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].

Revenue Performance - Revenue for Q3 2025 was $43.9 million, a decrease of 1% compared to $44.3 million in Q3 2024[3] - Subscription Revenue for Q3 2025 was $42.0 million, almost flat compared to $42.1 million in Q3 2024[3] - Total revenue for the three months ended September 30, 2025, was $43,866,000, compared to $44,295,000 for the same period in 2024, showing a slight decline[25] - Subscription revenue for the nine months ended September 30, 2025, was $129,266,000, up from $124,267,000 in the same period of 2024[25] Profitability Metrics - GAAP Gross profit for Q3 2025 was $30.7 million, with a gross margin of 70%, up from a gross margin of 67% in Q3 2024[3] - Non-GAAP Operating profit was $3.1 million for Q3 2025, compared to a non-GAAP operating profit of $1.3 million in Q3 2024[3] - Adjusted EBITDA for Q3 2025 was $4.2 million, an increase from $2.4 million in Q3 2024[7] - Gross profit for the three months ended September 30, 2025, was $30,727,000, an increase from $29,541,000 in the same period of 2024[28] - The company reported a net loss of $2,628,000 for the three months ended September 30, 2025, compared to a net loss of $3,610,000 for the same period in 2024[25] - Net loss for the nine months ended September 30, 2025, was $11,497,000, a decrease from $24,710,000 in the same period of 2024[29] - GAAP gross profit for the nine months ended September 30, 2025, was $94,683,000, compared to $86,825,000 in 2024, reflecting a 9.5% increase[30] - Non-GAAP gross profit for the nine months ended September 30, 2025, was $95,140,000, up from $87,952,000 in 2024, indicating an 8.5% growth[30] - Adjusted EBITDA for the nine months ended September 30, 2025, was $12,356,000, significantly higher than $4,615,000 in 2024[31] Future Expectations - For Q4 2025, Kaltura expects Subscription Revenue between $41.6 million and $42.3 million[7] - Remaining Performance Obligations represent contracted future revenue not yet delivered, with an expectation to recognize 60% as revenue over the next 12 months[23] Shareholder Actions - Repurchased 14.4 million shares of common stock for approximately $16.6 million, executed at a 25% discount to the 30-day VWAP[7] Assets and Liabilities - As of September 30, 2025, total assets amounted to $172,624,000, a decrease from $181,305,000 as of December 31, 2024[24] - The company’s total current liabilities as of September 30, 2025, were $100,730,000, slightly down from $101,663,000 as of December 31, 2024[24] Cash Flow - Cash provided by operating activities for the nine months ended September 30, 2025, was $10,893,000, an increase from $7,920,000 in 2024[29] - Cash used in financing activities for the nine months ended September 30, 2025, was $11,855,000, compared to $3,865,000 in 2024[29] - Cash, cash equivalents, and restricted cash at the end of the period were $41,613,000, up from $36,940,000 at the end of September 2024[29] Customer Metrics - Annualized Recurring Revenue (ARR) for Q3 2025 was $169.1 million, a slight increase from $168.9 million in Q3 2024[3] - Annualized Recurring Revenue as of September 30, 2025, was $169,094,000, slightly up from $168,879,000 in 2024[32] - Net Dollar Retention Rate for the three months ended September 30, 2025, was 97%, down from 101% in 2024[33] - The Net Dollar Retention Rate measures the success in retaining and growing recurring revenue from existing customers, calculated as the recognized recurring revenue from a set of customers compared to the same period in the prior year[22] Acquisitions - Signed a definitive agreement to acquire eSelf.ai, expected to close in Q4 2025[7] Performance Obligations - Remaining Performance Obligations as of September 30, 2025, were $159,330,000, down from $166,194,000 in 2024[32]

Core Insights - Kaltura, Inc. reported strong financial results for Q3 2025, exceeding guidance with record adjusted EBITDA and strong operating cash flow [2][3] - The company signed a definitive agreement to acquire eSelf.ai, enhancing its capabilities in AI-powered virtual agents [3][10] - Kaltura repurchased 14.4 million shares of common stock from Goldman Sachs for approximately $16.6 million, reflecting confidence in its growth trajectory [3][10] Financial Performance - Q3 2025 revenue was $43.9 million, a slight decrease of 1% from $44.3 million in Q3 2024 [4] - Subscription revenue remained stable at $42.0 million, nearly flat compared to $42.1 million in the same quarter last year [4] - Annualized Recurring Revenue (ARR) increased to $169.1 million, up from $168.9 million year-over-year [4] - GAAP gross profit was $30.7 million, with a gross margin of 70%, compared to $29.5 million and 67% in Q3 2024 [4] - Non-GAAP operating profit improved to $3.1 million from $1.3 million in Q3 2024 [4] - Adjusted EBITDA rose to $4.2 million, up from $2.4 million in the prior year [4] Business Highlights - Kaltura closed 12 six-figure deals across various industries, including technology and healthcare [10] - The company improved its gross retention rate and maintained strong engagement metrics [10] - An exclusive partnership with Telestream was established to migrate customers from the Sherpa Stream platform [10] - Kaltura launched its Media Publishing AI Agent at the IBC show in Amsterdam [10] Future Outlook - For Q4 2025, Kaltura expects subscription revenue between $41.6 million and $42.3 million, and total revenue between $45.0 million and $45.7 million [10] - The full-year guidance anticipates total revenue between $180.3 million and $181.0 million, with adjusted EBITDA projected between $16.6 million and $17.6 million [10]

Core Insights - Kaltura is acquiring eSelf.ai, an Israeli startup specializing in conversational avatars, for approximately $27 million [1] - The acquisition aims to enhance Kaltura's video platform by integrating eSelf's technology, which supports real-time, interactive user engagement [6][7] Company Overview - Kaltura is a New York-based AI video platform that provides a suite of cloud-based software solutions for advanced video applications, including corporate video portals and virtual classroom products [4][5] - The company serves over 800 enterprise customers, including major tech firms and financial institutions, and has around $180 million in revenue [5][16] eSelf.ai Details - eSelf.ai, co-founded in 2023, focuses on speech-to-video generation and low-latency speech recognition, allowing avatars to interact with users effectively [2][3] - The startup has a team of about 15 AI experts and will integrate its technology into Kaltura, with its co-founders joining Kaltura for this purpose [2][3] Strategic Importance - The acquisition is seen as strategic for Kaltura, enhancing its capabilities in real-time conversational technology and aligning with its goal of evolving into a video-based customer and employee experience provider [7][13] - Kaltura plans to launch standalone, embeddable agents for various sectors, including education, media, e-commerce, and healthcare [14] Financial Context - Kaltura has previously made three acquisitions and is exploring further opportunities for growth, including potential mergers and acquisitions [15][16] - The company went public in 2021 and is profitable on an adjusted EBITDA and cash flow basis [16]

Core Insights - Kaltura has signed a definitive agreement to acquire eSelf.ai, enhancing its capabilities in immersive, AI-infused virtual agents and experiences for organizations [1][3][9] - The acquisition is expected to accelerate Kaltura's evolution from enterprise video experiences to more interactive and engaging solutions [1][9] Company Overview - Kaltura, Inc. is known for its AI Video Experience Cloud, which provides hyper-personalized video experiences aimed at boosting customer and employee engagement [12] - eSelf.ai, founded in 2023, specializes in multimodal AI technology for agentic interactions with live avatars and has been recognized as a significant player in tech by FastCompany [2][12] Technology Integration - Kaltura plans to integrate eSelf.ai's technology into its existing video products, allowing for the creation of conversational, visually expressive agents that can interact with users in real-time [3][4] - The new technology will enable Kaltura's Genies to analyze user screens and provide dynamic interactions, enhancing customer engagement and employee retention [3][4] Product Development - Kaltura aims to develop a new video-on-demand content creation tool that incorporates eSelf.ai's avatar technology, allowing users to add animated avatars to videos easily [4] - The acquisition will also support the creation of embeddable, self-served interactive avatars, contributing to Kaltura's product-led growth strategy [4][5] Market Opportunities - The acquisition is expected to create upsell opportunities within Kaltura's premium customer base and attract new enterprise clients, including small and medium-sized enterprises [5][10] - The immersive virtual agents will be applicable across various use cases, including marketing, sales, support, training, recruiting, and internal communications [8][13] Financial Details - The transaction includes a cash payment of $7.5 million upon closing, with an additional $12.5 million payable over three years based on performance milestones, and 4,690,025 shares of Kaltura stock [10] - The total deal value is approximately $27 million, contingent on achieving all earnout milestones and retention targets [10] Future Outlook - The acquisition is expected to close in Q4 2025, pending customary closing conditions and regulatory approvals [11]

Core Insights - Kaltura has launched a new AI-powered Accessibility Agent to help organizations comply with upcoming digital accessibility regulations, particularly for video content [1][3][4] Group 1: Regulatory Context - New Title II regulations in the U.S. and the European Accessibility Act mandate that all video content must be fully accessible, including captioning and audio descriptions, by April 2026 [2] - Institutions with extensive video libraries face significant challenges in assessing compliance due to the manual nature of the process [2] Group 2: Product Features and Benefits - The Kaltura Accessibility Agent automates the process of ensuring video content meets accessibility standards, including adding necessary features before publication [3] - The solution not only aids compliance but also enhances student engagement and retention through improved accessibility features like closed captions and interactive transcripts [4] Group 3: Market Trends and Future Directions - There is a growing trend among forward-thinking enterprises to prioritize accessibility for both employees and customers, seeking AI-powered solutions for inclusivity [5] - Kaltura will showcase its Accessibility Agent and other AI solutions at the upcoming EDUCAUSE annual conference, highlighting practical strategies for compliance and innovation in accessibility [5]

Core Insights - Kaltura will release its third quarter financial results for the period ended September 30, 2025, after market close on November 10, 2025 [1] - A conference call will be held to review the financial results and discuss the financial outlook [1] Company Overview - Kaltura's mission is to create AI-infused hyper-personalized video experiences that enhance customer and employee engagement [2] - The Video Experience Cloud includes a platform for enterprise and TV content management, along with various Gen AI-infused video-first products [2] - Kaltura engages millions of end-users across different environments, improving experiences in marketing, sales, education, communication, and entertainment [2]

Core Insights - The report emphasizes that ease of use is prioritized over perfection, with 72% of video producers preferring integrated software solutions over specialized tools [1][8] - Companies utilizing AI-powered video tools report significant effectiveness, with 76% of those employing advanced strategies and 52% with intermediate strategies describing their impact as 'very effective' [2] - Video is increasingly becoming a preferred learning and problem-solving tool in the workplace, with 65% of employees favoring on-demand videos over asking colleagues for help [4] Adoption and Usage - 75% of employees indicate that their organizations encourage video production for business purposes, yet 68% believe they could create more videos with easier-to-use tools [3][8] - Concerns about video quality and software usability persist, with 29% worried about content quality and 49% unsure of which software to use [8] - 55% of decision-makers consider the ability to secure content from unauthorized viewers as very important [8] Investment and Features - There is a strong willingness among tech leaders to invest in AI-enhanced video strategies, with 72% of CIOs willing to pay a premium for speech-to-text solutions to improve video searchability [8] - 77% of organizations are interested in implementing AI video features to enhance video production quality [8] - Employees express a desire for direct access to relevant video content, with 71% agreeing they would utilize archived videos if they could search using specific terms [8] Learning and Talent Acquisition - Seamless video experiences are crucial during talent acquisition, with 77% of candidates impressed by companies offering on-demand training for career exploration [8] - The report indicates a shift in employee preferences towards video as a primary tool for learning and problem-solving, reflecting a broader trend in workplace communication [4][5]

Core Points - Kaltura, Inc. announced the resignation of Chief Financial Officer John Doherty, effective December 5, 2025, as he transitions to a CFO role in the medical technology sector [1] - The company has engaged an external search firm to find a successor for the CFO position, and Doherty will remain as an advisor until March 31, 2026, to ensure a smooth transition [2] - Kaltura's leadership expressed gratitude for Doherty's contributions and reaffirmed confidence in the company's strategy and financial guidance for the third quarter [3] Company Overview - Kaltura's mission focuses on creating AI-infused hyper-personalized video experiences aimed at enhancing customer and employee engagement [4] - The company's offerings include a comprehensive platform for enterprise and TV content management, along with various AI-driven video products such as Video Portals, LMS and CMS Video Extensions, Virtual Events, and TV Streaming Applications [4]