Company reports record gross margins, growing revenues and second consecutive quarter of positive adjusted EBITDA
Conference Call Wednesday, May 1, 2019 at 10:00 a.m. ET
Minneapolis, April 30, 2019 – Qumu Corporation (NASDAQ: QUMU) today reported financial results for the first quarter ended March 31, 2019. The Company reported first quarter revenue of $7.1 million, a net loss of $(950,000) and adjusted EBITDA, a non-GAAP measure, of $210,000, ending the quarter with cash of $8.6 million.
“Qumu has delivered a strong start to 2019, building on momentum from the second half of 2018. Given our growing revenue, strong sales pipeline, solid balance sheet and positive adjusted EBITDA for three of the last four quarters, we have a high degree of confidence in our 2019 annual financial guidance,” said Vern Hanzlik, Qumu’s President and CEO. “Convergence of the Enterprise Video market with the Web and Video Conferencing market traditionally dominated by firms like Zoom, Cisco, Microsoft, and Google is happening as we speak—and Qumu is directly benefiting from it.”
For the three months ended March 31, 2019, revenue was $7.1 million, compared to $4.8 million last year, and net loss was $(950,000), or $(0.10) per diluted share, compared to $(4.5) million, or $(0.48) per diluted share, for the first quarter 2018. For the three months ended March 31, 2019, adjusted EBITDA was $210,000, compared to adjusted EBITDA of $(2.9) million for the first quarter 2018.
Other Financial Highlights
- Operating loss decreased by $3.3 million in the three months ended March 31, 2019, compared to corresponding 2018 period.
- Gross margin for the first quarter 2019 was 78.3%, compared to 56.3% for first quarter 2018.
- Cash and cash equivalents totaled $8.6 million as of March 31, 2019, compared to $8.6 million as of December 31, 2018.
- Software license and appliance revenue was $1.0 million and $451,000 for the three months ended March 31, 2019 and 2018, respectively.
- Subscription, maintenance and support revenue was $5.6 million and $4.0 million for the three months ended March 31, 2019 and 2018, respectively.
- Operating expenses decreased $503,000 during the three months ended March 31, 2019, compared to the corresponding 2018 period, reflecting the impact of the Company’s improved operating efficiencies.
The Company is reiterating its financial guidance for 2019:
- Annual contract value bookings growth is expected to be 20% to 25% in 2019 compared to 2018.
- Revenue for 2019 is expected to be approximately $27 million. Gross margin percentage is expected to be in the high 60s to low 70s.
- Net loss for 2019 is expected to be approximately $(5.1) million. Adjusted EBITDA for 2019 is expected to be approximately $(1.5) million. Forecasted adjusted EBITDA for 2019 excludes forecasted interest expense of approximately $1.0 million, income tax benefit of approximately $(0.2) million, depreciation expense of approximately $0.3 million, amortization of acquired intangible assets of approximately $1.2 million, stock-based compensation of approximately $0.9 million, and increase in warrant liability of approximately $0.4 million.
The Company has scheduled a conference call and webcast to review its first quarter 2019 results tomorrow, May 1, 2019 at 10:00 a.m. Eastern Time. The dial-in number for the conference call is 877-456-6914 for domestic participants and 929-387-3794 for international participants. Investors can also access a webcast of the live conference call by linking through the Investor Relations section of the Qumu website. Webcasts will be archived on Qumu’s website.
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 income (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 warrant liabilities, foreign currency gains and losses, 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 months ended March 31, 2019 and 2018.
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. Such forward-looking statements include, for example, statements about: the Company’s future revenue and operating performance, cash balances, future product mix or the timing of recognition of revenue and the demand for the Company’s products or software. The statements made by the Company are based upon management’s current expectations and are subject to certain risks and uncertainties that could cause the actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include the risk factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 and other factors set forth in the Company’s filings with the Securities and Exchange Commission.
Qumu (Nasdaq: QUMU) is the leading provider of a best-in-class platform to create, manage, secure, distribute and measure the success of live and on demand video for the intelligent enterprise. Backed by the most trusted and experienced team in the industry, the Qumu platform enables global organizations to drive employee engagement, increase access to video, and modernize the workplace by providing a more efficient and effective way to share knowledge.
Chief Financial Officer
Investor Relations Contact:
Matt Glover or Tom Colton
Gateway Investor Relations