Summary
Kaltura closed fiscal 2022 with fourth-quarter revenue of $44.07 million, up 3.2% from the prior-year quarter. Gross profit was $27.61 million, up 3.1%, and gross margin was 62.6%, flat compared with the prior-year quarter. The company reported an operating loss of $11.36 million, narrower than the prior-year quarter, and operating margin improved to -25.8%, up 3.3 percentage points. Net loss was $14.78 million, also narrower. Operating cash flow was negative $5.85 million, an improvement of 45.6% from the prior-year quarter. Capital expenditures were $0.21 million, down 27.7%. Deferred revenue, current portion, rose 15.8% to $59.84 million. Remaining performance obligations fell 7.5% to $171.66 million. Annualized recurring revenue was $159.2 million, up 6% from $150.8 million in 2021. Net dollar retention rate was 96% for the quarter, down from 120% in the prior-year quarter.
For the full year, revenue was $168.81 million, up 2.3%. Gross profit was $106.94 million, up 4.1%, and gross margin was 63.3%, up 1.1 percentage points. The full-year operating loss was $56.38 million, wider than the prior year, and operating margin was -33.4%, down 13.6 percentage points. Net loss was $68.50 million, wider than the prior year. Operating cash flow was negative $46.83 million, down 111.8% from the prior year. Capital expenditures were $1.22 million, down 35.1%. Adjusted EBITDA was negative $28.3 million for the full year, compared with negative $12.2 million in 2021. Full-year net dollar retention rate was 100%, down from 118% in 2021.
Operationally, Kaltura closed an upsell deal with a large telecom customer and completed projects with two additional large telecom companies. It signed several six-digit deals for enterprise products and education solutions. The Events offering expanded from early adopters in tech and financial services into pharma, healthcare, manufacturing, market research, and education. The company hosted its second annual Virtually Live! by Kaltura event with over 5,000 registrants. It released new features for Events and Webinar products, updated its Player and Player Studio, and introduced a Webex integration. In January 2023, Kaltura executed a cost-cutting plan that downsized 11% of its workforce. The 2023 Reorganization Plan is expected to produce annualized cost reductions of approximately $16 million and pre-tax charges of approximately $1 million, mostly in the first quarter of 2023. The earlier 2022 Restructuring Plan reduced headcount by about 10%.
Guidance points to modest growth and continued losses. For the first quarter of 2023, Kaltura expects subscription revenue to grow 5% to 7% year over year to between $38.9 million and $39.6 million. Total revenue is guided to grow 1.5% to 3.5% to between $42.3 million and $43.2 million. Adjusted EBITDA is expected to be negative in the range of $3 million to $4 million. For the full year ending December 31, 2023, subscription revenue is expected to grow 4% to 6% to between $158.6 million and $161.7 million. Total revenue is guided to grow 0% to 2% to between $168.8 million and $172.2 million. Adjusted EBITDA is expected to be negative in the range of $5 million to $8 million. The company has not provided a quantitative reconciliation of forecasted Adjusted EBITDA to forecasted GAAP net loss.
The quarter showed some stabilization in revenue and narrower losses, but the full-year picture remains challenging. Macroeconomic headwinds, lower demand, spend, and available budgets across market segments, recession risks, and currency headwinds weighed on results. Remaining performance obligations declined 7.5% year over year, and net dollar retention fell to 96% in the fourth quarter from 120%. Full-year net loss widened to $68.50 million, and operating cash flow worsened to negative $46.83 million. Kaltura is relying on restructuring plans to cut costs and reach break even in 2024. Execution risks around those plans, the ability to retain customers, and the uncertain economic climate remain central to the investment case.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2022 | Q3 FY2022 | QoQ | Q4 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $44.1M | $41.1M | +7.3% | $42.7M | +3.2% |
| Gross profit | $27.6M | $26.4M | +4.7% | $26.8M | +3.1% |
| Gross margin | 62.6% | 64.3% | -1.6 pp | 62.7% | -0.0 pp |
| Research & development | $14.2M | $13.9M | +2.1% | $13.3M | +6.4% |
| Sales & marketing | $13.2M | $15.0M | -12.2% | $13.8M | -4.6% |
| General & administrative | $11.2M | $11.4M | -1.6% | $12.0M | -6.7% |
| Total operating expenses | $39.0M | $41.2M | -5.5% | $39.2M | -0.6% |
| Operating income (loss) | -$11.4M | -$14.9M | +23.5% | -$12.4M | +8.6% |
| Operating margin | -25.8% | -36.2% | +10.4 pp | -29.1% | +3.3 pp |
| Net income (loss) | -$14.8M | -$19.4M | +24.0% | -$15.9M | +7.2% |
| Net margin | -33.5% | -47.4% | +13.8 pp | -37.3% | +3.7 pp |
| Customers | 1,000 | — | — | — | — |
| Net retention rate | 100.0% | 117.0% | -17.0 pp | 118.0% | -18.0 pp |
Risks
The worsening economic climate has caused lower demand, spend and available budgets across the company's market segments, longer sale cycles, and increased price-driven competition, including bid processes. MD&A states it does not expect the COVID-era demand trend to continue in 2023 and cannot estimate the ultimate impact.
Revenue grew only 2.3% year to date to $168.81M, and Net Dollar Retention Rate fell to 100% for FY2022 from 118% for FY2021. MD&A attributes the slowdown to subsiding COVID effects and worsening economic climate, increasing risk that revenue may decline or grow less than expected.
The 2022 Restructuring Plan reduced the workforce by about 10%, and the January 2023 Reorganization Plan downsizes an additional 11% while targeting about $16M in annualized cost reduction. The workforce reduction places significant strain on remaining personnel and could impair product development and execution, especially with R&D personnel downsized.
Net loss widened to $68.50M for FY2022 from $59.35M for FY2021, and operating loss widened to $56.38M for FY2022 from $32.68M for FY2021. The company had an accumulated deficit of $391.1M as of December 31, 2022 and has incurred losses each year since incorporation.
Operating cash flow used in operating activities widened to $46.83M for FY2022 from $22.11M for FY2021, a decrease of 111.8%. Liquidity depends on cash on hand and revolving credit availability, and additional financing may not be available on favorable terms or at all.
The company relies on third-party contractors in Ukraine and Belarus for software development, quality assurance, operations, and customer support. War-related risks include injury or death of personnel, infrastructure destruction, lack of electricity and connectivity, sanctions, and potential unavailability of resources.
The markets are highly fragmented and competitive, with key competitors including Microsoft, Zoom, Vimeo, AWS, and others that have greater financial, technical, and marketing resources. Competitors may offer more attractive pricing or bundling, and open source alternatives could put pricing pressure on Kaltura offerings.
The top ten customers accounted for approximately 29.2% of revenue for FY2022, and Vodafone and Amazon continued to contribute a significant portion of overall revenue. The loss of one or more significant customers or reduced spending by any such customer could significantly and adversely affect results.
Kaltura CE is licensed under AGPL, allowing commercial licensees to use it internally for free or provide it to others for free. This creates competition without traditional overhead, could reduce demand, and may put pricing pressure on the company's Media Services offerings.
Customer agreements include service-level commitments, and TV Solution agreements include committed delivery schedules and milestones. Failures could trigger service credits, refunds, contractual penalties, liquidated damages, litigation, terminations, and lower renewals.
Workforce reductions under the Reorganization Plans increase strain on remaining personnel and risk losing key employees and knowledge. Competition for skilled DevOps, engineering, research and development, sales, and support personnel is significant, particularly in Israel and New York.
Remaining performance obligations declined to $171.66M in FY2022 Q4 from $185.48M in FY2021 Q4, down 7.5%. This suggests softer contracted future revenue despite deferred revenue rising 15.8% to $59.84M over the same comparison.
The company previously identified a material weakness in internal control over financial reporting for FY2021 that has since been remediated, but it may discover additional significant deficiencies or material weaknesses in the future. Unremediated issues could cause reporting failures or restatements and loss of investor confidence.
A stockholder rights plan adopted on August 7, 2022 has anti-takeover effects and causes substantial dilution to any person or group acquiring 10% or more of common stock without board approval. This may discourage a merger or takeover that stockholders consider favorable.
SaaS KPIs
All quarters →Net Dollar Retention Rate
Remaining Performance Obligations
Annualized Recurring Revenue
Summary, forecast, risks and KPIs are extracted from KALTURA INC's SEC filings for Q4 FY2022 (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 2, 2026.