Summary
Kaltura reported second quarter fiscal 2023 revenue of $43.88 million, up 4.5% from the prior-year quarter. Year-to-date revenue reached $87.15 million, up 4.1% from the prior-year period. Gross profit was $28.60 million for the quarter, up 7.2%, and gross margin rose to 65.2%, up 1.6 percentage points. Year-to-date gross profit was $55.89 million, up 5.5%, with a gross margin of 64.1%, up 0.8 percentage points. The company said the quarter produced record subscription revenue and the highest year-over-year total revenue growth rate since the first quarter of 2022. Annualized Recurring Revenue was $163.4 million, up 8% from the prior-year quarter. Net Dollar Retention Rate was 100%. Remaining Performance Obligations were $174.33 million, up 0.9%, and deferred revenue was $57.07 million, up 10.0%.
Profitability improved sharply. Operating loss was $9.56 million for the quarter, a narrowed loss from the prior-year quarter, and operating margin was negative 21.8%, up 15.1 percentage points. Net loss was $10.78 million, a narrowed loss, and diluted EPS was negative $0.08, an improvement from the prior-year quarter. On a year-to-date basis, operating loss was $21.52 million, a narrowed loss, with an operating margin of negative 24.7%, up 11.3 percentage points. Year-to-date net loss was $23.57 million, a narrowed loss, and year-to-date diluted EPS was negative $0.17, an improvement from the prior-year period. Non-GAAP operating loss was $2.0 million, compared with $9.1 million in the prior-year quarter. Adjusted EBITDA was negative $1.0 million, compared with negative $8.5 million. Operating cash flow was negative $4.13 million for the quarter, an improvement of 81.7% from the prior-year quarter. Year-to-date operating cash flow was negative $11.56 million, an improvement of 72.5%. Capital expenditures were $0.74 million for the quarter, up 133.9%, and $1.59 million year to date, up 109.1%.
Guidance points to continued growth but still negative Adjusted EBITDA. For the third quarter of 2023, Kaltura expects total revenue to grow 4% to 6% year over year and subscription revenue to grow 5% to 7%. Third quarter Adjusted EBITDA is expected to be negative $0.5 million to $1.0 million. For the full year 2023, the company expects total revenue to grow 1% to 2% and subscription revenue to grow 5% to 6%. Full year Adjusted EBITDA is expected to be negative $4.5 million to $5.5 million. Kaltura reaffirmed plans to achieve positive Adjusted EBITDA in 2024.
The quarter also carried clear risks. Kaltura cited a worsening economic climate, lower demand, lower spend, and tighter budgets across its market segments. The 2023 Reorganization Plan cut 11% of the workforce and is expected to produce annualized cost reductions of approximately $16 million; the company incurred pre-tax charges of approximately $1 million as of June 30, 2023. On July 19, 2023, Kaltura amended a commercial agreement that decreases future commitments from the counterparty by approximately $7.0 million. The credit agreement includes an Annualized Recurring Revenue covenant and a liquidity covenant of at least $10 million. The term loan matures on January 14, 2024, with $33.0 million outstanding and $35.0 million available under the revolver. Operationally, Kaltura pointed to growth in qualified leads, sales development meetings, and request for proposal submissions, especially for its Event Platform and Virtual Classroom products. It hosted Kaltura Connect on the Road 2023, won awards, and began adding Generative AI to its video experiences. Net Dollar Retention Rate was 100%.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2023 | Q1 FY2023 | QoQ | Q2 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $43.9M | $43.3M | +1.4% | $42.0M | +4.5% |
| Gross profit | $28.6M | $27.3M | +4.8% | $26.7M | +7.2% |
| Gross margin | 65.2% | 63.1% | +2.1 pp | 63.6% | +1.6 pp |
| Research & development | $13.0M | $14.1M | -8.2% | $14.4M | -10.2% |
| Sales & marketing | $12.7M | $12.1M | +5.5% | $16.4M | -22.4% |
| General & administrative | $12.4M | $12.1M | +2.7% | $11.3M | +9.6% |
| Total operating expenses | $38.2M | $39.2M | -2.8% | $42.2M | -9.6% |
| Operating income (loss) | -$9.6M | -$12.0M | +20.1% | -$15.5M | +38.3% |
| Operating margin | -21.8% | -27.6% | +5.9 pp | -36.9% | +15.1 pp |
| Net income (loss) | -$10.8M | -$12.8M | +15.8% | -$17.3M | +37.9% |
| Net margin | -24.6% | -29.6% | +5.0 pp | -41.3% | +16.8 pp |
| Diluted EPS | -$0.08 | — | — | -$0.13 | +$0.05 |
| Net retention rate | 100.0% | 102.0% | -2.0 pp | 100.0% | ±0.0 pp |
Risks
MD&A states the worsening economic climate and recession headwinds led to lower demand and the company does not expect the rapid growth trend to continue in 2023; it expects lower demand, spend, and available budgets across its market segments.
Risk factor: offices near Tel Aviv, Israel, had 341 full-time employees as of June 30, 2023, and house primary research and development, human resources, and certain finance and administrative activities; hostilities, military reserve duty, and judicial system changes could disrupt operations and access to capital.
Risk factor: the company may require additional financing, and the worsening economic climate, inflation, and interest rates may reduce net cash from operations while making new financing limited, costly, or unavailable; equity or debt issuance could dilute stockholders.
New risk factor: the business utilizes AI and machine learning technologies, some offered by third parties, and plans significant investments in generative AI across the product layer and platform APIs; incorrect design, evolving regulation, competition, and uncertain market acceptance could harm results.
Risk factor: the majority of cash and cash equivalents is held at major U.S. and multi-national financial institutions in amounts exceeding insured limits, and failure of any such institution could delay or prevent access to uninsured funds.
Risk factor: the company depends on senior management, including co-founder and CEO Ron Yekutiel, and on skilled engineering and sales personnel; intense competition and high attrition in the Israeli high-tech industry, plus equity value changes, may increase attrition.
MD&A: on July 19, 2023, the company entered an amendment to a commercial agreement that decreases future commitments from the counterparty by approximately $7.0 million and reduces unbilled consideration; RPO was $174.3 million as of June 30, 2023, up 0.9% versus the prior-year quarter.
MD&A: Media & Telecom gross profit decreased 8% to $5.5 million for the quarter ended June 30, 2023, and gross margin decreased 9 percentage points to 43% from 52%, primarily due to an increase in production cost as a percentage of subscription revenue.
MD&A: the 2023 Reorganization Plan downsized an additional 11% of the workforce, targets approximately $16 million in annualized cost reductions, and incurred pre-tax charges of approximately $1 million as of June 30, 2023; execution may not achieve the intended efficiency and productivity gains.
MD&A: the Term Loan Facility is due January 14, 2024, with approximately $33.0 million outstanding as of June 30, 2023, and the Credit Agreement requires a minimum ARR covenant that increases through the fiscal quarter ending December 31, 2023 and Liquidity of at least $10 million.
SaaS KPIs
All quarters →Net Dollar Retention Rate
Annualized Recurring Revenue (ARR)
Adjusted EBITDA
Remaining Performance Obligations (RPO)
Summary, forecast, risks and KPIs are extracted from KALTURA INC's SEC filings for Q2 FY2023 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.