Kaltura Announces Financial Results for Third Quarter 2021

Kaltura, Inc., the video experience cloud, today announced reported financial results for the third quarter ended September 30, 2021, as well as outlook for the fourth quarter and full year 2021.

“We are excited to report earnings for the second time as a public company, with total revenue, subscription revenue, and Annualized Recurring Revenue each growing at or above 40% year-over-year. In a world reshaped by the pandemic, video technology and experiences have become mission critical, and Kaltura is uniquely positioned to harness this opportunity as a long-time leader in the Enterprise Video Content Management market and a strong recent entrant into the Meeting Solutions and Virtual Event spaces,” said Ron Yekutiel, Co-founder, Chairman and Chief Executive Officer of Kaltura. “We are especially excited to see the strong demand for our newer products that power ‘meetings with purpose’ – Virtual Events, Webinars, and Virtual Classrooms. Our ability to power tightly integrated and easily customized on-demand, live, and real-time video experiences at great scale and quality make us ideally suited to address specialized meeting experiences and virtual events for enterprises.”

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Third Quarter 2021 Financial Highlights:

• Revenue for the third quarter of 2021 was $43.0 million, an increase of 40% compared to $30.6 million for the third quarter of 2020.
• Subscription revenue for the third quarter of 2021 was $37.7 million, an increase of 40% compared to $26.9 million for the third quarter of 2020.
• Annualized Recurring Revenue (ARR) for the third quarter of 2021 was $151.7 million, an increase of 41% compared to $107.3 million for the third quarter of 2020.
• Gross profit for the third quarter of 2021 was $27.8 million, representing a gross margin of 65%, compared to a gross profit of $18.1 million and gross margin of 59% for the third quarter of 2020. Gross profit for the third quarter of 2021 includes the impact of $0.2 million in stock-based compensation expenses, $0.1 million in amortization of acquired intangible assets, and $0.2 million in depreciation expenses. Gross profit for the third quarter of 2020 includes the impact of $0.1 million in stock-based compensation expenses, $0.2 million in amortization of acquired intangible assets, and $0.7 million in depreciation expenses.
• Operating loss was $5.9 million for the third quarter of 2021, compared to a loss of $4.4 million for the third quarter of 2020. Operating loss for the third quarter of 2021 includes the impact of $3.7 million in stock-based compensation expenses, $0.2 million in amortization of acquired intangible assets, $0.4 million in depreciation expenses, and $0.8 million in gain on sale of property and equipment. Operating loss for the third quarter of 2020 includes the impact of $1.0 million in stock-based compensation expenses, $0.3 million in amortization of acquired intangible assets, $0.8 million in depreciation expenses, and $4.0 million in abandonment of data center equipment costs.
• Net loss was $25.2 million or $0.26 per diluted share for the third quarter of 2021, compared to a net loss of $6.4 million, or $0.38 per diluted share, for the third quarter of 2020. Net loss for the third quarter of 2021 includes the impact of $3.7 million in stock-based compensation expenses, $0.2 million in amortization of acquired intangible assets, $0.4 million in depreciation expenses, $0.8 million in gain on sale of property and equipment and $16.8 million in expense from remeasurement of warrants to fair value. Net loss for the third quarter of 2020 includes the impact of $1.0 million in stock-based compensation expenses, $0.3 million in amortization of acquired intangible assets, $0.8 million in depreciation expenses, and $4.0 million in abandonment of data center equipment costs.
• Adjusted EBITDA was ($2.3) million for the third quarter of 2021, compared to adjusted EBITDA of $1.7 million for the third quarter of 2020. Adjusted EBITDA excludes stock-based compensation expenses, the amortization of acquired intangible assets, depreciation expenses, abandonment costs, gain on sale of property and equipment, financial expenses, and the provision for income taxes.
• Net cash used in operating activities was ($5.7) million for the third quarter of 2021, compared to $4.9 million provided by operating activities in the third quarter of 2020.

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Third Quarter 2021 Business Highlights:

• Another robust quarter of bookings
• Forecasted average annual salesforce productivity is tracking on plan
• Net Dollar Retention Rate of 117%, up from 111% in the third quarter of 2020
• Kaltura positioned as a Visionary in 2021 Gartner® Magic Quadrant^TM for Meeting Solutions, ranking 4th in the ‘External Presentation’ Use Case, and 5th in the ‘Learning and Training’ and ‘Webinar’ Use Cases in the Gartner 2021 Critical Capabilities for Meeting Solutions companion report
• Continued product development work towards launch of our next generation virtual event platform and towards launching low-touch and self-serve products

Financial Outlook:

For the fourth quarter of 2021, Kaltura currently expects:

• Revenue to be in the range of $41.2 million to $43.2 million
• Adjusted EBITDA to be negative in the range of $9.5 million to $7.5 million
• Weighted average basic and diluted shares to be approximately 126.7 million

For the full year ending December 31, 2021, Kaltura currently expects:

• Revenue to be in the range of $163.5 million to $165.5 million
• Adjusted EBITDA to be negative in the range of $14.1 million to $12.1 million
• Weighted average basic and diluted shares to be approximately 70.7 million

The guidance provided above are forward-looking statements and actual results may differ materially. Refer to “Forward-Looking Statements” below for information on the factors that could cause our actual results to differ materially from these forward-looking statements. Kaltura has not provided a quantitative reconciliation of forecasted Adjusted EBITDA to forecasted GAAP net income (loss) within this press release because the Company is unable, without making unreasonable efforts, to calculate certain reconciling items with confidence. These items include, but are not limited to, stock-based compensation expenses, financial expenses (income), net, and provision for income tax. These items, which could materially affect the computation of forward-looking GAAP net income (loss), are inherently uncertain and depend on various factors, some of which are outside of the Company’s control. The guidance above is based on current expectations relating to COVID-19 and its variants.

Adjusted EBITDA is a non-GAAP financial measure. Additional information on Kaltura’s reported results, including a reconciliation of the non-GAAP financial measure to their most comparable GAAP measures, is included in the financial tables below.

Conference Call

Kaltura will host a conference call today on November 3, 2021 to review its third quarter 2021 financial results and to discuss its financial outlook.

A replay of the webcast will be available in the Investor Relations section of the company’s web site approximately two hours after the conclusion of the call and remain available for approximately 30 calendar days.

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