Qumu Corporation

Welcome to Kumu's second quarter 2021 conference call. My name is Nika and I will be your operator this afternoon. Joining us is Kumu's President and CEO, TJ Kennedy, CFO Dave Bristow, and Matt Glover from Gateway Investor Relations. The results we will review today further enhance our pre-announcement shared on June 29, 2021. At this time, all participant lines are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to turn the call over to Matt Glover. Sir, you may begin.

Thanks, Operator, and good afternoon, everyone. After the market closed today, Kumu issued a press release announcing its financial results for the second quarter ended June 30th, 2021, a copy of which is available in the investor relations section of the company's website. During today's call, management will make certain statements with respect to the company's expected financial results, the impact of COVID-19 on the use and adoption of video in the enterprise, the company's go-to-market strategy, and efforts designed to increase the company's traction and penetration with customers. These statements are forward-looking and involve a number of risks and uncertainties that could cause actual results to differ materially. Please note that these forward-looking statements reflect management's opinions only as of the date of this call, and the company undertakes no obligation to publicly update or revise any forward-looking statements, whether a result of new information, future events, or otherwise, except as required by law. Please refer to CUMU's SEC filings, specifically its Form 10-K and financial results press release, for a more detailed description of risk factors that may affect the company's results. During the call today, management will discuss adjusted EBITDA, a non-GAAP financial measure. In the company's press release and filings with the SEC, both of which are posted on the company's website, you will find additional disclosures regarding the non-GAAP measure, including a reconciliation of this measure with its comparable GAAP measure. Non-GAAP financial measures are not intended to be considered in isolation from, substitute for, or superior to GAAP results. The company encourages you to consider all measures when analyzing its performance. I would like to remind everyone that this call will be recorded and made available for replay via a link available in the investor relations section of Kumu's website. Now I would like to turn the call over to Kumu's President and CEO, T.J. Kennedy. T.J.? ?

Thank you, Matt, and good afternoon, everyone. It's a pleasure to be speaking with you today. It has been just over a year since I joined as CEO, and a lot has happened in that time. Most importantly, we have made significant progress through the early stages of our company's ongoing transformation into a SaaS-first organization that is capable of generating robust and predictable long-term growth. Execution on our strategic roadmap has undoubtedly strengthened Kumu's position as a leader in cloud-first enterprise video, and jumpstarted our evolution towards becoming a subscription-first business. The work has not been without its challenges, and we still have much to do in order to realize our vision. As we shared in our second quarter preliminary results conference call on June 29th, our financial results were lower than expected, driven by longer-than-anticipated transitions and ramp-up periods with our organization, which has impacted our ability to achieve our overall revenue growth target for 2021 and pushed our growth inflection point into early 2022. On that recent call, we covered in great detail the challenges we experienced in Q2, specifically what happened, why it happened, and how we are addressing it. Let me first recap what happened and why. Then our CFO, Dave Risto, will walk you through our financial details for Q2, which as you may have seen in our earnings release today, we're largely in line with or a modest improvement over the preliminary ranges we previously reported. Afterwards, I will discuss our plans and key initiatives for the second half of the year. To be clear, our leadership team is absolutely committed to this transformation, and our board remains confident in our near and long-term business prospects and organizational sustainability, and we'll share why in just a few minutes. So what happened? At a high level, sales cycles in Q2 lagged our initial estimates. This delay was based in part on lengthy procurement timeframes, More specifically, indecision about timing for returning to a hybrid office environment and other key decisions on work location and technology. Furthermore, it took longer than expected to align our legacy sales force with our new SaaS-based value-driven sales process, and our new SaaS sales team were slower than expected. Given the nearly universal move to a remote work environment accelerated by the pandemic, we had estimated a quicker ramp in sales productivity than we recently experienced in selling to our enterprise customers. We initially modeled this process as a five to seven month time frame. However, in practice, we now believe the complete ramp for new sales professionals to reach full productivity will likely take around 12 months. The elongated ramp due to the complexity of the sale, individual enablement, marketing implementation, and procurement time cycles. We also realized that the new SaaS resources in our customer success team took longer to hire than our sales and marketing personnel. In turn, the extended onboarding market conditions and resulting sales efforts caused our bookings velocity and new logo acquisition to be lower than originally modeled. Our initial new logo demand plan called for 25% inbound marketing and 75% outbound marketing. While we put a great deal of effort towards enhancing our updated enablement messaging, Launching new products, as well as expanding our go-to-market motions, we didn't gain the anticipated traction from our outbound marketing efforts, and looking back, we likely would have been better to focus on inbound marketing strategies. Inbound marketing is a critical element required to pull in more prospects, increase brand exposure, and create more brand authority. Nevertheless, the key learnings from these challenges have helped us to refocus our approach and prompted us to implement key adjustments in our business planning for the second half of 2021. Before I get into those plans, I'm going to hand the call over to Dave to cover the financials. Dave.