Quick Summary:
Consolidated Balance Sheets (U.S.dollars in thousands) As of March 31, 2024 December 31, 2023 (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $31,565 $36,684 Marketable securities 37,294 32,692 Trade receivables 17,837 23,312 Prepaid expenses and other current assets 8,298 8,410 Deferred contract acquisition and fulfillment costs, current 10,426 10,636 Total current assets 105,420 111,734 LONG-TERM ASSETS: Marketable securities 4,904 5,844 Property and equipment, net 19,008 20,113 Other assets, noncurrent 2,879 3,100 Deferred contract acquisition and fulfillment costs, noncurrent 15,757 17,314 Operating lease right-of-use assets 13,468 13,872 Intangible assets, net 572 689 Goodwill 11,070 11,070 Total noncurrent assets 67,658 72,002 TOTAL ASSETS $173,078 $183,736 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term loans $2,066 $1,612 Trade payables 8,069 3,629 Employees and payroll accruals 11,552 12,651 Accrued expenses and other current liabilities 18,922 17,279 Operating lease liabilities 2,413 2,374 Deferred revenue, current 53,913 62,364 Total current liabilities 96,935 99,909 NONCURRENT LIABILITIES: Deferred revenue, noncurrent 203 369 Long-term loans, net of current portion 31,741 33,047 Operating lease liabilities, noncurrent 16,996 17,796 Other liabilities, noncurrent 2,067 2,295 Total noncurrent liabilities 51,007 53,507 TOTAL LIABILITIES $147,942 $153,416 STOCKHOLDERS' EQUITY: Common stock $14 $14 Treasury stock (4,881) (4,881)Additional paid-in capital 478,292 471,635 Accumulated other comprehensive income 302 1,047 Accumulated deficit (448,591) (437,495) Total stockholders' equity 25,136 30,320 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $173,078 $183,736 Consolidated Statements of Operations (U.S.dollars in thousands, except for share data) Three Months EndedMarch 31, 2024 2023 (Unaudited) Revenue: Subscription $41,170 $40,392 Professional services 3,611 2,881 Total revenue 44,781 43,273 Cost of revenue: Subscription 11,401 11,168 Professional services 4,772 4,819 Total cost of revenue 16,173 15,987 Gross profit 28,608 27,286 Operating expenses: Research and development 12,005 14,130 Sales and marketing 11,812 12,071 General and administrative 12,082 12,100 Restructuring — 945 Total operating expenses 35,899 39,246 Operating loss 7,291 11,960 Financial income, net 1,497 (1,785) Loss before provision for income taxes 8,788 10,175 Provision for income taxes 2,308 2,620 Net loss $11,096 $12,795 Net loss per share attributable to common stockholders, basic and diluted $0.08 $0.09 Weighted average number of shares used in computing basic and diluted net loss per share attributable to common stockholders 144,253,660 135,087,949 Consolidated Statements of Operations (U.S.dollars in thousands, except for share data) Stock-based compensation included in above line items: Three Months Ended March 31, 2024 2023 (Unaudited) Cost of revenue $285 $264Research and development 1,172 1,145Sales and marketing 770 772General and administrative 4,302 4,978 Total $6,529 $7,159 Revenue by Segment (U.S.dollars in thousands): Three Months Ended March 31, 2024 2023 (Unaudited) Enterprise, Education and Technology $32,440 $31,330Media and Telecom 12,341 11,943 Total $44,781 $43,273 Gross Profit by Segment (U.S.dollars in thousands): Three Months Ended March 31, 2024 2023 (Unaudited) Enterprise, Education and Technology $23,556 $22,789Media and Telecom 5,052 4,497 Total $28,608 $27,286 Consolidated Statement of Cash Flows (U.S.dollars in thousands) Three Months Ended March 31, 2024 2023 (Unaudited)Cash flows from operating activities: Net loss $(11,096) $(12,795)Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 1,305 1,009 Stock-based compensation expenses 6,529 7,159 Amortization of deferred contract acquisition and fulfillment costs 2,888 2,970 Non-cash interest expenses (income), net (286) (224)Gain on foreign exchange (325) (195)Changes in operating assets and liabilities: Decrease in trade receivables 5,475 10,553 Increase in prepaid expenses and other current assets and other assets, noncurrent (560) (764)Increase in deferred contract acquisition and fulfillment costs (1,067) (1,642)Increase (decrease) in trade payables 4,447 (1,450)Increase (decrease) in accrued expenses and other current liabilities 1,654 (37)Decrease in employees and payroll accruals (1,099) (2,405)Increase (decrease) in other liabilities, noncurrent (36) 406 Decrease in deferred revenue (8,617) (9,595)Operating lease right-of-use assets and lease liabilities, net (358) (422) Net cash used in operating activities (1,146) (7,432) Cash flows from investing activities: Investment in available-for-sale marketable securities (15,424) (2,924)Proceeds from maturities of available-for-sale marketable securities 12,000 9,236 Purchases of property and equipment (93) (852)Capitalized internal-use software — (380) Net cash provided by (used in) investing activities (3,517) 5,080 Cash flows from financing activities: Repayment of long-term loans (875) (1,500)Proceeds from exercise of stock options 104 578 Payment of debt issuance costs (10) — Net cash used in financing activities (781) (922) Effect of exchange rate changes on cash, cash equivalents and restricted cash 325 195 Net decrease in cash, cash equivalents and restricted cash $(5,119) $(3,079)Cash, cash equivalents and restricted cash at the beginning of the period 36,784 45,833 Cash, cash equivalents and restricted cash at the end of the period $31,665 $42,754 Reconciliation from GAAP to Non-GAAP Results (U.S.dollars in thousands, except per share data; Unaudited) Three Months Ended March 31, 2024 2023 Reconciliation of gross profit and gross margin GAAP gross profit $28,608 $27,286 Stock-based compensation expense 285 264 Amortization of acquired intangibles 105 104 Non-GAAP gross profit $28,998 $27,654 GAAP gross margin 64% 63%Non-GAAP gross margin 65% 64%Reconciliation of operating expenses GAAP research and development expenses $12,005 $14,130 Stock-based compensation expense 1,172 1,145 Amortization of acquired intangibles — — Non-GAAP research and development expenses $10,833 $12,985 GAAP sales and marketing $11,812 $12,071 Stock-based compensation expense 770 772 Amortization of acquired intangibles 13 60 Non-GAAP sales and marketing expenses $11,029 $11,239 GAAP general and administrative expenses $12,082 $12,100 Stock-based compensation expense 4,302 4,978 Amortization of acquired intangibles — — Facility exit and transition costs(b) — 154 War related costs(d) 21 — Non-GAAP general and administrative expenses $7,759 $6,968 Reconciliation of operating income (loss) and operating margin GAAP operating loss $7,291 $11,960 Stock-based compensation expense 6,529 7,159 Amortization of acquired intangibles 118 164 Facility exit and transition costs (b) — 154 Restructuring (c) — 945 War related costs(d) 21 — Non-GAAP operating loss $623 $3,538 GAAP operating margin (16)% (28)%Non-GAAP operating margin (1)% (8)%Reconciliation of net loss GAAP net loss attributable to common stockholders $11,096 $12,795 Stock-based compensation expense 6,529 7,159 Amortization of acquired intangibles 118 164 Facility exit and transition costs (b) — 154 Restructuring (c) — 945 War related costs(d) 21 — Non-GAAP net loss attributable to common stockholders $4,428 $4,373 Non-GAAP net loss per share - basic and diluted $0.03 $0.03 Adjusted EBITDA (U.S.dollars in thousands) Three Months Ended March 31, 2024 2023 Net loss$(11,096) $(12,795)Financial expenses (income), net (a) 1,497 (1,785)Provision for income taxes 2,308 2,620 Depreciation and amortization 1,305 1,009 EBITDA (5,986) (10,951)Non-cash stock-based compensation expense 6,529 7,159 Facility exit and transition costs (b) — 154 Restructuring (c) — 945 War related costs (d) 21 — Adjusted EBITDA$564 $(2,693) (a) The three months ended March 31, 2024 and 2023 include $704 and $803, respectively, of interest expenses.(b) Facility exit and transition costs for the three months ended March 31, 2023 include losses from sale of fixed assets and other costs associated with moving to our temporary office in Israel.(c) The three months ended March 31, 2023, includes employee termination benefits incurred in connection with the 2023 Reorganization Plan.(d) The three months ended March 31, 2024 includes costs related to conflicts in Israel, attributable to temporary relocation of key employees from Israel for business continuity purposes, purchase of emergency equipment for key employees for business continuity purposes, and charitable donation to communities directly impacted by the war.
Important factors that could cause actual results to differ materially from those anticipated in our forward-looking statements include, but are not limited to, the current volatile economic climate and its direct and indirect impact on our business and operations; political, economic, and military conditions in Israel; our ability to retain our customers and meet demand; our ability to achieve and maintain profitability; the evolution of the markets for our offerings; our ability to keep pace with technological and competitive developments; our ability to maintain the interoperability of our offerings across devices, operating systems and third-party applications; risks associated with our Application Programming Interfaces, other components in our offerings and other intellectual property; risks associated with our use of certain artificial intelligence and machine learning models; our ability to compete successfully against current and future competitors; our ability to increase customer revenue; risks related to political, economic, and military conditions; risks related to our approach to revenue recognition; our potential exposure to cybersecurity threats; our compliance with data privacy and data protection laws; our ability to meet our contractual commitments; our reliance on third parties; our ability to retain our key personnel; risks related to our international operations; risks related to our revenue mix and customer base; risks related to potential acquisitions; our ability to generate or raise additional capital; and the other risks under the caption "Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission ("SEC”), as such factors may be updated from time to time in our other filings with the SEC, which are accessible on the SEC’s website at and the Investor Relations page of our website at investors.kaltura.com.
Non-GAAP Financial Measures Kaltura has provided in this press release and the accompanying tables measures of financial information that have not been prepared in accordance with generally accepted accounting principles in the U.S.("GAAP"), including non-GAAP gross profit, non-GAAP gross margin (calculated as a percentage of revenue), non-GAAP research and development expenses, non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses, non-GAAP operating loss, non-GAAP operating margin (calculated as a percentage of revenue), non-GAAP net loss, non-GAAP net loss per share and Adjusted EBITDA.
