that has

see XXXX if -- grow to least the into maintain, through that at expect end year We to not the and moderately of XXXX.

Operator

question I'm have out We the another it here, pulling queue. just

Palani, from Group. JMN Vivekanandhan Our Research next question Investment comes from

Vivekanandhan Palani

behalf on about have Vivek of Mike questions I a I'm of here. Latimore. couple

guys seen one have is sales The you concerns? first microeconomic any given elongation

Rose Bentley

one. I'll take that

digital to to continuing priority see are transformation the be a we for So enterprise.

reasons of are the our it's there. the that see are the of strong, incumbent so of continuing We is one rates redemption to renewal also power

the to forward, the in market as acknowledge, I I behave we slow, all at enterprises we not as in be acknowledging think but to we planning. uncertainty current to of expect, some of very we I But are going needs XXXX as and and start seeing today, some demand. to XXXX point start and in I into think, derisked and will we the that our being the examine this start the the smart said, are reflect stabilization due this think to watching how uncertainty market

Vivekanandhan Palani

cases question what the Great. been in My is biggest second have demand? use

Rose Bentley

yes. Oh,

our short-form customer that, because user-generated of more consuming XXX% there's consumption video. content and right, it's customers right, video our their of lot consume base, or asynchronously. far, of own. And so by Across content content asynchronous So creating a because video, they're on

a to course, especially consume events workday global understanding size a you're customers people trying of blended see, becoming expect are less people content I to that when live because consume and communication. and But it the leverage decent live our the and to is want continue less manage of that We of to changing think that's audiences. and they lot when

Vivekanandhan Palani

last one with can Great. question -- And am have hello, audible? I me. you I give

Rose Bentley

you are. Yes, hear you. can I

Vivekanandhan Palani

providers? question off SaaS The software see to is your third-party customers Yes. you on-premise on did any churn last

Rose Bentley

question? Did see we on-premise churn? any the Is that

Vivekanandhan Palani

premise on services. Yes, software

For services. on-premise software

Rose Bentley

Yes.

into revenue coming we revenue. So year, maintenance forecast in to a decline in on-prem the and continue that that

transformation we the that continue to embrace not is continue answer to on-prem do to see potentially choose We or stay and customers That to either yes. another move the cloud. So or go the choose we see the business on on-premise, as short the vendor. transform cloud digital with something is to

Operator

Thank you much the session. Company's time, questions. conclude your so question-and-answer for this we'll At

If please at have that's question team a Qumu's taken, contact you not QUMU@gatewayir.com. IR

back the her turn Bentley for closing to like I'd call Now to over remarks. Ms.

Rose Bentley

Thanks, this Curt, and everyone, you, call joining thank our afternoon. for

to Back dispatches Curt. LinkedIn you, already, at I If underway for CEO receive follow done so you to encourage haven't better on over here on my Qumu. ongoing initiatives up-to-date Twitter to you or Qumu color automatically

Operator

Thank the Conference and end -- you the Quarter for Call. joining us conference today. Qumu's Third This will

disconnect. You may now

Qumu (QUMU) 30 Oct 222022 Q3 Earnings call transcript