Kaltura, Inc.

Good morning, everyone, and welcome to Kaltura First Quarter 2022 Earnings Call. All material contained in the webcast is 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. Sapphire Investor Relations, please go ahead.

Thank you and good morning. With me today from Kaltura are Ron Yekutiel, co-founder, chairman, and chief executive officer, and Yaron Gamazi, chief financial officer. Ron will begin with a summary of the results for the first quarter ended March 31st, 2022, and the trends and areas of focus that are expected to impact 2022. Yaron will then review in greater detail the financial results for the first quarter. and others, followed by the company's outlook for the second quarter and full year of 2022. 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. 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 Caltura's annual report on Form 10-K for the fiscal year end, December 31st, 2021, and other periodic SEC filings, including the quarterly report on Form 10-Q for the quarterly period ended March 31, 2022 to be filed with the SEC. Any forward-looking statements made in 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 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.caltura.com. Now I'd like to turn the call over to Ron.

Thank you, Erica, and thanks to everyone for joining us on the call this morning. We reported today that our total revenue for the first quarter of 2022 was $41.7 million. Up 11% year-over-year, and our adjusted EBITDA for the quarter was negative 8.4 million. Both results exceeded the high-end over-guidance range. As we stated in our last earning call, the growth headwinds that we encountered in the second half of 2021 continued into the first quarter of 2022. We estimated them well and continue to believe now that we will increase our revenue growth rates in the second half of this year. I'd like to briefly recap what we stated in our last earning call were the three main driving forces behind the headwinds, as well as the three main growth engines that we believe would re-accelerate our growth towards the second half of this year. The six factors remain very relevant. We said in our last earnings call that the headwinds were driven first by lower than planned E&T booking caused by lengthening sales cycles and a slower than planned Salesforce ramp. Second, by a reduced need for our professional services caused by our continued shift towards lower touch and self-serve offerings, and third, by one of our major customers reducing part of their business and revenue with us. We further said that we expect our growth to be refueled first by the evolution of our virtual event offering from catering exclusively to large flagship events that typically require significant event services to an event platform that caters to events of all sizes and that is managed by the customers independently with minimal event services required, if any. Second, the launch of additional low-touch and self-serve products and go-to-market vehicles for both ENT and M&T. And third, for the continued ramp of our sales force. I'd like to give you an update on these six factors, starting with our ENT-related product, services and sales cycles. In the first quarter, we continue to sell our virtual events offering for flagship events. We're still benefiting from the significant professional services revenues that are attached to these deals, but our eyes are now set on our upcoming cross-enterprise event platform deals that power centrally all events of all sizes across the organization. Though there will be less, if any, professional service revenues from these deals, there are many more such deals to be had, and they command higher subscription revenues and greater stickiness. To that end, we have a growing sales pipeline of existing customers and new prospects that are evaluating a new platform, including Fortune 100 and 500 companies. They come from a diverse array of industries, including tech, financial services, healthcare, professional services and education. They're looking to use our platform for tens, hundreds, sometimes even thousands of events every year, catering both to customer and partner events to internal events, and in many cases also to their signature flagship events. Throughout the first quarter, we launched new innovative features advancing our event platform, and we continue to believe that this new product will contribute to the acceleration of our revenue growth in the second half of this year. We also continued selling in the first quarter our core content management products to customers, including Fortune 100 and 500 companies, that uses externally for marketing and community engagement and internally for knowledge sharing, learning, and development. At that end, we're continuing to see increased demand for a unified platform that can address both internal and external use cases for both content management and events. This is a strong and unique selling point for Kaltura, so we believe we're very well positioned to capitalize on this marketing consolidation. Moving on to our low touch and self-serve products and go-to-market vehicles. Following the initial release of our self-serve virtual classroom, webinar, and media services offerings, we continue to optimize and scale our digital operations and to ramp up our inside sales team to cater to transactional sales, augmenting our main sales team that is focused solely on larger customers and deals. We believe that several upcoming product enhancements will further drive growth coming from these initiatives in the second half of the year, especially from webinars where offering is expected to provide unique attributes and value around user experience, branding, live to on-demand flows, and integrations. At M&T, we're continuing to expand the market from large telcos to mid-sized media companies where we enjoy faster sales and deployment cycles by providing an easy-to-deploy, end-to-end streaming platform that includes a front-end user experience and monetization tools. During the first quarter, we partnered with several technology providers to productize such an end-to-end offering and augment it with a marketplace of value-added services, and we believe it will also help to fuel our future growth. Regarding the major customer that reduced part of their business with us, as previously mentioned, they have since renewed various existing projects and have partnered with us in new ones in the first quarter. So the impact of the reduction hit most strongly in the fourth quarter of 2021 and the first quarter of 2022. Our business with this customer is picking up again, and we believe that we'll remain a major customer this year. And regarding our Salesforce ramp, in the first quarter of 2022, we had over 30% more ramped enterprise sales reps and over 15% more account managers as compared to the first quarter of 2021. So in summary, after certain headwinds, including those related to post-COVID shifts, brought about close to flat revenues in the fourth quarter of 2021 and a reduction in revenue in the first quarter of 2022, the headwinds are starting to be offset by our growth engines. Our guidance reflects an expected turnaround in the sequential quarterly growth trend line in the upcoming second quarter of 2022. as well as an increase in our year-over-year revenue growth rate in the second half of this year. With that, I'll turn it over to Yaron, our CFO, to discuss our financial results in more detail. Yaron.