Qumu Reports 10% Increase in Quarterly SaaS
Revenue and SaaS Annual Recurring Revenue for Second Quarter
2022
Company Reiterated its SaaS Growth Expectations
for 2022 and 2023
Qumu Corporation (Nasdaq: QUMU), a leading provider of
cloud-based enterprise video technology, today reported financial
results for the second quarter ended June 30, 2022.
Q2 2022 and Recent Operational Highlights
- Selected by Proprep for video management and distribution of
e-learning Content to STEM students worldwide
- Named a Top Purpose-Built Streaming Platform by Wainhouse
Research
- Won fourth consecutive Stevie® Award in 2022 for Customer
Service
Q2 2022 Financial Highlights
- Software as a Service (SaaS) revenue increased 10% to $2.8
million, compared to $2.5 million in Q2 2021
- SaaS Annual Recurring Revenue (SaaS ARR) grew to $13.3 million,
up 10% year-over-year
- SaaS revenue accounted for 54% of total revenue, compared to
54% in Q1 2022 and 43% in Q2 2021
- Gross margin improved to 75.4%, compared to 71.5% for Q1 2022
and 73.6% for Q2 2021
- Operating expenses decreased 15% sequentially and 27%
year-over-year
- Net cash used in operating activities decreased to $3.7
million, an improvement compared to $4.9 million in Q1 2022 and
$6.1 million in Q2 2021
- Solid balance sheet with $6.4 million of cash and cash
equivalents and no debt at quarter end
- Company reiterated its expectation that SaaS recurring revenue
will comprise approximately 65% of its overall recurring revenue
mix by the end of 2022, with targeted growth to approximately 75%
of recurring revenue mix by the end of 2023
Q2 2022 Key Performance Indicators
- SaaS revenue accounted for 61% of recurring revenue, up from
60% in Q1 2022 and 49% in Q2 2021
- SaaS revenue accounted for 54% of total revenue, compared to
54% in Q1 2022 and 43% in Q2 2021
- SaaS ARR increased to $13.3 million from $13.0 million in Q1
2022 and $12.2 million in Q2 2021
- SaaS customer retention metrics:
- Gross Retention Rate (GRR): 90% at end of Q2 2022 compared to
81% at end of Q2 2021
- Net Retention Rate (NRR): 103% at end of Q2 2022 compared to
144% at end of Q2 2021
Management Commentary
“Our strong results for the second quarter and first half of
2022 demonstrate the continued execution of our strategy to grow
our cloud business and scale our SaaS revenue base,” said Qumu
President and CEO Rose Bentley. “Highlighting our success in Q2 was
a 10% increase in both SaaS revenue and SaaS ARR, putting us well
on track to achieve our SaaS growth targets for 2022 and 2023. Our
cloud transformation initiatives and increased SaaS contributions
also helped produce a robust gross margin of 75.4% in Q2, a level
we expect to build on as SaaS becomes a greater portion of our
overall topline.”
Qumu CFO Tom Krueger commented: “Qumu’s improving financial
performance and strong SaaS KPIs reflect the increasing success and
momentum of our partner-led sales strategy as well as our current
customers growing their investment. In fact, in Q2 we added new
customers at twice the rate of Q1 and more than 80% of new bookings
in the first half of 2022 were sourced or influenced by our
partners. Additionally, over the last 12 months, our customers have
added 51% more authorized users to our platform, and we have seen
an increase of asynchronous video views increase by over 30%. The
growing investment from our customers is exemplified by our average
annual contract value increasing by 474% in the first half of 2022.
Triple-digit growth in contract size demonstrates our ability to
deliver greater value through additional use cases when we acquire
new customers. As we continue to grow our cloud business, build our
partner ecosystem, and further transition to a purely
subscription-based model, we expect our financial performance to
improve throughout 2022 and beyond.”
Bentley continued: “Overall, Qumu’s transformation is well
underway, and our past investments are yielding strong returns. Our
business is optimized and now hitting its stride. Our plan is
supported by a solid cash position and available resources that
provide sufficient runway to execute our growth strategy. We
entered Q3 with a record pipeline of opportunities that we are
converting at an escalating pace. Our partner-led sales strategy is
gaining momentum and creating repeatable sales motions that give us
confidence in our ability to secure a record number of new logos in
2022.
“Looking ahead we continue to expect our SaaS recurring revenue
as a percentage of our total recurring revenue to be at least 65%
by the end of 2022 and 75% by the end of 2023. We also continue to
expect to crossover to cash flow breakeven in 2023. We remain
confident Qumu will emerge as a 100% subscription company operating
at scale, benefiting from high-margin recurring revenues, growing
cash flow and adjusted EBITDA and net income profitability.”
Second Quarter 2022 Financial Results
Revenue for Q2 2022 was $5.1 million, compared to $4.9 million
in Q1 2022 and $5.9 million in Q2 2021. The year-over-year decrease
was due to the company’s strategic shift away from perpetual
license sales, and the related maintenance revenue, and toward SaaS
sales.
Service revenue for Q2 2022 was $4.9 million, compared to $4.8
million in Q1 2022 and $5.7 million in Q2 2021. The year-over-year
decrease resulted from customer contracts sunsetting, which
impacted maintenance revenue associated with the company’s
on-premise solution. Subscription and support revenue, which is
included in service revenue and comprises the company's SaaS
revenue, was $2.8 million for Q2 2022, compared to $2.7 million in
Q1 2022 and $2.5 million in Q2 2021. The company expects
subscription revenue will continue to grow as Qumu executes on its
cloud transformation strategy.
Gross margin in Q2 2022 was 75.4%, compared to gross margin of
71.5% for Q1 2022 and 73.6% for Q2 2021. The gross margin
percentage improved due primarily to better margins on SaaS revenue
recognized in Q2 2022 compared to Q1 2022 and to a higher
percentage of SaaS revenue contributing to the overall sales mix
compared to Q2 2021.
Net loss in Q2 2022 totaled $(2.6) million, or $(0.15) loss per
basic and diluted share. This compares to net loss of $(4.6)
million, or $(0.26) loss per basic and diluted share, for Q1 2022
and net loss of $(4.3) million, or $(0.24) loss per basic share and
$(0.30) loss per diluted share, in Q2 2021.
Adjusted EBITDA loss, a non-GAAP measure, in Q2 2022 was $(3.1)
million, compared to $(4.1) million in Q1 2022 and $(4.5) million
in Q2 2021.
As of June 30, 2022, the company had cash and cash equivalents
of $6.4 million.
Business Outlook
Qumu provides guidance based on current market conditions and
expectations. The company emphasizes that its guidance is subject
to various important cautionary factors referenced in the section
entitled “Forward-Looking Statements” below, including risks and
uncertainties associated with the company’s strategic plan,
transition to SaaS recurring revenue through channel partners, and
the COVID-19 pandemic, such as trends in distributed remote and
hybrid work impacting enterprise technology adoption and
procurement.
To give insight into the progress of Qumu’s SaaS business
transformation, the company provides a business outlook based on
the percentage of recurring revenue comprised of SaaS revenue.
Qumu’s management reiterated its expectation that SaaS recurring
revenue will comprise approximately 65% of its overall recurring
revenue mix by the end of 2022, with targeted growth to
approximately 75% of recurring revenue mix by the end of 2023.
Conference Call
Qumu executive management will host a conference call today
(August 10, 2022) at 4:30 p.m. Eastern time. Register here to join
the conference call:
https://register.vevent.com/register/BIb213b80569034b4e953e038a9d64a33f.
Investors can also access a webcast of the live conference call
by linking through the investor relations section of the Qumu
website at https://ir.qumu.com. The webcast will be archived on
Qumu’s website for one year.
Non-GAAP Information
To supplement the company's condensed consolidated financial
statements presented on a GAAP basis, the company uses Adjusted
EBITDA, a non-GAAP measure, which excludes certain items from net
loss, a GAAP measure. Adjusted EBITDA excludes items related to
interest income and expense, the impact of income-based taxes,
depreciation and amortization, stock-based compensation, change in
fair value of derivative and warrant liabilities, foreign currency
gains and losses, Employee Retention Credit income and other
non-operating income and expenses.
The company uses both GAAP and non-GAAP measures when planning,
monitoring, and evaluating the company’s performance. The company
believes that Adjusted EBITDA is useful to investors because it
provides supplemental information that allows investors to review
the company's results of operations from the same perspective as
management and the company's board of directors. Non-GAAP results
are presented for supplemental informational purposes only for
understanding our operating results. The non-GAAP results should
not be considered a substitute for financial information presented
in accordance with generally accepted accounting principles and may
be different from non-GAAP measures used by other companies.
See the attached Supplemental Financial Information for a
reconciliation of net loss, a GAAP measure, to Adjusted EBITDA, a
non-GAAP measure, for the three and six months ended June 30, 2022
and 2021.
About Qumu
Qumu (Nasdaq: QUMU) is a leading provider of best-in-class tools
to create, manage, secure, distribute and measure the success of
live and on-demand video for the enterprise. The Qumu Cloud
platform enables global organizations to drive human engagement,
increase access to and insights from video use, and modernize the
workplace by providing a more efficient and effective way to share
knowledge.
Forward-Looking Statements
This press release contains forward-looking statements that are
made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Any statements contained
in this press release that are not statements of historical fact
may be deemed to be forward-looking statements. Without limiting
the foregoing, words such as “may,” “will,” “expect,” “believe,”
“anticipate,” or “estimate” or comparable terminology are intended
to identify forward-looking statements. Forward-looking statements
are subject to various risks and uncertainties that could cause
actual results to differ materially from those expressed or implied
in such statements.
Such forward-looking statements include, for example, statements
about: the success of go-to-market strategies or the other
initiatives in the company’s strategic plan, the company's ability
to continue as a going concern, the expected use and adoption of
video in the enterprise, the ability to obtain additional capital
as needed, the ability to attract and retain necessary personnel,
the impact of COVID-19 on the use and adoption of video in the
enterprise, the company’s future revenue and operating performance,
cash balances, future product mix or the timing of recognition of
revenue, or the demand for the company’s products or software. The
risks and uncertainties that could cause actual results to differ
materially from those expressed or implied in these forward-looking
statements include the risk factors described in the company’s
Annual Report on Form 10-K for the year ended December 31, 2021,
and other factors set forth in the company’s filings with the
Securities and Exchange Commission.
The forward-looking statements in this press release speak only
as of the date of this press release. Except as required by law,
Qumu assumes no obligation to update or revise these
forward-looking statements for any reason, even if new information
becomes available in the future, except as required by law.
QUMU CORPORATION
Condensed Consolidated Statements of
Operations
(unaudited - in thousands, except per
share data)
Three Months Ended
June 30,
Six Months Ended
June 30,
2022
2021
2022
2021
Revenues:
Software licenses and appliances
$
278
$
138
$
389
$
246
Service
4,853
5,729
9,682
11,441
Total revenues
5,131
5,867
10,071
11,687
Cost of revenues:
Software licenses and appliances
48
63
79
127
Service
1,212
1,486
2,591
2,989
Total cost of revenues
1,260
1,549
2,670
3,116
Gross profit
3,871
4,318
7,401
8,571
Operating expenses:
Research and development
1,930
2,184
3,755
4,214
Sales and marketing
2,687
5,173
6,495
9,649
General and administrative
2,251
2,142
4,694
4,669
Amortization of purchased intangibles
153
163
309
325
Total operating expenses
7,021
9,662
15,253
18,857
Operating loss
(3,150
)
(5,344
)
(7,852
)
(10,286
)
Other income (expense):
Employee Retention Credit income
649
—
649
—
Interest expense, net
(39
)
(15
)
(109
)
(69
)
Decrease in fair value of derivative
liability
—
—
—
37
Decrease in fair value of warrant
liability
51
1,018
117
1,375
Other, net
(156
)
(89
)
(184
)
(27
)
Total other income (expense), net
505
914
473
1,316
Loss before income taxes
(2,645
)
(4,430
)
(7,379
)
(8,970
)
Income tax benefit
(23
)
(109
)
(117
)
(199
)
Net loss
$
(2,622
)
$
(4,321
)
$
(7,262
)
$
(8,771
)
Net loss per share – basic:
Net loss per share – basic
$
(0.15
)
$
(0.24
)
$
(0.40
)
$
(0.51
)
Weighted average shares outstanding –
basic
18,072
17,741
18,042
17,096
Net loss per share – diluted:
Loss attributable to common
shareholders
$
(2,622
)
$
(5,339
)
$
(7,262
)
$
(10,146
)
Net loss per share – diluted
$
(0.15
)
$
(0.30
)
$
(0.40
)
$
(0.59
)
Weighted average shares outstanding –
diluted
18,072
17,899
18,042
17,299
QUMU CORPORATION
Condensed Consolidated Balance
Sheets
(unaudited - in thousands)
June 30,
December 31,
Assets
2022
2021
Current assets:
Cash and cash equivalents
$
6,435
$
20,563
Receivables, net
3,467
3,709
Contract assets
676
446
Income taxes receivable
658
556
Other receivable
649
—
Prepaid expenses and other current
assets
2,094
2,184
Total current assets
13,979
27,458
Property and equipment, net
222
337
Right of use assets – operating leases
45
146
Intangible assets, net
1,049
1,388
Goodwill
6,639
7,388
Deferred income taxes, non-current
17
17
Other assets, non-current
320
362
Total assets
$
22,271
$
37,096
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and other accrued
liabilities
$
3,521
$
2,742
Accrued compensation
1,380
1,725
Deferred revenue
9,604
10,862
Operating lease liabilities
192
597
Financing obligations
152
5,502
Warrant liability
684
801
Total current liabilities
15,533
22,229
Long-term liabilities:
Deferred revenue, non-current
1,102
1,507
Income taxes payable, non-current
641
630
Operating lease liabilities,
non-current
—
21
Financing obligations, non-current
87
113
Total long-term liabilities
1,830
2,271
Total liabilities
17,363
24,500
Stockholders’ equity:
Common stock
179
178
Additional paid-in capital
105,785
105,655
Accumulated deficit
(97,955
)
(90,693
)
Accumulated other comprehensive loss
(3,101
)
(2,544
)
Total stockholders’ equity
4,908
12,596
Total liabilities and stockholders’
equity
$
22,271
$
37,096
QUMU CORPORATION
Condensed Consolidated Statements of
Cash Flows
(unaudited - in thousands)
Six Months Ended
June 30,
2022
2021
Operating activities:
Net loss
$
(7,262
)
$
(8,771
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
427
492
Loss on disposal of property and
equipment
—
3
Stock-based compensation
150
1,155
Accretion of debt discount and issuance
costs
27
33
Decrease in fair value of derivative
liability
—
(37
)
Decrease in fair value of warrant
liability
(117
)
(1,375
)
Changes in operating assets and
liabilities:
Receivables
138
1,802
Contract assets
(230
)
238
Income taxes receivable / payable
(152
)
221
Other receivable
(649
)
—
Prepaid expenses and other assets
151
(105
)
Accounts payable and other accrued
liabilities
658
(242
)
Accrued compensation
(322
)
(1,305
)
Deferred revenue
(1,360
)
(3,724
)
Net cash used in operating activities
(8,541
)
(11,615
)
Investing activities:
Purchases of property and equipment
(8
)
(216
)
Net cash used in investing activities
(8
)
(216
)
Financing activities:
Principal payments on line of credit
(5,000
)
(1,840
)
Proceeds from line of credit
—
1,840
Principal payments on term loan
—
(1,833
)
Payment for line of credit issuance
costs
(86
)
—
Principal payments on financing
obligations
(376
)
(219
)
Net proceeds from common stock
issuance
—
23,085
Proceeds from issuance of common stock
under employee stock plans
—
226
Common stock repurchases to settle
employee withholding liability
(19
)
(6
)
Net cash provided by (used in) financing
activities
(5,481
)
21,253
Effect of exchange rate changes on
cash
(98
)
28
Net increase (decrease) in cash and cash
equivalents
(14,128
)
9,450
Cash and cash equivalents, beginning of
period
20,563
11,878
Cash and cash equivalents, end of
period
$
6,435
$
21,328
QUMU CORPORATION
Supplemental Financial
Information
(unaudited - in thousands)
A summary of revenue is as follows:
Three Months Ended
June 30,
Six Months Ended
June 30,
2022
2021
2022
2021
Software licenses and appliances
$
278
$
138
$
389
$
246
Service
Subscription and support
2,764
2,512
5,419
4,827
Maintenance and support
1,769
2,570
3,562
5,234
Subscription, maintenance and support
4,533
5,082
8,981
10,061
Professional services and other
320
647
701
1,380
Total service
4,853
5,729
9,682
11,441
Total revenue
$
5,131
$
5,867
$
10,071
$
11,687
A reconciliation from GAAP results to
Adjusted EBITDA is as follows:
Three Months Ended
June 30,
Six Months Ended
June 30,
2022
2021
2022
2021
Net loss
$
(2,622
)
$
(4,321
)
$
(7,262
)
$
(8,771
)
Interest expense, net
39
15
109
69
Income tax benefit
(23
)
(109
)
(117
)
(199
)
Depreciation and amortization expense:
Depreciation and amortization in operating
expenses
58
59
118
113
Total depreciation and amortization
expense
58
59
118
113
Amortization of intangibles included in
cost of revenues
—
27
—
54
Amortization of intangibles included in
operating expenses
153
163
309
325
Total amortization of intangibles
expense
153
190
309
379
Total depreciation and amortization
expense
211
249
427
492
EBITDA
(2,395
)
(4,166
)
(6,843
)
(8,409
)
Employee Retention Credit income
(649
)
—
(649
)
—
Decrease in fair value of derivative
liability
—
—
—
(37
)
Decrease in fair value of warrant
liability
(51
)
(1,018
)
(117
)
(1,375
)
Other expense (income), net
156
89
184
27
Stock-based compensation expense:
Stock-based compensation included in cost
of revenues
17
17
36
32
Stock-based compensation included in
operating expenses
(223
)
549
114
1,123
Total stock-based compensation expense
(206
)
566
150
1,155
Adjusted EBITDA
$
(3,145
)
$
(4,529
)
$
(7,275
)
$
(8,639
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220810005556/en/
Company Contact: Tom Krueger Chief Financial Officer Qumu
Corporation Tom.Krueger@qumu.com +1.612.638.9100
Investor Contact: Matt Glover or Tom Colton Gateway
Investor Relations QUMU@gatewayir.com +1.949.574.3860
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