Patrick Walravens: Okay. And I mean, under what circumstances would you say, okay, this is time to consider our strategic alternatives and consider selling the company?
Ron Yekutiel: I think it’s always been a reasonable, legitimate option, like it is for any single company in Earth. I don’t know that we’ve ever said that we’re not, or that we are. Our responsibility is to take care of our shareholders, and we listen to them closely, and we’ve been in touch and continue to be in touch with different players. If and when an offer that makes sense would come our way, then we will reconsider it. But this has never been a yes versus no. It’s always been devil’s in the detail, in the right time and the right place, the deal could happen. We said that. The same answer I’ve said time and time again by the way.
Patrick Walravens: Yes. Okay. And then lastly on a positive note, I really –
Ron Yekutiel: And I do want to just mention one thing in macro, because it’s easy to kind of – the whole industry right now is where it’s at. You can listen to all the other players in the industry, three of which have already reported. What you’re hearing here is different. We’re looking at a situation where there are some headwinds that are continuing by way of demand and by retention and pressures. This is happening to everybody. I must admit that most of the other folks out there that are public and you see their numbers have been declining aggressively this year. We’re not. And so, we’re not as out of place as the others are. Is this a great year for us? Definitely is it. Is there a lot more to hope for? Yes. Are we meeting the numbers that we’ve set at the beginning of the year?
We are. We’re doing better than the numbers, both on adjusted EBITDA and revenue. And so, the direction is as guided for the year, but we’re hoping that next year is going to pull up. We need to wait patiently like all the other folks in our industry. And like I said, we do see top of the funnel activity that looks good. And we do see continued strategic interest in moving to Kaltura. And we hear a lot of folks talking about moving to Kaltura when things are better, because when you talk about consolidation and the interest to have one single platform for everything, a lot of them are saying, listen, for the immediate short term, it’s an investment that we don’t want to make. But for the mid to long-term, it’s a savings that we want to have, and it’s a better product that we want to have.
And so we keep on hearing this. The question is, when are we going to click on it? And again, we’re doing better than the other folks, but I think that when things turn around for the industry, we’re going to continue to be on top. And that’s going to mean, I think it’s going to mean decent returns that we’ve not seen over the last couple of years for sure. Not us more than the industry. Sorry, Pat, just needed to add this color.
Patrick Walravens: That’s fine. Thank you very much.
Operator: Thank you. And the next question comes from Michael Turrin with Wells Fargo.
Austin Williams: Hey, this is Austin Williams on for Michael Berg. Just wanted to ask on the EBITDA breakeven target, it’s good to hear that that’s restated for next year. But looking into 2024, where are you expecting the biggest areas of operating leverage to emerge?
Ron Yekutiel: Yaron, you want to take it?
Yaron Garmazi: Yes. First of all, the one comment that I made in my statement is that this trend of getting back to a positive bottom line adjusted EBITDA-wise, is going to happen anyway that the revenue will develop into next year. We said all along that at least for the short-term, the gross margin will continue to be in the low to mid-60s. And I think it’s a very solid statement right now. In the long term, it’s definitely going to go more to the 70%. If we will be able to do it all over the next year, I’m not sure, but we are doing some major efforts around production costs and major agreement that we signed with one of our cloud providers, which give us much better unit economics. At the same time, we believe that in terms of our expense base, we don’t need to increase significantly our sales and marketing and our R&D in order to push revenue and to start seeing re-acceleration of the revenue.
So bottom line, keep the gross margin as it is right now, increase – keep the rest of the balance sheet, the expenses around the same levels, and get back to growth next year. It will enable us at least to be in a positive territory going into the beginning of the year.
Austin Williams: Okay, got it. And I also wanted to ask on the new AI assistant and some of the new AI features. What are you expecting this to open up from a monetization perspective and how is this changing the expansion discussion with customers? Thank you.
Ron Yekutiel: Sure, I’ll take this one. Thanks for the question. It’s early to say, for us and for everybody. We do know that a residual effect of this is a dramatically greater amount of videos that are created and consumed in a higher ROI for wherever the videos are used. Will the immediate value come from a higher subscription for the feature or will it come from the greater use of the platform? That’s a question. If you ask me, I expect it to be more the latter than the first, but it’s so early days around that to be able to provide a clear enough answer. At this point of time, we’re still in initial deployment time, but the focus is on creating value as opposed to optimizing and maximizing revenue. I believe that over the next few quarters that will take shape and then we’ll be able to provide you a good answer. And by the way, this is the same answer for every single company in our ecosystem. It’s still too early.
Operator: Thank you. And the next question comes from George Iwanyc with Oppenheimer.
George Iwanyc: Thank you for taking my question. Ron, maybe following up on your comments about the sales productivity progress you’re seeing. Can you give us some perspective on the lower touch parts of the platform that you put in place and the traction you’re seeing there?
Ron Yekutiel: Yes, I’m happy to do that. Look, we said that throughout the year that this is not the bigger focus, especially given our need to focus on the different aspects of the business, especially in a year like this. Now, we’ve improved our messaging framework and updated it in order to have better flow around webinars. Some of the signs have grown by about 180% quarter-over-quarter. In part, by the way, we’ve inserted AI into that. And we’ve also seen that the number of webinars that are created in the platform have increased 100% month-over-month. And so the KPIs that we’re currently looking on are more adoption, user conversion that are not yet revenue KPIs for this year. And we said that throughout the entire year.
