Qumu (NASDAQ:QUMU) slumped -18.44% to $3.14 after-hours following the announcement that it expects revenue to be flat or decrease modestly over the next several quarters as the company continues to develop its SaaS subscription business according to its strategic roadmap.
The company's has withdrawn its revenue guidance for 2021 issued on April 29, effective today due to its new business outlook approach.
According to preliminary results, Qumu expects Q2 revenue to range between $5.7M and $5.9M, compared to $9.3M in Q2 2020. Consensus revenue estimate is pegged at $6.59M.
Qumu President and CEO, TJ Kennedy said the company's new SaaS sales team ramped more slowly than expected and the legacy salesforce was not directly aligned with the future, SaaS-based sales process. The transition requires time which impacted the company's ability to grow revenue in Q2.
"While we are seeing, and expect to continue to see, positive trends in the growth of subscription revenues, we believe our overall revenue will be flat or decrease modestly over the next several quarters as we work to gain full sales traction in building the recurring SaaS revenue stream," commented Kennedy.
The company expects subscription, maintenance, and support revenue for Q2 2021 to be in the range of $4.9M to $5.1M, compared to $4.7M in the same period a year ago.
Gross margin is expected to be between 72.5% and 73.5%, compared to 68.5% in Q2 2020.
Adjusted EBITDA loss for Q2 is estimated to be between -$5.1M and -$4.8M, compared to +$809K a year ago.
Net loss is expected in the range of -$4.9M and -$4.3M, compared to net loss of -$692K in Q2 2020.
Outlook: Qumu said it is rightsizing its burn rate, slowed hiring and made other cost-cutting measures to ensure adequate working capital to support its longer transition to SaaS.
The company expects SaaS recurring revenue to comprise about 60% of its overall recurring revenue mix by the end of 2022, with targeted growth to about 70% by the end of 2023.
Complete financial results for Q2 will be released in late July.
Source: Press Release

SA Editor Ravikash Bakolia

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