Summary
Kaltura's fiscal 2024 third quarter delivered modest revenue growth and a much cleaner profit profile. Revenue was $44.3 million, up 1.7% from the prior-year quarter. Gross profit was $29.5 million, up 6.7%, and gross margin was 66.7%, up 3.1 percentage points. The company reported an operating loss of $4.5 million, up 46.3% year over year. Net loss was $3.6 million, up 66.3% year over year. Diluted EPS was negative $0.02, up 75.0% year over year. Operating margin was negative 10.1%, up 9.0 percentage points. Operating cash flow was $10.7 million, up 542.8% year over year. Capital expenditures were $0.09 million, down 53.2%. Deferred revenue was $63.2 million, up 6.7%, and remaining performance obligations were $187.8 million, up 14.5%. For the first nine months, revenue was $133.1 million, up 1.8%, and gross profit was $86.8 million, up 3.9%.
Management pointed to several operating wins. Annualized Recurring Revenue was $168.9 million, up 4%. Net Dollar Retention Rate returned to 101%, after 98% in the last three quarters. Kaltura closed 2 seven-digit deals and 22 six-digit deals, the highest new bookings since the fourth quarter of 2022. Gross retention improved year over year. The company started productizing its Content Lab, which uses Gen-AI to analyze video captions and viewership engagement data to create clips, highlight reels, and other immersive experiences. It also showcased beta Gen-AI offerings for Media and Telecom customers at the IBC 2024 conference in Amsterdam. Kaltura won two industry awards: best overall event management solution in the 7th annual international Martech Breakthrough Awards Program and best video management platform in the 2024 Digiday Technology Awards.
Guidance points to continued but slow growth. For the fourth quarter of 2024, Kaltura expects subscription revenue to grow 2% to 4% year over year to between $41.8 million and $42.5 million. Total revenue is expected to grow or decline by negative 1% to 1% year over year to between $44.0 million and $44.7 million. Adjusted EBITDA is guided to $0.5 million to $1.5 million. For the full year ending December 31, 2024, subscription revenue is expected to grow 2% year over year to between $166.1 million and $166.8 million. Total revenue is expected to grow 1% to 2% year over year to between $177.1 million and $177.8 million. Adjusted EBITDA is guided to $5.1 million to $6.1 million. The company expects positive cash flow from operations in the fourth quarter and for the full year, which would translate to over a $46 million improvement in cash flow from operations in 2024 compared to the same period only two years ago.
The balance sheet remains supported by available credit. Kaltura had no balance outstanding under its Revolving Credit Facility and $25.0 million available for future borrowings. It was in compliance with financial covenants that require a minimum amount of Consolidated Adjusted EBITDA and Liquidity of at least $20.0 million. The company repurchased 1,758,929 shares at an average price of $1.24 per share under a program authorized for up to $5.0 million, leaving $2.8 million remaining. Year to date, operating cash flow was $7.9 million, up 180.0%, while net loss was $24.7 million, narrowed 28.0%.
Management flagged a long list of risks. These include the volatile economic climate, political, economic, and military conditions in Israel, the ability to retain customers and achieve profitability, competition, risks from artificial intelligence and machine learning models, cybersecurity threats, data privacy compliance, reliance on third parties, key personnel retention, revenue mix, international operations, acquisitions, and the ability to raise additional capital. The company also noted that its cash and cash equivalents are maintained at financial institutions in amounts that exceed federally insured limits.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2024 | Q2 FY2024 | QoQ | Q3 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $44.3M | $44.0M | +0.6% | $43.5M | +1.7% |
| Gross profit | $29.5M | $28.7M | +3.0% | $27.7M | +6.7% |
| Gross margin | 66.7% | 65.1% | +1.6 pp | 63.6% | +3.1 pp |
| Research & development | $12.4M | $12.0M | +3.3% | $12.6M | -1.0% |
| Sales & marketing | $11.8M | $11.8M | +0.4% | $11.7M | +1.3% |
| General & administrative | $9.8M | $13.4M | -27.3% | $11.8M | -17.1% |
| Total operating expenses | $34.0M | $37.2M | -8.6% | $36.0M | -5.6% |
| Operating income (loss) | -$4.5M | -$8.6M | +47.8% | -$8.3M | +46.3% |
| Operating margin | -10.1% | -19.4% | +9.3 pp | -19.1% | +9.0 pp |
| Net income (loss) | -$3.6M | -$10.0M | +63.9% | -$10.7M | +66.3% |
| Net margin | -8.2% | -22.7% | +14.6 pp | -24.6% | +16.5 pp |
| Diluted EPS | -$0.02 | -$0.07 | +$0.05 | $0.08 | -$0.10 |
| Net retention rate | 101.0% | 98.0% | +3.0 pp | 101.0% | ±0.0 pp |
Risks
The filing highlights political, economic, and military conditions in Israel, including the current security situation or any escalation of conflicts, which could disrupt operations and access to capital. MD&A also notes war related costs for the nine months ended September 30, 2024 tied to temporary relocation of key employees and emergency equipment.
Global economic volatility, rising inflation and interest rates, price increases, and decreased customer spend or available budget have disrupted financial markets and may reduce the company's ability to access capital. The filing also cites the ongoing Russia-Ukraine conflict as a factor.
The Credit Agreement requires maintenance of a minimum Consolidated Adjusted EBITDA and Liquidity of at least $20.0 million as of the last day of any calendar month, and contains restrictive covenants and event-of-default provisions that could accelerate borrowings. As of September 30, 2024, the company was in compliance and had approximately $33.3 million outstanding under the Term Loan Facility.
Cash and cash equivalents are maintained at financial institutions in amounts that exceed federally insured limits, and failure of those institutions could prevent timely access to uninsured funds. The company also may need additional debt or equity financing, which may not be available on favorable terms or at all.
Media & Telecom gross margins have been negatively impacted by implementation resources for TV Solution and Media Services, longer booking-to-go-live periods, and a higher proportion of professional services revenue. For the three months ended September 30, 2024, M&T revenue decreased 4% and M&T professional services gross loss was $0.8 million, while EE&T professional services gross loss increased 18% to $1.3 million.
Total revenue increased 1.7% for FY2024 Q3 versus the prior-year quarter, with Media & Telecom revenue down 4% and Net Dollar Retention Rate flat at 101%. Annualized Recurring Revenue grew 4% in the three months ended September 30, 2024 compared to the prior-year period, indicating limited expansion from existing customers.
MD&A attributes lower general and administrative compensation costs partly to Executive departures in the first quarter of 2024 and cancellation of market-based equity awards previously granted to the CEO. Loss of key executives could disrupt operations and strategy execution.
SaaS KPIs
All quarters →Net Dollar Retention Rate
Annualized Recurring Revenue (ARR)
Adjusted EBITDA
Non-GAAP Operating Margin
Non-GAAP Gross Margin
Remaining Performance Obligations (RPO)
Summary, forecast, risks and KPIs are extracted from KALTURA INC's SEC filings for Q3 FY2024 (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.