So now that’s done in an automated way. And the other one that we mentioned was done with Salesforce at their event at Dreamforce, which was also successful. So it’s already starting to hit. We also mentioned that we are working with a lot of ecosystem partners. As mentioned, we have some 15 already that are working with us. And there’s many other customers. Many customers already 10 that are formally there and others that are joining and added into that that are looking to consume these services. A big advantage of Kaltura, given what I said earlier about APIs and workflows, is that we’re open and flexible and we can easily insert third-party innovation coming from other companies. We’ve done that across our history. We have 120 different technology partners for the company at large beyond AI, and we expect to do the same here for AI.
So a lot of plans and we’re going to share them as we advance for both E&P and M&T. We also mentioned some M&T applications that we are running.
Ryan Koontz: Okay. That’s great, Ron. Thank you for that color. On your large deals, your six and seven-figured new deals you announced. Any general trend there in terms of these typically still displacements of multiple vendors you’re going into, or some of them new use cases for your customer base? Thanks.
Ron Yekutiel: It’s a combination of both. So – but we mentioned one of them, for example, an existing bank that we have. It’s an existing use case that we powered, but they continue to grow organically. The specific bank that we’re discussing, it is the wealth management use case. If you recall, and that specific bank in the past we’ve discussed was one we started internally with a video portal for training and knowledge sharing, and then I moved to webcasting and then I moved to external use. And ultimately have moved into video for wealth management where ARPU enable a secure distribution and creation and distribution of content for wealth managers for their customers in a mission-critical way, connected to all the compliance and security and approvals that are required in such a situation.
In this specific piece, by the way, that customer had grown 10x in recent years in a deep, dipped into the seven-digit figure as a bank, and it started with six-digit as an initial deal. Not only are we adding use cases, but they’re adding users and adding departments, and so it continues to grow and grow. In a different example which we’ve mentioned, it was the expansion from external into internal use case where we started with events less than a year ago as a new customer, and now they had moved into their internal ‘TV’ for internal learning and collaboration. By the way, that customer is now in discussion with us around a very large deal to move all of their marketing use case to Kaltura, which could be another very large seven-digit deal, which as an example, budget pertaining, they already said, look, we wanted to do this in Q4, but we’re rolling this into next year because of budgetary reasons.
But we’ve already selected Kaltura. We believe you’re the right partner. We’d like to do it with you, but budget-wise, it’s going to need a bit longer to get the budget. And so this keeps on being the story. We enter from the window. We exit from the door, or the other way around. Its either internal goes external, external goes internal, but the ARPU continue to climb, and the land and expand will continue to do very well for us.
Ryan Koontz: That’s really helpful, Ron, and best thoughts to everyone there and at the company.
Ron Yekutiel: Thank you, Ryan. Appreciate it.
Operator: Thank you. And the next question comes from Patrick Walravens with JMP Securities. Please go ahead, Mr. Walravens. Your line is live.
Patrick Walravens: Thank you. And let me add my thoughts and prayers, Ron, to you, your families, and everyone. So, number one, why is subscription revenue, and I know you answered it, but just very clearly for us, why is subscription revenue going down from Q3 to Q4 by $1 million to $1.5 million?
Ron Yekutiel: So, I mentioned half of this, right? And I said bookings are flattish compared to last year, and at about a 25% to last. The other piece of it is retention, right? And I said last quarter that it went down, and we expected the continue to go down, because we also said that we had that large deal that we announced that came in after the end of the quarter, but we mentioned it last time for the RPO change, and it hit this quarter Q3. So, we had another quarter of lower gross retention rates than usual in part because of that large single customer. Now, annual gross retention rate in general is down by a few percentage points from the high 80 to the mid 80. It’s still decent, but it’s not as good as it was before.
By the way, E&P had lower gross retention rates this quarter than M&T, and in E&P, half of the churn, very similar to last time, was reduction and not full churn, so it’s not customers completely leaving us, but spending less. Less than 10% of that reduction was because of product or services gap, and the rest is budget, price-related services that are no longer needed. So, net-net what we’re seeing is lesser gross retention and lesser new bookings, which are and have for this specific quarter ended up with a negative impact on subscription revenue. Now, we’re expecting and have expected this because we’ve seen that come towards Q2 and already saw what’s going to happen in Q4, but likewise, we could already see what’s expected to happen in Q1, or we’re seeing this balance given the different numbers that we’re seeing.
The question is for next year, right? Is the gross retention going to pick up again? And is the bookings going to go up again? I already mentioned earlier that productivity is higher than last year, because we’ve also released some of the people, and it’s really a question of are we seeing better quarters? There’s some upsets in Q4. We’re seeing a lot of interesting demand. There’s some interesting deals. We’re very cautious, and obviously we don’t forecast bookings, we forecast revenue, but by the end of Q4, we’ll be in a position to tell you what’s happening to booking. We have some reasons to be cautiously optimistic about Q4, maybe being different. But let’s wait and see.
