kltr-20230630
000143213312/312023Q2falsehttp://fasb.org/us-gaap/2023#CostOfRevenuehttp://fasb.org/us-gaap/2023#ResearchAndDevelopmentExpensehttp://fasb.org/us-gaap/2023#SellingAndMarketingExpensehttp://fasb.org/us-gaap/2023#GeneralAndAdministrativeExpensehttp://fasb.org/us-gaap/2023#RestructuringCharges00014321332023-01-012023-06-300001432133us-gaap:CommonStockMember2023-01-012023-06-300001432133us-gaap:PreferredStockMember2023-01-012023-06-3000014321332023-07-25xbrli:shares00014321332023-06-30iso4217:USD00014321332022-12-31iso4217:USDxbrli:shares0001432133kltr:SubscriptionMember2023-04-012023-06-300001432133kltr:SubscriptionMember2022-04-012022-06-300001432133kltr:SubscriptionMember2023-01-012023-06-300001432133kltr:SubscriptionMember2022-01-012022-06-300001432133kltr:ProfessionalServicesMember2023-04-012023-06-300001432133kltr:ProfessionalServicesMember2022-04-012022-06-300001432133kltr:ProfessionalServicesMember2023-01-012023-06-300001432133kltr:ProfessionalServicesMember2022-01-012022-06-3000014321332023-04-012023-06-3000014321332022-04-012022-06-3000014321332022-01-012022-06-300001432133us-gaap:CommonStockMember2023-03-310001432133us-gaap:TreasuryStockCommonMember2023-03-310001432133us-gaap:AdditionalPaidInCapitalMember2023-03-310001432133us-gaap:ComprehensiveIncomeMember2023-03-310001432133us-gaap:RetainedEarningsMember2023-03-3100014321332023-03-310001432133us-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-300001432133us-gaap:CommonStockMember2023-04-012023-06-300001432133us-gaap:ComprehensiveIncomeMember2023-04-012023-06-300001432133us-gaap:RetainedEarningsMember2023-04-012023-06-300001432133us-gaap:CommonStockMember2023-06-300001432133us-gaap:TreasuryStockCommonMember2023-06-300001432133us-gaap:AdditionalPaidInCapitalMember2023-06-300001432133us-gaap:ComprehensiveIncomeMember2023-06-300001432133us-gaap:RetainedEarningsMember2023-06-300001432133us-gaap:CommonStockMember2022-03-310001432133us-gaap:TreasuryStockCommonMember2022-03-310001432133us-gaap:ReceivablesFromStockholderMember2022-03-310001432133us-gaap:ComprehensiveIncomeMember2022-03-310001432133us-gaap:AdditionalPaidInCapitalMember2022-03-310001432133us-gaap:RetainedEarningsMember2022-03-310001432133us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300001432133us-gaap:CommonStockMember2022-04-012022-06-300001432133us-gaap:ComprehensiveIncomeMember2022-04-012022-06-300001432133us-gaap:RetainedEarningsMember2022-04-012022-06-300001432133us-gaap:CommonStockMember2022-06-300001432133us-gaap:TreasuryStockCommonMember2022-06-300001432133us-gaap:AdditionalPaidInCapitalMember2022-06-300001432133us-gaap:ComprehensiveIncomeMember2022-06-300001432133us-gaap:RetainedEarningsMember2022-06-3000014321332022-06-300001432133us-gaap:CommonStockMember2022-12-310001432133us-gaap:TreasuryStockCommonMember2022-12-310001432133us-gaap:AdditionalPaidInCapitalMember2022-12-310001432133us-gaap:ComprehensiveIncomeMember2022-12-310001432133us-gaap:RetainedEarningsMember2022-12-310001432133us-gaap:AdditionalPaidInCapitalMember2023-01-012023-06-300001432133us-gaap:CommonStockMember2023-01-012023-06-300001432133us-gaap:ComprehensiveIncomeMember2023-01-012023-06-300001432133us-gaap:RetainedEarningsMember2023-01-012023-06-300001432133us-gaap:CommonStockMember2021-12-310001432133us-gaap:TreasuryStockCommonMember2021-12-310001432133us-gaap:AdditionalPaidInCapitalMember2021-12-310001432133us-gaap:ComprehensiveIncomeMember2021-12-310001432133us-gaap:RetainedEarningsMember2021-12-3100014321332021-12-310001432133us-gaap:AdditionalPaidInCapitalMember2022-01-012022-06-300001432133us-gaap:CommonStockMember2022-01-012022-06-300001432133us-gaap:ComprehensiveIncomeMember2022-01-012022-06-300001432133us-gaap:RetainedEarningsMember2022-01-012022-06-300001432133kltr:EnterpriseEducationAndTechnologyMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2023-04-012023-06-30xbrli:pure0001432133kltr:EnterpriseEducationAndTechnologyMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2022-04-012022-06-300001432133kltr:EnterpriseEducationAndTechnologyMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2023-01-012023-06-300001432133kltr:EnterpriseEducationAndTechnologyMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2022-01-012022-06-300001432133kltr:EnterpriseEducationAndTechnologyMemberkltr:SubscriptionMemberus-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2023-04-012023-06-300001432133kltr:SubscriptionMemberkltr:MediaAndTelecomMemberus-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2023-04-012023-06-300001432133kltr:EnterpriseEducationAndTechnologyMemberus-gaap:SalesRevenueNetMemberkltr:ProfessionalServicesMemberus-gaap:RevenueFromRightsConcentrationRiskMember2023-04-012023-06-300001432133kltr:MediaAndTelecomMemberus-gaap:SalesRevenueNetMemberkltr:ProfessionalServicesMemberus-gaap:RevenueFromRightsConcentrationRiskMember2023-04-012023-06-300001432133kltr:EnterpriseEducationAndTechnologyMemberus-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2023-04-012023-06-300001432133kltr:MediaAndTelecomMemberus-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2023-04-012023-06-300001432133kltr:EnterpriseEducationAndTechnologyMemberkltr:SubscriptionMemberus-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2022-04-012022-06-300001432133kltr:SubscriptionMemberkltr:MediaAndTelecomMemberus-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2022-04-012022-06-300001432133kltr:EnterpriseEducationAndTechnologyMemberus-gaap:SalesRevenueNetMemberkltr:ProfessionalServicesMemberus-gaap:RevenueFromRightsConcentrationRiskMember2022-04-012022-06-300001432133kltr:MediaAndTelecomMemberus-gaap:SalesRevenueNetMemberkltr:ProfessionalServicesMemberus-gaap:RevenueFromRightsConcentrationRiskMember2022-04-012022-06-300001432133kltr:EnterpriseEducationAndTechnologyMemberus-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2022-04-012022-06-300001432133kltr:MediaAndTelecomMemberus-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2022-04-012022-06-300001432133kltr:EnterpriseEducationAndTechnologyMemberkltr:SubscriptionMemberus-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2023-01-012023-06-300001432133kltr:SubscriptionMemberkltr:MediaAndTelecomMemberus-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2023-01-012023-06-300001432133kltr:EnterpriseEducationAndTechnologyMemberus-gaap:SalesRevenueNetMemberkltr:ProfessionalServicesMemberus-gaap:RevenueFromRightsConcentrationRiskMember2023-01-012023-06-300001432133kltr:MediaAndTelecomMemberus-gaap:SalesRevenueNetMemberkltr:ProfessionalServicesMemberus-gaap:RevenueFromRightsConcentrationRiskMember2023-01-012023-06-300001432133kltr:EnterpriseEducationAndTechnologyMemberus-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2023-01-012023-06-300001432133kltr:MediaAndTelecomMemberus-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2023-01-012023-06-300001432133kltr:EnterpriseEducationAndTechnologyMemberkltr:SubscriptionMemberus-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2022-01-012022-06-300001432133kltr:SubscriptionMemberkltr:MediaAndTelecomMemberus-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2022-01-012022-06-300001432133kltr:EnterpriseEducationAndTechnologyMemberus-gaap:SalesRevenueNetMemberkltr:ProfessionalServicesMemberus-gaap:RevenueFromRightsConcentrationRiskMember2022-01-012022-06-300001432133kltr:MediaAndTelecomMemberus-gaap:SalesRevenueNetMemberkltr:ProfessionalServicesMemberus-gaap:RevenueFromRightsConcentrationRiskMember2022-01-012022-06-300001432133kltr:EnterpriseEducationAndTechnologyMemberus-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2022-01-012022-06-300001432133kltr:MediaAndTelecomMemberus-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2022-01-012022-06-300001432133country:USus-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2023-04-012023-06-300001432133country:USus-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2022-04-012022-06-300001432133us-gaap:EMEAMemberus-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2023-04-012023-06-300001432133us-gaap:EMEAMemberus-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2022-04-012022-06-300001432133kltr:OtherCountriesMemberus-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2023-04-012023-06-300001432133kltr:OtherCountriesMemberus-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2022-04-012022-06-300001432133us-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2023-04-012023-06-300001432133us-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2022-04-012022-06-300001432133country:USus-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2023-01-012023-06-300001432133country:USus-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2022-01-012022-06-300001432133us-gaap:EMEAMemberus-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2023-01-012023-06-300001432133us-gaap:EMEAMemberus-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2022-01-012022-06-300001432133kltr:OtherCountriesMemberus-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2023-01-012023-06-300001432133kltr:OtherCountriesMemberus-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2022-01-012022-06-300001432133us-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2023-01-012023-06-300001432133us-gaap:SalesRevenueNetMemberus-gaap:RevenueFromRightsConcentrationRiskMember2022-01-012022-06-300001432133us-gaap:BilledRevenuesMember2023-06-300001432133us-gaap:UnbilledRevenuesMember2023-06-300001432133us-gaap:SubsequentEventMemberus-gaap:UnbilledRevenuesMember2023-07-190001432133kltr:CostsToObtainContractMember2023-03-310001432133kltr:CostsToObtainContractMember2022-03-310001432133kltr:CostsToObtainContractMember2022-12-310001432133kltr:CostsToObtainContractMember2021-12-310001432133kltr:CostsToObtainContractMember2023-04-012023-06-300001432133kltr:CostsToObtainContractMember2022-04-012022-06-300001432133kltr:CostsToObtainContractMember2023-01-012023-06-300001432133kltr:CostsToObtainContractMember2022-01-012022-06-300001432133kltr:CostsToObtainContractMember2023-06-300001432133kltr:CostsToObtainContractMember2022-06-300001432133kltr:CostsToFulfillContractMember2023-03-310001432133kltr:CostsToFulfillContractMember2022-03-310001432133kltr:CostsToFulfillContractMember2022-12-310001432133kltr:CostsToFulfillContractMember2021-12-310001432133kltr:CostsToFulfillContractMember2023-04-012023-06-300001432133kltr:CostsToFulfillContractMember2022-04-012022-06-300001432133kltr:CostsToFulfillContractMember2023-01-012023-06-300001432133kltr:CostsToFulfillContractMember2022-01-012022-06-300001432133kltr:CostsToFulfillContractMember2023-06-300001432133kltr:CostsToFulfillContractMember2022-06-300001432133us-gaap:CorporateBondSecuritiesMember2023-06-300001432133us-gaap:MunicipalNotesMember2023-06-300001432133us-gaap:USTreasurySecuritiesMember2023-06-300001432133us-gaap:CommercialPaperMember2023-06-300001432133us-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-06-300001432133us-gaap:CorporateBondSecuritiesMember2022-12-310001432133us-gaap:MunicipalNotesMember2022-12-310001432133us-gaap:USTreasurySecuritiesMember2022-12-310001432133us-gaap:CommercialPaperMember2022-12-310001432133us-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-12-310001432133us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-06-300001432133us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001432133us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2023-06-300001432133us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2022-12-310001432133us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-06-300001432133us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001432133us-gaap:MunicipalNotesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-06-300001432133us-gaap:MunicipalNotesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001432133us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-06-300001432133us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001432133us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2023-06-300001432133us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2022-12-310001432133us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-06-300001432133us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001432133us-gaap:FairValueInputsLevel2Memberus-gaap:DepositsMemberus-gaap:FairValueMeasurementsRecurringMember2023-06-300001432133us-gaap:FairValueInputsLevel2Memberus-gaap:DepositsMemberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001432133us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-06-300001432133us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-12-310001432133us-gaap:CostOfSalesMember2023-01-012023-06-300001432133us-gaap:CostOfSalesMember2023-04-012023-06-300001432133us-gaap:CostOfSalesMember2022-04-012022-06-300001432133us-gaap:CostOfSalesMember2022-01-012022-06-300001432133us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-06-300001432133us-gaap:ResearchAndDevelopmentExpenseMember2023-04-012023-06-300001432133us-gaap:ResearchAndDevelopmentExpenseMember2022-04-012022-06-300001432133us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-06-300001432133us-gaap:SellingAndMarketingExpenseMember2023-01-012023-06-300001432133us-gaap:SellingAndMarketingExpenseMember2023-04-012023-06-300001432133us-gaap:SellingAndMarketingExpenseMember2022-04-012022-06-300001432133us-gaap:SellingAndMarketingExpenseMember2022-01-012022-06-300001432133us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-06-300001432133us-gaap:GeneralAndAdministrativeExpenseMember2023-04-012023-06-300001432133us-gaap:GeneralAndAdministrativeExpenseMember2022-04-012022-06-300001432133us-gaap:GeneralAndAdministrativeExpenseMember2022-01-012022-06-300001432133us-gaap:RestructuringChargesMember2023-01-012023-06-300001432133us-gaap:RestructuringChargesMember2023-04-012023-06-300001432133us-gaap:RestructuringChargesMember2022-04-012022-06-300001432133us-gaap:RestructuringChargesMember2022-01-012022-06-300001432133us-gaap:SubsequentEventMember2023-07-170001432133us-gaap:ComputerEquipmentMember2023-06-300001432133us-gaap:ComputerEquipmentMember2022-12-310001432133us-gaap:FurnitureAndFixturesMember2023-06-300001432133us-gaap:FurnitureAndFixturesMember2022-12-310001432133us-gaap:LeaseholdImprovementsMember2023-06-300001432133us-gaap:LeaseholdImprovementsMember2022-12-310001432133us-gaap:LeaseholdsAndLeaseholdImprovementsMember2023-06-300001432133us-gaap:LeaseholdsAndLeaseholdImprovementsMember2022-12-310001432133us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2023-06-300001432133us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2022-12-310001432133us-gaap:TechnologyBasedIntangibleAssetsMember2023-01-012023-06-300001432133us-gaap:TechnologyBasedIntangibleAssetsMember2023-06-300001432133us-gaap:TechnologyBasedIntangibleAssetsMember2022-12-310001432133us-gaap:CustomerRelationshipsMember2023-01-012023-06-300001432133us-gaap:CustomerRelationshipsMember2023-06-300001432133us-gaap:CustomerRelationshipsMember2022-12-310001432133us-gaap:TrademarksMember2023-01-012023-06-300001432133us-gaap:TrademarksMember2023-06-300001432133us-gaap:TrademarksMember2022-12-310001432133us-gaap:RedeemableConvertiblePreferredStockMember2023-04-012023-06-300001432133us-gaap:RedeemableConvertiblePreferredStockMember2022-04-012022-06-300001432133us-gaap:StockCompensationPlanMember2023-04-012023-06-300001432133us-gaap:StockCompensationPlanMember2022-04-012022-06-300001432133kltr:EnterpriseEducationAndTechnologyMember2023-04-012023-06-300001432133kltr:MediaAndTelecomMember2023-04-012023-06-300001432133kltr:EnterpriseEducationAndTechnologyMember2022-04-012022-06-300001432133kltr:MediaAndTelecomMember2022-04-012022-06-300001432133kltr:EnterpriseEducationAndTechnologyMember2023-01-012023-06-300001432133kltr:MediaAndTelecomMember2023-01-012023-06-300001432133kltr:EnterpriseEducationAndTechnologyMember2022-01-012022-06-300001432133kltr:MediaAndTelecomMember2022-01-012022-06-300001432133kltr:NewSeniorSecuredTermLoanFacilityMember2023-06-300001432133kltr:NewSeniorSecuredRevolvingCreditFacilityMember2023-06-300001432133kltr:CreditAdjustmentSpreadMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2023-06-300001432133us-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMemberkltr:InterestMarginMember2023-06-300001432133us-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2023-01-012023-06-300001432133kltr:AlternateBaseRateMember2023-01-012023-06-300001432133kltr:FederalFundsEffectiveRateMember2023-01-012023-06-300001432133kltr:OnApril012021ThroughDecember312021Member2023-01-012023-06-300001432133kltr:OnMarch312022ThroughDecember312022Member2023-01-012023-06-300001432133kltr:OnAndAfterMarch312023Member2023-01-012023-06-3000014321332022-01-012022-01-0100014321332023-01-012023-03-310001432133kltr:A2021PlanMember2023-06-300001432133us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2022-12-310001432133us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-12-310001432133us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-01-012023-06-300001432133us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-01-012023-06-300001432133us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-06-300001432133us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-06-300001432133us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2021-12-310001432133us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-12-310001432133us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2022-01-012022-06-300001432133us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-01-012022-06-300001432133us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2022-06-300001432133us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-06-300001432133kltr:A2022RestructuringPlanMember2022-08-072022-08-070001432133kltr:A2023RestructuringPlanMember2023-01-032023-01-030001432133kltr:EnterpriseEducationAndTechnologyMember2022-12-310001432133kltr:MediaAndTelecomMember2022-12-310001432133kltr:EnterpriseEducationAndTechnologyMember2023-06-300001432133kltr:MediaAndTelecomMember2023-06-30

Table of Contents
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2023
OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ____________
Commission File Number: 001-40644
Kaltura, Inc.
(Exact name of Registrant as specified in its Charter)
 
 
Delaware
20-8128326
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)

860 Broadway
3rd Floor
New York, New York
10003
(Address of principal executive offices)(Zip Code)
 
Registrant’s telephone number, including area code: (646) 290-5445

N/A

(Former name, former address and former fiscal year, if changed since last report)
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, $0.0001 par value per share
KLTR
The Nasdaq Stock Market LLC
Preferred Stock Purchase Rights
N/A
(1)
(1) Attached to Common Stock
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

The number of shares of the registrant’s common stock, par value $0.0001, outstanding as of July 25, 2023 was 138,491,324



Table of Contents


TABLE OF CONTENTS
 Page
PART I FINANCIAL INFORMATION 
Item 1.
Item 2.
Item 3.
Item 4.
PART II OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.




Table of Contents
FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements regarding our future results of operations and financial position, industry and business trends, stock-based compensation, revenue recognition, business strategy, plans and market growth.
The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following risks and the other important factors discussed in Part II, Item 1A, "Risk Factors" in this Quarterly Report on Form 10-Q and Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (the “SEC”) on February 24, 2023:

The worsening economic climate, and the associated impact on capital markets, has resulted in, among other things, slowdown of business activities and decline in spending and procurement by customers, increased price-driven competition, including through initiation of bid processes and longer sale cycles, and other adverse effects. If we are unable to successfully assess or mitigate the direct and indirect impact of the worsening economic climate on our business and operations, or the duration and depth of the current instability of the global economy, or if we are unable to retain our existing customer base or to obtain new customers at reasonable prices, our business, financial condition, results of operations and prospects would be adversely affected;

Our dependency on existing customer demand and exposure to changes in demand by our customers, loss of one or more of our significant customers, or any other reduction in the amount of revenue we derive from any such customer, including as a result from reasons not under our control, makes it difficult to evaluate our current business and future prospects and may increase the risk that our business, financial condition, results of operations and growth prospects would be adversely affected;

Our business and operations have experienced high volatility, including rapid growth partially attributed to the effects of the COVID-19 pandemic and thereafter a decline as such effects have subsided and the global economic climate has worsened. If we do not appropriately adapt to these or any future changes, including through improvement of our systems, processes, controls and efficiency, or if we are unable to successfully implement our Reorganization Plans (as defined below), our business, financial condition, results of operations and prospects would be adversely affected;

We have a history of losses and may not be able to achieve or maintain profitability;

Our future success depends on the growth and expansion of the markets for our offerings, which are new and evolving and may develop more slowly or differently than we expect, and on our ability to adapt and respond effectively to evolving market conditions;

1


Table of Contents
If we are not able to keep pace with technological and competitive developments. and develop or otherwise introduce new products and solutions and enhancements to our existing offerings, our offerings may become less marketable, less competitive or obsolete, and our business, financial condition and results of operations may be adversely affected;

We may face risks associated with our use of certain artificial intelligence and machine learning models (collectively, "AI").

If we do not maintain the interoperability of our offerings across devices, operating systems and third-party applications that we do not control, and if we are not able to maintain and expand our relationships with third-party technology partners to integrate our offerings with their products and solutions (or vice-versa), our business, financial condition and results of operations may be adversely affected;

Part of our Application Programming Interfaces (APIs) and other components in our offerings are licensed to the public under an open-source license, which could negatively affect our ability to monetize our offerings and protect our intellectual property rights;

The markets in which we compete are nascent and highly fragmented, and we may not be able to compete successfully against current and future competitors, some of whom have greater financial, technical, and other resources than we do or can provide a bundled offering and solutions that might be more attractive to our customers enabling them to better compete with us. If we do not compete successfully, our business, financial condition and results of operations could be harmed;

If we are unable to increase sales of our subscriptions to new customers, expand the offerings to which our existing customers subscribe or the value of their subscriptions, or have them renew their subscriptions in terms that are economically beneficial to us, our future revenue and results of operations would be adversely affected;

Political, economic, and military conditions in Ukraine, Russia and other countries following the Russian invasion to Ukraine, or political, economic, and military conditions in Israel and in other regions in which we operate, or changes in the business environment in those regions, could materially and adversely affect our business;

Currency exchange rate fluctuations affect our results of operations, as reported in our financial statements;

We recognize a significant portion of revenue from subscriptions over the term of the relevant subscription period, and as a result, downturns or upturns in sales are not immediately reflected in full in our results of operations;

Increased breaches of network or information technology security along with an increase in cyber-attack activities, increases the risk that we shall be subject to cybersecurity threats that could have an adverse effect on our business;

Data privacy and data protection laws are rapidly evolving and present increasing compliance challenges. Additionally, if we or our third-party service providers experience a security breach, data loss or other compromise, including if unauthorized parties obtain access to our customers’ data, our reputation may be harmed, demand for our platform, products and solutions may be reduced, and we may incur significant liabilities;

We typically provide service-level commitments and offer customer support under our customer agreements. If we fail to meet these contractual commitments, we could be obligated to provide credits for future service, face contract termination with refunds of prepaid amounts, be charged penalties, or could experience a decrease in customer renewals in future periods, any of which would lower our revenue and adversely affect our business, financial condition and results of operations;

We rely on third parties, including third parties outside the United States, for some of our software development, quality assurance, operations, and customer support;

2


Table of Contents
We depend on our management team and other key employees, and the loss of one or more of these employees or an inability to attract and retain highly skilled employees could adversely affect our business;

Our corporate culture has contributed to our success, and if we cannot maintain it as we grow, we could lose the innovation, creativity, and entrepreneurial spirit we have worked to foster, which could adversely affect our business;

The failure to effectively develop and expand our marketing and sales capabilities or to maintain or expand our international business, could harm our ability to increase our customer base and achieve broader market acceptance of our offerings;

The sales prices of our offerings may change, which may reduce our revenue and gross profit and adversely affect our financial results;

We expect our revenue mix to vary over time, which could negatively impact our gross margin and results of operations;

In the event of failure of any of the financial institutions where we maintain our cash and cash equivalents, there can be no assurance that we would be able to access uninsured funds in a timely manner or at all.

Our international operations and expansion expose us to risk;

A portion of our revenue is generated by sales to government entities, which are subject to a number of challenges and risks;

If we are unable to consummate acquisitions at acceptable rate or prices, and to enter into other strategic transactions and relationships that support our long-term strategy, our growth rate and the trading price of our common stock could be negatively affected. These transactions and relationships also subject us to certain risks;

A real or perceived bug, defect, security vulnerability, error, or other performance failure involving our platform, products or solutions could cause us to lose revenue, damage our reputation, and expose us to liability;

Failure to protect our proprietary technology, or to obtain, maintain, protect and enforce sufficiently broad intellectual property rights therein, could substantially harm our business, financial condition and results of operations;

Our failure to raise additional capital or generate the significant capital necessary to expand our operations and invest in new offerings could reduce our ability to compete and could adversely affect our business; and

Changes in laws and regulations related to the internet, changes in the internet infrastructure itself, or increases in the cost of internet connectivity and network access may diminish the demand for our offerings and could harm our business.

The forward-looking statements in this Quarterly Report on Form 10-Q are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
3


Table of Contents
You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q, whether as a result of any new information, future events or otherwise.
As used in this Quarterly Report on Form 10-Q, unless otherwise stated or the context requires otherwise, references to “Kaltura,” the “Company,” “we,” “us,” and “our,” refer to Kaltura, Inc. and its subsidiaries on a consolidated basis.

4


PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
KALTURA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except share and per share data)
(unaudited)
June 30, 2023December 31, 2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$40,181 $44,625 
Marketable securities29,432 41,343 
Trade receivables29,764 28,786 
Prepaid expenses and other current assets7,404 7,521 
Deferred contract acquisition and fulfillment costs, current10,761 10,759 
Total current assets117,542 133,034 
LONG-TERM ASSETS:
Marketable securities1,007  
Property and equipment, net20,100 15,142 
Other assets, noncurrent2,863 3,176 
Deferred contract acquisition and fulfillment costs, noncurrent19,351 21,691 
Operating lease right-of-use assets16,045 20,814 
Intangible assets, net929 1,244 
Goodwill11,070 11,070 
Total noncurrent assets71,365 73,137 
TOTAL ASSETS$188,907 $206,171 
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term loans$32,903 $5,793 
Trade payables10,575 9,437 
Employees and payroll accruals12,475 14,884 
Accrued expenses and other current liabilities16,267 16,527 
Operating lease liabilities, current2,440 2,355 
Deferred revenue, current57,074 59,841 
Total current liabilities131,734 108,837 
LONG-TERM LIABILITIES:
Deferred revenue, noncurrent798 1,266 
Long-term loans, net of current portion 30,004 
Operating lease liabilities, noncurrent18,679 20,697 
Other liabilities, noncurrent2,173 2,021 
Total long-term liabilities21,650 53,988 
TOTAL LIABILITIES$153,384 $162,825 
The accompanying notes are an integral part of the condensed consolidated financial statements
5

KALTURA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except share and per share data)
(unaudited)
June 30, 2023December 31, 2022
COMMITMENTS AND CONTINGENCIES (NOTE 8)
STOCKHOLDERS' EQUITY:
Preferred stock, $0.0001 par value per share, 20,000,000 shares authorized as of June 30, 2023 and December 31, 2022; 0 shares issued and outstanding as of June 30, 2023, and December 31, 2022
  
Common stock $0.0001 par value per share, 1,000,000,000 shares authorized as of June 30, 2023 and December 31, 2022; 145,478,668 and 142,249,619 shares issued as of June 30, 2023 and December 31, 2022, respectively; 137,793,478 and 134,564,429 outstanding as of June 30, 2023 and December 31, 2022, respectively
13 13 
Treasury stock –
7,685,190 shares of common stock, $0.0001 par value per share, as of June 30, 2023 and December 31, 2022
(4,881)(4,881)
Additional paid-in capital455,354 439,644 
Accumulated other comprehensive loss(261)(301)
Accumulated deficit(414,702)(391,129)
Total stockholders' equity35,523 43,346 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$188,907 $206,171 

The accompanying notes are an integral part of the condensed consolidated financial statements.


6

KALTURA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share data)
(unaudited)

Three Months Ended June 30, Six Months Ended June 30,
2023202220232022
Revenue:
Subscription$40,724 $37,972 $81,116 $74,989 
Professional services3,156 4,006 6,037 8,705 
Total revenue43,880 41,978 87,153 83,694 
Cost of revenue:
Subscription10,935 9,770 22,103 19,419 
Professional services4,343 5,519 9,162 11,315 
Total cost of revenue15,278 15,289 31,265 30,734 
Gross profit28,602 26,689 55,888 52,960 
Operating expenses:
Research and development12,975 14,441 27,105 29,314 
Sales and marketing12,734 16,416 24,805 31,032 
General and administrative12,431 11,338 24,531 22,775 
Restructuring23  968  
Total operating expenses38,163 42,195 77,409 83,121 
Operating loss9,561 15,506 21,521 30,161 
Financial income, net(1,166)(241)(2,951)(56)
Loss before provision for income taxes8,395 15,265 18,570 30,105 
Provision for income taxes2,383 2,082 5,003 4,168 
Net loss10,778 17,347 23,573 34,273 
Net loss per share attributable to common stockholders, basic and diluted $0.08 $0.13 $0.17 $0.27 
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted136,782,051 129,745,162 135,939,680 128,794,256 

The accompanying notes are an integral part of the condensed consolidated financial statements.
7

KALTURA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(U.S. dollars in thousands, except for share data)
(unaudited)

Three Months Ended June 30, Six Months Ended June 30,
2023202220232022
Net loss$10,778 $17,347 $23,573 $34,273 
Other comprehensive income (loss):
Net unrealized gains (losses) on cash flow hedges270 (1,572)(91)(1,049)
Net unrealized gains (losses) on available-for-sale marketable securities22 (145)131 (145)
Other comprehensive income (loss)292 (1,717)40 (1,194)
Comprehensive loss$10,486 $19,064 $23,533 $35,467 

The accompanying notes are an integral part of the condensed consolidated financial statements.


8

KALTURA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
U.S. dollars in thousands (except share data)
(unaudited)
Common stockTreasury stockAdditional paid-in capitalAccumulated other comprehensive lossAccumulated deficitTotal stockholders' equity
NumberAmountNumberAmount
 Balance as of April 1, 2023135,695,254 $13 7,685,190 $(4,881)$447,316 $(553)$(403,924)$37,971 
Stock-based compensation— — — — 7,668 — — 7,668 
Issuance of common stock upon exercise of stock options, and vesting of restricted stock units2,098,224  — — 370 — — 370 
Other comprehensive income
— — — — — 292 — 292 
Net loss— — — — — — (10,778)(10,778)
 Balance as of June 30, 2023137,793,478 $13 7,685,190 $(4,881)$455,354 $(261)$(414,702)$35,523 

Common stockTreasury stockAdditional paid-in capitalAccumulated other comprehensive lossAccumulated deficitTotal stockholders' equity
NumberAmountNumberAmount
 Balance as of April 1, 2022127,648,228 $13 7,685,190 $(4,881)$418,826 $523 $(339,560)$74,921 
Stock-based compensation expenses— — — — 6,145 — — 6,145 
Issuance of common stock upon exercise of stock options, and vesting of restricted stock units2,938,526  — — 1,066 — — 1,066 
Other comprehensive loss
— — — — — (1,717)— (1,717)
Net loss— — — — — — (17,347)(17,347)
 Balance as of June 30, 2022130,586,754 $13 7,685,190 $(4,881)$426,037 $(1,194)$(356,907)$63,068 


The accompanying notes are an integral part of the condensed consolidated financial statements.

9

KALTURA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
U.S. dollars in thousands (except share data)
(unaudited)
Common stockTreasury stockAdditional paid-in capitalAccumulated other comprehensive lossAccumulated deficitTotal stockholders' equity
NumberAmountNumberAmount
Balance as of January 1, 2023134,564,429 $13 7,685,190 $(4,881)$439,644 $(301)$(391,129)$43,346 
Stock-based compensation— — — — 14,959 — — 14,959 
Issuance of common stock upon exercise of stock options, and vesting of restricted stock units3,229,049  — — 751 — — 751 
Other comprehensive income
— — — — — 40 — 40 
Net loss— — — — — — (23,573)(23,573)
 Balance as of June 30, 2023137,793,478 $13 7,685,190 $(4,881)$455,354 $(261)$(414,702)$35,523 

Common stockTreasury stockAdditional paid-in capitalAccumulated other comprehensive lossAccumulated deficitTotal stockholders' equity
NumberAmountNumberAmount
 Balance as of January 1, 2022126,925,104 $13 7,685,190 $(4,881)$412,776 $ $(322,634)$85,274 
Stock-based compensation— — — — 11,897 — — 11,897 
Issuance of common stock upon exercise of stock options, and vesting of restricted stock units3,661,650  — — 1,364 — — 1,364 
Other comprehensive loss
— — — — — (1,194)— (1,194)
Net loss— — — — — — (34,273)(34,273)
 Balance as of June 30, 2022130,586,754 $13 7,685,190 $(4,881)$426,037 $(1,194)$(356,907)$63,068 

The accompanying notes are an integral part of the condensed consolidated financial statements.
10

KALTURA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
(unaudited)
Six Months Ended June 30,
20232022
Cash flows from operating activities:
Net loss$(23,573)$(34,273)
Adjustments to reconcile net loss to net cash used in operating activities:
Loss on sale of property and equipment  179 
Depreciation and amortization2,155 1,353 
Stock-based compensation expenses14,583 11,727 
Amortization of deferred contract acquisition and fulfillment costs5,872 5,066 
Non-cash interest expenses (income), net(405)20 
Gain on foreign exchange(485) 
Changes in operating assets and liabilities:
Trade receivables(978)(14,700)
Prepaid expenses and other current assets and other assets, noncurrent(6)115 
Deferred contract acquisition and fulfillment costs(3,279)(6,517)
Trade payables1,084 1,643 
Accrued expenses and other current liabilities(349)(4,721)
Employees and payroll accruals(2,409)(1,214)
Other liabilities, noncurrent415 (56)
Deferred revenue(3,235)(263)
Operating lease right-of-use assets and lease liabilities, net(954)(486)
Net cash used in operating activities(11,564)(42,127)
Cash flows from investing activities:
Investment in available-for-sale marketable securities(14,645)(38,393)
Proceeds from maturities of available-for-sale marketable securities26,191  
Purchases of property and equipment(1,591)(761)
Capitalized internal-use software(1,242)(3,076)
Investment in restricted bank deposit(1,001)(1,850)
Net cash provided by (used in) investing activities7,712 (44,080)
Cash flows from financing activities:
Repayment of long-term loans(3,000)(1,500)
Principal payments on finance leases (133)
Proceeds from exercise of stock options815 754 
Payment of debt issuance costs (125)
Net cash used in financing activities(2,185)(1,004)
Effect of exchange rate changes on cash, cash equivalents and restricted cash485  
Net increase (decrease) in cash, cash equivalents and restricted cash(5,552)(87,211)
Cash, cash equivalents and restricted cash at the beginning of the period45,833 144,371 
Cash, cash equivalents and restricted cash at the end of the period$40,281 $57,160 
The accompanying notes are an integral part of the condensed consolidated financial statements.
11

KALTURA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
(unaudited)

Six Months Ended June 30,
20232022
Supplemental disclosure of non-cash activity:
Purchase of property, equipment and internal-use software in credit$179 $415 
Lease liabilities arising from right-of-use assets$ $23,712 
Capitalized stock-based compensation cost $389 $170 
Pending proceeds from option exercises$163 $227 
Lease incentive recognized as leasehold improvements$3,790 $ 
Supplemental disclosure of cash flow information
Cash paid for income taxes, net$2,443 $6,463 
Cash paid for interest$1,504 $880 
Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheet
Cash and cash equivalents$40,181 $55,660 
Restricted cash included in other assets, noncurrent100 1,500 
Total cash, cash equivalents, and restricted cash$40,281 $57,160 
    
The accompanying notes are an integral part of the condensed consolidated financial statements.
12

KALTURA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
(unaudited)
NOTE 1: GENERAL
Description of Business
Kaltura, Inc. (together with its subsidiaries, the “Company”) was incorporated in October 2006 and commenced operations in January 2007. The Company’s business operations are allocated between two main segments, Enterprise, Education, and Technology (“EE&T”) and Media and Telecom (“M&T”). The Company has developed a platform for video creation, management, and collaboration. The Company's platform enables companies, educational institutions, and other organizations to cost-effectively launch advanced online video experiences, including for Over-the-top (“OTT”) Television, Cloud TV, web video publishing, video-based teaching, learning and training, video-based marketing, and video-based collaboration. The Company’s core offerings consist of various Software-as-a-Service (“SaaS”) products and solutions and a Platform-as-a-Service (“PaaS”).

NOTE 2: BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting.
The consolidated balance sheet as of December 31, 2022 was derived from the audited consolidated financial statements as of that date, but does not include all of the disclosures, including certain notes required by U.S. GAAP on an annual reporting basis. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 24, 2023.
In management’s opinion, the unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements with normal recurring adjustments necessary for the fair presentation of the Company’s financial position as of June 30, 2023, and the Company’s consolidated results of operations, stockholders’ equity, and cash flows for the three and six months ended June 30, 2023 and 2022. The results for the three and six months ended June 30, 2023, are not necessarily indicative of the results to be expected for the full year ending December 31, 2023, or any other future interim or annual period.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company evaluates on an ongoing basis its assumptions, including those related to contingencies, income tax uncertainties, incremental borrowing rate for operating leases, fair value of financial assets and liabilities, including fair value of derivatives, fair value and useful life of acquired intangible assets and goodwill, as well as in estimates used in applying the revenue recognition policy. The Company bases these estimates on historical and anticipated results, trends and various other assumptions that it believes are reasonable under the circumstances, including assumptions as to future events. Actual results could differ from those estimates.
Concentration of Risks
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, marketable securities, bank deposits, restricted cash and trade receivables.
The majority of the Company’s cash, and cash equivalents, marketable securities, bank deposits and restricted cash are invested with major banks in the United States, Israel, and the United Kingdom. Such investments in the United States may be in excess of insured limits and they are not insured in other jurisdictions. Market conditions can impact the viability of these financial institutions. In the event of failure of any of the financial institutions where the Company maintains its cash and cash equivalents, there can be no assurance that the Company would be able to access uninsured funds in a timely manner or at all. Any inability to access or delay in accessing these funds could adversely affect the Company's business and financial position. In general, these investments may be redeemed upon demand and therefore bear minimal risk.
The Company’s trade receivables are geographically dispersed and derived from sales to customers mainly in the United States, Europe, and Asia. Concentration of credit risk with respect to trade receivables is limited by credit limits, ongoing credit evaluation, and account monitoring procedures.
Major customer data as a percentage of total revenues:
The following table sets forth customers that represented 10% or more of the Company’s total revenue in each of the periods set forth below:
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Customer A (M&T)10.30 %          *)   — 10.50 %          *)   — 
*) Represents an amount that is lower than 10% of the Company's total revenue.
Significant Accounting Policies and Estimates
The Company’s significant accounting policies are discussed in Note 2 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which was filed with the SEC on February 24, 2023. There have been no significant changes to these policies during the six months ended June 30, 2023 except as noted below.
Recently Adopted Accounting Pronouncements
As an “emerging growth company”, the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act. The adoption dates discussed below reflect this election.
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected. The Company adopted this guidance using modified retrospective approach, effective on January 1, 2023. The adoption did not have a material effect on its consolidated financial statements.

NOTE 3: REVENUES FROM CONTRACTS WITH CUSTOMERS
Disaggregation of Revenue
The following tables present disaggregated revenue by category:
Three Months Ended June 30, 2023
Enterprise, Education and TechnologyMedia and Telecom
AmountPercentage of revenueAmountPercentage of revenue
Subscription $30,258 97.1 %$10,466 82.3 %
Professional services900 2.9 %2,256 17.7 %
$31,158 100 %$12,722 100 %

Three Months Ended June 30, 2022
Enterprise, Education and TechnologyMedia and Telecom
AmountPercentage of revenueAmountPercentage of revenue
Subscription $28,280 93.0 %$9,692 83.7 %
Professional services2,123 7.0 %1,883 16.3 %
$30,403 100 %$11,575 100 %

Six Months Ended June 30, 2023
Enterprise, Education and TechnologyMedia and Telecom
AmountPercentage of revenueAmountPercentage of revenue
Subscription $60,132 96.2 %$20,984 85.1 %
Professional services2,356 3.8 %3,681 14.9 %
$62,488 100 %$24,665 100 %
Six Months Ended June 30, 2022
Enterprise, Education & TechnologyMedia and Telecom
AmountPercentage of revenueAmountPercentage of revenue
Subscription $55,882 92.9 %$19,107 81.1 %
Professional services4,248 7.1 %4,457 18.9 %
$60,130 100 %$23,564 100 %


The following tables summarize revenue by region based on the billing address of customers:
Three Months Ended June 30,
20232022
AmountPercentage of revenueAmountPercentage of revenue
United States (“US”)$22,902 52.2 %$23,572 56.2 %
Europe, the Middle East and Africa ("EMEA")16,599 37.8 %13,816 32.9 %
Other4,379 10.0 %4,590 10.9 %
$43,880 100 %$41,978 100 %

Six Months Ended June 30,
20232022
AmountPercentage of revenueAmountPercentage of revenue
US$45,973 52.7 %$46,886 56.0 %
EMEA32,523 37.3 %27,640 33.0 %
Other8,657 9.9 %9,168 11.0 %
$87,153 100 %$83,694 100 %

Remaining Performance Obligations
Remaining performance obligations represent the amount of contracted future revenue that has not yet been recognized, including both deferred revenue and contracted amounts that will be invoiced and recognized as revenue in future periods. As of June 30, 2023, the aggregate amount of the transaction price allocated to remaining performance obligations was $174,329, which consists of both billed consideration in the amount of $57,872 and unbilled consideration in the amount of $116,457 that the Company expects to recognize as revenue but that was not yet recognized on the balance sheet. The Company expects to recognize 59% of its remaining performance obligations as revenue over the next 12 months and the remainder thereafter.
On July 19, 2023, after the balance sheet date, the Company entered into an amendment to an agreement with one of its customers. The amendment among other things, decreases future commitments from the customer by an amount of approximately $7,000. The amount will decrease the unbilled consideration balance mentioned above.

Costs to Obtain a Contract
The following table represents a roll forward of costs to obtain a contract:

Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Beginning balance $26,146 $25,292 $26,928 $26,274 
Additions to deferred contract acquisition costs during the period1,807 4,369 3,547 5,473 
Amortization of deferred contract acquisition costs(2,468)(2,275)(4,990)(4,361)
Ending balance$25,485 $27,386 $25,485 $27,386 
Deferred contract acquisition costs, current$9,042 $8,902 $9,042 $8,902 
Deferred contract acquisition costs, noncurrent16,443 18,484 16,443 18,484 
Total deferred costs to obtain a contract$25,485 $27,386 $25,485 $27,386 
Costs to Fulfill a Contract
The following table represents a roll forward of costs to fulfill a contract:
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Beginning balance$5,075 $5,641 $5,522 $5,427 
Additions to deferred costs to fulfill a contract during the period 512  1,084 
Amortization of deferred costs to fulfill a contract(448)(347)(895)(705)
Ending balance$4,627 $5,806 $4,627 $5,806 
Deferred fulfillment costs, current1,719 1,594 1,719 1,594 
Deferred fulfillment costs, noncurrent2,908 4,212 2,908 4,212 
Total deferred costs to fulfill a contract$4,627 $5,806 $4,627 $5,806 

NOTE 4: MARKETABLE SECURITIES
The following is a summary of available-for-sale marketable securities as of June 30, 2023 and December 31, 2022:
June 30, 2023
Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
Available-for-sale – matures within one year:
Corporate bonds$2,265 $ $(10)$2,255 
Municipal securities1,045   1,045 
U.S. Treasury12,408 1 (16)12,393 
Commercial paper8,797   8,797 
Agency bonds4,957  (15)4,942 
29,472 1 (41)29,432 
Available-for-sale – matures after one year:
Agency bonds1,017  (10)1,007 
1,017  (10)1,007 
Total$30,489 $1 $(51)$30,439 
December 31, 2022
Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
Available-for-sale – matures within one year:
Corporate bonds$9,305 $ $(66)$9,239 
Municipal securities1,751  (4)1,747 
U.S. Treasury16,306  (111)16,195 
Commercial paper11,237   11,237 
Agency bonds2,925 1 (1)2,925 
$41,524 $1 $(182)$41,343 
As of June 30, 2023 and December 31, 2022, the Company did not record an allowance for credit losses for its available-for-sale marketable debt securities and the vast majority of the gross unrealized losses of the Company's marketable securities have been in a continuous loss position for less than 12 months. There were no gains or losses from available-for-sale marketable securities that were reclassified out of accumulated other comprehensive loss during the periods presented.

NOTE 5: FAIR VALUE MEASUREMENTS
In accordance with ASC 820, the Company measures its cash equivalents and marketable securities at fair value using the market approach valuation technique. Cash equivalents and marketable securities are classified within Level 1 or Level 2 because these assets are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs. Foreign currency derivative contracts are classified within the Level 2 value hierarchy, as the valuation inputs are based on quoted prices and market observable data of similar instruments.
The following table sets forth the Company’s assets and liabilities that were measured at fair value as of June 30, 2023 and December 31, 2022 by level within the fair value hierarchy:
13

KALTURA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
(unaudited)
Fair Value Measurements As Of
DescriptionFair Value HierarchyJune 30, 2023December 31, 2022
Measured at fair value on a recurring basis:
Assets:
Cash equivalents:
Money market fundsLevel 1$19,870 $16,489 
U.S. TreasuryLevel 2$3,989 $ 
Short-term marketable securities:
Corporate bondsLevel 2$2,255 $9,239 
Municipal securitiesLevel 2$1,045 $1,747 
U.S. TreasuryLevel 2$12,393 $16,195 
Commercial paperLevel 2$8,797 $11,237 
Agency bondsLevel 2$4,942 $2,925 
Long-term marketable securities:
Agency bondsLevel 2$1,007 $ 
Prepaid expenses and other current assets:
Restricted bank depositsLevel 2$2,600 $2,600 
Other assets, noncurrent:
Restricted bank depositLevel 2$1,005 $ 
Liabilities:
Accrued expenses and other current liabilities:
Options and forward contracts designated as hedging instruments  Level 2$210 $120 
14

KALTURA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
(unaudited)
NOTE 6: DERIVATIVES AND HEDGING
The Company entered into forward, put and call option contracts to hedge certain forecasted payroll costs denominated in NIS against exchange rate fluctuations of the U.S. dollar for a period of up to twelve months. The Company recorded the cash flows associated with these derivatives under operating activities. The Company does not use derivative instruments for trading or speculative purposes.
Notional Amount of Foreign Currency Contracts
The Company had outstanding contracts designated as hedging instruments in the aggregate notional amount of $7,891 and $8,345 as of June 30, 2023 and December 31, 2022, respectively. The fair value of the Company’s outstanding contracts amounted to a liability of $210 and $120 as of June 30, 2023 and December 31, 2022, respectively. These liabilities were recorded under accrued expenses and other current liabilities. Losses of $693, $184, $1,198 and $735 were reclassified from accumulated other comprehensive losses during the three and six months ended June 30, 2023, and 2022 respectively. Such losses were reclassified from accumulated other comprehensive loss when the related expenses were incurred.
Effect of Foreign Currency Contracts on the Condensed Consolidated Statements of Operations
The effect of foreign currency contracts on the condensed consolidated statements of operations during the three and six months ended June 30, 2023 and 2022 were as follows:
Condensed Statement of Operations Location:Three Months Ended June 30, 2023Three Months Ended June 30, 2022Six Months Ended June 30, 2023Six Months Ended June 30, 2022
Cost of revenue$93 $124 $162 $100 
Research and development358 373 610 308 
Sales and marketing94 107 152 88 
General and administrative124 131 220 106 
Restructuring  28  
Total$669 $735 $1,172 $602 

15

KALTURA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
(unaudited)
NOTE 7: LEASES
The Company leases its office facilities under non-cancelable agreements that expire at various dates through November 2027. The Company has a lease agreement for offices in Israel which includes two extension options for five years each. The Company estimates that it is reasonably certain that it will exercise the option for the first extension period. Therefore, for the purposes of determining the amount of the expense and the value of the right of use asset and lease liability according to ASC 842, the Company determined that the lease term would end in November 2032.
Components of operating lease expense were as follows:
Three Months Ended June 30, 2023Three Months Ended June 30, 2022Six Months Ended June 30, 2023Six Months Ended June 30, 2022
Operating lease cost$726 $658 $1,488 $1,283 
Short-term lease cost 81 154 81 
Variable lease cost20 6 29 18 
Total$746 $745 $1,671 $1,382 
Supplementary cash flow information related to operating leases was as follows:
Three Months Ended June 30, 2023Three Months Ended June 30, 2022Six Months Ended June 30, 2023Six Months Ended June 30, 2022
Cash paid for operating leases$875 $876 $1,477 $1,343 
As of June 30, 2023, the weighted-average discount rate is 4.56% and the weighted-average remaining term is 8.5. Maturities of the Company’s operating lease liabilities as of June 30, 2023 were as follows:
Year Ending December 31,
2023 (Remainder)1,684 
20243,018 
20253,074 
20263,136 
20272,704 
20282,324 
2029 and thereafter8,908 
Total operating lease payments$24,848 
Less: imputed interest3,729 
Total operating lease liabilities$21,119 

16

KALTURA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
(unaudited)
NOTE 8: COMMITMENTS AND CONTINGENCIES
Purchase Commitments
The Company has entered into various non-cancelable agreements with third-party providers for use of mainly cloud and other services, under which it committed to minimum and fixed purchases through the year ending December 31, 2026. The following table presents details of the aggregate future non-cancelable purchase commitments under such agreements as of June 30, 2023:
Year Ending December 31,
2023 (Remainder)4,773 
202414,401 
202513,121 
202614,250 
Total purchase commitment$46,545 
On July 17, 2023, after the balance sheet date, the Company amended the agreement with one if its cloud service providers. Among other things, the amendment decreased the remaining commitment by approximately $35,000 and changed the termination date of the agreement to October 2024.
Litigation
The Company is occasionally a party to claims or litigation in the normal course of the business. The Company does not believe that it is a party to any pending legal proceeding that is likely to have a material adverse effect on its business, financial condition, or results of operations.

NOTE 9: CONDENSED CONSOLIDATED BALANCE SHEET COMPONENTS
Prepaid expenses and other current assets
Prepaid expenses and other current assets consisted of the following:

June 30, 2023December 31, 2022
Prepaid expenses$3,078 $3,369 
Government institutions289 422 
Restricted bank deposits2,600 2,600 
Other current assets1,437 1,130 
$7,404 $7,521 

17

KALTURA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
(unaudited)
Property and Equipment, net
Composition of property and equipment is as follows:

June 30, 2023December 31, 2022
Cost:
Computers and peripheral equipment$4,506 $4,323 
Office furniture and equipment1,855 551 
Leasehold improvements5,913 1,965 
Finance leases of computers and peripheral equipment253 253 
Internal use software13,458 12,095 
25,985 19,187 
Accumulated depreciation(5,885)(4,045)
Depreciated cost$20,100 $15,142 

Depreciation expenses for the three months ended June 30, 2023 and 2022, and for the six months ended June 30, 2023 and 2022 were $998, $568, $1,840 and $970, respectively.

Other assets, noncurrent

June 30, 2023December 31, 2022
Restricted cash$100 $1,208 
Severance pay fund1,592 1,855 
Restricted deposit1,005  
Other166 113 
$2,863 $3,176 

Accrued expenses and other current liabilities

June 30, 2023December 31, 2022
Accrued expenses$6,611 $7,471 
Accrued taxes8,636 7,966 
Derivative instruments210 120 
Other current liabilities810 970 
$16,267 $16,527 
18

KALTURA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
(unaudited)
NOTE 10: GOODWILL AND INTANGIBLE ASSETS
There was no goodwill activity during the periods presented.
The carrying amounts and accumulated amortization expenses of the intangible assets, as of June 30, 2023, and December 31, 2022, were as follows:
June 30, 2023December 31, 2022
Weighted average remaining useful life (in years)BalanceBalance
Gross carrying amount:
Technology1.75$4,700 $4,700 
Customer relationship3.752,419 2,419 
Tradename0980 980 
8,099 8,099 
Accumulated amortization and impairments:
Technology(3,961)(3,749)
Customer relationship(2,229)(2,203)
Tradename(980)(903)
(7,170)(6,855)
Intangible assets, net$929 $1,244 

During the three months ended June 30, 2023 and 2022, and the six months ended June 30, 2023 and 2022, the Company recorded amortization expenses in the amount of $148, $168, $315 and $383, respectively, included in cost of revenue and sales and marketing expenses in the statements of operations.
The estimated future amortization expense of intangible assets as of June 30, 2023, is as follows:
Year Ending December 31,
2023 (Remainder)240 
2024478 
2025148 
202650 
202713 
$929 

19

KALTURA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
(unaudited)
NOTE 11: INCOME TAXES
The Company recognized an income tax expense of $2,383, $2,082, $5,003 and $4,168 for the three and six months ended June 30, 2023, and 2022, respectively. The tax expense for these periods was primarily attributable to pre-tax foreign earnings. The Company’s effective tax rates of (28)%, (14)%, (27)% and (14)% for the three and six months ended June 30, 2023 and 2022, respectively, differ from the U.S. statutory tax rate primarily due to U.S. losses for which there is no benefit and the tax rate differences between the U.S. and foreign countries.
The Company has a full valuation allowance on its deferred tax assets. Deferred tax liability is from indefinite life goodwill intangibles. Management currently believes that it is more likely than not that the deferred tax regarding the tax loss carry forwards and other temporary differences will not be realized in the foreseeable future in the U.S.

NOTE 12: NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS
The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders for the periods presented:
Three Months Ended June 30, Six Months Ended June 30,
2023202220232022
Numerator:
Net loss$10,778 $17,347 $23,573 $34,273 
Denominator:
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted136,782,051129,745,162135,939,680128,794,256
Net loss per share attributable to common stockholders, basic and diluted$0.08 $0.13 $0.17 $0.27 

Instruments potentially exercisable for common stock that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been anti-dilutive are as follows:
As of June 30,
20232022
Outstanding stock options and RSUs39,020,539 37,827,145 
Total39,020,53937,827,145






20

KALTURA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
(unaudited)

NOTE 13: REPORTABLE SEGMENTS AND GEOGRAPHICAL INFORMATION
Reportable segments
ASC 280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company's chief operating decision maker ("CODM") is its Chief Executive Officer. The Company's CODM does not regularly review asset information by segments and, therefore, the Company does not report asset information by segment.
The Company organizes its operations in two segments: Enterprise, Education and Technology and Media and Telecom. The Enterprise, Education and Technology segment represents products related to industry solutions for education customers, and media services (except for Media and Telecom customers). The Media and Telecom segment primarily represents TV solutions that are sold to media and telecom operators.
The measurement of the reportable operating segments is based on the same accounting principles applied in these financial statements, which includes certain corporate overhead allocations.

Three Months Ended June 30, 2023
Enterprise, Education and TechnologyMedia and TelecomTotal
Revenue$31,158 $12,722 $43,880 
Gross profit$23,073 $5,529 $28,602 
Operating expenses38,163 
Financial income, net(1,166)
Provision for income taxes2,383 
Net loss$10,778 

21

KALTURA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
(unaudited)
Three Months Ended June 30, 2022
Enterprise, Education and TechnologyMedia and TelecomTotal
Revenue