Kaltura (KLTR) 8 Aug 242024 Q2 Earnings call transcript

Good morning, everyone, and welcome to the Kaltura's Second Quarter 2024 Earnings Call. All material contained in the webcast is the sole property and copyright of Kaltura with all rights reserved.

For opening remarks and introductions, I will now turn the call over to Erica Mannion at Sapphire Investor Relations. Please go ahead.

Thank you and good morning. for Yekutiel, John Chairman, will provide Doherty, a of Ron Executive and begin a by ended summary and quarter Officer; Chief results business joined update. Kaltura's XXXX, President, Co-Founder, Chief with June I'm XX, second and the Financial Officer. Ron John review year the for third results and full the for of second quarter outlook will in the greater company's XXXX. then of XXXX detail, financial the followed by quarter

questions, a revise measure, update note, or will on XX-K on EBITDA. Kaltura whether based non-GAAP may ended the forward-looking call discussed XX-Q for quarterly Laws, management's to We forward-looking materially discussing as expected in will limited otherwise, section to will SEC this the to the law. Please be filings, neither business. annual the note promises nor fiscal are required report during no of this include the with Important made or a guarantees them, Securities here. differ results can and as call report expectations within factors statements Federal responses December questions. Please on and to adjusted year to cause call, that your for including XXXX, actual the including during from then for from by expectations including XX, differ quarter cause These be XXXX, meaning involve actual to the those June result and found that risk Kaltura's uncertainties risks current could factors of plans other future financial financial we SEC. Any statements statements and new that XX, results for are filed open Form statements ended the except and call, today, Kaltura's conference forward-looking not results statements of as be the obligation regarding this Form of developments assumes and but

measure at our financial metric, our comparable this to on GAAP the to most of release, please reconciliation website non-GAAP refer www.investors.kaltura.com. available a For earnings is directly which

call Ron. pleased I'm to hand the Now over to

and year-over-year. quarter revenue Erica, welcome, marginally quarter for $XX.X up you, Thank to call. our of earnings XXXX the million, Total everyone, was second second

was up posted subscription company of note, $XXX.X record in quarter, While million, year-over-year. second X% $XX.X the Of a million. revenue we ARR

in million, for we $X.X As quarter fourth our XXXX. million consecutive quarter operations representing and quarter the from EBITDA in of quarter adjusted in profitability, bottom since million, an EBITDA line, of improvement second XXXX. posted $X.X Cash adjusted the highest used to the $X.X of second result third decreased the our of

adjusted quarter full together, flow again, reaffirm increase results the from for guidance Taken year, our our to post the second revenue positive our for and to, and EBITDA year. operations us to full the cash once lead plan for

update. the to on Moving business

expected, saw As the renewed quarter at subscription highest in level in quarter, growth were of the bookings XXXX. we new which the since fourth second

In second its addition, new Technology XXXX. since bookings Enterprise the at and new customers was of from portion highest Education quarter the of level

bookings deals, from spanning X-digit both diverse companies. and leading employee Kaltura, communication channel one engagement, to the a banks healthcare university, RX a the large the X than has The gamut of in of companies, and use is subscription government last world, ran largest student future subscription yielded new level X of customer learning new and U.S. highest annualized the quarter, results include largest a to remained Use compared software a all new bookings was entertainment. Gross and Our This cases, a retention revenue. subscription fuel an quarters, of cases rate marketing gross X to at and previous the with geographies. Customers the level the XX a years. and the first telecom leader, bookings world's rates in quarterly net higher European continues quarter of company, combination pharmaceuticals and of XXXX. tech and both that calendar customers better second institute in re-skilling, from represent increasing XXXX gross global array engagement, included and again X retention which similar the of upsells large gross higher helping industries, than retention large and

On an quarter our sessions dashboard. admin enhanced functionality options, second chat flow we between boosting event front, continued with and user in and group improved robust a the the targeting, platform product analytics SMB and more experience

features quarter management security guest to of enriched our portal AI, a Whisper number non-AI-based alternative launched added we speech based product new addition, of sessions provided. enhancements. advancing to we the AI-based continued developed automatic services our and our we recognition this our as previously ASR improved video the internally We on an in conferencing third-party rooms, service and and added landing admin platform. Related and pages, In for scalability content video player real-time our

the captions enhancing generated automatically within spoken, regardless and experience. of language With the AI, help videos of user are accessibility

products, users session an information, SMBs stay ensuring events that on notification automatically informed without based our engine AI-based generates intervention. ongoing For developed email webinars manual we and notifications for

and AI-based We also developed user chat presenters. analysis communications a real-time for of organizers sentiment event

noise video the quiz improved rooms, cancellation And launched an on video AI-based for conferencing we transcript. For AI-based our portal, for our generator audio. feature added based an we

them Hybrid X VIP Platform. In Events and yield how Novartis, Best Hat. Adobe, Event and Virtual Mayo Platform, Bloomberg, We Technology, results. Award AstraZeneca, Best Red as the quarter, and of Analytics of Event for marketing Technology and Platform, Road Siemens amazing to an boost continued New leadership events Clinic, customers prospects Eventex in Best Awards the MarTech and Salesforce, their passing San business Engagement Francisco, we Technology, IBM, industry Collection conducted the Awards Event XXXX had in Audience for awards Event Innovation Best from on Virtual leaders product our annual Technology, the as Data could Healthineers, attended Hundreds and Best Virtual London. communications video Business well also for this and such and Our Kaltura experiences lineup speaker are discussed XXXX XXXX corporate Events and quarter. Amongst AI-infused XXXX Connect Best York, customers

event, the Digital have demonstrated companies Healthineers. the categories different ABN America, Awards Bloomberg, Intuit, Adobe, IBM, During of Netflix, of the and Siemens have use Amazon Salesforce, AMRO, FIDE possibilities an expanded gave and Engagement Bank our across that platform and company, [ creative to ], X digital we out Kaltura Recipients exceptional of experiences enterprise. in included Audible,

on couple XX respectively. years our Bennett, are Lisa Lastly, want XX at a Gutman, of I recent Product mention our after Officer, and changes Kaltura, Chief and Marketing Kaltura. Officer, moving Renan to in executive Chief

years our as appreciative are and Education well General as Chief Revenue Enterprise new to contribution Renan role of Technology our them also We joined and Lisa's oversee Manager ago in of Renan's succeeds their who of Officer Business later the Officer, will great and wish Kaltura Chief Azaria, and Kaltura X.X held Product endeavors. Navi and marketing.

business most Liad and also with second last Enterprise MA from in sector, Education including XX guidance CEO computer customers, in analytics Liad's and the retention summary, most saw other in cycles yield revenue to an in Business Business experience roles the light and joining sequential servicing of Navi's Prior the most Revenue holds that, Navi new and are holds to also enterprises MBA our and Development contributed raising both has assumed we Kaltura adjusted all EBITDA and Columbia Technology data School, engineering. Liad the quarter a which complex biggest gross EBITDA the degree a providers. first communications Kaltura, we improvement included second Officer. our that, prior that of quarterly year. partners a our engineering. years, of law, has the been the for Before expected, the and who Officer. product led of our following revenue technology role results an and over company He incrementally bookings degree a in Eshkar, in materially was and leadership customers engineering. In year. of our recent the and to Chief Liad growth. and for role sales was sales In and adjusted continued Chief in overseeing year, above quarters from as outperformance

John? there factors around video savvy millennial believe in Fueling to online videos financial bookings, I'll their accelerate John, believe of advent companies turn experiences. initiatives savings of our our reaccelerate grow digital and our use profits. With results bring Gen-Z ROI. investments detail. are We video will cost the a such ahead tailwinds discuss as cases our it increase continue new are platform, increasingly multiple to revenue more these consolidating and creation continue about in and video We as consumption employees, in growth, CFO, more hybrid these will transformation and increased stronger that, and to our Gen-AI, by growth workplace, to and over which trends enterprise single

everyone the than focusing reallocating on the highest and towards new further hello XXXX. on year-over-year call which new quarter represents operating include and increase bookings to new our QX ROI doubled and including logos to Kaltura want and demonstrate resources monetizing opportunities Thanks, customer adding in sequential QX efficiency, few Ron, more today. that a markets. I touch highlights bookings, this. its make to our our important adjustments on existing improving base, business to continues higher the highlights in The from since and

all second year-over-year the quarters a fiscal remaining quarter row, year, of our driven the and performance represents level high consecutive date. if seventh improvement ARR gross subscription sustainable our in growth quarter years, a last the by revenue revenue, Our growth, watermark in obligations, primarily an highest and from to strength our for annualized, in last X for churn of

strong X earlier. With our lower Ron consecutive what is on continued let margin quarters, positive All move we quarter, expenses higher EBITDA, to in achieve of the our culminated fourth profitability and as than operating improvement mentioned positioning representing to in targets gross me adjusted results. the with as year-over-year see prior that, which

the contributed million. million, X% quarter of $XX.X X% year-over-year Subscription was range $XX.X results our and up and above guidance and services above Total is the range ended about for quarter. exceeded $XX.X down revenue June expectations for million, both of $XX points the for to million basis was the revenue to up XXXX, quarter adjusted high year-over-year the revenue of million for $X XX $XX end our XX, EBITDA Our guidance of and million. end year-over-year. $XX.X high Professional million revenue

$XXX.X quarter, XX% $XXX.X months. I million, We expect update expect provide were mentioned million I Consistent revenue quarter what recognize third revenue as the with X% $XX.X on for vacillate. and when renewal Media of RPO in of in in of anticipated up X% booking and last more revenue improvement professional X% remaining highest over was year-over-year, year. The guidance is our full business. to will a the the date achieved Technology to to and million, have result is of sequentially our the to Education subscription this touch increase and obligations and Enterprise services new on which revenue and performance sequentially ARR and of and I this an in continue and Telecom recurring increased next bookings we XX This up our strong Telecom year-over-year. in X% both Media and we reflective quarter. Annualized is

rate the dollar This reflects retention in was QX down from is for Our and from no first XX%. XXXX. the quarter change XXX% quarter net

improvement gross the of $XX.X from Media margin gross second sequential expected, was, our of gross in As we revenue be revenue X% and services similar the XX% quarter quarter, net was was quarter XXXX Within million, revenue down gross improve XXXX. sequential Technology Subscription in was time. therefore, XX%, a $XX.X QX year-over-year. to $XX.X increase up down total million is million, upsell million for of Telecom XX% in X% $XX.X is XXXX. in XX%, $X.X retention million, operating total over compared $X.X lower QX from expenses while result to of was to XX% second a improving the the second segment, we $XX as Education million improving is I result, contributed professional million, QX million quarter or the it demonstrated that our XX%, on profile than year-over-year. to to year-over-year Technology the segment, expense $X.X $XX which $XX.X second year-over-year quarter share. profit segment, second compared is This or year-over-year, revenue was the and quarters in of was last diluted an booking. This our gross an margin last have QX Media given quarter, Subscription bookings the indicates Within $X.X was bookings. Within our was revenue and and million resulting second year-over-year, with million, along for quarter for quarter the XX%, X for revenue Subscription XXXX, quarter million, half Subscription net up efficiency due X% down X% margin growth. a XXXX. a quarter improvement EBITDA million, year of were from representing better QX over our XXXX, a professional retention NDR $X.X second our reduction the quarter was gross Adjusted X% profit and last expect in per of quarter in with continue for XXXX. and down indicator our in margin in consistent XXXX Within to mentioned the $X.XX X% year-over-year. GAAP quarter we in second focus for gross million for up year-over-year. Enterprise million as up million, in lagging contributed of million for NDR and from expected Education XX% the GAAP $XX.X XXXX. loss QX operating services the Enterprise gross lower XX% gross to was $X.X profit million, This $XX.X representing in representing which segment, expected. margin Telecom was for increase $XX.X negative while the XXXX. Total $X XX% gross the

and in XXXX. now our professional the Turning growth sheet million year-over-year gross products flow. with compared the and first improvement year with QX improvement. I of securities. operations in due same in third we balance consumed in We $XX.X faster declines significant the $X.X which the new a $X.X This half second $X.X for pressure operations for XXXX, of million cash the deploy. $X.X quarter year-over-year reflects $XX.X ended XXXX million on cash marketable XXXX a and million million fiscal already been to subscription QX the from lower-margin large by the of would ending XXXX, corporate from million like a We to million December cash and in for our and $X.X into received, their XXXX XX, with delayed during we due from quarter restructuring. easier services have has would second to payment, that we moved payment in positive demand impact to XXXX. our period driven QX In With million this quarter. from to experienced entity of cash Throughout operations cash from along includes revenue outlook reduced $X.X that generated consumed last in to the retention compared customer to which year and the expansion was bookings, our that are turn to quarter,

mentioned sequential call. Last had services XXXX, quarter quarter, subscription we both revenue catch pressure subscription accumulated in in While towards in to reasons quarter. prior for expected recent gross quarters were would decline last first up still downward professional and the in an QX new retention guided low revenue on for improved the bookings in in quarters, us expecting the that earnings

I lower mentioned. While guidance, come new professional we Revenues did as some stronger indeed to expected. have gross out were manage and services we as through feel it and were bookings that, retention above able with from sequentially of also

to subscription believe are which return For be growth. third by will we a we the stabilization sequential quarter, forecasting followed of a revenue,

revenue deployments to million lower-margin in enabling the continued $XX.X third million $XX.X between expect has the a revenue, between our decline faster Accordingly, and services We revenue gross are we to and total higher also benefits positive subscription margins. and be million and quarter million. professional $XX.X forecasting sequential of in $XX.X which be

quarter to $X.X We million. expect between million and adjusted EBITDA positive in third the $X.X negative be

gross new the by towards revenue, professional we and revenues see from we driven the decline subscription bookings an rate as as look our continued As to year, improved in in well full services. increase expect retention

subscription and ranges the respectively, for our $X guidance ranges revenues, the As $X both a are million and of up and and bottom year subscription to increasing revenue $XXX.X the result, between million million. and million. $X for be full guidance million narrowing $XXX.X expect to total $X $XXX.X revenue $XXX.X for million be from and total Accordingly, million, we to between year, by we million

XXXX expect range. the negative of be million at We the to million for midpoint adjusted which of compares million, adjusted $X guidance EBITDA improvement EBITDA year the $X the $X of to be between an and would $X.X million

for believe cash spend offerings. As of continuing and video-based be the vendor, positive Ron seeing drive We full are continues that flow operations a hybrid to the we to tailwinds a transformation well benefit to to continue emerging single digital from demand positioned from forecast mentioned, is company workplace we also the consolidation year. to for

we and and growth As can right half drive and these We of into demonstrate achieve move to to both shareholders. beyond, profitability. we are the achieve expect to sustained we to improving on we path that that believe returns objectives and consistent XXXX revenue the our to continue second

the by the high in up in we'll adoption by growth bookings what We and demonstrated our continued by tailwinds we we growing pipeline increased Operator? in will second industry and the believe that for open that, are in of our XXXX. With our of and in year call half the be believe questions. yield retention deals could encouraged increase our the gross bookings, sustained rate products,

Borges from Sachs. Goldman first question Gabriela [Operator from Instructions] The is

course on with of how some number maps? in to some software cases they're pull plans, it vendor as evaluate the software. larger push you about of spending or companies Maybe us can software of the change sometimes And enterprises mentioned in what out? large are how thinking a about one specific with forward the in their have AI thinking with customers their Kaltura a little those that that from of perhaps of the remarks. these the bit or impressive it you customers road of some [Indiscernible] of even AI does some share some their Ron, enterprise prepared work enablement extent that

and the externally to and for their order internally be the or funnel. And and in of marketing results, depth conversions the X, and marketing. video through whether extremely people deep opportunities the It get very but exciting. about have what around the Connect workflows about a had is even huge they've there creation and integration sure very for large better time discussion come with make of you exciting improve learning reskilling so don't context is right several is video content AI. Number of things. it going out plus all content our several them, it here, The at to and with many that enterprises. and integrations come about for into AI the AI, possibilities how behind right moderation excited great -- event the Yes, our very be the for right training is have sales that better we the are Kaltura of getting faster world, a discussion say could in into marketing And more in the we detailed our the in into right we bring further content into fact integration excited and LMS into or workflows, is just order going the learning deep people

the yield better collecting is on federated offer, events, service And The a people that the what becoming bring we're single of they their advanced that the that full consider is prospect them we exciting. is this like, that data system. and And that pool when in or we And data where have results. with what a system prompt taste, layer trying the customer And order top very the you're to their across have like vendor their multiple when right have know our then increasingly, that they a towards that's have important, to course, integration so reason to to would that second thing they we now, know of track better put Kaltura what is products to data and really you system to a the appreciate. all interest, through you'd interactions how what do all want is behavior you on engagement information. approach the workflow we able a track of data different information metadata have, really into sandwich do the really

exciting across So customers we've looking forward. quarter of the had multiple this mentioned areas. around done that are releases AI all We

that stated, have in the put on and as we new translation E&T place, fueled been As by the a that Kaltura M&T, of and engine transcription both releases the lot both have have we M&T to time at in user well reactions the well further way well content ways as and better as the real as in recommendation as to analyze side, level. curate engage as the to better

there's So there. lot a

for follow-up Ron John is either growth the question. The normalized or

talked last the about how the bookings you've year So year. revenue this impacted have

Your more positive. are comments actually on bookings today

about know term? cross-sell, et with think you everything logos, normalized the Kaltura do doing Given Kaltura, you the how growth about cetera, in medium of profile have new customers been what

Yes.

Let could about go. thoughts me trends few about things and where in speak John quarter a and then this maybe bit say booking forward-looking about words let a

XXXX. said, positive. so were new bookings more correct. the fourth QX, quarter And since as It's of you the yes, It's highest

quarters So it's a sequential better as increase last year. to also was compared of throughout It than all expected, earlier QX.

compared QX. also had to deals We larger

in than we general. deals had more So X-digit

the sequential saw the a you and in also We from dollar increase customers. in number bookings

total larger not also was between new. deals. in first just with new the but So achieved upsells also And that and

and Europe, trends, about enterprise, came logos the the had and America both of percentage bookings the from of ARPU in enterprise, the of the North first in way, the dollar came fact, So since it's our from but dollar in from most value. in highest in the quarter EMEA new the units of the most XXXX. By ARPU number just grown, new

comment see customers around Enterprise. that external, sectors. services consolidate I've -- continued see turnaround Again, pharma having in we've and government good professional awakening course. and that still healthcare many And for Telecom We and data and education, and So also about few the both Media we're across tech and the Kaltura and the on market. continue from European And market. across touches the of success we're earlier seeing and to of financial internal seeing noted services we and a a

So picking growing new both that organically as potential well customers are up. as

You remember and And market a buying some would that gone bit but we're signs note we're look be quarter, that that other up. to tends clunkier. had earlier, a as in -- we good said I excited there couple that maybe seeing the we of into price mentioned points and the that, increases future. And we first

It Xx XXXX. was We that. had year a continue second to prior of quarter see we in the the booking actually

sequential command even prices And compared value we're to by able saw in the perspective, to the So lead increase then SDRs meeting better we by services Kaltura, a Gen and offered better our for competitively, own still a provided from RFP. set year before.

John is in grow, I'll trend the let direction. see good We that still comment and isn't lot tailwinds, expect will on we to a to believe all, look forward to turn more in into all to. grow. the There's lot more high going but a as as be a to headwinds that. So broadly it continue we Again, further this

Ron. Thanks,

our would for that bit we It's as -- working of a QX. that was about the XXXX. our of some we we guide be mentioned, in in of also So guide was for through where come talked were headwinds some QX. we guided we've coming and did out we in And to how QX but overall, were that out

we're The think, managing the we're XXXX. we this And stronger into it. as RPO, as as head well supports we bodes that year for in where certainly increase finish So bookings, well. guide and we through certainly headed our

next & is question Oppenheimer George from Co. Iwanyc from The

maybe linearity guidance. us into So progressed was Can give as July? you of a the like John, on and what building the quarter sense

talk it. July. For I'll end -- and what quarter, And the I But typical quarter. about not back necessarily strength unlike won't and second in the saw you through quarter that's yes, it's talk see into any we the June. about of towards specifically,

expect. where both for certainly, Our full things guide there are certain as year, managing a and through we're reflects we But business. quarter I that the said, as third

I'd the also focus on One profit is in and that of around keys what we're folks we margin particular. forward as doing gross move

kind that's think EBITDA what terms doing And I showing to us of be margin, gross in item around obviously is of which going plus but we We're Our we that PS, line subscription flow, focus each expect margins and bit guide of of profitability. subscription. a And shareholders. we're comes with talked PS a lighter on side up margin see a critical we're confident gross little does with we're we've where things. to support performance about, than headed where cash our adjusted for strong importance the lower have as fact the on for also and

maybe on next X And to you standpoint the investment any John, changes an side? the over are Ron, highlights the sales And up kind the you changes following some that, from on of you priority highlighted, us give that organizational with making especially months? leadership structure, would

least well situation, the year Obviously, take both next optimize a do the at organization. to to in look into once at as we it We continue we the and could level. we the that where Yes. where market as as we're

were that. have sales The Navi's high. you example. yes, is mean marketing system the marketing, that way there on for I'll in optimizations back excited an were moved. put to a now They organization, period are the closer marketing levels put a made under product of give organization. part I changes been sales and been trying energy marketing the were have about together together made, various that enablement As everybody with but in organization, they're better. SDRs would streamline

team effective team, moved Within we the had way. on what's separate that kind net fishing fishing of defined double customer our we core And had place with focus the of with more within kind route on down into that enterprise as are in the versus have ones down a team, a doubling the operations a further opportunities that, they sales smaller fishing further group large verticalization. our are where within care others and in

list think there's good and we've So all changes, leaders we points we energy we things great leading really is broadly, these quarters, get one and as gathered forward. going of with recent outcome, Like and high. said, we we've the back a I have the a that to for of any wisdom of teams come kind collect

of but guess And priorities. terms moment spoke one a some investment other me of just to ago, the covered to that highlight. was kind of I I in in when I --

improvement So around operating efficiency. continued

You leadership the well do certainly the as that top flow allowed the to -- some organization. through some of us changes that as of level at

In addition, make some presents well. as adjustments us that PS, about talked to lighter with related we cost there provides opportunity an -- also

Ron our addition, we'll are well. on kind some the we different the AI across how with our deployment across gain we portfolio operating an of it an we to customers external of present deploy product product Certainly, from perspective. run from and in it can overall business In parts but us and efficiencies focus how broad how covered enhance using portfolio, also our business opportunity, both that of as as

pretty say in to going up growth forward, revitalization, wasn't want think provide case. Additionally, set the that we have we some M&T. always business seen to growth also that is don't and but I well some

this, that's that on but existing is our touched focusing with So Ron customer key can it's priorities. story margin of our on and be and profit and growing And then certainly, our we're team base. part working one also within of closely

starting existing -- a other So have talked this you're we forward see quarter to to engagement, across and where starting a they for us reported what to based from that clients we what you're opportunities perspective. past certainly on we what see certain there's -- bookings and going work from

The next Canaccord from question Hynes is from DJ Genuity.

Congrats new better on pipeline? bookings Ron, the about kind cross-sell look of the of that? characterize opportunity faring would think how the frame how nice we would the go-forward kind environment the customer here. you Or you versus as than Is as growth at quarter you other? between one

Yes.

COVID, logos. And this said And picked I made I've back, more back a during in that to So of I'm period. my on Followed a that was better go quite point to very by it were a even take kind going consolidating we in understood the people that in there's a other direction, or favor or less had didn't it stuck calls. risk XX-XX upsells way their in to vendor have had to many solution, kind topic guess then the to budget there with ahead which were those the or they had. to averse myopic a by and one in vendor main you get had a going where comments of stuck opportunity XX-XX. after that up general more to become that each their process improving XX-XX though new because a previous and COVID stayed to a or that longer-term they guns on turn many to favoring short rush I it have of

XX-XX, have the like Kaltura of lot to has offer that kind opportunity shift X-plus There's I'd say. over years The consistently of products. we of customers continue expect upsell year-over-year. products towards grown around it as new number back the We to a

are And and multiple outside events so moving inside multiple in more and and people activities. buying from

actually the they that next of do but would a stop unified But there's the continue, it move a for not more term at also you as if as as a that people myopic cost-efficient not said vendor. could that year. that mentioned we provide a leading with because rebound an is expect looking insofar together. but better to to unified I that few virtues to a earlier, Should offer this in gradually vendor have opportunity more And of I when switching that economy all them the win in from long the just expect harmonization what's are save years, level to earlier where logos. Especially, switch we to to think knockout. us. application you're various for just And the and for forward, would to places said, we new mid them by a on better. I being see mean money I -- companies We brings platform value and scale solution data

next or faster it's over quarter the coming new after XX-XX. expect time. be answer short it Does relatively growth is the the going ultimately, back So bookings mean to we're in But to it's one a gradual?

a for John, you. follow-up

you stabilized, at keep I you standpoint a to posted So aware look, recognition that subscription Churn guess, Is numbers them? be spot sequentially revenue should or, record has in down bookings. know guiding hit we of? can record you trying there we in QX. a bookings just you're recent Or but where the midpoint revenue are anything from

that revenue a from concerned should you nothing about. Certainly be perspective recognition

some said, we're happened As a still of But guidance. would relative our approach Yes. what in working feel is it terms shape. posture to how I we strong We I conservative. through you characterize wouldn't our mentioned, I bookings. to did we still of XXXX lower relative in as as very certainly, And we're in say

more add one I'll thing.

because sometimes a immediate large few could most most not even kind a of your usually it's us, or into growth. I'm a Just point, year a in cases, in months. you're enterprises an it at M&T recognition revenue. of But and we're launch where to revenue with front, more. lag remind cases. a deployment take about is quarter a or it E&T on working takes the revival seeing In the least from Then behavior per not if bookings, talking

it QX is booking it of QX. so and QX be than was of a where And reflection a was QX lower more QX was. would

and aside, space company we. do that's obviously, that does order that. leave in an that, in odd. completely to not to so thoughtful more Every we for we're achieve guide So Put than trying

from is Co. Needham Ryan question & from Koontz next The

across, changing Actually, own say, to top there in the what attribute your or the improvement change go-to-market the that in bookings, factors you product processes? are

Yes.

just all, is typically that first remind of quarter First us the let's lower.

We had the also been the second. had way, have first the said second, in to them there lower. that By a from it caused be to closed which of we were deals the couple pushed

to And second. see the rebound expecting in a were so we

the point from general and a behavior yes, low. second beef better signs, seeing industry. It we later. and year. retention in expected was is expect was the back was The buying to historic in products. We bookings, our just Kaltura across macro to come move, It's that better we to It low retention. we XXXX definitely could a lower low was are But are It not signs continuing around. and turn this

with markets. In this also We are one external the we're solutions internal And for vendors take move been able internally expansion that for live associated our to growing. now started into a multiple or that are are things continuing from real expand ways. event solidify into from across external into to increasing position and stronger. stronger customers and and consolidating our away ones time few getting other from example, have of customers us with and and has with CMOs, the VOD just further case, and The strengthen

the believe is we the built, believe will it quarters ahead. we So momentum in being to be continue built and

Or of core have other the are scale margin product, you gross it that gross on are your up? picks subscription there margin what that And keys costs? any up? mainly Is there get because for getting the to kind levers margin to it

overall from and also on spaces profile an perspective. Yes. we're that focused making sure the It's truly customer scale right

to have that question subscription gross higher margin is subscription, increase and on blend us going level blended regardless well. a that of to our better and remind between the ability less is also And the have scale fact margin a that Just PS. blend ultimately we're our fact PS increase a going to to and as to we're a gross build going our good

to In question. addition your

question is Fargo. from from Michael next The Turrin Wells

This on super would guys on investment you is [ Like would how that's I that deal ] metrics would to light pipeline and helpful. Michael. click on be translating for into AI double the Burnett conversion? any Shaw love shine

of to mentioned we've reclarify about improvements which by that's more on But mentioned ASR improves on ability let I that transcription quality to Yes, me doing new that heels Again, work. capturing. And also only which as from improvement this as going question and the to it e-mail well for for the added We way sentiment comes margin notifications AI improvement. I AI now solution, the not parties et earlier. events Whisper cetera. it's we've third the done whole based do margin chat. what sure. we because automatically to fact automatic analysis the predominantly could on do Kaltura, forward, of capabilities to the around date real-time generate the earlier been just leverages, work is use multiple with and support

steroids knowledge and to world video This them. could people continuously that to based kind the learning taking enables get. end -- context. learn portal, Academy so cater creation you of have better itself, to right ROI we're could the So our us within this individual is how a they quiz to for generate right closer a We need pushed better had quiz what new generator where in on could we portal our the on Khan content AI which and get in and users increase it where their created

so us around focus half is improved beginning. the this repurposing. quality earlier, I for cancellation, talked just audio about also noise is big in We the the content of as grove. second said in rooms And And

to about to We going about released, a an -- else are -- how key automated we mentioned I in earlier And content users. that repurpose big for is package everything provide Media be insights summaries for talk specific AI and way, is of to going course, Telecom.

kind similar so editing was page our then our content, recommendation, lot. To and for talking daily getting saying were AI growth suggestions things picked have this We for with is assistant early days, of which zero you'd year-over-year how and that a same maybe and dynamic that for the home about the industry you, a of we curation and feeds a TVG question those find year-over-year like bit a your We for chatbot, a curator across recommendation It's are and have these content and thing. and personal about subtitling, number. in It's keep search on monetized. clips channels each. for up looking people entire things. And and

ARPU? highest increase I Is so this a As And be. new been us was helping for us for business? Is last the going going on while. like it's the declaring -- it win quarter exactly helping were, long logo ARPU is slowly said, the the the we're in more what impact it to

sell this point, And are Could mention supporting of it's it because happy? that our our higher also ability sell also and charging it numbers. existing separately. we're at and renew to the yes, that customers. people separately. for mean charge we necessarily At that to I be for increase size so supporting it could our not be doesn't It ability

the in We consider future. our ways will continue to

for follow-up deployment announced and given earlier capital on a buyback just John. cash balance the Can then how that And position you quarter? this you sheet us about your current the you remind think

let's period. we on Sure. mean, the it the first. we it I we we I of on certainly, focus where XXth. effectively, started June We announced cooling buyback a off -- a XXth mean had on of launched June, bit

we effectively AI that window foremost, So million being about there's growth. of purchased from where a a $X is in actually and just XXX,XXX opportunity We we business, using itself, main in resulted quarter invest $XXX,XXX of time. only to for which really in were the the shares areas by going the during was first days market. the few actually over that point. to -- see we focus the that one was continue where new in in Board. authorized We're And

of to ultimately, where given in to performance. we was for feel into. it form that we it the shape was important get no whatever or reflective way need had However, stock reasons don't the business did traded But underlying

the buyback, with have authorized for was we So thought an obviously, us they to Board's the our in toolkit. tool and it support, important

-- market shareholders. in it need the deployment maximize we we're right is value that we what the it. main capital But to we're to our moving focus certainly, putting We to in to this around doing ensure doing this for to place what be continue And and and in quarter to business about active can. do direction monitor

Matthew is question from from Niknam Deutsche Bank. next The

Allen dig This churn. to the a I is for want [ Michael Matt. ] just on in more on little

know So Was the sales improving more? XX% where area was down of there churn. quarter, you it an talked last improving. I sounds there were like about it's

was to thought Just seeing that area where there's trajectory you any there you're wondering where improvement better? be if and the this quarter

Yes.

we that's noted, X highest which that the an high saying quarterly yes, rate XXXX, quarter we same was of retention for represents year, well. fiscal that the better of year. rate industry. quarters the gross annualized since improvement. second it And abnormally And within also you noted consecutive the first we gross did So also is remember better of again of followed the the years the it there, fourth high us so of the so for quarter, in and than that last And quarter retention last current the in kind kind posted as than X as

was it's of the XX%, this that full about with versus down or same, sales. of So kind feeling question churn our down we're still churn which around and all in about a about. To churn together term point full quarter churn good your versus XX% partial versus

E&T. So it's And the in M&T in ratio. and was both same it

associated there's that's specific no topical that. So with area

maintaining to better no so place a level definitely than it's a other back on and area it of special was than QX. finger it's put a And the at while

as the better is the of half will year In be we which and the year a We the results better to much second the the is of second than note to is posted last NDR indicator. than discussion, year. I half forecast the a place continue last lagging then quarter. again just going second with to that quarter, same the year first going out come

had the quarter X a the good further, were thought. the last turn being what better result in expect we didn't. do so we it it it believe In since fact, the earnings that mentioned will And we dip quarters. NDR lagging that that direction that coming to around the of it's We quarters in last same call number, the fourth than it's as the

summary. my that's So

The next Securities. Walravens question is from JMP from Patrick

to bookings nice It's rebound.

Ron, then noticed the of called that times, to the when second then Kaltura as I'm is for soon out then can largest time just other in the to GTC noticed I the out be one replay. script guys noticed the my technology in you app. sometimes And wait user thing long conferences, one watching a in as out, NVIDIA travels, like these with So the start I can year, deals X literally you walk I've companies. world's the sessions of the going that got you at And conference that's of players. you walk the you this you And -- available like session, to

conferences NVIDIA an the So there? power guys more them Dreamforce I'm how there when how of get to or opportunity that GTC? big out you are you many user guys AWS of big How more these much an you is make And companies? wondering or do just of for

companies of very you've and yes, others the providing great So and we many glad companies of mentioned all, companies. the indeed had are ones, tech and largest be you to solutions are first mentioned leading for that some technology honored

We also it kind companies test definitely and understand of, They are I'd technologies. great appreciate great the vet fact and say, these the takes "smartest" technology. choosing what to that in to build technology how

have we're and content fact across various prelude immediately a time about getting a real video And management historical content able Yes, their immediately. spans experience at. I'd the experience use not real we into consolidate video live, cases, your natural. being #X on-demand, we content continuous more care the in various be to of Kaltura company much we about technologies And added various years. divide to wanting XXXX have to the that time. technology. we out is and believe also But that Gartner, that is you'd point part about care originally, the consolidate between out. question leading we the based the expect users we get you, To on when also that management to the for don't that we technologies. we're of stepping fact to expanded able do first events the you said after video in step in areas because from They a there, is value remind about we're So to which your believe, to say other

during and to experience immediately able a VOD after, right to lot so that a we've experiences put real-time experience so of and within continuum then. and before, of emphasis being you insert have convert live VOD and And after on

I'm you've noted and it big provide. a So happy indeed, that, that is we value

customer a of question of remain period, the as Amazon the they certain at deals. north say our time, because will to about to could for potential also define the I Lastly, revenue. a you XX% than that They other that there's as your very these second companies and as of the lot upside there some of They're upside the large there's more company. large, much more that and you largest similar have multi-multimillion in haven't. mentioned others

use and of as other I so also also adjacent but quality, into cases. better this don't said other upsells earlier, potential do in by with companies vendors. way various other have of are that us these And do Both and with having today, growing they same the the But just economy type not they use just activities increasing We but scale. of moving use cases for consolidating also that they discussions externally accounts. number about internally

value because grow. I year to year customer after saying one average is finalize per expect the to by we just after more that grow. yes, that customer. this for So and keeps on grown, continue we through year our more would offer the always is ARR could growing KPI each And has until

At questions. would are [Operator back turn floor Yekutiel Instructions] There no further for the over to to Ron time this I comments. closing like

lot by of one We're great quarter your that and questions of week. bottom tough any generate or into day line within growth from was ahead. There's growth up and declaring continue day, it how have have sure, a the quarter profitability. Thank quite We we're headwinds. interest forward that generally you, line for again, it's our with great believe translates been in and of the and But not There that support we to very into this work be we both context profitability, demonstrate at a lot Kaltura. and bookings much quite how way to years cash-based. key both victory. a also the as form But and said, and end and more of retention to that It direction. all Thank of accrual-based right, will both continued for translates the and to a top you and solid look perspective. and

This concludes today's teleconference.

lines your your you this may participation. disconnect Thank at You time. for