UNITED STATES
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Kaltura, Inc.
Delaware | 20-8128326 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
250 Park Avenue South 10th Floor New York, New York | 10003 |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common stock, $0.0001 par value per share | KLTR | The Nasdaq Stock Market LLC |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |
Non-accelerated filer | ☒ | Smaller reporting company | ☐ | |
Emerging growth company | ☒ |
Page | ||
PART I | FINANCIAL INFORMATION | |
F - 1 | ||
F - 2 - F - 3 | ||
F - 4 | ||
F - 5 - F - 8 | ||
F -9 - F - 10 | ||
F - 11 - F - 35 | ||
2 | ||
27 | ||
28 | ||
PART II | OTHER INFORMATION | |
29 | ||
29 | ||
77 | ||
77 | ||
77 | ||
77 | ||
78 | ||
79 | ||
i
• | Our business and operations have experienced rapid growth, and if we do not appropriately manage this growth and any future growth, or if we are unable to improve our systems, processes and controls, our business, financial condition, results of operations and prospects will be adversely affected; |
• | Our recent growth may not be indicative of our future growth, and we may not be able to sustain our revenue growth rate in the future. Our growth also makes it difficult to evaluate our current business and future prospects and may increase the risk that we will not be successful; |
• | We have a history of losses and may not be able to achieve or maintain profitability; |
• | The ongoing COVID-19 outbreak, and its variants, could adversely affect our business, financial condition and results of operations; |
• | The markets for our offerings are new and evolving and may develop more slowly or differently than we expect. Our future success depends on the growth and expansion of these markets and our ability to adapt and respond effectively to evolving market conditions; |
• | The loss of one or more of our significant customers, or any other reduction in the amount of revenue we derive from any such customer, would adversely affect our business, financial condition, results of operations and growth prospects; |
• | If we are not able to keep pace with technological and competitive developments and develop or otherwise introduce new products and solutions and enhancements to our existing offerings, our offerings may become less marketable, less competitive or obsolete, and our business, financial condition and results of operations may be adversely affected; |
• | If we do not maintain the interoperability of our offerings across devices, operating systems and third-party applications that we do not control, and if we are not able to maintain and expand our relationships with third-party technology partners to integrate our offerings with their products and solutions, our business, financial condition and results of operations may be adversely affected; |
• | A version of our Media Services is licensed to the public under an open source license, which could negatively affect our ability to monetize our offerings and protect our intellectual property rights; |
• | The markets in which we compete are nascent and highly fragmented, and we may not be able to compete successfully against current and future competitors, some of whom have greater financial, technical, and other resources than we do. If we do not compete successfully, our business, financial condition and results of operations could be harmed; |
• | If we are unable to increase sales of our subscriptions to new customers, expand the offerings to which our existing customers subscribe, or expand the value of our existing customers’ subscriptions, our future revenue and results of operations will be adversely affected; |
• | If our existing customers do not renew their subscriptions, or if they renew on terms that are less economically beneficial to us, it could have an adverse effect on our business, financial condition and results of operations; |
• | We recognize a significant portion of revenue from subscriptions over the term of the relevant subscription period, and as a result, downturns or upturns in sales are not immediately reflected in full in our results of operations; |
• | We typically provide service-level commitments under our customer agreements. If we fail to meet these contractual commitments, we could be obligated to provide credits for future service, face contract termination with refunds of prepaid amounts or could experience a decrease in customer renewals in future periods, any of which would lower our revenue and adversely affect our business, financial condition and results of operations; |
• | We rely on third parties, including third parties outside the United States, for some of our software development, quality assurance, operations, and customer support; |
• | We depend on our management team and other key employees, and the loss of one or more of these employees or an inability to attract and retain highly skilled employees could adversely affect our business; |
• | If we are not able to maintain and enhance awareness of our brand, especially among developers and IT operators, our business, financial condition and results of operations may be adversely affected; |
• | Our corporate culture has contributed to our success, and if we cannot maintain this culture as we grow, we could lose the innovation, creativity, and entrepreneurial spirit we have worked to foster, which could adversely affect our business; |
• | Our failure to offer high quality customer support would have an adverse effect on our business, reputation and results of operations; |
• | The failure to effectively develop and expand our marketing and sales capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our offerings; |
• | The sales prices of our offerings may change, which may reduce our revenue and gross profit and adversely affect our financial results; |
• | We expect our revenue mix to vary over time, which could negatively impact our gross margin and results of operations; |
• | The length of our sales cycle can be unpredictable, particularly with respect to sales to large customers, and our sales efforts may require considerable time and expense; |
• | Our international operations and expansion expose us to risk; |
• | If we are not successful in sustaining and expanding our international business, we may incur additional losses and our revenue growth could be adversely affected; |
• | Currency exchange rate fluctuations affect our results of operations, as reported in our financial statements; |
• | A portion of our revenue is generated by sales to government entities, which are subject to a number of challenges and risks; |
• | If we are unable to consummate acquisitions at our historical rate and at acceptable prices, and to enter into other strategic transactions and relationships that support our long-term strategy, our growth rate and the trading price of our common stock could be negatively affected. These transactions and relationships also subject us to certain risks; |
• | A real or perceived bug, defect, security vulnerability, error, or other performance failure involving our platform, products or solutions could cause us to lose revenue, damage our reputation, and expose us to liability; |
• | If we or our third-party service providers experience a security breach, data loss or other compromise, including if unauthorized parties obtain access to our customers’ data, our reputation may be harmed, demand for our platform, products and solutions may be reduced, and we may incur significant liabilities; |
• | Failure to protect our proprietary technology, or to obtain, maintain, protect and enforce sufficiently broad intellectual property rights therein, could substantially harm our business, financial condition and results of operations; |
• | Our failure to raise additional capital or generate the significant capital necessary to expand our operations and invest in new offerings could reduce our ability to compete and could adversely affect our business; |
• | Changes in laws and regulations related to the internet, changes in the internet infrastructure itself, or increases in the cost of internet connectivity and network access may diminish the demand for our offerings and could harm our business; and |
• | Political, economic, and military conditions in Israel could materially and adversely affect our business. |
September 30, 2021 | December 31, 2020 (as restated) | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 179,740 | $ | 27,711 | ||||
Trade receivables | 24,190 | 17,134 | ||||||
Prepaid expenses and other current assets | 7,826 | 2,769 | ||||||
Deferred contract acquisition and fulfillment costs, current | 8,702 | 5,848 | ||||||
Total current assets | 220,458 | 53,462 | ||||||
NON-CURRENT ASSETS | ||||||||
Property and equipment, net | 8,243 | 4,147 | ||||||
Other assets, noncurrent | 2,371 | 3,564 | ||||||
Deferred contract acquisition and fulfillment costs, noncurrent | 23,202 | 15,876 | ||||||
Intangible assets, net | 2,127 | 2,835 | ||||||
Goodwill | 11,070 | 11,070 | ||||||
Total non-current assets | 47,013 | 37,492 | ||||||
TOTAL ASSETS | $ | 267,471 | $ | 90,954 | ||||
LIABILITIES, CONVERTIBLE AND REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||
CURRENT LIABILITIES | ||||||||
Current portion of long-term loans | $ | 2,295 | $ | 1,000 | ||||
Current portion of long-term lease liabilities | 525 | 1,738 | ||||||
Trade payables | 4,418 | 5,045 | ||||||
Employees and payroll accruals | 20,540 | 16,275 | ||||||
Accrued expenses and other current liabilities | 17,212 | 11,251 | ||||||
Deferred revenue | 63,014 | 47,685 | ||||||
Total current liabilities | 108,004 | 82,994 | ||||||
NON-CURRENT LIABILITIES | ||||||||
Deferred revenue, noncurrent | 1,750 | 1,858 | ||||||
Long-term loans, net of current portion | 58,992 | 47,160 | ||||||
Other liabilities, noncurrent | 2,386 | 2,706 | ||||||
Warrants to purchase preferred and common stock | 0 | 56,780 | ||||||
Total non-current liabilities | 63,128 | 108,504 | ||||||
TOTAL LIABILITIES | $ | 171,132 | $ | 191,498 |
F - 2
KALTURA INC. AND ITS SUBSIDIARIES
September 30, 2021 | December 31, 2020 (as restated) | |||||||
(Unaudited) | ||||||||
COMMITMENTS AND CONTINGENCIES (NOTE 6) | 0 | 0 | ||||||
Convertible preferred stock, $0.0001 par value per share, 0 and 1,043,778 shares authorized, issued and outstanding as of September 30, 2021, and December 31, 2020, respectively; aggregate liquidation preference of 0 and $1,921 as of September 30, 2021, and December 31, 2020, respectively; | 0 | 1,921 | ||||||
Redeemable convertible preferred stock, $0.0001 par value per share, 0 and 15,968,831 shares authorized as of September 30, 2021, and December 31, 2020, respectively; 0 and 15,779,322 issued and outstanding as of September 30, 2021, and December 31, 2020, respectively; aggregate liquidation preference of 0 and $185,425 as of September 30, 2021, and December 31, 2020, respectively; | 0 | 158,191 | ||||||
Total mezzanine equity | 0 | 160,112 | ||||||
STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
Preferred stock, $0.0001 par value per share, 20,000,000 and 0 shares authorized as of September 30, 2021 and December 31, 2020, respectively; 0 issued and outstanding as of September 30, 2021 and December 31, 2020 | 0 | 0 | ||||||
Common stock, $0.0001 par value per share, 1,000,000,000 and 157,500,000 shares authorized as of September 30, 2021, and December 31, 2020, respectively; 134,261,190 and 33,153,112 shares issued as of September 30, 2021 and December 31, 2020, respectively; 126,576,000 and 25,467,922 shares outstanding as of September 30, 2021 and December 31, 2020, respectively; | 13 | 2 | ||||||
Treasury stock – 7,685,190 shares of common stock, $0.0001 par value per share, as of September 30, 2021 and December 31, 2020 | (4,881 | ) | (4,881 | ) | ||||
Additional paid-in capital | 407,915 | 8,388 | ||||||
Receivables on account of stock | 0 | (882 | ) | |||||
Accumulated deficit | (306,708 | ) | (263,283 | ) | ||||
Total stockholders’ equity (deficit) | 96,339 | (260,656 | ) | |||||
TOTAL LIABILITIES, CONVERTIBLE AND REDEEMABLE CONVERTIBLE PREFERRED STOCKS AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ | 267,471 | $ | 90,954 |
F - 3
KALTURA INC. AND ITS SUBSIDIARIES
Three months ended September 30 | Nine months ended September 30 | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
(Unaudited) | ||||||||||||||||
Revenue: | ||||||||||||||||
Subscription | $ | 37,675 | $ | 26,888 | $ | 106,483 | $ | 75,061 | ||||||||
Professional services | 5,309 | 3,720 | 15,817 | 10,202 | ||||||||||||
Total revenue | 42,984 | 30,608 | 122,300 | 85,263 | ||||||||||||
Cost of revenue: | ||||||||||||||||
Subscription | 9,629 | 7,700 | 29,524 | 19,736 | ||||||||||||
Professional services | 5,538 | 4,814 | 16,847 | 13,982 | ||||||||||||
Total cost of revenue | 15,167 | 12,514 | 46,371 | 33,718 | ||||||||||||
Gross profit | 27,817 | 18,094 | 75,929 | 51,545 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 12,363 | 7,275 | 35,050 | 20,543 | ||||||||||||
Sales and marketing | 11,257 | 6,651 | 31,942 | 21,451 | ||||||||||||
General and administrative | 10,070 | 8,579 | 27,457 | 16,762 | ||||||||||||
Other operating expenses | 0 | 0 | 1,724 | 0 | ||||||||||||
Total operating expenses | 33,690 | 22,505 | 96,173 | 58,756 | ||||||||||||
Operating loss | 5,873 | 4,411 | 20,244 | 7,211 | ||||||||||||
Financial expenses, net | 17,780 | 1,525 | 18,432 | 12,809 | ||||||||||||
Loss before provision for income taxes | 23,653 | 5,936 | 38,676 | 20,020 | ||||||||||||
Provision for income taxes | 1,497 | 498 | 4,749 | 2,404 | ||||||||||||
Net loss | 25,150 | 6,434 | 43,425 | 22,424 | ||||||||||||
Preferred stock accretion | 0 | 3,107 | 6,672 | 8,716 | ||||||||||||
Redemption of redeemable convertible preferred stock, upon initial public offering | 1,569 | 0 | 1,569 | 0 | ||||||||||||
Net loss attributable to common stockholders | $ | 26,719 | $ | 9,541 | $ | 51,666 | $ | 31,140 | ||||||||
Net loss per share attributable to common stockholders, basic and diluted | $ | 0.26 | $ | 0.38 | $ | 1.00 | $ | 1.26 | ||||||||
Weighted average number of shares used in computing basic and diluted net loss per share attributable to common stockholders | 102,938,814 | 25,217,473 | 51,647,683 | 24,790,067 |
F - 4
KALTURA INC. AND SUBSIDIARIES
Convertible Preferred stock | Redeemable Convertible Preferred stock | Common stock | Treasury stock | Additional paid-in | Accumulated | Total stockholders' | ||||||||||||||||||||||||||||||||||||||
Number | Amount | Number | Amount | Number | Amount | Number | Amount | capital | deficit | equity (deficit) | ||||||||||||||||||||||||||||||||||
Balance at July 1, 2021 | 1,043,778 | $ | 1,921 | 15,806,333 | $ | 159,340 | 25,794,262 | $ | 2 | 7,685,190 | $ | (4,881 | ) | $ | 17,838 | $ | (281,558 | ) | $ | (268,599 | ) | |||||||||||||||||||||||
Accretion of redeemable convertible preferred stock | - | 0 | - | 1,569 | - | 0 | - | 0 | (1,569 | ) | 0 | (1,569 | ) | |||||||||||||||||||||||||||||||
Redemption of redeemable convertible preferred stock upon initial public offering | - | 0 | - | (1,569 | ) | - | 0 | - | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||
Conversion of convertible and redeemable convertible preferred stock to common stock upon initial public offering | (1,043,778 | ) | (1,921 | ) | (15,806,333 | ) | (159,340 | ) | 76,262,942 | 8 | 0 | 0 | 161,253 | 0 | 161,261 | |||||||||||||||||||||||||||||
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and other issuance costs | 0 | 0 | 0 | 0 | 17,250,000 | 2 | 0 | 0 | 155,596 | 0 | 155,598 | |||||||||||||||||||||||||||||||||
Conversion of warrants to common stock upon initial public offering | 0 | 0 | 0 | 0 | 7,067,699 | 1 | 0 | 0 | 70,676 | 0 | 70,677 | |||||||||||||||||||||||||||||||||
Stock-based compensation expenses | - | 0 | - | 0 | - | 0 | - | 0 | 3,736 | 0 | 3,736 | |||||||||||||||||||||||||||||||||
Issuance of common shares upon exercise of stock options | 0 | 0 | 0 | 0 | 201,097 | * | ) | 0 | 0 | 385 | 0 | 385 | ||||||||||||||||||||||||||||||||
Net loss | - | 0 | - | 0 | - | - | - | 0 | 0 | (25,150 | ) | (25,150 | ) | |||||||||||||||||||||||||||||||
Balance at September 30, 2021 (unaudited) | 0 | $ | 0 | 0 | $ | 0 | 126,576,000 | $ | 13 | 7,685,190 | $ | (4,881 | ) | $ | 407,915 | $ | (306,708 | ) | $ | 96,339 |
F - 5
KALTURA INC. AND SUBSIDIARIES
Convertible Preferred stock | Redeemable Convertible Preferred stock | Common stock | Treasury stock | Receivables on account | Additional paid-in | Accumulated | Total stockholders' | |||||||||||||||||||||||||||||||||||||||||
Number | Amount | Number | Amount | Number | Amount | Number | Amount | of stock | capital | deficit | deficit | |||||||||||||||||||||||||||||||||||||
Balance at July 1, 2020 | 1,043,778 | $ | 1,921 | 15,779,322 | $ | 158,191 | 25,194,253 | $ | 2 | 7,685,190 | $ | (4,881 | ) | $ | (882 | ) | $ | 1,759 | $ | (220,510 | ) | $ | (224,512 | ) | ||||||||||||||||||||||||
Stock-based compensation expenses | - | 0 | - | 0 | - | 0 | - | 0 | 0 | 1,033 | 0 | 1,033 | ||||||||||||||||||||||||||||||||||||
Issuance of common shares upon exercise of stock options | 0 | 0 | 0 | 0 | 42,043 | * | ) | 0 | 0 | 0 | 37 | 0 | 37 | |||||||||||||||||||||||||||||||||||
Net loss | - | 0 | - | 0 | - | 0 | - | 0 | 0 | 0 | (6,434 | ) | (6,434 | ) | ||||||||||||||||||||||||||||||||||
Balance at September 30, 2020 (unaudited) | 1,043,778 | $ | 1,921 | 15,779,322 | $ | 158,191 | 25,236,296 | $ | 2 | 7,685,190 | $ | (4,881 | ) | $ | (882 | ) | $ | 2,829 | $ | (226,944 | ) | $ | (229,876 | ) |
F - 6
KALTURA INC. AND SUBSIDIARIES
Convertible Preferred stock | Redeemable Convertible Preferred stock | Common stock | Treasury stock | Receivables on account of stock | Additional paid-in capital | Accumulated deficit | Total stockholders' equity (deficit) | |||||||||||||||||||||||||||||||||||||||||
Number | Amount | Number | Amount | Number | Amount | Number | Amount | |||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2021 | 1,043,778 | $ | 1,921 | 15,779,322 | $ | 158,191 | 25,467,922 | $ | 2 | 7,685,190 | $ | (4,881 | ) | $ | (882 | ) | $ | 8,388 | $ | (263,283 | ) | $ | (260,656 | ) | ||||||||||||||||||||||||
Issuance of preferred stock upon exercise of warrants | 0 | 0 | 27,011 | 1,149 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||
Loan forgiveness | - | - | - | - | 0 | 0 | 0 | 0 | 882 | 0 | 0 | 882 | ||||||||||||||||||||||||||||||||||||
Accretion of redeemable convertible preferred stock | 0 | 0 | 0 | 1,569 | - | 0 | - | 0 | 0 | (1,569 | ) | 0 | (1,569 | ) | ||||||||||||||||||||||||||||||||||
Redemption of redeemable convertible preferred stock upon initial public offering | 0 | 0 | 0 | (1,569 | ) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||
Conversion of convertible and redeemable convertible preferred stock to common stock upon initial public offering | (1,043,778 | ) | (1,921 | ) | (15,806,333 | ) | (159,340 | ) | 76,262,942 | 8 | 0 | 0 | 0 | 161,253 | 0 | 161,261 | ||||||||||||||||||||||||||||||||
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and other issuance costs | 0 | 0 | 0 | 0 | 17,250,000 | 2 | 0 | 0 | 0 | 155,596 | 0 | 155,598 | ||||||||||||||||||||||||||||||||||||
Conversion of warrants to common stock upon initial public offering | 0 | 0 | 0 | 0 | 7,067,699 | 1 | 0 | 0 | 0 | 70,676 | 0 | 70,677 | ||||||||||||||||||||||||||||||||||||
Stock-based compensation expenses | - | 0 | - | 0 | - | 0 | - | 0 | 0 | 12,910 | 0 | 12,910 | ||||||||||||||||||||||||||||||||||||
Issuance of common shares upon exercise of stock options | 0 | 0 | 0 | 0 | 527,437 | * | ) | 0 | 0 | 0 | 661 | 0 | 661 | |||||||||||||||||||||||||||||||||||
Net loss | - | 0 | - | 0 | - | 0 | - | 0 | 0 | (43,425 | ) | (43,425 | ) | |||||||||||||||||||||||||||||||||||
Balance at September 30, 2021 (unaudited) | 0 | $ | 0 | 0 | $ | 0 | 126,576,000 | $ | 13 | 7,685,190 | $ | (4,881 | ) | $ | 0 | $ | 407,915 | $ | (306,708 | ) | 96,339 |
F - 7
KALTURA INC. AND SUBSIDIARIES
Convertible Preferred stock | Redeemable Convertible Preferred stock | Common stock | Treasury stock | Receivables on account | Additional paid-in | Accumulated | Total stockholders' | |||||||||||||||||||||||||||||||||||||||||
Number | Amount | Number | Amount | Number | Amount | Number | Amount | of stock | capital | deficit | deficit | |||||||||||||||||||||||||||||||||||||
Balance at January 1, 2020 | 1,043,778 | $ | 1,921 | 15,779,322 | $ | 155,550 | 22,959,969 | $ | 2 | 7,685,190 | $ | (4,881 | ) | $ | (882 | ) | $ | 0 | $ | (204,520 | ) | $ | (210,281 | ) | ||||||||||||||||||||||||
Stock-based compensation expenses | - | 0 | - | 0 | - | 0 | - | 0 | 0 | 2,829 | 0 | 2,829 | ||||||||||||||||||||||||||||||||||||
Issuance of common shares upon exercise of stock options | 0 | 0 | 0 | 0 | 1,049,812 | * | ) | 0 | 0 | 0 | 63 | 0 | 63 | |||||||||||||||||||||||||||||||||||
Issuance of common shares upon business combination | 0 | 0 | 0 | 0 | 1,226,515 | * | ) | 0 | 0 | 0 | 2,578 | 0 | 2,578 | |||||||||||||||||||||||||||||||||||
Accretion of redeemable convertible preferred stock | 0 | 0 | 0 | 2,641 | 0 | 0 | 0 | 0 | 0 | (2,641 | ) | 0 | (2,641 | ) | ||||||||||||||||||||||||||||||||||
Net loss | - | 0 | - | 0 | - | 0 | - | 0 | 0 | 0 | (22,424 | ) | (22,424 | ) | ||||||||||||||||||||||||||||||||||
Balance at September 30, 2020 (unaudited) | 1,043,778 | $ | 1,921 | 15,779,322 | $ | 158,191 | 25,236,296 | $ | 2 | 7,685,190 | $ | (4,881 | ) | $ | (882 | ) | $ | 2,829 | $ | (226,944 | ) | $ | (229,876 | ) |
F - 8
KALTURA INC. AND SUBSIDIARIES
(U.S. dollars in thousands)
Nine months ended September 30, | ||||||||
2021 | 2020 | |||||||
(Unaudited) | ||||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (43,425 | ) | $ | (22,424 | ) | ||
Adjustments required to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation, amortization, and abandonment costs | 1,795 | 7,146 | ||||||
Stock-based compensation expenses | 12,910 | 2,829 | ||||||
Amortization of deferred contract acquisition and fulfillment costs | 5,082 | 2,988 | ||||||
Change in valuation of warrants to purchase preferred and common stock | 15,046 | 10,034 | ||||||
Non-cash interest expenses | 267 | 104 | ||||||
Non-cash expenses with respect to stockholders’ loans | 882 | 0 | ||||||
Gain on sale of property and equipment | (757 | ) | 0 | |||||
Changes in operating assets and liabilities: | ||||||||
Increase in trade receivables | (7,055 | ) | (8,561 | ) | ||||
Decrease (increase) in prepaid expenses and other current assets and other assets, noncurrent | (4,937 | ) | 196 | |||||
Increase in deferred contract acquisition and fulfillment costs | (15,262 | ) | (7,934 | ) | ||||
Increase in trade payables | 849 | 104 | ||||||
Increase in accrued expenses and other current liabilities | 4,055 | 3,654 | ||||||
Increase in employees and payroll accruals | 4,265 | 4,149 | ||||||
Increase (decrease) in other liabilities, noncurrent | (306 | ) | 458 | |||||
Increase in deferred revenue | 15,221 | 8,977 | ||||||
Net cash provided by (used in) operating activities | (11,370 | ) | 1,720 | |||||
Cash flows from investing activities: | ||||||||
Net cash acquired in business combination | 0 | 383 | ||||||
Purchases of property and equipment | (1,580 | ) | (708 | ) | ||||
Proceeds from sale of property and equipment | 642 | 0 | ||||||
Capitalized internal-use software | (2,753 | ) | (1,255 | ) | ||||
Purchase of intangible assets | (79 | ) | (89 | ) | ||||
Net cash used in investing activities | (3,770 | ) | (1,669 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from initial public offering, net of underwriting discounts and commissions | 160,425 | 0 | ||||||
Payment related to the conversion of Series F redeemable convertible preferred stock upon initial public offering | (1,569 | ) | 0 | |||||
Proceeds from long term loans, net of debt issuance cost | 41,915 | 2,000 | ||||||
Repayment of long-term loans | (29,083 | ) | 0 | |||||
Principal payments on finance leases | (1,329 | ) | (1,842 | ) | ||||
Proceeds from exercise of options by employees | 661 | 63 | ||||||
Payment of deferred offering costs | (4,087 | ) | 0 | |||||
Net cash provided by financing activities | 166,933 | 221 | ||||||
Increase in cash, cash equivalents and restricted cash | 151,793 | 272 | ||||||
Cash, cash equivalents and restricted cash at the beginning of the period | 28,355 | 27,144 | ||||||
Cash, cash equivalents and restricted cash at the end of the period | $ | 180,148 | $ | 27,416 | ||||
Non-cash transactions: | ||||||||
Purchase and sale of property and equipment, internal-use software, and intangible asset in credit | $ | 814 | $ | 75 | ||||
Issuance of common shares and warrant with respect to business combination | $ | 0 | $ | 3,799 | ||||
Conversion of warrants to common stock upon initial public offering | $ | 70,677 | $ | - | ||||
Conversion of convertible and redeemable convertible preferred stock to common stock upon initial public offering | $ | 161,261 | $ | 0 | ||||
Unpaid deferred offering costs | $ | 626 | $ | 0 |
F - 9
KALTURA INC. AND SUBSIDIARIES
Nine months ended September 30, | ||||||||
2021 | 2020 | |||||||
Unaudited | ||||||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for income taxes, net | $ | (1,446 | ) | $ | (765 | ) | ||
Cash paid for interest | $ | (1,938 | ) | $ | (2,938 | ) | ||
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets: | ||||||||
Cash and cash equivalents | $ | 179,740 | $ | 26,808 | ||||
Restricted cash included in other assets, non-current | 408 | 608 | ||||||
Total cash, cash equivalents, and restricted cash | $ | 180,148 | $ | 27,416 |
F - 10
(In thousands of U.S. dollars unless specified otherwise)
NOTE 1: | BUSINESS |
NOTE 2: | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
F - 12
NOTE 2: | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
(unaudited) | ||||||||||||||||
Customer A (M&T) | 10.76 | % | 10.53 | % | * | % | 12.05 | % |
*) | Represents an amount that is lower than 10% of the Company’s total revenue. |
F - 13
NOTE 2: | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
F - 14
NOTE 2: | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
F - 15
NOTE 3: | REVENUES FROM CONTRACTS WITH CUSTOMERS |
a. | The following table presents disaggregated revenue by category: |
Enterprise, Education and Technology | Media and Telecom | |||||||||||||||
Amount | Percentage of revenue | Amount | Percentage of revenue | |||||||||||||
Three months ended September 30, 2021 (unaudited) | ||||||||||||||||
Subscription | $ | 27,952 | 91.9 | % | $ | 9,723 | 77.3 | % | ||||||||
Professional services | 2,458 | 8.1 | % | 2,851 | 22.7 | % | ||||||||||
$ | 30,410 | 100 | % | $ | 12,574 | 100 | % |
Enterprise, Education and Technology | Media and Telecom | |||||||||||||||
Amount | Percentage of revenue | Amount | Percentage of revenue | |||||||||||||
Three months ended September 30, 2020 (unaudited) | ||||||||||||||||
Subscription | $ | 19,765 | 94.1 | % | $ | 7,123 | 74.1 | % | ||||||||
Professional services | 1,236 | 5.9 | % | 2,484 | 25.9 | % | ||||||||||
$ | 21,001 | 100 | % | $ | 9,607 | 100 | % |
Enterprise, Education and Technology | Media and Telecom | |||||||||||||||
Amount | Percentage of revenue | Amount | Percentage of revenue | |||||||||||||
Nine months ended September 30, 2021 (unaudited) | ||||||||||||||||
Subscription | $ | 79,120 | 89.9 | % | $ | 27,363 | 79.7 | % | ||||||||
Professional services | 8,846 | 10.1 | % | 6,971 | 20.3 | % | ||||||||||
$ | 87,966 | 100 | % | $ | 34,334 | 100 | % |
F - 16
NOTE 3: | REVENUES FROM CONTRACTS WITH CUSTOMERS (Cont.) |
Enterprise, Education and Technology | Media and Telecom | |||||||||||||||
Amount | Percentage of revenue | Amount | Percentage of revenue | |||||||||||||
Nine months ended September 30, 2020 (unaudited) | ||||||||||||||||
Subscription | $ | 53,288 | 94.9 | % | $ | 21,773 | 74.8 | % | ||||||||
Professional services | 2,881 | 5.1 | % | 7,321 | 25.2 | % | ||||||||||
$ | 56,169 | 100 | % | $ | 29,094 | 100 | % |
b. | The following table summarizes revenue by region based on the billing address of customers: |
Three months ended September 30, (unaudited) | ||||||||||||||||
2021 | 2020 | |||||||||||||||
Amount | Percentage of revenue | Amount | Percentage of revenue | |||||||||||||
United States (“US”) | $ | 25,061 | 58.3 | % | $ | 17,653 | 57.7 | % | ||||||||
Europe, the Middle East and Africa ("EMEA") | 13,482 | 31.4 | % | 9,485 | 31.0 | % | ||||||||||
Other | 4,441 | 10.3 | % | 3,470 | 11.3 | % | ||||||||||
$ | 42,984 | 100 | % | $ | 30,608 | 100 | % |
Nine months ended September 30, (unaudited) | ||||||||||||||||
2021 | 2020 | |||||||||||||||
Amount | Percentage of revenue | Amount | Percentage of revenue | |||||||||||||
US | $ | 72,087 | 58.9 | % | $ | 48,567 | 56.9 | % | ||||||||
EMEA | 37,485 | 30.7 | % | 26,907 | 31.6 | % | ||||||||||
Other | 12,728 | 10.4 | % | 9,789 | 11.5 | % | ||||||||||
$ | 122,300 | 100 | % | $ | 85,263 | 100 | % |
c. | Remaining Performance Obligations: |
F - 17
NOTE 3: | REVENUES FROM CONTRACTS WITH CUSTOMERS (Cont.) |
d. | Costs to Obtain a Contract: |
Three Months ended September 30, | Nine Months ended September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
(unaudited) | ||||||||||||||||
Beginning balance | $ | 23,507 | $ | 10,938 | $ | 17,683 | $ | 9,015 | ||||||||
Additions to deferred contract acquisition costs during the period | 5,049 | 3,975 | 13,551 | 7,370 | ||||||||||||
Amortization of deferred contract acquisition costs | (1,643 | ) | (840 | ) | (4,321 | ) | (2,312 | ) | ||||||||
Ending balance | $ | 26,913 | $ | 14,073 | $ | 26,913 | $ | 14,073 | ||||||||
Deferred contract acquisition costs, current | $ | 7,346 | $ | 3,850 | $ | 7,346 | $ | 3,850 | ||||||||
Deferred contract acquisition costs, noncurrent | 19,567 | 10,223 | 19,567 | 10,223 | ||||||||||||
Total deferred costs to obtain a contract | $ | 26,913 | $ | 14,073 | $ | 26,913 | $ | 14,073 |
F - 18
NOTE 3: | REVENUES FROM CONTRACTS WITH CUSTOMERS (Cont.) |
e. | Costs to Fulfill a Contract: |
Three Months ended September 30, | Nine Months ended September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
(unaudited) | ||||||||||||||||
Beginning balance | $ | 4,771 | $ | 3,839 | $ | 4,041 | $ | 3,993 | ||||||||
Additions to deferred costs to fulfill a contract during the period | 492 | 266 | 1,711 | 564 | ||||||||||||
Amortization of deferred costs to fulfill a contract | (272 | ) | (224 | ) | (761 | ) | (676 | ) | ||||||||
Ending balance | $ | 4,991 | $ | 3,881 | $ | 4,991 | $ | 3,881 | ||||||||
Deferred fulfillment costs, current | $ | 1,356 | $ | 974 | $ | 1,356 | $ | 974 | ||||||||
Deferred fulfillment costs, noncurrent | 3,635 | 2,907 | 3,635 | 2,907 | ||||||||||||
Total deferred costs to fulfill a contract | $ | 4,991 | $ | 3,881 | $ | 4,991 | $ | 3,881 |
NOTE 4: | FAIR VALUE MEASUREMENT |
Level I - | Unadjusted quoted prices in active markets that are accessible on the measurement date for identical, unrestricted assets or liabilities; |
Level II - | Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and |
Level III - | Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). |
F - 19
NOTE 4: | FAIR VALUE MEASUREMENT (Cont.) |
December 31, 2020 (As restated) | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Warrants to purchase preferred and common stock | $ | 0 | $ | 0 | $ | 56,780 | $ | 56,780 |
2021 | 2020 (as restated) | |||||||
(unaudited) | ||||||||
Balance at January 1 | $ | 56,780 | $ | 17,111 | ||||
Issuance of warrants | 0 | 1,221 | ||||||
Reclassification of warrant to common stocks to equity | 0 | (3,057 | ) | |||||
Reclassification of warrant to common stocks to mezzanine equity | (1,149 | ) | 0 | |||||
Change in fair value of warrants | 15,046 | 41,505 | ||||||
Conversion of warrants to common stock upon initial public offering | (70,677 | ) | ||||||
Balance at the end of the period | $ | 0 | $ | 56,780 |
F - 20
NOTE 5: | GOODWILL AND INTANGIBLE ASSETS, NET |
September 30, 2021 | December 31, 2020 | |||||||||||
Weighted average remaining useful life (in years) | Balance | Balance | ||||||||||
(unaudited) | ||||||||||||
Gross carrying amount: | ||||||||||||
Technology | 3.5 | $ | 4,700 | $ | 4,700 | |||||||
Customer relationships | 3.36 | 2,419 | 2,340 | |||||||||
Tradename | 1.67 | 980 | 980 | |||||||||
8,099 | 8,020 | |||||||||||
Accumulated amortization and impairments: | ||||||||||||
Technology | (3,216 | ) | (2,759 | ) | ||||||||
Customer relationships | (1,962 | ) | (1,706 | ) | ||||||||
Tradename | (794 | ) | (720 | ) | ||||||||
(5,972 | ) | (5,185 | ) | |||||||||
Intangible assets, net | $ | 2,127 | $ | 2,835 |
Remaining 2021 | $ | 218 | ||
2022 | 666 | |||
2023 | 554 | |||
2024 | 478 | |||
2025 | 148 | |||
2026 and thereafter | 63 | |||
$ | 2,127 |
F - 21
NOTE 6: | COMMITMENTS AND CONTINGENCIES |
a. | Operating Lease Commitments: |
Year ended December 31, | Rental of premises | |||
Remaining 2021 | $ | 555 | ||
2022 | 728 | |||
Total | $ | 1,283 |
Year ended December 31, | ||||
Remaining 2021 | $ | 2,085 | ||
2022 | 11,664 | |||
2023 | 11,601 | |||
2024 | 26,250 | |||
2025 | 13,000 | |||
2026 | 14,250 | |||
Total purchase commitment | $ | 78,850 |
F - 22
NOTE 6: | COMMITMENTS AND CONTINGENCIES (Cont.) |
Year ended December 31, | Rental of premises | |||
Remaining 2021 | $ | 389 | ||
2022 | 142 | |||
Total minimum lease payments | 531 | |||
Less: Amount representing interest | 6 | |||
Present value of net minimum lease payments | $ | 525 |
NOTE 7: | PROVISION FOR INCOME TAXES |
The Company recognized an income tax expense of $1,497 and $498 for the three months ended September 30, 2021, and 2020, respectively, and $4,749 and $2,404 for the nine months ended September 30, 2021 and 2020, respectively. The tax expense for these periods was primarily attributable to pre-tax foreign earnings. The Company’s effective tax rates of (6)% and (8)% for the three months ended September 30, 2021 and 2020, respectively, and of (12)% and (12)%, for the nine months ended September 30, 2021 and 2020, respectively, differ from the U.S. statutory tax rate primarily due to U.S. losses for which there is no benefit and the tax rate differences between the United States and foreign countries.
The Company has a full valuation allowance on its deferred tax assets. As a result, consistent with the prior year, the Company does not record a tax benefit on its losses because it is more likely than not that the benefit will not be realized. |
F - 23
NOTE 8: | CONDENSED CONSOLIDATED BALANCE SHEET COMPONENTS |
a. | Prepaid expenses and other current assets: |
September 30, 2021 | December 31, 2020 | |||||||
(unaudited) | ||||||||
Prepaid expenses | $ | 7,007 | $ | 2,086 | ||||
Government institutions | 170 | 335 | ||||||
Deposit | 477 | 292 | ||||||
Other | 172 | 56 | ||||||
$ | 7,826 | $ | 2,769 |
b. | Property and Equipment, net: |
September 30, 2021 | December 31, 2020 | |||||||
(unaudited) | ||||||||
Cost: | ||||||||
Computers and peripheral equipment | $ | 5,085 | $ | 3,656 | ||||
Office furniture and equipment | 750 | 679 | ||||||
Leasehold improvements | 516 | 516 | ||||||
Capital leases of computers and peripheral equipment | 253 | 253 | ||||||
Internal use software | 5,746 | 2,142 | ||||||
12,350 | 7,246 | |||||||
Accumulated depreciation | (4,107 | ) | (3,099 | ) | ||||
Depreciated cost | $ | 8,243 | $ | 4,147 |
F - 24
NOTE 8: | CONDENSED CONSOLIDATED BALANCE SHEET COMPONENTS (Cont.) |
c. | Other assets, noncurrent: |
September 30, 2021 | December 31, 2020 | |||||||
(unaudited) | ||||||||
Restricted cash | $ | 408 | $ | 644 | ||||
Severance pay fund | 1,802 | 1,673 | ||||||
Deferred offering costs | 0 | 1,082 | ||||||
Other | 161 | 165 | ||||||
$ | 2,371 | $ | 3,564 |
d. | Accrued expenses and other current liabilities: |
September 30, 2021 | December 31, 2020 | |||||||
(unaudited) | ||||||||
Accrued expenses | $ | 7,464 | $ | 4,687 | ||||
Accrued taxes | 8,125 | 4,984 | ||||||
Other | 1,623 | 1,580 | ||||||
$ | 17,212 | $ | 11,251 |
F - 25
NOTE 9: | NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
(unaudited) | ||||||||||||||||
Numerator: | ||||||||||||||||
Net loss | $ | 25,150 | $ | 6,434 | $ | 43,425 | $ | 22,424 | ||||||||
Preferred stock accretion | 0 | 3,107 | 6,672 | 8,716 | ||||||||||||
Redemption of redeemable convertible preferred stock, upon initial public offering | 1,569 | 0 | 1,569 | 0 | ||||||||||||
Total loss attributable to common stockholders, for basic and diluted net loss per share | $ | 26,719 | $ | 9,541 | $ | 51,666 | $ | 31,140 | ||||||||
Denominator: | ||||||||||||||||
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted | 102,938,814 | 25,217,473 | 51,647,683 | 24,790,067 | ||||||||||||
Net loss per share attributable to common stockholders, basic and diluted | $ | 0.26 | $ | 0.38 | $ | 1.00 | $ | 1.26 |
September 30, 2021 | ||||
Warrants to purchase common stock | 613,255 | |||
Outstanding stock options | 30,625,929 | |||
Total | 31,239,184 |
F - 26
NOTE 10: | REPORTABLE SEGMENTS |
a. | Reportable segments: |
F - 27
NOTE 10: | REPORTABLE SEGMENTS (Cont.) |
Enterprise, Education and Technology | Media and Telecom | Total | ||||||||||
Three months ended September 30, 2021 (unaudited) | ||||||||||||
Revenues | $ | 30,410 | $ | 12,574 | $ | 42,984 | ||||||
Gross profit | $ | 22,157 | $ | 5,660 | $ | 27,817 | ||||||
Operating expenses | 33,690 | |||||||||||
Financial expenses, net | 17,780 | |||||||||||
Provision for income taxes | 1,497 | |||||||||||
Net loss | $ | 25,150 |
Enterprise, Education and Technology | Media and Telecom | Total | ||||||||||
Three months ended September 30, 2020 (unaudited) | ||||||||||||
Revenues | $ | 21,001 | $ | 9,607 | $ | 30,608 | ||||||
Gross profit | $ | 15,046 | $ | 3,048 | $ | 18,094 | ||||||
Operating expenses | 22,505 | |||||||||||
Financial expenses, net | 1,525 | |||||||||||
Provision for income taxes | 498 | |||||||||||
Net loss | $ | 6,434 |
Enterprise, Education and Technology | Media and Telecom | Total | ||||||||||
Nine months ended September 30, 2021 (unaudited) | ||||||||||||
Revenues | $ | 87,966 | $ | 34,334 | $ | 122,300 | ||||||
Gross profit | $ | 62,057 | $ | 13,872 | $ | 75,929 | ||||||
Operating expenses | 96,173 | |||||||||||
Financial expenses, net | 18,432 | |||||||||||
Provision for income taxes | 4,749 | |||||||||||
Net loss | $ | 43,425 |
F - 28
NOTE 10: | REPORTABLE SEGMENTS (Cont.) |
Enterprise, Education and Technology | Media and Telecom | Total | ||||||||||
Nine months ended September 30, 2020 (unaudited) | ||||||||||||
Revenues | $ | 56,169 | $ | 29,094 | $ | 85,263 | ||||||
Gross profit | $ | 41,226 | $ | 10,319 | $ | 51,545 | ||||||
Operating expenses | 58,756 | |||||||||||
Financial expenses, net | 12,809 | |||||||||||
Provision for income taxes | 2,404 | |||||||||||
Net loss | $ | 22,424 |
b. | Geographical information: |
September 30, 2021 | December 31, 2020 | |||||||
(unaudited) | ||||||||
US | $ | 6,445 | $ | 2,850 | ||||
EMEA | 1,760 | 1,283 | ||||||
Other | 38 | 14 | ||||||
$ | 8,243 | $ | 4,147 |
F - 29
Remaining 2021 | $ | 250 | ||
2022 | 3,000 | |||
2023 | 6,000 | |||
2024 | 52,500 | |||
$ | 61,750 |
F - 30
NOTE 12: | CONVERTIBLE AND REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) |
a. | Upon the closing of the Company’s IPO, Series A, B, C, D, D-1 and E of its convertible and redeemable convertible preferred stock automatically converted into 68,325,487 shares of common stock after giving effect to certain adjustments in connection with the 1-to-4.5 forward stock split (the “Stock Split”, see paragraph {d} “Stock Split” within this Note for further information). |
December 31, 2020 | ||||||||||||
Authorized | Issued and outstanding | Aggregate liquidation preference | ||||||||||
Number of shares | ||||||||||||
Series A Preferred stock | 1,043,778 | 1,043,778 | $ | 1,921 | ||||||||
Series B Preferred stock | 3,240,085 | 3,240,085 | 12,631 | |||||||||
Series C Preferred stock | 3,434,556 | 3,403,141 | 18,110 | |||||||||
Series D Preferred stock | 2,870,544 | 2,814,258 | 17,287 | |||||||||
Series D-1 Preferred stock | 714,286 | 714,286 | 4,354 | |||||||||
Series E Preferred stock | 4,042,693 | 3,940,885 | 40,000 | |||||||||
Series F Preferred stock | 1,666,667 | 1,666,667 | 93,043 | |||||||||
Convertible and redeemable convertible Preferred stock | 17,012,609 | 16,823,100 | $ | 187,346 |
F - 31
NOTE 12: | CONVERTIBLE AND REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (Cont.) |
b. | Receivables on Account of Stock: |
c. | Equity Incentive Plans: |
F - 32
NOTE 12: | CONVERTIBLE AND REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (Cont.) |
A summary of the Company’s stock option activity with respect to options granted under the Equity Incentive Plans is as follows:
Number of Options | Weighted Average exercise price | Weighted remaining contractual term (years) | Aggregate Intrinsic Value (as restated) | |||||||||||||
Outstanding as of December 31, 2020 | 31,981,404 | $ | 3.86 | 7.72 | $ | 100,495 | ||||||||||
Granted | 0 | - | ||||||||||||||
Exercised | (527,437 | ) | 1.26 | 4,764 | ||||||||||||
Forfeited | (828,038 | ) | 3.12 | |||||||||||||
Outstanding as of September 30, 2021 (unaudited) | 30,625,929 | $ | 3.92 | 7.00 | $ | 195,001 | ||||||||||
Exercisable options as of September 30, 2021 (unaudited) | 17,068,716 | $ | 1.38 | 5.39 | $ | 152,115 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
(unaudited) | ||||||||||||||||
Cost of revenues | $ | 168 | $ | 63 | $ | 635 | $ | 208 | ||||||||
Research and development | 528 | 256 | 2,252 | 681 | ||||||||||||
Sales and marketing | 438 | 341 | 1,641 | 788 | ||||||||||||
General and administrative | 2,602 | 373 | 8,382 | 1,152 | ||||||||||||
Total expenses | $ | 3,736 | $ | 1,033 | $ | 12,910 | $ | 2,829 |
F - 33
NOTE 12: | CONVERTIBLE AND REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (Cont.) |
d. | Stock Split: |
NOTE 13: | SELECTED STATEMENT OF OPERATIONS DATA |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
(unaudited) | ||||||||||||||||
Financial income: | ||||||||||||||||
Interest income | $ | 2 | $ | 0 | $ | 3 | $ | 18 | ||||||||
Foreign currency translation adjustment, net | 0 | 0 | 0 | 635 | ||||||||||||
2 | 0 | 3 | 653 | |||||||||||||
Financial expenses: | ||||||||||||||||
Bank fees | 23 | 16 | 504 | 51 | ||||||||||||
Remeasurement of warrants to fair value | 16,822 | 0 | 15,046 | 10,034 | ||||||||||||
Interest expense | 766 | 1,037 | 2,228 | 3,062 | ||||||||||||
Foreign currency translation adjustments, net | 61 | 341 | 335 | 0 | ||||||||||||
Other | 110 | 131 | 322 | 315 | ||||||||||||
17,782 | 1,525 | 18,435 | 13,462 | |||||||||||||
Financial expenses, net | $ | 17,780 | $ | 1,525 | $ | 18,432 | $ | 12,809 |
F - 34
• | 2009: Brought to market our LMS Video solution and began selling to educational institutions |
• | 2011: Released our Video Portal product and started selling to enterprises |
• | 2013: Expanded into live video with the launch of our Town Halls product |
• | 2014: Launched our TV Content Management System for media and telecom companies, following the acquisition of Tvinci Ltd., a leading provider of an OTT TV platform |
• | 2017: Launched our Lecture Capture solution |
• | 2018: Launched our Video Messaging product |
• | 2018: Acquired certain of the assets of Rapt Media, Inc., an interactive personalized video startup |
• | 2020: Added real time conferencing capabilities to our Media Services following the acquisition of Newrow, Inc., a video conferencing and collaboration platform |
• | 2020: Released our Webinars, Virtual Events and Meetings products, as well as our Virtual Classroom and TV Solutions |
• | Enterprise, Education & Technology: Includes revenues from all of our products, industry solutions for education customers, and Media Services (except for media and telecom customers), as well as associated professional services for those offerings. These solutions are generally sold through our EE&T sales teams. Subscription revenues are primarily generated on a per full-time equivalent basis for on-demand and live products and solutions, per host basis for real-time-conferencing products and solutions, and per participant basis for the Virtual Events product (which intersects on-demand, live, and real-time-conferencing video). Contracts are generally 12 to 24 months in length. Billing is primarily done on an annual basis. The average time it takes to implement EE&T offerings ranges from three to six months. |
• | Media & Telecom: Includes revenues from our TV Solution and Media Services for media and telecom customers, as well as associated professional services for those offerings. These offerings are generally sold through our media and telecom sales team. Revenues are generated on a per end-subscriber basis for telecom customers, and on a per video play basis for media customers. Contracts are generally two to five years in length. Billing is generally done on a quarterly or annual basis. It generally takes from nine to 12 months to implement M&T offerings. The upfront resources required for implementation of our Media & Telecom solutions generally exceed those of our other offerings, resulting in a longer period from initial booking to go-live and a higher proportion of professional services revenue as a percentage of overall revenue. Additionally, a higher proportion of revenue comes from customers who choose to license our offerings through private cloud and on-premise deployments, which also impacts our gross margin. In the long-term, we expect the margins for this segment to improve due to the following: increasing the ratio of subscription revenue to professional services with scale, improved efficiencies of both production and professional services costs, and an increase in the proportion of revenues from media customers, which generally entail simpler deployments compared to telecom customers. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
(unaudited) | ||||||||||||||||
(in thousands) | ||||||||||||||||
Revenue | ||||||||||||||||
Enterprise, Education & Technology | $ | 30,410 | $ | 21,001 | $ | 87,966 | $ | 56,169 | ||||||||
Media & Telecom | $ | 12,574 | $ | 9,607 | $ | 34,334 | $ | 29,094 | ||||||||
Total Revenue | $ | 42,984 | $ | 30,608 | $ | 122,300 | $ | 85,263 | ||||||||
Gross Profit | ||||||||||||||||
Enterprise, Education & Technology | $ | 22,157 | $ | 15,046 | $ | 62,057 | $ | 41,226 | ||||||||
Media & Telecom | $ | 5,660 | $ | 3,048 | $ | 13,872 | $ | 10,319 | ||||||||
Total Gross Profit | $ | 27,817 | $ | 18,094 | $ | 75,929 | $ | 51,545 |
For the Three Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
(dollar amounts in thousands) | ||||||||
Annualized Recurring Revenue | $ | 151,704 | $ | 107,270 | ||||
Net Dollar Retention Rate | 117 | % | 111 | % | ||||
Remaining Performance Obligations | $ | 162,316 | $ | 130,735 |
• | such measures do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments; |
• | such measures do not reflect changes in, or cash requirements for, our working capital needs; |
• | such measures do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments on our debt; |
• | such measures do not reflect our tax expense or the cash requirements to pay our taxes; |
• | although depreciation and amortization expense and non-cash stock-based compensation expense are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and such measures do not reflect any cash requirements for such replacements; and |
• | other companies in our industry may calculate such measures differently than we do, thereby further limiting their usefulness as comparative measures. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
(USD in thousands) | ||||||||||||||||
Net loss | $ | (25,150 | ) | $ | (6,434 | ) | $ | (43,425 | ) | $ | (22,424 | ) | ||||
Financial expenses, net (a) | 17,780 | 1,525 | 18,432 | 12,809 | ||||||||||||
Provision for income taxes | 1,497 | 498 | 4,749 | 2,404 | ||||||||||||
Depreciation and amortization | 594 | 1,082 | 1,795 | 3,177 | ||||||||||||
EBITDA | (5,279 | ) | (3,329 | ) | (18,449 | ) | (4,034 | ) | ||||||||
Non-cash stock-based compensation expense | 3,736 | 1,033 | 12,910 | 2,829 | ||||||||||||
Abandonment costs (b) | - | 3,969 | - | 3,969 | ||||||||||||
Gain on sale of property and equipment (c) | (757 | ) | - | (757 | ) | - | ||||||||||
Other operating expenses (d) | - | - | 1,724 | - | ||||||||||||
Adjusted EBITDA | $ | (2,300 | ) | $ | 1,673 | $ | (4,572 | ) | $ | 2,764 |
(a) | The three months ended September 30, 2021 and 2020, and the nine months ended September 30, 2021 and 2020 include $16,822, $0, $15,046 and $10,034 respectively, of remeasurement of warrants to fair value, and $766, $1,037, $2,228 and $3,062 of interest expenses. |
(b) | The three and nine months ended September 30, 2020 includes a $3,969 one-time expense related to the abandonment of data center equipment in connection with our transition to a public cloud infrastructure. |
(c) | The three and nine months ended September 30, 2021 includes a one-time gain on sale of data center equipment in connection with our transition to a public cloud infrastructure. |
(d) | The three and nine months ended September 30, 2021 include other operating expenses related to the forgiveness of loans to certain of our directors and executive officers in connection with the public filing of the registration statement in connection with our IPO. |
Three Months Ended September 30, | Period-over-Period Change | Nine Months Ended September 30, | Period-over-Period Change | |||||||||||||||||||||||||||||
2021 | 2020 | Dollar | Percentage | 2021 | 2020 | Dollar | Percentage | |||||||||||||||||||||||||
(unaudited) | (unaudited) | |||||||||||||||||||||||||||||||
(in thousands, except percentages) | ||||||||||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||
Enterprise, Education & Technology | $ | 30,410 | $ | 21,001 | $ | 9,409 | 45 | % | $ | 87,966 | $ | 56,169 | $ | 31,797 | 57 | % | ||||||||||||||||
Media & Telecom | 12,574 | 9,607 | 2,967 | 31 | % | 34,334 | 29,094 | 5,240 | 18 | % | ||||||||||||||||||||||
Total revenue | 42,984 | 30,608 | 12,376 | 40 | % | 122,300 | 85,263 | 37,037 | 43 | % | ||||||||||||||||||||||
Cost of revenue | 15,167 | 12,514 | 2,653 | 21 | % | 46,371 | 33,718 | 12,653 | 38 | % | ||||||||||||||||||||||
Total gross profit | 27,817 | 18,094 | 9,723 | 54 | % | 75,929 | 51,545 | 24,384 | 47 | % | ||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||
Research and development | 12,363 | 7,275 | 5,088 | 70 | % | 35,050 | 20,543 | 14,507 | 71 | % | ||||||||||||||||||||||
Selling and marketing | 11,257 | 6,651 | 4,606 | 69 | % | 31,942 | 21,451 | 10,491 | 49 | % | ||||||||||||||||||||||
General and administrative | 10,070 | 8,579 | 1,491 | 17 | % | 27,457 | 16,762 | 10,695 | 64 | % | ||||||||||||||||||||||
Other operating expenses | - | - | 1,724 | - | 1,724 | |||||||||||||||||||||||||||
Total operating expenses | 33,690 | 22,505 | 11,185 | 50 | % | 96,173 | 58,756 | 37,417 | 64 | % | ||||||||||||||||||||||
Operating loss | 5,873 | 4,411 | 1,462 | 33 | % | 20,244 | 7,211 | 13,033 | 181 | % | ||||||||||||||||||||||
Financial expenses, net | 17,780 | 1,525 | 16,255 | 1,066 | % | 18,432 | 12,809 | 5,623 | 44 | % | ||||||||||||||||||||||
Loss before provision for income taxes | 23,653 | 5,936 | 17,717 | 298 | % | 38,676 | 20,020 | 18,656 | 93 | % | ||||||||||||||||||||||
Provision for income taxes | 1,497 | 498 | 999 | 201 | % | 4,749 | 2,404 | 2,345 | 98 | % | ||||||||||||||||||||||
Net loss | $ | 25,150 | $ | 6,434 | $ | 18,716 | 291 | % | $ | 43,425 | $ | 22,424 | $ | 21,001 | 94 | % |
• | Enterprise, Education & Technology (71% and 69% of revenue for the three months ended September 30, 2021 and 2020, respectively, and 72% and 66% of revenue for the nine months ended September 30, 2021 and 2020, respectively): Our EE&T segment represents revenues from all of our products, industry solutions for education customers, and Media Services (except for M&T customers), as well as associated professional services for those offerings. |
• | Media & Telecom (29% and 31% of revenue for the three months ended September 30, 2021 and 2020, respectively, and 28% and 34% of revenue for the nine months ended September 30, 2021 and 2020, respectively): Our M&T segment primarily represents revenues from our TV Solution and Media Services sold to media and telecom customers. |
Three Months Ended September 30, | Period-over-Period Change | |||||||||||||||
2021 | 2020 | Dollar | Percentage | |||||||||||||
(in thousands, except percentages) | ||||||||||||||||
Enterprise, Education & Technology revenue: | ||||||||||||||||
Subscription revenue | $ | 27,952 | $ | 19,765 | $ | 8,187 | 41 | % | ||||||||
Professional services revenue | 2,458 | 1,236 | 1,222 | 99 | % | |||||||||||
Total Enterprise, Education & Technology revenue | $ | 30,410 | $ | 21,001 | $ | 9,409 | 45 | % | ||||||||
Enterprise, Education & Technology gross profit: | ||||||||||||||||
Subscription gross profit | $ | 22,471 | $ | 15,731 | $ | 6,740 | 43 | % | ||||||||
Professional services gross loss | (314 | ) | (685 | ) | 371 | 54 | % | |||||||||
Total Enterprise, Education & Technology gross profit | $ | 22,157 | $ | 15,046 | $ | 7,111 | 47 | % |
Three Months Ended September 30, | Period-over-Period Change | |||||||||||||||
2021 | 2020 | Dollar | Percentage | |||||||||||||
(in thousands, except percentages) | ||||||||||||||||
Media & Telecom revenue: | ||||||||||||||||
Subscription revenue | $ | 9,723 | $ | 7,123 | $ | 2,600 | 37 | % | ||||||||
Professional services revenue | 2,851 | 2,484 | 367 | 15 | % | |||||||||||
Total Media & Telecom revenue | $ | 12,574 | $ | 9,607 | $ | 2,967 | 31 | % | ||||||||
Media & Telecom gross profit: | ||||||||||||||||
Subscription gross profit | $ | 5,575 | $ | 3,457 | $ | 2,118 | 61 | % | ||||||||
Professional services gross profit (loss) | 85 | (409 | ) | 494 | 121 | % | ||||||||||
Total Media & Telecom gross profit | $ | 5,660 | $ | 3,048 | $ | 2,612 | 86 | % |
Three Months Ended September 30, | Period-over-Period Change | |||||||||||||||
2021 | 2020 | Dollar | Percentage | |||||||||||||
(in thousands, except percentages) | ||||||||||||||||
Employee compensation | $ | 9,850 | $ | 5,873 | $ | 3,977 | 68 | % | ||||||||
Subcontractors and Consultants | 1,050 | 751 | 299 | 40 | % | |||||||||||
Other | 1,463 | 651 | 812 | 125 | % | |||||||||||
Total research and development expenses | $ | 12,363 | $ | 7,275 | $ | 5,088 | 70 | % |
Three Months Ended September 30, | Period-over-Period Change | |||||||||||||||
2021 | 2020 | Dollar | Percentage | |||||||||||||
(in thousands, except percentages) | ||||||||||||||||
Employee compensation & commission | $ | 9,210 | $ | 5,644 | $ | 3,566 | 63 | % | ||||||||
Marketing expenses | 1,155 | 319 | 836 | 262 | % | |||||||||||
Other | 892 | 688 | 204 | 30 | % | |||||||||||
Total selling and marketing expenses | $ | 11,257 | $ | 6,651 | $ | 4,606 | 69 | % |
Three Months Ended September 30, | Period-over-Period Change | |||||||||||||||
2021 | 2020 | Dollar | Percentage | |||||||||||||
(in thousands, except percentages) | ||||||||||||||||
Employee compensation | $ | 7,096 | $ | 3,242 | $ | 3,854 | 119 | % | ||||||||
Professional fees and insurance | 1,265 | 460 | 805 | 175 | % | |||||||||||
Travel and entertainment | 21 | 24 | (3 | ) | (13 | )% | ||||||||||
Abandonment of data center equipment | - | 3,969 | (3,969 | ) | % | |||||||||||
Gain on sale of property and equipment | (757 | ) | - | (757 | ) | % | ||||||||||
Other | 2,445 | 884 | 1,561 | 177 | % | |||||||||||
Total general and administrative expenses | $ | 10,070 | $ | 8,579 | $ | 1,491 | 17 | % |
Nine Months Ended September 30, | Period-over-Period Change | |||||||||||||||
2021 | 2020 | Dollar | Percentage | |||||||||||||
(in thousands, except percentages) | ||||||||||||||||
Enterprise, Education & Technology revenue: | ||||||||||||||||
Subscription revenue | $ | 79,120 | $ | 53,288 | $ | 25,832 | 48 | % | ||||||||
Professional services revenue | 8,846 | 2,881 | 5,965 | 207 | % | |||||||||||
Total Enterprise, Education & Technology revenue | $ | 87,966 | $ | 56,169 | $ | 31,797 | 57 | % | ||||||||
Enterprise, Education & Technology gross profit: | ||||||||||||||||
Subscription gross profit | 61,167 | $ | 44,051 | $ | 17,116 | 39 | % | |||||||||
Professional services gross profit (loss) | 890 | (2,825 | ) | 3,715 | 132 | % | ||||||||||
Total Enterprise, Education & Technology gross profit | $ | 62,057 | $ | 41,226 | $ | 20,831 | 51 | % |
Nine Months Ended September 30, | Period-over-Period Change | |||||||||||||||
2021 | 2020 | Dollar | Percentage | |||||||||||||
(in thousands, except percentages) | ||||||||||||||||
Media & Telecom revenue: | ||||||||||||||||
Subscription revenue | $ | 27,363 | $ | 21,773 | $ | 5,590 | 26 | % | ||||||||
Professional services revenue | 6,971 | 7,321 | (350 | ) | (5 | )% | ||||||||||
Total Media & Telecom revenue | $ | 34,334 | $ | 29,094 | $ | 5,240 | 18 | % | ||||||||
Media & Telecom gross profit: | ||||||||||||||||
Subscription gross profit | $ | 15,793 | $ | 11,274 | $ | 4,519 | 40 | % | ||||||||
Professional services gross loss | (1,921 | ) | (955 | ) | (966 | ) | (101 | )% | ||||||||
Total Media & Telecom gross profit | $ | 13,872 | $ | 10,319 | $ | 3,553 | 34 | % |
Nine Months Ended September 30, | Period-over-Period Change | |||||||||||||||
2021 | 2020 | Dollar | Percentage | |||||||||||||
(in thousands, except percentages) | ||||||||||||||||
Employee compensation | $ | 28,409 | $ | 16,237 | $ | 12,172 | 75 | % | ||||||||
Subcontractors and Consultants | 2,842 | 2,294 | 548 | 24 | % | |||||||||||
Other | 3,799 | 2,012 | 1,787 | 89 | % | |||||||||||
Total research and development expenses | $ | 35,050 | $ | 20,543 | $ | 14,507 | 71 | % |
Nine Months Ended September 30, | Period-over-Period Change | |||||||||||||||
2021 | 2020 | Dollar | Percentage | |||||||||||||
(in thousands, except percentages) | ||||||||||||||||
Employee compensation & commission | $ | 26,763 | $ | 16,470 | $ | 10,293 | 62 | % | ||||||||
Marketing expenses | 2,661 | 2,636 | 25 | 1 | % | |||||||||||
Other | 2,518 | 2,345 | 173 | 7 | % | |||||||||||
Total selling and marketing expenses | $ | 31,942 | $ | 21,451 | $ | 10,491 | 49 | % |
Nine Months Ended September 30, | Period-over-Period Change | |||||||||||||||
2021 | 2020 | Dollar | Percentage | |||||||||||||
(in thousands, except percentages) | ||||||||||||||||
Employee compensation | $ | 20,832 | $ | 9,125 | $ | 11,707 | 128 | % | ||||||||
Professional fees and insurance | 2,430 | 1,094 | 1,336 | 122 | % | |||||||||||
Travel and entertainment | 73 | 158 | (85 | ) | (54 | )% | ||||||||||
Abandonment of data center equipment | - | 3,969 | (3,969 | ) | % | |||||||||||
Gain on sale of property and equipment | (757 | ) | - | (757 | ) | % | ||||||||||
Other | 4,879 | 2,416 | 2,463 | 102 | % | |||||||||||
Total general and administrative expenses | $ | 27,457 | $ | 16,762 | $ | 10,695 | 64 | % |
• | create, issue, incur, assume, become liable in respect of or suffer to exist any debt or liens; |
• | consummate any merger, consolidation or amalgamation, or liquidate, wind up or dissolve, or dispose of all or substantially all of our or their respective property or business; |
• | dispose of property or, in the case of our subsidiaries, issue or sell any shares of such subsidiary’s capital stock; |
• | repay, prepay, redeem, purchase, retire or defease subordinated debt; |
• | declare or pay dividends or make certain other restricted payments; |
• | make certain investments; |
• | enter into transactions with affiliates; |
• | enter into new lines of business; and |
• | make certain amendments to our or their respective organizational documents or certain material contracts. |
Nine Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
(unaudited) | ||||||||
(in thousands) | ||||||||
Net cash provided by (used in) operating activities | $ | (11,370 | ) | $ | 1,720 | |||
Net cash used in investing activities | (3,770 | ) | (1,669 | ) | ||||
Net cash provided by financing activities | 166,933 | 221 | ||||||
Net increase in cash, cash equivalents, and restricted cash | 151,793 | 272 | ||||||
Cash, cash equivalents, and restricted cash at beginning of period | 28,355 | 27,144 | ||||||
Cash, cash equivalents and restricted cash at end of period | $ | 180,148 | $ | 27,416 |
• | attract new customers and maintain our relationships with, and increase revenue from, our existing customers; |
• | provide excellent customer and end user experiences; |
• | maintain the security and reliability of our platform, products and solutions; |
• | introduce and grow adoption of our offerings in new markets outside the United States; |
• | hire, integrate, train and retain skilled personnel; |
• | adequately expand our sales force and distribution channels; |
• | continually enhance and improve our platform, products and solutions, including the features, integrations and capabilities we offer, and develop or otherwise introduce new products and solutions; |
• | obtain, maintain, protect and enforce intellectual property protection for our platform and technologies; |
• | expand into new technologies, industries and use cases; |
• | expand and maintain our partner ecosystem; |
• | comply with existing and new applicable laws and regulations, including those related to data privacy and security; |
• | price our offerings effectively and determine appropriate contract terms; |
• | determine the most appropriate investments for our limited resources; |
• | successfully compete against established companies and new market entrants; and |
• | increase awareness of our brand on a global basis. |
• | growing our base of field sales representatives and customer success managers, introducing inside sales and self-serve offerings and distribution channels, and expanding our customer base; |
• | extending our product leadership by investing in our Webinars and Meetings products, as well as our Virtual Classroom industry solution, our Virtual Events product, our TV Solution and other recently introduced offerings, as well as by developing new products, expanding our platform into additional industries and enhancing our Media Services offerings with additional core capabilities and technologies; |
• | increasing sales within our existing customer base through increased usage of our platform and the cross-selling of additional products and solutions; |
• | augmenting our current offerings by increasing the breadth of our technology partnerships and exploring potential transactions that may enhance our capabilities or increase the scope of our technology footprint; |
• | continuing to grow our international operations; and |
• | general administration, including legal, accounting, and other expenses related to our transition to being a new public company. |
• | our ability to attract new customers and increase revenue from our existing customers; |
• | the loss of existing customers; |
• | subscription renewals, and the timing and terms of such renewals; |
• | fluctuations in customer usage from period to period, including as a result of seasonality in our customers’ underlying businesses, which create variability in our cost of revenue; |
• | customer satisfaction with our products, solutions, platform capabilities and customer support; |
• | mergers and acquisitions or other factors resulting in the consolidation of our customer base; |
• | mix of our revenue; |
• | our ability to gain new partners and retain existing partners; |
• | fluctuations in stock-based compensation expense; |
• | decisions by potential customers to purchase competing offerings or develop in-house technologies and solutions as alternatives to our offerings; |
• | changes in the spending patterns of our customers; |
• | the amount and timing of operating expenses related to the maintenance and expansion of our business and operations, including investments in research and development, sales and marketing, and general and administrative resources; |
• | our increasing reliance on a public cloud infrastructure, which will result in higher variable costs compared to our own data centers; |
• | network outages; |
• | developments or disputes concerning our intellectual property or proprietary rights, our platform, products or solutions, or third-party intellectual property or proprietary rights; |
• | negative publicity about our company, our offerings or our partners, including as a result of actual or perceived breaches of, or failures relating to, privacy, data protection or data security; |
• | the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired companies; |
• | general economic, industry, and market conditions; |
• | the impact of the ongoing pandemic related to COVID-19 and its variants, or any other pandemic, epidemic, outbreak of infectious disease or other global health crises on our business, the businesses of our customers and partners and general economic conditions; |
• | the impact of political uncertainty or unrest; |
• | changes in our pricing policies or those of our competitors; |
• | fluctuations in the growth rate of the markets that our offerings address; |
• | seasonality in the underlying businesses of our customers, including budgeting cycles, purchasing practices and usage patterns; |
• | the business strengths or weakness of our customers; |
• | our ability to collect timely on invoices or receivables; |
• | the cost and potential outcomes of future litigation or other disputes; |
• | future accounting pronouncements or changes in our accounting policies; |
• | our overall effective tax rate, including impacts caused by any reorganization in our corporate tax structure and any new legislation or regulatory developments; |
• | our ability to successfully expand our business in the United States and internationally; |
• | fluctuations in the mix of on-premise and SaaS/PaaS deployments; |
• | fluctuations in foreign currency exchange rates; and |
• | the timing and success of new products and solutions introduced by us or our competitors, or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers or partners. |
• | breadth and scale of products, solutions and Media Services; |
• | ability to provide a cross-organization video platform with multiple interoperable video solutions; |
• | ability to support converging experiences across live, real-time and on-demand video; |
• | flexibility to build and support custom workflows using video technology; |
• | ease of customization and integration with other products; |
• | quality of service and customer satisfaction; |
• | flexibility of deployment options; |
• | ability to innovate quickly; |
• | data capabilities, including advanced analytics and AI; |
• | enterprise-grade reliability, security and scalability; |
• | cost of implementation and ongoing use; |
• | brand recognition; and |
• | corporate culture. |
• | Microsoft/Azure Media Services, Amazon/AWS Media Services and Twilio for our Media Services; |
• | Microsoft/Teams and Cisco (through their partnership with Vbrick) for Video Portal, Town Halls and Video Messaging; |
• | Zoom, Cisco/Webex and Adobe/Connect for Meetings and Webinars; |
• | Intrado and Hopin for Virtual Events; |
• | Zoom, Microsoft/Teams and Cisco/Webex for our education solutions; and |
• | Synamedia (formerly under Cisco), MediaKind (formerly under Ericsson) and Comcast Technology Solutions for our Media & Telecom Solution. |
• | unexpected changes in practices, tariffs, export quotas, custom duties, trade disputes, tax laws and treaties, particularly due to economic tensions and trade negotiations or other trade restrictions; |
• | different labor regulations, especially in the European Union, where labor laws are generally more advantageous to employees as compared to the United States, including deemed hourly wage and overtime regulations in these locations; |
• | exposure to many evolving stringent and potentially inconsistent laws and regulations relating to privacy, data protection, and information security, particularly in the European Union; |
• | changes in a specific country’s or region’s political or economic conditions; |
• | risks resulting from the ongoing pandemic related to COVID-19 and its variants, or any other pandemic, epidemic, or outbreak of infectious disease, including uncertainty regarding what measures the U.S. or foreign governments will take in response; |
• | risks resulting from changes in currency exchange rates; |
• | challenges inherent to efficiently managing an increased number of employees over large geographic distances, including the need to implement appropriate systems, policies, benefits, and compliance programs; |
• | difficulties in maintaining our corporate culture with a dispersed workforce; |
• | risks relating to the implementation of exchange controls, including restrictions promulgated by the United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), and other similar trade protection regulations and measures in the United States or in other jurisdictions; |
• | reduced ability to timely collect amounts owed to us by our customers in countries where our recourse may be more limited; |
• | slower than anticipated availability and adoption of cloud infrastructures by international businesses, which would increase our on-premise deployments; |
• | limitations on our ability to reinvest earnings from operations derived from one country to fund the capital needs of our operations in other countries; |
• | potential changes in laws, regulations, and costs affecting our U.K. operations and personnel due to Brexit; |
• | limited or unfavorable—including greater difficulty in enforcing—intellectual property protection; and |
• | exposure to liabilities under anti-corruption and anti-money laundering laws, including the U.S. Foreign Corrupt Practices Act of 1977, as amended, and similar applicable laws and regulations in other jurisdictions. |
• | Any business, technology, product, or solution that we acquire or invest in could under-perform relative to our expectations and the price that we paid or not perform in accordance with our anticipated timetable, or we could fail to operate any such business or deploy any such technology, product, or solution profitably. |
• | We may incur or assume significant debt in connection with our acquisitions and other strategic transactions and relationships, which could also cause a deterioration of our credit ratings, result in increased borrowing costs and interest expense, and diminish our future access to the capital markets. |
• | Acquisitions and other strategic transactions and relationships could cause our financial results to differ from our own or the investment community’s expectations in any given period, or over the long-term. |
• | Pre-closing and post-closing earnings charges could adversely impact operating results in any given period, and the impact may be substantially different from period to period. |
• | Acquisitions and other strategic transactions and relationships could create demands on our management, operational resources, and financial and internal control systems that we are unable to effectively address. |
• | We could experience difficulty in integrating personnel, operations and financial and other controls and systems and retaining key employees and customers. |
• | We may be unable to achieve cost savings or other synergies anticipated in connection with an acquisition or other strategic transaction or relationship. |
• | We may assume unknown liabilities, known contingent liabilities that become realized, known liabilities that prove greater than anticipated, internal control deficiencies or exposure to regulatory sanctions resulting from the acquired company’s or investee’s activities and the realization of any of these liabilities or deficiencies may increase our expenses, adversely affect our financial position and/or cause us to fail to meet our public financial reporting obligations. |
• | In connection with acquisitions and other strategic transactions and relationships, we often enter into post-closing financial arrangements such as purchase price adjustments, earn-out obligations, and indemnification obligations, which may have unpredictable financial results. |
• | As a result of our acquisitions, we have recorded significant goodwill and other assets on our balance sheet and if we are not able to realize the value of these assets, or if the fair value of our investments declines, we may be required to incur impairment charges. |
• | We may have interests that diverge from those of our strategic partners and we may not be able to direct the management and operations of the strategic relationship in the manner we believe is most appropriate, exposing us to additional risk. |
• | Investing in or making loans to early-stage companies often entails a high degree of risk, and we may not achieve the strategic, technological, financial or commercial benefits we anticipate; we may lose our investment or fail to recoup our loan; or our investment may be illiquid for a greater-than-expected period of time. |
• | cease selling or using offerings that incorporate or are otherwise covered by the intellectual property rights that we allegedly infringe, misappropriate, or otherwise violate; |
• | make substantial payments for legal fees, settlement payments or other costs or damages, including potentially treble damages if we are found liable for willful infringement; |
• | obtain a license to sell or use the relevant technology, which may not be available on reasonable terms or at all, may be non-exclusive and thereby allow our competitors and other parties access to the same technology, and may require the payment of substantial licensing, royalty, or other fees; or |
• | redesign the allegedly infringing offerings to avoid infringement, misappropriation, or other violation, which could be costly, time-consuming, or impossible. |
• | develop or enhance our platform, products, or solutions; |
• | continue to expand our research and development and sales and marketing organizations; |
• | acquire complementary technologies, products, or businesses; |
• | expand operations in the United States or internationally; |
• | hire, train, and retain employees; or |
• | respond to competitive pressures or unanticipated working capital requirements. |
• | our ability to obtain additional debt or equity financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes may be limited; |
• | a portion of our cash flows from operations will be dedicated to the payment of principal and interest on the indebtedness and will not be available for other purposes, including operations, capital expenditures and future business opportunities; |
• | certain of our borrowings are at variable rates of interest, exposing us to the risk of increased interest rates; |
• | our ability to adjust to changing market conditions may be limited and may place us at a competitive disadvantage compared to less-leveraged competitors; and |
• | we may be vulnerable during a downturn in general economic conditions or in our business, or may be unable to carry on capital spending that is important to our growth. |
• | create, issue, incur, assume, become liable in respect of or suffer to exist any debt or liens; |
• | consummate any merger, consolidation or amalgamation, or liquidate, wind up or dissolve, or dispose of all or substantially all of our or their respective property or business; |
• | dispose of property or, in the case of our subsidiaries, issue or sell any shares of such subsidiary’s capital stock; |
• | repay, prepay, redeem, purchase, retire, or defease subordinated debt; |
• | declare or pay dividends or make certain other restricted payments; |
• | make certain investments; |
• | enter into transactions with affiliates; |
• | enter into new lines of business; and |
• | make certain amendments to our or their respective organizational documents or certain material contracts. |
• | implement usage-based pricing; |
• | discount pricing for competitive products; |
• | otherwise materially change their pricing rates or schemes; |
• | charge us to deliver our traffic at certain levels or at all; |
• | throttle traffic based on its source or type; |
• | implement bandwidth caps or other usage restrictions; or |
• | otherwise try to monetize or control access to their networks. |
• | actual or anticipated changes or fluctuations in our results of operations; |
• | the guidance we may provide to analysts and investors from time to time, and any changes in, or our failure to perform in line with, such guidance; |
• | announcements by us or our competitors of new offerings or new or terminated contracts, commercial relationships, or capital commitments; |
• | industry or financial analyst or investor reaction to our press releases, other public announcements, and filings with the SEC; |
• | rumors and market speculation involving us or other companies in our industry; |
• | future sales or expected future sales of our common stock; |
• | investor perceptions of us and the industries in which we operate; |
• | price and volume fluctuations in the overall stock market from time to time; |
• | changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; |
• | failure of industry or financial analysts to maintain coverage of us, the issuance of new or updated reports or recommendations by any analysts who follow our company, or our failure to meet the expectations of investors; |
• | actual or anticipated developments in our business or our competitors’ businesses or the competitive landscape generally; |
• | litigation involving us, other companies in our industry or both, or investigations by regulators into our operations or those of our competitors; |
• | developments or disputes concerning our intellectual property or proprietary rights or our solutions, or third-party intellectual or proprietary rights; |
• | announced or completed acquisitions of businesses or technologies, or other strategic transactions by us or our competitors; |
• | actual or perceived breaches of, or failures relating to, privacy, data protection or data security; |
• | new laws or regulations or new interpretations of existing laws or regulations applicable to our business; |
• | actual or anticipated changes in our management or our board of directors; |
• | general economic conditions and slow or negative growth of our target markets; and |
• | other events or factors, including those resulting from war, incidents of terrorism or responses to these events. |
• | the delegation to our board of directors of the exclusive right to expand the size of our board of directors and to elect directors to fill a vacancy created by any such expansion or the resignation, death or removal of a director, which will prevent stockholders from being able to fill vacancies on our board of directors; |
• | the division of our board of directors into three classes, with each class serving staggered three-year terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors; |
• | limitations on convening special stockholder meetings, which could make it difficult for our stockholders to adopt desired governance changes; |
• | advance notice procedures, which apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company; |
• | a prohibition on stockholder action by written consent, which means that our stockholders will only be able to take action at a meeting of stockholders; |
• | a forum selection clause, which means certain litigation against us can only be brought in Delaware; |
• | no authorization of cumulative voting, which limits the ability of minority stockholders to elect director candidates; |
• | directors will only be able to be removed for cause and only by the affirmative vote of two-thirds of the then outstanding voting power of our capital stock; |
• | certain amendments to our Certificate of Incorporation and Bylaws will require the approval of two-thirds of the then outstanding voting power of our capital stock; |
• | the affirmative vote of two-thirds of the then-outstanding voting power of our capital stock, voting as a single class, will be required for stockholders to amend or adopt any provision of our Bylaws; and |
• | the authorization of undesignated or “blank check” preferred stock, the terms of which may be established and shares of which may be issued without further action by our stockholders, which could be used to significantly dilute the ownership and voting rights of a hostile acquirer. |
• | we are required to have only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations disclosure; |
• | we are not required to engage an auditor to report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; |
• | we are not required to comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis); |
• | we are not required to submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay,” “say-on-frequency” and “say-on-golden parachutes;” and |
• | we are not required to disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation. |
Incorporated by Reference | Filed/ | |||||
Exhibit Number | Exhibit Description | Form | File No. | Exhibit | Filing Date | Furnished Herewith |
8-K | 001-40644 | 3.1 | 07/23/2021 | |||
8-K | 001-40644 | 3.2 | 07/23/2021 | |||
S-1/A | 333-253699 | 4.1 | 03/23/2021 | |||
S-1/A | 333-253699 | 4.2 | 03/23/2021 | |||
S-1/A | 333-253699 | 4.7 | 03/23/2021 | |||
S-1/A | 333-253699 | 10.1 | 07/12/2021 | |||
S-1/A | 333-253699 | 10.7 | 03/23/2021 | |||
S-1/A | 333-253699 | 10.8 | 03/23/2021 | |||
S-1/A | 333-253699 | 10.9 | 03/23/2021 | |||
S-1/A | 333-253699 | 10.17 | 03/23/2021 | |||
S-1/A | 333-253699 | 10.18 | 03/23/2021 | |||
* | ||||||
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101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document | * | ||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | * | ||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | * | ||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | * | ||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | * | ||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | * | ||||
104 | Cover Page Interactive Data File (as formatted as Inline XBRL and contained in Exhibit 101) | * |
KALTURA, INC. | |||
Date: November 04, 2021 | By: | /s/ Ron Yekutiel | |
Ron Yekutiel | |||
Chairman and Chief Executive Officer | |||
(Principal Executive Officer) | |||
Date: November 04, 2021 | By: | /s/ Yaron Garmazi | |
Yaron Garmazi | |||
Chief Financial Officer | |||
(Principal Financial and Accounting Officer) |