Qumu Corporation

Hello, and welcome to Kumu's second quarter 2022 conference call. My name is Chris, and I'll be your operator this afternoon. Joining us at Kumu's, President and CEO Rose Bentley, CFO Tom Kruger, and Matt Glover from Gateway Investor Relations. At this time, all participant lines are in listen-only mode. After the speaker presentation, there'll be a question and answer session. To ask a question during that session, you'll need to press star 1 1

your telephone i would now like to turn the call over to matt glover sir you may begin thanks chris 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 2022 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 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 as a result of new information, future events, or otherwise, except as required by law. Please refer to Kumu's SEC filings, specifically its Form 10Q 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 this non-GAAP financial 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 is being recorded and will be made available for replay via a link available in the investor relations section of Kumu's website. Now I'd like to turn the call over to Kumu's President and CEO, Rose Bentley. Rose?

Thank you, Matt, and good afternoon, everyone. We appreciate you taking the time to join our second quarter conference call. To begin, we remain incredibly encouraged by the continued progress we are making in our transformation to SaaS. The strategic investments we've made over the last 18 months and our team's ability to execute against that plan are driving strong operational and financial results. As we continue to grow our cloud business, build our partner ecosystem, and further transition to a purely subscription-based model, We expect our performance to improve throughout the balance of 2022 and beyond. Highlighting our success in the quarter was a 10% increase in both SAS revenue and SAS ARR. Our SAS revenue as a percentage of total reoccurring revenue in Q2 accounted for 61%, up from 60% in the prior quarter, and 49% in Q2 last year. This is in line with our goals and has us well on track to achieve our SaaS growth targets for 2022 and 2023. Our cloud transformation initiatives and increased SaaS contributions also helped produce a gross margin of 75.4 during Q2, which we expect to continue as SaaS becomes a greater portion of our overall top line. Along with our transformation to the cloud being on target, we are progressing and marching towards cash flow breakeven. We used $4.9 million and $3.7 million of cash for operating activities in Q1 and Q2, respectively. We expect cash used in operating activities to come down significantly in Q3 and Q4, ensuring we have the runway we need to complete our transformation to the cloud. Now, we have a lot to cover today, so before I go any further into updates from operations, I'll now turn it over to our CFO, Tom Kruger, to provide more detail on our Q2 financial performance and key SAS metrics. Tom?