Kaltura(US:KLTR)2023-11-11 01:02Financial Data and Key Metrics Changes - Total revenue for Q3 2023 was $43.5 million, up 6% year-over-year, with subscription revenue at $40.8 million, up 8% year-over-year [23][34] - Adjusted EBITDA for the quarter was positive $0.3 million, improving from a negative $7.2 million in Q3 2022 [51][34] - Cash flow from operations was $1.7 million, the highest since Q4 2020 [35] Business Line Data and Key Metrics Changes - Within the E&P segment, total revenue was $31.1 million, up 3% year-over-year, with subscription revenue at $30 million, up 5% year-over-year [50] - In the M&P segment, total revenue was $12.4 million, representing 13% year-over-year growth, with subscription revenue at $10.8 million, up 17% year-over-year [24] Market Data and Key Metrics Changes - Annualized recurring revenue was $163.1 million, up 7% year-over-year, with a net dollar retention rate of 101% in Q3 2023 compared to 96% in Q3 2022 [73] - Remaining performance obligations were $164 million, down 3% year-over-year, with 59% expected to be recognized as revenue over the next 12 months [73] Company Strategy and Development Direction - The company is focusing on returning to profitability, achieving positive adjusted EBITDA and cash flow from operations [9][20] - Kaltura is expanding its AI offerings, including an AI assistant for webinars and partnerships with leading tech companies for generative AI tools [14][18] - The company is also enhancing its event platform features to improve engagement and ROI [18] Management's Comments on Operating Environment and Future Outlook - Management noted that lower budgets, increased price pressure, and elongated sales cycles have kept new bookings relatively flat [21] - The company expects to achieve positive cash flow from operations for the second half of 2023, with a maximum forecasted annual cash consumption of $11.5 million compared to $46.8 million in 2022 [22] - Management expressed cautious optimism for Q4, indicating potential improvements in bookings [66] Other Important Information - The company has not seen disruptions in delivering products and services despite geopolitical tensions in the Middle East [19] - Kaltura is committed to sustainability, diversity, equity, and inclusion, recognizing their growing importance in the marketing landscape [39] Q&A Session Summary Question: What has changed in the macro environment affecting subscription revenue? - Management indicated that the decline in subscription revenue was expected due to lower gross retention and new bookings, with budgetary pressures being a significant factor [77][93] Question: What are the expectations for 2024? - Management expects subscription revenue to continue growing in 2024, despite anticipated declines in professional services revenue [80] Question: How is the competitive landscape affecting Kaltura? - Management stated that win rates remain high and that Kaltura is not losing accounts to competitors, but rather experiencing general industry pressures [121]