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Qumu on the Comeback Trail?

The Wainhouse Research Blog

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on Unified Communications & Collaboration


Qumu on the Comeback Trail?

By: -
1 Aug 2018

Qumu is showing its first glimmers of a comeback.

The enterprise streaming platform vendor this week reported $5.2 million in contract bookings for the second quarter of 2018, nearly doubling the bookings reported during the same period a year earlier.

Likewise, software license and appliance revenue for the company more than tripled over the prior year, reaching $2.9 million in sales and up from $900,000 during the same time last year.

The results represent a second dose of good news for a company that had been encountering significant financial struggles in recent years.

Last month, the company received $9.6 million from the sale of its investment in BriefCam – a developer of technologies used in analyzing raw security video footage. The cash infusion allowed Qumu to pay off more than $6.4 million in debt and replenish its cash war chest. The company now reports that it has $7.3 million in cash on-hand as of July 20.

“Our plan for success is working,” said Qumu CEO Vern Hanzlik in a call with analysts this week.

Certainly, it’s an improvement for a Qumu that had faced a bleak financial landscape at the end of 2017. Last year, the company lost more than $11 million for the second straight year while seeing year-over-year revenues decline more than 10% to a total of $28.2 million for 2017. In the fourth quarter of 2017, Qumu had also lost a key customer that had been anticipated to generate $3.2 million in revenues for the company in 2018.

The increase in sales bookings in the second quarter of 2018 represent long-term contract commitments by Qumu customers to pay monthly fees for hosted software and professional services. As such, it serves as a precursor to improved financial performance in the future. For all of 2018, Hanzlik said the company expects to boost bookings by 25% over 2017 levels.

The overall sales results for the second quarter still reflect some of Qumu’s financial challenges of the past. The company posted a net loss of $1.5 million on revenues of $7.6 million for the quarter ended June 30. During the same period in 2017, the company lost $2.6 million on revenues of $6.7 million.

The company now projects that it will generate $25 million in revenues for 2018 and generate a net loss of $3.5 million for the year.

What I Think: For better or worse, Qumu’s financial results are closely watched by its rivals in the enterprise streaming business. As a publicly traded company focusing on streaming behind the corporate firewall, it offers a rare look behind the curtain that provides insight into the financial prospects for companies selling enterprise-focused streaming solutions.

Strong financial results from Qumu may serve as an investor reference that makes it easier for start-ups and private solution developers to raise new rounds of financing. When Qumu performs poorly, streaming vendors are left to explain to prospective investors why their financial outcomes will be different than what is produced by Qumu.

The second quarter results provide hope that the Qumu story is solidifying and headed for an upward trajectory. Of particular interest to me from this week’s analyst call was Qumu’s open promotion of its integration with Microsoft’s Skype for Business platform. Essentially, in this type of deployment, Qumu’s back-end infrastructure serves as a gateway, helping support one-to-many distribution of video events originating from the Skype for Business application.

Qumu is not yet integrated with Microsoft Stream – Redmond’s dedicated streaming solution designed to be used in conjunction with the Office 365 suite. But, in the analyst call, Hanzlik did say that Qumu is looking at options for integrating with Microsoft Stream. This is a development that should be watched closely and could further fuel Qumu growth opportunities over time.