Q1 2021 Qumu Corp Earnings Call

[music].

Welcome to kind of nice first quarter 2021 conference call. My name is actually in all of your operator this afternoon.

Joining us is fused president N T O P J Kennedy.

P S O Dave Ristow.

T O O loose eventually.

The Magic Rover from Gateway Investor Relations.

At this time all participants are in a listen only mode.

After the Speakers' presentation, there will be a question and answer session.

The 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 turn the call over to Matt Glover, Sir you may begin.

Thanks, Ashley and good afternoon, everyone from.

Market close today couple of issued a press release announcing its financial results for the first quarter ended March 31, 2021, a copy of which is available in the Investor Relations section of the company's web site.

On 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 comp.

Please 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.

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.

Refer to <unk> SEC filings, specifically form 10-K, and financial results press release for a more detailed description of the risk factors that may affect the companys 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 Companys website. You may 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 the 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 link available in the Investor Relations section of <unk> Web site now I would like to turn the call over to <unk> President and <unk>.

CEO T J Kennedy D J.

Thank you, Matt and good afternoon, everyone the pleasure to be here with you today.

So on the call with me is our CFO day, Bristow and our new CMO Rose Bentley.

<unk> joined US last month to lead our global operations and manage the day to day execution of our growth strategy.

<unk>, She led operations and go to market strategy for a $1 8 billion revenue analytics company before that Roseland global sales and customer success out of leading customer experience management company, which was acquired in 2019 Roses experience and leadership will be critical as we continue to win the hearts and minds of customers through innovative solutions.

That will shape the future of work sort of the next generation.

For today's call.

Kick off on the worldwide shift of hybrid and asynchronous work and then we'll cover of high level overview of our Q1 results and operational progress within the context of the strategic roadmap.

And then I will turn it over to Dave who will walk you through our detailed financial performance for Q1 and outlook for 2021.

Rose will then discuss select key operational initiatives.

Afterwards, I will speak to our growth initiatives on the next phase of our strategic roadmap.

The world changed in 2020.

We are not going back to the way work was before the pandemic.

Last year enterprises replace conference room meetings with video teleconference platforms as the first response to remote work.

We will prove that meetings could be held remotely and the <unk> no longer had to be in the same physical space.

To be effective.

This is just the beginning of the transformation of work.

2021 will mark the real change to work.

Work will now include a synchronous work and collaboration that is unencumbered by location.

And time zone.

The future of <unk> video at work is about more than just large scale synchronous live video but.

Also asynchronous video and what we accrue may refer to as video on demand.

The synchronous video opens up an entirely new dimension of asynchronous work that is more effective and efficient.

Asynchronous and synchronous work require of platforms like Hulu that offer both options that are seamlessly integrated together as well as enterprise security and enterprise video content management.

The market to address this new way of work is just starting to grow.

Adoption of new technologies by business is growing in 2021 and feel that we are just at the beginning of the significant change in the way enterprises around the world, We will think about and conduct work.

We are building the team to handle the significant shift in how technology will enable businesses to thrive and to facilitate <unk> growing with them as they go on their journey to work from wherever whenever.

We have updated our work from wherever approach just swapping whenever for forever as it as a foregone conclusion that work will not go back to exactly what we had before the pandemic.

Hybrid work the permanent work from wherever whenever is the change that is already underway.

Whenever truly highlights the fact that more and more work will be asynchronous.

In Q1 2021, we completed the second phase of our two year strategic road map.

Phase two was focused on implementing the key restructure required to strengthen <unk> position as the leader in cloud first enterprise video.

Transitioning us into SaaS first company.

As well as establishing the infrastructure for accelerated growth.

Some of you know phase one which commenced following my appointment last July.

Of all of the comprehensive evaluation of coolers business as well as the detailed assessment of our market positioning and industry dynamics, resulting in commodity strategic roadmap.

At a high level the evaluation of confirmed several things we believed to be important including koumas competitive strength and advantages, which are enabling hyper distributed engagement the.

Delivering the right content at any time and leveraging the power of enterprise video to drive measurable business impact.

We took these findings and develop a go forward two year strategic roadmap.

We initiated phase two of our plant in late Q4 of 2020 and concluded it at the end of Q1 2021.

Phase two involves strengthening the leadership team as well as bolstering our customer facing teams.

We have successfully restructured our sales and marketing teams and implemented a new customer success team.

We have now brought on board 27, new sales and marketing personnel of above our previous level of staffing, including an additional 70 customer success team members.

And our hiring we specifically targeted talent that showed the same excitement we feel about the future of video on the enterprise.

Sure the absolute commitment to the customer and demonstrated the drive to excel in their role is to generate the financial results for <unk> that should be a natural extension of the market opportunity and could lose competitive strengths and advantages.

With these changes in place to move us in a solid position to drive scale on sustainable growth into the future.

We plan to further expand our revenue generating teams to meet market demand and continue to drive our obsession with our customers every step of the way.

During this process, we had four key achievements I would like to highlight.

First we implemented a customer first and SaaS first approach across both of our organization and business model and we've refined our go to market strategy to better align with our strengths and the industry growth opportunities.

Second we leveraged our work from wherever whenever approach to strengthen our team by expanding our universe of available applicants and offering greater certainty to where our work would occur for employees and provide flexibility to our team.

This enabled us to bolster our go to market teams across the pipeline development direct sales sales channels customer success and geographic regions.

Third we solidified our balance sheet by adding $23 1 million in cash through an equity raise in January in force, we established ESG and diversity equity and inclusion initiatives and corporate social responsibility mandates that have been well received by our stakeholders.

Clearly we have accomplished a lot of relatively short period of time and I'm incredibly proud of our organization's unwavering commitment and dedication to driving demonstrable results and delivering on the computer vision.

Our focus during the first first quarter of this year was on building the infrastructure and aggregating the resources and talent to take to move to the next level of growth and performance.

This included hiring and on boarding the right people arming them with the right tools to be successful and then leveraging them to start to cultivate and drive new business.

Our operational execution against our strategic roadmap in Q1 was and continues to be solid in alignment with the roadmap. We have encountered temporary challenges that can be expected with this kind of accelerated change from on premise to the cloud.

Which caused our topline to come in lower than desired.

We have always anticipated that the first half of 2021 was going to be the build part of the plan and that is exactly the case.

Q1 was an important and necessary transition every period for our company, which continues as we grow and add resources, especially for our sales and marketing teams.

The collective focus during the quarter was first on on boarding new sales professionals training the customer facing teams and implementing enhanced sales strategies and second on reviewing our existing historical pipeline, making necessary adjustments in order to prepare for the SaaS business. We are building going forward.

This focus was critical to executing on our roadmap, but not unexpectedly created challenges in securing new logo. So early in the transformative process.

However, despite these anticipated challenges we are seeing improvements in the critical indicators that to our SaaS business, providing greater visibility.

From a pure sales perspective, we closed on new SaaS sales that are aligned with our strategy, including adding new logos and perhaps most notably closing on a large cloud conversion of an international telecommunications giant in Q1.

To put it in relative percentage terms, we delivered 21% year over year growth in our SaaS subscription annual recurring revenue, reflecting our continued success transitioning to a more predictable SaaS based business model.

Which is building a solid foundation for predictable growth in the years ahead the.

21% year over year increase in IRR is the result of effectively converting on prem customers to the tune of the cloud and better customer alignment, resulting in increased retention from our customer success efforts are focused on driving cloud conversions continue to produce promising results.

We also continue to achieve solid SaaS customer retention metrics, including 104% Rolling 12 months as renewal rate as of quarter end.

In terms of customer retention and expansion of our SaaS customer retention metrics from Q1 were solid with year over year increases on several metrics, including a 5% increase in gross renewal rate of 9% increase of net renewal rate of 14% increase in dollar value of retention as well as the six 6% increase in overall gross margin and deferred revenue was up 30% in Q1.

2021 over Q1 of 2020.

Before I dive deeper into our execution of strategy.

The growth initiatives and outlook I will turn it over to Dave to walk you through our key financial results for the first quarter and outlook for 2021 days.

Thank you T J and good afternoon, everyone turning to our Q1 results in more detail revenue for the first quarter of 2021 was $5 $8 million compared to $6 2 million in Q1 of last year and this compares to $6 9 million in Q4 of 2020 in Q1, 2021 and Q4 of 2020.

Total revenue was negatively impacted by the expected decline of on premise and appliance revenue is our target market shifts to the use of SaaS solutions, which aligns with our long term strategic roadmap.

Compared to Q4 of 2020 total revenue in Q1 2021 was lower due to a onetime term license recognition event in Q4 relating to a large and successful cloud conversion as well as slightly higher cloud usage overage fees in the quarter.

The first quarter 2021, also experienced slightly lower maintenance and support revenue due to cloud conversions now recognized on subscription revenue.

Lower on premise maintenance recognized for customers not using on premise appliances due to present remote working arrangements with our customers.

The key to our strategic roadmap is growing our subscription business and we are pleased to report that subscription and professional service revenues were very much in line with expectations for phase two of our transition plan as T. J I previously noted.

Subscription maintenance and support revenue for the first quarter of 2021 increased 20% to $5 million from $4 2 million in Q1 of last year.

The 20% increase was driven by new cloud and term deals as well as moderate cloud usage overage fees. Additionally, we saw year over year expansion of cloud engagement on our platform driven by new use cases and enterprises driving their daily operations to the efficient and effective use of video.

Looking at our SaaS metrics as T. J mentioned subscription <unk> increased 21% two of $11 9 million from $9 $9 million on Q1 of last year, we anticipate annual recurring revenue to continue to grow as bookings of mid and large enterprise.

Ram with our SaaS selling efforts and on as on premise customers convert to our SaaS or a hybrid platform.

Our efforts to drive subscription <unk> provides us with good visibility into the future revenues.

Due to the ratable recognition of our subscription revenue at quarter end of SaaS gross renewal rate or <unk> improved to 93%. This compares to 88% at the end of Q1 last year, our SaaS net renewal rate or NR also improved to 112.

The 6% compared to 117% at the end of Q1 last year and finally, our SaaS dollar value of retention. It grew to 104% and this compares to 90% at the end of Q1 2020.

Deferred revenue at the end of.

At the end of the quarter was $14 8 million. This is up 30% from $11 4 million in Q1 of last year and looking to our margins gross margins for the first quarter of 2021.

We're 73% an improvement from 67% in Q1 of last year. This was driven by a favorable sales mix and higher margin SaaS sales as we continue the transition our business model. The SaaS, we believe our gross margins can expand to the mid to high 70% range.

Looking at our profitability metrics net loss for the first quarter of 2021 totaled $4 5 million or 27 loss per basic share and a 29 loss per diluted share. This comparison of $2 $7 million loss or <unk> 20.

Loss per basic share on a 21 stop loss per diluted share in Q1 of last year.

Adjusted EBITDA loss, it's a non-GAAP metric for the first quarter of 2021 totaled $4 1 million compared to a loss of $1 $1 million in Q4 of last year.

As expected the higher adjusted EBITDA loss was due to investments we are making in connection with our strategic roadmap and growth plans.

Shifting gears to our balance sheet at quarter end, we had a rock solid liquidity position of 27 6 million on cash and cash equivalents on hand.

This liquidity provides us with the necessary resources and flexibility to continue our growth strategy.

Finally, turning to our financial outlook and the expectations for 2021.

The turmoil provides revenue guidance based on current market conditions and expectations.

Based on our Q1 results and our pipeline of business, we are reiterating our expectations for at least 20% revenue growth or total revenue of approximately $35 million in 2021, and this compares to 2020.

As we continue to expand our SaaS sales force, we anticipate that our operating expenses will increase from Q2 as those investments take hold we expect that our revenue growth rate to accelerate in the second half of 2021 as compared to the first half of 2021.

So kudos prospects and customers are shifting to Cumulus cloud and subscription based business model over our traditional on premise solution.

Last year, only 7% of our new sales were on premise solutions and around 10% of our existing on premise customers converted to the cloud.

More on premise customers are expected to migrate to a cloud solution in 2021, and although it's difficult to predict exactly how many we expect an increase throughout the year on the number of our customers moving off premise Amanda our cloud platform.

Our new SaaS sales are expected to grow significantly in the second half of the year and will show an accretive long term effect on our top line revenue growth.

So on a more detailed analysis of our financial results. Please refer to today's earnings release as well as our 10-Q. This completes my financial summary, I, probably know turn the call over to rose to discuss key initiatives for our strategic roadmap.

Thanks, Dave it's a pleasure to have this opportunity to speak with you. This afternoon is.

As TJ mentioned I joined from the last month and will be leading the company's global operation at a critical inflection point the adoption of video.

As an increasingly integral communication medium for businesses globally as it is at an all time high and we intend to capitalize on this opportunity is that like the day time has become the new currency and video is there any language I am incredibly energized to help lead <unk> to its next phase of innovation guided by operational excellence.

Building on T. J, the opening remarks prior to joining <unk> I hope the range of leadership roles and multiple path technology companies, where I was.

Instrumental and revitalizing scaling and driving business growth.

And my most recent leadership role I was charge of growing partner sale of accelerating the shift from perpetual license to subscription based revenue in.

In that time, we expanded to over 90% of revenue for the cloud.

And can the new Chief operating officer, I will be leveraging my prior experiences to implement best practices and make smart investments to support can you just focus on operational excellence and industry leadership.

Along that line of key pillar of our strategic roadmap of investing in various functions across our business to drive growth and further our competitive lead.

This includes investments in R&D to increase resources dedicated to the cloud technology developed and sales growth that results from this enhanced investment.

Last week, we announced the development and release of the.

Of our lives capturing capabilities.

This new release of <unk> cloud provides artificial intelligence based translation of the.

The waste to on screen captions for video viewer.

Developed by our cloud engineering team live casting is immediately available as part of the key new offering without the need to upgrade.

To maintain top standard we are working closely with customers, including a national pharmacy and of COVID-19 vaccine administrator to improve the accuracy viewing and user experience with multiple upgrades planned throughout the year.

Yeah.

In parallel as T. J mentioned, we are aggressively investing in the SaaS sales and marketing teams to expand our footprint and reach end of the market.

We achieved our hiring goals in Q1, adding 48 highly qualified and talented professionals to our organization.

He was work from wherever whenever policy continues to differentiate us in the hiring market and served as a competitive advantage to attracting and retaining top talent.

It has provided us the flexibility to hire the best people minimizing geographical and relocation of obstacles and at the same time facilitating greater in place like the ability diversity and inclusion.

Our employees new antenna continue to thrive in their new virtual workspaces supported by technology tools and processes to ensure future success.

In addition to helping our teams collaborate more effectively the technologies, we have implemented across the organization are not only providing greater insight into our day to day operation.

Also driving greater efficiencies as well.

We now use a synchronous video across the organization to reduce the length of meetings and to allow team members to faster solve issues and drive our success.

This is only one of the powerful ways, we are giving our teams back time, and we will continue to embrace new and innovative practices to ensure our teams are able to meet the growing demands of our customers and our partners. This concludes my prepared remarks, I will turn the call back over to the T. J.

Thank you rose and it's great to have you on board and we're really excited about the positive changes you've been able to drive the spearhead since you joined.

The future of <unk> is helping enterprises drive human engagement.

The consistent video interaction with the synchronicity of synchronous video is the future of the new work.

Exciting from our perspective are the signs of early success and traction with the new sales and marketing approach, we have been putting in place throughout Q1.

We have also been able to start adding new SaaS pipeline of increasing rates. These signs of early traction has been taking place while putting on new programs in place and more importantly, while hiring and training new business development reps <unk> and regional sales managers rsm's per.

Prior to full capacity and ramp.

We look forward to these numbers growing as well.

Future increased bookings from our <unk> and <unk> when they hit full ramp in five to seven months.

The strategic roadmap process also revealed specific areas for improvement opportunities to drive greater efficiencies and implement new and clearer strategies.

These included among other things transforming our sales and business development approach to align our resources to our cloud based SaaS offering.

We're focused on maturing of our business led selling approach that focuses on the new hybrid work that is transforming enterprises around the world and meeting the needs of the business leaders to change the way they communicate in a post pandemic world and environment.

We are laser focused on being customer obsessed.

Staffed our new customer success organization to focus on delivering value to the enterprise business leaders we serve.

The changes described above are already resonating with our customers and we are receiving positive feedback from customers that they have felt the change and that we can partner in the operational success not just their technical success of leveraging video as the new way to communicate and both of an asynchronous and asynchronous environment, both the synchronous and asynchronous environment.

The first and second phase of our strategic roadmap address the massive change to work.

This is already that is already here and is prepared to move to be of much more focused capable and scalable organization.

Going forward, we will be actively executing on phase three of our plan, which involves continuing to ramp global sales and marketing resources capabilities and expanding our customer obsessed culture across our sales and customer success teams.

Our execution of this phase is intended to expand and diversify our customer base deepen our customer and partner engagements and transform our business model, which should translate the SaaS growth for crew move for the second half of 2021.

The first pillar of phase three of our strategic roadmap encompasses building up a customer success team to drive even higher customer retention.

As part of this initiative, we are investing in our customer success team, adding customer success managers and additional account managers the.

The team is responsible for the continued unification and harmonization of our professional services customer support <unk>.

Product management and account management teams in order to drive increased value to our global customers as we scale.

Our renewed focus on retention of the obsession with the customer has enabled us to grow <unk> of double digit rate year over year and improve our SaaS customer retention rates.

Our healthy gross and net renewal rate increases combined with our growing high margin subscription and <unk>.

Setting the course for sustainable growth and high margin SaaS recurring revenues.

The second pillar of phase III involves the evolution of our sales and marketing teams, who are laser focused on global enterprise accounts and securing both expansion deals and new logos.

The first initiative of the second pillar is ramping those sales and marketing teams, including additional hires.

Educating training and integrating the new community as we call them into our organization and the Khumbu culture of care.

We've developed comprehensive Onboarding and training for all of our sales professionals.

The second initiative of the second pillar is driving new business and expanding our pipeline of opportunities.

Per training and Onboarding of sales professional professionals requires time and as we expect the bulk of our new our current new sales professionals to be up and running in the field by the end of our second quarter.

For this reason, we expect to realize solid bookings growth starting in Q3 of this year.

It's also important to keep in mind that our average sales cycles of approximately 90 to 120 days, sometimes longer for large enterprise accounts.

This reason, we believe measuring our success quarter to quarter in this phase of our growth evolution isn't the best barometer as we will build momentum and increased traction through our sales efforts.

But to be sure our enhanced sales efforts and resources are demonstrating promising outcomes, both in terms of customer activity and touch points and more importantly of robust opportunity pipeline.

The third pillar of phase three of our strategic roadmap evolves activating a professional focus channel Alliance and partnership efforts we.

We are extending the value we deliver to our customers through strategic partnerships partners are supplementing our direct sales efforts and drive even more engagement on our platform leveraging both synchronous and asynchronous video due to the ease of capture and creating video in concert with <unk> ability to securely distribute and manage all video that is being created the hyper distributed workforce.

Yes.

We believe our new partnerships can contribute meaningful Arctic and we are collaborating closely to ensure commercial success.

<unk> of this effort our team is actively identifying additional strategic partners to drive differentiated customer value in 2021.

We believe the future of work will be based on the enterprises that have employees working on many different locations and at different times.

Hulu is a significant advantage with robust enterprise large scale synchronous and asynchronous video with deep analytics and reporting.

And as we convert legacy on Prem installations, while layering in more cloud and hybrid deals, we expect to see significant margin expansion and more predictable and growing SaaS recurring revenue on a sequential basis.

We have innovative technology, and an enviable position as a leading provider of best in class life streaming and on demand truly scalable video technology for hyper distributed organizations of all sizes.

We will leverage this position to capitalize on the abundant opportunities on the horizon, particularly given the ongoing proliferation of hybrid work and the growing need for daily video enabled human engagement to drive business.

Some of those sits at the confluence of change of months growing global markets that represent an aggregate of $21 $6 billion opportunity by 2024.

The industry analyst approximately 72% of the the total addressable market remains untapped and ripe for the taking.

And with Kuehne was proven and unique value proposition coupled with our clear market direction. We are confident that our growth plans are well within reach.

These forceful industry tailwind and favorable market dynamics have us on track to achieve our financial and operational objectives in 2021.

On a robust balance sheet will enable us to accelerate many of our growth initiatives continued execution against our plan positions us extremely well to meet our 20% plus revenue growth in 2021.

Long term, we believe our successful execution of our two year strategic roadmap will mark the realization of our vision.

Which is a company operating at scale and benefiting from high margin recurring revenues sustainable and growing adjusted EBITDA and net income profitability.

That concludes our prepared remarks.

We'll now open it up to questions operator, please provide the appropriate instructions.

Oh very minded to ask the question you will need to press star one on the telephone.

The RF question basketball.

Your first question comes from the Ryan.

Jeff Van <unk> Craig.

<unk> Hallum capital Your line is now open.

Thanks, guys. This is rudy on for Jeff.

I wanted to start.

T J, David I'm, not sure who would take this.

When you guys do of.

Prem to cloud migration is there any uplift on the.

The the maintenance dollars to subscription dollar.

Say like a one two of one five or something or is that sort of a revenue neutral.

Migration and I guess, depending on your answer to that if there is an uplift.

How much of of the growth in 'twenty one.

Is dependent upon those migrations or how much are you baking in from those migrations.

However, it is Dave I'll take it.

So in general and this is consistent with what we've reported we essentially track this quarter over quarter and so for every single migration. We then look at those migrations on average so on on premise two of cloud migration on average will produce between 25 and about 42% uplift now that can vary of Cam.

B zero it can be north of 42%. So those are those of the average for kind of on medium and then all of a large customer respectively.

We then do when we're doing those migration varies as we size them. So effectively when we're doing that conversion.

Not every piece of content north central their bandwidth storage and or concurrent live streams need.

Need to come on on day, one when they start so we will move them over.

At a minimum it's flat and for the most part we have uplift in it and then as you know.

T. J has spoken about I mean, a big piece of our long term strategy is actually growing from an LTV perspective, looking at getting probably 60 to 75 per cent of our total revenues coming after an event such as the new customer addition, or.

Conversion, because we add new products as we bring more users on as we expand with new use cases as we educate on the asynchronous video case et cetera, and we began to work into the workflows of enterprises. Those are all upsell opportunities for us So a little.

A little bit of of a long winded answer in.

At a minimum is generally zero generally 25% to 42%, but what we really focus on is continuing to deliver value and by doing that we wind up enhancing our long term revenue profile.

Got it and then I know, it's early with the five to seven.

<unk> sales ramp for these new reps hired in Q1, not going to be productive. The went to the end of Q2, but I guess just at this point.

What are you guys seeing in in the early pipeline build thus far Theres still gives you conviction in the pretty steep revenue ramp in the second half.

Yes, we're good as T. J I mean from my perspective, we continue to see growth in the pipeline that happens.

Week to week and month to month, and we've seen that through Q1 as we started to ramp the resources that we have those early signs are very good signs for us we track of that through a number of elements, whether we're looking at the number of calls E mails and follow up but also of the number of meetings being set and then progressing them through our stages of sales and sales force and so.

As we continue to see that pipeline grow and the quality of that pipeline improve for the SaaS opportunities on the key enterprises, where looking forward it gives us that confidence.

Got it and then just lastly.

I think you guys had said previously.

You expected to burn I think roughly $10 million between here and becoming a cash flow breakeven again, some point in the first half of 'twenty two.

Is that thinking still the same or any any changes changes that.

Hi, everybody I'll take that this is Dave.

The thinking the same what we had previously communicated as debt.

We will achieve adjusted EBITDA positivity is what our present outlook is at the $11 million to $12 million per quarter revenue range and that that would occur probably in late H one of 2022.

And that between now and then that essentially cash burn will be between 10 and $12 million.

Got it very helpful I'll jump back in the queue. Thanks, guys.

Thanks Julie.

Your next question comes from the line of Mike Latimore with Northland capital markets.

Your line is now open.

Yeah.

Hi, guys.

In terms of out on from Michael let them all.

Could you give me add David on yeah.

Could you just give me an update on the demand for even now with the six months ago.

Sure. This is TJ I'll jump in on that one we see virtual events continuing to happen a couple of different things, we do see a lot of folks starting to do some hybrid events. We also see some events that started out being planned as hybrid but went all virtual as different.

COVID-19 precautions go up and down and there's been a lot of flexibility, we see from our customer base that the need to continue to have cloud based on the hybrid solutions for different major events is going to continue to happen even as some of events go in.

In person and the the rationale behind that is there are still people not traveling there are still people that will not be in person and so it's a mixture of these events that will continue and so we have not seen any significant change in the events that our customers are having.

Okay do you have.

Much of one time revenue from the lights and even to the scar.

This is in order to take that.

Sure.

From a one time virtual event the answer is very.

Virtually nil.

The reality is is what we sell to.

Enterprises are solutions that are charged on the subscription basis. It is quite rare that we wind up doing one time events. If we do it's generally professional services and if we are doing that.

The purpose in doing so is to actually.

Get them prepared for.

And get them convinced that an enterprise solution to manage all of their video needs is that the the.

The highest and best use of working with Como and we'd like to prove that to them.

Alright and.

What about the softball game coming from channel partners.

Ah.

Great question. So channel partners has historically contributed about 22% of our annual revenue it does vary quarter by quarter and it really does depend upon deal mix on what's flowing through those partners, we're pretty consistent with that and in line with the essentially that trajectory for the annual period within.

In the quarter.

Okay.

And the last one.

Can you quantify the.

The.

Pipeline.

At this.

We're not pushing out specifics on the growth of pipeline. We're early in our transformation and continuing to grow and change our weekly so we're not reporting on any specifics on that at this time.

Alright.

Thank you. Thank you.

Okay.

Your next question comes from Steven Frankel with Colliers.

Okay.

Good afternoon, and TJ on your commentary mentioned, some roadblocks that led to.

And revenues that were disappointing in Q1, I Wonder if you could give us some.

Some specifics on what you encountered in the quarter and what youre, putting in place to mitigate that going forward.

Yes, I mean, I don't think there's too much specifics on it but just from a key of just the ramping and the fact that we've hired so many new people and getting them through training and ramped it up to speed as we do that the time for them to get productive as we talked about it as five to seven months, we saw what was mostly anticipated.

But that's also just part of that also we continue to work with our existing partners and talking and integrating with the new and potential new partners. Some of those newer partners. We still have more work to do so I think more of that will be coming here in follow on quarters and so some things just take a little bit of time to get the traction that we want.

Like in some of the partner relationships in the future and so we will see more of that improve as we go ahead.

Okay, and then maybe per rose, what's the profile of the successful.

Cumulus salesman.

What are you looking for in terms of.

What they did prior and what they bring the kilo versus the people that used to be there.

Yeah, absolutely, Steve I mean I.

I think.

In my experience right on as we start understanding with this profile looks like in the rest of it are really starting to make their mark I think on building the pipeline are coming with the strong that cloud video experience, they're coming in with easily five to 10 years of experience selling into enterprise in down markets. They are coming in of course of an attitude of the thing too.

The ramp quickly train proficiently and be a part of the innovation in the future of work that we're looking looking to shape as we innovate and grow.

And then Dave TJ anything else you want to add to that.

No I think you hit it.

Okay.

And then maybe what's the biggest positive surprise and a couple of months you've been at the company.

Yes.

The biggest surprise is the amount of opportunity. We have ahead of us the ability that we have to innovate and make our mark on the market was probably a bigger surprise than I would've expected. It's one of the reasons frankly, when I joined the company was the market opportunity ahead of us.

Our ability to grow with partners and scale with our customers. But this is that's why they might think of surprise and I'm excited to grow the a part of that journey.

Okay, and then Dave what were Overages in the quarter on what were they a year ago.

Yes, a year ago, a little over 150000 in the quarter. It was just slightly under on the 1000.

Okay, great. Thank you.

Thanks, Steve.

Yes.

Yes.

Thank you at this time. This concludes the company's question and answer the question.

The third question of us not taking it.

Please contact <unk>.

IR team at <unk>.

Notably <unk> Dot com.

I would now like to turn the call back over to Mr. Kennedy for any closing remarks.

Thank you so much and thank you to everyone for joining our call. This afternoon. We appreciate your continued support as we scale to move to the next level I look forward to speaking to all of you again soon.

Okay.

This concludes today's conference call. Thank you for joining him on harvesting.

All right.

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