What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-02-24 compared with 2022-02-25 · 217 added, 587 removed, 36 unchanged (96% of the section changed)

Our mission is to power any video experience, for any organization.

Our Video Experience Cloud powers live, real-time, and on-demand video for webinars, events, virtual classrooms, and video sites.

offer robust Application Programming Interfaces ("APIs") and Software Development Kits ("SDKs") for developers and industry solutions

for education and media and telecom.

Our Video Experience Cloud is used by leading brands across all industries, reaching millions of

users, at home, at school and at work, for communication, collaboration, marketing, sales, customer care, learning, and entertainment

With our flexible offerings, customers can experience the benefits of video across a wide range of use cases, while customizing

their deployments to meet their individual, dynamic needs.

Video is everywhere.

It has become a driving force for online

interactions and engagement, and has revolutionized how we communicate, work, learn, and entertain.

For businesses, video sits at the

heart of digital transformation, with organizations increasingly embracing video solutions to better engage with customers and employees.

Video adoption has been further fueled by the availability of broadband, increased penetration of smartphones, rise of over-the-top streaming

(“OTT”) and cloud technologies, consumerization of enterprise technology, elevation of video to strategic and mission-critical

use cases, the entry of younger professionals into the workforce and the growth in remote and distributed workforces.

Furthermore, we

believe the COVID-19 pandemic has accelerated the use and adoption of video.

Our vision and technology are differentiated in the market, addressing

video as a unique data type that can and should be handled by a unified horizontal technology stack that powers all live, real-time, and

on-demand video use cases, maximizing engagement, interactivity and the collection of data.

Our Video Experience Cloud powers a wide array

of video applications across industries and use cases.

Our core offerings consist of various Software-as-a-Service (“SaaS”)

products and solutions and a Platform-as-a-Service (“PaaS”) offering, including:

Video Products – Video Sites, Webinars, Virtual Classroom, and Events.

Customers leverage these products for video-based communication,

collaboration, training, and customer experience (marketing, sales, and customer care).

Video Industry Solutions – LMS Video (Learning Management System) and Lecture Capture for educational institutions to support

and enhance in-class and remote teaching and learning.

We also offer a TV Solution for media companies and telecom operators, allowing

them to provide OTT advertising and subscription-based live and on-demand TV services for entertainment experiences.

Media Services – Live, real-time, and on-demand video APIs, SDKs, and Experience Components as well as Video and TV Content

Management Systems that govern the entire lifecycle of video, enabling customers to build any video experience and workflow.

Services also serve as a foundation for our products and industry solutions.

Our APIs and SDKs address:

media ingestion, creation, editing,

files transcoding, live transcoding, real-time video, publishing, streaming, distribution, recording and scheduling, video enrichment,

search, management, monitoring, engagement, video and image transformation, access control, user management, analytics, multi-tenancy,

security, digital rights management, and media repurposing at scale.

Our Experience Components include video player, video editor, video

accessibility tools, video capture tools, large files upload SDKs, interactive video editor, quizzing, hot-spots, polling, native mobile

and TV SDKs, video applications framework, embedded live stream app, and embedded WebRTC meeting components.

As of December 31, 2021, we had over 1,000 customers from

a wide range of industries, including financial services, high technology, healthcare, education, public sector, media and telecommunications.

Among our customers are 28 of the US Fortune 100, more than 50% of U.S.

R1 educational institutions, including seven of the eight Ivy

League schools and some of the largest global media companies and telecom operators.

This subset of customers accounted for approximately

39% of our revenue for the year ended December 31, 2021.

Most of our top customers leverage several Kaltura products for a range of use

cases across their organization.

Between December 31, 2018 and December 31, 2021, we expanded our base of customers with ARR greater

than $100,000 from 178 to 294, and the number of customers with ARR greater than $1.0 million from 4 to 21.

In 2021, we were recognized as a Visionary in the 2021 Gartner®

Magic Quadrant™, and we ranked 4th in the ‘External Presentation’ (4.44/5) Use Case, and 5th in the ‘Learning

and Training’ (4.32/5), and ‘Webinars’ (4.16/5) Use Cases in the Gartner 2021 Critical Capabilities for Meeting Solutions

We were also recognized as a Representative Vendor in the 2020 Gartner Market Guide for Enterprise Video Content Management.

have been included in Gartner research reports on this since 2013, where we were listed as a Leader for 5 consecutive times in the Magic

Quadrant for Enterprise Video Content Management report and ranked highest in all Use Cases in the last-published Critical Capabilities

for Enterprise Video Content Management report.

Gartner discontinued publication of this Magic Quadrant for Enterprise Video Content Management

report in 2018 and of the correlating Critical Capabilities report in 2019.

We have also received customer recognition.

As of January 19,

2022, we ranked 4.6/5 out of 57 reviews for Meeting Solutions and 4.6/5 out of 28 reviews for Enterprise Video Content Management by customers

on Gartner Peer Insights.

In March 2021, we were also cited as a Strong Performer in The

Forrester Wave™:

B2B Marketing Events Management Solutions, Q1 2021.

To date, we have invested primarily in increasing the scope and

depth of our offerings.

At the same time, we have accelerated our year-over-year revenue growth from 12% in 2018 to 18% in 2019, 24% in

2020 and 37% in 2021.

We accomplished this growth without materially increasing our sales and marketing spend over 2019 and 2020.

fourth quarter of 2020, we began investing significantly in sales and marketing expenses to drive revenue growth, and we expect this trend

to continue for the foreseeable future.

Additionally, for the year ended December 31, 2021, we generated net losses of $59.4 million and

had Adjusted EBITDA of $(12.2) million.

See Part II, Item 7.

“Management’s Discussion and Analysis of Financial Condition

and Results of Operations—Non-GAAP Financial Measures” for a discussion of the limitations of Adjusted EBITDA and a reconciliation

of Adjusted EBITDA to net loss, the most directly comparable GAAP performance measure.

Our platform provides a differentiated and comprehensive value

proposition for our customers.

Additionally, we believe the demand for video offerings has reached an inflection point, with several trends

driving strong demand for video applications.

We intend to continue expanding our Video Experience Cloud with new Media Services, as well

as new products and industry solutions.

We have also begun to increase our sales and marketing investment to capture the significant market

opportunity ahead of us, including increasing the size and reach of our direct sales team, and investing in self-serve products and channel

partnerships to expand our presence with smaller customers across all industries.

Key Trends Impacting the Video Market

It has become a driving force for online interactions and engagement, and has revolutionized how we communicate, work, learn, and entertain.

For businesses, video sits at the heart of digital transformation, with organizations increasingly embracing video solutions to better engage with customers and employees.

The COVID-19 pandemic accelerated the use and adoption of video, while creating a long-lasting remote operation culture across all sectors.

Kaltura's Video Experience Cloud includes products that power virtual and hybrid events, webinars, online learning, and video portals for companies across all industries.

Our platform also includes industry-specific video solutions, currently for the Education and Media and Telecom industries.

For developers, it includes an extensive array of Application Programming Interfaces (APIs) and developer tools that enable them to build other video workflows, products, and industry solutions.

Kaltura has long been recognized by top industry analysts as a leader in the Enterprise Video Content Management market, which includes experiences that are based on video-on-demand and live broadcast/streaming.

In 2020 we expanded our offerings to power experiences that harness two-way real-time-communication (RTC) with the launch of our new products for virtual and hybrid events, webinars and online learning.

Our Video Experience Cloud is used by leading brands, reaching millions of users, at home, at school and at work.

Organizations from a wide range of industries, including financial services, technology, professional services, healthcare, pharma, education, public sector and media and telecommunications, trust Kaltura to power their video experiences for marketing, events, communication, collaboration, sales, customer care, training and learning, and entertainment experiences.

Before the COVID-19 pandemic, Kaltura demonstrated a track record of double digit revenue growth while having positive adjusted EBITDA.

In the last three years, we experienced COVID-19 driven tailwinds followed by a correction after the effects of the COVID-19 pandemic subsided and recession headwinds, that led to an increase and then a decrease in year-on-year revenue growth.

In August 2022, our Board of Directors approved a strategic restructuring program (the “2022 Restructuring Plan”) to streamline our operations in order to support our investment in critical growth areas.

The 2022 Restructuring Plan included, among other things, a workforce reduction of approximately 10% of our employees.

The 2022 Restructuring Plan was substantially completed in 2022.

On January 3, 2023, our Board of Directors approved a re-organization plan (the “2023 Reorganization Plan” and together with the 2022 Restructuring Plan, the “Reorganization Plans”) that included, among other things, downsizing an additional 11% of our workforce and adapting our organizational structure, roles, and responsibilities accordingly.

The total cost reduction from the downsizing in connection with the 2023 Reorganization Plan on an annualized basis is expected to be approximately $16 million.

The 2023 Reorganization Plan is focused on realigning our operations to further increase efficiency and productivity, in reaction to the current macro-economic climate.

The 2023 Reorganization Plan's main objectives are to position the Company for lower demand, spend, and available budgets across our market segments, align our business strategy in light of these market conditions and support our growth initiatives and return path to profitability.

The 2023 Reorganization Plan is expected to be substantially completed in the first half of 2023.

See Note 18, Restructuring Activities, for further information.

We foresee great potential and growth opportunities for video experiences, and we believe Kaltura is well positioned with our robust offering and strong customer base in this growing market.

We intend to continue to innovate and invest in our products to maintain and improve our market position.

Key Trends In Our Favor

The nature of video consumption has transformed in recent years.

Several major trends have played a role in this evolution:

Availability of Broadband:

The availability of internet-based services has increased in recent years, with global telecom operators

increasing investment in next-generation mobile networks to reach previously underpenetrated regions and enhance performance in existing

This, coupled with the decreasing price of broadband, has accelerated the use of internet-based services such as video across a

global audience.

Broad Penetration of Smartphones:

Billions of people around the world use smartphones today, equipped with sophisticated technology

that allows them to create, watch, and transmit video anytime and anywhere.

Rise of OTT and Cloud Technologies:

Television has left its original home within cable and satellite networks and TV set-top boxes

and is now being delivered from the cloud as an internet-based service to any device.

OTT video technology has enabled content providers

to bypass the traditional distribution value chain and reach consumers directly without relying on network owners as the middleman.

• Shift to Remote Work and Education:

The world is settling into a "new normal" that includes remote and hybrid work and learning practices that rely heavily on video, and that require complex, integrated video workflows and analytics, to create comprehensive digital experiences at scale.

• Events are No Longer just In-Person :

Marketers and event organizers embrace virtual experiences as part of their engagement strategy.

The core of these experiences is video.

• Consumerization of Enterprise Technology :

Employees in today’s businesses expect consumer-like experiences with enterprise

technology, expanding their use case of technology at work from simply exchanging information and data, to interacting, socializing, and

Employees and other audiences and users in today’s businesses expect consumer-like experiences.

This has accelerated the use of video for both internal and external use cases.

The Shift to Remote Work and Education:

The world is shifting to a new normal that includes remote and hybrid work practices that

rely heavily on video communication, including virtual meetings and asynchronous communications, each of which require complex, integrated

video workflows and analytics, to create comprehensive digital experiences at scale.

Additionally, as entire campuses have shifted online,

video and virtual classrooms have become a requirement for business continuity and operations.

Virtual Events:

Over the past two years, COVID-19 has forced conference and event organizers to adopt a virtual experience.

events have proven their ROI in marketing funnels and employee engagement, enabling a scale of events and digital touchpoints with a lower

At the core of these events is video – for communication, content, education and more.

COVID-19 Pandemic Accelerating Preexisting Trends:

We believe the COVID-19 pandemic has accelerated the use of video for numerous

use cases, including remote learning, remote work, remote healthcare, consumer communication, e-commerce and online entertainment.

believe that the COVID-19 pandemic has accelerated preexisting trends, with video experiences poised to be a key element of online interactions

for decades to come.

Limitations of Existing Video Solutions

While various video solutions exist in the market today, we believe

they are mostly discrete inflexible point solutions that suffer from a lack of modularity, extensibility, and interoperability;

limited breadth and depth of functionality, data insights, and end user engagement;

and do not provide the required cloud-based enterprise-grade

reliability, scalability, compliance, and security.

As a result, these offerings limit the ability of customers to maximize the benefits

of video technology for their businesses and are also too costly and require significant time to value.

Discrete Point Solutions:

Most existing solution providers lack workflows

and experiences connecting different video technologies (live, real-time and on-demand), devices, and use cases.

As a result, businesses

are faced with the complexity of working with multiple vendors to meet their video needs, often leading to a lack of cohesiveness across

offerings, silos of content and disjointed workflows, and security and monitoring concerns.

Inflexible Offerings:

Many existing video solutions are turnkey applications

that provide little by way of integration and customization.

Their inflexible architecture often inhibits existing vendors’ ability

to innovate quickly and extend the offering to keep up with the rapidly growing and evolving needs for video.

Additionally, existing vendors

provide few tools for businesses to build their own advanced video workflows and products.

Limited Integration with Ecosystem:

Most existing video solution providers

have only a few integrations with third-party platforms, and therefore offer limited interoperability and a disjointed end-user experience.

Limited Analytics Capabilities:

Existing solutions often lack the robust

analytics tools that enable interactivity and personalization.

This limits the ability of businesses to make data-driven business decisions,

further translating to limited end user engagement and a lower return on investment.

Not Optimized for End Users:

The interfaces of existing solutions are

often not intuitive, and do not generate an immersive and engaging end user experience across devices.

Not Built for the Cloud:

Many existing offerings are not cloud-native

and instead rely on legacy on-premise deployments to deliver their solutions, limiting their ability to innovate quickly and provide video

seamlessly across devices.

This also creates operational complexities for customers managing multiple video solutions and limits their

ability to leverage economies of scale.

Insufficient Support of Enterprise Standards:

Many existing offerings

lack the scale, security, and compliance needed by today’s enterprises, and also lack the development, contribution, and support

for industry standards that promote openness, interoperability, and accessibility.

This creates a growing risk for businesses that are

using video for mission-critical use cases at scale.

Unnecessary Costs:

Existing solutions frequently require extensive implementation,

hardware maintenance and custom integrations with other video solutions and adjacent tools, often resulting in excess costs for the customer.

Kaltura’s Video Experience Cloud

Our Video Experience Cloud powers all types of video experiences:

live, real-time, and on-demand.

We designed it from the ground up using API-based building blocks that govern the entire video lifecycle

and provide the foundation for our video applications.

We believe our Video Experience Cloud is differentiated by the following characteristics:

Unified Experiences:

Our native support for video solutions across the

tech stack – live, real-time, and on-demand, enables us to create unified experiences that bridge technologies to create simple,

cohesive workflows.

This enables us to not only simplify operations, but also create new video experiences and richer content, avoiding

the content and data silos generated by having several fragmented and disjointed point solutions.

Interactive Media Experiences:

We provide the complete stack, from video

creation tools to playback.

By providing tools for creators, we can create more immersive playback experiences, with interactive options

Live experiences such as webinars and meetings can be translated to interactive on-demand videos, providing not only a better

experience for each viewer, but also a longer shelf life for content created.

With content-centric experiences, we create engagement around

the content, powering learning and collaboration.

Media Services and Extensive Developer Tools:

We offer developers extensive

APIs, SDKs and media capabilities, enabling them to bring video experiences to any application.

With embeddable experience components,

application developers can shorten time to market, while bringing a complete and mature experience to their users.

We have built a rich ecosystem of over 125 technology partners,

extending our experiences with AI, video creation, and network optimization, among others.

We make our partners’ solutions available

to our customers through our marketplace, complete with a variety of plugins and out-of-the-box integrations with our platform.

This ecosystem

further simplifies our customers’ workflows, enabling them to weave video capabilities into non-video workflows and discover new

technologies to further enhance their own offerings, ultimately increasing their satisfaction and stickiness with our platform.

Our platform offers powerful analytics across multiple dimensions,

including insights related to engagement, time and seasonality comparisons, bottleneck identification, and congestion detection.

features help companies maximize the use of the data they are gathering across video channels, and better guide workflows associated with

subscription.

They also enable us to generate a significant amount of valuable data, which, when coupled with our proprietary AI/ML-powered

analytics capabilities, drives further usage of our platform, creating a powerful virtuous cycle.

Cloud-Agnostic:

While most of our customers use our public cloud products

and solutions, our solutions can be deployed across any private, public, or hybrid cloud environment, as well as on-premise, providing

our customers with complete flexibility around their deployment.

Enterprise-Grade:

Our platform offers enterprise-grade reliability, security,

and scalability, allowing us to support mission-critical workflows for experiences of any scale.

We also offer proactive monitoring and

various tiers of customer support.

For customers that rely on Kaltura to power TV experiences, we offer service availability commitments

of up to 99.995%, the highest industry benchmark required by major media and telecom customers.

Additionally, we are a leader in the market

with the development, contribution, and support for industry standards such as MPEG-DASH, LTI, Caliper and Open Video Capture standards

by IMS Global Learning Consortium.

We maintain compliance with accessibility standards, such as 508, CVAA, and WCAG 2.0 AA, and issued

a self-disclosing Voluntary Product Accessibility Template (“VPAT”) to ensure we adhere to the highest standards.

• Rise of Over-The-Top (OTT) Video :

Television is increasingly delivered as an internet-based service.

OTT video technology has enabled content providers to bypass the traditional distribution value chain and reach consumers directly.

It also enables any organization, and even person, to easily produce and distribute video content.

• Universal Access to Broadband and Smartphones :

With the widespread availability of affordable high speed internet, and with billions of people around the world using smartphones, it has never been easier to access video content.

Challenges That Organizations Who Want to Use Video Currently Face

Video has become a primary means for organizations of all industries to enrich sales and marketing activities, host events, communicate and collaborate, support customers and offer learning and training.

However, taking full advantage of the transformational potential of video in an organization is not a trivial endeavor, and end users, content managers and business leaders must overcome significant pitfalls and challenges:

• Not integrating video into existing processes, tools and systems.

Video is a data type, just like text, not a stand-alone application.

It should therefore be tightly integrated and utilized within existing workflows and applications, rather than just be used separately as complementary standalone experiences.

Most video solutions are, however, stand-alone experiences that are not tightly integrated into existing workflows, and we believe most organizations are still far from exploring the full transformational potential of video as an in integral part of their business activities.

• Dealing with a large number of single purpose and often redundant video applications.

Many organizations are working with multiple video vendors who offer point solutions for seemingly separable use cases.

This also often includes utilizing different providers for on-demand, live, and real-time video, instead of meshing these experiences together.

These organizations may suffer from limited functionality, a lack of cohesiveness and inconsistent user experience, disjointed workflows, content silos, and fragmented analytics that lack a holistic view of user behavior.

All of this reduces usability and user engagement, adds unnecessary complexities and costs, and lowers return-on-investment.

• Still offering mostly non-personalized lean-back viewing experiences.

Currently, most common systems still offer unified passive viewing experiences that are not personalized for individual users' needs and do not encourage them to interact with the content or contribute their own.

This greatly limits engagement and reduces return-on-investment.

• Being vulnerable to mission-critical risks and liabilities .

Video is a demanding data type and solutions that were not designed from the ground up to support the specific needs of video capture, preparation and distribution nor to run in scalable public clouds have difficulties offering the availability and service level that many companies require.

Security and data protections are also lacking in many video applications, as providers have not invested in the technical implementations and compliance mechanisms needed by enterprises that use video at scale for mission-critical use cases.

How Kaltura Addresses Organizations' Video Challenges

Customers trust Kaltura to power their video experiences for the following main reasons:

• Advanced Video Content Management:

We offer a powerful and feature rich content processing, management and distribution system.

Hundreds of open APIs allow developers unparalleled flexibility to build fully custom use cases and deeply, yet easily, integrate video functionality into their existing workflows and applications.

Over one hundred ecosystem partners are already pre-integrated to Kaltura.

• A Single Platform for All Video Experiences:

Our Platform seamlessly combines real-time, live and on-demand video and manages all content from one place, across experiences and platforms.

This avoids content silos and unnecessary complexities and costs, and enables vendor-consolidation, economies-of-scale, and an increased return-on-investment.

Unified in-depth analytics across products and use-cases provides a holistic view of video usage and user journeys and helps boost engagement.

• Heightened Engagement, Interactivity, and Personalization:

We offer applications, sites and management consoles that are fully branded, engaging, interactive, personalized, and easy to use, and that include powerful features for both end-user and service managers.

• Built for Enterprise:

Our platform is built from the ground-up as a mission-critical platform for large enterprises, offering high availability, scalability, accessibility, security and data protection.

Market Recognition of Kaltura

In 2022, we were recognized as a Representative Vendor in the 2022 Gartner Market Guide for Event Technology Platforms, and the 2022 Gartner Market Guide for Meeting Solutions.

In 2021, we were recognized as a Visionary in the 2021 Gartner® Magic Quadrant™ for Meeting Solutions, and we ranked 4th in the ‘External Presentation’ (4.44/5) Use Case, and 5th in the ‘Learning and Training’ (4.32/5), and ‘Webinar’ (4.16/5) Use Cases in the Gartner 2021 Critical Capabilities for Meeting Solutions Report.

(1) We were also recognized as a Representative Vendor in the 2020 Gartner Market Guide for Enterprise Video Content Management.

(1) We have been included in Gartner research reports on this since 2013, where we were listed as a Leader for 5 consecutive times in the Magic Quadrant for Enterprise Video Content Management report and ranked highest in all Use Cases in the last-published Critical Capabilities for Enterprise Video Content Management report.

(1) Gartner discontinued publication of this Magic Quadrant for Enterprise Video Content Management report in 2018 and of the correlating Critical Capabilities report in 2019.

We have also received customer recognition.

As of January 30, 2023, we ranked 4.5/5 out of 61 reviews for Meeting Solutions and 4.6/5 out of 27 reviews for Enterprise Video Content Management by customers on Gartner® Peer Insights TM .

In November 2022, we were recognized as a Notable Vendor in The Forrester B2B Event Management Technology Landscape, Q4 2022.

In March 2021, we were also cited as a Strong Performer in The Forrester Wave™:

B2B Marketing Events Management Solutions, Q1 2021.

The Gartner content described herein, (the "Gartner Content") represent(s) research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc.

("Gartner"), and are not representations of fact.

Gartner Content speaks as of its original publication date (and not as of the date of this Form 10-K) and the opinions expressed in the Gartner Content are subject to change without notice.

(1) Gartner's Magic Quadrant and Critical Capabilities references are provided for historical purposes only and do not reflect current market recognition.

As of December 31, 2022, we served over 1,000 customers, including several of the world’s leading brands across multiple industries, including financial services, high technology, healthcare, education, public sector, media and telecommunications.

We serve 30 of the U.S.

Fortune 100, and more than 50% of the top U.S.

research universities (R1 Research Institutions).

Additionally, our solutions power 27 major global TV initiatives.

Most of our top customers leverage several Kaltura products for a range of use cases across their organization.

Our customers are global, spanning 51 countries, and during the year ended December 31, 2022, our technology reached end users in over 200 countries.

For the year ended December 31, 2022, approximately 38% of our revenue was generated from customers in the Americas, 34% from customers in EMEA and 7% from customers in APAC.

We have sold our products to customers of all sizes, selling to large global enterprises as well as more recently to small and medium enterprises ("SMEs").

As of December 31, 2022, our customer base included 303 customers with annualized recurring revenue ("ARR") greater than $100,000 and 21 customers with ARR greater than $1.0 million, compared to December 31, 2019, when we had 209 customers with over $100,000 ARR and 6 customers with over $1.0 million ARR.

Growth Strategies

We intend to drive significant growth by executing on the following

key strategies:

Acquire New Customers:

We believe we have a significant opportunity to

expand our presence with Fortune Global 2000 companies and other global enterprises.

We are in the process of increasing our investment

in sales and marketing to capitalize on our significant market opportunity and on the strong sales efficiency unit economics that we have

demonstrated.

We are growing our base of field sales representatives and customer success managers, which we believe will drive both geographic

and vertical expansion.

Additionally, we are investing for the first time in inside sales, self-serve offerings, and distribution channels.

We believe this will enable us to expand our presence across all industries – beyond enterprises into SMEs, beyond universities

into K-12 schools, beyond tier 1 media and telecom companies to tier 2 and 3 media and telecom companies, and beyond providing Media Services

to large technology companies to also addressing smaller technology firms and startups.

Extend Product Leadership:

We believe our platform is ideally suited for

expansion across products, solutions, industries, and use cases.

We will continue to invest in new technologies and harness existing ones.

We intend to continue to invest in our solutions across multiple dimensions:

What changed 10-K

Item 1. Business