Earnings call transcript Q1 2023

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Operator

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. Kaltura and Yekutiel, Officer. Yaron from Chief Chairman today Officer; Executive Garmazi, me are Co-Founder, Ron and With Chief Financial will XX, summary first a business begin results Ron the for update. of quarter and XXXX, the March provide a ended with then second the results Yaron year XXXX. quarter first and review for company's the greater followed XXXX, full of by in outlook the detail will financial quarter for the of

open then call for the questions. We will

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

Important forward-looking could filings, December Factors on quarterly from on year the XX-Q results SEC. statements the Form be including report to of the fiscal ended can Form Kaltura's factors differ Risk cause quarter filed other SEC in XXXX report XXXX, and to the XX, annual for with section found that March the actual XX-K XX, for be ended

required including statements result of and expectations new developments responses Any conference law. them, otherwise, on a as by obligation as revise whether assumes your this made to based forward-looking no as questions are in Kaltura to today, call, current of update except or or

during note, call. Please discussing be non-GAAP adjusted we will this measure, a financial EBITDA

which on website measure For earnings please most to directly available a the comparable our to release, metric, financial refer reconciliation www.investors.kaltura.com. this GAAP our at non-GAAP of is

to to like turn Now, Ron. I call the over would

Ron Yekutiel

we million, X% for and morning. everyone for X% $X.X the up million. call was $XX.X year-over-year Erica the quarter subscription of on of year-over-year. Today us for up $XX.X Adjusted you, of million, quarter joining total to negative first the revenue and revenue this XXXX thanks reported Thank EBITDA

Subscription our and XXXX, of revenue revenue, productization revenues evolution subscription the from record our decrease record services to the rates towards posted were since we our year-over-year represented one revenue highest up in growth XXXX. increased subscription to XX% total quarter due and continue quarter as This revenue of a and low-touch XX% quarter products. from professional total first

also dollar improve see to We're encouraged retention predicted. our as net

While we do we formal fluctuate, for year. continue it believe to second still last of forecast not do the it will provide what than KPI this a better was may in half it and

of the in quarters. we a focus in goal plan loss return EBITDA adjusted We loss last XXXX. positive a on dollar lowest and adjusted continue EBITDA our the Once to six EBITDA digit adjusted achieve of to profitable and again, single achieving to growth XXXX our reaffirm

compared one cash to this million quarter our from Regarding cash in $X.X operations $XX.X materially in quarter XXXX. million flow, consumption we reduced with

we discussed to January occurred impact consumption our cash call, from believe due operations seasonality partial in quarter year of budget we expected the of the As first last our the in cuts. our the for and typical majority

quarters three with significant improvement cash reserves. during cash our We flow next to the from and XXXX breakeven operations expect a in cash achieve in flow sufficient

getting As in of profitable XXXX to EBITDA operations in flow and stated we independent and goal are the top-line growth. cash before, our adjusted and XXXX from of committed again were there soon

updates. business to on Moving

with increasingly processes employees. is sets customers skill playing roles. and This from new from of personal new to physical engagement in-person with companies mission-critical video and This benefit remote. leading and to digital secular requires interactions to online with trends video new from transformation its for to world industries full the at continue We center the business shifting models

to platform. We connect one launched producing, in remote based them financial incorporating consultants and a U.S. and largest wealth seminars. meaningful customers, improve and with by on the the them approving and of and enabling their advisory For service reach more the videos to their example, into events effectiveness a in easily digital Kaltura’s way this bank's quarter prospects banks empowered sharing

We on-demand, of all to Kaltura’s new and and internal video town power vendors use that and and platform customers also and single external Many existing delivery, and example and all events use live companies including portals, and consolidate real-time. around different needs, halls training uniquely their caters video management and flexible cases external webinars. see for events, to continued internal platforms to video types content

some providers. just workflows, Forrester that is in to and many single recent increasingly today's webinar organizations around unnecessary and different their consolidating as eliminates content in financial the economical environment. stated events, as seven reduces far streamlines more of value a appreciate therefore A vendor. power Companies especially using multiple complexities, silos, challenging providers XX% This even appealing are great

to new first salespeople. for bookings year bookings compared RAM softest the While is our quarter fewer translates the productivity a to having despite last quarter expect quota meaningful different, same improvement. ARR typically year, grew to and be no carrying This we this sales

was them four to in both segments. in media M&T average increase end, five insurance, our but E&T higher our seven-digit quarters customers, our ARR of closed ARR customers. bookings our we than contracts compared The not came this biggest declines. booking product in year more year-over-year quarter new broadening in customers, ago, The tech the to to quarters. portfolio contributor of the To that from of be new new enterprise also segment, a which new is new quarter and This mostly half business and recent to following companies, which with new with marks size, consecutive also our continued quarter new deal second bookings of this just five earlier banking, thanks

number rest in support of across and the in the in the the number set We of the is our our XXXX. SDRs meetings second of growing for of to pipeline sales numbers half RFP growth of see opportunities continued great bookings, submissions Our sectors. with compared in leading including the growth new by expected and sales indicators year all

in our XXXX we time the New We're and activities the will June series take increase also decided and Francisco, adoption experiences. event first retention with Road Atlanta, closer of that XXXX, Kaltura and to San relaunch resources and five this get achieve fewer Connect our collaboration, training to This with advanced industry London, the York, how Berlin. physical will pre-COVID. market marketing time using than engagements, we In a learning, of ever on to discuss for place the video boosting greater improve leads with events since

plans on investment engaging towards from technologists Attendees, digital including marketing, through increasing hear training, top speakers in creating and for will interactions. return meaningful action IT and event participate professionals industry workshops learning, geared

our the and metadata quarter for set front, our developer capabilities a the single custom that to events launch evolve advanced make We introduced certification professional sign-on we on our These tools. and complex during development workflows Lastly, product easier need templates, services. platform, operate, products, continued the for further and include events automated webinars of to first APIs reducing support, and education. continue

expanded usage and session analytics enhance also systems. marketing We and with our integrations automation

needs. needs, video to capabilities video consolidating for all real-time We our also end-to-end power several that the and benefit live types on-demand, and external and internal increase types of launched

products gather For which personalization, return across events, products, video customers example, profile to and across all all further launched including and to interactivity, webinars, user user present Kaltura portals, and enables to we engagement aggregate insights investment. on the and increase now data ability collect,

their Whereas content schedule new embedded another page showcase customer webinars, event anywhere. and full past to example, all This easy-to-find upcoming where and and in that customers we launched consolidate allows event events be all visible. a their are single location a share can

telecom and the we boxes, first commercially and already media now and our with is time front, to application front-end the devices TVs which connected TV On over-the-top last setup quarter, for TV four live the footprint enhance operators. of expand continue launched for and Smart

now By back-end applications adding and advertising. This and and competitive to future size offering an front-end our and and increases TV average media set end-to-end introduction revenue insights positioning we're from for stickiness experience user our also additional to streams our customers. provide deal able enables telecom a strengthens of of our platform,

quarter the optimistic the to of results remain us the summary, of rest allow In first XXXX. about cautiously

experienced budgets translating While tighten are some to and improved continue we new encouraged of are we customers and headwinds see Salesforce year-over-year growth that bookings. we indicators to purchases, industry in a demands, market delay to of early XXXX present productivity and see the still in

improving product has expanding portfolio and of in to especially to is in our encouraging in resulted EBITDA our from profitable towards operations the adjusted cash consolidate average And quarter and which in to our around returning Kaltura, We've goal the climate, growth. committed progress first remain companies current made increase financial deal size. flows an the

year, we and from flow the single-digit adjusted that for loss behind adjusted breakeven from of for achieving I flow As are positive operations forecast us already cash we believe year a into most reaffirming EBITDA mentioned, cash this XXXX. operations a in is burn our EBITDA and the

With Yaron, Yaron. I'll over financial turn more to that, discuss it detail. our CFO, in our results to

Yaron Garmazi

Thank you, morning and Ron, good everyone.

our will included today, available of the www.investors.kaltura.com. GAAP a non-GAAP reconciliation release, at that referring note I As EBITDA. on be I review financials, adjusted quarter is first A website non-GAAP to results earnings metric which please in and today's

of were the and year-over-year. million, performance $X.X we expect which year-over-year. X% down down as for revenue XX% to $XX.X services XX% months. quarter X% professional X% Subscription contributed ended XX XXXX first million, year-over-year, revenue $XXX.X the Total remaining $XX.X revenue year-over-year, XX, up while million, next March revenue obligations was up recognize million, was over The

X% was $XXX.X year-over-year. Annualized up recurring million, revenue

the was was $X.X X% while QX, up down our net $XX.X revenue in was quarter, year-over-year, million, Our $XX.X for Subscription the X% highest year-over-year. XXX% services million, revenue Within XX% contributed XXXX. quarter revenue professional dollar retention the first first up since EE&T million, year-over-year. total segment, rate

$X.X the EE&T XX% million, our QX, $XX.X for gross representing of in $XX.X a year-over-year. margin XX% revenue flat profit Within $XX.X while the gross GAAP up revenue quarter professional total services down segment, revenue quarter margin million, XXXX. million, the same million was contributed gross was for as Subscription year-over-year. XX%, was year-over-year, first

a from quarter Adjusted in quarter from representing segment, in or Within first negative million, our XX%, XXXX. was the QX, from net $XX.X segment, XX% X.XX for EE&T $XX.X was profit the a quarter gross GAAP gross down QX loss our XXXX. of the for gross XXXX. a gross for improving in $X.X margin $X.X was in margin QX, margin negative profit million, was Within a M&T $X.X of share. of margin the gross million gross XX%, quarter million, first representing up per diluted EBITDA of XX% million

$X.X $XX Turning $XX.X XXXX. Net operating to quarter activities the in in cash in with and million to used in QX, cash and sheet was million cash the flow, we quarter, the ended million marketable balance securities. compared

ending to December turn quarter like XXXX. second of and second million. $XX.X to revenue would and to I revenue by the million In to and year the the XX, subscription now increase X%, expect $XX.X for grow by million between outlook X% to and $XX.X fiscal we $XX.X to between million, XXXX to to for quarter, X% total X% our

$X.X We expect a million. adjusted negative $X.X between million EBITDA and

the grow $XXX.X to to million full revenue by and million, and between we X%, and expect between to total by $XXX.X to to subscription X% X% $XXX.X million For million. grow year, X% to $XXX.X revenue

We negative expect EBITDA $X million. adjusted million full and be to year between $X the

about quarter. though demand booking, am improved light we for early spoke we headwinds, internal of the rest market of optimistic profitability this encountering flow I in are and that about, industry revenue, expectations cash cautiously Ron summary, of retention, met XXXX. In still indicators our the of And

revenue from continue grow revenue. revenue services expect total faster our and subscription continue to to We to decrease than to professional

committed positive Notwithstanding adjusted This our top-line EBITDA profitability. negative to meeting returning firmly growth, and goal adjusted our to means we this EBITDA remain year. next year's forecast single-digit of

we from for flow flow a with of and we already operations during reserves. achieve this plan behind believe cash are As also operation burn, XXXX break-even that cash year's sufficient most cash to losses us, from cash

With that, we Operator. will question. for open call the

Operator

Instructions]. Thank you. [Operator

Gabriela Your ahead. with first Borges question comes Goldman from Sachs. go Please

Jake Titleman

productivity. sales questions. that's Gabriela. getting productivity? about on our I that improve or that market wanted you Good seeing a improvements are morning, you've Jake This Titleman that for in for to taking actions environment Thanks guys. ask Do you're just the think function there taken internally of specific better the in is to

Ron Yekutiel

but on Hey color behavior. me both improvement and for to question, more today some an way stuff, on you Jake! line. stand We by of things it's hello everybody the think in where Thanks let booking give the

than after second the last higher the So we've quarter noted it that was year-over-year year-over-year quarter year, of first of like earlier increase, booking quarters and it's five of and decline. that's

after opposed bookings size new that's up. so enterprise is good. to XX/XX, this enterprise about logos as were went in go to More down, Average side. as from quarter now in bookings Most the which came ratio usual the from so COVID to continues the is back past, deal

much. XX%-ish funnel a Geo-split marketing as more from North visitors to It's from services channels, our rest there's booking the and America, to hasn't mainly but changed indicator, services from type declining, we a channels of website ago. year compared said

meetings have our We more SDRs. by set

year, of out higher rate We actually what's all have more try than a we win notably the and and than win RFP last have also percentage. on the quarters changing. rate, figure to second year's submissions higher last of half we It's so

now cut save we still Well but online, shifting did brought want same, that it's the is to the travel about which fact internal more is the people by now market are good. really costs, stream speak products and that the around tailwinds, because events the could even that great, products that's we've new and consolidate to work it's to they we've money around and reducing so had, vendors added exciting, Kaltura

We're in it's front We bit types the events still rebooking, incumbent which still that and also seeing than the other potentially is telecom coming market, added make There's increasing that which before we backwind a situation. noted factor result prices, so across see in end, use but tech, also more and macroeconomic a it's new of And our around market, of budgets. reducing ARPU, was but the trends the and we now the by including all that's products industries. all still when the media of then are all vendors stuff, predominantly difference. the companies recently headwinds. a still we Customers also we lowering have to you just think other

And company, new on past media Kaltura. It's seven-digit five well-known a lastly, logo a we that services deal. tech very large and a It's of said one consolidated service with we deals. large and vendors platforms multiple have

companies, the both for three webcasting enterprise external XX got insurance and with SaaS It's strategy That's grow. these around our I new We are company. and so virtual pipeline and front Fortune marketing That's telecom. and We also seeing and affecting and hybrid on more deals got our think media internal logos. is end, media product banks, live-streaming factoring events. companies, we're a the

Does that address your question, Jake?

Jake Titleman

higher talk we of the wanted you there in great to about pricing overall. of pick talked couple on some cost up quarters environment Yeah, win pressure, know answer. do past maybe mentioned that's you just higher just a on those the I lower win had the things one What rates from competitive the competitors. just being rates. I think is of driving about and

Ron Yekutiel

a good it's question. Yeah,

all, than quarters. So It earlier notably win come logo had first was of a higher the new of rate bit. the down any

of and more, the situation lot I that the because that, think gone people maybe of a we're want number virtue consolidation that more deals, is seeing one. that's that value the up, had

better, like the having shell even of come whether a potentially or people premium and exact worthwhile and Kaltura the markets out hopefully of little last regardless second a half shock of price, the same. at bit the year, it's higher product do two, Number is as of

We or vendors it to Maybe normally then which a did in you consolidation. willing of way, more that in second but to products some decisions prices go delay better say now we're last reducing the they Kaltura half to are are enough year, bit back or know we're now breathing way, their and that go existing better, cases. what, incumbent was is the saying,

best the be that'll think reason. I So

etc., offerings that consolidation. there's around event other them launched products the had platform, and of we to further with our continue that The are strengthen, around again, undercurrent and thing, new

powerful was maybe hand the lesser one with and a on think go other hand, the willing more value I and out willing the offering the there. markets on prices that with cheaper it much understand are other vendors just more to way to not

Jake Titleman

Great. Thank you much. very

Ron Yekutiel

Appreciate it, Jake.

Operator

ahead. go Deutsche with Matt next comes Bank. from Your Niknam question Please

Matt Niknam

Hey guys! Thank you the for questions. taking

could, referenced. flattish was the I some it larger first relatively you why just sequentially despite of if ARR, wondering Just deals on

yet I'm particularly in place started the that linearity and And the new about on larger So implemented, note, that a earlier quarter, in talk March if are quarter. related you deals choppiness given in macro some of of the then haven't wondering billing. restructuring there maybe can the been the Thanks. booked that were if maybe bookings took

Yaron Garmazi

Yeah, let me one. this take

time picking Regarding the recognition. ARR, it's the time up mentioned, delay till revenue There fully that we from then just a we we matter recognize the of Ron revenue. timing momentum is book of see it, and a the that as

of will pickup rest trend numbers. the some this in we for ARR see if the So should the definitely year, continue

what this missed but it. addresses part? was question, So I probably the second your

Matt Niknam

Just longer We taking lot saw cadence of the bit drop-off so headlines a there of decisions. around the was any little maybe around make booking, to in a industry, financial March?

So between quarter, had longer wondering, you or did you cycles? and maybe slower April, March given any see bookings earlier that I'm sales March into any push-outs just in between from activity the restructuring in the

Yaron Garmazi

The comment are but sales it's of longer the any don't in quarter, part the you make probably valid, change second trend. we significant is tell beginning still before year going general we see to that the that no, saw of some and this No. decline into we answer is the cycles that or applied the still in

Ron Yekutiel

but XXX, about make basically always not looked want I revenue a ARR, way to take it's or subscription KPI. at glorified different subscription a the We to question committed The add for It's revenue AAC not just ARR, just it's all is so some corrections ARR so remembering. CRR. number. the first we're we've contracted and

we want launch, started are otherwise. don't take that's that signed media quarters, moment confusing. especially ARR, put sometimes deals want to The number an that add to signed, and even reporting. to take the reason contracts IPO we of from going some to were longer didn't and could the they a that's few be ARR, because implement, We CRR want to the to if from didn't We maybe our –

so are you quarter, one. they're not And we as not quarter, the defined number ARR the the they see throughout deals that's anyway, that recognized if revenue throughout that, wouldn't closed so as fact and

than a one. we've that in always is Number most quarter remember let's said quarter softer two, it like

going good better had bit we we well. So deals, than It's still going planned. have a

a the so So year, that. the things or thoughtful huge direction, this is this of and the it's that's going in about but are we're revolution, rest the that also right not other,

Lastly, EE&T and I you growth, want say etc. about to about ARR and M&T versus trends, said

You can EE&T look quarter time Last it that actually at the this that revenue subscription grew. was grew. M&T

a lot of have that. We

other. non-recurring. it's clunky, Sometimes big especially it's and They're M&T in there's that are sometimes they come one, influencing, the is, sometimes and projects

as last would I So And kind go. we happened expect come quarter, subscription what compared continue going a growth that as to and this a a well said were There last note to EE&T. that was M&T. non-recurring but quarter, they flat quarter, things sequential revival M&T to bit a have that of the to growth and in which of change we is as year not was a a throughout of sequential quarterish,

and bookings productivity seeing all our It better all-in-all is than we're numbers the the no, nothing specifically, March slowdown, said, the but we're lastly, to question said closed for the and in expected, we why that's quarter. done, already the into in compared happened March like still And before. was specifically factoring earlier And quarter on okay. when as on bad

Matt Niknam

That's you great. both. Thank

Ron Yekutiel

Thank you, Matt.

Operator

next George Oppenheimer. Please from ahead. Iwanyc go Your question with comes

George Iwanyc

the with on Ron, type Thank into us you're traction some the you seeing the Maybe the sales gains? my give perspective you're success front, can productivity low-touch taking maybe digging you seeing question. from effort the of consolidation on for

Ron Yekutiel

Yeah.

that's that in always something the So so and low-touch now, just starting for are the again, that put model the we've no-touch said we not and ourselves.

sales, people numbers make XXXX. low the especially the contributing good the and for etc. of in putting selling, it's people, XXXX, low-touch the on very we the have all working all here, and very given around they product are a upside, adjustments until it's and difference are expected to market and We and feel We few a and started exact handful cuts numbers a but have

And really in the no-touch, webinars our product, it's launch new around QX. the in

around just couple first For we those launched noticed, came days ago. a have It campaign just out of large webinars. literally a who

also there. video it There's on can nice very our You see website. a

free I viral trial could the think it go product. pretty for and promoting

invited think about what You're see try it. it and yourself to you

We and a think make beyond, short-term going and the to now, committed. for numbers, numbers that's a for It's a move but it's that's not accelerator. not XXXX, mid-term it's expected But to great right a even the majority and of accelerator on XXXX QX product, equally difference. for we're definitely

causing impact different just shown revenue in There's an on us this that is our the anticipated. analysis nothing up to that's what that think It's we numbers. has immediate than not

George Iwanyc

any spend And moment. time into comments or smaller at well. are maybe landing by success use new you case the on you that ways, you're customer Are can seeing the different you some some in digging where landing Maybe bigger? as

Ron Yekutiel

there's sense one EDU. So I There's it's about that's around in TV, recent one. the we another another said one things big a a one There's array more Cloud of earlier tech There's wide obviously that's different that It's industries. and of large our another that's very not combination. healthcare. a There's just insurance. very deals. have some no,

we the industry, one world, contract at mean companies. current web of manufacturing. you the have if had our We software a if we I the look you also very deals, with in – take six-digit around Europe, also largest nice had the defense pipeline

We have bank. European a very large

it's deals, U.S. service healthcare We offering large up of And Indian And that are IT size for and is the external. a going another is said, we pretty have internal are going both increasingly people combined new from the the provider, a wide. it's going reason again ARPU so retailer, like large up. that firm, a

products, unified, said said our caters when and platform ARPU, strength XXXX our to in that across more we use If we also case customers bump started been gradually use and to deals. this; And net a we we to IPO-ed when just we're that of know and that powerful, that's always products. stats the retention beyond, adding cases seeing the that bump half we dollar you it's our for said a we bigger horizontal used X-plus and have had It's that recall, company, going external going products. and that it's

services in Xx them entry grown the financial compared recently the to Xx point. have of Some to original

So mature. we expect to these become see more products further as of that

George Iwanyc

And Yaron, you. And talked maybe maybe one question bit us just pace about? seasonality from for year? sense you're give comment about you expecting this investment the you Can an what a dig into a little that

Yaron Garmazi

it you Can again? say

Ron Yekutiel

for When say case, you it could investment clarify you us?

George Iwanyc

Sure.

a year, this kind that you Just you seasonality, the from visibility And comments investment are from with pace now? of at on in and can of you're your standpoint right a comfortable guidance? level dig spending,

Yaron Garmazi

Yep, yeah.

started of investment we basically the us give and now, it to then exercise Most it year the in that we expense completed and we have to some base regarding all So of will impact around obviously reduction. QX, that the done benefit all, the cost earlier first right continue have this QX.

So line bottom to the of in rest the year. the is going continue trend into the

from is point for the Most seasonality we of mentioned view took important actually of year most place QX. as flow mentioned, in earlier burn this cash our The has already part to situation. cash a as related

this year. is cash million of cooperation, part spend a will that you see have flow which negative major represents that the $X.X a in number the we of So overall

same different at year. completely last it's improve in $XX of and the to significant way, burn second a by which trend of $X.X with going we now is And part year part a already started the area. in year, the be the million million, is turn definitely QX, it's around here. which a going to We in second the saw So completely the

Ron Yekutiel

I is would and re-state to going for according that there plan, us. just things are surprises no

world, very the it So we're It's we're us. the of as off nothing we're in where the easy. very EBITDA industry it's be for still. we at was for of trying for rising quarter and because the taking in thought a Adjusted turbulent year is year, it's confidence our we look and in. be. thinking the it so quarter would and about guidance first But where the to level to entire year be, year the going still We're a results and thoughtful was rest

of impact a our of cuts continuing and We have bit a better adjusted impact we numbers, next the are only year. we had better rest partial to the And going will quarter for year. we're head the January more and quarter, that number to and hit this towards and EBITDA of definitely the then

our track off, happened It numbers the flow always profitable, were when were in XXXX We've numbers. provided. even and we happened adjusted hitting always EBITDA record our To in is hit flow. numbers feel and we've about so It revenue XXXX. both very and comfortable bottom line, the that numbers remind cash we EBITDA you, the both also XXXX ops cash and on XXXX, adjusted in and

Yaron Garmazi

situation for year is in very EBITDA of valid. And the terms we still mentioned that next break-even adjusted

planning year. as are from mentioned, flow also the next operation positive during We viewing flow cash to from a cash be

George Iwanyc

you Thank again.

Operator

Wells with Your next question go comes from Fargo. Michael ahead. Turrin Please

Austin Williams

was drive helping dollar the is the looks the that bigger uptick side on expansions Michael there's what any outlier if last quarter. to was and retention well. over net add retention change Williams deal guys. This on wondering the I you gross could Hey here, there's pretty there meaningfully you're for just as and in seeing any like Turrin. It up Austin if

Yaron Garmazi

specific quarter a it a that up. last going a pick that second specific XX%, that Yeah, actually was yes, saw question. be And was XXX%. up, didn't we way for when probably intermediate it And By said it's or where for question. mean the to all when we it's that where went or mentioned in along we the going way, all quarter, the XXX% say to think to we deal believe it's we XXX%. situation I row it we only. around above going a to pick the And Thank good an it's quarter you it was only

the year, pull question, the There there we do outlier. mark going is half be up. year, specific that and XX%, saw deal above the the in XXX still of To numbers better that we last of no customers around the for to when we we believe number your second on of that look which year. see the is rest specific no it's was the And therefore, rest or

of terms mentioned, one as but strong, year of very is no a outlier. mentioned there retention It terms this not bit in on quarter I most still that from And retention, less obviously quarter, last record QX quarter, question very part And the that actually in important before. strong it different numbers is last we was so that a gross saw in we little a and rates. was your

So any make a new business basically point rate change from pickup is story additional for seen a long the much that don't in this gross retention short, see or closing retention. dollar And net previous trend definitely you've customers significant in to not and so gross retention. coming at we from

Austin Williams

that see anything? side evolving. to an it. how opportunity to potentially see Do on integrate you and trend got Okay, you. the if as are generative this Thank I AI functionality also doing you and there’s just you ask on wanted what product that

Ron Yekutiel

it and to disruptor in very, progress very important of know big looking Obviously changes our AI all mean the at make AI big, we Yeah, months a interesting very yes, great is I And a seriously. lot years come. in will a question. is generally industry. we're as generative and and a

horizontally Kaltura way as just for for used to increasing marketing, in very an the sales, that goes we the and video into a Kaltura what clear think events, utilize video. in not I a and the a not an than a video end. discussing video enables for things us for for videos mean because AI platform goes video workflows, that learning, we'll upcoming just sake It's is as deeply video Connect It's like and be of for stronger and much better lot a most, the ROI conferences. for that video as value of provide of end, leads

BI so strong very until and very we've good had while And now analytics.

insights considering and gather in to all that there's ways to this across AI different announced also the step are to such individual them this go made BI our products all around users this We across the done. and turn that from we next ripe It's which planning and we into could places. get quarter you interconnected various

better, list years been area have where it progress our couple the done so we're and budgets. big, But It putting in we spend monitoring already stronger would of was frankly, our and to-do next and is But important far have we're item. if But it. as would an important, us. accordingly important the for this as

cases we of own started in and with we some from creation think video, could to the going a to on the entire up platform and think the right entire targeting, of through content creation and feedback platform, as and could We the then targeted distribution to created and a that AI BI. people shelf context life are right fly, there flow the behavior, user be leading closes the on and become consumption the the fly lifecycle ideally, improving video we with loop

the us. for It's So question. area an important for thanks

Operator

Your Hynes comes ahead. Canaccord. with from next question Please DJ go

DJ Hynes

M&T Ron, questions Hey! Good business. the morning, on have I guys. two

margins. with one, to to of revenue first have the services favorable and subscription kind up revenue expected I that a is impact would gross So down, see

on advertising touch the this of So then incremental maybe what data you interestingly, end talked And time. happening of front opportunities over mining, with more alluded a you consumer think just just what's piece, to I second, there. addition around revenue some morning, about kind maybe

business about are Just thinking how you that evolving?

Ron Yekutiel

DJ. Yeah, great question. Thanks

bit M&T. is been services has all, of its business, because a M&T which a is ratio. of a first professional deals, higher always So big clunky

could and up down. so go And it

also for PS went quarter significantly up. and QX anomaly to down example, an QX, was this came it compared but For

was subscription QX, went PS so both up in and and it time subscription of this down it around, by kind PS. And flattish went

And so all change subscription every in it not all, big a M&T, quarter. doesn't and grow in it's

hard half-year tell re-up to and up to Some users calculate in with every so right, quarter side it's is jumps using Europe also I deployed the eastern cases that. our for there, a a they you operator the this of places. example, new we'll in and or of front-end, gone multiple live number for with in of in such contractors We've we've could the single and make believe given continuing another that the We've the the business front-end. I example they But basis on second quarter, and shared top that. projects largest

revenue year-over-year some the expected as to at are growth definitely similar well could the for we're services see We when right at basis right professional proportionate I'll in E&T. be continuing bit M&T. expect year-over-year in be downs in a on a a quite So level year it, as repeat, looking percentage the direction subscription, is services changes we're decrease expected and increase, ups both and But the similar. clunkier. subscription to for now, and decline quite to a professional basis percentage on to percentage

note overall bigger you less, they nicely. M&T there's and it's they the to together, grow By behave going two that PS. impact a quickly add on because bit then well M&T But PS because way, a will them to grow when in more are probable going are

time front-end, it's yes, is then and can a long get And even user, if into to advertising. advertising for our control reason that more you and end recommendation targeting, targeted the we've Now waited analytics, the add you so back front-end.

places. system further We back-end we the well step number were by work after leader's, that climbing into it's and front-end. we and So And more offer quarter growing to to bit advertising. to then started fair already launched live users next get recommendation, up targeting, the many and it doing with one last natural insight be being accepted will and of and and a towards analytics, the

what where we consume, exactly the what are whole in do they for infrastructure because And great we're where because obviously and thing. the that, We're we managers. the consume, think users know we how content, spot know a do. delivers they that also they behave, they We content the the

their in we're know front-end. behavior, also the because We

expected general, advertising unlike video deliver you or optimize in right in and targeting, the is online now person, right the in right the than online not TVOD it'll online called SVOD, advertising-based situation, TV be be what's and be It's so advertising then advertising-based and could in more dramatically time, to CPMs the AVOD, there. right will if if you TV right transaction, the that inventory higher programmatic, out So more to subscription ratio higher. of right and or general think the context, the offering, the advertising right VOD, also

us. natural for to so And a yes, there. there's We're progression going get

to clearly to been these we very last Had thought months, the park things. We year, aggressively some XX of over originally. again I'm prioritize great that that comment a have advanced it with would going been across needed more we than earlier.

us And leap the over believe there, that big a we network so effect have pool immediate not create a our materially, we this you, get the will next DJ. industry. Thank it's to progression next will increase enable quarters, but in and

DJ Hynes

comment. Yeah, yeah, helpful Thank you.

Operator

Your go Blakey Please Markets. KeyBanc next with question Tom Capital comes ahead. from

Tom Blakey

Hello here systems, context maybe companies My past to question, the most constrained wanted seeing these you've the here organization and everyone! integration first I I my seems the the in to be just that of Thanks question and more question. upstream in the with In of there's a and that are as analyzing for CMOs deals in is know across my what recent Ron, seen Kaltura Ron on would you terms of change talked guys. you're be kind deals larger pipe number what if see taking selling a well. to quarters, here. prior first of going about spending integrations. we're selling when in

Ron Yekutiel

Yep.

a very it a So Lego is us and advantages tightly written to from the quickly SaaS, mean the very enables We were that's to all flexible PaaS we the biggest the platform I of Kaltura be but into idea the has add workflows. API-driven APIs. lot whole very then first as is, answer APIs, every all build integrations the put one aren't flexibly and together, beginning. it way software was of very this connected softwares most of concept and of then

so things And connected Number have one, a so the the into an use integrated is else CMO, case of their with likewise, when few everything internal moved use there's company, in highlight. it's to workflow we the case. obviously to they

internally it somebody it the if used another same So to could content created then from and one go externally.

this live we XXX yes, second in a or we already plus over And ecosystem in have and real probably integrating is expect to four integrated third have started by about to year, way. we with The couple running dozen modern quarters rapidly. few the with technologies. the last third, partner companies integrations is integration way the integrating already. and over more and time of we together are a fact that VOD the seamless parties, And the more of We over like last three have so a next quarters,

easy quickly And then have is they additional ones affordable may, you in being to added way generic a and that the it's that way enables very this so very and quickly. if we middleware running that very us quick, add are

that. we're So think speed And very fast. I is again, unique the there at

Because they It's an don't at the don't And mentioned. you do look savings and players and to do having say different in hard cases, could of don't they of cost example, end-to-end the lot solution it's of not just sales, CMO it's a as all them are do internal, CIO, different world lot HR, a where and it cater that the I even starts use for If they're it do mixed. them, internal, all L&D. they where they for ends. don't events

all partners, have end-to-end you Our them internal that solution we're or to to need external, position. an address and in

Tom Blakey

solid for here. And Sounds about is, second then you retention Yaron trends visibility my there. net for and I question guess

Some of about versus way comments your unorthodox of calculating traditional way your of – questions contracted a moment terms ago ARR. in

be ‘XX of to some Ron these size ultimately here know guidance helpful. of wanted you. I Just Thank gating Yaron, would increase of just kind around what again, with as factors into we half are that That deal second visibility with and the and the deals. in go

Ron Yekutiel

let will clear. I but very, thing make Yaron I Yeah, very one answer, to just want

closed a but and we less thoughtful, understand to get it's whatever. want big mean, it because is ARR and it. of understand unorthodox couple to that's call orthodox conservative, deals a it's you let's said Because You what a important it's That's that and you put an higher. know much excited less, number you more much it's I what very

ahead. and if go So it seeing ahead be then keep you'll let's just up. go it But we've goes always goes when please real said, Yaron, it up, it

Yaron Garmazi

look don't than to be around for that At and on you what before try we a rest for we cautious us make deliver the the we have very to QX. QX, we we to be we some for of we the provided, did sure you things guided thoughtful and a terms we we numbers obviously way the not that want continue solid guidance we of that promising. better visibility, are because if guidance year than in time, what provided strong same Yeah, to to and better are happening guidance the because have clear, be want top still line, in saw just

not guidance positive So we same developments. and at QX. the the Hopefully But of have before, which to at be we'll beats that in year. visibility be we some point, did full year, for do this on decided to outcome the to deliver definitely this the trend of cautious into able raise especially we mentioned based a trends good Ron of the point, some that are the

same And numbers thing we that the bottom it's guided. line the regarding

can and to continued nicely the cash line bottom improve that the see flow. it's You

most to develop, We into we be and do least numbers have and at visibility, all strong that achieve. of a have line the take we to strong took in we or – visibility order the actions to able to wanted deliver this. believe We that bottom that a the we actions we'll

way, bottom the for we By the company we a line public. even delivered before went already positive

while it a solid rate, do growth are to to being parallel how know still we So we maintaining profitable.

Ron Yekutiel

It's been everything that of change of did not is this it's well, get how therefore, any and think that. looks. because a take doesn't just add, quarter while we've the strong that early now right us around, comfortable to for would easy all go. doesn't year, for we the year. that weren't change it we It see and we the first in that take the in said back, forward. I'll we so us to quarter, one to things cause world time, the And not definitely we need but It where especially crazy years it and enough

place, and we bar visibility, they want bar the we're there we that the good means are we're you results. we that have cushions even and in are fact forward, the definitely just deliver that but and don't executing whatever good quarter raise expecting you a may, guys Hopefully, to if raise in we because safer still and want we continue not to move had to

Tom Blakey

gentlemen. Clear, Thank Understood. you, and helpful.

Ron Yekutiel

you. Thank

Operator

comes question next from Your go Pat with Walravens JMP. Please ahead.

Pat Walravens

From Norman Aviv, Great. Thank you. The Ron. Tel in Hotel

Ron Yekutiel

Hey!

Pat Walravens

know. I I know,

Which questions. is of two pretty off One missed is forgive this, is there a paid housekeeping. I is there just so, that's chunk So, – me debt getting soon? if

Yaron Garmazi

a Yeah. Right repayment of in now, quarterly have we million $X.X debt. our

rest So for we the same to quarter. the did to pay and an loan. the at that it's million, supposed time, by for million way, continue our But each we're SBB a $X.X it's debt of records $X.X pay It's in not the QX secret. of

ways discussing refinance than this $X.X a quarter. it, yes, other to it but payment that, are was million We

Pat Walravens

having of Okay, [Cross liabilities. that to with do SBB? something Talk] Is because versus current

Ron Yekutiel

No, it payment. the to do it. timeline It's has because the of of nothing with

Yaron Garmazi

of payment. schedule payment, original Nothing changed because the SBB the was it of no situation. No,

Pat Walravens

When when amount? have mature? do to full that so Okay, does you pay the

Yaron Garmazi

probably fact that that we still have and year. refinance Next But if lenders. year our discussion things at as to that, projection some the a be in we positive and we cash be refinance will next pay tractions are flow order potential to this are strong from you will to those all going But we a we cash as already from mentioned, I operations, mentioned in in see needed cash we from point, and can we very even position.

Pat Walravens

using then use can the you environment. one perfect. video leads, you Okay, talk this a of And – particularly in picture of bigger mentioned increasing Ron, cases for

I think everyone needs that.

And to be where maybe are then able do know about bit but talk too. that would the maybe So planning to if if fits little your are plans a on you into in AI there, does, future? I interesting don't that you what be can and you it

Ron Yekutiel

Yeah, thanks Pat.

we out measuring and what interaction well as whole with yeah, moved continue we case, So them. mean, to be do when events then ping to and people was on and that geared webinars, and CMO follow-up the the started towards as working the I stuff thing use them trying do shelf see and actually able i.e., lead life to of to and have

to lead etc. early to sense full in direction. continues days, of we life that the a general have be into able a we're turn that's that condition across full opportunity, the don't that So a market in But kind entire

we're cause by a back I the the monetization into started as to and DXP, is and all way from platform, a when the internal about a analytics, external video in the to to then just end then in targeted moved front the general well, of is the like you the experience as TV from to direction digital moving need. enterprise said is learning and first, inside earlier, that mean, video marketing of to I we've move that end be out that think then a better from to the as kind fueled

be lead also at using platform. integrate mainly bring that don't MarTech, management there. the engagement the manage lead the look but important. today's engagement so engagement about opportunity the the to platform you they process and if much then and back They video, of not would and they They're end, are stop platform the And vertically drive the at kind is

significant been I the And milestones is the the we planning better them leads. vendor. all on become we're to But earlier, way going more. this the to big as bringing adding put a we're part to with working general going the have year, in direction and we this always had and that multi-strategy Again, we've to names we're do put logos and them said a I'm were to and leads very of it big have very statement which

Kaltura. step as next of the personalization AI, maximizing it will the you've then inter-activity, heart will into, the the mentioned, be etc., That XXX% when leads. into get around value So be we and connected AI for of ROI

Pat Walravens

you. Thank

Operator

proceed. There are Please questions time. at this no further

Ron Yekutiel

I done. great all Okay. wish everybody health. to we're questions. call you and for good all thank the want like It I sounds

greater general and as And for moving the mentioned think, said, from headwinds as I tailwinds all provided the the areas you know clear, have year. on I we industry that have were but more of feel numbers with forward the thoughtfully comfort and growth company that we've earlier. we we're a we also visibility perspective,

day. a Thanks beautiful Have Bye-bye. again.

Operator

call your Ladies please and participating We concludes this disconnect you conference for for today. you gentlemen, lines. thank and ask that your

Kaltura (KLTR) 9 May 232023 Q1 Earnings call transcript