Q4 2020 Qumu Corp Earnings Call

Ladies and gentlemen, thank you for standing by and welcome to <unk> fourth quarter 2020 earnings Conference call. At this time all participants are in a 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 one on your telephone.

If you require any further assistance please press star zero.

I would now like to introduce your host.

<unk> Chief Financial Officer, Mr. Dave Ristow, sorry, you may begin.

Thank you Paul and good afternoon, everyone. After the market closed today combo issued a press release announcing its fiscal results for the fourth quarter and full year ended December 31, 2020, a copy of which is available on the Investor Relations section of the company's website or financial results are consistent with the preliminary fourth quarter and.

2020 fiscal year end results, we issued on January 21st of 2021.

During today's call, we 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 on penetration with customers. These statements are forward looking and involve a number of risks and uncertainties that could cause actual.

Our results to differ materially. Please note that these forward looking statements reflect management's opinions only as of the date on this call on 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 please refer to <unk> SEC filings specifically it's formed.

10-K, and 10-Q and financial results press release for a more detailed description of the 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 Companys press release and filings with the SEC both of which are posted on the company's website you will find additional disclosures related to this non-GAAP measure, including a reconciliation of this measure with its comparable GAAP measure non.

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 <unk> performance.

I would like to remind everybody on this call is being recorded and it will be made available for replay via a link available on the Investor Relations section of come on as website for.

For those of you who are already not aware the company released a full read fully redesigned investor relations website late last year, making it easier to standard formed about all investor relations activities on news events of criminals. Among the new features of the web site is an upgraded email notification system that provides subscribers with real time press releases.

As in our SEC filing notifications.

We're interested in following our progress on a more user friendly manner I encourage you to go to our website at IR dot come on Dot com sign up for the alerts you will have the option to receive press releases as well as annual and quarterly reports insider transactions and proxy information.

On the call with me today is our president and CEO T J Kennedy.

After I review the financial results for the fourth quarter and full year T. J will discuss our operational progress.

Within the context of our strategic roadmap afterwards, he will provide some color around our business and the financial outlook for 2021.

At a high level, our financial performance for the quarter and full year 2020 reflects our ability to successfully grow subscription annual recurring revenue or <unk> and recurring revenue.

Our key tenants to our long term strategic roadmap.

More specifically, we grew our high margin subscription a R. R 29% to a record $11 $6 million in 2020, which has established a solid foundation for predictable growth in the years ahead.

Now, let's look at the results in more detail.

Revenue for the fourth quarter of 2020 was $6 9 million compared to $6 $2 million in Q4 of last year the increase.

On revenue was primarily due to higher subscription maintenance and support revenue as well as higher subscription bookings for.

For the full year 2020 revenue increased 15% to $29 1 million from $25 $4 million on the same period last year.

The increase was primarily due to a large customer order received at the end of the first quarter of 2020.

During the first fourth quarter, we added nine new cloud customers, one on premise customer and converted one enterprise customer to cloud.

For the full year 2020, we have secured 33, new customers and appointments and comparison, we secured 20, new customers on deployments for all of 2019. This is a 65% increase year over year.

Subscription maintenance and support revenue for the fourth quarter of 2020 increased 23% to $5 4 million from $4 $4 million in Q4 of last year.

The 23% increase was driven by new cloud and term deals signed in 2020 with minimal cloud usage overage fees.

Cloud usage continues to grow with significant increase is being driven by new use cases and enterprises driving their daily operations through the efficient and effective use of video.

For the full year of 2020 subscription maintenance and support revenue increased 7% to $19 $6 million from $18 $2 million for the full year 2019 the.

The 2020 increase was partially offset by the recognition of large term license renewals in 2019 that were absent in the comparable period of 2020.

At quarter end, our SaaS gross renewal rate for <unk> was 94% compared to 90% at the end of Q4 2019 on.

Our net renewal rate or <unk> was 128% compared to 115% at the end of Q4 2019, and lastly, our dollar value retention was 103% compared to 90% at the end of Q4 2019.

Deferred revenue at quarter end was $16 $4 million up 3% from the prior quarter and up 42% from Q4 of last year.

Looking into our margins gross margins for Q4, 2020 was 75, 7% up from 68, 8% in Q4 of last year.

The increase was primarily due to a favorable sales mix and an increase in higher margin SaaS revenue for.

For the full year of 2020 gross margin was 71, 3% compared to 72, 2% for the full year 2019.

So the slight decrease was primarily due to a higher mix of appliance revenue in 2020, which generally carries lower margins.

Turning to our profitability metrics net loss for the fourth quarter of 2020 was $4 million or 29 cents loss per basic and diluted share. This compares to a $1 $7 million loss or <unk> 14 cents loss per basic share on our 17 cents loss per diluted.

Sure in the fourth quarter of last year.

Net loss in the fourth quarter of 2020 was negatively impacted by $1 1 million in noncash expense associated with an increase in the warrant liability fair value, primarily due to the company's higher stock price in the fourth quarter of 2020.

The company incurred approximately $917000 and noncash office lease charges related to the enactment of a remote work policy and surrender of three office spaces as well as associated with the initial implementation of our long term strategic roadmap and higher commissions.

For the full year of 2020 net loss was $9 2 million or 68.

Loss per basic share and a 70 cent loss per diluted share compared to a net loss of 16 six for $6 4 million or 62 loss per basic share and 63 loss per diluted share for the full year 2019.

Net loss for 2020 was favorably impacted by higher gross profit driven by higher revenue in 2020, and lower interest expense given our repayment of our term loan in the fourth quarter of 2019.

These favorable impacts were offset in 2020 by the items previously noted and $664000 in severance charges $1.8 million, resulting from the unfavorable impact of changes in the warrant liability fair value and $1.6 million on transaction expense associated.

With her now terminated merger with Blood Center core adjusted.

Adjusted EBITDA loss, a non-GAAP metric for the fourth quarter, 2020, total $1 $1 million compared to a loss of $1 $2 million in Q4 of last year for the full year 2020, adjusted EBITDA loss totaled $2 3 million.

This was an improvement from the loss of $2 9 million for the full year 2019.

Quarter end, we had a healthy liquidity position with $11 9 million in cash and cash equivalents, which was up $500000 from 11 $4 million at September 30 of 2020 on.

On January 29 of this year, we solidified our balance sheet by issuing $3 7 million shares and raising approximately $23 $1 million in an underwritten public offering.

Including the net proceeds from the offering cash and cash equivalents totaled $32.6 million as of January 31, 2021.

Earlier in January we also closed the $10 million revolving credit facility with Wells Fargo borrowed $1 $8 million to repay the face amount of the note payable to <unk> holdings.

Also occurring in January was held capital exercise of approximately 76000.

Warrants all this total 314000 warrants, which have an exercise price of $2 80 per share.

With all of that said switching to outlook as we've talked about on prior calls we will provide revenue guidance based on current market conditions and expectations, including the unknown financial impact of COVID-19 will have on economies and enterprises around the world.

Based on our Q4 financial results and pipeline of business, we expect at least 20% revenue growth for total revenue of approximately $35 million in 2021.

As we continue to expand our SaaS sales force and marketing efforts, our operating expenses will increase significantly in the first half of 2021 as compared to the first half of 2020.

And we expect our revenue growth rate to accelerate significantly in the second half of 2021 as compared to the first half of 2021.

With that for more detailed analysis of our financial results. Please refer to today's earnings release as well as our 10-K, which we plan to file by March nine.

This completes the financial summary, and I'll now turn the call over to T. J to discuss our operational progress and more on our outlook.

Thanks, Dave and good afternoon.

Pleasure to have this opportunity to speak with you all today.

As you just heard in so many words from our financial performance.

<unk> was a big year for us in what was a transformative period for our business and the rest of the world. We finished the year strong and our positioning to move in 2021 to achieve our long term growth goals.

Due to COVID-19, and the new global work from home reality 2020 was the year that mainstream the use of video for businesses of all sizes.

A recent Gartner survey revealed that 82% of company leaders plan to allow employees to work remotely some of the time and nearly half 47% said they plan to allow employees to work remotely full time going forward.

A massive increase in the number of virtual meetings brought on by the change to the way we now work.

Necessitated initially by the pandemic forced enterprises of all sizes to double down on implementing a broader use of video conferencing tools to replace the office conference room and allow hybrid and remote work.

We believe that in 2020, one this trend of permanently remote and hybrid work will continue.

On the enterprise use of video will grow.

With this newly captured video content. Another dilemma was created which is how we keep track store and manage it effectively.

How can the enterprise make the best use of video to save time to add value for global customers and employees.

Enterprises in 'twenty, and 'twenty, one need to secure store and leverage this content better.

To better manage and grow their business.

Oh usage will become more sophisticated in 2021 and employees will leverage both synchronous and asynchronous video to be more efficient and effective in how they conduct their business.

Cubo has been purpose built to provide the global enterprise with secure scalable live and on demand video content.

We are uniquely suited to extend this value now and into the future.

Okay.

<unk> operates a business in the enterprise collaboration technology space supporting organizations I believe remote work treble minimization and Virtualized events are both sustainable and the new normal.

We help organizations of all sizes maintain business continuity as they implement work at home policies restrict travel and Virtualized events and we also extend the functionality of tools like zoom Webex, Microsoft teams and streams by adding massive scale enterprise grade security comprehensive video asked.

Debt management and self service broadcasting.

Our technology is leveraged by organizations rely on on demand video use cases, including executive webcasting product launches customer training wellness communications and employee on boarding enterprises.

Enterprises can manage content and portals or channels to target communications for specific audiences.

And our quarter. We believe it is important for <unk> to be one of the first companies on Earth space to acknowledged this fundamental change in workplace dynamic and leverage the technology, we provide to make it happen.

In December we announced virtualization of the entire <unk> workforce eliminated dedicated office space as part of our transformation initiative, which we call our work from wherever forever policy.

Part of this effort, we entered flexible shared work space arrangements in London in Minneapolis, and finalized our shared office workspace arrangement in Hyderabad, India.

We also expanded our companywide home office program to optimize employee effectiveness for the benefit of all <unk> employees and our global customer base.

This kind of change requires rethinking what is needed for employee success, including providing the necessary connection points with processes and technologies.

This means leveraging our best in class SaaS tools for collaboration infrastructure and operations such as our cloud video platform, which enables our employees to use video on all the ways that we work.

We changed the way we work to include not just live video, but the regular daily use of a synchronous video on demand.

Asynchronous video will allow employees to communicate more on different time zones around the world and move faster.

We are providing all full time employees with a work at home stipend and have implemented local team meet ups meet ups and social gatherings when permitted based on local public health considerations and guidelines. We've also implemented new employee feedback and visibility tools to enhance collaboration and allow remote teams to share real time progress on major projects.

<unk> has created a culture that is truly boundary lists and our employees are thriving and helping to move scale.

In parallel we also began executing on our strategic roadmap to significantly expand our revenue generating team across both the Americas and Europe ex.

Executing on our strategic roadmap and achieving our aggressive growth plans demand that we have the freedom to quickly bring on world class talent from a global resource pool.

Our work from wherever wherever policy has given us the flexibility to hire the best people unconstrained by geography or relocation obstacles and at the same time facilitate greater employee diversity and inclusion.

Operating flexible working arrangements are now a significant differentiator when competing for high end talent and we're excited about the possibilities on the recruiting front.

We have been impressed by how important this proactive approach and flexibility has been in getting top and talented resources to join the Khumbu cheap.

As part of this change we have now brought on board, our new Chief revenue Officer, Lori Goldstein.

Lauren comes to <unk> Street from being a high growth CRO and sales thought leader, who knows how to grow teams that will build more success with closing deals and building revenue.

Her experience with building World class channels will also be put to very good use of coupons.

Lori Goldstein as the growth leader with 25 years of experience scaling organizations and delivering success to some of the world's most respected and innovative companies, including Adobe Airbnb Altera ex American Express GE, Google HP, IBM, JP Morgan Chase Linkedin, Microsoft Salesforce and tableau.

In her role as Chief revenue Officer Officer at annuities, a demand market and business growth services formed firm Loren helped transform enterprise organizations through strategic sales and marketing programs that build stronger brands better customer experiences and more sustainable revenue growth. She also brings two decades of experience building out partner sales.

<unk> with enterprise class marketing technology organizations, like Adobe and Oracle.

We also believe our work from wherever forever policies. The socially responsible thing to do for our employees on their health for the well being of the planet and for outside stakeholders and their investments in our future. When are the primary objectives is to set a great example for other organizations when it comes to remote work and I'm incredibly proud to say that we've achieved our objective.

On a remote work policy underscores Cumulus foundation of values on our focus on environmental social societal and governance programs or ESG.

Our ESG framework is built on best practices to guide our decision, making on a daily basis as part of this we've established a diversity equity and inclusion committee that is led by our Chief commercial officer, and Chief Counsel, Jason Kurt We're incredibly proud of the initiatives we have in place in these areas, which we think bodes well for our stakeholders as we continue to grow.

From this point I'd like to spend the rest of my prepared remarks, and review of our strategic roadmap execution. The goal of which is to position <unk> as a more focused cloud first organization driving improved high margin recurring revenues.

As Dave previously mentioned the proceeds from the successful offering and working capital facility. We completed in January have provided the resources to accelerate the key initiatives within our long term strategic roadmap and keep us well capitalized for other high value opportunities.

Now, let's talk about some of those.

Some of these opportunities and related strategic initiatives, we have three key areas of strategic focus on our business. Today. All three are focused on providing increasing value to our customers and prospects, which will ultimately drive long term profitable growth agreement.

These local strategies, the prioritization and elevation of our SaaS offering the extension of our addressable market and the evolution of our go to market motion.

Prioritizing the elevating khumbu in the cloud starting with our first major initiative, which is price.

<unk> and.

<unk> Kumar <unk>.

Key driver of our strong financial performance in Q4, and 2020 was the record cloud video usage on our platform, which exceeded 32 million monthly viewers during Q4.

This jump represents more than 880% increase in platform usage from Q4 of 2019.

Tumulus obsessed with helping our global customers use video to powder remote collaboration and engage more effectively with employees customers and partners.

As Dave mentioned during Q4, we added eight new cloud customers and converted one large enterprise customer to our cloud platform for the year, we have five on premise to cloud conversions, demonstrating our success expanding our cloud and hybrid customer base. It's important to note that cloud conversions will add RR for total bookings.

But revenue will be split between subscription and maintenance.

As for our business model continues to transform to SaaS keep in mind that while we expect overall double digit revenue growth. The on premises portion will plateau, while the high value on higher margin SaaS revenue stream accelerates. This crossover is happening now.

We are also focused on research and development on growing our cloud product line and investing in the growing cloud platform that continues to see more demand each quarter, we continue to add capability as well as integration to other cloud platforms that drive interoperability and ease of use for our customers.

Developing our partner ecosystem is a critical element in our SaaS strategy the value we deliver to our customers will be extended through product churn on distribution partnerships as we move forward.

We have leadership in place to help us establish and build strategic partnerships on a global Alliance program I'm encouraged to report that we have already implemented a new partnership with social life.

The video creation and live streaming platform for business.

Social lives will help cumulus customers create more high quality video across the enterprise partners like social life.

We entered into an agreement with last month will drive even more engagement leveraging both synchronous and asynchronous video due to the ease of capture and creating video in concert with Cumulus ability to securely distribute and manage all video that is being created.

We'll continue to identify partners to drive differentiated customer value in 2021.

Our team's consistent and successful execution over the past few months on our strategic roadmap has created significant momentum heading into 2021 looking forward to move continues to benefit from the massive shift to remote work and the increased need for large scale streaming video on demand and video content management capabilities.

As the reliable leader of cloud based enterprise video technology for organizations of all sizes, we expect to play a leading role in the ongoing transformation for how organizations communicate.

Those that have followed our company for a while know Cumulus historically targeted very large enterprise companies with 50000 to 300000 plus employees.

As part of our strategic plan, we are now, making a concerted effort to expand into the mid market with offerings for small and medium sized enterprises. These enterprises can range from 1000 to 50000 employees, we are making to move the we're making the khumbu brand more approachable to mid market firms are now implementing a new go to market approach to target small and medium.

Size enterprises as well as the very large enterprises.

We think the needs of these enterprises have grown in the technology and economics makes sense for this push in 2021.

While we are extending the value offered to the market through our mid market offerings. We will also maintain and grow our leadership position with the very large global enterprises and Q4, we had a major win with Dow chemical one of the largest chemical producers with a presence in about 160 countries and 54000 people worldwide. Our team secured a new contract with Dow chemical for a cloud platform.

<unk> enterprise video as a service that will be migrating to a cloud platform over the next couple of quarters.

We've also brought on new leadership and our marketing team that has a tremendous background in SaaS and they are focused on a new account based marketing strategy that will specifically target growing more large enterprise accounts. We believe these efforts are critical to grow new large enterprise accounts based on our previous success, our use cases, and our ability to truly solve key business processes.

<unk> for large businesses.

I'm encouraged to report that our sales and marketing restructuring is complete.

Since December we've been actively building a roster of global sales reps for the enterprise and mid enterprise targets and have this week brought on board a new Chief revenue Officer, Lori Goldstein, Lauren is a proven leader with expertise in aligning corporate processes and messages to the needs of the market and in creating focused account base new logo acquisition Laurence Jim will be responsible for driving a significant increase.

And <unk> this year.

And to growing our sales organization of our strategic plan involved in investing in our cloud business to take advantage of current market trends and customer needs.

Our enterprise video as a service platform was specifically designed with the smaller enterprises also in mind, allowing users to quickly customize on annual cloud video subscription based on parameters, such as storage and bandwidth needs distribution requirements authenticated user limits and more these organizations appreciate that they can easily access a benefit you could was best in class.

<unk> platform for creating managing and delivering live and on demand video at scale.

Just like in sales or marketing hiring is ramping up as well and we've made great strides expanding our resources reach and leadership to that end, we recently appointed Jim <unk> as our new Chief marketing Officer.

Gen leads our marketing efforts and strategic investments to accelerate momentum in the booming video marketplace.

Focus CMO with 20 years, plus driving business to business technology.

Market marketing performance for companies like <unk>, ignite Plex systems, and Polycom Jen brings exactly the talent and expertise that <unk> needs to execute our aggressive growth plan.

Jen is building a high performance team that will partner with Lori Goldstein, and our chief customer success Officer, Chad Sears to drive <unk> go to market growth.

Over the last several months Chad is unified and harmonized our professional services customer success customer support product management and account teams.

We are developing strong leadership in each of these areas and are aggressively hiring to provide the support and value to our global customers have always counted on from <unk> as we continue to grow.

Success within this group and our laser focus on retention has enabled us so far to grow air at a double digit rate and improve our SaaS customer retention rates, including 103% dollar value retention, 94% gross renewal rate and 128% net renewal rate.

All three metrics improved compared to the prior quarter again, demonstrating the mission critical role that our solutions fill for our customers and more and more instances are healthy gross and net renewal rates increases combined with our growing high margin subscription here are are setting the course for sustainable growth and high margin SaaS recurring revenues.

Customers continue to select to move because they require more than a simple small scaled video conferencing or team collaboration solution to a tree cheap true business continuity.

Humans enables businesses to grow and thrive in all work environments can.

<unk> provides reliable enterprise grade infrastructure that supports our enterprise and enterprise is permanent shift to a new global work from anywhere environment.

Our customers choose to move because we have a highly scalable platform a repressed a robust enterprise on demand capability World class professional services and support.

As well as market leading security.

The major shift has positioned <unk> to deliver greater value for existing customers and to increase our footprint in a massive global market.

Enterprises are just undergone a crash course using video for the four most individual and team meetings and many are ready to take it to the next level.

Synchronous video on demand and streaming from anywhere at higher quality and scale, while better managing large libraries of video content.

We believe that 2021 is a year that enterprises focused on implementing robust video content management video on demand as well as larger scale solutions as they transition to work from anywhere or permanent hybrid approach.

Favorable market dynamics have us on track to achieve our financial and operational objectives. In 2021 are bolstered balance sheet has enabled us to lean into this opportunity with the right team infrastructure and resources to meet this growing demand and capitalize on the massive opportunity.

Which we believe will occur for the next several years, we are confident that the investments. We have made will accelerate the evolution of <unk> subscription business model and expansion into new market opportunities.

Longer term, we believe our building momentum.

On the successful execution of our strategic roadmap will translate to improved high margin recurring revenues sustained adjusted EBITDA profitability and ultimately net income profitability.

That concludes our prepared remarks.

We will now open it up to questions. Paul Please provide the appropriate instructions.

No problem, Sir I'd remind you on ladies and gentlemen, if you have a question. Please press star one on your telephone keypad again its star one on your telephone keypad. Please standby, while we compile the Q&A roster.

Our first question is from the line of Mike Latimore with Northland Capital. Your line is open.

Great Yeah, thanks, very much congratulations on the great year here guys.

Yes.

Thanks, Mike.

In terms of the SaaS air growth looks like on accelerated to 29% year over year from 18% I guess.

Can you provide any more color on that type of acceleration and then.

Does that sort of 29% is something that we should think about you know maybe going forward here as well.

Dave you want to go out and take that.

Absolutely.

Mike on a year over year basis are we wound up adding.

The most customers more customers than we added in the prior year.

We reported significant growth there, let me describe the 65% increase year over year. So.

Big driver there is really that the new customer adds it was also bolstered by essentially conversions of our on premise into the cloud based solution, which is feeding our subscription revenue growth on a go forward basis, I would actually suggest that embedded within our year over year annual revenue guidance.

We would be achieving at least that and likely more what's essentially the SaaS sales pods that we're putting together.

Okay, Great and then the deferred revenue grew quite a bit 42% I think year over year.

Is that tied to this the SaaS growth or is it kind of timing of maintenance renewals.

It's a combination of both some of it is certainly tied to what we're doing with the subscription revenue growth. There's also a component that will play out in terms of the timing of when things are invoice and effectively the run off there as well.

Got it and then some.

You're putting a bigger operating income kind of the go to market.

Strategy around small business can you just elaborate a little bit on kind of your small business go to market strategies here on this one.

TJ do you want me to take that or would you like to draw.

Sure I'm happy to.

So you know really like we've tried to look at it as small enterprise because we're not going to be going after necessarily small business, but the reality of small enterprise for us is kind of a net 123 4000 employee range and mid market enterprise for US is 5000 to 50000 employees.

So in the mid market, we're definitely building SaaS sales pods that are very focused on communicating with them and driving that that sales process on the smaller side, we're driving it more through our online ability and e-commerce to be able to directly sell to them with less motion.

We're also driving that with some of our account based marketing campaigns that are targeting both small and medium enterprises, which we did not target before in addition to the large enterprise where are our largest focuses today.

Got it got it I guess just one more for me in terms of the SAA.

SaaS bookings in the quarter were there sort of.

A variety of use cases are there was was there a couple that were a little more.

On the normal just kind of on and maybe touch on the use cases that we're driving them both of them.

Great question I think at one I'll give you a couple of just anecdotes here so.

One of them was actually a conversion from on premise in the cloud and it's about some some of those bookings do relate to the.

The reality that folks are recognizing that the cloud is an important place to be and we've got a customer is actually now running both solution sets.

Well talk about that conversion because they're they're they're deploying bolt on.

Also in connection with without it comes down to the use cases behind it.

So fundamentally and this is where we've got great customer stories that.

We're essentially equipping our new sales teams with.

Debt debt communicate everything from within health care.

We may have customers are using are about six use cases are seven or eight or nine use cases reality is is when we go out and engage with our customers and go across the health care sector. For example, Mike we're finding that we've got 30 to 35 years cases, when we aggregate all of the unique use cases across across that.

Those platforms. So what we're doing is actually capturing these use cases, aggregating them and helping existing customers to not only deploy the solution set more broadly within their existing enterprise, but this is great great great feeder for essentially all of the sales on the SaaS sales teams that we've got because it doesn't really mean.

Matter to us what that point of entry is at the end of the day, we've got a point solution that solves a video pain today that can drive real business impact and so we'll start with just about any use case.

<unk> that Pam pinpoint to move them forward, but then it's really down to our customer success organization to deal with that expansion and it's T. J noted we've got 800 plus percent increased usage in the cloud based platform. So these get leveraged out both for new and expansion of the existing base and it truly is.

Great question, let's use case revenue.

Alright, great. Thanks, a lot good luck this year.

Thank you.

Thank you.

Once again, ladies and gentlemen, if you have a question. Please press star one on your telephone keypad.

Our next question is from Jeff Van <unk> with Craig Hallum. Your line is open.

Great. Thanks for taking my questions guys. A couple from me I wanted to follow up on Mike's question. There on the on the new customers with respect to the cloud customers. What was the average size of those new customers. If you want to quote it in seats or however, you want to sort of frame it in in sort of the spread as well as the distribution of the sizes, but just just curious what size deals were embedded in there and then also.

You know not quite a use case question, but as you look at you know sort of connectors are you seeing particular drivers from from the zoom or other key platforms that are really driving sales those new cloud customers this quarter.

Yeah, So Jeff our use cases are quite broad. So we did we did have within essentially the bookings in the quarter across the the nine net new the one on premise and the enterprise it's been very consistent with the Asps that we've shared.

So between when we're looking at and remember we've got such a 5050 thousand on what we're calling mid enterprise those asp's were ranging from between 35000 and 150000 a week.

We did have that the on premise sale are those sales are typically $150000 plus.

And then when we're dealing with the existing cloud customer that was actually a fairly significant customer that we've had for a.

Many years, who wound up converting over to cloud, but we're deploying new use cases for cloud within that enterprise and eventually though will come off the on premise and move over to the SaaS space and that's that's larger than our typical on premise either.

Sure sure.

That's helpful. And then maybe just speak to the pipeline of immuno T. J you came in and in man and made up a pretty remarkable amount of change already you're dropping a lot of new talent in.

So I realize there's some on fairness embedded in the question, but I'm wondering if you can talk to the pipeline and any observations a of of some of your early efforts showing up at the front end of that pipeline and then B just talk to the breadth depth composition of the pipeline.

Any any call outs there.

Yeah, I mean, a couple of things happened at the end of Q4 and go into the beginning of Q1, where you know first of all we put in place some really important rigor around sales force and around the opportunities is also the focus on.

Our cloud solution versus on Prem and so there was a lot of clean up that occurred as part of bringing in new leadership into sales and marketing.

If you really go through that pipeline really drive out any and all opportunities that would present in it and make it a very real pipeline to some degree break it down before you build it back up.

We're now starting to hear in Q1 buildup of account based marketing campaigns to drive an increase that pipeline and those are just underway on the <unk>.

Last month, as well and those new opportunities are now being fed into what I would call is a much more clean and road and focused on SaaS pipeline going forward for us. So very much it's about getting it are focused in driving the new opportunities that are really in the SaaS space for us and so the good news is I think what what do we.

Can say more on a qualitative level is I think that the opportunities that we now have coming in and adding to that or are more high quality SaaS opportunities, both large enterprise and mid enterprise and that's been the focus of where we're going I'm not going to report out on any pipeline coverage today I think as we go forward and we build this this this drive between marketing and sales going.

Forward, we'll have more to talk about.

Coming quarters, but definitely a new focus and drive to make sure that we really do.

Drive through the data and have data driven metrics on on the opportunities that we're pursuing and also going after them on a very aggressive way, we're using a lot of video as part of our sales routines and we're doing a lot of review and coaching from the sales side to our regional sales leaders as they are out there and this is going to drive better results for us in 2021.

Yeah helpful last one for me just on the EBITDA side as.

As you're mapping out the you obviously, you've given the growth you you've made it clear youre investing front and backend is the revenue growth at this point just any anything you can share in terms of where you think that breakeven crossover is on EBITDA.

Yes.

We're looking at is probably $11 million to $12 million in revenue on we're looking at essentially the adjusted EBITDA crossover to be probably first half of 2022.

Okay.

Okay got it thank you guys.

Thanks, Jeff.

Once again, ladies and gentlemen, if you have a question. Please press star one on your telephone keypad. If you have a follow up please press star one at this time.

Please stand by while we check if there are additional questions.

We have a follow up from the line of Mr. Mike Latimore with Northland Capital. Your line is open.

Great. Yeah. Thanks, So I guess I'll kind of come more on here.

In terms of the customer success team I.

I think youre going to add 15 to 20 people on that group, but I guess, what's the status of that and.

As your new CRO.

Good day.

Change outs change that goal or is it pretty pretty excited on here.

So a couple of price on that Mike on the CRO side with our sales hiring very.

Very much a significantly underway and continuing to round out that team here in Q1.

And the hiring has been mostly on target on a little bit behind but pretty pretty close to where we want to be on the customer success side, we're continuing to hire into the customer success management manager roles. Some additional hiring still needed there I would say, it's slightly behind where we're at on the sales side, which is further ahead in pretty much on target at this.

Yeah.

Okay got it.

And then I guess just back on the books.

Bookings and pipeline.

We see a lot of.

Focus on virtual events. This year, whether it's you know hosting conferences virtually or CEO is doing virtual events of their employees I guess.

Can you talk a little bit about virtual events as a driver of kind of the bookings and pipeline.

Sure a lot of virtual events for us had been happening through the enterprise sales motion is one of the things. We saw really improve later in the year or was that a lot of our customers who used to move quite often for our many internal events are also now using it for more and more external events and whether that's external and its health care.

Companies that are also working with patients and communicating in the community or whether it's on the finance side with their key finance customers that are holding webinars and holding events, we see that continuing to grow and that has continued to grow with their webinar and events that are on trusted platforms that have to work for these very large events. So we have definitely seen a growth.

And events kind of quarter over quarter and these events are very much driven to drive both internal and external purposes for the business, whether it's training and learning on the internal side or communication or on the external side, it's actually hosting a large events that have replaced what would traditionally a lot of in person events, but I would say.

Even in the future. We believe are some events go back to in person there they're going to maintain this hybrid element, where theres still a live streaming that and they're still leveraging those events with video on demand. After the fact and that has continued to grow in enterprises of not just grown in the number of enterprises that do it but also the amount of video streaming and video events.

They hold has continued to increase.

And Mike I'd also add debt.

Along those same line I mean, one of our core differentiator is so to the extent that there are a couple of customer and they've got to come on platform and if theyre going outside to an on 24 or whatnot that content oftentimes isn't in our centrally managed repository its not an asset that they get to work with down the road and as a result folks who can't attend line.

<unk> are trying to go look for a length somewhere so the ability to repurpose those assets and deploy them very efficiently that has been a part of just our the our sales teams.

Just entry point, so where they where they need to manage that and bring all content together.

It's a great talking point for us and we're doing every single day.

Dozens of live events, some of which are in turn on some of which are our broadcast we don't have visibility great visibility on what's happening on the on premise just because of the nature of that it is on premise to cloud based platforms, we can see that activity.

And definitely no debt at the driver to effectively this platform usage.

Okay. I guess just last one I have in my notes here that in the past if somebody went from our customer went from maintenance to SaaS.

25% to 40% uplift in I guess its annual value.

Still the way to think about it.

It is as we go ahead and quote those out that is exactly what we intend to do not every customer moves in that direction like for instance, we've got somebody who is actually taking it on as a second platform.

They will come in a different on the on premise.

In its initial and sensor life. So if they're just picking up that they've got a big bulky on premise platform. For example on when they were adding on cloud and they don't plan to complete that migration over until let's say 24 months later than the way that that plays out as we will go in for the specific business unit business purpose size it.

Right for them and then we give them a path to bring everything over.

On subsequent periods when they're ready to do so.

Okay great.

Great. Thanks, a lot.

Okay.

Mike.

Once again, ladies and gentlemen, if you have a question. Please press star one on your telephone keypad, we have a follow up from the line of Jeff Van <unk> with Craig Hallum. Your line is open.

Yeah, just one quick follow up for me I think on the retention front a man on thanks for the retention metrics always very helpful. But I'd be curious you know on.

On the on the key metrics or SaaS net retention.

You know maybe the dollar retention as well what what I'm, how should we think about that trending through you know through 'twenty. One I mean, obviously, you've got a lot of you know.

<unk> uses a lot of things are playing out and they were just want to make sure we're sort of level setting how do you see those numbers rolling through the year.

Yeah, I think at the headline Jeff from a dollar value retention on our goal is to take essentially what's been running probably 90% to 93% and with the creation of our customer success organization and the things that we're doing to to cross pollinate effectively use cases and get stickier with the platform we envisioned in TARP.

<unk> are targeting essentially bringing that to 94 plus percent.

At the headline and then as you look at the SaaS related metrics.

The ability to go ahead, and this really does drive back to essentially our SaaS model it but it doesn't really matter or a point of entry. If you look at essentially how how a bowtie funnel works for our SaaS organization, you know, 60% to 70% of LTV comes out of that post initial sale sort of approach and that's exactly what we're building with the <unk>.

Customer success and account management organization, the playbook that we've built and the training that we're deploying to back the new personnel.

Mhm.

Okay fair enough great. Thanks.

Once again, ladies and gentlemen, if you have a question or follow up please press star one at this time.

Once again star one on your telephone keypad.

As I am showing no further questions at this time I would now like to turn the conference back to Mr. T J Kennedy President and CEO cash.

Thanks, Paul appreciate it and thank you everyone for joining our call. This afternoon. We appreciate your continued support as we execute on our growth plan and scale to move to the next level I look forward to speaking with you again very soon.

Ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect have a great day and stay safe.

Okay.

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On <unk>.

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