Summary
Kaltura reported fourth quarter 2023 total revenue of $44.5 million, up 0.9% from $44.1 million in the prior-year quarter. Full year revenue was $175.2 million, up 3.8% from $168.8 million. Gross profit was $28.6 million in the quarter, up 3.8%, and $112.2 million for the full year, up 5.0%. Gross margin improved to 64.4% in the quarter from 62.6%, a gain of 1.8 percentage points. For the full year, gross margin was 64.1%, up 0.7 percentage points. Operating margin was negative 19.8% in the quarter, up 6.0 percentage points from negative 25.8%. For the full year, operating margin was negative 22.1%, up 11.3 percentage points from negative 33.4%. The company continued to reduce its losses. Operating loss narrowed to $8.8 million in the fourth quarter from $11.4 million a year earlier. For the full year, operating loss narrowed to $38.7 million from $56.4 million. Net loss narrowed to $12.1 million in the quarter from $14.8 million. Full year net loss narrowed to $46.4 million from $68.5 million. Full year diluted EPS was negative $0.34.
Cash generation improved sharply. Fourth quarter net cash provided by operating activities was $1.6 million, up from $5.8 million used in the prior-year quarter. Full year net cash used in operating activities was $8.3 million, an improvement from $46.8 million used in 2022. Capital expenditures were $0.82 million in the quarter, up from $0.21 million. For the full year, capital expenditures were $2.61 million, up from $1.22 million. Deferred revenue, current portion, was $62.4 million, up 4.2% from $59.8 million. Remaining performance obligations were $185.3 million, up 7.9% from $171.7 million. The company expects to recognize 59% of remaining performance obligations as revenue over the next 12 months. Adjusted EBITDA was $0.8 million in the fourth quarter, compared to negative $4.2 million in the prior-year quarter. Full year Adjusted EBITDA was negative $2.5 million, compared to negative $28.3 million. Annualized recurring revenue was $164.7 million, up 3% from $159.2 million. Net Dollar Retention Rate was 99% in the fourth quarter, up from 96% a year earlier.
Guidance points to a flat start for 2024. For the first quarter of 2024, Kaltura expects total revenue to be roughly flat compared with the prior-year period, with Adjusted EBITDA between negative $0.5 million and $0.3 million. For the full year 2024, total revenue is expected to be roughly flat compared with the prior year, with Adjusted EBITDA between $0 million and $1 million. The company says the guidance reflects its current expectations on macro-economic climate trends. Kaltura has not provided a quantitative reconciliation of forecasted Adjusted EBITDA to forecasted GAAP net loss because it cannot calculate certain reconciling items without unreasonable efforts.
Operationally, Kaltura reported that it closed more deals, achieved higher new bookings, and posted a higher gross retention rate than all previous quarters last year. It also posted a third consecutive quarter with an increase in qualified leads. The company launched new AI features and expanded its AI Accelerator program. Risks remain. The company cites macro-economic climate, budgetary constraints for enterprises, customer spending, ability to retain customers, competition, technological changes, reliance on third parties, and international operations. The conflict in Israel is another risk. Kaltura also has credit facility covenants, including a minimum Consolidated Adjusted EBITDA and Liquidity of at least $20 million. It was in compliance as of December 31, 2023. The 2023 Reorganization Plan was substantially completed in the first half of 2023.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2023 | Q3 FY2023 | QoQ | Q4 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $44.5M | $43.5M | +2.1% | $44.1M | +0.9% |
| Gross profit | $28.6M | $27.7M | +3.4% | $27.6M | +3.8% |
| Gross margin | 64.4% | 63.6% | +0.8 pp | 62.6% | +1.8 pp |
| Research & development | $12.7M | $12.6M | +1.4% | $14.2M | -10.2% |
| Sales & marketing | $12.3M | $11.7M | +5.4% | $13.2M | -6.8% |
| General & administrative | $12.4M | $11.8M | +5.5% | $11.2M | +10.6% |
| Total operating expenses | $37.5M | $36.0M | +4.0% | $39.0M | -3.9% |
| Operating income (loss) | -$8.8M | -$8.3M | -6.1% | -$11.4M | +22.4% |
| Operating margin | -19.8% | -19.1% | -0.7 pp | -25.8% | +6.0 pp |
| Net income (loss) | -$12.1M | -$10.7M | -12.5% | -$14.8M | +18.4% |
| Net margin | -27.1% | -24.6% | -2.5 pp | -33.5% | +6.4 pp |
| Customers | 1,000 | — | — | 1,000 | ±0.0% |
| Net retention rate | 100.0% | 101.0% | -1.0 pp | 100.0% | ±0.0 pp |
Risks
The filing cites the current volatile economic climate, rising inflation and interest rates, and decreased customer spend or available budget, which have caused longer sale cycles and increased price driven competition including bid processes. MD&A ties the 2023 Reorganization Plan to the current macro-economic climate and lower demand.
The company says the current economic climate has resulted in longer sale cycles and increased price driven competition, including bid processes, which adversely affects retention, renewals, and up-sales. Net Dollar Retention Rate was 100% for FY2023 and FY2022, indicating limited expansion.
Top ten customers accounted for approximately 28.9% of revenue for FY2023, and Vodafone accounted for approximately 10.2% of revenue for FY2023. Loss of one or more significant customers could significantly and adversely affect results.
The company has incurred losses each year since 2006, with net losses of $46.4 million, $68.5 million, and $59.4 million in FY2023, FY2022, and FY2021, respectively, and an accumulated deficit of $437.5 million as of December 31, 2023. FY2023 net loss narrowed 32.3% from FY2022, but profitability is not assured.
The company is developing and integrating AI and generative AI features while facing evolving AI regulation, including the EU AI Act expected to enter into force in 2024 and a US executive order issued in October 2023. The EU AI Act includes fines for breach of up to 7% of worldwide annual turnover and may require additional compliance measures and increased costs.
The market is highly fragmented and competitive, with key competitors including Microsoft, Vimeo, Zoom, On24, Cvent, Mediakind, Synamedia, and media services from AWS and Microsoft. Many competitors have greater resources and may sell at zero or negative margins, bundle products, or force migrations, which could reduce revenue, gross profit, and gross margins.
The company relies on third-party contractors in Europe including Poland, Czech Republic, Ukraine, and Belarus, and personnel in Ukraine face risks from the ongoing war, including injury, infrastructure destruction, and occupation. FY2023 Adjusted EBITDA includes $331 thousand of war related costs, and MD&A notes costs related to conflicts in Israel for temporary relocation and business continuity.
Customers have no contractual obligation to renew subscriptions after the term, and renewals may decline due to satisfaction, pricing, outages, or public sector funding changes. Net Dollar Retention Rate was 100% for FY2023 and FY2022, so the company is not currently expanding net revenue from existing customers.
AI and machine learning outputs may be inaccurate due to their probabilistic nature, and the company cannot assure accuracy of any output. Failure to establish processes and contractual frameworks to avoid misuse or unauthorized use of customer data, or to secure its own AI developments, could lead to intellectual property infringement or misuse claims.
A version of Media Services, Kaltura Community Edition, is licensed under AGPL, allowing free self-hosted use and potential competition. The company has limited ability to detect license violations and open source competition could put pricing pressure on offerings.
The company depends on senior management, including co-founder, CEO and President Ron Yekutiel, and on engineering and sales personnel. Competition for skilled personnel is significant, particularly in Israel and New York, and equity value changes may affect retention.
The company previously identified and disclosed a material weakness in internal control over financial reporting for FY2021, which has since been remediated, but may discover additional significant deficiencies or material weaknesses in the future. Any failure to remediate could cause reporting failures or restatements.
Media & Telecom gross margin decreased to 41% for FY2023 from 48% for FY2022, and M&T gross profit decreased 11% to $20.6 million for FY2023. M&T professional services gross loss increased 120% to $2.7 million for FY2023, driven by higher production costs and implementation resources.
Net cash used in operating activities was $8.3 million for FY2023, an improvement of 82.3% from FY2022, but the company had $34.7 million of term loan borrowings outstanding as of December 31, 2023 and is subject to financial covenants. Global economic volatility and rising interest rates may reduce ability to access capital.
The education market has historically seen higher sales and new academic customers in Q2 and Q3 due to school procurement periods, with lower sequential sales and customer growth in other quarters. Increased usage during school sessions leads to higher cost of revenue in Q1 and Q4, and certain agreements do not limit usage or increase pricing for excess usage.
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 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.