Q1 2025 Kaltura Inc Earnings Call

Operator 2: Good morning everyone, welcome to the Kaltura Q1 2025 Earnings Call. All material contained in the webcast is the sole property and copyright of Kaltura with all rights reserved. For opening remarks and introductions, I will now turn the call over to Erica Mannion at Sapphire Investor Relations. Please go ahead, Erica.

Good morning, everyone and welcome to the Cal to our first quarter 2025 earnings call. All material contained in the webcast is the sole property and copyright of cats for us with all rights reserved for opening remarks and introductions I will.

Speaker Change: Now I'll turn the call over to Erica Mannion of Sapphire Investor Relations. Please go ahead Erica.

Erica Mannion: Thank you, operator. Good morning. I am joined by Ron Yekutiel, Kaltura's co-founder, chairman, president, and Chief Executive Officer, and John Doherty, Chief Financial Officer. Ron will begin with a summary of the results for Q1 ended 31 March 2025, and provide a business update. John will then review the financial results for Q1 of 2025 in greater detail, followed by the company's outlook for Q2 and full year 2025. We will open the call for questions. Please note that this call will include forward-looking statements within the meaning of the federal securities laws, including but not limited to, statements regarding Kaltura's expected future financial results and management's expectations and plans for the business. These statements are neither promises nor guarantees and involve risks and uncertainties that may cause actual results to differ materially from those discussed here.

Erica Mannion: Thank you operator, and good morning, I'm joined by Ron You can heal Californias co founder Chairman, President and Chief Executive Officer, and John Doherty, Chief Financial Officer, Ron will begin with the summary of the results for the first quarter ended March 31, 2025, and provide a business update.

Erica Mannion: John will then review the financial results for the first quarter of 2025, and greater detail followed by the company's outlook for the second quarter and full year 2025.

Erica Mannion: We will then open the call for questions.

Erica Mannion: Please note that this call will include forward looking statements within the meaning of the federal securities laws, including but not limited to statements regarding <unk> expected future financial results and management's expectations and plans for the business.

These statements are neither promises nor guarantees and involve risks and uncertainties that may cause actual results to differ materially from those discussed here.

Erica Mannion: Important factors that could cause actual results to differ materially from forward-looking statements can be found in the Risk Factors section of Kaltura's annual report on Form 10-K for the fiscal year ended 31 December 2024, and other SEC filings. Any forward-looking statements made during this conference call, including responses to your questions, are based on current expectations as of today, and Kaltura assumes no obligation to update or revise them, whether as a result of new developments or otherwise, except as required by law. Please note, during this call, we will be discussing non-GAAP financial measures, adjusted EBITDA, adjusted EBITDA margin, and adjusted gross margin. For a reconciliation of these measures to the most directly comparable GAAP metric, please refer to our earnings release, which is available on our website at www.investors.Kaltura.com. I will now turn the call over to Ron.

Erica Mannion: Important factors that could cause actual results to differ materially from forward looking statements can be found in the risk factors section of calories annual report on Form 10-K for the fiscal year ended December 31, 2024, and other SEC filings.

Erica Mannion: Any forward looking statements made during this conference call, including responses to your questions are based on current expectations as of today and Cal Tour assumes no obligation to update or revise them, whether as a result of new developments or otherwise except as required by law.

Erica Mannion: Please note.

Erica Mannion: During this call we will be discussing non-GAAP financial measures adjusted EBITDA, adjusted EBITDA margin and adjusted gross margin.

Erica Mannion: For a reconciliation of these measures to the most directly comparable GAAP metric. Please refer to our earnings release, which is available on our website at www dot investors dock Cal tourists dotcom.

Ron: I will now I'll turn the call over to Ron.

Ron Yekutiel: Thank you, Erica, and thanks to everyone for joining us on the call this morning. Today, we reported record total revenue of $47 million for Q1 2025, up 5% year-over-year, which included record subscription revenue for the quarter of $44.9 million, up 9% year-over-year. It was our third consecutive quarter of increasing year-over-year revenue growth. We also posted record ARR for the fourth consecutive quarter, up 7% year-over-year, and grew our RPO 12% year-over-year. As for our bottom line, in Q1, adjusted EBITDA reached a record level of $4.1 million, representing our seventh consecutive quarter of adjusted EBITDA profitability. We also posted record positive non-GAAP earnings per share. This was fueled in part by a strong non-GAAP gross margin of 70%, up from 65% in the same quarter last year.

Ron: Thank you Erica and thanks to everyone for joining us on the call. This morning.

Ron: Today, we reported record total revenue of 47 million for the first quarter of 2025.

Ron: Up 5% year over year, which included record subscription revenue for the quarter of $44 9 million up 9% year over year.

Ron: It was our third consecutive quarter of increasing year over year revenue growth.

Ron: We also posted record AOR for the fourth consecutive quarter up 7% year over year and grew our art P O 12% year over year.

Ron: As for our bottom line in the first quarter adjusted EBITDA reached a record level of $4 1 million, representing our seventh consecutive quarter of adjusted EBITDA profitability.

Ron: We also posted record positive non-GAAP earnings per share it.

Ron: This was fueled in part by a strong non-GAAP gross margin of 70% up from 65% in the same quarter last year.

Ron Yekutiel: We consumed $1 million in cash for operations during the quarter, similar to what we had consumed in Q1 of last year. While cash flow was a little lower than expected, it is aligned with our typical seasonality and does not change our cash flow forecast for the full year. Moving on to the business update. New subscription bookings in Q1 were seasonally low compared to other quarters, as usual and expected. Similar to Q1 of last year, it included 1 seven-digit deal and 15 six-digit deals, though the portion of new subscription bookings from new customers grew year over year, as did the average selling price for new customers. New logos in the past quarter included Stripe, a leading financial services company, Novo Nordisk, a leading multinational pharmaceutical company, a leading global medical device company, and a large US private university.

Ron: We consumed 1 million in cash for operations during the quarter.

Ron: Similar to what we are consumed in the first quarter of last year.

Ron: While cash flow was a little lower than expected. It is aligned with our typical seasonality and does not change our cash flow forecast for the full year.

Ron: Moving onto the business update.

Ron: New subscription bookings in the first quarter were seasonally low compared to other quarters as usual and expected.

Ron: Similar to the first quarter of last year. It included one seven digit deal and 15 six digit deals.

Ron: The portion of new subscription bookings from new customers grew year over year as did the average selling price for new customers.

Ron: You logos in the past quarter included right, a leading financial services company.

Ron: <unk> North is a leading multinational pharmaceutical company.

Ron: A leading global medical device company in the large U S private University.

Ron Yekutiel: Most of our new subscription bookings came again from upselling to existing customers, including a global leading cloud provider, a CRM market leader, a large Asian bank, a leading healthcare software company, and several media and telecom companies. Companies continued to consolidate their video usage around Kaltura during the quarter. Accordingly, our average ARR per customer continued to grow to another record high. On the growth retention front, we mentioned in our last earnings call that we anticipated a lower rate of retention in H1 of the year due to delayed media and telecom churn from last year. This is occurring as expected. That said, our gross retention rate in ENT was at its best level since Q4 2022. We continue to forecast an annual ENT rate in 2025 that is better than that of the previous four years.

Speaker Change: Most of our new subscription bookings came again from upselling to existing customers.

Ron: Leading a global leading cloud provider.

Ron: Our CRM market leader, a large Asia bank.

Ron: A leading health care software company.

Ron: And several media Telecom company.

Ron: Companies continue to consolidate their video usage or uncle charge during the quarter and.

Ron: And accordingly, our average Arab per customer continued to grow to another record high.

Ron: On the gross retention front.

Ron: We mentioned in our last earnings call that we anticipated a lower rate of retention in the first half of the year due to delays in media and telecom insurance from last year and this is of course you guys expected.

Ron: That said, our gross retention rate in E. N T was at its best level since the fourth quarter of 2022, and we continue to forecast an annual E N T rates in 2025.

Ron: Better than that of the previous four years.

Ron Yekutiel: We were pleased that net dollar retention in Q1 continued its climb to 107%, its highest level since Q1 2022. Moving on to the product front. Let's begin with our continued and growing investment in AI to deliver hyper-personalized, data-driven experiences. In Q1, we enhanced our new Genie agents to empower organizations running multiple Genie instances to cater to different audiences, departments, and use cases. Imagine, for example, a marketing Genie agent that provides marketing teams customer insights, customer stories, and marketing tips. In the same company, also a separate academy Genie agent that provides employee microlearning and testing around company training materials and policies. In addition, Genie now supports self-service experiences with simple login mechanisms and enables ingestion of additional video sources beyond Kaltura, like YouTube.

Ron: We were pleased that that dollar retention in the first quarter continued its climb to 107%.

Ron: Highest level since the first quarter of 2022.

Ron: Moving on to the product front, let's begin with our continued and growing investment in AI.

Ron: The liver hyper personalized data driven experiences.

Ron: In the first quarter, we enhanced our new junior agents to empower organizations running multiple ginnie instances to cater to different audiences departments and use cases.

Ron: Imagine for example in marketing journey agent that provides marketing teams customer insights customer stories and marketing trips.

Ron: And in the same company also a separate Academy gene agent that provides employees micro learning and testing around company training materials and policies.

Ron: In addition, getting all support self service experiences with simple logging mechanisms and enables ingestion of additional video sources Bianco true like Youtube.

Ron Yekutiel: On the M&T front, Kaltura TV Genie recently won the Product of the Year award for streaming at the 2025 NAB Show, underscoring the disruption that our innovative Genie product is introducing to the market. During the quarter, we also released two more agents within our Content Lab family of offerings for content creators. A highlights video generator agent, which automatically creates highlights out of every video, stitching together multiple AI-generated clips into a single video, and a content enrichment agent, which automatically generates titles, descriptions, and tags for the content, driving discoverability and searchability to reach a broader audience with greater relevancy. Our AI beta program for evaluating both our Genies and Content Lab offerings for customer and employee experiences has already sparked the interest of more than 150 customers to date, which constitutes roughly 20% of our customer base.

Ron: On the R&D front cause tourists Genie Genie recently wanted to plots of the year awards for streaming at the 20th twenty-five N D show.

Ron: Underscoring the disruption that our innovative genie product is introduced into the market.

Ron: During the quarter. We also released two more agents within our content labs family of offerings for content creators.

Ron: Highlights video generator agent, which automatically creates highlights out of every video.

Ron: Together multiple AI generated clips into a single video.

Ron: And the concept of enrichment agent, which automatically generates titles descriptions and Todd so the content driving discovery ability and search ability to reach a broader audience with greater relevancy.

Ron: Our AI beta program for evaluating both our Genie and content lab offerings for customer and employee experiences has already sparked your interest.

Ron: More than 150 customers to date.

Ron: Which constitutes roughly 20% of our customer base.

Ron Yekutiel: These customers span across all of our target industries, including technology companies, regulated industries like banking, insurance, healthcare and pharma, education institutions, and media and telecom companies. While it's early, 20 of these customers, spanning from US-headquartered enterprises such as Accenture and New York Life to global universities such as Nanyang Technological University and Ngee Ann Polytechnic, which we can name, have progressed in their POCs beyond legal and onboarding to generate GenAI test queries and video transformation. These tests show that 85% of the video content that is recommended to users by Genie has not been previously seen by them, demonstrating how Genie surfaces value from underutilized content to optimize hyper-personalized journeys. We think this represents a significant upsell opportunity for us and expect to start closing deals in the coming quarters.

Ron: These customers span across all of our target industries, including technology companies regulated industries like banking insurance health care and pharma education institutions in media and Telecom company.

Ron: While it is early 20 of these customers spanning from U S. Headquartered enterprises, such as Accenture, and New York life to global universities, such as NAND Young Technology University, and then G and Polytechnic, which we can name a progressed in their P. O sees beyond legal and Onboarding to generate Jennie O.

Ron: Worries and video transformation.

Ron: These tests show that 85% of the video content that is recommended to users by Genie.

Ron: Not been previously seen by them.

Speaker Change: Hemans trading our genie surfacing value from underutilized content.

Ron: Optimize hyper personalized journey.

Ron: We think this represents a significant up sell opportunity for us and expect to start closing deals in the coming quarters.

Ron Yekutiel: As for our recently released GenAI-powered transcription engine, it has already been successfully deployed with over 200 customers, providing improved results at lower operational costs, which helps increase our gross margin. We plan to soon expand from VOD captioning in English and image-to-text OCR to supporting additional languages into live captioning. Lastly, we continue to expand our collaboration with third-party GenAI vendors. For example, with Synthesia, a developer of hyper-realistic AI avatars, with which we enable our customers to create avatar-based experiences based on Kaltura's video content and within Kaltura experiences. Beyond AI, on the virtual events and webinars front during Q1, we bolstered our mobile experience with full support for chat and collaboration, polls, and quizzes.

Ron: As for our recently released an AI powered transcription engine.

Ron: It has already been successfully deployed with over 200 customers, providing improved results at lower operational costs.

Ron: Which helps increase our gross margin.

Ron: We plan to soon expand from D. O D captioning in English and image detection Uzi are supporting additional languages into life captioning.

Ron: Lastly, we continue to expand our collaboration with third party Jenny I vendors for examples with Cynthia.

Ron: Albert of hyper realistic AI avatars, with which we enable our customers to create avatar based experiences based on corporate video content and within corporate experience.

Ron: Beyond the eye on the virtual events Webinars from during the first quarter, we bolstered our mobile experience with full support for chatting collaboration pulls them with it.

Ron Yekutiel: We also enhanced the way we track viewership, engagement, and completion of training paths to offer more granular certifications, released RSVP and tags to allow for larger multi-session events to be easier to manage, and expanded our events API to allow for better integration and control. In the last quarter, our video portal received a new modern design with easier content discovery and navigation. These and many more improvements continue to earn us top recognition by leading analyst firms, including Gartner, which recently recognized Kaltura again as a representative vendor in their market guides for both meeting solutions and video platform services. Moving on beyond product. In the passing quarter, we hosted our first annual investor event. It was held in our New York office, and remote attendants joined using Kaltura's event platform.

Ron: We also enhanced the way, we track viewership engagement and completion of training paths to offer more granular certification.

Ron: We leave our V P and tags to offer larger multi session events be easier to manage.

Ron: And expanded our events API to allow for better integration and control.

Ron: Also on the last quarter, our video portal received a new modern design with easier content discovery and navigation.

Ron: These and many more improvements continued to earn us pop recognition by leading analyst firms, including Gartner, which reasonably recognized again as a representative vendor in their market guide for both meeting solutions and video platform services.

Ron: Moving on beyond product.

Ron: In the past quarter, we hosted our first annual Investor event was held in our New York Office and remote attendance joined using called tourists have been platform.

Ron Yekutiel: It was a great opportunity to provide additional color on our profitable growth plans and goal of achieving both double-digit revenue growth and a rule of 30, which combines year-over-year revenue growth and adjusted EBITDA margin by 2028 or before. The highlight of the day was showcasing our great products and sharing our exciting AI-infused vision and roadmap, as well as hearing live customer testimonials. AWS shared how they use Kaltura, among other things, to enable thousands of partners monthly across 6 languages. Accenture shared how every month they have millions of plays on Kaltura and 3,500 new videos uploaded powering training, enablement, and internal marketing. Boston University mentioned how Kaltura enables them to provide a flipped classroom experience to students in over 100 countries. Vodafone explained how Kaltura acts as the centerpiece of Vodafone TV, which reaches today over 3 million households across 9 markets.

Ron: It's a great opportunity to provide additional color on our profitable growth plan.

Ron: And goal of achieving both double digit revenue growth and the rule of 30, which combined year over year revenue growth and adjusted EBITDA margin by 2028 or before.

Ron: The highlight of the day with showcasing our great products and sharing our exciting AI infused vision and roadmap.

Ron: As well as hearing life customer testimonial EW.

Ron: AWS shared I'll do you go through among other things to enable thousands of partners monthly across six languages.

Ron: Accenture sharing how every month they have millions of players uncle draw and 3500, new videos uploaded hiring training and enablement and internal marketing.

Speaker Change: Boston University, you've mentioned the whole country enables them to provide a flipped classroom experience to students and over 100 countries.

Speaker Change: Vodafone explain how cutthroat.

Speaker Change: The centerpiece of Vodafone T V, which reaches today over 3 million households across nine market.

Ron Yekutiel: WE Telecom shared how at the end of their current migration process, they will provide TV services with Kaltura to more than 4 million households. A video recording of the event and our presentation deck are available at the investor section of our website. We also provided through the website access to Kaltura Genie instance, where you can run AI-based Kaltura queries on this recording and additional content provided. While on the topic of Kaltura events, I want to remind you all that our Kaltura Connect on the Road 2025 events are taking place later this month in New York, San Francisco, and London. We'll discuss how AI-powered personalization, intelligent archives, agentic intelligence, and data-rich video are reshaping customer and employee experiences and hear from amazing speakers from leading enterprises such as Salesforce, JPMorgan Chase, Vanguard, Adobe, AWS, Visa, Bloomberg, Pinterest, Zendesk, Accenture, AstraZeneca, and more.

Speaker Change: And weak telecom assured how at the end of their current migration process that will provide TV services will go through a more than 4 million households.

Speaker Change: A video recording of the event in our presentation deck are available at the investors section of our website.

Speaker Change: We also provided through the website access to culture of Genie instance, where you could run the AI based they'll throw up worries on this recording an additional content provided.

Speaker Change: And while on the topic of corporate events.

Speaker Change: I want to remind you all that our cultural connect on the road 2025 events are taking place later this month in New York, San Francisco and London well.

Speaker Change: Discuss how AI powered personalization intelligence archives, <unk> intelligence and data rich video are reshaping customer and employee experiences.

Speaker Change: And here from amazing speakers to leading enterprises, such as Salesforce JP Morgan Chase Vanguard, Adobe AWS visa Bloomberg Pinterest, Zen desk, Accenture Astrazeneca and more.

Ron Yekutiel: These events are followed by six connect and education events that will take place across the US and in Europe, as well as virtually for APAC organizations. Information for all these events is available on our website. We invite you to join. In summary, we wrapped up a record revenue and adjusted EBITDA quarter. While the year started as usual with slower new bookings compared to other quarters, our current pipeline indicates an expected improvement in the coming quarters, and we continue to forecast a year-over-year regrowth in new bookings for the full year, fueled by customer consolidation around our platform, maturity of our newer products, exciting new GenAI capabilities, growth potential within our great customer base, and a gradual regrowth in our sales force.

Speaker Change: These events are followed by six connecting education events.

Speaker Change: Take place across the U S and in Europe, as well as virtually for APAC organization.

Speaker Change: Information for all of these events is available on our website, we invite you to join.

Speaker Change: In summary.

Speaker Change: We wrapped up a record revenue and adjusted EBITDA quarter.

Speaker Change: While the year started as usual with lower new bookings compared to other quarters. Our current pipeline indicates an expected improvement in the coming quarters, and we continue to forecast a year over year re growth in new bookings for the full year.

Speaker Change: By customer consolidation around our platform maturity of our newer products exciting news Jennie O capabilities growth potential within our great customer base and a gradual rate growth in our sales force.

Ron Yekutiel: We also continue to forecast a bounce back in gross retention in H2 of the year, following the expected decline in H1 of the year, as mentioned earlier and in the previous earnings call. Despite our revenue guidance outperformance in Q1, we're mindful of the typical slower booking start for the year and the still uncertain macro outlook, and are therefore maintaining our previously provided revenue guidance for 2025. We are, however, slightly increasing our adjusted EBITDA guidance for the year and restating our goal of posting positive cash flow from operations for the year at a similar level as our forecasted adjusted EBITDA, with most, if not all contribution, expected to come in H2 of the year, consistent with historical seasonality. With that, I'll turn it over to John, our CFO, to discuss our financial results in much more detail. John?

Speaker Change: We also continue to fork out a bounce back in gross retention in the second half of the year. Following the expected decline in the first half of the year as mentioned earlier and in the previous earnings call.

Speaker Change: Despite our revenue guidance outperformance in the first quarter.

Speaker Change: Mindful of the typical slower bookings start for the year, and but still uncertain macro outlook and are therefore, maintaining our previously provided revenue guidance for 2025.

Speaker Change: We are however, slightly increasing our adjusted EBITDA guidance for the year.

Speaker Change: And restating our goal posting positive cash flow from operations for the year at a similar level as our forecasted adjusted EBITDA.

Speaker Change: With most if not all contribution expected to come in the second half of the year consistent with historical seasonality.

Speaker Change: With that I'll turn it over to John our CFO to discuss our financial results in much more detail John.

John Doherty: Thanks, Ron, and hello to everyone on the call today. Kaltura continued its strong and focused execution in Q1, with further monetization of our existing customer base and addition of new customers, continued improvement in operating efficiency, and reallocation of resources towards higher ROI opportunities and markets. Touching on a few highlights in the quarter that demonstrate this, for the 10th consecutive quarter, total revenue grew year-over-year, driven primarily by strength in our subscription revenue, which has grown year-over-year in this and all past quarters. It was also our third consecutive quarter of increasing year-over-year growth rates. Both total ARR and average ARR per customer continue to grow and are at the highest level to date. Net dollar retention reached its highest level since Q1 2022.

John Doherty: Thanks, Rod and Hello to everyone on the call today.

John Doherty: <unk> continued its strong and focused execution in the first quarter with further monetization of our existing customer base and the addition of new customers continued improvement in operating efficiency and reallocation of resources towards higher ROI opportunities and markets.

John Doherty: Touching on a few highlights from the quarter that demonstrates this.

John Doherty: For the 10th consecutive quarter total revenue grew year over year, driven primarily by strength in our subscription revenue, which has grown year over year and this and all past quarters. It was also our third consecutive quarter of increasing year over year growth rates.

John Doherty: Both total IRR and average <unk> per customer continued to grow and are at the highest level to date.

John Doherty: Net dollar retention reached its highest level since first quarter of 2022.

John Doherty: A strong gross retention rate in EE&T, which was at its highest level since Q4 2022. A record level of adjusted EBITDA, representing the seventh consecutive positive quarter of adjusted EBITDA profitability, highlighting our continued focus on operating expense management, and significant net loss improvement on a GAAP basis and record positive adjusted net income on a non-GAAP basis. With that, let me move on to our results. Our results once again exceeded our guidance for both revenue and adjusted EBITDA for the quarter. Total revenue for the quarter ended 31 March 2025, was $47 million, up 5% year-over-year and above the high end of our guidance range of $45.7 million to $46.5 million. Subscription revenue was $44.9 million, up 9% year-over-year.

John Doherty: Strong gross retention rate in E N T.

John Doherty: That its highest level since the fourth quarter 2022.

John Doherty: Our record level of adjusted EBITDA, representing the seventh consecutive positive quarter of adjusted EBITDA profitability, highlighting our continued focus on operating expense management and significant net loss improvement on a GAAP basis and record positive adjusted net income on a non-GAAP basis.

John Doherty: With that well.

John Doherty: Let me move on to our results our results once again exceeded our guidance for both revenue and adjusted EBITDA for the quarter.

John Doherty: Total revenue for the quarter ended March 31, 2025 was $47 million up 5% year over year and above the high end of our guidance range of $45 7 million to $46 5 million.

John Doherty: Subscription revenue was $44 9 million up 9% year over year.

John Doherty: This was also above the high end of our guidance range of $43.4 million to $44.2 million. Professional services revenue contributed $2.1 million for the quarter, down 42% year over year, consistent with the expected trends we discussed on our previous 3 earnings calls. The remaining performance obligations were $184.9 million, down 9% sequentially, but still an increase of 12% year over year, of which we expect to recognize 59% as revenue over the next 12 months. The sequential decrease in RPO is a result of the typical seasonal decline in new bookings and renewals in the Q1, and we expect this to rebound as we move through the year consistent with past years, as Ron mentioned earlier. Annualized recurring revenue was $174.8 million, up 1% sequentially and 7% year over year.

John Doherty: This was also above the high end of our guidance range of $43 4 million to $44 2 million.

John Doherty: Professional services revenue contributed $2 1 million for the quarter down 42% year over year consistent with the expected trends we discussed on our previous three earnings calls.

John Doherty: Meaning performance obligations were $184 9 million down 9% sequentially, but still an increase of 12% year over year of which we expect to recognize 59% as revenue over the next 12 months.

John Doherty: The sequential decrease in our P. O is a result of the typical seasonal decline in new bookings and renewals in the first quarter and we expect this to rebound as we move through the year consistent with past years as Ron mentioned earlier.

John Doherty: Annualized recurring revenue was $174 8 million up 1% sequentially and 7% year over year.

John Doherty: This is the highest ARR we've achieved to date and the fourth consecutive sequential increase, driven primarily by our increase in subscription revenue. Our net dollar retention rate for the quarter was 107%, compared to 103% last quarter and 98% in the same quarter last year. It was at its highest level since Q1 2022, consistent with our expectations. Within our EE&T segment, total revenue for Q1 was $34.4 million, up 6% year over year. Subscription revenue was $33.6 million, up 10% year over year, while professional service revenue contributed $0.8 million, down 55% year over year. Within our M&T segment, total revenue for Q1 was $12.6 million, representing 2% year over year growth. Subscription revenue was $11.3 million, up 7% year over year, while professional services revenue contributed $1.3 million, down 31% year over year.

John Doherty: This is the highest a R. R. We've achieved to date and the fourth consecutive sequential increase driven primarily by our increase in subscription revenue.

John Doherty: Our net dollar retention rate for the quarter was 107% compared to a 103% last quarter and 98% in the same quarter last year.

John Doherty: It was at its highest level since the first quarter 2022 consistent with our expectations.

John Doherty: Within our E N T segment total revenue for the first quarter was $34 4 million up 6% year over year subscription.

John Doherty: Subscription revenue was $33 6 million up 10% year over year, while professional service revenue contributed.

John Doherty: 8 million down 55% year over year.

John Doherty: Within our EM and TS segment total revenue for the first quarter was $12 $6 million, representing 2% year over year growth.

John Doherty: Subscription revenue was $11 3 million up 7% year over year, while professional services revenue contributed $1.3 million down 31% year over year GAAP gross profit in the first quarter was $32 7 million up 1% sequentially and 14% year over year.

John Doherty: GAAP gross profit in Q1 was $32.7 million, up 1% sequentially and 14% year over year. Gross margin was 70%, which is up from 64% in Q1 2024, and subscription gross margin was 77%, which is up from 72% in Q1 2024. Total operating expenses in the quarter were $34.3 million, compared to $35.9 million in Q1 2024, a reduction of 4% year over year. Adjusted EBITDA for the quarter was $4.1 million, an increase of $3.6 million from $0.6 million in Q1 2024. This result, along with our improving expense and margin profile, highlights our continued focus on improving our operating efficiency over time. GAAP net loss in the quarter was $1.1 million, or $0.01 per diluted share. This is an improvement of $10 million year-over-year.

John Doherty: Gross margin was 70%.

John Doherty: This is up from 64% in the first quarter 'twenty 'twenty four and subscription gross margin was 77%, which is up from 72% in the first quarter 2024.

John Doherty: Total operating expenses in the quarter were $34 3 million compared to $35 9 million in the first quarter of 'twenty 'twenty four a reduction of 4% year over year.

John Doherty: Adjusted EBITDA for the quarter was $4 1 million, an increase of $3 6 million.

John Doherty: From zero point $6 million in the first quarter of 2020 for this.

John Doherty: This result, along with our improving expense and margin profile highlights our continued focus on improving our operating efficiency over time.

GAAP net loss in the quarter was $1 1 million.

John Doherty: Or a penny per diluted share.

John Doherty: This is an improvement of $10 million year over year.

John Doherty: Moving to the balance sheet and cash flow. We ended Q1 with $80.9 million in cash and marketable securities. Net cash used in operating activities was $1 million in the quarter, similar to the amount used in Q1 2024. Ron mentioned, while cash flow was a little lower than expected, it is aligned with our typical seasonality and does not change our cash flow outlook for the year. I would now like to turn to our outlook for Q2 2025 and for the fiscal year ending 31 December 2025. While we have continued to execute well, as our strong Q1 outperformance demonstrates, we are in an uncertain macroeconomic environment as we collectively await clarity on the various ongoing tariff negotiations. We are keeping an eye on the impact to the general business environment as well as any related currency movements.

John Doherty: Moving to the balance sheet and cash flow. We ended the first quarter was $80 9 million in cash and marketable securities.

John Doherty: Cash used in operating activities was $1 million in the quarter similar to the amount used in the first.

John Doherty: 2024, as Ron mentioned, while cash flow was a little lower than expected. It is aligned with our typical seasonality and does not change our cash flow outlook for the year.

Speaker Change: I would now like to turn to our outlook for the second quarter of 2025 and for the fiscal year ending December 31 2025.

Speaker Change: While we have continued to execute well as a strong first quarter outperformance demonstrates we are in an uncertain macroeconomic environment as we collectively await clarity on the various ongoing tariff negotiations.

Speaker Change: We are keeping an eye on the impact to the general business environment as well as any related currency movements. Overall, we believe that any related impacts from tariffs are manageable for cat for us.

John Doherty: Overall, we believe that any related impacts from tariffs are manageable for Kaltura. As Ron mentioned, we continue to be thoughtful in maintaining our overall revenue guidance for the full year with a slight increase to our adjusted EBITDA guidance for the year. Regarding our Q2 revenue guidance, consistent with what we said on our last earnings call and our historical quarterly trends, we expect Q2 revenue to decline sequentially. This is due to the typical lower level of bookings we experience in the Q1 and disproportionate recognition of on-prem revenue in the quarter as well. As we mentioned on the Q4 2024 call, this year we expected to see a more pronounced decline due to higher Q1 on-prem revenue and the increased M&T churn in the H1 of the year.

Speaker Change: As Ron mentioned, we continue to be thoughtful and maintaining our overall revenue guidance for the full year with a slight increase to our adjusted EBITDA guidance for the year.

Speaker Change: Regarding our second quarter revenue guidance consistent with what we said on our last earnings call and our historical quarterly trends, we expect second quarter revenue to decline sequentially.

Speaker Change: This is due to the typical lower level of bookings, we experienced in the first quarter and disappointed recognition of on Prem revenue in the quarter as well.

Speaker Change: As we mentioned on the fourth quarter 2024 call. This year, we expected to see a more pronounced decline due to higher Q1 on Prem revenue and the increased MNC churn in the first half of the year.

John Doherty: In Q2, we expect subscription revenue to range from a decrease of 1% to an increase of 1% year-over-year, and to be between $40.8 and 41.6 million. Total revenue to range from a decrease of 1% to flat year-over-year, and to be between $43.4 and 44.2 million. We expect an adjusted EBITDA between $1.5 to 2.5 million. For the full year, we are maintaining our guidance and expect subscription revenue to range from an increase of 2% to 3% over 2024 full year, and to be between $170.4 and 173.4 million. Total revenue to range from an increase of 1% to 2% year-over-year to between $179.9 and 182.9 million. We are slightly raising our expected adjusted EBITDA for the full year to between $13.5 and 15.5 million. This would result in a doubling of our adjusted EBITDA margin from 2024.

Speaker Change: In the second quarter, we expect subscription revenue to range from a decrease of 1% to an increase of 1% year over year and to be between $40 8 million and $41 6 million in total revenue to range from a decrease of 1% to flat year over year and to be between $43 four.

Speaker Change: And $44 2 million.

Speaker Change: And adjusted EBITDA of between $1 5 million to $2 5 million.

Speaker Change: For the full year, we are maintaining our guidance.

Speaker Change: <unk> subscription revenue to range from an increase of 2% to 3% over 'twenty 'twenty four full year to be between $174 million and $173 4 million.

Speaker Change: Total revenue to range from an increase of 1% to 2% year over year to between $1 $79 9 million and $182 9 million.

Speaker Change: We are slightly raising our expected adjusted EBITDA for the full year between $13 5 million and $15 5 million.

Speaker Change: This would result in a doubling of our adjusted EBITDA margin from 2024.

John Doherty: We are also expecting to continue to post positive and improving cash flow from operations to a similar level as our adjusted EBITDA for the full year in 2025, with most, if not all, contribution coming in the H2 of the year, consistent with historical seasonality. In summary, the Q1 was a solid start for us in 2025 and has us well positioned going forward. As we mentioned previously, we need to manage through some of the late churn in M&T in the H1 of 2025. We expect to achieve a strong result in EE&T, and we have. In the H2 of the year, we expect our consolidated retention rate to return to last year's strong level, driven by both EE&T and M&T.

Speaker Change: We are also expecting to continue to post positive and improving cash flow from operations to a similar level as our adjusted EBITDA for the full year in 2025 with most if not all contribution coming in the second half of the year consistent with historical seasonality.

Speaker Change: In summary, the first quarter was a solid start for us in 2025 and has us well positioned going forward as we mentioned previously we need to manage through some of the delayed churn and empty in the first half of 2025, we.

Speaker Change: We expect to achieve a strong result, and E T and we have and in the second half of the year. We expect our consolidated retention rates returned to last year's strong level driven by both E N G and LNG.

John Doherty: I mentioned last quarter that our overall outlook on the business is brighter, and the results this quarter have not changed this view. While we are closely and prudently monitoring the macroeconomic environment, we believe that we will continue to benefit from emerging tailwinds that we are seeing of spend consolidation to a single vendor, digital and AI transformations, and the hybrid workplace that is continuing to drive demand for video-based offerings. This is certainly highlighted by our record average ARR this quarter. As we've said in the past, and I want to reinforce here, we will continue to target both revenue growth and sustained and improving adjusted EBITDA profitability consistent with our guidance. With an adjusted EBITDA margin of 9% and total revenue growth of 5% in the quarter, we achieved a rule of 14 for the quarter as compared to only 5% the year before.

Speaker Change: I mentioned last quarter that our overall outlook on the business is brighter in the results this quarter have not changed his view.

Speaker Change: We are closely and prudently monitoring the macroeconomic environment. We believe that we will continue to benefit from emerging cowboy means that we are seeing of spend consolidation to a single vendor.

Speaker Change: Digital and AI transformations, and the hybrid workplace that is continuing to drive demand for video based offerings. This is <unk>.

Speaker Change: Certainly highlighted by our record average a R. R. This quarter.

Speaker Change: We've said in the past and I want to reinforce here, we will continue to target both revenue growth and sustained and improving adjusted EBITDA profitability consistent with our guidance.

Speaker Change: With an adjusted EBITDA margin of 9% and total revenue growth of 5% in the quarter, we achieved a rule of 14 for the quarter as compared to only 5% the year before our results demonstrate that we have continued on the right path to achieving these objectives and to drive consistent returns to our shareholders. We.

John Doherty: Our results demonstrate that we've continued on the right path to achieving these objectives and to drive consistent returns to our shareholders. We are confident that we remain in a good position to achieve modestly accelerated revenue, adjusted EBITDA profitability, and cash flow from operations growth profile beyond 2025. Our target continues to be to achieve double-digit revenue growth and a rule of 30 combination between revenue growth and adjusted EBITDA by 2028 or sooner. Kaltura has achieved this goal in the past, and we firmly believe that we are on the right path to achieve it again. With that, we'll open the call for questions. Operator?

Speaker Change: We are confident that we remain in a good position to achieve modestly accelerated revenue adjusted EBITDA profitability and cash flow from operations growth profile beyond 2025, our target continues to be to achieve double digit revenue growth and our rule of 30 combination between revenue growth and adjusted EBITDA by 2028.

Speaker Change: Or sooner.

Speaker Change: <unk> has achieved this goal in the past and we firmly believe that we are on the right path to achieve it again with that we'll open it the call for questions operator.

Operator 2: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Your first question comes from Gabriela Borges with Goldman Sachs. Please go ahead.

Speaker Change: Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two to remove yourself from the queue for participants using speaker equipment. It may be necessary to pick up your handset.

Speaker Change: Before pressing the star keys.

Gabriela Borges: Your first question comes from Gabriela Borges with Goldman Sachs. Please go ahead.

Speaker Change: Okay.

Gabriela Borges: Hey. Good morning, team. Thanks for taking my question and thanks for the detail. Maybe we'll follow up here, Ron and John, on the macro commentary that you just provided.

Gabriela Borges: Hey, guys. Good morning, Thanks for taking my question and thanks for the detail, maybe well follow up here, Ron and John on the <unk>.

Speaker Change: Macro commentary that you just provided.

Gabriela Borges: I fully understand that the situation is fluid and that you're monitoring it. I'd love to just get a sense of what customers are telling you, particularly those customers that have some exposure to consumer or ad spending trends. What are they telling you in terms of their willingness to spend this year relative to 4 or 5 months ago? Is there any nuance between your larger customers and then some of the mid-market customers that I know you're increasingly targeting? Thanks.

Speaker Change: I understand that the situation is fluid and that you're monitoring it I'd love to just get a sense of what customers are.

Speaker Change: Tiny, particularly those customers that have some exposure to humira, our AD spending trends what are they telling you in terms of their willingness to spend this year relative to Q4 or five months ago and is there any nuance between larger and then some of the mid market customers are increasingly target.

Speaker Change: Thanks.

Ron Yekutiel: Yeah. Thank you for the great question, Gabriela. Let me start by saying that we don't see any negative impact at this point. We're thoughtful, we're careful, we all live in the same world. We have not heard anything material from any material customer about exposure to the situation. I would repeat your point that we are catering to larger organizations by design. We are not an SMB company. We're also definitely not a B2C company. Those that we work with are thinking for the mid to long-term and are not planning monthly and are not planning quarterly. It's been stable over the last weeks and months.

Gabriela Borges: Yes. Thank you for the Great question Gabriela <unk>, let me start by saying that we don't see any negative impact at this point you know we're thoughtful we're careful we all live in the same world.

Gabriela Borges: But we have not heard anything material from any material customer about exposure to the situation I would repeat your point, though we are catering to larger organizations by design we.

Gabriela Borges: We are not an SMB company and we're all so definitely not a BDC company and those that we work with our thinking for the mid to long term and are not planning monthly you are not planning quarterly so it's been it's been stable over the last.

Ron Yekutiel: That being said, it's hard to know whether, for example, if certain deals slip from this quarter to the next quarter is because people are taking a little bit of time to figure things out, even if they don't tell us, as it were. As we always know, Q1 is a slower quarter. It has been similar to last year, so we don't have any alarm bells. Could it have been maybe a bit better if the world would've been stabler and people would've felt comfortable to close deals earlier rather than wait a bit? Could've been, but at this point, we've not had any direct impact. Also important to note, we're a SaaS company. We're a cloud company. We don't have any equipment or CapEx or things that need to be shipped from one place to the other.

Weeks or months that being said.

Gabriela Borges: It's hard to know whether for example of certain deals slipped from this quarter to the next quarters because people are taking a little bit of time to figure things out even if they don't tell us as it were as you know we always know the first quarter is a slower quarter it.

Gabriela Borges: It has been similar to last year. So we don't have any alarm bells, but could it have been maybe a bit better if the world would've been stabler than people would've felt comfortable to close deals earlier, rather than wait a bit could have been but at this point, we've not had any direct impact also important to note or South company a word cloud company, we don't have any equipment or.

Gabriela Borges: Capex or things that need to be shipped from one place to the other so we don't expect tariffs to have a big impact on culture in any way shape or form, but again I think the operative word here is being thoughtful and it is the first quarter of the year, we never change guidance. After the first quarter and this year wouldn't be the odd here on that but let me pass it over to John John Go ahead, Ron touched on it you know mainly ware.

Ron Yekutiel: We don't expect tariffs to have a big impact on Kaltura in any way, shape, or form. Again, I think the operative word here is being thoughtful, and it is the Q1 of the year. We never change guidance after the Q1, and this year wouldn't be the odd year in that. Let me pass it over to John. John, go ahead.

John Doherty: Yeah, I mean, Ron touched on it. Mainly, we don't have an exposed supply chain. Effectively, as a SaaS company focused on the enterprise market, we feel, as I mentioned in the upfront comments, that we can manage through this. It's important that we are watching this. We haven't really heard signals from our customers. I mean, one of the other things is we have a product suite that ultimately can allow our customers to have a more efficient operating expense, depending on how they deploy our product. Certainly, that's an angle that we've used in the past and we'll continue to use going forward from a sales perspective. The other thing is, which I mentioned, too, is really around currency. We're watching currency. We're well-positioned in terms of from an expense perspective, how we're hedged with expenses we have in Israel.

Speaker Change: You know we don't have we don't have an exposed supply chain. So effectively a SaaS company focus on the enterprise market, we feel as I mentioned.

Speaker Change: Front comments that we we can manage through this but you know, but it's important that we are watching this we we haven't really heard.

Speaker Change: No signals from our customers I mean, one of the other things as you know we have a product suite that ultimately can allow our customers to have a more efficient operating expense depending on how they deploy our products. So certainly you know that's an angle that we've used in the past and will continue to use going forward for them from a sales perspective and the other thing is.

Speaker Change: As you know, which I mentioned to us is really around currency, we're watching currency, we're well positioned in terms of from an expense perspective, how we're hedged with expenses we have in Israel and then we're looking continuing to look at the dollar against the Euro and the pound dollar weekend weakening euro pound a little bit stronger.

John Doherty: We continue to look at the dollar against the euro and the pound. Dollar weakening, euro, pound a little bit stronger, primarily in the back half of Q1. From that perspective, we're watching it, but that's not a hurt for us.

Speaker Change: Maryland in the back half of the first quarter. So from that perspective, you know we're watching it but that's not effort for us.

Ron Yekutiel: I'd say even the contrary. I mean, a stronger European currency is good for us because a certain percentage of our revenue is from Europe. If that currency gets stronger on a dollar basis, we're even better. That's a good thing. From a cost perspective, it's really mostly the US and then Israel, which is its own story. I want to double down on a good comment that John had stated insofar as being kind of counter-recessionary in a way, insofar as us supporting reduced OpEx. One comment that was an off comment that we did hear, at least from one place, and I don't know if it's indicative, I don't know if there's going to be more of it, was the question of virtual events versus physical events.

Speaker Change: Steve on the contrary I mean, a stronger European currency is good for us because a certain percentage of our revenue is from Europe, if that currency gets stronger on a dollar basis or even better.

Speaker Change: So that's a good thing from a cost perspective, it's really mostly the U S and in Israel, which is its own story.

Speaker Change: But I want to double down on I was on a good comment that John stated insofar as being kind of counter recessionary in a way in so far as the supporting reduce topics. One comment that was an off comment that we did here at least for one place and I don't know if it's indicative I don't know if there's going to be more of it was the question of virtual events versus physical events, we all know.

Ron Yekutiel: We all know that there had been, after the height of COVID, where everything had gone virtual, a return to physical and hybrid. We have heard at least a couple of occasions where people have spoken about, Yeah, we want to strengthen the virtual side to reduce or accommodate for lower travel spend. We feel that we as a company are very well-positioned to benefit from any situation where companies are going to want to spend less and be efficient in training, marketing, selling, collaborating remotely. The answer is absolutely yes.

Speaker Change: There had been after the height of Covid, where everything have gone virtual I returned to physical and hybrid we have heard at least a couple of occasions, where people had spoken about yeah, we want to strengthen the virtual sides to reduce or comedy for lower travel spend and so we feel that we as a company are very well positioned.

Speaker Change: The benefit from any situations, where companies are going to want to spend less and be efficient in training marketing selling and collaborating remotely answer's absolutely yes.

Gabriela Borges: Yes. That makes sense. Thanks for all the detail there. As a follow-up, you've talked about growing the sales team gradually this year. Maybe tell us a little bit about where you're most excited to put new resources to work. It's a pretty unique position where you've done all the heavy lifting and optimization in the last 3 years, and now you're thinking about growth. Would love to hear where you plan to allocate those resources.

Speaker Change: Yeah that makes sense thanks holiday.

Speaker Change: And as a follow up you've talked about growing the sales team gradually this year, maybe tell us a little bit about where you are not quite up to put new resources to work its pretty unique professionalized done all the heavy lifting in up to my question in the last three years and I think he is my question.

Speaker Change: That's a fair way you plan to allocate those resources.

Ron Yekutiel: Yeah, thank you for that. We had reduced our sales headcount by 25% from the height during COVID. We've done that to accommodate for our return to profitability plan as well as for the declining demand in order to kind of match our sales efficiency, customer acquisition cost ratios, et cetera. When things started turning around, bookings started coming back, markets started being more efficient, and we had achieved our profitability goals and became just even a profitable and now in EPS levels, non-GAAP, et cetera, and are getting in the right direction, we feel comfortable to gradually, and the operative word here again is gradually start increasing it, and it's throughout the year. It's not an immense increase, but for the first time it will be an increase. As to the question of where, there's two aspects here.

Speaker Change: Yes, thank you for that.

Speaker Change: So we had reduced our sales head count by about 25% from the height during COVID-19.

Speaker Change: And we've done that to accommodate for our return to profitability plan as well as for the declining demand in order to kind of match, our sales efficiency customer acquisition cost ratios et cetera, and when things started turning around bookings started coming back market started to be more efficient and we had achieved our profitability goes in.

Speaker Change: You know just EBITDA profitable and now in.

Speaker Change: And EPS levels, non-GAAP et cetera, and are getting in the right direction, we feel comfortable to gradually and the operative word the Oregon is gradually start increasing it and it's throughout the year, it's not in the mens increase but for the first time, there will be an increase as to the question of where there's two aspects here when we have reduced the head count we had focused increasingly so.

Ron Yekutiel: When we had reduced the headcount, we had focused increasingly so on the enterprise side of the business, more so than M&T and education. The reason for that was that we felt that that represented, at the time, the most effective return on our capital spent. It is both the largest TAM and was also where we had the most amount of continued demand. M&T had stopped even more aggressively than some others on new initiatives. We had our own organic growth, as it were. These cycles are longer. They're a bit less profitable. We said that's not the time to double down on that. On the education front, it was more upselling, those that market is a bit more saturated compared to enterprise. Again, it made more sense to go deeper on the enterprise front. What we're seeing now is two things.

Speaker Change: On the enterprise side of the business more so than them in tea and education and the reason for that was that we felt that that represented at the time the most effective.

Speaker Change: Return on our capital spend it is both the largest Tam. It was also where we had the most amount of continued demand M. D had stopped even more aggressively than some others on new initiatives, we had our own organic growth as it works. These cycles are longer they're a bit was profitable. So we said that's not the time to double down on that.

Speaker Change: And on the education front.

Speaker Change: It was more upselling.

Speaker Change: That market is a bit more saturated compared to enterprise.

Speaker Change: Again, it made more sense to go deeper on the enterprise from what we're seeing now is two things number one is enterprise continued as even.

Ron Yekutiel: Number one is enterprise continued is even increasingly so interesting and exciting, right? We had expanded our use cases to cater to CMOs with adding our event-based and virtual and webinar-based products, as well together with our virtual classroom. We have more products, the market's doing better, but we're also in a great position to re-accelerate the markets that we've taken the foot off the gas a bit more. We're seeing a rebound in interest in media and are able to cater with a great success and continued growth and great endorsement by our existing market-leading blue-chip customers. In education, likewise, we're in such a strong position, market presence, additional products that enables us to continue to expand from teaching and learning to marketing and admissions with a slew of new products that we have launched.

Speaker Change: Increasingly so interesting and exciting right. We had expanded their use cases to cater to Cmos with adding our event based and virtual webinar based products as well.

Speaker Change: With our virtual classroom. So we have more products the market is doing better but.

Speaker Change: We're also in a great position to Reaccelerate the market. So we've taken the foot off the gas a bit more so we're seeing a rebound in interest in media and are able to cater with great success and continued growth in great endorsement by our existing market, leading blue chip customers and an education. Likewise, we're in such a strong position.

Speaker Change: Market presence additional products that enables us to continue to expand from teaching and learning to marketing and admissions with a slew of new products that we've launched so where we had taken off the foot was more from these areas now that we're re accelerating works we are re accelerating across the board.

Ron Yekutiel: Where we had taken off the foot was more from these areas. Now that we're re-accelerating, we're re-accelerating across the board.

Gabriela Borges: Very good. Thank you for the detail.

Speaker Change: Alright, thank you kind of detail.

Ron Yekutiel: Thank you, Gabrielle.

Gabriel: Thank you Gabriel.

Operator 2: Next question, Ryan Koontz with Needham & Company. Please go ahead.

Speaker Change: Next question Ryan.

Speaker Change: And the company. Please go ahead.

Ryan Koontz: Great. Thanks for the question. Ron, relative to the M&T churn that you see coming down the pipe here, is this, these customers that are downsizing deals? Are they exiting the business? Any color you can share generally on the kind of nature of the churn?

Speaker Change: Great. Thanks for the question.

Speaker Change: Relative to the a M and T churn that you see coming down the pipe here is this are these customers that are downsizing deals are they exiting the business any color you can share generally on the kind of nature of the chair.

Ron Yekutiel: Yeah, happy to do so. Just to remind all of us, because we've been talking about this for a while in the last earnings call, and this is as expected, so nothing here has changed over the last few months insofar as expectations for the year. I'm reminding us that last year we had a very low churn, historically low churn, lower than any other year in the history of the company for M&T. In general, by the way, it was a much, much better year than earlier years and a big rebound in gross retention compared to the year before for the company, so we're all doing great. We also said that there were a few churns as of last year that had been pushed into 2025, and accordingly, we expect the gross retention this year for M&T to be lower.

Speaker Change: Yes happy to do so so just to remind all of us because we've been talking about this for a while in the last earnings call and this is as expected. So nothing here has changed over the last few months and so far as expectation for the year I'm reminding us that last year, we had a very low churn historically low churn lower than any other year in the history of the company from in Ts in general by the way it was a much much better.

Speaker Change: Here in early years, and a big rebound in gross retention compared to the year before for the companies of the world doing great. But we also said that there were future as of last year that had been pushed into 2025 and accordingly, we expect the gross retention this year for M. T. W. La work, we still said that while this is going to drag it down.

Ron Yekutiel: We still said that while this is gonna drag down our gross retention as a company, it's gonna be better than 2023. It's gonna be a bit lower than 2024, and we expect that to be 100% temporary. We don't expect that to continue after. Now, back to this quarter and to your question about is this decreasing or exiting a few points, but I'll start actually from the ENT, and then I'll talk about M&T. ENT was a great gross retention quarter, best for multiple years, and continue to do good, and this is the majority of our business. I want to first take off the table that the conversation here is not on ENT, it's 100% on M&T.

Speaker Change: Our gross retention as a company is going to be better than 2023 is going to be a bit lower than 2024, and we expect that to be 100% temporary. So we don't expect that to continue after now back to this quarter and to your question about is this decreasing or exiting a few points, but I'll start actually from the E&P and then I'll talk about EM.

Speaker Change: T.

Speaker Change: E N T was a great gross retention quarter best for multiple years and continue to do good and this is the majority of our business. So I want to first take off the table that the conversation years, not any anti it's 100% on empty coming back to them and T. In a it is the expected few accounts that we knew that are coming off nothing more than that.

Ron Yekutiel: Coming back to M&T, and A, it is the expected few accounts that we knew that are coming off, nothing more, and that we continue to see increase in both upsells for our existing other customers, as well as a material regrowth in new booking opportunities in that line of business. Finally, getting to your specific question as to the cases that we're talking about here. In most of the cases here, and it's only less than five, right? It's a few customers. It is mostly a full exit as opposed to decrease due to a strategic decision that they have taken for various different reasons. They, they brought it in-house. They wanted to move to something else.

Speaker Change: We continue to see increase in both upsells for our existing other customers as well as immaterial re growth and you're booking opportunities in that line of business are finally getting to your specific question as to the.

Speaker Change: The cases that we're talking about here and most of the cases here and it's only less than five Reits a few accustomed.

Speaker Change: Customers. It is mostly a full exit as opposed to decrease due to a strategic decision that they've taken for various different reasons. So they they brought it in house. They wanted to move to something else. It was a company that was acquired out of a bigger company that we have catered to that separate company has a different plan given the.

Ron Yekutiel: It was a company that was acquired out of a bigger company that we have catered to, and that separate company has a different plan given the ex-exit from the larger company. These are very specific situations, and it is more a full exit rather than a decrease. Does that address your question, Ryan?

Speaker Change: Except from the larger companies. So these are very specific situations and it is more a full exit rather than a decrease does that address your question Ryan.

Ryan Koontz: Yeah, it does. I have one more follow-up if I could. That's really helpful. Thanks, Ron.

Speaker Change: And one more follow ups.

Ryan: That's really helpful. Thanks, Ron.

Ron Yekutiel: Yeah.

Ryan Koontz: On the, on the product front, as you think about your, kind of your build-out of the product and obviously attempting to re-accelerate revenue, do you think it's more critical to build out kind of deeper solutions around verticals?

Speaker Change: On the on the product front as you think about your kind of your build out of the product and obviously attempting to reaccelerate revenue.

Speaker Change: You do you think it's more critical to build out.

Speaker Change: Deeper solutions around verticals or is it more about self.

Ron Yekutiel: Yeah.

Ryan Koontz: Is it more about self-service, ease of onboarding, simplify the product, go down market? Like kind of which direction are you placing bets there on the product investment? Thank you.

Speaker Change: Self service ease of Onboarding simplify the product go downmarket like.

Speaker Change: Which direction are you, placing bets on the other product stuff. Thank you.

Ron Yekutiel: Yeah, love these questions. First, we don't need a revolution, and to be honest, not even an evolution, because we have the products that we need in order to accelerate and grow. You've seen this in growth numbers this quarter. Again, the specific situation that is occurring on the media and telecom side, which is the only piece that is slowing down growth to some extent, is a piece that is a very temporary situation. There's more demand. To my point earlier, even about M&T, significant opportunities. More of the pipeline now is huge compared to what it was a few quarters ago. We're not required to build new things in order to generate the goals that we have stated.

Speaker Change: You know I love these questions. So.

Speaker Change: First we don't need a revolution and to be honest not even an evolution because we have the products that we need in order to accelerate and grow and you've seen this in the growth numbers. This quarter again, the specific situation that is occurring on the media and telecom side, which is the only piece that it's slowing down growth to some extent as a piece of it as a very temporary.

Speaker Change: And there's more demand and to my point earlier, even about them and see significant opportunities more of the pipeline now is huge compared to what it was a few quarters ago and so we're not required to build new things in order to generate the goals that we had stated that being said.

Ron Yekutiel: That being said, you know, the main focus that we have right now, and we've stated that multiple times, is to ensure that we continue to move from a content management company to a hyper-personalized experience company, where we move to enabling individuals to have their own experience around learning, teaching, marketing, sales, and entertainment with an AI-infused content management system. We're in a huge advantage because we were atomizing content that we already own and maintain, not own, but we manage on behalf of our customers. By doing so, we're seeing great excitement. I've mentioned 150 customers are going down the various stages of our POCs, and 20 of them that are already generating a lot of traffic and excited, and daily we get feedback from that.

Speaker Change: The main focus that we have right now and we've stated multiple times is to ensure that we continue to move from a coffee management company to a hyper personalized experience company, where we move to enabling individuals to have their own experience around learning teaching marketing sales and entertainment.

Speaker Change: And AI infused a content management system.

Speaker Change: We're in a huge advantage because we were atomizing content that we already own and maintain not owned but we manage on behalf of our customers and so by doing so we're seeing great excitement I've mentioned, the 150 customers that are going down the various stages of our P. O season, and 20 of them that are already generating a lot of traffic and excited and daily we get fees.

Speaker Change: Back from that so that's an important important piece that I'd call out horizontal because theres. Many agents are we're putting in place. They don't fall under deeper vertical solutions. They definitely don't fall under self service, but that is an important part between the two that you had mentioned.

Ron Yekutiel: That's an important piece that I call a horizontal because there's many agents that we're putting in place. They don't fall under deeper vertical solutions. They definitely don't fall under self-serve, but that is an important part. Between the two that you had mentioned, if I were to choose a more important area for us in the short term, that would be more in the deeper solutions rather than self-serve and down markets. While we do believe that this company has a great opportunity to continue to expand from large enterprise to medium-size and departmental entries, and that had been part of our plans and strategies over recent years, and we've discussed them. It's been a few tough years, and we needed to have made some smart decisions around where we put our capital, and that was the one area that we said we could wait.

Speaker Change: If I were to choose a more important area for us in the short term that would be more of a deeper solutions rather than self serve in down market.

Speaker Change: While we do believe that this company has a great opportunity to continue to expand from large enterprise to medium size and departmental entries and that had been part of our plans and strategies over recent years and we've discussed them. You know it's been a few tough years and we needed to have made some smart decisions around where we put our capital and that was.

Speaker Change: The one area that we said we could wait we've looked at other companies in this space and obviously, the bleeding and have decided that we'd rather stay where we are kings, which by the way is the area where everybody is trying to go to we're already there for the last 19 years and continue to deepen our strengths and move later to the self serve and I will say that what I said earlier in so far as the IDE.

Ron Yekutiel: We've looked at other companies in this space and have seen them bleeding, and have decided that we'd rather stay where we are kings, which, by the way, is the area where everybody's trying to go to. We're already there for the last 19 years and continue to deepen our strength and move later to the self-serve. I will state that what I said earlier, insofar as AI, is 100% aligned with the notion of less effort, more self-service, because the AI tools are enabling to create content automatically, deliver it automatically, take the insights automatically. To the extent that they are catering to less touch, more self-service, that's something that we're doing. Should you expect to see over the next quarter or 2 quarters, a massive move towards SMB? Not yet. Does that address your question, Ron?

Speaker Change: 100% aligned with the notion of less effort more self service because the AI tools are enabling to create content automatically deliberate automatically take the insights automatically so to the extent that they are catering to.

Speaker Change: Let's touch more self service, that's something that we're doing but.

Speaker Change: Should you expect to see over the next quarter or two quarters, a massive move towards SMB not yet does that address your question right.

Ryan Koontz: Yeah, it does. That's it. Great, Ron. Thank you so much.

Speaker Change: Yes, I'd say, it's great Ron Thanks, so much.

Ron Yekutiel: Thank you.

Speaker Change: Thank you.

Operator 2: Next question, Patrick Walravens with Citizens JMP. Please go-

Patrick Walsh: Next question Patrick Walsh.

Speaker Change: Sam. Thank you. Please go ahead.

Patrick Walravens: Oh, great. Thank you. Can you, John, maybe to start, just sort of bridge the amount of the decrease in total revenue from Q1 to Q2? What are the components of that?

Speaker Change: Oh, great. Thank you.

Speaker Change: Can you John.

Speaker Change: John maybe to start just sort of bridge the the amount of the decrease from in total revenue from Q1 to Q2 like what are the what are the components of that.

Speaker Change: Okay.

John Doherty: Basically, if you look at what's happening first in Q1, as mentioned on the call, we did have a pickup in on-prem. That was about $1.6 million. Relative to the guidance, about $1.4 million of that is falling off. Plus, we had the lower bookings.

Speaker Change: So basically.

Speaker Change: Basically if you look at what's happening first in Q1, Yeah as mentioned on the call. We did have a pickup in on Prem.

Speaker Change: That was about $1 6 million.

Speaker Change: I mean relative to the guidance you know about $1 4 million of that is falling off plus we had you know the lower book at it.

Patrick Walravens: Got it.

John Doherty: in the quarter, which also will impact the number for the most part. Those are the two biggest pieces.

Speaker Change: In the quarter, which also will impact the number for the most part so those are the two biggest pieces.

Ron Yekutiel: I will note on the on-prem.

Speaker Change: Yes.

Patrick Walravens: Yeah

Speaker Change: Yeah.

Ron Yekutiel: I will note on the on-prem stuff that it is a typical Q1 situation, and this also happened last year. It's not something that is completely off, it's just that the nature of the annualized behavior of on-prem is one that gives a pickup more in Q1 rather than not. As you've noted, it's actually a bit probably less than that number when you look at the specific additional stuff that's come in, it's about $1 million. If you look at that increment of about $1 million that's been incremented compared to the year before, as opposed to the same on-prems that have been there forever, that will return the Q1 the following few years as well. It's not a one-off, it's just returning here and there depending on the renewal cycle.

Speaker Change: But on the on Prem stuff that it is a typical Q1 situation that has also happened last year.

Speaker Change: Not something that is completely off is just that the nature.

Speaker Change: Of the annualize behavior of on Prem is one that gives a pick up more in Q1 rather than not.

John Doherty: Yeah, Pat, the last piece is the M&T churn that's been talked about.

Patrick Walravens: Right. Okay. I mean, all your metrics look good, right? Your RPO looks good, but you're telling us that the bookings were soft, yet it's typical for softness, but maybe you'd hoped it would be better. Do we see that anywhere, or is it just in the guidance that that shows up?

Ron Yekutiel: Yeah, you would see it in the RPO, but again, the RPO is combining two things. It's combining all the existing business and to what extent it is being renewed or not renewed, as well as the incremental new bookings. You don't have a view on just new bookings.

Speaker Change: I mean, you would see it in the RP O, but again the RP O is combining two things, it's combining all the existing business and to what extent that is being renewed or not renewed as well as the incremental new bookings.

Speaker Change: Don't have a view on just new bookings. Another view of every now Q1 is always lower in <unk> in Q4, mostly because forever you wont have been a low new bookings quarter and because it has forever been alone in bookings quarter. Then the renewals in Q1 are far far far lesser than any other quarters and because of the renew.

Ron Yekutiel: you have a view of everything.

Patrick Walravens: Yeah.

Ron Yekutiel: Q1 is always lower in RPO than Q4, mostly because forever Q1 had been a low new bookings quarter. Because it's forever been a low new bookings quarter, then the renewals in Q1 are far, far, far lesser than any other quarters. Because the renewals are far lesser, then the RPO falls down. The fact that that specific year is also another low number just adds to the point. It's just that Q1 is always a drop because there's forever been much less business. Like I said, nothing material happened from a standpoint of appreciating that the first quarter is not the quarter to usually open up champagne bottles and say, Oh my God, what an amazing beginning for a strong year. Rather than, okay, pipeline still looks strong, Q1 is kind of naturally lower, let's see what happens in Q2, Q3, and Q4.

Speaker Change: It was a far lesser than the RPM falls down and the fact that that specific year is also another low number just adds to the point, but it's just the Q1 is always a drop because he has forever been much less business.

Speaker Change: So like I said I don't nothing material happened from a standpoint of appreciating that the first quarter is not a quarter or two usually open up champagne bottles.

Speaker Change: Oh, My God, what an amazing beginning for a strong year, rather than okay pipeline still looks strong Q1 is kind of naturally lower let's see what happens in Q2, Q3, and Q4 to add to the fact that generally companies don't start off the year and immediately start changing their guidance does not a prudent thing to do you don't get points for it and it doesn't make a lot of sense.

Ron Yekutiel: To add to the fact that generally companies don't start off the year and immediately start changing their guidance, it's not a prudent thing to do. You don't get points for it, and it doesn't make a lot of sense. If you add a lot on top of that, we have the discussion around the churn and M&T. That's where it all comes together. Again, would we have left off suddenly a huge jump in the Q1 bookings? Yeah, this is not something that's non-standard for how the year starts. We have not lost any material deals, maybe a few got pushed. From a pipeline perspective, we have good coverage for a strong bookings year, we feel good.

Speaker Change: But if you add on top of that then we have the discussion around the churn in <unk>. So that's where it all comes together, but again.

Speaker Change: We have loved to have suddenly a huge jump in our Q1 bookings yet, but this is not something that.

Speaker Change: Non standard for how the year starts and we have not lost any material deals maybe a few got pushed and from a pipeline perspective, we have good coverage for a strong bookings year. So we feel good.

Patrick Walravens: All right. That's my last question, which is, and you can't give the actual numbers, but, you said the pipeline is high. Huge, I think you said, compared to the last couple of quarters, and then you have to assume some conversion rate, right? Can you quantify in any way for us sort of how big is the pipeline risk that covers Kaltura? Yeah.

Speaker Change: Alright, So thats my last question, which is in it.

Speaker Change: Given the actual numbers, but.

Speaker Change: You said that the pipeline is is.

Speaker Change: Hi, compare huge I think you said compared to the last couple of quarters and then you have to assume some conversion rate right. So can.

Speaker Change: Can you quantify in any way for us sort of.

Speaker Change: How big.

Speaker Change: The coverage late.

Ron Yekutiel: Yeah. We can, but, and again, we got to be consistent and careful and let John comment on it. Just to be very clear, when I said huge, I said the M&T pipeline is huge compared to what it was before, because I also said the sentence before that we took our foot off the gas and we had no people selling into M&T. We made a very clear decision that this is not a focus area for new logo rather than upsell. For the M&T case, it's a very, very steep jump when you look at our current pipeline compared to what it was before. For the rest of the business, it's a very nice pickup. We do see the pipeline picking up and looking nice and supportive of our plan for year-over-year growth.

Speaker Change: Yes, we can and again, we got to be consistent with careful and let John comment on it but just to be very clear when I said huge I said the MMP pipeline is huge compared to what it was before because I also said the sentence before that we took our foot off the gas and we have no people selling at <unk> you made a very clear decision. So this is not a phone.

Speaker Change: This area for new logo, rather than upsell. So for the <unk> T case, it's a very very steep jump when you look at our current pipeline compared to what it was before now for the rest of the business. It's a very nice pick up and we do see the pipeline picking up and looking nice and supportive of our plan for year over year growth.

Ron Yekutiel: I didn't come and say that for the entire company, it's a huge down, so just to make that point. Yeah, as you know, we've never, and we don't change that from a KPI perspective, provided actual booking numbers nor actual coverage ratios. It's just not a KPI that we provide, but I'll let John comment on that, how about it?

Speaker Change: I didn't come in and say that for the entire company. It's a huge balance so just to make that point, but yes. We don't as you know we've never and we don't change that from keeping our perspective provided actual booking numbers nor actual coverage ratios.

Speaker Change: Not to keep you on that we provide but let John comment on that about it yes, I mean, just to just to wrap it all up.

John Doherty: Just to wrap it all up, and we mentioned some of this, but I'll talk about a little bit more into 2025. Typical lower bookings Q1. We gave you guidance for Q2 in terms of what we expect. We are seeing, and expect bookings to pick up as we move into the H2 of the year, and to have a very strong and solid H2 of the year, which would round us out to our overall annual guidance.

Speaker Change: And we've mentioned some of this.

Speaker Change: Talk about a little bit more into 2025.

Speaker Change: Typical lower bookings for the first quarter.

Speaker Change: We gave you guidance for second quarter in terms of what we expect.

Speaker Change: And we are seeing.

Speaker Change: And expect bookings to pick up as we move into the second half of the year and to have a very strong and solid second half of the year, which rounds, which would round us out to two of our overall annual guidance.

Patrick Walravens: Okay, thank you both.

Speaker Change: Okay. Thank you both.

Ron Yekutiel: Thank you.

Speaker Change: Thank you.

Operator 2: Once again, if you would like to ask a question, please press star one on your telephone keypad. Next question comes from Michael Turrin with Wells Fargo.

Speaker Change: Once again, if he would like to ask a question. Please press star one on your telephone keypad.

Speaker Change: Next question comes from Michael Carrier with Wells Fargo. Please proceed.

Ronan Shaw: Hey, this is Ronan Shaw on for Michael. Just a question on the higher ARR per customer. Maybe just talk about the dynamics between price increases and customers expanding their product portfolio, and what's driving that record number.

Speaker Change: Hey, this is Brian at Shaw on for Michael.

Speaker Change: Just a question on the higher <unk> per customer, maybe just talk about the dynamics between price increases and customers expanding their product portfolio and what's driving that record number.

Ron Yekutiel: Yeah. Thank you, Ronan, for your question. We've had both. We've stated consistently that as things advance, we're getting kind of the automatic price increases, and we're pushing for some of that. Note that the price increase is always a lesser piece compared to more products, and the reason is that the price increase is only relevant for those that have come to a new renewal session, which by design in Q1 is a small group, as I said earlier, because most of the renewals do not come there.

Speaker Change: Yeah. Thank you run it through your question, we've had both and we've stated consistently that as things advance, we're getting kind of the automatic price increases and we're pushing for some of that.

Speaker Change: But note that the price increase is always a lesser piece compared to more products and the reason is that the price increase is only relevant for those sort of come to a new renewals session, which by design in the first quarter is a small group as I said earlier, because most of the renewals do not come there. So even if there is some price increase by.

Ron Yekutiel: Even if there's some price increase by some of the customers that have come to renewal, that doesn't move the needle as much compared to the latter part, which is consolidation around Kaltura, more up-sells, more products being used, continue to focus on the larger opportunities as opposed to the small folks out there, which is where we're strategically positioned. The number one push, and that would be that our customers use us for multiple products, multiple use cases, of course, multiple video technologies between on-demand, live, and real-time. That is the main driver of the increase, which has always been there. It's almost quarter by quarter, and of course, that could shift in any given quarter a bit to the right, to the left, but it continue to grow and grow and grow.

Speaker Change: Some of the customers that have come to a renewal that doesn't move the needle as much compared to the latter part which is consolidation around culture.

Speaker Change: For up sells more products being used.

Speaker Change: Continue to focus on the larger opportunities as opposed to the small folks out there, which is where we're strategically positioned so the number one push and would be that our customers use us for multiple products multiple use cases of course multiple video technologies between on demand live in real time that is the main driver.

Speaker Change: Of the increase which has always been there it's almost quarter by quarter and of course that could shift in any given quarter a bit to the right to left but it continue to grow and grow and grow if you look at a multi year basis. The graph is very strong and you could just see is growing and growing.

Ron Yekutiel: If you look at a multi-year basis, the graph is very strong and you could just see us growing and growing.

Ronan Shaw: Got it. Just another follow-up. At the Investor Day, you guys said it was early days on AI monetization strategy. Wondering if you guys have any update here, just having another quarter under your belt, with customers testing out the products?

Speaker Change: Got it.

Speaker Change: And then just another follow up at the Investor Day, you guys said it was early days on AD monetization strategy I'm wondering if you guys have any update here just having another quarter under your belt with.

Speaker Change: With customers testing out the products.

Ron Yekutiel: Yeah, we continue to be very excited. Like I said, the pipeline is growing. The companies are going down the funnel of our POCs. Both the number of companies in that funnel, the stage they're in the funnel, the feedback we're getting from them, the recognition in the market insofar as awards that are stating, This is really, really exciting. There's just all lights are green. There's just a question of how quickly that turns into dollar signs. We are, for the first time, mentioning in this earnings call that we are now with opportunities in our pipeline, and we expect to start monetizing over the next few quarters. You have not heard that in earlier calls, because quite frankly, we weren't as close. We said, Look, we're starting to launch stuff. We believe it's going to be interesting. We said, Okay, we launched stuff.

Speaker Change: Yeah, we continue to be very excited.

Speaker Change: The like I said the pipeline is growing the company's are going down the funnel of our appeal sees both the number of companies.

Speaker Change: Companies in the funnel the stage they are in the funnel the feedback we're getting from them the recognition in the market and so far as awards that are stating. This is really really exciting. There's just all lights are green is just a question of how quickly that turns into dollar signs. We are for the first time mentioning in this earnings call.

Speaker Change: We are now with opportunities in our pipeline and we expect to start monetizing over the next few quarters you have not heard that in earlier calls because quite frankly, we weren't as close and we said look we're starting one stuff. We believe it's going to be interesting that we said, okay. We launched stuff, it's becoming interesting now we're saying what we've launched up people are testing it theyre, saying theyre excited and all we're saying.

Ron Yekutiel: It's becoming interesting. Now we're saying, Well, we've launched stuff. People are testing it. They're saying they're excited. Now we're saying, and they're also talking to us about paying us money, and it's around the corner. We're absolutely moving forward, but this is too early to call it and to be able to say exactly how much and where. This is becoming, and will continue to become an important piece of our revenue.

Speaker Change: And they're also talking to us about paying us money and it's around the corner. So we are absolutely moving forward, but this is too early to call it and to be able to say exactly how much and where but this is becoming and we'll continue to become an important piece of our revenue.

Ronan Shaw: Awesome. Thank you.

Speaker Change: Awesome. Thank you.

Ron Yekutiel: Thank you.

Speaker Change: Thank you.

Operator 2: Thank you. I would like to turn the floor over to Ron Yekutiel for closing remarks.

Speaker Change: Thank you I would like to turn the floor over to Ron you could feel for closing remark.

Ron Yekutiel: Yep. We're very excited to start the year strong with some good growth and continued march towards profitability. I think one of the interesting remarks that was made by us is look at the rule of 30, quote unquote, where it has gone, and how much it has jumped and continue to jump. I think when you look at other companies in this industry, I think it's clear that we're continuing to outperform and do well. We want to thank you again for your interest and for joining our call. Just a reminder, we're going to be participating at the Needham Technology, Media, & Consumer Conference in May. We look forward to meeting you there, thank you for Needham folks.

Ron: Yeah. So we're very excited to start the year strong with some good growth and continued March towards profitability I think one of the interesting remarks that was made by US is look at the rule of <unk> quote unquote and word has gone and how much. It has jumped and continue to jump in I think when you look at other companies in this industry I think it's clear.

Ron: So we're continuing to outperform and do well we want to thank you again for your interest and for joining our call and just a reminder, we're going to be participating at the Needham technology media and consumer conference in May and we look forward to meeting you there and so thank you for <unk> folks and lastly.

Ron Yekutiel: Lastly, we do hope to see some of you coming to our Connect events throughout the month that we have in both New York, San Francisco, and London, and later the education events. Please go to our website and register. We would love to see you there. Thanks, and have a wonderful day and week. Take care.

Ron: We do hope to see some of you coming to our connect events throughout the months that we have in both New York, San Francisco and London, and later of the education events. So please go to our website and register we love to see you there. So thanks.

Ron: Thanks, and have a wonderful day, and we can take care.

Operator 2: This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.

Speaker Change: This concludes today's teleconference. You may disconnect your lines at this time and thank you for your participation.

Ron: Okay.

Ron: Okay.

Ron: Yes.

Ron: [music].