Kaltura Announces Financial Results for Second Quarter 2024

Rhea-AI Summary

Kaltura announced its Q2 2024 financial results, reporting record annualized recurring revenue (ARR) of $165.2 million, up 1% YoY. Revenue was $44.0 million, up slightly from $43.9 million in Q2 2023. Subscription revenue rose to $41.0 million. The company saw a GAAP net loss of $10.0 million, improving from $10.8 million in the previous year. However, non-GAAP operating profit was $0.5 million compared to a loss of $2.0 million. Adjusted EBITDA was $1.6 million, a significant improvement from negative $1.0 million last year.

Kaltura closed 23 six-digit deals and launched several AI enhancements. For Q3 2024, it expects subscription revenue of $40.5-41.2 million and adjusted EBITDA between negative $0.3 million and $0.7 million. Full-year 2024 guidance projects subscription revenue of $163.2-165.2 million and adjusted EBITDA of $2.0-3.0 million.

Positive

• Record ARR of $165.2 million, up 1% YoY.
• Revenue increased to $44.0 million, a slight rise from $43.9 million YoY.
• Non-GAAP operating profit was $0.5 million, a significant improvement from a loss of $2.0 million.
• Adjusted EBITDA of $1.6 million, an improvement from negative $1.0 million YoY.

Negative

• GAAP net loss of $10.0 million, compared to $10.8 million last year.
• Q3 2024 subscription revenue guidance indicates potential decline or flat growth.

Financial Analyst

Kaltura's Q2 2024 results show modest growth and improved profitability. Revenue reached $44.0 million, a slight increase from Q2 2023. Notably, ARR grew to $165.2 million, up 1% year-over-year. The company achieved non-GAAP operating profit of $0.5 million, a significant improvement from the $2.0 million loss in Q2 2023.

While growth is slow, profitability is improving. Adjusted EBITDA turned positive at $1.6 million, compared to negative $1.0 million last year. This marks the fourth consecutive quarter of Adjusted EBITDA profitability. The company's focus on cost management is evident, with reduced net cash used in operations.

However, investors should note the conservative guidance for Q3 and full-year 2024, projecting flat to modest growth. This suggests ongoing challenges in accelerating top-line growth despite positive industry trends mentioned by management.

Tech Industry Analyst

Kaltura's Q2 results reflect the evolving landscape of enterprise video platforms. The company's success in closing 23 six-digit deals across diverse sectors indicates growing demand for comprehensive video solutions. The launch of AI-driven product enhancements, including speech recognition and sentiment analysis, positions Kaltura at the forefront of the AI revolution in video technology.

The company's focus on consolidating multiple enterprise video use-cases around a single platform aligns with the trend of streamlining digital transformation initiatives. This strategy, coupled with the increasing adoption of hybrid work models, could drive future growth. However, the modest revenue growth suggests that market penetration and upselling remain challenging in a competitive landscape.

Investors should monitor Kaltura's ability to leverage AI innovations to drive user engagement and differentiate its offerings, potentially accelerating growth in the coming quarters.

Market Research Analyst

Kaltura's Q2 performance reflects broader market trends in the enterprise video sector. The company's highest new bookings since Q4 2022 and improved gross retention rate suggest a potential turning point in customer acquisition and retention strategies. The focus on AI-driven features aligns with the industry's direction, potentially enhancing Kaltura's competitive position.

The mention of strong tailwinds, including increased investments in digital transformation and the impact of Gen-Z and millennial employees, indicates favorable market conditions. However, the modest revenue growth suggests that these trends have yet to fully materialize in Kaltura's financial performance.

Investors should watch for signs of accelerated adoption in the second half of 2024, particularly as companies reassess their digital strategies post-pandemic. The company's ability to capitalize on the growing demand for AI-enhanced video experiences could be a key differentiator in driving future growth.

NEW YORK, Aug. 08, 2024 (GLOBE NEWSWIRE) -- Kaltura, Inc. (“Kaltura” or the “Company”), the video experience cloud, today announced financial results for the second quarter ended June 30, 2024, as well as outlook for the third quarter and full year 2024.

“We delivered record annualized recurring revenue ("ARR") in the second quarter, making it our seventh consecutive quarter of year-over-year revenue growth, while also posting a sequential and year-over-year increase in new bookings and sustaining the improved gross retention rate we saw in the first quarter. It was also our fourth consecutive quarter of Adjusted EBITDA profitability, and its highest result since the third quarter of 2020.   Accordingly, we are incrementally raising our revenue and adjusted EBITDA guidance for the full year and are reaffirming our plans to achieve positive cash flow from operations in 2024,” said Ron Yekutiel, Kaltura Co-founder, Chairman, President and CEO.

Mr. Yekutiel continued “Looking to the second half of 2024 and beyond, we continue to believe there are strong tailwinds ahead of us, as we are seeing companies re-accelerate their investments in digital transformation and online experiences. Fueling these initiatives are factors such as an increasingly hybrid workplace, growth in Gen-Z & millennial video-savvy employees, cost savings by consolidating multiple enterprise video use-cases around a single video platform, and the advent of Gen-AI, which we expect will bring about more creation and consumption of videos and increased ROI. We believe these trends will continue to grow our new bookings, accelerate our revenue growth, and increase our profits.”

Second Quarter 2024 Financial Highlights:

• Revenue for the second quarter of 2024 was $44.0 million, compared to $43.9 million for the second quarter of 2023.
• Subscription revenue for the second quarter of 2024 was $41.0 million, an increase of 1% compared to $40.7 million for the second quarter of 2023.
• Annualized Recurring Revenue (ARR) for the second quarter of 2024 was $165.2 million, an increase of 1% compared to $163.4 million for the second quarter of 2023.
• GAAP Gross profit for the second quarter of 2024 was $28.7 million, representing a gross margin of 65% compared to a GAAP gross profit of $28.6 million and gross margin of 65% for the second quarter of 2023. 
• Non-GAAP Gross profit for the second quarter of 2024 was $29.0 million, representing a non-GAAP gross margin of 66%, compared to a non-GAAP gross profit of $29.0 million and non-GAAP gross margin of 66% for the second quarter of 2023. 
• GAAP Operating loss was $8.6 million for the second quarter of 2024, compared to an operating loss of $9.6 million for the second quarter of 2023.
• Non-GAAP Operating profit was $0.5 million for the second quarter of 2024, compared to a non-GAAP operating loss of $2.0 million for the second quarter of 2023.
• GAAP Net loss was $10.0 million or $0.07 per diluted share for the second quarter of 2024, compared to a GAAP net loss of $10.8 million, or $0.08 per diluted share, for the second quarter of 2023.
• Non-GAAP Net loss was $1.0 million or $0.01 per diluted share for the second quarter of 2024, compared to a non-GAAP net loss of $3.2 million, or $0.02 per diluted share, for the second quarter of 2023.
• Adjusted EBITDA was $1.6 million for the second quarter of 2024, compared to negative adjusted EBITDA of $1.0 million for the second quarter of 2023.
• Net Cash Used in Operating Activities was $1.6 million for the second quarter of 2024, compared to $4.1 million for the second quarter of 2023.

Second Quarter 2024 Business Highlights:

• Closed 23 six-digit deals (banking, government, pharma, tech, education, and media & telecom companies).
• Highest new bookings since the fourth quarter of 2022.
• Same gross retention rate as the first quarter, representing an improvement over each of the quarters in 2023.
• Launched a number of AI product enhancements, including an AI-based Automatic Speech Recognition service, an AI-based email notification engine, a real-time AI-based sentiment analysis within user chats, an AI-based quiz generator, and AI-based noise cancellation for improved audio.
• Won multiple industry awards: the 2024 Innovation in Business MarTech Awards for best Virtual Event Platform, the 2024 Event Technology Awards for best Virtual and Hybrid Event Platform, and four 2024 Eventex awards for best Event Technology, best Audience Engagement Technology, best Data Collection/Event Analytics Technology, and best Virtual Event Platform.
• Hosted “Kaltura Connect on the Road 2024” - a series of three exclusive events around the world, with hundreds of attendees, focusing on how AI-infused video experiences can boost business results.

Financial Outlook:

For the third quarter of 2024, Kaltura currently expects:

• Subscription Revenue to grow (decline) by (1)%-1% year-over-year to between $40.5 million and $41.2 million.
• Total Revenue to be flat to down 2% year-over-year to between $42.6 million and $43.3 million.
• Adjusted EBITDA to be in the range of negative $0.3 million to $0.7 million.

For the full year ending December 31, 2024, Kaltura currently expects:

• Subscription Revenue to be flat to up 2% year-over-year to between $163.2 million and $165.2 million.
• Total Revenue to be flat to up 1% year-over-year to between $174.7 million and $176.7 million.
• Adjusted EBITDA to be in the range of $2.0 million to $3.0 million.

The guidance provided above contains forward-looking statements and actual results may differ materially. Refer to “Forward-Looking Statements” below for information on the factors that could cause our actual results to differ materially from these forward-looking statements. Kaltura has not provided a quantitative reconciliation of forecasted Adjusted EBITDA to forecasted GAAP net loss within this press release because the Company is unable, without making unreasonable efforts, to calculate certain reconciling items with confidence. The reconciliation for Adjusted EBITDA includes but is not limited to the following items: stock-based compensation expenses, depreciation, amortization, financial expenses (income), net, provision for income tax, and other non-recurring operating expenses. These items, which could materially affect the computation of forward-looking GAAP net loss, are inherently uncertain and depend on various factors, some of which are outside of the Company’s control.

Additional information on Kaltura’s reported results, including a reconciliation of the non-GAAP financial measures to their most comparable GAAP measures, is included in the financial tables below.

Conference Call

Kaltura will host a conference call today on August 8, 2024 to review its second quarter 2024 financial results and to discuss its financial outlook.

	Time:	8:00 a.m. ET
	United States/Canada Toll Free:	1-877-407-0789
	International Toll:	1-201-689-8562

A live webcast will also be available in the Investor Relations section of Kaltura’s website at: https://investors.kaltura.com/news-and-events/events

A replay of the webcast will be available in the Investor Relations section of the company’s web site approximately two hours after the conclusion of the call and remain available for approximately 30 calendar days.

About Kaltura

Kaltura’s mission is to power any video experience for any organization. Our Video Experience Cloud offers live, real-time, and on-demand video products for enterprises of all industries, as well as specialized industry solutions, currently for educational institutions and for media and telecom companies. Underlying our products and solutions is a broad set of Media Services that are also used by other cloud platforms and companies to power video experiences and workflows for their own products. Kaltura’s Video Experience Cloud is used by leading brands reaching millions of users, at home, at school and at work, for communication, collaboration, training, marketing, sales, customer care, teaching, learning, virtual events, and entertainment experiences.

Investor Contacts:
Kaltura
John Doherty
Chief Financial Officer
IR@Kaltura.com

Sapphire Investor Relations
Erica Mannion and Michael Funari
+1 617 542 6180
IR@Kaltura.com

Media Contacts:
Kaltura
Lisa Bennett
pr.team@kaltura.com

Headline Media
Raanan Loew
raanan@headline.media
+1 347 897 9276

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including but not limited to, statements regarding our future financial and operating performance, including our guidance; our business strategy, plans and objectives for future operations; and general economic, business and industry conditions, including expectations with respect to trends in corporate spending.

In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “predict,” “potential,” “positioned,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Any forward-looking statements contained herein are based on our historical performance and our current plans, estimates and expectations and are not a representation that such plans, estimates, or expectations will be achieved. These forward-looking statements represent our expectations as of the date of this press release. Subsequent events may cause these expectations to change, and we disclaim any obligation to update the forward-looking statements in the future, except as required by law. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from our current expectations.

Important factors that could cause actual results to differ materially from those anticipated in our forward-looking statements include, but are not limited to, the current volatile economic climate and its direct and indirect impact on our business and operations; political, economic, and military conditions in Israel and other geographies; our ability to retain our customers and meet demand; our ability to achieve and maintain profitability; the evolution of the markets for our offerings; our ability to keep pace with technological and competitive developments; our ability to maintain the interoperability of our offerings across devices, operating systems and third-party applications; risks associated with our Application Programming Interfaces, other components in our offerings and other intellectual property; risks associated with our use of certain artificial intelligence and machine learning models; our ability to compete successfully against current and future competitors; our ability to increase customer revenue; risks related to our approach to revenue recognition; our potential exposure to cybersecurity threats; our compliance with data privacy and data protection laws; our ability to meet our contractual commitments; our reliance on third parties; our ability to retain our key personnel; risks related to our international operations; risks related to our revenue mix and customer base; risks related to potential acquisitions; our ability to generate or raise additional capital; and the other risks under the caption “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission (“SEC”), as such factors may be updated from time to time in our other filings with the SEC, which are accessible on the SEC’s website at www.sec.gov and the Investor Relations page of our website at investors.kaltura.com.

Non-GAAP Financial Measures

Kaltura has provided in this press release and the accompanying tables measures of financial information that have not been prepared in accordance with generally accepted accounting principles in the U.S. ("GAAP"), including non-GAAP gross profit, non-GAAP gross margin (calculated as a percentage of revenue), non-GAAP research and development expenses, non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses, non-GAAP operating loss, non-GAAP operating margin (calculated as a percentage of revenue), non-GAAP net loss, non-GAAP net loss per share and Adjusted EBITDA. Kaltura defines these non-GAAP financial measures as the respective corresponding GAAP measure, adjusted for, as applicable: (1) stock-based compensation expense; (2) the amortization of acquired intangibles; (3) facility exit and transition costs; (4) restructuring charges; and (5) war-related costs. Kaltura defines EBITDA as net profit (loss) before financial expenses (income), net, provision for income taxes, and depreciation and amortization expenses. Adjusted EBITDA is defined as EBITDA (as defined above), adjusted for the impact of certain non-cash and other items that we believe are not indicative of our core operating performance, such as non-cash stock-based compensation expenses, facility exit and transition costs, restructuring charges and other non-recurring operating expenses. We believe these non-GAAP financial measures provide useful information to management and investors regarding certain financial and business trends relating to Kaltura’s financial condition and results of operations. These non-GAAP metrics are a supplemental measure of our performance, are not defined by or presented in accordance with GAAP, and should not be considered in isolation or as an alternative to net profit (loss) or any other performance measure prepared in accordance with GAAP. Non-GAAP financial measures are presented because we believe that they provide useful supplemental information to investors and analysts regarding our operating performance and are frequently used by these parties in evaluating companies in our industry. By presenting these non-GAAP financial measures, we provide a basis for comparison of our business operations between periods by excluding items that we do not believe are indicative of our core operating performance. We believe that investors’ understanding of our performance is enhanced by including these non-GAAP financial measures as a reasonable basis for comparing our ongoing results of operations. Additionally, our management uses these non-GAAP financial measures as supplemental measures of our performance because they assist us in comparing the operating performance of our business on a consistent basis between periods, as described above. Although we use the non-GAAP financial measures described above, such measures have significant limitations as analytical tools and only supplement but do not replace, our financial statements in accordance with GAAP. See the tables below regarding reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures.

Key Financial and Operating Metrics

Annualized Recurring Revenue. We use Annualized Recurring Revenue (“ARR”) as a measure of our revenue trend and an indicator of our future revenue opportunity from existing recurring customer contracts. We calculate ARR by annualizing our recurring revenue for the most recently completed fiscal quarter. Recurring revenues are generated from SaaS and PaaS subscriptions, as well as term licenses for software installed on the customer's premises (“On-Prem”). For the SaaS and PaaS components, we calculate ARR by annualizing the actual recurring revenue recognized for the latest fiscal quarter. For the On-Prem components for which revenue recognition is not ratable across the license term, we calculate ARR for each contract by dividing the total contract value (excluding professional services) as of the last day of the specified period by the number of days in the contract term and then multiplying by 365. Recurring revenue excludes revenue from one-time professional services and setup fees. ARR is not adjusted for the impact of any known or projected future customer cancellations, upgrades or downgrades or price increases or decreases. The amount of actual revenue that we recognize over any 12-month period is likely to differ from ARR at the beginning of that period, sometimes significantly. This may occur due to new bookings, cancellations, upgrades or downgrades, pending renewals, professional services revenue, foreign exchange rate fluctuations and acquisitions or divestitures. ARR should be viewed independently of revenue as it is an operating metric and is not intended to be a replacement or forecast of revenue. Our calculation of ARR may differ from similarly titled metrics presented by other companies.

Net Dollar Retention Rate. Our Net Dollar Retention Rate, which we use to measure our success in retaining and growing recurring revenue from our existing customers, compares our recognized recurring revenue from a set of customers across comparable periods. We calculate our Net Dollar Retention Rate for a given period as the recognized recurring revenue from the latest reported fiscal quarter from the set of customers whose revenue existed in the reported fiscal quarter from the prior year (the numerator), divided by recognized recurring revenue from such customers for the same fiscal quarter in the prior year (denominator). For annual periods, we report Net Dollar Retention Rate as the arithmetic average of the Net Dollar Retention Rate for all fiscal quarters included in the period. We consider subdivisions of the same legal entity (for example, divisions of a parent company or separate campuses that are part of the same state university system) ,as well as Value-add Resellers (“VARs”) (meaning resellers that directly manage the relationship with the customer) and the customers they manage, to be a single customer for purposes of calculating our Net Dollar Retention Rate. Our calculation of Net Dollar Retention Rate for any fiscal period includes the positive recognized recurring revenue impacts of selling new services to existing customers and the negative recognized recurring revenue impacts of contraction and attrition among this set of customers. Our Net Dollar Retention Rate may fluctuate as a result of a number of factors, including the growing level of our revenue base, the level of penetration within our customer base, expansion of products and features, and our ability to retain our customers. Our calculation of Net Dollar Retention Rate may differ from similarly titled metrics presented by other companies.

Remaining Performance Obligations. Remaining Performance Obligations represents the amount of contracted future revenue that has not yet been delivered, including both subscription and professional services revenues. Remaining Performance Obligations consists of both deferred revenue and contracted non-cancelable amounts that will be invoiced and recognized in future periods. We expect to recognize 60% of our Remaining Performance Obligations as revenue over the next 12 months, and the remainder thereafter, in each case, in accordance with our revenue recognition policy; however, we cannot guarantee that any portion of our Remaining Performance Obligations will be recognized as revenue within the timeframe we expect or at all.

Consolidated Balance Sheets (U.S. dollars in thousands)
		As of
		June 30, 2024				December 31, 2023
		(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	34,268			$	36,684
Marketable securities			34,035				32,692
Trade receivables			22,116				23,312
Prepaid expenses and other current assets			7,522				8,410
Deferred contract acquisition and fulfillment costs, current			10,384				10,636
Total current assets			108,325				111,734
LONG-TERM ASSETS:
Marketable securities			2,953				5,844
Property and equipment, net			18,068				20,113
Other assets, noncurrent			2,843				3,100
Deferred contract acquisition and fulfillment costs, noncurrent			14,526				17,314
Operating lease right-of-use assets			13,067				13,872
Intangible assets, net			452				689
Goodwill			11,070				11,070
Total noncurrent assets			62,979				72,002
TOTAL ASSETS		$	171,304			$	183,736
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term loans		$	2,280			$	1,612
Trade payables			7,052				3,629
Employees and payroll accruals			11,748				12,651
Accrued expenses and other current liabilities			19,552				17,279
Operating lease liabilities			2,402				2,374
Deferred revenue, current			55,458				62,364
Total current liabilities			98,492				99,909
NONCURRENT LIABILITIES:
Deferred revenue, noncurrent			80				369
Long-term loans, net of current portion			31,110				33,047
Operating lease liabilities, noncurrent			16,081				17,796
Other liabilities, noncurrent			2,064				2,295
Total noncurrent liabilities			49,335				53,507
TOTAL LIABILITIES		$	147,827			$	153,416
STOCKHOLDERS' EQUITY:
Common stock			15				14
Treasury stock			(4,966	)			(4,881	)
Additional paid-in capital			487,406				471,635
Accumulated other comprehensive loss			(383	)			1,047
Accumulated deficit			(458,595	)			(437,495	)
Total stockholders' equity			23,477				30,320
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	171,304			$	183,736

Consolidated Statements of Operations (U.S. dollars in thousands, except for share data)
		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024			2023
		(Unaudited)
Revenue:
Subscription		$	41,014			$	40,724			$	82,184		$	81,116
Professional services			3,018				3,156				6,629			6,037
Total revenue			44,032				43,880				88,813			87,153
Cost of revenue:
Subscription			10,861				10,935				22,262			22,103
Professional services			4,495				4,343				9,267			9,162
Total cost of revenue			15,356				15,278				31,529			31,265
Gross profit			28,676				28,602				57,284			55,888
Operating expenses:
Research and development			12,029				12,975				24,034			27,105
Sales and marketing			11,780				12,734				23,592			24,805
General and administrative			13,417				12,431				25,498			24,531
Restructuring			—				23				—			968
Total operating expenses			37,226				38,163				73,124			77,409
Operating loss			8,550				9,561				15,840			21,521
Financial expense (income), net			(1,010	)			(1,166	)			488			(2,951	)
Loss before provision for income taxes			7,540				8,395				16,328			18,570
Provision for income taxes			2,464				2,383				4,772			5,003
Net loss			10,004				10,778				21,100			23,573
Net loss per share attributable to common stockholders, basic and diluted		$	0.07			$	0.08			$	0.14		$	0.17
Weighted average number of shares used in computing basic and diluted net loss per share attributable to common stockholders			147,607,504				136,782,051				145,939,847			135,939,680

Stock-based compensation included in above line items:
		Three Months Ended June 30,						Six Months Ended June 30,
		2024			2023			2024			2023
		(Unaudited)
Cost of revenue		$	263		$	266		$	547		$	535
Research and development			1,158			1,131			2,329			2,272
Sales and marketing			729			798			1,499			1,571
General and administrative			6,752			5,227			11,054			10,205
Total		$	8,902		$	7,422		$	15,429		$	14,583

Revenue by Segment (U.S. dollars in thousands):
		Three Months Ended June 30,						Six Months Ended June 30,
		2024			2023			2024			2023
		(Unaudited)
Enterprise, Education and Technology		$	30,965		$	31,158		$	63,405		$	62,488
Media and Telecom			13,067			12,722			25,408			24,665
Total		$	44,032		$	43,880		$	88,813		$	87,153

Gross Profit by Segment (U.S. dollars in thousands):
		Three Months Ended June 30,						Six Months Ended June 30,
		2024			2023			2024			2023
		(Unaudited)
Enterprise, Education and Technology		$	22,932		$	23,073		$	46,488		$	45,862
Media and Telecom			5,744			5,529			10,796			10,026
Total		$	28,676		$	28,602		$	57,284		$	55,888

Consolidated Statement of Cash Flows (U.S. dollars in thousands)
		Six Months Ended June 30,
		2024				2023
		(Unaudited)
Cash flows from operating activities:
Net loss		$	(21,100	)		$	(23,573	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			2,585				2,155
Stock-based compensation expenses			15,429				14,583
Amortization of deferred contract acquisition and fulfillment costs			5,731				5,872
Non-cash interest income, net			(593	)			(405	)
Losses (Gain) on foreign exchange			132				(485	)
Changes in operating assets and liabilities:
Decrease (Increase) in trade receivables			1,196				(978	)
Increase in prepaid expenses and other current assets and other assets, noncurrent			(34	)			(6	)
Increase in deferred contract acquisition and fulfillment costs			(2,497	)			(3,279	)
Increase in trade payables			3,447				1,084
Increase (decrease) in accrued expenses and other current liabilities			1,967				(349	)
Decrease in employees and payroll accruals			(903	)			(2,409	)
Increase (Decrease) in other liabilities, noncurrent			(33	)			415
Decrease in deferred revenue			(7,195	)			(3,235	)
Operating lease right-of-use assets and lease liabilities, net			(883	)			(954	)
Net cash used in operating activities			(2,751	)			(11,564	)
Cash flows from investing activities:
Investment in available-for-sale marketable securities			(19,392	)			(14,645	)
Proceeds from maturities of available-for-sale marketable securities			21,482				26,191
Purchases of property and equipment			(327	)			(1,591	)
Capitalized internal-use software			—				(1,242	)
Investment in restricted bank deposit			—				(1,001	)
Net cash provided by investing activities			1,763				7,712
Cash flows from financing activities:
Repayment of long-term loans			(1,313	)			(3,000	)
Proceeds from exercise of stock options			177				815
Payment of debt issuance costs			(10	)			—
Repurchase of common stock			(85	)			—
Payments on account of repurchase of common stock			(65	)			—
Net cash used in financing activities			(1,296	)			(2,185	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash			(132	)			485
Net decrease in cash, cash equivalents and restricted cash			(2,416	)			(5,552	)
Cash, cash equivalents and restricted cash at the beginning of the period			36,784				45,833
Cash, cash equivalents and restricted cash at the end of the period		$	34,368			$	40,281

Reconciliation from GAAP to Non-GAAP Results (U.S. dollars in thousands)
		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Reconciliation of gross profit and gross margin
GAAP gross profit		$	28,676			$	28,602			$	57,284			$	55,888
Stock-based compensation expense			263				266				547				535
Amortization of acquired intangibles			106				106				213				212
Non-GAAP gross profit		$	29,045			$	28,974			$	58,044			$	56,635
GAAP gross margin			65	%			65	%			64	%			64	%
Non-GAAP gross margin			66	%			66	%			65	%			65	%
Reconciliation of operating expenses
GAAP research and development expenses		$	12,029			$	12,975			$	24,034			$	27,105
Stock-based compensation expense			1,158				1,131				2,329				2,272
Amortization of acquired intangibles			—				—				—				—
Non-GAAP research and development expenses		$	10,871			$	11,844			$	21,705			$	24,833
GAAP sales and marketing		$	11,780			$	12,734			$	23,592			$	24,805
Stock-based compensation expense			729				798				1,499				1,571
Amortization of acquired intangibles			13				42				26				103
Non-GAAP sales and marketing expenses		$	11,038			$	11,894			$	22,067			$	23,131
GAAP general and administrative expenses		$	13,417			$	12,431			$	25,498			$	24,531
Stock-based compensation expense			6,752				5,227				11,054				10,205
Amortization of acquired intangibles			—				—				—				—
Facility exit and transition costs(b)			—				—				—				154
War related costs(d)			1				—				22				—
Non-GAAP general and administrative expenses		$	6,664			$	7,204			$	14,422			$	14,172
Reconciliation of operating income (loss) and operating margin
GAAP operating loss		$	(8,550	)		$	(9,561	)		$	(15,840	)		$	(21,521	)
Stock-based compensation expense			8,902				7,422				15,429				14,583
Amortization of acquired intangibles			119				148				239				315
Restructuring(c)			—				23				—				968
Facility exit and transition costs(b)			—				—				—				154
War related costs(d)			1				—				22				—
Non-GAAP operating profit (loss)		$	472			$	(1,968	)		$	(150	)		$	(5,501	)
GAAP operating margin		(19		)%		(22		)%		(18		)%		(25		)%
Non-GAAP operating margin			1	%		(4		)%			—	%		(6		)%
Reconciliation of net loss
GAAP net loss attributable to common stockholders		$	10,004			$	10,778			$	21,100			$	23,573
Stock-based compensation expense			8,902				7,422				15,429				14,583
Amortization of acquired intangibles			119				148				239				315
Restructuring(c)			—				23				—				968
Facility exit and transition costs(b)			—				—				—				154
War related costs(d)			1				—				22				—
Non-GAAP net loss attributable to common stockholders		$	982			$	3,185			$	5,410			$	7,553
Non-GAAP net loss per share - basic and diluted		$	0.01			$	0.02			$	0.04			$	0.06
GAAP weighted-average shares used to compute net income per share - basic and diluted			147,607,504				136,782,051				145,939,847				135,939,680

Adjusted EBITDA (U.S. dollars in thousands)
	Three Months Ended June 30,								Six Months Ended June 30,
	2024				2023				2024				2023
Net loss	$	(10,004	)		$	(10,778	)		$	(21,100	)		$	(23,573	)
Financial expense (income), net(a)		(1,010	)			(1,166	)			488				(2,951	)
Provision for income taxes		2,464				2,383				4,772				5,003
Depreciation and amortization		1,279				1,146				2,585				2,155
EBITDA		(7,271	)			(8,415	)			(13,255	)			(19,366	)
Non-cash stock-based compensation expense		8,902				7,422				15,429				14,583
Facility exit and transition costs(b)		—				—				—				154
Restructuring(c)		—				23				—				968
War related costs(d)		1				—				22				—
Adjusted EBITDA	$	1,632			$	(970	)		$	2,196			$	(3,661	)

(a)     The three months ended June 30, 2024 and 2023, and the six months ended June 30, 2024 and 2023, include $702, $808, $1,406 and $1,611 respectively, of interest expenses.

(b)     Facility exit and transition costs for the six months ended June 30, 2023, include losses from sale of fixed assets and other costs associated with moving to our temporary office in Israel.

(c)     The three and six months ended June 30, 2023, include one-time employee termination benefits incurred in connection with the 2023 Reorganization Plan.

(d)     The three and six months ended June 30, 2024 includes costs related to conflicts in Israel, attributable to temporary relocation of key employees from Israel for business continuity purposes, purchase of emergency equipment for key employees for business continuity purposes, and charitable donation to communities directly impacted by the war.

Reported KPIs
		As of June 30,
		2024			2023
		(U.S. dollars, amounts in thousands)
Annualized Recurring Revenue		$	165,167		$	163,405
Remaining Performance Obligations		$	177,751		$	174,329

		Three Months Ended June 30,
		2024			2023
Net Dollar Retention Rate		98	%		100	%

FAQ

What were Kaltura's Q2 2024 financial results?

Kaltura reported Q2 2024 revenue of $44.0 million, record ARR of $165.2 million, and a GAAP net loss of $10.0 million. Non-GAAP operating profit was $0.5 million, and adjusted EBITDA was $1.6 million.

What is Kaltura's guidance for Q3 2024?

For Q3 2024, Kaltura expects subscription revenue of $40.5-41.2 million and total revenue of $42.6-43.3 million. Adjusted EBITDA is projected between negative $0.3 million and $0.7 million.

What is Kaltura's full-year 2024 financial outlook?

Kaltura expects full-year 2024 subscription revenue to be $163.2-165.2 million and total revenue of $174.7-176.7 million. Adjusted EBITDA is projected to be in the range of $2.0-3.0 million.

How did Kaltura perform in terms of adjusted EBITDA for Q2 2024?

Kaltura reported an adjusted EBITDA of $1.6 million for Q2 2024, improving significantly from negative $1.0 million in Q2 2023.

What were Kaltura's key business achievements in Q2 2024?

In Q2 2024, Kaltura closed 23 six-digit deals, launched several AI product enhancements, and won multiple industry awards.