Qumu Corporation

Welcome to CUMU fourth quarter and full year 2021 conference call. My name is Dilem, and I'll be your operator this afternoon. Joining us is CUMU's president and CEO, T.J. Kennedy, CFO Tom Kruger, COO Rose Bentley, and Matt Glover from Gateway Investor Relations. At this time, all participants are on a listen-only mode. After the speaker 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, Dylan, and good afternoon, everyone. After the market closed today, Kumu issued a press release announcing its financial results for the fourth quarter and year ended December 31, 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 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 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 as 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'll find additional disclosures regarding this 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, a 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 is being recorded and will be made available for replay via a link available in the investor relations section site of Kumu's website. Now we'll turn the call over to Kumu's president and CEO, TJ Kennedy. TJ.

Thank you, Matt, and good afternoon to everyone on the call. Thank you for joining us. From a high level, our results for the quarter and the year demonstrate the continued execution of our strategic roadmap, which emphasizes growing our cloud business and scaling our SAS revenue base. Highlighting the success is the 35% SAS revenue growth we delivered in 2021, bringing our total SAS revenue to a record $10.2 million at year end. Our SAS revenue as a percentage of total revenue has grown from 18% of total revenue in Q2 of 2020 to 48% of total revenue for Q4 2021. This is a dramatic shift of our business to SAS in just six quarters. SAS revenue accounted for 56% of our total recurring revenue, exceeding our guidance for 2021 and giving us encouraging momentum as we begin 2022. SAS annual recurring revenue also grew by 16% in 2021, bringing the compounded annual growth rate for SAS ARR over the last two years to 40%, which we expect to serve as a strong benchmark going forward. Our SaaS revenue and ARR growth in Q4 and 2021 clearly demonstrate that our SaaS transformation is underway. As expected, our overall top line was down for the year, which was a result of certain legacy on-prem contracts sunsetting as we focus our attention on higher margin and recurring revenue deals. Our partner-led sales motions and customer success efforts are gaining momentum and driving new logos, deeper relationships, higher retention, and cloud conversions. In 2021, we completed five on-prem to SaaS conversions, and we expect to complete a similar number this year. Partner-generated revenue grew 25% to 2020, compared to 2020, and accounted for more than 30% of our total revenue in 2021. Looking at our costs, the optimization measures we implemented in the second half of 2021 have made us a more nimble and efficient organization. reflected by strong margins and reduced operating expenses, which we expect to maintain throughout the course of this year. That commentary provides a nice segue to introduce our new CFO, Tom Kruger, who joined Kumu last December. In less than four months, Tom has already made a marked impact on our finance organization and has helped to augment our ongoing evolution into a SaaS-first organization. For those that haven't had the pleasure to get to know Tom, he is a seasoned finance leader with more than 20 years of experience working with leading SaaS-centric and technology companies, including Coros, Meltwater, Salesforce, and Sun Microsystems. Prior to Kumu, he was acting CFO and VP of Finance for Coros, a $200 million SaaS-based customer engagement software company. Prior to Coros, he led FP&A for Meltwater, a $165 million SaaS-based social media monitoring business. And with that introduction as a background, I'll now turn it over to Tom to discuss our financial results for the fourth quarter and full year 2021. Tom.