KLTR - Earnings call transcript Q3 2021

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Operator

Good morning, everyone, and welcome to the Kaltura Third Quarter 2021 Earnings Call.

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

Erica Mannion

Thank you, and good morning. With me today from Kaltura are Ron Yekutiel, Co-Founder, Chairman and Chief Executive Officer; and Yaron Garmazi, Chief Financial Officer. September a with of business a the quarter with market mission results begin third and opportunity summary ended will brief Kaltura's recap and for Ron XXXX. XX, of the by of review then fourth for quarter, for financial Yaron the full will outlook year the company's and the results third followed XXXX. quarter the

risks describes required with adjusted except reserved. not is as rights of accordance this to law. U.S. including to, of the in update on Any to that on XX, Form revise a statements call, this the with those involve XX, be periodic a with copyright from result statements and to or measure, but forward-looking of and of statements EBITDA, include assumes We prepared to open for and as call the report differ differ material SEC. note, by property will Form Kaltura financial XXXX, contained including, report future cause will Important Kaltura's plans Risk current Please guarantees statements to Kaltura's Laws, your responses them, statements other today, for conference quarterly the actual regarding this results non-GAAP is neither the meaning materially questions, discussed of results in then otherwise, be not as can or expectations and ended GAAP. Securities Factors results the period are XXXX, obligation ended promises in uncertainties forward-looking presentation nor sole expectations developments from filed limited period June questions. and made including section filings, business. found Please on note the All management's that factors which in webcast may XX-Q the actual whether are new Kaltura here. could no quarterly Federal within June and a forward-looking These XX-Q the all for for based and SEC cause

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

call Now over to I'd turn to like the Ron.

Ron Yekutiel

Erica, more report the We're for everyone time company. to passing earnings some third market mission us a the because this to as may provide our opening third you be quarter. thanks morning the from excited you, story, of few for I'll on which brief the of to quarter, quarterly Kaltura opportunity, morning. reported a then with second and call still this I Thank a We the want and financial just detail recap a on will provide strong after start new I highlights to public joining quarter.

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

Our XXX% rate Annualized up our ago. up $XXX.X XX% from retention and to net dollar year million, Revenue was year-over-year X Recurring grew XXX%,

segments and reported a XX% the improving We in achieved quarter. both also margin gross our continued gross across margins of

was EBITDA of of ahead $X.X negative adjusted Our guidance. our million, the high end also

everyone from change. to the as a now learning, virtual work, of replacing to technology emerge in participate facilitator to the technology and entertainment, world experiences, future and continue As pandemic, experiences learning reshaped work, to we more, classrooms, enabling video the and look event a remote entertainment online office in-person and by primary customer for meetings, foundation remote for everywhere. venues much as events Video serves travel, space, video

any organization. video power to any is Our for transmission experience

from to-date learning, collaboration, all to at major school. of entertainment home markets: including and for at work, people experience drives events cater at than enterprises XX% experiences cloud of U.S. and the communication, industries, video We Our virtual X more millions main

our our heavier sales increase and and primarily fueled across recent force started sales are EBITDA XX% powering solutions combines organized our and and achieved teams Fortune through and webinars account including this fuel deliver customer expanding our League schools whom expect with halls, video also Ivy digital our more markets. video which marketing solutions experiences remote events, deliver planned lastly, systems, virtual and portfolio them to messaging, longer for a extensions cycles. X to in direct classroom cloud of live real-time telecom institutions along teams on of and And whom X segments, through U.S. research, are of to that sales ad-supported both to solution. we video years, future existing Educational growth, recent solutions to we've workflows launch components based product In new spend. TV streaming customer these we experience and than learning of their and management educational the Technology it and town communication products. marketing markets in-class top as to on-demand, adoption report represents the an services based learning products and media which electric the been video without spend. materially accelerating services. institutions, and our our provide in solution for X adjusted sell sales our we internal also the segments EE&T video and companies and companies, teaching sales and subscription-based we continue rich which improved our markets which provide and video portal, increase on learning and We add segments: experiences. rates broad market, a first media XXX well to our enable a have In revenue deployment and or months, marketing for the the virtual X growing including APIs X video capture whom we set by and video our that last efficiency, M&T for often increasing growth as media and We involves by which

classroom including associated recent our events, webinars power to Our market virtual move increased and with adoption also increase in expected planned is down partners. by expected releases, smaller products, our growth self-serve also with coupled by through low-touch virtual and an boosted supported to organizations of is be the and product most sales channel

XXXX. pursuing our customer ARR deals. and to the to continued timely the unique quarter, see perspective, mission, in segment, believe returning in increase starting go-to-market I'm and with average We per average inspiring third EE&T third are new are in From the of we future. an and an quarter advantages a and we very for now sustainable the excited the of have size

our since reduction webinars booked last offerings, Quadrant and refer Report and well Kaltura purpose', as management excited the though the continued secured unique using to including percentage was of solution be as a address approach also platform. proportion customers, in of a global from Magic market. on coming tools market-leading Magic that shorter virtual training North classrooms the virtual recognized parcel and webinars 'External new in virtual to purchased largest versus as mature and and Cases greater and deployment named classroom Critical to in beyond a the remains XXXX Management Pertaining coming events. continued video saw professional management of fifth in as in Kaltura Gartner new products based that our our market. our and bookings in capabilities ranked solution We call last and in of of growth Cases expansion be America universities underlying as Research We XXX cases. companies year, standard the reports Report. these meetings with Presentation' a times Use which this additions from to use Management previously our EMEA including Content product integration our report, the to consecutive highest wide to Magic webinars, for real-time that last video the video last in with virtual learning array new and fourth enterprise ranked Enterprise as of channels new continued Fortune for has Solution reports with content for our content the a were enterprise for 'meetings their events, which in second Content Critical Visionary meeting Kaltura Use offering time launched the and the Meeting Quadrant with well issued year. new as portion compared We subscriptions publication quarter conferencing to such workflows complexities go and continue critical the the Gartner cycles. and We Capabilities for since require we new APAC Video services for published leader for as our discontinued new Quadrant business is and the Gartner XXXX X by EE&T included all offerings XXXX XXXX. Solutions the quarter, we our Companion We Capabilities Meeting of

strength of the one solution power global to helped the and our existing business the Our to firms secure largest remote addressing such with their as training customers new and development all its world employee 'meetings in with expand us across existing third in the customers with quarter accounting in purpose' replace globe. Kaltura

U.S. classroom their also address universities a single but needs content signed virtual We and up with management the worldwide, and in new to media sought platform.

successfully simulive, all customers real-time our on market. existing this onboard virtual one complex for new video events, and platform events events power become leading combining and continuing small. to Our us broad virtual their in We're on-demand a stack that central of enables upsell enterprises builds for to platform event virtual very and large exciting technology to live, and video

attend that capabilities topic Kaltura's events, of which included upcoming future preferences in from engagement and Oracle XXXX town showcase releasing as management sure about video events read content has the November halls Live well this XXXX latest Drift, NASDAQ, since virtual we capabilities, real-time tomorrow This more. marketing Oracle including experiences. and Be tremendous While on Accenture, Virtually our DocuSign, will live, virtual they events services. SAP, stint portal Kaltura using of greatest been in Virtually YouTube, and buyer our event of where to Oracle, they on responses video virtual the thrilled agreement marketing only the in original based capabilities and talk covering executives into event with lineup out. This Oracle Continuing on the to using will platform. video the a expanding HubSpot, and their and a our Atlassian more of host of media the add put X,XXX are the with we our for and feedback many survey about Microsoft, event market products that also register X, XXXX report, to we user EE&T, we're as had in virtual than Live also all and of employee extended education. agreement us with external a OEM internal agreement third customer signed covers video and our to our for strategic quarter are simulive announced of customer virtual

partnership Oracle potential of cloud As of products the undertaken hosted partnership. this part to extremely host infrastructure. expansion solutions to Oracle This Oracle, Oracle-related the Cloud. of excited and salespeople about we've sell all on We're on enable with huge workloads Oracle also will the

to also been growing continue powering go-to-market our in with all customers. plan our AWS, our partner of strong has cloud partnership We SaaS that provider

segment, new offerings. targeting is shift powered majority a as AWS. In M&T shortens healthy as electronics go-to-market our our third events running larger market, regards also platform telcos to well Fortune the with addressable new we on leading in our XXX these came targeting in for broadcasters company we're shift efforts virtual our from direct-to-consumer and mainly The example, HCM the from to on is because telcos, and a consumer the and continuing markets. our part including professional media For companies business of smaller increases It the it quarter the cycles regions, impact not to lead of lengthier all our in compared XXXX. from in America, XXXX. because Latin required revenue new M&T reducing cases, than Also, quarter's be cycles, growth percentage of amount in of of bookings bookings segments still terms the our coming services. some tracking sales But late deployment recognized until usual of a will from bigger deployment the continues third to XXXX

third building both and success reps, we M&T, new sales the EE&T and our sales staff. including sales support customer in So continued force managers quarter, up

internal our to catch the expect behind plan slightly quarters. are but in We up coming hiring

year perspective, our remains to our levels, Our forecasted average in accelerate map. productivity growing considering the per for force. order anticipated salesperson which great product road to the we a continuing ramp sales From technology at are developers up is development

platform past the a manage management for services, offerings OCI move and as classroom services, half increase and that set lastly, need to easily and include companies required the previously. to target in includes cycles orchestration deployment real-time on gross platform schools to improve smaller is all for to near-future enable of a support and our services execute events to target more enterprises, user-friendly to an again, offering effort discussed and to need would help This to to separately their our to to medium for number layer up in first without also who quarter end-to-end primary enable large services virtual designed This marketers quicker in and to X media added meetings our continue our to procure media simplified of professional comprehensive expected self-serve our conferencing one, sizes. our services reduce reduce all engine, increase and are is margins. our on margins. to components. that in in This development an virtual reduce launch marketers gross cost and hybrid to and virtual year. launch services, Our margins. activities to is to is Two, version suited and as platform follows: products a of events. second-generation our an an broaden recently launching continue to events the five, in the of to and run smaller small margins. now M&T individual Three, effort And working us best start-ups well professional stock gross an telcos and expected and advancing increase tech and required and effort market event Fourth, professional This products shorten sales gross for required our fast-growing effort unit to towards next the continue again, sector, market webinars and increase

rates hard-at-work up strong and all Our with adoption to retention and product to in we already continued line and additional quarter sales had across excited important the our and great a We're margins, with about next the our summary, of market upcoming launches products of market areas our marketing sales continuing increase growth, ramp gross on and related and quarter. and investment disruption. we're staff. spend are to In technology Cases, trends Use we're video

traction to to gross could with also margins. turn services market more We be launch and faster recent enhancements that that, and touch we're new important up our open and excited small which With for continue offerings, expect we to solution CFO, Yaron? that target these seeing higher product our our to over less addition in our it will strong deploy organizations the results sell Yaron, and self-serve at to I'll lower about releases and to including are financial products discuss we to excited detail. in include

Yaron Garmazi

morning, good and Ron, everyone. you, Thank

is to results I million, adjusted $XXX.X million, in A were compared the benefited revenue profit of Subscription $XX.X EE&T Within [$X.X] was from performance was of XX% a is was year-over-year. continued year-over-year. over revenue Gross of year-over-year. a M&T total up XX% was today's million, was million, $XXX.X year-over-year, in $X.X XXX% QX $XX.X revenue and revenue Subscription XX.X% that on XX% Subscription the in million, was revenue was XX% million, of professional increase XX% rate, year-over-year. expenses Sales M&T margin $XX.X professional of Recurring recognize QX from was representing per dollar an from and a compared R&D please we was will to XXXX. million driven XXXX. we while a in financials from by million, GAAP and continue headcount September up compared XX% we QX stock-based EBITDA. in was XXXX. XX while $X.X a of Total while marketing invest to $XX.X Annualized $X.X by Within XX%, offset in up XX% segment, net I related XXXX. million, or XX, our segment, was Adjusted position fuel further our $XX.X margin which order XXXX. quarter retention QX or quarter to third in XX% today, additional segment, XXX% contributed our to to XX% professional the revenue revenue Within efforts, G&A $XX.X data margin year-over-year. of which invest addendum revenue gross and marketing decreasing expenses, of in was technology XX% XXXX. million, year-over-year to in year-over-year. obligation revenue increase and up $X.X share. innovation. QX revenue up gross XXXX. The third EE&T was in is year-over-year, XX% to up significant in services $X.X up in opportunity million, discussed up headcount negative to payer gross expenses XX.X% quarter and Revenue contributed EBITDA XX% The line plan year-over-year, our our continue up compensation million were It revenue expenses QX in investment, as of total capture non-GAAP and year-over-year. million, ended from next result in increase to services driven XX% margin $XX.X in compared profit million, remaining a year-over-year, in personnel-related revenue center as expenses marketing leverage XX% intend increase We in with our million, $XX up and net review expand contributed and QX our was sales expense gross sales XX% Revenue was and $X.X months. $XX.X gross to in The release, gross the QX by was The force $XX.X representing XXXX. was million, marketing profit was million, result expenses. additional gross a onetime as growth earlier. which up XX%, QX available increase expect representing Within in XX% up XX%, XXXX, G&A front As the services or sales note of XX% margin non-GAAP up $X.XX headcount loss gross in including million, up market margin for of the segment, XX% in metric, as our us. XXXX. a $XX in be million and GAAP million third IPO-related diluted in This equipment revenue quarter referring website. earnings expenses. reconciliation included quarter spending XX% to decrease growth

to operating our investments, balance $XXX.X We was the with and $XXX.X I to ended year of would Turning turn public July cash XXXX. to fourth like quarter our and from sheet quarter. million. $X.X million our and in flow. offering of Net reflecting the -- cash in quarter full now net million with preliminary approximately in proceeds used for activity cash a outlook the the short-term

$XX.X $X.X quarter, million. we million to is fourth $XX.X revenue to to the -- with For a negative of million $X.X which EBITDA adjusted expect million be

$XXX.X are $XX.X elevated we to expect revenue EBITDA with strong, our These of products negative million guidance. a For for in goals. retention a will and sales to recurring million. -- our gross With year, enable marketing rate in million Operator? both previous line continue with and $XXX.X rate million up revenue dollar summary, new are from In of operate growth long-term increasing call increased our net our $XX.X we we the us and believe questions. resources full to the that, adjusted growth and margin will support robust

Operator

[Operator Instructions].

from Koji of America. Bank question first is The Ikeda from

Koji Ikeda

about X at for heading segment, the you you a of those about quarter. end as to EE&T and a which technology. about bit most excited Great about of question your talk here. a Maybe you're growth X the enterprise into factor We're wanted XXXX XXXX I specifically and education XXXX? ask could

Ron Yekutiel

and miss-represented, XXXX. by that said Koji, the I've all much that thank noticed lead in correction one joining. you so that I And I our you segment after to thank for M&T slight continues way,

In of XXXX. of it's terms percentage obviously, XXXX, versus growth

So small that's one fix.

excited all because that all For growing its excited There's about a grow very to We've X already year. we're been very on about, our lot across your of mentioned question percentage we're XXXX, the what of this nicely. demand. and is way highest areas, M&T

for has at the I'd There's in But the So is some next EE&T. the end one. following and see we're that EE&T. one so with say more growth we and largest now. remind EE&T we're year growth going is of market delay events within within the market products both -- going that one to to enjoy significant far new towards by of we sector, you, all for in. learning. say to expect X revenue great on as virtual self-serve the demand launching this. followed most by also the It demand subsector strong. that dollar opportunity started largest Net And size retention the But by down way products tech overall market SME by go are very the that generally way them, is a I'd booking explosive way It's with of enterprise the right all of and one we've led And within by the enterprise. OEM market one it

to continue so push. expect to And that we

a your all Does say potential, they're would question, at. and overall I'd So Koji? enterprise answer I'd exciting be from size say that

Koji Ikeda

perfect. that's wanted follow-up on I the here, just I click Yes, double to may. And hiring plan. if one

from that. stated sales Could talk thinking about I ramp sort dig the a bit quantify capacity? in sales XXXX? any there And about You slightly we you're about catch-up you be current your how on qualitatively and that should maybe of wanted or heading to and in behind, here more into

Ron Yekutiel

do to happy that. Yes,

in and our ramp been X EE&T, can success team nicely. quarter say in In managers sales and specific combination quarter But say report don't of a it's we've we're I kind ramp. that huge of M&T, compared growth significant it's quarter X, X CSN so customer growing behind, jump. it's by planned. by slightly very, a was the lag. XX% salespeople a compared grew in XX% type And around quarter our we So sales a that X, numbers When so to size of grew to we in very force that single-digit

to because We be over next a of and end quarters from need see QX that to lot efficiency growth expect the we're growth seen to to few definitely entering we it's putting rented. pass of we're year, that that's that are salespeople in more important And remind covered everybody, with to place. the also the of going because we're more the the anticipated baton over growth we're that we've way something to starting now, increased And going in XXXX. years bookings, to see that by of towards

here? signs, Yaron, and re-acceleration, it. want you seeing early may, we're us, add about ahead you anything excited that we're of So and do is to if

Yaron Garmazi

Yes.

Ron also right First high. we of mentioned, significant. level will amount adding It's our year. that are next believe QX, productivity we into still see force. QX And people the and people remain adding during important of as all, support for sales XX% the most the that as in XX% we catching getting as growth have Ron is we is force year of very the that And the is to of since the at this mentioned, like, increase up point, and sales mentioned, to by the we beginning between point the that

definitely So we see don't productivity. in erosion

going people, we we So see year. that next believe by a adding nice the into will increase very

Operator

from Canaccord. is Hynes from question next The DJ

David Hynes

ask the environment across commentary in I pretty added about qualitative net XX% Congrats. the the lowest see to obviously mean of quarter. and a in more look ARR at execution want upbeat. quarter, than amount the bookings we've in the I seen Great year. the new the you to board. it's the growth I If sounded

last it maybe I you of kind just about just in in? quarter? the pipeline some the is So deals can benefited like what on the and rates you couple saw QX? talk of double-click dropping looks quarters of Or M&T in what close those mean, from chunky

Ron Yekutiel

DJ. to do that, Yes, happy

-- color. a bit more So

So a continues from much EE&T coming From are segments. the segment-wise, a earlier, single seen I include concentration that we perspective, had meetings-related, not enterprise. very a majority Concentration, both be push product past, now. comments, customers. contributor, more and in conferencing. in deals say The I'll so perspective, the our from booking coming to are live contribution the you've had we've as mentioned large of and/or for few largest case down. real-time all they that large in revenue That's the

XX You'll see XX-Q that year Top are that single was sliding is to last under from customers XX% Amazon year-to-date down versus in the digits. as Vodafone XX%. down well. at came QX.

highest grew good. year. So that's ARPU to new From level an this ARPU EE&T deal perspective, the the

driven virtual item. large by and products, or virtual class mainly and the And for ticket seeing so companies events this new bigger we're

offering and had can we've can far grown of be companies as as and manage both you facing We how bit a couple are They Edu, and [indiscernible], sales it's solutions very together to on that and event folks e-commerce service be shipping like very in saw report thousands very deals deal already to don't as In seeing new marketing continue the companies, They media between productivities, support in We planned. tell large did mentioned So from conducted country, for been tens largest workflows. content more but tell strong. seeing also I virtual management XXXX. virtual we're continue upsells bigger We slightly a of Microsoft companies bigger you website business virtual so strong. all of enterprise, Fortune launching up to close direct-to-consumer bunch Kaltura meetings-related you their retail we in. second media, the videos folks. give European kids examples. manufacturers our and the biggest Kaltura on of lot that I have just force ad-base In just like one of the still things mean, of externally companies, the is and non-meeting I XXX their purchasing We that chip a come just then And with of of side, we're and they that with the with examples. stories, large Zoom. with catching logos Teams new of give numbers and more. other and we've channel one their question X we we a to the new combined set into event integrated forecasted a classroom

customers have firm has been and small. biggest they've added joined both an we our that a expansion. of that ones earlier, existing large of bunch us, more did platform with mentioned mention and lot a learning -- the I for accounting There's tech development. smaller using One a replaced for very supports our a big events, extensively lot. There's OEM us that Oracle vendor

I'd because That's in take report good by some say a QX and why of it. strong this wouldn't catches generally too don't very way it's other one QX M&T. shift strongly we It So quarter. of bookings. the deal is a I very very mega strong rich, was large quarter also well on diversified. quarter, up. on between very,

and come they take after. while Sometimes bit a a they

add anything? So some to my of thoughts. these Yaron, want you are

Yaron Garmazi

Yes. And fact a you this for asked the growth slow that quarter. the see about ARR you in

forward. specific And beginning we very from and impact now of booking negotiating reporting the will from half, it's to year, the hopefully for a this in maximized a that sales it the see the time, are fact believe of close. the the And people. that At interesting going into the growth with we will typically, improving QX Ron beginning So X of will adding we be deal, day able create but the adding, of that have next turnaround, a productivity. we mainly focusing the discussed QX effect second which effect mentioned, we the we'll same we were salespeople And is are we it very on is some that booking. be more some big are the are year. it we focusing as not is And are And we that new we more going because deals coming of slowdown. strong in from general, slowdown the fact

actions a from short, almost, reaccelerate we of are the in from all It we ARR X the make this going the see it's we way. story kind order taking to in again. guided right So but that it was plan, slowdown always to day long growth the

David Hynes

Yes.

color. go make helpful what can happen, maybe follow-up. more of about the Ron, kind to mean drive Very I You about talk -- on buying. thoughts One efforts to doing some that you to get your right? talked I'd love you're just self-serve on Okay. self-serve, do the it see folks products you that it's efforts make to common right? sense, of feel motion, how of that sales we direct layer like top layer often see way. the but go-to-market other less into the I but

love there. I'd to So some color get

Ron Yekutiel

Yes.

SaaS The registration work next working and cetera, So are platforms-as-service our the that we -- solutions solutions we've event well hard-at-work and use that. main for workflows while, is stuff do from developers. half some external self-support and been we're to need for PaaS to that, as for marketing development for adding the talking we internal way year. as that all for both the self-care and like webinars, a expected virtual et right tying launch on this They're in the internal about of learning both self-serve solutions, first on are to

be intermediate-sized We start-ups. and expect be that expect to change a about confident the this world companies be to material to developers that to mean not for go We're move. doing. come very going what not we're expected of But of to world We SMEs. down feel media targeting will will consumers. launch. the media we all to the definitely We're SMBs. I way It's

that things we're quarter a started the of quarter, more spend do next the One is we doing lot on more in on start marketing. this more working to to going

we're to CIO that funding promoting that to our from a going pursuit a of we bit are we brought We campaigns is strong from way of do And putting people also these advance of and That equipped see towards actual We're that this on launch clear, the that. all that. feel a working part sale solutions. the we are companies. in be funnel the whole to products, to that even the have FTE brand experts the larger and anyway it sales well funnel top You're as promoting are on organizations this definitely, from for perspective our going departmental question? with for in coming coverage. making unified to a your as be full And the with other opposed digital address

David Hynes

very sense makes It and Totally. helpful. again,

Operator

Turrin is The Wells Fargo. next from question Michael from

Austin Williams

for Austin on is This Michael. Williams

being in like down looks is sequentially, despite implies sequentially growth the the grew at X% guide XQ. it X% So the midpoint the about but roughly revenue quarter a

any So Professional between and give of what is sequential on can step And are the that split there Subscription color Services? down? you the drivers

Yaron Garmazi

It's virtual of it Yes. significant some the had previous calls, still it of we significant quarters that non-recurring events Thank quarter. question. in revenue again a you before. the in asking it because not related for we before of said and to are the it's fact good said to saying the it. We a happen non-recurring previous lot a revenue, of Yes, big that -- part fact this going we've where we

are But one is to beat we out will more the for that work this fact already on these people. reasons of I more the Hopefully, numbers. decrease. we elaborated adding and the So

to right deals have negotiating from So than we anything can is don't the coming now future also some I But is think also there Other impact that quarters big the -- I the we that that for on direction. this to going definitely that, change growth. are contribute add.

it's people, going continue we that to we acceleration deals believe the are the numbers the we fact of looking is into was on this the in obviously the the and the the are that fact we significant story, have, long adding going it revenue, we very growth when recurring that quarter. of on a that a to that are the non-recurring will point make beat to revenue be And future. and not some main So the big

Ron Yekutiel

just the fact numbers we've the is the that salespeople for I'll be to Yes. other because is since catapulted add QX non-recurring saying is certain it. we that And done kind we've we've beginning Thanks is been that's what that than expected fees for this of going not year QX fact knew question the the the good before. what there to by slowdown equal revenue back. guided a to of going come for

you what So we're We're That hasn't would a range run for down. But And year, have that full and full run expectations otherwise, mid-range to up range million. the at allow kind we kind you changed. changed. We of if swings maintaining just the the of QX. kind meant. annual increased QX the maintaining put by of earlier increased bit and the for haven't we we gains $X

upped the year us. and want full for where range the QX, we see cautious. maintain We it basically and So takes let's always to and be

Austin Williams

any margin other Or unpack Okay. to a as nicely little any just here and drivers the prior That's prior just Was looks over pretty major call in the wanted And color. the then whether improvement? other that the out follow-up, impact I usage and quarter helpful it like gross year. improved bit. segment? a to driving

Yaron Garmazi

improving we The in especially the post-COVID. are we system, before, No. driver, as going told to No. heavily focus everybody main

related the way the of is the where it's in by So you to not number see the the which we are we much but taking. And of the marketing be, and part, but way, want education we to OEM, I tech that the that, some don't made actions improving think pre-COVID. we so mileage still enterprise can numbers, are some

look improved there XX% fact a for compared revenue, including there And by we XX% in from for room the the from room it's The will to the that of Telecom. to the We always improved year, of improvement last we is to E&T grow. other quarter see Enterprise of -- you gross the believe room XX% and to Media say when XX%. margin there non-recurring that from XX%. reduction of And the So that from was big to actions, change a size despite of still the lot some taking XX%. is we improvement. We

the the not what of most last next detailed and had continued next XXs discussed did improve when see of going -- in had into to high especially after again, to we and are to the committing company we we right But for now a guidance XXs. will XX%. short-term, XXs, it before, of And we provide continue when more XX% quarter. obviously, Because related at for to continue we the improved are the above we will rest year year. we are was in it XX% that now, the going to So be year. get actions going low beginning definitely we to And the low will improve. It's not the to

Ron Yekutiel

with Enterprise lower scale obviously, the economy the general, coming and I'll both the a that Telecom that an that's which we've we're is just And improved introduces And for pricing services, non-recurring. good and one of building add percentage and great. usage-based It's in of Media pricing reduction new in targeting we're our the Education other is growing that and Tech. a and IS professional reduction of the of the products so continued been in things is seeing together scale. and post-pandemic, growth shift one a and product also of

expecting goals. definitely towards we're So long-term to to our go continue

in [indiscernible], as had we said, short-term. With some in see Yaron expect that do the jumps the margin gross fluctuations to and

So back could expect improving down in go up I see to and QX gross hard margin. up. it would not We're gross very to It margins. continues before necessarily working again better optimistic come towards

Operator

Matt next from The Deutsche Bank. is question Niknam from

Matthew Niknam

think And do envision from the from percent you self-serve products? time of of follow-up sort partners Oracle-specific as non-direct more where today? some Oracle about sort to AWS? workflows maybe time? expanded I some that a margin actually newer or beyond you channel. I'm How other margins over over both gross would cloud Cloud new the a And migrating then for public are then be gross What One And question. with maybe sales? of then meaningful tailwind beyond to on the this ones just where going guess, curious, you and bookings in efforts business coming of channel is on

Ron Yekutiel

you. Thank Yes.

to beyond business mid- up. of from at it's percent actually went were. channels that as is recent Typically, coming XX%. a far it's level on EE&T so in highest and first we So the go continued single-digits. It

cases. in not that's is going a really So M&T channel well. business most

coming some have in. channel business do we Sometimes

So EE&T there. I would one focus

channel jump that's to products, we we'll when our be launch we partners So easily that things year, have. able the is to the is that and building be more expect next self-serve channel and we up biggest through going push

going large, the far right it's So And maybe excited about we're in we're at as question and about and direction. your Oracle relationship. optimistic as the

As the which of they're we in both into that, more enables with have which the time, to agreement it announced plans. step very XXXX. OEM mentioned, XXXX. live enables and We've real the the announced We next them push now valued lot since customer and big a of products

AWS. in are stuff on salespeople customers. improve to exciting. and Oracle running products order gross to Yes, support not putting migrate that's margin, we enabling to OPI them we to and Oracle Kaltura from it's in to are So offer order That's that, not

partner important We us. continue to to They're good AWS. be for very a very,

We have ongoing engagements them. be future. going with for the in important to us They're

incremental enable to or with is us going or our partners are to move additional that reduce that's point change address here business Does create the your that. associated that rather to across question? flourish not So than

Matthew Niknam

great. the That's Ron. Thanks, Congrats on quarter.

Operator

The from Steve Enders next question KeyBanc. is from

Steven Enders

more bit environment little that to now. the a on I you're ask want seeing just hiring

about in a But resignations you in movement finding bring engagements lot and I've today. talent great hiring to the of new and and bit ability a today? lot also just been quitting just are think hearing are these competitive market I of the a people how how

Ron Yekutiel

appealing many folks a all to which past was of exciting company. sure. I it very asking. it's for of extremely right? all all more people. But the do, in TV education, yes, in we're powering bit the the trying lot to is a to what markets, it And at the end day, home, than to competitive a are you Thank I is it's of definitely from the Yes. in we're At of way for about heart different mean, Kaltura mean, enterprise.

users, that kind hospice that I love what and relate people world do, you company of around the of type it's not CIO, pride also in people end but this we and take back-office help breadth touches to the of something the how a people supports the actually but think can that. in that technology

our open, big a I draw. a how fact industry. way our go-to-market, the for of The public company collaborative of is perceived and company is and within how accelerate our both we're really we're is and and the Being folks. words, this goes in just the actions, potential helpful grow by public but exciting which our to but on portraying company is matter the innovation of providing that flexible, also comp, not think new strategy culture

yes, folks see it company. X the or given great we So but have or that to would hiring, X excitement are it's bit harder a join a amount than companies been year ago, from the of

Steven Enders

we the And I off? about And Okay. that's hear. the of Good follow-up that's roll beginning there? on just a is here. the we to coming how services mix as there is in think non-recurring this piece. on model usage primarily of a coming component here Or the side? I should on impact mean, guess the just think kind kind about to

Ron Yekutiel

we to that Pure to When you're non-recurring, and margin lower we're services. refer referring the work done. is done

it's but EE&T in the specific in high been build of So it's specific new since case them last products. customers. integrator often ran solutions it's specific in product the customer. to media historically, That's new we for for bespoke year And telecom, we development large in to order cycle customize customize I because ever our launched mean, and higher

charge awful with when so because on lot we virtual yet. our wasn't event initially And ready services platform, professional it we came an just

kind And we loaded customers of to they what need. the to on it it so customize

Now product. more that that within enable capabilities the created we've automated

seen the the in And professional revenues a process, coming for good it the revenue, recurring. thing revenue does more improved hurt We've the pushed on cycles declining cycles company. our and down, a a gross and booking. good and We've and very thing. we've So in deployment declining from it's we've to but non-recurring services accelerated a sales seen margin it's actually

Operator

Koontz Needham from Ryan is next The question Company. from &

Ryan Koontz

maybe bit about I professional to services a aspect. way different ask the wanted little

new Sounds ramp challenge the revenue. to and of the wins ramping like converting there is

transition So there do color for to the or kind in have the sector, addition any there medium dependence -- is strategies to hires would get professional or onboarded there there reduce customers of aspect other faster? to -- add services in that of ground it self-service the end low just be helpful. Any you to make the any

Ron Yekutiel

across deployment been we've towards Yes. I always Thank that and our cycles. cycles doing mean, geared has been sales you. accelerating the product work

bunch that have and everything our products, minimal projects, new very initiatives if to is we've mean out by. years just product especially capabilities integrations. claim set great the what's tailored, Now a do. degree as enterprise It's that's come same which that that may, branding of you the that a power over viable you lot there I go of offer a done a with you has years unique when about of the is There's are enterprise ability cannot we the and very of when a of vendors not coming with with ability, Kaltura. to later small and

one been these all not hard ground one but working last next evil. goes integration with it's and we've year, necessarily enabling offering, It's customizations, something middle find our this year, to so an year, And end, platform-fits-all. well that that

this creating But hand, do [indiscernible]. other not customers enabling into to the so. all deep too On our go to

ongoing self an at it's effort the for at And complete we're XX% We're the been self-serve. percentages, So company. recurring not the years. moment going that the revenue waiting has look for for

and to continue to go it expect cross We the XX%.

that note takes when not it better it down. It's So you been. that than is has much you'd at look heavy. we're EE&T, M&T And always that EE&T

So in in both to cases, improve. we're I good continuing think and place a

Ryan Koontz

the a but the in more And follow-up with of seen kind your Great. of it's the just like , a quick education of the share reopening it impact on what education tech weeks goals? you sounds couple sector. with K can misses of ed and kind XX on us reopening, the on couple color Okay. of We've last to

Ron Yekutiel

as bookings and revenues or? software so in far misses You're saying lower

Ryan Koontz

Yes. Yes.

mostly sort of Sounds thing. and it to like K that XX was

Ron Yekutiel

Yes.

K-XX. majority of of not So coming all, K-XX, down know, as the we also first it's to address higher our that ed, you is business albeit are

the that's of lot And seen of future. usage were a have and the that might the continued continue so a of means not in by pandemic, or things management true necessarily a content way education had front. we but there of of it's and into have to all and didn't run content within and the that demand interest right-now platform. But, happening, the your but also a, of the we height are day definitely type not of a quickly the get on your metadata. done that upsells of all class X folks significant storage that anything That just It's management

accumulative. is that so And

so need still to carried And in universities schools and volume it the use future. because higher be that to needs with we still cater to us a into

of of EdTech the in because are think video the I in that offer quickly the content, to a The was to quick very first second for learning be teaching inning remotely folks is for join manage second truly not we net what is with really very that the but class video. solution to and happened pandemic and

if thinking you're to your still your to not XXX% If it's it's analytics, there. or connected cards score

at looks folks move next solution of the So first second to but just not to than campus. remotely to classroom the the actual By just the and the an the campus, it's end-to-end way, in remotely if lectures teaching do learning and that you for to purpose deliver is homework. classroom, actually coming never are that so flipping could even then come have

the software, the that And connections for it given into the degree is I the classroom. ahead LMS, situated think into of us. of integrations, our still APIs, now classroom is best best Kaltura virtual

significant for very very not education. the or optimistic and in more education, seeing I'm So future softening for we're churn

Operator

question next is Ittai from from Oppenheimer. Kidron The

Ittai Kidron

of been about my and talk but Ron, progressed has been guess, I have there? Most meetings can questions maybe what answered, you

Ron Yekutiel

Yes.

not targeting we would meetings launched conferencing, the exactly where we've a that And like when but clearly said call kind we're that 'meetings this be, of Teams to advanced. what is purpose'. with So or Zoom regular we real-time we

focused. Microsoft, not as we eco scores showing and Gartner at positioning. reports report we've and and have in and that, in of in, as players. management Cisco where look the is for places most real our We're But you there how time. is that XX-plus Zoom after been If an of in with And an strong last very grown right system is they've been and together year-by-year these to content years this where we're that Webex a combination area our

is economic done. virtual big is by capability One by ousting to and existing in and huge, scale, quality, leading ways. classic X market, is RTC also by in that are not we're vendors you advanced and these we've people solutions harness significant in do And that combination unique time. that within get we But within a capabilities. think demand very way separated. unit They're for of very putting even of more importantly convergence. convergence way -- because harden of classroom, of There virtual the and smart of our So how a I content real efficiencies, management and we events. way the is of lot we're that are to

is focus, excited and this our about it. So we're

Ittai Kidron

as should acceleration next anticipate maybe guess as and self-serve you've strong to from with sales talked growth if a kind the up the have, standpoint? about that your with an 'XX model year I to with early a your ability ramp we it. unleash of you follow-up, revenue that and I'm ARR be it. year backlog Got tying

Ron Yekutiel

the we're for the for Thanks not yet year. question. guidance providing Yes. Obviously,

mix into we could We've year, to We together. get that have all I be continue now. planned thrown to self-serve, and will things launched and that There's that. the to was of But spoken be that guidance. to put still still is of we've plans all it it's definitely It had next planned again, intend provide there. plans before kind about the the do that a as we lot say we

have and a behind think we're to the engines we'll but guidance. wait you I very very, Yaron, with excited is words? any specific there company. strong bit next year, do

Yaron Garmazi

No.

will in numbers heard At we'll infrastructure we try the when some you to But plan. what we going a and what strong forward. to in able will this the be that build be see to are call deliver point, think -- ready for numbers this continue you continuing to we do number to hopefully, good I it. for

Operator

to for closing This like back remarks. to turn Ron the concludes Yekutiel any question-and-answer session. would conference the I over

Ron Yekutiel

questions for time rates. be you listening for just all And those and time for to everybody for you continue thank It's Hopefully, and and making your Thank listening who is and healthy. for are markets, to and fueled great fuel growth. our continued marketing by especially thank Yes. in, your Excited we're another across in. sound productivities great quarter up our onward sales attention. been you upward and safe our strong ramping everybody. Take board, And future in resources towards retention the across care. the and future,

Operator

This concludes today's conference call.

you a participating, and Thank You for may day. lines. your pleasant disconnect have

Kaltura (KLTR) 6 Nov 212021 Q3 Earnings call transcript