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KI

KALTURA INC (KLTR)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered record revenue and subscription revenue, with total revenue of $46.984M (+5% YoY) and subscription revenue of $44.906M (+9% YoY); non-GAAP EPS was $0.02 and Adjusted EBITDA reached $4.141M, both record levels .
  • Results beat Wall Street consensus: revenue beat by ~$0.95M ($46.98M vs $46.04M*) and EPS materially beat (+$0.02 vs -$0.04*), reflecting strong subscription mix and efficiency improvements .
  • Management maintained FY 2025 revenue guidance but raised Adjusted EBITDA guidance to $13.5–$15.5M (from $12.7–$14.7M), citing continued operating discipline and improving margin profile .
  • Near-term caution: Q2 2025 sequential revenue decline guided due to typical Q1 on-premise revenue timing (~$1.6M pickup with ~$1.4M fall-off) and expected M&T churn in 1H25; adjusted EBITDA guided to $1.5–$2.5M .
  • Strategic catalyst: accelerating AI adoption (Genie agents, Content Lab) and expanding enterprise use cases; >150 customers engaged in AI POCs (~20% of base), with 20 advancing to deeper testing and early monetization expected over the coming quarters .

What Went Well and What Went Wrong

What Went Well

  • Record subscription revenue ($44.9M, +9% YoY) and non-GAAP EPS (+$0.02), with Adjusted EBITDA at a record $4.1M, demonstrating improved operating efficiency and pricing/upsell momentum .
  • Net dollar retention improved sequentially and YoY to 107%, the highest since Q1 2022, signaling stronger customer expansion and consolidation on Kaltura’s platform .
  • Management quote: “We surpassed our guidance…record total and subscription revenue…record ARR and the highest net dollar retention rate since the first quarter of 2022” .

What Went Wrong

  • Professional services revenue fell 42% YoY to $2.078M, continuing the expected decline as mix shifts to higher-margin subscription .
  • Q2 sequential decline guided, driven by seasonal on-prem revenue recognition and delayed M&T churn in 1H25; CFO bridged ~$1.4M fall-off from Q1 on-prem pickup .
  • Operating cash flow usage of $1.047M (similar to prior year) was “a little lower than expected,” though management reiterated full-year positive CFO outlook .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Total Revenue ($USD Millions)$44.295 $45.609 $46.984
Subscription Revenue ($USD Millions)$42.085 $43.414 $44.906
Professional Services Revenue ($USD Millions)$2.210 $2.195 $2.078
GAAP Gross Profit ($USD Millions)$29.541 $32.281 $32.736
GAAP Gross Margin (%)67% 71% 70%
Non-GAAP Gross Margin (%)68% 71% 70%
GAAP Operating Loss ($USD Millions)$(4.466) $(3.793) $(1.577)
Adjusted EBITDA ($USD Millions)$2.423 $2.658 $4.141
GAAP EPS ($)$(0.02) $(0.04) $(0.01)
Non-GAAP EPS ($)$0.01 $(0.01) $0.02

Segment breakdown

Segment MetricQ3 2024Q4 2024Q1 2025
EET Revenue ($USD Millions)$32.341 $32.958 $34.416
M&T Revenue ($USD Millions)$11.954 $12.651 $12.568
EET Gross Profit ($USD Millions)$24.539 $25.901 $26.568
M&T Gross Profit ($USD Millions)$5.002 $6.380 $6.168

KPIs

KPIQ3 2024Q4 2024Q1 2025
ARR ($USD Millions)$168.879 $173.900 $174.842
RPO ($USD Millions)$187.846 $203.379 $184.860
Net Dollar Retention (%)101% 103% 107%
Subscription Gross Margin (%)72% (prior-year Q1 reference) → 77% current Q1

Actual vs Consensus (Wall Street)

MetricQ3 2024Q4 2024Q1 2025
Revenue Consensus Mean ($USD)$43.063M*$44.362M*$46.037M*
Revenue Actual ($USD)$44.295M $45.609M $46.984M
Primary EPS Consensus Mean ($)$(0.068)*$(0.05)*$(0.04)*
Primary EPS Actual ($)$0.01 $(0.01) $0.02
Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Subscription Revenue ($USD Millions)FY 2025$170.4–$173.4 $170.4–$173.4 Maintained
Total Revenue ($USD Millions)FY 2025$179.9–$182.9 $179.9–$182.9 Maintained
Adjusted EBITDA ($USD Millions)FY 2025$12.7–$14.7 $13.5–$15.5 Raised
Subscription Revenue ($USD Millions)Q2 2025N/A$40.8–$41.6 Initial
Total Revenue ($USD Millions)Q2 2025N/A$43.4–$44.2 Initial
Adjusted EBITDA ($USD Millions)Q2 2025N/A$1.5–$2.5 Initial

Notes: No guidance provided on margins (gross/operating), OpEx, OI&E, tax rate, dividends in these materials .

Earnings Call Themes & Trends

TopicQ3 2024 (Prev-2)Q4 2024 (Prev-1)Q1 2025 (Current)Trend
AI initiatives (Genie, Content Lab)Began productizing “Content Lab”; showcased beta Gen-AI features for M&T at IBC 2024 Launched Class Genie & Work Genie; deep AI across lifecycle; strong interest from large orgs Expanded Genie agents; >150 customers engaged; 20 advanced POCs; TV Genie won NAB award Building momentum toward monetization
Macro/tariffs & FX—Thoughtful guidance; macro and FX considerations noted for 2025 Monitoring tariff negotiations; FX (EUR/GBP strength) seen as manageable or positive Cautious but manageable exposure
Bookings/RetentionHighest new bookings since Q4’22; NDR to 101% 3rd straight quarter of increasing bookings; NDR 103% Seasonal Q1 bookings; NDR 107% (best since Q1’22); expect 2H retention bounce-back Improving trajectory, seasonality persists
Segment dynamics (M&T churn)—Flagged delayed M&T churn into 1H25 Confirmed <5 accounts, mostly full exits; 1H impact temporary Transitory headwind in 1H25
On-prem revenue timing—Guided more pronounced Q2 sequential decline due to higher Q1 on-prem CFO bridged ~$1.6M Q1 on-prem pickup; ~$1.4M fall-off into Q2 Recognition seasonality recurring
Sales force & go-to-market—Plan to gradually grow sales force in 2025 Gradual headcount increase focused on enterprise; reopening M&T and education Controlled reinvestment for growth

Management Commentary

  • “We surpassed our guidance for the first quarter, delivering record total and subscription revenue…record ARR and the highest net dollar retention rate since the first quarter of 2022” — Ron Yekutiel, CEO .
  • “Adjusted EBITDA reached a record level of $4.1M…seventh consecutive quarter of adjusted EBITDA profitability…We also posted record positive non-GAAP earnings per share” — CEO prepared remarks .
  • “While cash flow was a little lower than expected, it is aligned with our typical seasonality and does not change our cash flow forecast for the full year” — CEO .
  • “We are…maintaining our previously provided revenue guidance for 2025. We are, however, slightly increasing our adjusted EBITDA guidance for the year” — CEO .
  • “Subscription gross margin was 77%, up from 72% in the first quarter 2024” — CFO .

Q&A Highlights

  • Macro/tariff impact: Management sees manageable exposure; enterprise SaaS model limits supply chain risks; FX (stronger EUR/GBP) can be beneficial; some customers may tilt toward virtual events to reduce travel spend .
  • Q2 sequential decline drivers: CFO cited ~$1.6M Q1 on-prem pickup with ~$1.4M fall-off, plus lower Q1 bookings seasonality and M&T churn expected in 1H25 .
  • Nature of M&T churn: Fewer than five accounts; mostly full exits due to strategic shifts (in-house moves, corporate changes) rather than downsizing; temporary impact .
  • ARR per customer drivers: Upsell and multi-product consolidation are primary; price increases are secondary and limited to renewal cohorts .
  • AI monetization: Pipeline progressing; 20 customers in advanced POCs; management expects monetization in coming quarters, adding to growth beyond core offerings .

Estimates Context

  • Q1 2025 beat: Actual revenue $46.984M vs consensus $46.037M*; actual Primary EPS $0.02 vs consensus $(0.04)* .
  • Prior quarters: Q4 2024 actual revenue $45.609M vs $44.362M*; actual Primary EPS $(0.01) vs $(0.05); Q3 2024 actual revenue $44.295M vs $43.063M; actual Primary EPS $0.01 vs $(0.068)* . Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Strong beat-and-raise dynamic: Kaltura beat revenue and EPS in Q1 and raised FY Adjusted EBITDA guidance, reinforcing improving operating leverage and subscription mix quality .
  • Near-term volatility expected: Q2 sequential decline guided due to on-prem recognition timing and transitory M&T churn; watch the magnitude of Q2 softness vs guidance .
  • Durable expansion indicators: NDR rose to 107% and ARR reached a record $174.8M, suggesting healthy upsell and consolidation within the base .
  • AI as emerging monetization engine: With >150 customers in AI POCs and 20 in advanced stages, early revenue contribution from Genie/Content Lab could begin over the next few quarters, supporting bookings and retention .
  • Margin trajectory favorable: Subscription gross margin expanded to 77%; management expects continued improvement over time, supporting higher gross profit growth vs revenue growth .
  • Execution focus: Gradual sales force expansion targeted at enterprise, with reopening efforts in M&T and education to broaden new logos while maintaining upsell-driven growth .
  • Trading setup: Q2 sequential decline is well-telegraphed; upside skew exists if churn proves less severe, on-prem fall-off is smaller, or AI monetization lands sooner than expected; downside if churn/on-prem dynamics overshoot guidance .