Kaltura(US:KLTR)2025-11-10 21:15Revenue 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].