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KI

KALTURA INC (KLTR)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered record revenue and subscription revenue, both above the company’s guidance ranges; adjusted EBITDA reached the highest quarterly level in four years, supported by record gross margin .
  • KPIs hit highs: ARR $173.9M (+6% YoY), RPO $203.4M (+10% YoY), and Net Dollar Retention reached 103% (up from 98% in Q4 2023) .
  • Management initiated Q1 2025 and FY 2025 guidance, aiming to double adjusted EBITDA margin in 2025 and expecting gross margin to improve year-over-year; cautioned for a typical sequential dip in Q2 due to on‑prem revenue recognition and M&T churn timing .
  • Strategic catalysts: momentum in bookings (four 7‑digit and 29 six‑digit deals), AI‑driven product launches (Class Genie, Work Genie, Content Lab), and consolidation trends among large enterprises .

What Went Well and What Went Wrong

What Went Well

  • Record total revenue ($45.6M, +3% YoY) and subscription revenue ($43.4M, +6% YoY), both above the high end of guidance; adjusted EBITDA of $2.7M with record gross margin at 71% .
  • Bookings momentum: highest new subscription bookings since Q4 2022, including four seven‑digit and 29 six‑digit deals; ARR and RPO reached all‑time highs .
  • AI product progress and recognition: launched beta for Class Genie and Work Genie; enhanced AI across TV CMS and streaming apps; industry recognition and strong beta interest from large organizations .

“Being mindful of the market volatility … we are guiding towards doubling our adjusted EBITDA profit margin in 2025” — CEO .

What Went Wrong

  • Professional services revenue decreased 40% YoY to $2.2M, reflecting ongoing mix shift away from lower margin PS work; management expects continued PS moderation .
  • GAAP net loss remained negative at $6.6M (improved YoY from $12.1M), underscoring ongoing GAAP profitability challenges despite non‑GAAP improvements .
  • Expected sequential Q2 revenue decline in 2025 due to on‑prem revenue recognition timing and increased M&T churn in 1H, including delayed churn from 2024 .

Financial Results

Quarterly Performance vs Prior Quarters (oldest → newest)

MetricQ2 2024Q3 2024Q4 2024
Total Revenue ($USD Millions)$44.0 $44.3 $45.6
Subscription Revenue ($USD Millions)$41.0 $42.1 $43.4
Professional Services Revenue ($USD Millions)$3.0 $2.2 $2.2
GAAP Gross Profit ($USD Millions)$28.7 $29.5 $32.3
Gross Margin (%)65% 67% 71%
Subscription Gross Margin (%)81% 75% 77%
Total Operating Expenses ($USD Millions)$37.2 $34.0 $36.1
Adjusted EBITDA ($USD Millions)$1.6 $2.4 $2.658
GAAP Net Loss ($USD Millions)$10.0 $3.61 $6.61
GAAP Diluted EPS ($USD)$(0.07) $(0.02) $(0.04)
Cash from Operations ($USD Millions)$(1.6) $10.7 $4.3

Year-over-Year Comparison (Q4 2023 vs Q4 2024)

MetricQ4 2023Q4 2024
Total Revenue ($USD Millions)$44.5 $45.6
Subscription Revenue ($USD Millions)$40.8 $43.4
Professional Services Revenue ($USD Millions)$3.7 $2.2
GAAP Gross Profit ($USD Millions)$28.6 $32.3
Gross Margin (%)64% 71%
Subscription Gross Margin (%)73% 77%
Adjusted EBITDA ($USD Millions)$0.843 $2.658
GAAP Net Loss ($USD Millions)$12.1 $6.6
ARR ($USD Millions)$164.7 $173.9
RPO ($USD Millions)$185.3 $203.4
Net Dollar Retention (%)98% 103%

Segment Breakdown

Segment Revenue ($USD Thousands)Q2 2024Q3 2024Q4 2024
Enterprise, Education & Technology (EE&T)31,000 32,341 32,958
Media & Telecom (M&T)13,100 11,954 12,651
Segment Gross Profit ($USD Thousands)Q4 2023Q4 2024
EE&T22,998 25,901
M&T5,648 6,380

KPIs (oldest → newest)

KPIQ2 2024Q3 2024Q4 2024
Annualized Recurring Revenue ($USD Thousands)165,200 168,879 173,900
Remaining Performance Obligations ($USD Thousands)177,800 187,846 203,379
Net Dollar Retention (%)98% 101% 103%
Cash & Marketable Securities ($USD Millions)$71.3 $79.9 $84.7

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Subscription Revenue ($USD Millions)Q1 2025N/A$43.4–$44.2 Initiated
Total Revenue ($USD Millions)Q1 2025N/A$45.7–$46.5 Initiated
Adjusted EBITDA ($USD Millions)Q1 2025N/A$2.5–$3.5 Initiated
Subscription Revenue ($USD Millions)FY 2025N/A$170.4–$173.4 Initiated
Total Revenue ($USD Millions)FY 2025N/A$179.9–$182.9 Initiated
Adjusted EBITDA ($USD Millions)FY 2025N/A$12.7–$14.7 Initiated

Additional guidance commentary: Management expects gross margin to continue to improve in 2025; majority of operating cash flow in 2H; typical sequential decline in Q2 due to on‑prem revenue recognition and increased M&T churn in 1H 2025 .

Earnings Call Themes & Trends

TopicQ2 2024 (Q-2)Q3 2024 (Q-1)Q4 2024 (Current)Trend
AI initiativesLaunched in‑house ASR (Whisper), AI notifications, sentiment analysis, quiz generator, noise cancellation Productized “Content Lab”; showcased GenAI features at IBC (metadata, subtitles, dubbing, recs) Launched beta “Class Genie” and “Work Genie”; expanded AI in TV CMS/streaming (recs, chaptering, dubbing) Accelerating productization and adoption
Bookings & NDRHighest new bookings since Q4’22; NDR 98% Highest new bookings since Q4’22; NDR improved to 101% Highest new bookings since Q4’22; NDR 103% Sequential & YoY strengthening
Gross margin65%; sub margin 81% Record margin; GM 67% GM 71%; sub margin 77%; caution AWS credits boosted Q4; slight dip possible in Q1 Up and to the right; quarterly variability
Segment mixM&T up YoY; EE&T down YoY EE&T up; M&T modestly down EE&T strength; managing M&T churn in 1H’25 EE&T drives margin; M&T cautious near-term
GeographyNew logos skew EMEA; bookings NA NA stronger bookings Strength across NA and EMEA; APAC reopening; LatAm lighter Broadening across regions
Go-to-marketLeadership changes; verticalization; efficiency New product/sales leads; focus on larger opps Regrowing sales force in 2025 to pursue new logos Scaling sales capacity
Cash flowCFO -$1.6M; expected positive FY Record CFO $10.7M CFO $4.3M; positive FY; majority CFO in 2H’25 Improving and seasonally back‑half weighted
Guidance cadenceFY24 raised ranges Q4’24 guide: sub $41.8–$42.5; rev $44.0–$44.7; EBITDA $0.5–$1.5 Q1’25 & FY’25 guidance; Q2 sequential dip expected Establishing forward guardrails

Management Commentary

  • Strategy: “Unified cross‑enterprise platform… tightly integrated into business workflows… supporting use cases from employee communication and training to marketing, customer success, and entertainment” .
  • AI roadmap: “Agentic AI‑powered tools… amplifying engagement flywheels… leveraging vast content, metadata, and analytics for hyper‑personalized experiences” .
  • Bookings/retention: “Third consecutive quarter… year‑over‑year increase in net new subscription bookings… Net dollar retention reached 103%” .
  • Profitability targets: “We are guiding towards doubling our adjusted EBITDA profit margin in 2025… by 2028 or before to return to being a Rule of 30 company” .

Notable quotes:

  • “We reported record total revenue of $45.6 million… and record subscription revenue of $43.4 million… Adjusted EBITDA was $2.7 million… fueled in part by a record gross margin” .
  • “We believe we have the right products and market positioning to enable a gradual and sustained acceleration of revenue growth… and to double adjusted EBITDA in 2026” .

Q&A Highlights

  • On‑prem recognition and sequential Q2 dip: On‑prem is ~2% of revenue and recognized all at once; typical lower Q1 bookings plus M&T churn timing drive expected Q2 sequential decline .
  • AI monetization roadmap: Strong beta interest; AI agents deliver hyper‑personalized experiences leveraging institutional data; expected to boost video consumption 10%–100% over time .
  • Gross margin drivers: Mix shift to subscription and EE&T; customer profitability initiatives; note one‑time AWS credits lifted Q4 GM; 2025 gross margin expected higher vs 2024 .
  • Vertical/geographic traction: Strong wins across tech, financials, automotive, healthcare; NA and EMEA robust; APAC reopening; channel business rising to ~15% of bookings .
  • Growth vs profitability balance: Flexibility to invest to accelerate revenue while remaining profitable; continued focus on adjusted EBITDA and operating cash flow .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 was unavailable at time of analysis due to access limits; therefore, a comparison to consensus cannot be provided.
  • Relative to company guidance for Q4 provided in November: Kaltura beat on revenue ($45.6M vs $44.0–$44.7M), subscription revenue ($43.4M vs $41.8–$42.5M), and adjusted EBITDA ($2.658M vs $0.5–$1.5M), indicating stronger‑than‑guided performance .

Key Takeaways for Investors

  • Execution momentum: Consecutive bookings growth, rising NDR (103%), and record ARR/RPO underpin subscription revenue trajectory into 2025 .
  • Margin expansion lever: Ongoing mix shift to subscription and EE&T, pricing discipline, and AI‑enabled efficiency support structurally higher gross margins (71% in Q4) .
  • AI as growth catalyst: Class/Work Genie and Content Lab deepen differentiation; expect increased content creation/consumption and upsell potential across large enterprise base .
  • 2025 profile: Management targets doubling adjusted EBITDA margin; gross margin up y/y; cash flow weighted to 2H—set expectations for seasonal revenue/CF patterns .
  • Near‑term caution: Q2 2025 sequential revenue decline expected (on‑prem timing and M&T churn); monitor 1H dynamics vs 2H reacceleration .
  • Upside from consolidation: Strong enterprise relationships and platform breadth position Kaltura to win vendor consolidation mandates; ARPU expansion historically robust .
  • Actionable: Favor medium‑term positioning on AI differentiation and margin expansion; in the near term, trade around seasonality and M&T churn risk while tracking bookings/NDR for confirmation of growth reacceleration .