Greetings. And welcome to the Kaltura Third Quarter 2024 Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Erica Mannion, Kaltura Investor Relations. You may begin.

Thank you, Operator, and good morning. I’m joined by Ron Yekutiel, Kaltura’s Co-Founder, Chairman, President and Chief Executive Officer; and John Doherty, Chief Financial Officer. Ron will begin with a summary of the results for the third quarter ended September 30, 2024, and provide a business update. John will then review the financial results for the third quarter of 2024 in greater detail, followed by the company’s outlook for the fourth quarter and full year 2024. We will then open the call for questions. Please note that this call will include forward-looking statements within the meaning of the federal securities laws, including but not limited to statements regarding Kaltura’s expected future financial results and management’s expectations and plans for the business. These statements are neither promises nor guarantees and involve risks and uncertainties that may cause actual results to differ materially from those discussed here. Important factors that could cause actual results to differ from forward-looking statements can be found in the risk factor section of Kaltura’s annual report on Form 10-K for the fiscal year ended December 31, 2023, and other SEC filings, including the quarterly report on Form 10-Q for the quarter ended September 30, 2024, to be filed with the SEC. Any forward-looking statements made during this conference call, including responses to your questions, are based on current expectations as of today, and Kaltura assumes no obligation to update or revise them, whether as a result of new developments or otherwise, except as required by law. Please note we will be discussing a non-GAAP financial measure, adjusted EBITDA, during this call. For a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP metric, please refer to our earnings release, which is available on our website at www.investors.kaltura.com. Now I’m pleased to hand the call over to Ron.

Thank you, Erica, and welcome, everyone, to our third quarter earnings call. We reported today total revenue for the third quarter of 2024 of $44.3 million, up 2% year-over-year and record subscription revenue of $42.1 million, up 3% year-over-year. In the third quarter, we also posted a record ARR for the second consecutive quarter, as well as a record RPO. As for our bottom line, in the third quarter, we posted adjusted EBITDA of $2.4 million, representing our fifth consecutive quarter of adjusted EBITDA profitability, and the highest result since the second quarter of 2020, fueled in part by a record gross margin. In the third quarter, we also generated a record cash flow from operations of $10.7 million, a significant improvement from $1.7 million in the third quarter of 2023. In light of these results, we’re once again increasing our full-year revenue and adjusted EBITDA guidance, and are expecting to post positive cash flow from operations in the fourth quarter, as well as for the full year in 2024. Moving on to the business update. In the third quarter, we posted both year-over-year and sequential growth in new subscription bookings for the second consecutive quarter. These new bookings were at the highest level since the fourth quarter of 2022 and came from two seven-digit deals and 22 six-digit deals across a diverse array of industries, use cases, and geographies. New customers included a Fortune 500 automotive manufacturer that is now using our video portal and content management system for internal, live, and on-demand communication and collaboration, a leading training and certification provider that is now using our virtual events and webinars for internal learning and development, a leading visual discovery engine that is now using our virtual events and webinars for marketing, sales, and customer success, and a North American TV company that is now using our streaming platform for entertainment and monetization. A majority of our new bookings came, again, from providing additional solutions empowering new use cases for our existing customers, including, for example, providing marketing, sales, and customer success solutions to an S&P 500 health insurance company, to a leading provider of an employee experience platform, to a Fortune 100 bank, and to a top-ranked music college; from providing communication and collaboration solutions to a Fortune 100 tech company, and to a leading healthcare software company; from providing teaching, training and certification solutions to universities in the U.S. and Europe; and from providing entertainment and monetization solutions to telcos. Upsells to our customers continue to be fueled by an increased interest to consolidate around Kaltura across multiple internal and external use cases, which is also evidenced through our increased average subscription revenue per customer, which was also at an all-time high in the third quarter. In addition to growing new bookings, gross retention in the third quarter of 2024 continued to improve year-over-year, and net dollar retention, which, as we stated in the past, is a lagging indicator, started reacting to the recent improvements, bouncing back to 101% after posting 98% in the last three quarters. The combination of increased gross new subscription bookings and continued improved gross retention rates has yielded, for the first time since the second quarter of 2021, two consecutive quarters with a year-over-year increase in net new subscription bookings, which is fueling the pickup in our year-over-year subscription revenue growth. On the product front, in the third quarter, we continued boosting events and webinars with automated email scheduling and enhanced our chat and collaboration widgets and integration with a third-party marketing platform, further enabling our customers to run their marketing automation via their preferred market partner or directly in Kaltura. On the video content management and portal side, we completed our integration with Microsoft Teams, and together with our other Zoom and WebEx integrations, now offer a comprehensive archiving solution that enables organizations using multiple conferencing tools to seamlessly and flexibly access, manage, and share video content across these leading platforms with a unified workflow. We launched an updated VPAT for our video player as part of our continued commitment to accessibility, enhanced content layout in our conferencing room, in our Cloud TV platform, enhanced subscription management capabilities and furthered security and protection around operator workflows. On the AI front, we are continuing to move towards a future where video content will be created and modified seamlessly for the benefit of each individual viewer. Over the prior quarters, we conducted successful pilots for content repurposing, where Gen AI was used to analyze video captions and viewership engagement data of existing videos to create new clips, highlight reels, and other immersive experiences in real time that are hyper-personalized and hyper-contextualized. This functionality is designed to address individual end user wants and needs at the right time and context, and to achieve heightened engagement and interactivity and boost business results at a fraction of the current time and costs. In the third quarter, we started productizing this functionality by adding it into our video content management system in a new component called Kaltura Content Lab. We also showcased a beta version of our Gen AI offerings for Media and Telecom at the IBC 2024 conference in Amsterdam. Among the features presented to excited customers and prospects were AI-generated metadata enrichment, subtitles, dubbing, chaptering, highlights, and content recommendations for live streaming, VOD assets, and user-generated content. Over the next few quarters, we plan to further enhance Kaltura Content Lab and integrate it into our product portfolio, including streamlining with our other Gen AI developments, such as our transcription engine, quiz generator, sentiment analyzer, notification engine, and Gen AI assistance for events. Our product leadership was recently recognized with the receipt of two additional industry awards, the Best Overall Event Management Solution Award in the 7th Annual International MarTech Breakthrough Award Program, and the Best Video Management Platform Award in the 2024 Digiday Technology Awards. We are pleased to have posted a record quarter across many topline and bottom line parameters. We continue to see both sequential and year-over-year growth in new subscription bookings and a growth retention rate that materially improves over last year, both resulting in an uptick in year-over-year subscription revenue growth. In addition, we saw continued expansion of our growth and net margins, as well as cash flow, leading us to forecast for the year a positive annual adjusted EBITDA and cash flow from operations for the first time since 2020. And we plan to continue expanding our growth margins, adjusted EBITDA margins, and cash flow from operations in 2025 and beyond. In recent years, we and our entire industry have experienced strong downward pressure on bookings, retention, and revenue growth that was induced by post-COVID and economic downturn headwinds. To that end, while we are not content with our slower revenue growth, we do appreciate the fact that, unlike many other companies in our industry, our quarterly subscription revenue always continues to grow year-over-year. And with the exception of only the third quarter of 2022, our year-over-year total revenue has also grown every quarter, despite the purposeful decline in our revenue from professional services in order to accelerate our deployment time and increase growth margins. In summary, we believe the tide is gradually turning on the industry and Kaltura, and the improved booking and retention trend we began to see in recent quarters will continue and strengthen in 2025 and beyond, fueled by renewed industry and macroeconomic tailwinds, as well as product enhancements like Gen AI that are expected to bring about further digital transformation and proliferation of video experiences. We are excited about the opportunities ahead, especially since we believe Kaltura’s flexible and extendable platform uniquely caters to the widest array of enterprise video experiences, while also providing the tightest integrations with our mission-critical workflows. We expect that as the market gradually recovers, customers will further accelerate the consolidation of their video needs around Kaltura to boost all of their employee and customer experiences across communication and collaboration, training, teaching and learning, marketing, sales and customer success, and entertainment and monetization. Kaltura’s single platform is designed to help our customers avoid unnecessary content and data silos, broken workflows, complexities, and costs that can result from using many disparate point solutions and increase their productivity and AI-infused insights, engagement, and business results. With that, I’ll turn it over to John, our CFO, to discuss our financial results in more detail. John?

Thanks, Ron, and hello to everyone on the call today. Kaltura continued its strong and focused execution in the third quarter, achieving continued growth in new subscription bookings, sustained high gross retention rate, further monetization of our existing customer base, addition of new customers, and continued improvement in operating efficiency and reallocation of resources towards higher ROI opportunities and markets. I want to touch on a few highlights in the quarter that demonstrate this. The highlights include new subscription bookings continued to grow both sequentially and year-over-year for the second consecutive quarter, posting the highest new bookings since Q4 2022. Gross retention continued to improve year-over-year, and in the third quarter, represented an annualized run rate similar to the two years preceding last year’s gross retention decline. Our eighth consecutive quarter of year-over-year total revenue growth, driven primarily by strength in our subscription revenue, which has grown year-over-year in this and all past quarters. Our growth in remaining performance obligations and ARR, with both metrics at the highest level to date. And our reinforced belief that we are strongly positioned to achieve our profitability targets, with gross margin at a record high level, lower year-over-year operating expenses, continued improvement in adjusted EBITDA, representing the fifth consecutive positive quarter and the highest results since the second quarter of 2020, and a record cash flow from operations quarter. With that, let me move on to our results. Our results exceeded our guidance for both revenue and adjusted EBITDA for the quarter. Total revenue for the quarter ended September 30, 2024, was $44.3 million, up 2% year-over-year, and above the high end of our guidance range of $42.6 million to $43.3 million. Subscription revenue was $42.1 million, up 3% year-over-year. This is also above the high end of our guidance range of $40.5 million to $41.2 million. Professional services revenue contributed $2.2 million for the quarter and was down 18% year-over-year, consistent with the expected trends we discussed on the second quarter earnings call. The remaining performance obligations were $187.8 million, up 6% sequentially and 15% year-over-year, of which we expect to recognize 59% as revenue over the next 12 months. Consistent with what I mentioned last quarter, the increase in RPO is a result of our increased renewal bookings this quarter, as well as improvement in new bookings. Analyzed recurring revenue was $168.9 million, up 2% sequentially, and 4% year-over-year. This is the highest ARR we have achieved to date, and is reflective of increased subscription revenue in the quarter. Our net dollar retention rate for the quarter was 101%, an improvement from 98% in the previous three quarters. It is also consistent with our expectations for improvement in the second half of 2024 that we mentioned on the second quarter earnings call. This result has been driven by the improved gross retention profile throughout the last four quarters, and the sequential and year-over-year increase in new subscription bookings over the past two quarters. Within our Enterprise, Education and Technology segment, total revenue for the third quarter was $32.3 million, up 4% year-over-year. Subscription revenue was $31.5 million, up 5% year-over-year, while professional services revenue contributed $0.8 million, down 20% year-over-year. Within our Media and Telecom segment, total revenue for the third quarter was $12 million, a decrease of 4% year-over-year. Subscription revenue was $10.6 million, which was down 2% year-over-year, while professional services revenue contributed $1.4 million, down 17% year-over-year. GAAP gross profit for the third quarter was $29.5 million, up 3% sequentially and 7% year-over-year. Gross margin was 67%, which is up from 64% in Q3 2023 and subscription gross margin was 75%, which is up from 73% in Q3 2023. Within our Enterprise, Education and Technology segment, gross profit for the third quarter was $24.5 million, up 7% sequentially and 8% year-over-year. EE&T gross margin was 76%, which is up from 73% in Q3 2023 and subscription gross margin was 82%, which is up from 79% in Q3 2023. Within our Media and Telecom segment, gross profit for the third quarter was $5 million, down 13% sequentially and up 1% year-over-year. Media and Telecom gross margin was 42%, up from 40% in Q3 2023. And subscription gross margin was 55%, consistent with Q3 2023. Total operating expenses in the quarter were $34 million, compared to $36 million in Q3 2023, a reduction of 6% year-over-year. Adjusted EBITDA for the quarter was $2.4 million, an increase of $2.1 million from $0.3 million in Q3 2023. This result, along with our improving expense profile, highlights our continued focus on improving our operating efficiency over time. GAAP net loss for the quarter was $3.6 million or $0.02 per diluted share. This is an improvement of $7.1 million year-over-year. Turning to the balance sheet and cash flow, we ended the quarter with $79.9 million in cash and marketable securities. We generated a record $10.7 million in cash from operations during the third quarter, which reflects a significant improvement of $9 million compared with $1.7 in Q3 2023. In the quarter, this is aided by our lower operating expenses, collections seasonality, in which the third quarter is our highest collections quarter, primarily in the EE&T segment, as well as the delay of a $2.3 million payment from a large customer from the second quarter to the third quarter that I mentioned on the last earnings call. Through the first three quarters of 2024, we generated $7.9 million in cash from operations, compared to consuming $9.9 million in the same period last year, a $17.8 million year-over-year improvement. I would now like to turn to our outlook for the fourth quarter of 2024 and for the fiscal year ending December 31, 2024. As we have mentioned in the past, throughout 2023, we experienced pressure on our revenue growth due to year-over-year declines in gross retention and new subscription bookings, along with reduced demand for our lower margin professional services that was driven by our expansion into products that are easier and faster to deploy. With the improvement in gross retention in recent quarters and two successive quarters of increased new subscription bookings, our overall outlook on the business is brighter. Last quarter, we guided towards a sequential stabilization of subscription revenue in the third quarter, followed by a return to growth. We also forecasted a continued sequential decline in our lower margin professional services revenue, with positive benefits from enabling faster deployments and higher gross margins. Well, we were right on one count, and pleasantly surprised on the second. We did see a continued sequential decline in lower margin professional services revenue. However, subscription revenue returned to growth faster than anticipated, with revenue approximately $1 million above the higher end of our previous Q3 2024 guidance and up 3% sequentially. This result was driven by our continued solid gross retention results, as well as increased new bookings. I would now like to discuss our outlook for the fourth quarter of 2024 and for the fiscal year ending December 31, 2024. In the fourth quarter, we expect subscription and total revenue to be consistent with the third quarter, with subscription revenue between $41.8 million and $42.5 million and total revenue between $44 million and $44.7 million. We expect adjusted EBITDA in the fourth quarter to be between $0.5 million and $1.5 million. Accordingly, for the full year, we expect subscription revenue to be between $166.1 million and $166.8 million, total revenue to be between $177.1 million and $177.8 million, and adjusted EBITDA to be between $5.1 million and $6.1 million, which compared to the negative $2.5 million adjusted EBITDA of 2023, would be an improvement of $8.1 million at the midpoint of the guidance range. As Ron mentioned, and as supported by our third quarter results, we are also expecting to post positive cash from operations in the fourth quarter, as well as for the full year in 2024, as compared to a negative $8.3 million in 2023 and a negative $46.8 million in 2022. We believe the company continues to be well-positioned to benefit from emerging tailwinds we are seeing of spend consolidation to a single vendor, digital transformation, and the hybrid workplace that is continuing to drive demand for video-based offerings. As we move into the fourth quarter of 2024 and beyond, we continue to target both revenue growth and sustained and improving profitability. We believe our results demonstrate we are on the right path to achieve these objectives and to drive consistent returns to our shareholders. We are encouraged by the increased adoption of our products, highlighted by our increase in new bookings, our sustained high gross retention rate, and the deals in our pipeline that we believe could yield continued growth in bookings and by growing industry talent as we bring 2024 to a close. We are also confident that this sets us up for a modestly accelerated growth profile for 2025 and a sustainable increase in adjusted EBITDA profitability and cash flow from operations profile. We will provide guidance for 2025 when we report to you for 2024 and 2024 full year in February of 2025.

Thank you. Our first question comes from Gabriela Borges with Goldman Sachs. Please proceed with your question.

Hi. Good morning and good evening, Ron and John. Congratulations on the quarter. This seems like some of the cleanest beat and raise results that you’ve had in a number of quarters. So, Ron, I’m hoping you can comment, is there one or two things that you would point to from a company-specific standpoint that you think are really driving incremental stability in your business now relative to all of the heavy lifting that you’ve been doing over the last, call it, four to six quarters?

Thank you, Gabriela, and good morning to everybody on the call today. What can I say? Luck favors the prepared. We’ve been working hard towards this and it’s showing results. I think the industry is gradually turning around. You can see a bit of it from some of the other vendors in this industry, which is good. We’ve always outperformed and we continue to outperform, and continue to climb and grow, and we’re seeing increased demand and definitely continued success in being able to deliver against that demand. I’m happy to give you a bit more color around what’s happening on the business side. So, you do know that we had the highest new bookings since Q4 of 2022, and it’s both sequential and year-over-year growth now for the second quarter in a row. We did have bigger deals. So, we had two seven-digit deals this quarter compared to none last quarter and one deal in Q1. We also had 22 six-digit deals, so they’re bigger. We do see customers continue to consolidate around Kaltura, which has been our strategy. We’ve said we expect to see more and more of that, especially as times improve, because people have the time and the bandwidth to think forward and not myopically and not go for the better solution, but also one that is financially making sense to the mid- and long-term because we’re saving costs and not just providing better solutions. We’ve seen success across all industries, tech, financial services, automotive, professional services, healthcare, education. If I look at it per industry and give you a bit of an analysis there, we’ve seen most of the new bookings come in this last quarter from the tech companies. They also grew most year-over-year and sequentially. And after that, I’d say regulated industries, so that would be financial services, it’ll be government, it’ll be insurance, it’ll be healthcare, because of the integrated workflows that we offer connected to compliance and all these detailed things that regulated industries require. And then after that, we’re seeing folks like M&T, education, and professional and commercial services. From a geo-perspective, we mentioned back that Europe was doing well in balancing. They still did well. They still did better year-over-year in Europe compared to Q3 the year before, but in this quarter, most of the new bookings came from North America and it was more on a percentage basis and an absolute basis as well compared to Q1 and Q2. So it was definitely looking well. From a per product perspective, it’s across the board. We’ve seen most of it come from our video content management core and then followed by virtual events and the TV platform. And from a use case perspective, again, a healthy blend between CX, customer experience, and training and teaching and certification externally, but also EX around corporate communication and collaboration, and also entertainment and monetization. The other point that I’d note, we’ve said throughout the year that we were doing okay in price increases. We also had this quarter about a threefold booking from price increase compared to the same quarter last year. We’re able to continue to show customers that we are a premium product and we should be paid for it. And maybe lastly, the record average ARR. We’ve mentioned ARPUs and ARR continue to climb up as it is, it’s at about 200 grand and some of the other players there are maybe a tenth of that. So it’s real true enterprise deals. And when you think about that and it’s growing significantly, I mean, grew year-over-year by more than 10%, but that is a tribute to the continued consolidation around Kaltura. So as we think into the future, not only do we see continued upsell and hopefully continued pickup in NDR and the ability to serve our customers more with more consolidation and more penetration, we’re looking forward to having more new logos. And I mean, that’s the one point that I’ve slowed down in these last few years for most because people have done limited jumps from one vendor to another. We expect to see more of that. That’s going to fuel our growth.

Yeah. Absolutely. Thanks for the call. The follow-up is for John. So this will be your first year with Kaltura for the annual planning process for 2025. Talk to us a little bit about your framework for 2025 forecasting, any early call you’re willing to give on how to think about revenue growth and margins for 2025 and maybe how you’re applying all of the dynamics that Ron was just talking about to coming up with a forecast for 2025? Thank you.

Yeah. Sure. And it sounds a little bit like a setup, but appreciate the question in terms of you going deeper on guidance for 2025, which, as I mentioned, and as is typical for us, we’ll provide in February when we do the full year and fourth quarter. That said, yeah, I think one of the things about our performance this quarter and also which sets us up well for 2025, hence my comment around us seeing what we consider to be a bit of a brighter kind of forecast overall, and we’ll leave it at that in terms of a general comment. It’s basic blocking and tackling. The company is executing well. Expenses are down, hence profitability is up. Hence profitability is up. Adjusted EBITDA is moving in the right direction. Company continues to grow revenue. Ron touched on this a bit. But it’s been a very consistent focus of ours on a couple areas. Customer profitability, we’ve been dissecting our profitability by customer over the course of the past year, and the company started doing that before I joined, and we’ve just continued, which I’ll call basic blocking and tackling, and ultimately, some of that’s what’s driving some of the price increases, because we’re targeting what we’re doing and where we have opportunities to derive additional value from our products that we’re doing it. In addition, we have also re-aligned some of our workforce, if you will, which has driven additional improvement in operating expenses. OpEx is better, $2 million year-over-year, $3 million sequentially, and we continue to expect to go down that path. So for 2025, as we mentioned, we think we’re going to have a modestly improving growth and profitability profile.

Sounds good. Thank you for the color.

Thank you, Gabriela.

Our next question comes from DJ Hynes with Canaccord Genuity. Please proceed with your question.

Hey, guys. I’ll echo Gabriela’s comments. Congrats on the nice bookings quarter and nice to see that dollar-based net retention back in the triple digits. Maybe we could start there, and actually something you alluded to, Ron, in your answer to Gabriela. So the majority of bookings I think you noted in the quarter were new use cases or expansion with existing customers. What’s the pipeline for new customers look like, and how important is that to the sustainability of renewed growth from here?

Thank you, DJ. I appreciate it. First, I want to address the part about upsells, which has been our main focus for net dollar retention and supporting our existing customers, especially the larger ones. In the third quarter, we maintained a high quarterly gross retention similar to previous quarters, and it has significantly improved compared to the same quarter last year. Our gross retention forecast for the full year is now expected to exceed levels from 2021 and 2022, and we believe that 2023 was an outlier year, as many in the industry have also experienced a decline in gross retention this year. We’ve seen a robust rebound that surpasses previous years. Most of the last monthly recurring revenue has been due to downsells rather than total churn, with only a small percentage linked to specific product or service gaps, around 15%. The majority is still due to budget constraints or the discontinuation of certain products or services. Given the recent improvements and rebound in bookings, we anticipated that net dollar retention would continue to rise, and we're pleased it has exceeded 100%. We expect this positive trend to carry on into the future. Regarding new logos, we have had some strong quarters recently, and while growth can be uneven, we do expect it to continue. The reason for a slower pace in acquiring new customers lately is that many companies have been cautious about the time, effort, and budget required to switch to a new vendor. When existing vendors offer discounts, they often prefer to stay with them, even if their product isn’t as effective or comes at a higher cost, since switching to a consolidated vendor like Kaltura could lead to more savings over time. Many have expressed interest in our superior and more affordable solutions over the mid to long term. They have indicated they are waiting for the right moment to act, and we are now seeing many of them actively discussing potential transitions. Many of these leads are currently in our pipeline and are expected to materialize in the coming quarters. Therefore, we anticipate further growth. However, it's important to note that this is a cautious market. We are careful in how we communicate our future expectations and forecasts, and we will wait to see how things unfold. Nonetheless, we are confident that this will contribute to significant growth for the company, aligning with our vision for the right trajectory.

Yeah. Yeah. That makes sense. That’s a helpful color. Maybe as a follow-up, Ron, you’ve got new leaders now in the product and sales lead roles, obviously, not new to Kaltura, but new to those responsibilities. Are there any changes those folks have implemented or are contemplating that we should be aware of? I mean, I know you’ve talked about focusing on larger opportunities, verticalization of the sales force. Anything else we should be thinking about?

So, first of all, yes, we have to some extent new, but to another extent, they’re not new to the company and have been around for a long time and they are - have been extremely well-accepted and are doing an amazing, amazing job. We have Navi that has moved from Chief Revenue Officer to lead our product and tech. And to remind everybody, when we said that last quarter, Navi’s background was from engineering and as a CEO of an analytics BI and AI company. He’s also coming from a lot of data and enterprise sales. But when he joined the company, he was supposed to have been a GM. And then when things slowed down, he was put to run revenue and understanding our customers and their needs. He’s in the best situation now to bring about continued success and changes within our R&D department. He’s done a great job there, and we are pushing, continue to push forward very aggressively on the AI front. So it’s not a change, but it is doubling down and continue to push forward. And I want to state there very clearly, we think that’s a huge backroom opportunity. And the reason is that we are integrated deep into the workflow and we are the ones that are harmonizing all the data external and internal in the company. So we can prompt the system and the LLM in the best way in order to generate the experiences, which we also power. So if you look at that sandwich, workflow integration, data harmonization, AI on top of that, the experience we could offer all that. And again, we spoke this quarter about how we’re bringing a market for the latest AI updates around Content Lab. We’re launching what we call a Class Genie and a Work Genie that’s enabling basically people at work and at school to get hyper-personalized, hyper-contextualized content, either repurposed or created from scratch, and that’s because we’re atomizing all of the content that’s on our system. Remember, we’re sitting on a gold mine of data, sitting on all of the data that’s recorded in universities, most of the data in 25% of the Fortune 100 companies, and we’re adding a lot of logic into the content and how they’re being used in order to best cater to the needs. So point number one on the product side is more AI. On the go-to-market side with Liad, we’ve already led our most strategic customers. He’s back now to leading the entire team and has been for more than a decade in the company. He knows it inside out. Very well embraced and hit the ground running and the team is further verticalizing our efforts, bringing in more into mission-critical capabilities and expanding globally. He’s been traveling the world, he’s now in Europe, he was in Asia-Pac, so we’re doubling down and going deep into all the initiatives we had before. So no news, but a lot more of what you’ve seen before and we’re excited.

Very good. Thank you, guys. Congrats.

Thank you, DJ.

Our next question comes from Ryan Koontz with Needham & Company. Please proceed with your question.

Hi. Thanks. Congrats on the great results. Really nice to see this. Maybe you can unpack a couple of the customer applications that you talked about there in the strong tech vertical, Ron. Can you maybe unpack that a little bit in terms of what some of these use cases are and where your real value is in terms of either, are these renewals versus new logos, etc.? Thanks.

Sure. The strength of Kaltura lies in our extensive range of products that address various market needs. We provide a video content management system that supports all content within an organization, along with video portals for both internal and external events and content creation. Our offerings include an events and webinar service designed for large gatherings, which now facilitates thousands of engaging events for marketers and trainers. Additionally, our virtual classroom solution enables real-time learning and teaching for partners, customers, and employees, focusing on structured sessions where instructors prepare the environment effectively. We integrate our services with learning management systems and content management systems used by schools and organizations, alongside our Media and Telecom suite. Typically, customers start with one solution and then expand to others. For example, they may seek content management and video portal functionality both internally and externally. Use cases often involve employee communication, collaboration, teaching, learning, and development. Some clients come to us for a comprehensive system to record, store, and manage conferencing or to enhance webcasting capabilities beyond traditional meeting solutions. Recently, we added the ability to record and manage meetings with tools like Zoom and WebEx, providing a unified solution. Meanwhile, others leverage our systems for training and education across various learning experiences. Our AI tools, Work Genie and Class Genie, help create personalized learning paths for employees and students based on their interests, quiz results, and interactions, dynamically delivering relevant video content in real-time. Externally, we serve customers and partners in teaching, training, and education. We offer comprehensive certification solutions with analytics while also supporting sales, customer success, and marketing through events and enablement tools. For instance, banks use our tools to engage with wealth management clients through tailored videos, while healthcare organizations enhance patient communication for better understanding and relationships with doctors. We offer broad capabilities, and this breadth enhances Kaltura's effectiveness. Our deep integration into mission-critical workflows ensures we remain essential for our users, leading to higher average revenue per user and increased customer retention. We eliminate content silos by allowing the same content for internal and external use depending on permissions and workflows, all within a secure and compliant environment. This results in cost savings on production, improved content accessibility, and extended content life. Our AI capabilities further ensure that the right content reaches the right audience at the optimal time and place. Overall, Kaltura provides a powerful and comprehensive solution for our clients.

That’s really great. Sounds like what you’ve been working on for years and the market’s maybe finally coming to you. Thanks for the question.

100%, I appreciate that, Ryan. I will say there, for years, video has been used as an end as opposed to as a mean. Here’s a video player, run it, that’s highly commoditized, that was never interesting for us. Our vision was always how to use video in order to better learn, better market, better sell as part of the workflow and this has been the Kaltura promise since inception. I think that it started picking up, things were doing great. Then came a few years where things were a bit harder from a budget perspective. We think this is gradually, and I’m emphasizing gradually. I don’t think it’s an overnight, next quarter, everything’s totally hunky-dory, but it is picking up. And we think that now the value of video as a mean, not as an end, fueled with AI-infused feature sets will really enable to drive all these mission-critical use cases with video. And that enables a 10x growth for the opportunities around video, and we think we’ll be a leader there.

Great, Ron. Thanks a lot.

Appreciate it.

Our next question comes from Patrick Walravens of Citizens JMP. Please proceed with your question.

Oh! Great. Thank you, and let me add my congratulations. The RPO growth is particularly nice to see. So I have two questions. Ron, for you, it’s nice to see the seven-figure deals come in Q3. Usually, you think of that as sort of an end-of-the-year phenomenon. So how does the seven-figure pipeline look going forward? Are there still things in it?

Yes. There are. Thank you. And yes, thank you for noting Q3 versus Q4. I mean, it varies, sometimes Q4, sometimes Q3. Our pipeline does have a bunch of seven-figure deals and we’re hoping to continue to land them in Q4 and beyond, yes.

All right. Great. And then, John, for you, I noticed in your script, you made a comment about reallocating resources to, I forget how you word it, but sort of higher return opportunities. Like, I thought it’d be really interesting for investors to see some examples of what were some of the places you took resources from and where did you put them?

Yeah. If you look at our revenue results and kind of one of the themes that we’ve talked about is really two themes. Number one, focusing on customer profitability. So ultimately, we have a team that works on that regularly and we use the information that comes out of that process to target the specific price increase opportunities where we have resale opportunities and we’ve been able to benefit from some of that. In addition, we’ve been very focused on, across the sales organization, it’s one thing about landing customers, we have a really deep and I think underappreciated customer profile. And ultimately, part of our success this quarter, and we saw some of it last quarter and we expect it to continue, is our ability to go deeper within existing customers, and we’re very much aligned with the sales team, supporting the sales team, and certainly that also takes a bit of a shift in focus and investment.

Awesome. Well, let me add my congratulations again. Thank you.

Thank you, Pat. And I’d just like to add, because we’ve really spoken a lot about the upside of the opportunities and growth and hopeful continued growth. I do want to say a word about the bottom line, because as John has referenced it in some of his answers, this is a big and important focus for us, and John has said that multiple times, that we’re an end company. We’re going to grow top and bottom line. You’ve seen gross margin grow. We expect that to continue to happen and we are expecting our bottom line to continue to grow, and we’re doing both. And so we’re looking very carefully on this and where and what we do to support that, and I and the entire company are fully committed to achieving that in the next quarter and beyond. So, and that obviously goes towards cash flow as well. You’ve seen this was a strong cash flow quarter, and again, some of these results might jump in any given quarter to the left or the right, but they could be a bit clunky. So I wouldn’t take any one of these statements verbatim for a Q4 versus a Q1, but the general trend that we’re going to continue to post here is one of increased cash flows, increased profitability, and then increased growth.

Achieving that in the next quarter and beyond is important for cash flow. This was a strong cash flow quarter, and while some results may vary from quarter to quarter, they could be a bit inconsistent. Therefore, I wouldn't rely on any single statement for Q4 compared to Q1. However, the overall trend we expect to see is an increase in cash flows, profitability, and growth.

Anything, Operator?

It appears there are no further questions at this time, so I would now like to turn the floor back over to Ron Yekutiel for closing comments.

Yeah. Appreciate it. So, yeah, we feel good about the quarter, but we feel that there’s a lot more hard work ahead of us and we are heads down to continue to execute to bring things onward and upward. I do appreciate everybody making time, especially on a special day like this. And just a word, maybe as in the US, everybody’s now coming together to be again, one nation and put our divides aside. I think we as Kaltura and definitely the tech industry are at the forefront of putting people together and collaborating in an open, flexible, and collaborative way. So onward and upward to us and to the industry. Have a beautiful day and a great week. Thank you. Take care.

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