KLTR - Earnings call transcript Q2 2021

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Operator

Good morning everyone and welcome to the Kaltura Second Quarter 2021 Earnings Call. This call is being simultaneously webcast on the Company’s website in the Investors section under Events.

For opening remarks and introductions, I’ll now turn the call over to Erica Mannion at Sapphire Investor Relations. Please go ahead.

Erica Mannion

Thank you, and good morning. Kaltura and Yekutiel, Officer. Yaron from Chief Chairman today Officer; Executive Garmazi, me are Co-Founder, Ron and With Chief Financial will ended brief for a an begin the Kaltura. Ron results business overview review of the XX, June of quarter XXXX and second with the full-year then by of the XXXX. quarter, review the for will results for outlook Yaron, second third the financial followed Company’s quarter and

expectations plans cause risks management’s and the and from this Federal then results business. results, We involve promises may Laws, Kaltura’s that the materially call and call here. note, will the Please actual These within neither statements regarding include open discussed are not will meaning uncertainties but questions. and to of Securities including the statements guarantees, nor limited statements forward-looking differ for for to those financial future

on measure, which not with of note, presentation rights Please accordance webcast Additional as from differ the is including filings, with this EBITDA, revise except are whether Risk otherwise, section statements US XXXX Kaltura and as results the of information for Kaltura’s in as current XX, to forward-looking statements XX-Q assumes period of by periodic with SEC is non-GAAP with the XX, the actual of could or the filed the developments expectations your SEC to to material sole that based be contained conference Form all or found Rule XXX(b) update Factors July them, in to prospectus, on June and quarterly be GAAP. this XXXX, copyright pursuant on call, in cause no a can SEC. questions today, in property report law. Any prepared ended and made obligation Kaltura new filed describes All the reserved. forward-looking responses to other including adjusted result the required

please metric, comparable earnings to financial refer the release. most For GAAP of measure non-GAAP this reconciliation to a directly our

like to the over turn to Officer. Chairman call Ron, I’d Co-Founder, Executive Now, and Chief

Ron Yekutiel

for this And on thanks Erica. call us joining to the Thank you, everyone morning.

quarter I off report We’re acknowledgments a first thanks. with this excited and few our a to to want quick public special start as call company.

team, call for shareholders big passion and collaboration. long-time and of amazing ourselves, your for and steadfast founding employees, Kalturains, unwavering we for openness, always commitment and as values or First resilience, flexibility dreaming for your for partners dedication,

continuing and lastly, Second to customers, our your say to shareholders, the most and And confidence. partnership, loyal with as for in world stronger to and to together. look importantly, our you higher trust faster, Olympics, for vote support, they new you, forward videofy the of your thank

We’re have family. join excited extended you our to

to Our any organization any power journey experience only just for has video begun.

and Kaltura is ahead the and all and believe strong our us. rates. may quarter, quarter to more time second dollar fueled morning on the highlights to robust take passing provide start much to call, second from quarter, I’ll details market an road the of opportunity, the many be After by We story. of sales you business retention as new force very a ahead. which, productivity bookings, reported overview provide and thrilled want this just with and energized I’ll We the very enter because new to are chapter our first some strongly best I it few is that earnings this a of financial then, opening net

of total for Subscription revenue $XX.X revenue revenue. was reached the XX% represented from XX% year the up quarter of an increase $XX.X year-over-year. million, prior and quarter for Our the million, XX%

one XXX%, ago. up rate from year run $XXX.X revenue million, increase recurring our and year-over-year up annual rate grew continued to to XX% net retention XXX% Our dollar to

I of quarter, is to believe results details road about want new come. for more it provide and the to best the about very benefit Kaltura, quickly We’re summary we the yet ahead, why of before our and the business who share excited but the passing of I a are those

virtual major passing was in the participated you events year, using in If it Kaltura. possibly conducted

If the decade, or used you or have from consumed may in you’re videos in last a or Kaltura when university one you have studying graduated class remotely. created in

If organization, also and and you Kaltura. possibly videos with engaged town watched work internal at halls, large any have using customers your you videos

that experience OTT Kaltura. online Kaltura. of on a mission video If you just you was in when Video TV increasingly series using your is are a as organization. and and infancy, have to video a may Vodafone, would everywhere platform subscriber its favorite XXXX, We in major for a embarked any started provider any watched Kaltura also and like power open flexible build single, so

the includes Over people at into a conferencing for and market, real-time and home, as the robust leading well work conferencing, and that live, real-time primarily content XXXX, solution, both, and Video and millions enterprise to developer real-time drive our communication, on-demand that the focusing web capabilities. and offering many solutions. built collaboration, require on-demand tools products, video years, entertainment for in recognized school. learning we experiences set of management are as for Cloud management on-demand specifically, space, in live both And today vendor expanded the organizations for we broad Experience live, products More and we’ve and video capabilities of content as TV advanced on

today of Cloud three following Experience the Video is components. Our comprised

tools of on-demand, services tech products. We companies media services workflows TV content set for and system. these want that developer video, First, management that live include their hundreds to video of to license own a and APIs real-time video add media to video

and solutions our of all same of We services interoperable make these of top customize which and avoiding APIs, our with, flexible, products and This the throughout very rapid easy innovation. integrate and offerings silos fueled to also all modularity and media built that pace also of traditional own go redundancies.

external cater needs customers, industries, their powering live prospects. as with organizations on-demand, partners products employees, both that video as needs real-time internal of all their and Second, well and to their with video

video [ph] sending since for added assistance Our offerings conferencing ever we’ve products for virtual events. for messages, system and year, our video last webinars real-time and also channels, include a portal,

all We education power and two in-class a or for to media remote and teaching hybrid video includes offer video popular learning. markets, solutions, learning teaching telecom. stream live systems, learning that This & for also Third, solution currently extension and and education for capture remote from record virtual lectures, and lecture solution management XXXX starting institutions. solutions to catering a video industry-specific a classroom and

platform also and service, catch-up We and ad-based. a to their manage subscription-based live both TV cloud-based telecommunications on-demand and including and media launch over-the-top offer companies, TV

XX over a the the unified four together as Education these second & the fourth are Telecom as segment, June across Technology of is have reported separate of XX, them, Media markets. Enterprise, and customers we XXXX, X,XXX customers As Among U.S. Three and reported second. are of

Fortune XX% research of our initiatives primarily we account cloud in XX around power expenses of more in of our same U.S. the direct the of are XXXX. materially and date, media significantly the year-over-year the up first we four spend that on to this revenue In XXXX. XX% and for from without fourth quarter We than drive and sales and to depth and quarter and XX% quarter over than and XXXX trend telecom marketing increasing XXXX, our in and At growth, second also the time, including increasing the we primarily scope XXX, XXXX offering. foreseeable marketing to institutions, these seven of based of began organized XXXX, have we continue and We investing TV XX% for sales in educational and we’ve schools, through the more customer League from XXXX, XX% for revenue the in the to sales major acceleration Ivy future. XXXX, our companies sell and of XXXX, solutions from quarter top in this large expect world. accelerated of teams in XX%, first teams, eight invested XX% quarter now XXXX growth the in markets. the To second accomplished XX%

dollar XXXX primarily first XX during XXXX, and and growing rate cost X, value to metrics. lifetime XX of X, of date exceeded the our was acquiring times and the We quarter through our acceleration revenue achieved that customers efficiency XXXX, Our of them. XXXX, estimate net the retention again

offerings To of of purchased organizations. is a ARR number consumption to customer. from that net demand to of in use more date, each XXX% to levels of and customers now, in a have use across And it per half them the XXXX. in XXX%. rate metrics grew of continued into growing XXXX to XXX% XXX% first the average rise dollar The to XXXX, purchased growing growing customer, offerings of in increased by our XXXX for both of three quarter by attributed which retention fueled Our quarter second is or a our increased range cases and end,

Kaltura all into As are ever. more excited at we future, than look the us of

of the started our several customers. our We’re products from for finally webinars, only virtual XXXX investment heels attractive operational unit And new continue established on recently events accelerating create to and including leadership to we virtual solutions in across exciting large and We and sales our classrooms. and and commercializing solutions efficiency. and proven economics products innovative markets, marketing plan

cater with to market new and distribution low-touch developers, partners. and We’re a down self-serve to of including do smaller for to support planning with products so to new go and customers, companies also channel SMEs

quarter timeless. of we in This what our we next is brings and growth development I from would on XXXX. many give done opportunity some engine. go-to-market and development do like have second the quarter how technology me back you We drivers past more to and the growth we’ve what and to currently plan a see color to perspective, our large

average saw increase First, We and perspective, another per traction, quarter. of again retention and great customer. robust this was from strong go-to-market bookings a our an once ARR

On around virtual large the including the to Fortune our product as major the during We world, platform over enterprise quarter, registrants. high-stakes XXX,XXX sold including events. itself and delivered continues to the go-to new for XXX virtual position some organizations, a events companies event front, Kaltura

them events. contracts We had initial for virtual extend renew also customers additional their event and

I’m It take unified have the event field November the and called Live of forever, is a this Xth. and launch announce live, Kaltura and events, it on on will place the hybrid change the virtually transforming hybrid virtual, Kaltura-led While Live funnel. will delighted of Virtually topic, new today, transformation marketing to focus a by upcoming Virtually events. the and industry virtual of in

business to to the We’re leaders come. peers, us look like expecting re-imagine Martech leaders to would and how events market in years join

some We Kaltura’s biggest events hosted industry’s which the event the tech platform, year. on virtual deliver will has events of this

virtual gain with enterprise video video a transitioning video-based messaging major market messaging using events, communication customers popularity with the financial to in our its institution continues Beyond to product.

our customers virtual our companies We’re classroom from and of to over one to solution also firms, of virtual multiple continue the seeing including global consulting switch more platforms, other purchase most major offerings. learning

So, as continuing on-demand, to video strengthen very all educational of Education remain real-time in enterprise are and much demand. for products the to dependence our learning, we’re position on institutions our their and continuing media institutions. central repository for grow both

that materially, of our and Our continued dollar embedding their In TV cloud are own platform. continue platforms this customers rates. our contributor remains media to usage Telecom, tech to retention to broaden services net have their we Media highest our footprint grow & in the the

important quarter, TV our telecom closed Germany, power France. QX, TV Kaltura company in cloud powered in longtime large This TV a for launched Vodafone market. deal largest Also an their customer their in service Vodafone we to

playback, large, on-demand high-stakes simulate initiative. to engine. across experiences live On we the customers, education and within for Zoom recordings and our certain driving Second, for capabilities joint released a of on our all area migrating added Zoom Kaltura to virtual powerful for especially pace new viewer to have customers that We customers real-time streaming for plug-in manage allowing Kaltura. Kaltura and systems. scale functionalities quarter real-time in for TV management perspective, customers advanced video of cloud upgraded a analytics flows new Zoom, demand like important live across several addresses innovation we to engagement allow provides finished our live. also capabilities, on with hundreds to use learning welcome and more customers. XXX pools. accompanies growing of more also conferencing, includes and our continued power advanced adding rooms, fast that and of value customers a management to cloud better partners new upgraded is companies, products real-time highlight automated both than pre-record for a user classroom our ideally for content breakout and new stacks also content our added live production. marketplace, partner solutions events streaming extending I’d further I’d virtual from and and broadcast, hybrid B.live, with forward. focus simple webinar suited stress joined capabilities and events our It live and plan interactive of on live infrastructure very-high Idomoo that automated the of which and events. management our a convergence platform, to past with about like and advanced a We and has based for investment have is communication core our technology tech much Pigeonhole in capabilities video built, We’ve Simulive virtual to studio our newly innovation set words On and for our a tool innovation remains an types, VOD, platform, personalization going of live, A few live in in relieving past Kaltura broadcast, real-time Simulive modernized virtual quality, us. technology months, we concurrency, this that that been our

On side, to our the stack. heavily our continue real-time technology to media to plan services invest infrastructure, we recent most addition is in the which video

tools. enhanced the we’re editing and personalization For investing our of on-demand users experiences, in

We on strategic facilitate our hosting to also the clouds started partnerships cloud players. with multiple journey towards several platform our

purchasing Lastly, the and we’re for for also customers, media to building broader community. large self-serve the tech developer to tech to services cater start-ups beyond infrastructure our

for for are industry heavily advanced we companies amplify events. virtual in ideally to platform, for our our several self-serve, that launch self-serve companies purchasing infrastructure cross product products We’ll better specific combine the On to more and to SMEs. that capabilities suited smaller to with continue to capabilities cater and utilize also that management side, are events suited also our branding event and investing plan self-serve departments bigger

interactive, And building for easily of learning For version training we’re the our to the create a media videos use a direct-to-consumer tech by learning same new global companies, services and enterprise, including putting need infrastructure we’re personalized education well edit to to allow components. and end-to-end cases as or simplified them months, streaming features or even matter robust more of market more to services, in paths. personalized subscription-based facilitate individual as offering to for the and stack instead designed for telcos without together advertising a and engagement launch of weeks, the offered in procure

this another remains across discussed, a our are year. how I’ll it team and far In Third, the and growth enable who year. products productivity discuss and sales currently of outlook results track great good demand spend, smaller and the our and success and the seeing of average ramping turn sales progress growing to cater us S&M us up And our will including in develop on for our the R&D in XXXX. of and products and we’re we spend last, all made to growing reps to Yaron? new summary, I’ve financial releases customer With behind new see to new down quarter those detail. should We organizations. more engine? that to market set that, to CFO, strong starting Yaron, of our of contributing planned. solution we’re so We’ve good a go rest with of increasing start over in markets for second our as traction our solutions, a half our

Yaron Garmazi

everyone. Thank and you, morning, Ron, good

today’s the website. will included I which is to earnings The non-GAAP second available is GAAP know of on review that non-GAAP As our financials please reconciliation I to release, metrics. today, referring our be quarter results in

and as model, I financial company, our highlights year I through close I the then perspectives some walk Given the our about the start quarter full finally, second will is business for and to public question. want open call quarter up we from guidance before profile, our quarter, sharing that a our this first with will for the third

operation, administrative or Enterprise, of the M&T. common and Telecom underlying EET, platform, segments our As as Education the Ron reportable segments, two businesses product share resources. mentioned, as we Technology Media development, & architecture API-based and and in unified These well organize consistent or

revenue services full-time products length. live except time telecom per and are our implementation Our services EET segment host education And media XX solutions, six customers, primarily for three per and well real-time-conferencing to solutions the basis includes associated for generated Contracts offerings. those on and per products, XX Virtual for on-demand and from customers services, professional revenues and equivalent ranges Subscription for for and media industry Events from solutions, as all in basis product. for months a basis generally to products months. average participant are

length for from the greater per telecom initial a for on well in years in two Our professional time for higher M&T implementation, of as customers, resulting solution is of five associated as offerings. speaking, requires those play a upfront for TV subscribed per includes a services to for and solution on revenue from booking a X services customers, revenues generated months. as longer XX segment basis and resources M&T telecom professional contracts average and are Generally our of to customers, services basis and go-live media video and percentage media range -- implementation Revenues media proportion revenue. overall generally to period

team, with improved increase due generally deployments the by compared visibility leverage M&T segment our higher impacts into areas comprises have from large dialogue and through sales help deployments, and customers. are sales organizations offering expect in usage accounts reseller market of in telecom the of and market cloud gross currently and a whom long-term, have in direct direct of our go-to proportion which private we simpler customers, and especially solutions customers on-premise media and a and type limited team comes worldwide, both From standpoint, We revenue We majority grouped sell primarily focus to a for to Additionally, and which team. margin. in marketing we offerings. an to efficiencies of products margins expected from professional large production customers entail revenues our revenue, services relationships a presence. costs, sell have their existing of we globally professional revenue customers, proportion and of efforts a target lower mix to on which we the In to tend our gross active our and improve the to the services sales

XX% quarterly quarter, representing in up retention quarter year-over-year, months. ended $XX.X of obligations for was million, to the year-over-year. Moving revenue results. up QX marketing to up XX% quarter $X.X to expand QX were year-over-year. was to revenue $XX.X the million, We was June marketing XX% expenses. and revenue expect XX%, revenue was XXXX. was XXXX. revenue and the leverage were Annual which was in R&D and XX% million, additional profit of the year-over-year. is expenses while increase margin up of revenue $XX.X XX% down an and contributed $X.X XX% margin QX to opportunity $XX.X revenue market net the service of increase marketing XX% Adjusted compared the financial related acceleration or and was to was net benefited capture $XXX.X were This XXXX revenue, Subscription a was increase technology to XXX% in XX payroll and EET XX% loss up in Gross over EBITDA we M&T our year-over-year. to revenue QX year-over-year, performance force Within million, invest up Sales expense total $X.XX $XXX.X dollar negative revenue from revenue spend, significant of total $XX XXXX. G&A million, Subscription earlier. Remaining GAAP XX% and was in continue million, second compared in million of with million revenue XX, by and QX XX% by as Within sales G&A invest XX% Total in services million, gross XXX% and million, in gross equals personnel XXX% year-over-year. driven XXXX, professional million which was million, result diluted in share. contributed to year-over-year XX% recognize services reflects $X XX% subscription decreasing and $X.X headcount while strong compared million, was payroll expenses, second position expenses. increase professional segment, to $X.X per was the rate, additional million, front year-over-year, the professional in $X.X Revenue order segment, our $X of revenue as sales discussed million, in $XX.X of fuel of million, year-over-year, XXXX. growth, was $XX.X up we to year-over-year. we innovation. the our to further contributed continue compared driven to our in investments, our in $X.X while in intend up our us. XX% a up line million, which XX% headcount QX million, level next from XX% in to efforts quarter sales marketing expenses including revenue XX% This the plan or recurring and XXXX. booking continued $XX.X headcount

full-year million the We XXXX. turn the provided by quarter. to balance ended to in cash of flow. outlook the and operating the now quarter $X.X like I and sheet the cash million quarter third activity Net the $XX.X short-term would with was to and cash Turning investments. in for

we the $X.X million of million adjusted $X.X For million third to quarter, a to of negative million. $XX.X with revenue expect $XX.X EBITDA

and call revenue time a we’ll after new and of marketing business to the a growth recurring to we and of with $XXX.X summary, our support retention resources With negative our robust significant dollar continue accelerated million, $XXX.X enable million rate. us sales also, For pipeline, net a increase to open million long adjusted of EBITDA the full-year, million. rate, expect questions. $XX.X a for $XX.X strong In will that, revenue Operator?

Operator

line conducting Our with be Instructions] from time, proceed question-and-answer of with Bartus America. the a Please we’ll first this Daniel of your question session. At Bank question. comes you. [Operator Thank

Daniel Bartus

Hey for the and question guys. Congrats on again here. thanks the taking IPO,

EET wanted I First, to ask strength. about the

demand, but which are you that by it there? products in Sounded driving you’re help can more, driving certainly seeing strong growth a little maybe XQ understand most us ranking like what’s bit broad

Ron Yekutiel

Dan. again. time Thank been contribution else your Broadly, XXXX. a similar record here for everybody had us. you to Sure, across it’s record you markets. way, booking between thank and all QX upsells. joining, by quarter bookings new contribution for was Strong the came We a for Previous new logos and

of For were the virtual EET supported new of significant live a half majority The bookings experiences. quarter first year specifically, part in the town and along the in events, classrooms, our our of products, virtual new second business RTC for with deals halls. webinars,

to all remind EET hall quite business something And last fact the a is is significant. for new our for started you, of added. is but the there had also half And this been So, we ones have town this while, year. the now, that

expected again, On well. increased That’s and There’s the of to also EE&T remains a strong. geo mainly services the the booking Pipeline we customer deals in starting and And productization, basis, increase both, acquisition the of trend because in what of expect I’d in by per of like remains upsells see North between percent to were also it mainly from as our total an That’s of XX-XX. America in approach. expected M&T. year. usage; see line products, the reduction, booking balanced had throughout an the we say percent deals small channels, more to generally interesting ARPU also impact which EMEA. in as affect or before. revenue a we in consumption way professional licenses number was One started EET were increase is and were note strong we more Our with bookings. multiproduct of as an from that is seeing M&T

ahead. year. M&T. great revenue Yaron, in We’re you on to how also this maybe and bit route a absolutely having in Maybe strong add want to Go EET a affects

Yaron Garmazi

the EE&T And thank and Ron Ron. questions. Thank the you, Yes. very you not growing Yes, coming segments. for growth the nicely. see board all just obviously, joining Dan, mentioned, for it’s By from across the way, we as that’s

showing that I momentum basically a this quarter. we this M&T. for saw booking not but are for booking had to last going booking significant into We on this very the quarter. we was also year had tell booking We that Actually number, can this equal the you the same quarter

would nice down catch-up year, a also So, the revenue you terms from segment. very of see the probably in this coming

The which mentioned very important and is of down. percentage Ron a services, going other as trend, is revenue professional it,

So, Telecom, the & Tech Education in is Media and recurring we Enterprise, revenue. see both that revenue, & in acceleration very the OEM in especially accelerating nicely,

Ron Yekutiel

And OEM mentioned growing it’s under of post-COVID booking that -- kind & & because referring the couple points, then XX%. rebounding market enterprise, now, significant you’re But growing tech fastest lastly, Media of as was revenue one Maybe Telecom. growing by & only for was Media then, followed the almost to in Telecom. Media Telecom was

question, strongly that that expect answer Dan? grow up future. to we into So, Does your the

Daniel Bartus

then, nicely you, net too. for retention ask Thanks all of because either a for bit, Yes. maybe certainly. wanted about little that’s here, improving a And Yes, this guys. the follow-up, I to color rate is

products, for Just guidance have retention new all second curious your at level, think where a retention baked half’s And what in here? do more rate do Yaron, net the high rate? your you specifically, net maybe could Thanks. from with go you

Ron Yekutiel

Yes.

then Let rates. it pass me statement it general off, about retention over to kick okay, Yaron, and

the last quarter our had QX year, But for reporting better retention enterprise on And gross last yearly they about that the had and just So QX best-in-class rates, year first, continue we renewals. a them. we even be second even in not quarter, we’re to industry. of to understand

also customers low, churn. different new So, And dollar of cohorts our before. of than other very the our cohorts was gross unit similar XXXX churn not churn is our to

fueling that really Go us do talk mind gross the about ahead? also is is what’s good. retention to upsells, of dollar in looking forward really, bearing retention? lot a net So, but Yaron, you want

Yaron Garmazi

rate. a dollar net on the Yes, comments more retention few

XXX% to nicely XXX% was you So from first quarter. very growing it of this all, mentioned quarter, as last

was remind board. and two across to and The acceleration years XXX%. it the growth the before we see Just us, XXX%

OEM, telecom introduction coming are can dollar up you education the media product not to of the for board. into with But, we future. not the and tell guidance will going it is net new and mostly expect the We breaking I across tech users from And usage accelerating that retention coming and rate that is and see absent be in enterprise the forward. see growth we for providing we and

for not rate. year. going tell feel comfortable be is will the that and very the quarters next But, see strong, number the you guidance retention We dollar into two net sharing on this that of I we specific forward the for the can going momentum numbers we

Ron Yekutiel

and Yes. using per we That’s One last we’re that grew also big half has in the it people another by adding that’s And We three customers the products customer, products. by on our continued and upselling, by that average always per as products plus XX% are customer, reported year-over-year. increase I’d are stated fueled but multiple nature the case. comment, of both continuing. adding exciting new just that revenue say, and been

So, the trend. that’s strong

Operator

you. Thank

proceed Wells the of from Please comes with line next Michael question. Our Turrin Fargo question with Securities. your

Michael Turrin

a in of if start commentary can mentioned guidance? second morning. metrics QX upside of into the to built can that. you I of ramp anything present approach suggest overall growth Good Thanks. potential outlook? half color Is How you does much well. just heading terms those any, slowdown you’re investments a you’re to just should bit the just to provide else QX. providing. some the Ron around outlook if is there provide continue on I’m especially It accelerate of half there. you. conservatism, the Hey, know back rate, as any in outlook the terms and that Thank or into wondering could in making

Ron Yekutiel

Thank you, Yaron add after. maybe I’ll few off ahead, Mike. I’ll points let and start a Yaron. Go

Yaron Garmazi

the quarter. saw you we the have that provided and for Obviously, numbers the guidance

deceleration what the that part of year, the the By slower it’s way, much You’re growth trend expected second right the that we see. to a is there in rate.

provided two year. we The is the this XX% for terms So, We started deceleration. for of full numbers overall for we company around are than in quarters better obviously XX%. year that the what expected roughly growth the

you So, important. second year there of part to are points deceleration of in it see expected be. is can But that we kind some the that as very the few

revenue recurring on if XX% revenue was we part last this of rate increase that of Actually all, see in in -- last the between that you rate look blended for revenue. basis impacted non-recurring of year, QX year, and year the to the the growth First had non-recurring. of QX which major non-recurring the was related will you the growth the

on continue of non-recurring look this first you trend year. revenue trend right will the rest We revenue, now, believe into XX%. year, the into the the is the of the If half going that services professional just the

to close going So get to terms it’s rate be see in and rate recurring of company. direct that the overall very math to of you basically, definitely do the decelerating growth part of as it’s if overall what’s the going you a not of the the growth company, will business, the

out the we expected. than the And it’s and take better we faced way equation, we the way definitely much booking QX. QX during is is it’s rate and the the if and slower, that what the churn main deceleration non-recurring much, that reason smaller, revenue, So, of better

the Ron increasing see. fruits we are part, is we sales XX%. look the which getting as overall, the rate and recurring if the definitely to the the it’s the to in So, and and important it of right story before, very the long revenue, marketing to very mentioned the short, starting growth as close are the I trends make And of important, new you overall is to the now, on mentioned products Company, of in most investment

you it’s important. probably As Ron, But Ron can highlight more. very mentioned,

Ron Yekutiel

And thanks Sure, happy that. to for again do the question.

as post-COVID. first So, all we slowdown the expected comparing the from bumps because that’s we affecting beginning year, QX, post-COVID we’re look, from not in got all advance, way model, the our it COVID. and and COVID in just mainly the in us. the Obviously of it’s was QX because of there But, half versus we

maintain spend was the done efficiency. we sales for know, the same And you of and As way. mainly years marketing improved improvement because

not people remained is. sales efficiencies then ultimately around. to to You for it’s to is remember grow, you’re are more from And to X XX XX. at continuing went If it what as X come waiting and

end contribute And It’s going people year. year, coming XXXX not second our at is up about to this to this sales the revenue. and all the the So, gradual next and into what’s mainly of the subscription just happen. the it’s starting started with mainly customers, number of year. ramp then ramping last They’re of up, We time beginning takes of increasing year. that the this it in them to of recognition for up half it’s

look couple than increase people, significant. the channels are support which and that’s longer quite if term important with next the that’s to partners, strategic activities at than we most So, growth. and the the the other ramp-up the sales one, in in expect Then, you going quarters other the

great surface we virtual our classrooms. with And started traction new of the seeing virtual this, webinars, We’re products. just events, the scratching

we’re big we’re products part of right the a that’s beginning. self-serve enable to to to And new As going as set us low-touch. markets and selling solutions just I grow of mentioned earlier, what a they’re and And well. now. during developing faster It’s down

a as well. there lot Go going of Yaron. things So, ahead,

Yaron Garmazi

quarter, the main the And we provided. Obviously, work regarding for provided that of to Yes. those numbers. that very to guidance guidance try point the we believe we the rest but hard we will one beat

Operator

question. comes with Bank. your question of line Niknam from Deutsche Matt Please next Our with proceed the

Matt Niknam

COVID of can as maybe a that’s some rightsizing starting anything lap peak some maybe taking across heard I’m We’ve the last may if proliferation with as to you’ve year. follow weeks, recent for you wondering in or And Ron, variant, little alluded question Delta guys. peers similar IPO. effect you or of weeks. from in verticals. change if a recent benefits start of more about if of sort initial the to wondering customer the to seen core demand Congrats on on any your think, on I there, expound. Thanks bit, had the demand. Hey, can comment I of then, the I’m up you this Thanks. demand maybe talk just whether had any moderation meaningful well as question. And they about but have a

Ron Yekutiel

question, the for Matt. Thanks

telecom, companies we’re have of for tech remember we education, OEM and lot embedded all these then of been different thing pumped of and addressing things; come during a One these as up down. and enterprise, to different have between not because that COVID also that in not a usage slowing So, consumption media one we’ve very seen markets slowdown company, a a and horizontal demand. company, us

remember If last our you the we versus about up a year, that pricing have was that. we by pushed fact If consumption. of growth lot -- any spoke were margins usage picked fact that down because FTE-based the the and gross not

is about So, levels, a we’re less slightly because our margins. starting to demand, new that. these started adding also we exciting if any, consumption year. pipeline seeing the not that gross are improve late are of We talk we’re in what maybe have our But softening all that seeing which we can very more products last

before we of demand products, in to few which the lot a these didn’t for cater last seeing years. We’re

we’re some a are hiding of in growth. where now, undercurrent of the market it’s seeing people maybe but lot so, want, what generally And we right

see their of reason and we customers power to that but time just in homework don’t order for going their supportive people As they’re I continuing. flip and longest you not teachers definitely, work of do to going and of good there trainers, lot I either way. to the to people which impact. might be I’m teaching home staying learning, the And been remote they’re remote we’re of examples. continued It’s learning. learning. for at teaching the and where that give classroom in we’re coming stay think Delta, the trend is our we a But a home trends listen the lectures. to and back mean, have couple about for about the what’s called it’s and to In order school together underlying with

of And strong wanting both events. to In few that have renewals and events these to and customers as of and a weeks, are And as considering tool so, way been renewals have virtual well. marketing. there engaging That’s Even the hybrid. virtual lot very for definitely the continuing, virtual communities. doing is last back-to-back a historical of encouraging. physical they replacing It’s have their see events lot for were the trends for for see reason we that those a seeing that lifelong we’re

physical, just So, instead it’s it’s not of the addition. an

at this any question, Does we’re seeing not address is, Matt? So, point, the softening. that your short answer

Matt Niknam

could throw if last And in does. just It one I follow-up.

actually your then, professional is how about be also talked And may little you tailwind for moving the consumption, moderating some bit commentary, the which to margins. You potential maybe lower percent revenue. total as about of in a gross a a spoke services

profitability. that, years? the maybe So collectively, a wondering, couple guess, does map dual over towards profitability those of road all, for at like just seem next picture, tailwinds I I’m bigger if affect how return to visibility or

Ron Yekutiel

let this a Maybe few ahead, things, a a add talk is I’ll but for us Yaron. margin. Yaron margin. chance gross good bit Yes. to talk Go about about gross

Yaron Garmazi

that -- better last you this it’s which was had grew in what quarter year. for gross -- margin even QX than in the saw Yes. Obviously, XX%, we

year the even last beginning the to or If saw it we that of the due you is fact us. move had we behind challenges of in our end that look the to on year some cloud, all of the public to of

And is even big & see Telecom. more & cases, we even very Education nice improvement both in saw Actually, significant all So, that we before way forward. going also phase in Media OEM, this the a We back in and the the margin a gross Media change. margin, we before had Enterprise, and many Telecom, Tech came gross in to COVID. in in it

As is into nonrecurring at continue the will definitely trend of part first that believe year, portion this you we revenue the mentioned, and the the decreasing, future. of

gross level of that before to COVID. see the do itself scenario were So, the margin, if overall the we we that definitely balanced profile you take a it’s

are the not reasons For below that of for now. the term, are guidance growth, some providing and right short to the the you system. it it’s mentioned, our gross are especially that we it probably go the expect level term, the to reducing non-recurring -- but for we midterm, optimize improve definitely, revenue to do of continuing the we for portion And margin, are fact going any short not much we the that is lower we on

and that make the as a us going road, not definitely, below gross take help overall us to XX% to margin. improve. back had before. profitability. pressure will long a scenario improve very-balanced of some will And the the we It’s short, situation margin gross see a trend we So, story down that see definitely will It’s a the we to

of plan monitor expense very so We base, will the much change are next years. profitability carefully of Company to couple as to to we to mid profitability. come rate we run view But our long-term adjusting are not back the and still Obviously, It’s plan. to in the the of a profitability changing our definitely, take overall it investing didn’t fuel to we are growth. the the

Ron Yekutiel

in because that of in is both in XXXX, to not And it’s ratio coming is professional the and much say and But still both the still improved from going And we’re with of the a recurring And of revenue the Thank weight pre-pandemic was it’s our consumption, Media too just is the I’ll consolidated gross that’s and gross going services and subscription improve. in everything, EE&T. improvement us. ratio we continue some levels the Yes. our far pre-pandemic of that Yaron. margin subscription consumption storage to EE&T, it’s to XX% heavier Telecom, did But accumulated help subscription -- XX%. across which you, we current have consolidated quarter-over-quarter down. our all lower than we the in move pandemic in are think AWS GM & of the not better. still that to margin said, GM, improvement that somewhat everything recurring nonrecurring still because which of versus

acquired definitely ones the events, the first professional more ones lot than a services virtual we at in doing and do look ones you going if now So, to future. the that we’re the we’re

of And direction gross the same recent the the on scale for growth So, to is in again weeks margin. about everything going and that spoke question. term, months. longer the we’re the towards we in optimistic Thanks

Operator

you. Thank

Please question your with comes proceed Our Hynes from Canaccord with next of line question. Genuity. the DJ

DJ Hynes

and are would of nice talk made the Ron, ed cycles. bets the hoping and terms ed their I about tech on could in year Hey even last a market bit start you was they have of buying K-XX where during have lot Congrats little video a guys. IPO and buyers higher that thought here. I the would pandemic.

couple there’s if of you’re market? wondering softness in seeing that about in and us buying up next the just So, vertical any what for that Can over that sets the risk cycles. talk dynamic you

Ron Yekutiel

Happy that. to do

in do of seeing at in product, the you place something So, stack schools leading started into countries time. to live as know, Part as XXXX. are to-date. X management we’ve RTC, it started is products schools classroom including in together. say, moved, we’ve K-XX to you into addition now market. initial have and Throughout schools. to U.S., integrate the live between the of we all get we’re in is wonderful that video and been last full full This are from the power the with of we full down And end Ivy it -- taking of RX acquisitions all for schools. virtual had hadn’t half government X years regions. a now we’re year. our consolidate go starting everything of we League deeper It’s video And I’d we and more the deals more these manages runs moving the to real different doing generally, know, the system that’s content VOD these And what that of on-demand and years, and what the that And

RTC of providers, into clear, and be quarter into and actually launched to and into Zoom some this Teams we Now, integrated integration are all these. better a with the we’ve

in we into and element. book solution real us enables the really continuous or But that a classroom to using from those more is alternative the to connect for that really, are enabled provide have value live that to on-demand to the grade Zoom offer attractive. that now even everything virtual Teams for So, the LMS time

just had some that think and do end-to-end solution at people, full look they’re a just as in done world. patch. how put And post-COVID is in wonderful remote truly live future, on-demand Kaltura’s into But, in interested remote not they’re for I adding a the and solutions but time, not but a So, schools real to piecemeal looking this they that. place disrupting education

with through share K-XX a lot and juice universities global, have education. is wallet going to down to it increasing So still with real-time of going or existing go we whether market

DJ Hynes

Got a category, strategy I bit sense. a maybe I investors they oh about it. and makes right? then, follow-up, meeting want the ask hear that think as Yes, is little with that And to bit Kaltura how space, really my it? your rest Thank think, immediately of about you the around Is of the differentiating Maybe God, little solutions, Zoom, Teams, about like the wrapping Meet, portfolio it kind that. a could just right? talk you.

Ron Yekutiel

Sure.

of is first going solutions So, a of marketing, we RTC for this It’s to internally in and externally at other schools. virtual ergo the selling for RTC learning also events the our point training platform that webinars offer. communication addition development case classroom, The use as virtual with for our with we’re and piece a for into and events definitely integrated any for or not really all, after and Teams. or aggressively collaboration Zoom

live Kaltura not of and standalone power is a the RTC, So, between VOD, integration consolidation RTC.

or It might. SMB the in you that or could large selling even regular near the see will enterprise, happen? less So, meeting to future, solution, pure-play us so future the in consumer

of that are silos the the and like also, enterprise said, that. all does to that larger needs X we’re lot of, And products. content One all definitely outside also have is redundancies. And platform Microsoft management to for brings example, one or that players all video that a avoid of like player together integrated and of they’d things place the the we’re But, vendor on Kaltura one these addresses even the into that definitely less people number one Zoom is the integrated have to for other we’re Teams. seeing have they able their be scope consolidating it I places both, video and and managed in to where

workflows And direct with address DJ? learning, and not marketing different and larger platform. for that definitely one use and integrated to so, answer Does SMB and and not consumer Zoom as competition, it enterprise all integrated and events the to your absolutely the consolidating Teams, is pertains question, short cases

Operator

Yes. Thank you.

question next with Please Markets. question. Steve of the from Our comes proceed with your line KeyBanc Capital Enders

Steve Enders

you think would I you attribute partner the wondering this in I the at mentioned helping how ramping the as a as you point? that. the cloud of providers some mix channel script And was part as bookings are channel strength that is improving of partners a just and for drive there. what

Ron Yekutiel

Yes. Happy to answer that question, Steve.

it through you’d A, to like things I’d that. channels, years and of the been of deploy a you for to was have easy kind now sell, When issue very had bookings, to ramp our high-single-digit and relatively integrate right? mid-single-digit, customers; we of to that’s of And contributor channel the be say, to how what been. self-serve or addressing up array be, part are, new products and our more low-touch deploy. not are So, large starting B, Part a significant historically

whether whether capability, to community a enterprise, seeing up look we’re as to it’s relevant, whether developers we’re as tech smaller you SMEs the that start-up channels K-XX catering smaller and companies. -- to more broader in kind it’s it’s media the tech As the OEM we more the addition SMEs, into it’s for we’re to whether become And open of coming of and companies are start that media go schools, RTC a now for lot And and telecom, then the side. volumes, happen. solutions and

industries. as resellers channels to catering are specific integrators are ones Video that is consumer the value-added the biggest of that to affinity global drive are attention and Infrastructure-as-a-Service. IaaS and specific our consumption. one Some have of accelerator The these that really big well

and synergy So, now through partners their amount are marketplace tremendous video of resources, PaaS and IaaS, reselling X. SaaS X through equals a and of plus of X they benefiting co-selling between and like and have AWS there’s their consumption lot us are that a

of AWS a So is we’re partner. in salespeople. process great training the

We’re process also partnerships. more looking to in of strategy multi-cloud into the address a

lot And so, good think come. a to more there’s I stuff

Operator

Thank you.

Our of comes your Company. Koontz the line with question with from Needham next proceed question. Ryan & Please

Ryan Koontz

It of to want channel on of your there seems model I question. the the for a types you’re like follow Thanks partners. partners targeting. lot up and Infrastructure-as-a-Service

what in products As would look types their Thanks. solutions, be at they other Kaltura? with of portfolio they bundling their

Ron Yekutiel

the storage IaaS mean provider, compute, on gross. delivery type consuming Thank it’s we in you. standard which we’re It of if depends enough do it’s and partner. then that I basically a

So, now, different products. using two provider full the a question SaaS is our either They directions. in really, they And OEM could value-add have are that with work deal solutions. their Platform-as-a-Service a videofy to could

the be and others customer sales cycle have sales, theirs. As you if or HCM that’s to folks our including that it players, varies. are add or video environment, learning happens that many know, development, internal that into co-sellers. better. teams announced where their even they cloud we addressing relationship with it runs so especially But, could a such on have so it a long the that sell there’s Oracle, that’s experiences And capability and type And

us to looking in good have hope and but ones partners, the interesting and/or going We’re that around months for are a for Software-as-a-Service as we’re resell. embedded as I have the more Infrastructure-as-a-Service, all And quarters the come. Platform-as-a-Service alignment to co-sell some announcements the both, types and most of

Operator

you. Thank

of comes Please Kidron with Oppenheimer. question. the question next with from line Our Ittai proceed your

Ittai Kidron

and to the Ron, I upsell maybe guys, about talk again, Thanks on opportunity. want congrats IPO. the

would before mentioned the think more years? now? out you a what of Maybe most offerings us call can the three And -- that of three of your for you that offerings. would buying or right talked change you perhaps kind half perhaps You’ve of customers in couple popular how are are

Ron Yekutiel

media that for say portal, us content platform with I’d the the learning platform together our video the sellers core into integration management capabilities, that historically, includes were together LMSs. or with So, biggest our our

full TV LMSs. from for putting EE&T, because content I’m video that portal in moved we’ve small management, gradually was to So, and But second for -- it was platform a cloud on aside media learning the with TV. OVP for TV, companies

virtual Now what’s that together from perspective, most events, come momentum solutions enterprise the interesting with classroom. side beginning seeing together. the popular the of is webcasting virtual on we’re a and very are But they

them the integration a virtual on have I’d that I’d I’d to to like classroom without rest. people go a like sell So, video or say, banks LMS that or without and to having like a virtual and the event VOD have by have live portal the webcasting RTC to the without way

to addition, a in drive lot it’s it’s we’ve instead, So, but had acceleration they what not before. of

Operator

back concludes our Ladies session. question-and-answer Mr. you. gentlemen, turn and for any Thank that I’ll Yekutiel to final floor comments. the

Ron Yekutiel

for time Yes. know I a attention. I it’s and everybody, to thank period. busy just your want again, you

to great us. You’ve and We’ll and the be Take further talk of day with made to a week. a when to you lot with soon. provide in happy information you of time wish stay And you care. touch are if us, and remaining you

Operator

concludes conference. This today’s you. Thank

for at this your Thank you participation. lines You may disconnect time. your

Kaltura (KLTR) 18 Aug 212021 Q2 Earnings call transcript