What changed in this filing

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Item 1. Business

2024-02-22 compared with 2023-02-24 · 82 added, 48 removed, 205 unchanged (39% of the section changed)

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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.

Moreover, generative AI enables real-time, automatic production of highly personalized and contextually-relevant content, including video and rich media, that we believe would materially boost the creation, consumption, and business impact of video experiences.

With the expected growth in rich content in organizations, the potential need for content management solutions and advanced digital experiences is expected to grow.

Kaltura's Video Experience Cloud includes products that power digital experiences such as virtual and hybrid events, webinars, online learning, and content portals for large enterprises and small and medium enterprises (SMEs), across all industries, including technology, financial services, healthcare and pharma, IT & professional services, retail and manufacturing.

In 2023, we broadened our suite of offerings for marketers, successfully attracting new clients and stakeholders across Marketing Technology (MarTech), Field Marketing, and Chief Marketing Officer (CMO) groups.

Our platform also includes industry-specific 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 media workflows, integrations, 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.

Since then, the capabilities of our event and webinar platform that incorporates our virtual meeting rooms have also been recognized by those same analysts.

These newer products now incorporate our full stack of on-demand, live and RTC technology, designed to provide our customers with the utmost level of flexibility and variety when crafting their digital experiences.

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.

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 digital 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 2020 and most of 2021 there was increased demand for video services due to the COVID pandemic across enterprises and in the education sector, which led to further acceleration of our year-on-year revenue growth.

Beginning in the fourth quarter of 2021, revenue growth has decreased, which we attribute to the post-COVID return to offices and university campuses, and subsequently to the economic slowdown and financial markets instability that resulted from the increase in inflation and interest rates, and geopolitical unrest.

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.

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The 2022 Restructuring Plan was substantially completed in 2022.

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.

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, to realign our operations, with a goal of increasing efficiency and productivity, in reaction to the macro-economic climate, 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 our return path to profitability.

The 2023 Reorganization Plan was substantially completed in 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

We foresee great potential and growth opportunities for rich media digital 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 and technology to maintain and improve our market position.

Key Industry Trends

The nature of video consumption has transformed in recent years.

Several major trends have played a role in this evolution:

We have observed the following trends playing a role in this evolution:

• 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.

The need for high-quality remote and hybrid digital experiences has become increasingly important with the recent trend towards reduced business travel to address companies' budgetary constraints and commitments to climate change and reduction in carbon footprint.

• 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 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.

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

The core of these experiences is video, with growing interest in in-depth engagement analytics.

• Growing Importance of Employer Branding :

Companies are increasingly promoting their brand both externally, for customer and prospect marketing, and internally, for employee recruitment and retention.

Communications by marketing to external audiences and internal company human resource and executive communications are getting closer in term of their needs, as companies are increasingly looking for the same level of experience for both audiences.

• Focus on First Party Data :

Marketers increasingly are relying on user consent and first party data to target their audiences, given, among other things, recent changes to privacy and data regulations that disincentive usage of third-party data.

This shifts the focus to creators of digital experiences, which are key drivers of first party data, to raise the quantity and quality of the experience, as well as the breadth and depth of the data that is derived from interactions.

• Rise of Over-The-Top (OTT) Video :

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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.

• Move from growth to profitability:

In the current unstable economic climate, we have seen a noticeable shift towards businesses streamlining operations and maximizing value by consolidating vendors.

This trend is largely motivated by the need for organizations to reduce complexity, manage costs more effectively, and enhance operational efficiency.

Companies are increasingly looking for versatile solutions that can cover multiple digital transformation needs - such as virtual events, corporate communications, and live streaming - within a single platform.

This approach not only simplifies vendor management but also provides a more integrated and cohesive strategy for leveraging technology.

By prioritizing partnerships with vendors capable of delivering comprehensive solutions, businesses can achieve greater agility, improved cost efficiencies, and a stronger competitive edge in the digital marketplace.

• Generative Artificial Intelligence on the Rise:

The technology revolution around generative AI has introduced a slew of ways to automate workflows, increase productivity and save costs across every department and industry.

With the expected growth in rich content in organizations, the potential need for content management solutions and advanced digital experiences is expected to grow.

Generative AI is especially popular in the world of marketing technology, and we are seeing growing interest in built-in AI capabilities for marketers to leverage in a wide range of use cases across the creation and execution of video-based digital experiences.

Challenges That Organizations Who Want to Use Video Currently Face

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• 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.

Many organizations are working with multiple 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.

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• 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.

Currently, most common systems still offer unified passive viewing experiences that are not optimized or personalized for 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.

Video is a demanding data type, and solutions that were not designed from the ground up to support the specific needs of video capture, creation, preparation, repurposing, 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.

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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.

Over one hundred ecosystem partners are already integrated with 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.

Our Platform seamlessly combines real-time, live and on-demand video and manages all content from one place, across experiences, use-cases and platforms, from webinars and events to online learning and content management.

This avoids content silos and unnecessary complexities and costs, and enables vendor consolidation across CIO, CMO and training departments, 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.

We offer applications, sites and management consoles that are fully branded, engaging, interactive, personalized, and easy to use.

These create a holistic digital experience, leveraging content and video capabilities alongside audience interactions.

Kaltura provides powerful capabilities for both end-user and experience managers, including recent additions, such as the AI assistant for Events and Webinars, that leverage session data to suggest real-time actions that event managers and moderators can take.

• Built for Enterprise:

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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 2023, we were recognized as a Representative Vendor in the 2023 Gartner Market Guide for Event Technology Platforms, the 2023 Gartner Market Guide for Meeting Solutions, and the Market Finder and Use Case Guide for Meetings and Virtual Events.

In 2022, we were recognized as a Visionary in the 2022 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.

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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 .

As of January 30, 2024, we received a rating of 4.8/5 from 4 reviews for Event Technology Platforms, and 4.5/5 from 62 reviews for Meeting Solutions and 4.6/5 from 27 reviews for Enterprise Video Content Management by customers on Gartner® Peer Insights TM .

In March 2023, we were recognized as a Contender in The Forrester Wave™:

B2B Event Management Technology, Q1 2023 .

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

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(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.

As of December 31, 2023, we served approximately 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 28 of the U.S.

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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.

Our customers are global, spanning 54 countries, and during the year ended December 31, 2023, our technology reached end users in over approximately 200 countries.

For the year ended December 31, 2023, approximately 56% of our revenue was generated from customers in the Americas, 38% from customers in EMEA and 6% 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.

We have sold our products to customers of all sizes, selling to large global enterprises as well as more recently to SMEs.

As of December 31, 2023, our customer base included 301 customers with annualized recurring revenue ("ARR") greater than $100,000 and 26 customers with ARR greater than $1.0 million.

Growth Strategies

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• Grow Our Existing Customers :

Most of our customers use multiple Kaltura products, and many do so across multiple use-cases.

We plan to sell more to our existing customers by providing them more products (existing and new) and addressing additional use cases.

We also expect to see an increase in their usage of our products, by way of more video creation and consumption and more end-users.

Most of our customers use multiple Kaltura products, and many do so across multiple use-cases and buyers.

We plan to sell more to our existing customers by providing them more products and capabilities (existing and new) and addressing additional use cases.

For example, in 2023 we continued expanding our customers' use-cases from internal in-house use for their employees (e.g.

employee training and communication), to also external (e.g.

customer and prospect marketing, and partner training).

We expect to see continued increase in usage of our products, by way of more video creation and consumption and more end-users.

For the years ended December 31, 2023 and 2022, our Net Dollar Retention Rate (as defined below in Part II, Item 7.

"Management's Discussion and Analysis of Financial Condition and Results of Operations") was 100% and 118%, respectively.

"Management's Discussion and Analysis of Financial Condition and Results of Operations") was 100%.

• Secure New Customers Within our Current Markets:

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• Expand our Product Offering for our Existing Markets :

Our flexible and extendable platform facilitates a continuous expansion of our product portfolio to include more enterprise video products, and additional industry-solutions for the Education and Media & Telecom markets.

Our flexible and extendable platform facilitates a continuous expansion of our product portfolio to include more advanced capabilities and use cases, and additional industry-solutions.

For example, since 2020, we have introduced Webinars, Online Learning, and Hybrid and Virtual Events products, and a set of new Cloud TV applications for viewers using TVs, PCs, tablets, and mobile devices.

• Expand into New Markets:

We are expanding down market from large enterprises to also power SMEs through making our products more self-operated, and advancing our inside-sales and self-serve marketing, sales, and operations practices.

We are expanding down market from large enterprises to also power SMEs through making our products more self-operated, and advancing our inside-sales marketing, sales, and operations practices.

We also plan to expand in the future into new markets by introducing new industry solutions, for example for the financial services and healthcare markets.

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Additionally, we intend to continue to explore potential M&A transactions that could enhance our capabilities, increase our market share in markets we already operate in, or open up new markets.

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

Kaltura's Video Experience Cloud includes products that power virtual and hybrid events, webinars, online learning, and video portals for companies across all industries, including technology, financial services, healthcare and pharma, IT and professional services, retail and manufacturing.

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

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• Media Services :

Hundreds of media services APIs for live, on-demand and real time video, offering ingestion, transcoding, enrichment, management, distribution, engagement, monetization, and deep view analytics amongst many other capabilities.

• Experience Components:

Complete experiences ready to be embedded in any application.

This includes our video player, video editor, video capture tool, chat and networking widgets and our software development kits (SDKs) for mobile applications and smart TVs.

This includes our video player, video editor, video capture tool, and chat and networking widgets.

Our business has been driven by constant innovation, anticipating trends ahead of other participants in the market.

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Our ability to be a leader in our target markets and rapidly introduce new applications depends on the constant expansion of our APIs, and the development of new products and industry solutions that rely on them.

Our unique technology enables very large scale interactive video applications at a high level of reliability, performance, scale and security.

Our cloud platform was specifically designed to address the entire lifecycle of media (including video on demand, live video and real-time video, as well as images and audio files), how users interact with media online and the business models that support content monetization.

Our unique technology enables very large scale interactive video applications at a high level of reliability, performance, accessibility, scale and security.

Our cloud platform was specifically designed to address the entire lifecycle of media, how users interact with media online and the business models that support content monetization.

With new AI technologies available we plan to further expand our offering to include capabilities such as content enrichment and content repurposing.

Kaltura's platform natively supports live broadcast, real-time communications, and VOD playback.

The platform also addresses other media types such as audio files (e.g., podcasts) and images including PDFs.

The platform provides a complete digital experience within the site, built on the content management capabilities, that connects these different experiences and creates workflows and cohesive, engaging experiences for end users.

The platform's flexibility and robustness enables creation of highly customized experiences at scale.

With AI assistant, we are able support users with automated advanced workflows that leverage real-time platform analytics.

Our technology and platform are infrastructure agnostic, allowing us to also offer managed, hybrid, private and air-gapped deployment options.

While the great majority of our customers are hosted on our public Software-as-a-Service ("SaaS") offering, some customers are hosted on separate and dedicated private cloud environments that are also managed by us.

In our operations, we receive, collect, store, process, transfer, share and otherwise use or host personal information and other sensitive information about individuals and other data relating to users of our offerings, our employees and contractors, and other persons.

As a result, we are subject to various data privacy and data protection laws, which are rapidly evolving and present increasing compliance challenges.

For more information regarding the applicable legal framework and risks related to data privacy, see Part I, Item 1A.

“Risk Factors—Risks Related to Information Technology, Intellectual Property and Data Privacy and Security.”

Partner Ecosystem

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• corporate culture.

Recent trends towards consolidation within the industry may result in our competitors achieving greater capabilities in some or all of these areas.

Sales & Marketing

We sell our video portal, virtual and hybrid events, webinars, and online learning products to any organization, including companies in any industry, governments and non-profits.

We sell products for virtual and hybrid events, webinars, online learning, and content portals for large enterprises and small and medium enterprises (SMEs), across all industries, including technology, financial services, healthcare and pharma, IT and professional services, retail and manufacturing, and more.

These products are typically bought by CTOs, CIOs, and heads of Learning and Development when used for internal events, communication and collaboration, training and learning.

CMOs are typically the buyers for marketing and external events.

CMOs are typically the buyers for marketing programs, such as webinars and external events.

We also sell specialized video industry solutions.

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We also leverage digital campaigns and make free trials available for many of our products to drive engagement and conversion.

Intellectual Property

Intellectual Property and Data Privacy

Intellectual property is an important aspect of our business and we seek protection for our intellectual property rights as appropriate.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business