Core Insights - The report "The Next Era of Marketing: 2026 AI and Video Trends" highlights that while 98% of marketing leaders recognize the importance of personalization for growth, 99% are unable to achieve the desired level of 1:1 personalization due to fragmented data [1][4]. Group 1: AI and Personalization - AI has achieved near-universal adoption among marketers, yet 99% report that their AI tools operate in silos, limiting their ability to support personalization at scale [3]. - Personalization is a significant performance driver, with 68% of marketers indicating it positively impacts organizational growth; however, true one-to-one personalization remains elusive, with 99% operating at the persona or segment level [4]. - The primary challenges to achieving effective personalization include fragmented data (62%) and compliance concerns (58%) [4]. Group 2: Video in Marketing - Video has become a preferred marketing format, with 56% of marketers ranking it among their top three formats and 69% producing more video content than the previous year [6]. - Video engagement is now viewed as a critical measure of customer intent, providing valuable insights for sales and customer success teams [8]. - Despite the desire to increase video usage, barriers such as slow approval cycles (28%), high production costs (17%), and limited in-house expertise (13%) hinder scaling efforts [8]. Group 3: Organizational Alignment - There is notable progress in aligning marketing and revenue teams, with 83% of respondents indicating that sales and customer success teams regularly utilize video-derived engagement data to inform customer interactions [7]. - The integration of video data into customer interactions signifies a shift towards shared intelligence and coordinated efforts across organizations [7]. Group 4: Kaltura's Strategic Moves - Kaltura's acquisition of eSelf.ai reflects the growing demand for enhanced personalization and AI-driven business outcomes across various sectors [5]. - The company emphasizes the need for unified AI frameworks to facilitate business-wide alignment and smarter workflows, enabling organizations to personalize at scale [6].

Kaltura Inc. Conference Call Summary Company Overview - **Company Name**: Kaltura Inc. (Ticker: KLTR) - **Industry**: Video Management and AI-Driven Virtual Agents - **Founded**: 2006 - **Revenue**: $180 million, profitable business model [3][32] Core Products and Innovations - **Initial Offerings**: Video management platform evolved into advanced video experiences for enterprises, including content management systems for video [3][4] - **Key Products**: - Video portal for corporate use (white label YouTube) [3] - Integration with learning environments, particularly in higher education [4] - Real-time conversation tools and virtual events [4] - AI capabilities, including a product called Genie for hyper-targeted video responses [5][6] - **New Innovations**: Introduction of immersive virtual agents, which are photorealistic, multilingual, and hyper-personalized avatars that enhance user interaction [12][14] Market Position and Competition - **Market Standing**: Kaltura is positioned in the top right quadrant of the video management market, competing with companies like Brightcove and Vimeo [8] - **Customer Base**: 30% of the top 50 technology companies, including Amazon, Adobe, NVIDIA, Salesforce, and Oracle [10] - **Market Challenges**: The video industry has flattened post-COVID, with some companies experiencing declines. Kaltura has seen only single-digit growth [9][32] Financial Performance and Projections - **Current Financial Status**: The company has returned to profitability and is generating cash flow from operations [33][40] - **Future Growth Expectations**: Aiming for double-digit growth and a return to a "Rule of 30" company status by 2028 [33][34] - **Adjusted EBITDA**: Positive margins reported, with expectations for GAAP profitability to improve [40] Investment Thesis - **Leading Technology**: Kaltura is the only public company in the immersive virtual agent space, providing a unique investment opportunity [34] - **Large and Growing Total Addressable Market (TAM)**: Transitioning from a video market to a broader customer experience (CX) and employee experience (EX) market [34][52] - **Customer Retention**: High gross retention rates, particularly in the enterprise market, indicating strong customer loyalty [49] Additional Insights - **AI Integration**: The company is leveraging AI to enhance user engagement and create personalized experiences [6][14] - **Sales Cycle**: Generally ranges from three months to a year, with larger projects potentially taking longer [44] - **Balance Sheet**: Approximately $60 million in gross cash with $30 million in debt, indicating a stable financial position [47] Conclusion - Kaltura is positioned for significant growth with its innovative offerings in immersive virtual agents, backed by a strong customer base and a commitment to profitability. The transition into a broader market presents substantial opportunities for investors [51][52]

Kaltura (NasdaqGS:KLTR) FY Conference January 14, 2026 11:45 AM ET Company ParticipantsRon Yekutiel - CEONone - Video Narrator 4None - Video Narrator 2None - Video Narrator 3None - Video Narrator 1None - Video Narrator 5Conference Call ParticipantsRyan Koontz - Communications and Networking AnalystRyan KoontzGood afternoon and welcome to Needham's 28th Annual Growth Conference. I'm Ryan Koontz. I cover the communications and networking sector here at Needham. Really pleased to be introducing Kaltura today. ...

Core Insights - Kaltura has been recognized for its market leadership in the enterprise video industry by Frost & Sullivan's Global Enterprise Video Platform Market Radar 2025, highlighting its innovations and value as a vendor [1][2] Group 1: Market Position and Recognition - Kaltura's advanced AI capabilities, particularly its early adoption of agentic AI, have positioned the company at the forefront of enterprise video innovation [2] - The recognition from Frost & Sullivan serves as a guide for tech leaders to evaluate global vendors based on their scale and market focus [1] Group 2: Product Innovations - Kaltura has launched a portfolio of AI agents called "Kaltura Genies," which enhance customer and employee experiences through personalized learning and large-scale video generation [2][3] - The recent acquisition of eSelf.ai allows Kaltura to integrate AI-based interactive avatars into its products, transforming them into conversational agents that can analyze user interactions in real time [3] Group 3: Product Features and Flexibility - Kaltura's modular, API-first architecture offers exceptional flexibility for deep integration and customization, catering to the needs of modern enterprises [4] - The AI Video Experience Cloud is a scalable solution that empowers enterprises to maximize the potential of video, featuring tools for webinars, virtual events, and more [4] Group 4: Company Vision and Commitment - Kaltura's mission focuses on creating AI-infused hyper-personalized video experiences that enhance customer and employee engagement [6] - The company emphasizes the importance of video content that drives real results, leveraging AI-powered interactive avatars to create conversational and mission-driven experiences [5]

Group 1 - The stock market is experiencing challenges due to disappointing Q3 results, prompting a strategic shift towards small- and mid-cap stocks that are catalyst-driven and have been overlooked [1] - The analyst has extensive experience in technology sectors, having worked on Wall Street and in Silicon Valley, which informs their perspective on current industry trends [1] - The analyst has been contributing to Seeking Alpha since 2017 and has been featured in various publications, indicating a recognized voice in investment analysis [1]

Core Insights - Kaltura, Inc. reported Q3 2025 earnings with an EPS of $0.016, exceeding the forecast of $0.01, while revenue was approximately $43.87 million, falling short of the expected $46.62 million [1][5] Financial Performance - The company achieved a record adjusted EBITDA profit and strong operating cash flow, attracting attention from investment firms such as Needham & Company and Canaccord Genuity Corp [2] - Kaltura has a price-to-sales ratio of 1.25 and an enterprise value to sales ratio of 1.33, indicating a balanced valuation perspective. The enterprise value to operating cash flow ratio is 14.48, highlighting cash flow efficiency [4] Strategic Initiatives - Kaltura's strategic moves include the acquisition of eSelf.ai, a provider of AI solutions, and the repurchase of 14.4 million shares valued at $16.6 million from Goldman Sachs, aimed at enhancing its technological capabilities and market position [3]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $43.9 million, down 1% year-over-year, but above the guidance range of $42.8 million to $43.6 million [34] - Subscription revenue was $42 million, flat year-over-year, also exceeding the guidance range of $40.8 million to $41.6 million [34] - Adjusted EBITDA reached a record $4.2 million, marking the ninth consecutive quarter of profitability, up 72% from $2.4 million in Q3 2024 [40] - Non-GAAP net profit was $2 million, an improvement of $2 million year-over-year [40] - Cash flow from operations was $9.3 million, consistent with forecasts for strong cash flow in the second half of the year [5] Business Line Data and Key Metrics Changes - The EE&T segment generated total revenue of $32.4 million, a slight increase year-over-year, with subscription revenue up 1% to $31.8 million [38] - The M&T segment saw total revenue of $11.5 million, down 4% year-over-year but up 3% sequentially, with subscription revenue also down 4% year-over-year [39] Market Data and Key Metrics Changes - New subscription bookings included 12 six-digit deals with notable new customers, indicating strong market interest [20] - The gross retention rate in EE&T remained strong, while M&T's gross retention rate improved sequentially [22] Company Strategy and Development Direction - The company announced the acquisition of ESOF.ai to enhance its AI capabilities and transition from a video company to a rich media-powered, AI-infused customer and employee experience company [6][9] - The strategic focus is on developing immersive virtual agents that will enhance customer and employee engagement through real-time video experiences [10][11] - The company aims to achieve double-digit revenue growth and a rule of 30 combination between revenue growth and adjusted EBITDA margin by 2028 or sooner [30][48] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the upcoming fourth quarter, expecting a sequential increase in total revenue for the first time this year [29] - The company anticipates continued strong cash flow and adjusted EBITDA growth, with a forecast for another record high in Q4 [45] - Management acknowledged challenges in customer projects that delayed revenue recognition but expects improvements in the fourth quarter [72][73] Other Important Information - The company repurchased 14.4 million shares from Goldman Sachs at a 25% discount, representing 9.2% of outstanding shares [18] - Following the share repurchase and ESOF acquisition, the company expects to end the year with approximately $60 million in gross cash [19] Q&A Session Summary Question: Thoughts on the investments for the new product and integration - Management indicated that the focus is on long-term strategic value rather than immediate returns, with a gradual rollout expected over the next year [51][52] Question: Signs of AI technology adoption affecting video content creation - Management noted increased interest in AI offerings like Genie and ContentLab, with several deals closed in Q3 and more expected [66][67] Question: Updates on revenue recognition delays with customers - Management clarified that delays were due to customer-related issues, not Kaltura's delivery, and expects resolution in Q4 [72][74]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $43.9 million, down 1% year-over-year, but above the guidance range of $42.8 million to $43.6 million [34] - Subscription revenue was $42 million, flat year-over-year, exceeding the guidance range of $40.8 million to $41.6 million [34] - Adjusted EBITDA reached a record $4.2 million, marking the ninth consecutive quarter of profitability, up 72% from $2.4 million in Q3 2024 [40] - Non-GAAP net profit was $2 million, an improvement of $2 million year-over-year [40] - Cash flow from operations was $9.3 million, consistent with forecasts for strong cash flow in the second half of the year [5] Business Line Data and Key Metrics Changes - The EE&T segment generated total revenue of $32.4 million, a slight increase year-over-year, with subscription revenue up 1% to $31.8 million [38] - The M&T segment saw total revenue of $11.5 million, down 4% year-over-year but up 3% sequentially, with subscription revenue also down 4% year-over-year [39] - Professional services revenue contributed $1.9 million, down 14% year-over-year, consistent with previous trends [34] Market Data and Key Metrics Changes - New subscription bookings included 12 six-digit deals with notable new customers from various sectors, indicating a diverse market presence [20] - The gross retention rate in EE&T remained strong, while M&T's gross retention rate improved sequentially, with expectations for further improvement in Q4 [22][46] Company Strategy and Development Direction - The company announced the acquisition of ESOF.ai, aimed at enhancing its capabilities in AI-driven immersive virtual agents and video content creation [6][10] - The strategic shift is from being a video company to a rich media-powered, AI-infused customer and employee experience company, focusing on hyper-personalized and context-aware solutions [9][16] - The company plans to integrate ESOF's technology into its existing product offerings, expanding its addressable market to include small and medium businesses [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, forecasting a sequential increase in total revenue for Q4 2025 and raising adjusted EBITDA guidance for the year [29][45] - The company anticipates continued growth in adjusted EBITDA and cash flow, with a target of achieving double-digit revenue growth by 2028 or sooner [30][48] - Management acknowledged challenges in customer adoption of AI technologies but noted increasing interest and engagement from clients [66][68] Other Important Information - The company repurchased 14.4 million shares from Goldman Sachs at a 25% discount, representing 9.2% of outstanding shares, which is seen as a value-accretive move [18][19] - Following the share repurchase and the expected ESOF acquisition, the company forecasts closing the year with approximately $60 million in gross cash [19][41] Q&A Session Summary Question: Thoughts on the investments for the new product and integration - Management indicated that the focus is on long-term strategic value rather than immediate returns, with a gradual rollout expected over the next year [51][52] Question: Signs of AI technology adoption affecting video content creation - Management noted increased interest in AI offerings like Genie and ContentLab, with several deals closed in Q3, indicating a growing trend in video generation [66][67] Question: Clarification on revenue recognition delays with customers - Management explained that delays were due to customer-related issues, not Kaltura's delivery, and adjustments were made accordingly [72][74]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $43.9 million, down 1% year-over-year, but above the guidance range of $42.8 million to $43.6 million [33] - Subscription revenue was $42 million, flat year-over-year, exceeding the guidance range of $40.8 million to $41.6 million [33] - Adjusted EBITDA reached a record $4.2 million, marking the ninth consecutive quarter of profitability, up 72% from $2.4 million in Q3 2024 [38] - Non-GAAP net profit was $2 million, an improvement of $2 million year-over-year [38] - Cash flow from operations was $9.3 million, consistent with forecasts for strong cash flow in the second half of the year [5] Business Line Data and Key Metrics Changes - The EE&T segment generated total revenue of $32.4 million, a slight increase year-over-year, with subscription revenue up 1% to $31.8 million [36] - The M&T segment saw total revenue of $11.5 million, down 4% year-over-year but up 3% sequentially [37] - Professional services revenue contributed $1.9 million, down 14% year-over-year, consistent with previous trends [33] Market Data and Key Metrics Changes - New subscription bookings included 12 six-digit deals with notable new customers from various sectors, indicating a diverse market presence [20] - The gross retention rate in EE&T remained strong, while M&T's gross retention rate improved sequentially but was still lower than usual [21] Company Strategy and Development Direction - The company announced the acquisition of ESOF.ai, aiming to enhance its capabilities in AI-driven immersive virtual agents and video content creation [6][10] - The strategic shift is from being a video company to a rich media-powered, AI-infused customer and employee experience company [9][16] - The company plans to integrate ESOF's technology into its existing offerings, expanding its target market to include small and medium businesses [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, forecasting a sequential increase in total revenue for Q4 2025 and continued growth in adjusted EBITDA [28][44] - The company anticipates a strong pipeline of new bookings in Q4, driven by customer consolidation and the maturity of newer products [27][40] - Management acknowledged challenges in the macroeconomic environment but remains focused on operational efficiency and strategic growth [40] Other Important Information - The company repurchased 14.4 million shares from Goldman Sachs at a 25% discount, representing 9.2% of outstanding shares [18] - Following the share repurchase and ESOF acquisition, the company expects to end the year with approximately $60 million in gross cash [19] Q&A Session Summary Question: Thoughts on the investments for the new product and integration timeline - Management indicated that the focus is on long-term strategic value rather than immediate results, with a realistic timeline for product integration [48] Question: Signs of increased adoption of AI technologies - There is growing interest in utilizing AI products like Genie and ContentLab, with several deals closed in Q3 [58] Question: Delays in revenue recognition with two customers - The delays are due to customer-related issues, not Kaltura's delivery, and are expected to resolve in Q4 [62]

Revenue Performance - Total revenue for the three months ended September 30, 2025, was $43.87 million, a slight decrease of 1% compared to $44.30 million in the same period of 2024[143]. - Annualized Recurring Revenue (ARR) as of September 30, 2025, was $169.09 million, showing a marginal increase from $168.88 million in 2024[151]. - The Enterprise, Education & Technology segment generated $32.37 million in revenue for the three months ended September 30, 2025, compared to $32.34 million in 2024[143]. - The Media & Telecom segment reported revenue of $11.50 million for the three months ended September 30, 2025, a decrease from $11.95 million in 2024[143]. - Total revenue for the three months ended September 30, 2025, was $43.9 million, a decrease of $0.4 million or 1% compared to $44.3 million in the same period of 2024[185]. - Enterprise, Education & Technology (EE&T) revenue slightly increased to $32.4 million, up by $0.02 million or 0% from $32.3 million year-over-year[188]. - Media & Telecom (M&T) revenue decreased by $0.5 million or 4% to $11.5 million for the three months ended September 30, 2025, primarily due to a decrease in revenue from existing customers[193]. - Total Enterprise, Education & Technology (EE&T) revenue increased by $4.3 million, or 4%, to $100.0 million for the nine months ended September 30, 2025, from $95.7 million for the same period in 2024[202][218]. - EE&T subscription revenue increased by $0.3 million or 1% to $31.8 million for the three months ended September 30, 2025, while professional services revenue decreased by $0.3 million or 37% to $0.5 million[189]. - EE&T subscription revenue rose by $6.1 million, or 7%, to $98.0 million for the nine months ended September 30, 2025, compared to $91.9 million in 2024[203]. - Media & Telecom (M&T) revenue decreased by $2.1 million, or 6%, to $35.3 million for the nine months ended September 30, 2025, from $37.4 million in 2024[208]. - M&T subscription revenue declined by $1.1 million, or 3%, to $31.3 million for the nine months ended September 30, 2025, from $32.3 million in 2024[208]. Profitability and Expenses - For the three months ended September 30, 2025, the net loss was $2,628, compared to a net loss of $3,610 for the same period in 2024[164]. - Adjusted EBITDA for the three months ended September 30, 2025, was $4,154, an increase from $2,423 in the same period of 2024[164]. - Total gross profit for the three months ended September 30, 2025, was $30.7 million, an increase of $1.2 million or 4% compared to $29.5 million in 2024[185]. - Research and development expenses decreased by $0.9 million or 8% to $11.5 million for the three months ended September 30, 2025, mainly due to reduced compensation expenses[197]. - Sales and marketing expenses decreased by $0.8 million or 7% to $11.0 million for the three months ended September 30, 2025, attributed to lower headcount and more efficient advertising management[198]. - General and administrative expenses decreased by $0.9 million or 9% to $8.9 million for the three months ended September 30, 2025, driven by reduced professional fees and strategic initiative costs[199]. - Net loss for the three months ended September 30, 2025, was $2.6 million, a decrease of $0.98 million or 27% compared to a net loss of $3.6 million in 2024[185]. - General and administrative expenses decreased by $5.2 million, or 15%, to $30.1 million for the nine months ended September 30, 2025, from $35.3 million in 2024[215]. Cost Management and Future Plans - The company plans to reduce costs by approximately $8.5 million annually through a reorganization plan that includes downsizing about 10% of its workforce[140]. - The company continues to invest in growth opportunities, particularly in enhancing its platform capabilities with generative AI features[145]. - Research and development expenses are expected to gradually decrease as a percentage of revenue, reflecting efficiency improvements[177]. - Sales and marketing expenses are anticipated to remain stable as a percentage of revenue, indicating consistent investment in growth[178]. - General and administrative expenses are projected to decrease as a percentage of revenue, enhancing overall profitability[179]. Cash Flow and Financing - Net cash provided by operating activities increased by $3.0 million to $10.9 million for the nine months ended September 30, 2025, compared to $7.9 million in 2024[239][241]. - Net cash provided by investing activities was $8.9 million for the nine months ended September 30, 2025, primarily from $59.6 million in maturities of marketable securities[243]. - Net cash used in financing activities increased to $11.9 million for the nine months ended September 30, 2025, mainly due to $9.6 million for stock repurchases[246]. - The Company maintained compliance with financial covenants, including a minimum liquidity requirement of $20.0 million as of September 30, 2025[234]. - The Company authorized a stock repurchase program in 2025 for up to $15.0 million, superseding the previous $5.0 million program[221][223]. - The Company repurchased 14,443,739 shares at a total cost of $16,610,300, equating to $1.15 per share, reflecting a 25% discount on the average daily VWAP[223]. - The Company refinanced its Credit Agreement in December 2023, increasing the term loan facility to $34.5 million and reducing the revolving credit facility to $25.0 million[224]. - As of September 30, 2025, the Company had $30.6 million outstanding under the Term Loan Facility and no balance under the Revolving Credit Facility[236]. Market Risks - The company is exposed to market risks from changes in exchange rates, interest rates, and inflation, which arise in the ordinary course of business[250]. - Revenue and expenses are primarily denominated in U.S. dollars, with significant operating costs in NIS, leading to foreign currency exchange risks[251]. - A hedging program has been established to mitigate the impact of foreign currency exchange risks, particularly related to U.S. dollar/NIS exposure[252]. - A hypothetical 10% change in foreign currency exchange rates would have impacted results by $0.2 million and $1.0 million for the three and nine months ended September 30, 2025, respectively, due to NIS, and $1.1 million and $3.7 million due to Euros[253]. - The company has outstanding floating rate debt obligations of $30.4 million, making it sensitive to fluctuations in market interest rates[254]. - A hypothetical 10% change in interest rates would have resulted in a change to interest expense of $0.1 million and $0.2 million for the three and nine months ended September 30, 2025, respectively[254]. - The company does not believe inflation has had a material effect on its historical results, but significant inflationary pressures could adversely affect its financial condition[255].