Qumu (QUMU) Misses Q4 EPS by 6c, Revenues Miss

Qumu (NASDAQ: QUMU) reported Q4 EPS of ($0.29), $0.06 worse than the analyst estimate of ($0.23). Revenue for the quarter came in at $6.88 million versus the consensus estimate of $6.92 million.

Fourth Quarter 2020 Financial Results

• Revenue for Q4 2020 was $6.9 million compared to $6.2 million for Q4 2019. The increase in revenue was primarily due to higher subscription, maintenance, and support revenue as well as higher subscription bookings.
• Subscription, maintenance, and support revenue for Q4 2020 increased 23% to $5.4 million from $4.4 million in Q4 2019, which was driven by new cloud and term license deals signed in 2020 as well as an increase in cloud usage overages. Cloud usage continues to grow with significant increases being driven by new use cases and enterprises driving daily operations through the efficient use of video.
• Gross margin in Q4 2020 was 75.7% compared to 68.8% for Q4 2019. The gross margin percentage increase was primarily due to a favorable sales mix and an increase in higher-margin SaaS revenue.
• Net loss in Q4 2020 was $(4.0) million, or $(0.29) loss per basic and diluted share, compared to $(1.7) million, or $(0.14) loss per basic share and $(0.17) loss per diluted share, for Q4 2019. Net loss for Q4 2020 was negatively impacted by $1.1 million in non-cash expense associated with an increase in the warrant liability fair value primarily due to the company’s higher stock price in the fourth quarter 2020. The company incurred approximately $917,000 in non-cash office lease costs related to the enactment of the company’s remote work policy and surrender of office space, expenses associated with the initial implementation of initiatives within the company’s long-term strategic roadmap, and higher commissions.
• Adjusted EBITDA loss, a non-GAAP measure, in Q4 2020 was $(1.1) million, compared to an adjusted EBITDA loss of $(1.2) million for Q4 2019.
• Cash and cash equivalents totaled $11.9 million as of December 31, 2020, an increase of $1.2 million from December 31, 2019. On January 29, 2021, the company’s underwritten public offering closed, raising approximately $23.1 million. As of January 31, 2021, the company’s cash and cash equivalents totaled $32.6 million with $1.8 million outstanding on the company’s credit facility. The proceeds from the offering will allow the company to accelerate many key initiatives within its long-term strategic roadmap and keep it well-positioned to execute against its cloud-first vision.

“In a transformative period for our business and the world, we finished the year strong and are well-positioned to meet our long-term growth goals,” said Qumu President and CEO TJ Kennedy. “Our improved quarterly and annual financial results demonstrate traction that is driving high-margin subscription ARR, which increased 29% to a record $11.6 million in 2020. Growing this valuable revenue base is a key priority within our long-term strategic roadmap, which is designed to position Qumu as a leader in cloud-first enterprise video. Combined with our healthy increase in gross and net renewal rates, we are setting the course for sustainable growth and high-margin, recurring SaaS revenues. Our team has been consistently executing the long-term strategic roadmap and delivering improved performance heading into 2021.

“Qumu continues to benefit from the continuing shift to remote and permanent hybrid work, and the increasing need for businesses to manage large scale streaming video and video content libraries. As a leading provider of cloud-based enterprise video technology, we expect to play a vital role in the ongoing transformation for how organizations communicate and work.

“These market dynamics have been favorable to Qumu and put us on track to achieve our financial and operational objectives in 2021. We are confident that the investments we have made in our long-term strategic roadmap will accelerate the evolution of Qumu’s subscription business model and expansion into new market opportunities. Longer term, we believe our building momentum and the successful execution of our strategic roadmap will translate to improved, high-margin long term recurring revenues.”

For earnings history and earnings-related data on Qumu (QUMU) click here.

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