Kaltura, Inc. (KLTR) Bundle
Understanding Kaltura, Inc. (KLTR) Revenue Streams
Understanding Kaltura, Inc.’s Revenue Streams
Primary Revenue Sources:
- SaaS and PaaS subscriptions
- Professional services
Revenue Breakdown:
| Segment | Subscription Revenue (2024) | Professional Services Revenue (2024) | Total Revenue (2024) | Total Revenue (2023) | Percentage Change |
|---|---|---|---|---|---|
| Enterprise, Education & Technology | $91,920 | $3,826 | $95,746 | $93,583 | 2% |
| Media & Telecom | $32,347 | $5,015 | $37,362 | $37,111 | 1% |
| Total | $124,267 | $8,841 | $133,108 | $130,694 | 2% |
Year-over-Year Revenue Growth Rate:
- 2024 Total Revenue: $133,108
- 2023 Total Revenue: $130,694
- Percentage Increase: 2%
Contribution of Different Business Segments:
- Enterprise, Education & Technology contributed 72.9% of total revenue.
- Media & Telecom contributed 27.1% of total revenue.
Significant Changes in Revenue Streams:
- Enterprise, Education & Technology subscription revenue increased by $1,745 (2%) compared to 2023.
- Media & Telecom subscription revenue saw a slight increase of $560 (2%), with professional services revenue decreasing by $309 (6%).
Recent Revenue Performance:
| Period | Enterprise, Education & Technology Revenue | Media & Telecom Revenue | Total Revenue |
|---|---|---|---|
| Q3 2024 | $32,341 | $11,954 | $44,295 |
| Q3 2023 | $31,095 | $12,447 | $43,542 |
| Change | $1,246 | ($493) | $753 |
Summary of Revenue Changes for 2024:
- Total revenue increased by $2,414 (2%) year-over-year.
- Cost of revenue decreased by $824 (2%) to $46,283.
- Gross profit increased to $86,825, a 4% increase from $83,587.
A Deep Dive into Kaltura, Inc. (KLTR) Profitability
Profitability Metrics
Gross Profit: For the nine months ended September 30, 2024, the total gross profit was $86,825 thousand, up from $83,587 thousand for the same period in 2023. This represents an increase of 4%.
Operating Profit: The operating loss for the nine months ended September 30, 2024, was $20,306 thousand, compared to an operating loss of $29,836 thousand for the same period in 2023, marking a 32% improvement.
Net Profit Margin: The net loss for the nine months ended September 30, 2024, was $24,710 thousand, improving from $34,299 thousand for the same period in 2023, representing a 28% reduction in net loss.
Trends in Profitability Over Time
Over the past year, the company's gross profit margin has shown slight improvement. The gross margins for the nine months ended September 30, 2024, were 65% compared to 64% for the same period in 2023. This indicates a trend towards better cost management and increased revenue from subscriptions.
Comparison of Profitability Ratios with Industry Averages
Industry averages for gross margins in the SaaS sector typically range from 70% to 80%. The company's gross margin of 65% indicates that while it is below the industry average, it is improving and trending positively.
Analysis of Operational Efficiency
The operating expenses for the nine months ended September 30, 2024, totaled $107,131 thousand, down from $113,423 thousand in 2023, reflecting a 6% reduction. The breakdown of operating expenses is as follows:
| Expense Type | 2024 (thousands) | 2023 (thousands) | Change ($ thousands) |
|---|---|---|---|
| Research and Development | 36,460 | 39,663 | (3,203) |
| Sales and Marketing | 35,421 | 36,489 | (1,068) |
| General and Administrative | 35,250 | 36,298 | (1,048) |
| Total Operating Expenses | 107,131 | 113,423 | (6,292) |
Operational efficiency has improved with the reduction in operating expenses contributing to a decrease in the net loss margin. The company has also been focusing on improving gross margins through better management of production costs.
Net Dollar Retention Rate: The company's Net Dollar Retention Rate remained stable at 101% for the three months ended September 30, 2024, indicating effective customer retention and expansion strategies.
Annualized Recurring Revenue Growth: The Annualized Recurring Revenue grew by 4% for the three months ended September 30, 2024, compared to the same period in 2023, reflecting successful customer acquisition and upselling efforts.
Debt vs. Equity: How Kaltura, Inc. (KLTR) Finances Its Growth
Debt vs. Equity: How Kaltura, Inc. Finances Its Growth
Debt Levels: As of September 30, 2024, Kaltura, Inc. reported a total long-term debt of $33.3 million under its Term Loan Facility, with no outstanding balance under its Revolving Credit Facility of $25 million. The company utilized its borrowing capacity to finance operations and growth initiatives.
Debt-to-Equity Ratio: The debt-to-equity ratio stands at approximately 1.38 for the period ending September 30, 2024, calculated from total liabilities of $178.6 million and total stockholders' equity of $24.1 million. This ratio indicates a reliance on debt financing compared to equity financing, which is higher than the industry average of 0.75.
Recent Debt Issuances: In December 2023, Kaltura amended its Credit Agreement, which included a new term loan facility for $35 million. This was part of a broader strategy to manage its financing structure effectively.
Credit Ratings: The company has not publicly disclosed specific credit ratings as of the last reporting period; however, the conditions of its credit agreements suggest a moderate risk profile.
Refinancing Activity: Kaltura previously refinanced its debt agreements in January 2021 and made amendments in May 2023 to adjust interest rate benchmarks from LIBOR to SOFR. This indicates a proactive approach to managing interest costs and optimizing its debt structure.
Balancing Debt and Equity Funding: Kaltura maintains a strategy of balancing its debt and equity funding to support growth while managing financial risk. The company repurchased 1.7 million shares at an average price of $1.24 during the three months ended September 30, 2024. This reflects a commitment to enhancing shareholder value while leveraging debt financing for operational needs.
| Category | Amount (in millions) |
|---|---|
| Total Long-term Debt | $33.3 |
| Total Short-term Debt | $0.0 |
| Total Liabilities | $178.6 |
| Total Stockholders' Equity | $24.1 |
| Debt-to-Equity Ratio | 1.38 |
| Revolving Credit Facility | $25.0 |
| Repurchased Shares (Q3 2024) | 1.7 million |
| Average Repurchase Price | $1.24 |
Assessing Kaltura, Inc. (KLTR) Liquidity
Assessing Kaltura, Inc.'s Liquidity
Current Ratio: As of September 30, 2024, the current ratio is 1.26, calculated from current assets of $132,350 and current liabilities of $106,123.
Quick Ratio: The quick ratio stands at 0.95, derived from liquid assets (cash and cash equivalents) of $36,940 divided by current liabilities of $106,123.
Analysis of Working Capital Trends
The working capital as of September 30, 2024, is $26,227, indicating a positive trend compared to $21,441 in the previous year. This growth signifies improved short-term financial health.
| Period | Current Assets ($) | Current Liabilities ($) | Working Capital ($) |
|---|---|---|---|
| September 30, 2024 | 132,350 | 106,123 | 26,227 |
| September 30, 2023 | 125,000 | 99,909 | 25,091 |
Cash Flow Statements Overview
Operating Cash Flow: For the nine months ended September 30, 2024, net cash provided by operating activities was $7,920, a significant improvement from $(9,904) in the same period of 2023.
Investing Cash Flow: Cash used in investing activities was $(4,184), compared to $1,081 in the prior year, primarily due to increased investments in marketable securities.
Financing Cash Flow: Cash used in financing activities totaled $(3,865), reflecting repayments of long-term loans and stock repurchases.
| Cash Flow Type | 2024 ($) | 2023 ($) |
|---|---|---|
| Operating Activities | 7,920 | (9,904) |
| Investing Activities | (4,184) | 1,081 |
| Financing Activities | (3,865) | (3,276) |
Potential Liquidity Concerns or Strengths
Despite the overall positive liquidity position, there are risks associated with reliance on external financing. The company has a Term Loan Facility of $40,000 and a Revolving Credit Facility of $10,000, which may impact future cash flows due to interest obligations and principal repayments.
As of September 30, 2024, the company met all covenants under the credit facilities, reflecting a stable financial position. However, the potential for adverse market conditions could affect liquidity if capital markets tighten or operational cash flow does not improve.
Is Kaltura, Inc. (KLTR) Overvalued or Undervalued?
Valuation Analysis
The valuation of a company is crucial for investors to determine whether it is overvalued or undervalued. Key metrics used in this analysis include the price-to-earnings (P/E) ratio, price-to-book (P/B) ratio, and enterprise value-to-EBITDA (EV/EBITDA) ratio.
Price-to-Earnings (P/E) Ratio
As of the latest financial reports, the P/E ratio is calculated based on the net loss per share. For the nine months ended September 30, 2024, the net loss per share attributable to common stockholders was $0.17. Given the stock price of $1.24 as of September 30, 2024, the P/E ratio is negative, indicating a loss rather than earnings.
Price-to-Book (P/B) Ratio
The P/B ratio is determined by dividing the market price per share by the book value per share. As of September 30, 2024, the total stockholders' equity was $24,141. With 149,646,001 shares outstanding, the book value per share is approximately $0.16. Thus, the P/B ratio is approximately 7.75 (calculated as $1.24 / $0.16), suggesting the stock may be overvalued compared to its book value.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
For the nine months ended September 30, 2024, the EBITDA was reported as $4,615. To calculate enterprise value, we consider the market capitalization, total debt, and cash. The total debt as of September 30, 2024, was approximately $35,000, and cash was about $30,320. Therefore, the enterprise value is calculated as follows:
- Market Capitalization = Stock Price Shares Outstanding = $1.24 149,646,001 ≈ $186,000
- Enterprise Value = Market Capitalization + Total Debt - Cash = $186,000 + 35,000 - 30,320 ≈ $190,680
- EV/EBITDA = $190,680 / $4,615 ≈ 41.29
This high EV/EBITDA ratio may indicate that the company is overvalued compared to its earnings before interest, taxes, depreciation, and amortization.
Stock Price Trends
Over the last 12 months, the stock price has fluctuated. The stock opened at approximately $6.00 in late 2023 and has seen a decline to $1.24 as of September 30, 2024, reflecting a significant downward trend.
Dividend Yield and Payout Ratios
Currently, there are no dividends paid, and thus the dividend yield is 0%. The payout ratio remains 0% as well, due to the absence of any dividend distribution.
Analyst Consensus
Analyst consensus indicates a mixed view on the stock valuation, with several analysts rating it as a hold, while some suggest a sell due to the ongoing losses and high valuation ratios.
| Metric | Value |
|---|---|
| P/E Ratio | Negative (due to net loss) |
| P/B Ratio | 7.75 |
| EV/EBITDA Ratio | 41.29 |
| Stock Price (as of Sep 30, 2024) | $1.24 |
| Dividend Yield | 0% |
| Analyst Consensus | Hold/Sell |
Key Risks Facing Kaltura, Inc. (KLTR)
Key Risks Facing Kaltura, Inc.
The financial health of Kaltura, Inc. is influenced by various internal and external risk factors. Below is an overview of these key risks:
Industry Competition
The competitive landscape in the video technology sector is intensifying. Key competitors include major players such as Adobe, Brightcove, and Vimeo, which could pressure market share and pricing strategies.
Regulatory Changes
Changes in data protection regulations, such as GDPR and CCPA, may impose additional compliance costs. These regulations can impact operational flexibility and increase legal risks.
Market Conditions
Fluctuations in market demand for video platforms can significantly affect revenue. Economic downturns can lead to reduced spending by enterprise customers, directly impacting sales.
Operational Risks
Operational risks include challenges in maintaining service uptime and the potential for data breaches. The company reported a net loss of $24.7 million for the nine months ended September 30, 2024, compared to a net loss of $34.3 million for the same period in 2023.
Financial Risks
Financial risks are highlighted by the company’s reliance on debt financing. As of September 30, 2024, total liabilities stood at $154.4 million, with a significant portion attributed to a senior secured term loan facility of $35 million.
Strategic Risks
Strategic risks involve the execution of growth initiatives. The company’s ability to innovate and expand its service offerings will be crucial for sustaining competitive advantage. Revenue from the Enterprise, Education, and Technology segment increased by 2% to $95.7 million for the nine months ended September 30, 2024.
Mitigation Strategies
To address these risks, Kaltura has implemented several mitigation strategies. These include enhancing compliance frameworks for regulatory adherence and investing in cybersecurity measures. The company also focuses on diversifying its customer base to reduce dependency on specific market segments.
| Risk Factor | Description | Impact |
|---|---|---|
| Industry Competition | Pressure from competitors | Potential loss of market share |
| Regulatory Changes | Compliance with new data protection laws | Increased operational costs |
| Market Conditions | Fluctuations in demand for video technologies | Revenue volatility |
| Operational Risks | Service uptime and data security | Increased service interruptions |
| Financial Risks | Reliance on debt financing | Interest rate exposure |
| Strategic Risks | Execution of growth initiatives | Failure to innovate |
Future Growth Prospects for Kaltura, Inc. (KLTR)
Future Growth Prospects for Kaltura, Inc.
Key Growth Drivers
The company's growth prospects are underscored by several key drivers:
- Product Innovations: The company has focused on enhancing its platform capabilities, which has led to a reported 4% increase in subscription revenue in the Enterprise, Education, and Technology segment, amounting to $91.9 million for the nine months ended September 30, 2024, up from $90.2 million in the same period of 2023.
- Market Expansions: The company continues to expand its footprint in the U.S. and EMEA markets, generating 54% and 36.5% of total revenue, respectively.
- Strategic Partnerships: Collaborations with key educational institutions and media companies have bolstered service offerings and market penetration.
Future Revenue Growth Projections and Earnings Estimates
Revenue projections indicate steady growth, with total revenue expected to reach $133.1 million for the nine months ended September 30, 2024, a 2% increase from $130.7 million in 2023. Earnings estimates suggest a narrowing of net losses, projected at $24.7 million for the nine months ended September 30, 2024, compared to $34.3 million in the prior year.
Strategic Initiatives
Recent strategic initiatives include:
- Investment in R&D: The company allocated $36.5 million to research and development for the nine months ended September 30, 2024, aiming to innovate and enhance product offerings.
- Cost Management: Operating expenses decreased by 6% to $107.1 million for the same period.
Competitive Advantages
Kaltura maintains several competitive advantages that position it for growth:
- Diverse Revenue Streams: The company's revenue is split between subscription services, which accounted for 96% of the Enterprise, Education, and Technology revenue.
- Strong Brand Recognition: Kaltura is well-regarded in the education and media sectors, facilitating easier customer acquisition and retention.
- Operational Efficiency: The gross profit margin for the three months ended September 30, 2024, was reported at 67%, reflecting improved operational efficiencies.
| Metrics | 2024 (Nine Months) | 2023 (Nine Months) | Change (%) |
|---|---|---|---|
| Total Revenue | $133.1 million | $130.7 million | 2% |
| Net Loss | $24.7 million | $34.3 million | 28% |
| R&D Expenses | $36.5 million | $39.7 million | -6% |
| Gross Profit Margin | 67% | 64% | 3% |
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Updated on 16 Nov 2024
Resources:
- Kaltura, Inc. (KLTR) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Kaltura, Inc. (KLTR)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Kaltura, Inc. (KLTR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.