Greetings and welcome to the Kaltura third quarter 2026 conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Erica Mannion, Investor Relations. Please go ahead.

Thank you, operator, and good afternoon. I am joined by Ron Yekutiel, Kaltura's co-founder, chairman, president, and chief executive officer, and Liron Sharon, executive vice president of FP&A and interim principal financial officer. Ron will begin with a summary of the results for the third quarter ended September 30, 2026, and provide a business update. Liron will review the financial results for the third quarter of 2026 in greater detail, followed by the company's outlook for the fourth quarter and full year 2026. We will then 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, management's expectations and plans for the business, including execution on our strategic transition and upcoming product launches, integration and expected benefits of our recent acquisitions, our deal pipeline, trends in customer engagement, anticipated headwinds, and our expectations around capabilities and benefits of our products, including AI technologies. These statements are neither promises nor guarantees and involve risks and uncertainties that may cause actual results to differ maturely from those discussed here. Important factors that could cause actual results to differ 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 December 31, 2025 and other SEC filings, including the quarterly report on Form 10-Q for the quarter ended September 30, 2026, filed with the SEC. 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, we will be discussing non-GAAP financial measures, adjusted EBITDA, adjusted EBITDA margin, non-GAAP gross margin, non-GAAP net profit, and non-GAAP net profit per share during this call. 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.

Thank you, Erica, and thank you, everyone, for joining us today. We delivered another strong quarter, exceeding the high end of our guidance for total revenue, subscription revenue, and adjusted EBITDA. Third quarter total revenue was $47.3 million, up 8% year-over-year, and subscription revenue was $45.9 million, up 9% year-over-year. both reaching record quarterly levels. Adjusted EBITDA was $6 million, up 45% year-over-year, and representing our highest third quarter result to date. Cash flow from operations was $7.6 million, reflecting the expected second half seasonality of our cash generation and keeping us on track with our full-year cash flow expectations. Net dollar retention also improved for the second consecutive quarter. Beyond the financial results, I'm particularly encouraged by the acceleration we saw in our commercial activity and by the continued progress of our newer AI offerings. New subscription bookings more than doubled sequentially from Q2, making Q3 our strongest bookings quarter since 2024. We signed 11 transactions with total contract values of at least six figures, including three seven-figure transactions, Marking our highest quarterly number of seven-figure transactions since 2024. These larger transactions included significant expansions within our install base, as well as two new logo wins, including a seven-figure transaction with a new customer. The 11 deals spanned a broad range of industries, including technology, financial services, healthcare, energy, higher education, and media. Taken together, the acceleration in bookings, the greater contribution from seven-figure transactions, and the combination of install-based expansion and new logo wins provide encouraging evidence of strengthening commercial momentum. Within this overall performance, our AI products and capabilities are also beginning to play a more meaningful commercial role, including within some of our larger strategic customer transactions. During Q3, We signed 15 transactions that included one or more of our AI offerings. Their combined total contract value was approximately 3.8 million compared with approximately 1 million in the prior quarter. As a reminder, these figures represent the full value of the transactions and should not be interpreted as standalone AI product bookings. A substantial portion of the increase in total contract value came from the largest transaction which was with a leading U.S. university that expanded its relationship with Kutura through a seven-figure agreement supporting its digital accessibility requirements. Our new AI-powered workflow automation and metadata enrichment capabilities were the key reason the customer chose Kutura for this expansion. These capabilities apply predefined policies to identify content requiring action, enrich the relevant metadata, and automatically initiate the appropriate accessibility workflows across a large media environment. For large institutions, the challenge is not simply making an individual asset accessible, but applying accessibility policies consistently across very large and continuously growing content libraries. Given our significant education and public sector install base, we believe this can become an attractive expansion use case. This also illustrates that AI has the potential to create value not only through direct purchases of AI products, but by making the broader Kaltura platform more intelligent, automated, and differentiated, and helping drive larger platform decisions. Several additional aspects of the transaction mix also demonstrate the breadth of engagement. 12 of the 15 transactions were expansions or renewals with existing customers. This demonstrates the opportunity to introduce our newer AI capabilities into Kaltura's install base where we already manage significant content libraries, support important workflows, and maintain long-standing enterprise relationships. Adoption extended across multiple areas of our product portfolio. Specifically, nine transactions included agentic avatars or related avatar capabilities, and eight included content lab with several customers adopting both. This demonstrates interest across conversational and avatar based experiences, AI powered content creation and adaptation and AI enabled workflow automation. Higher education was particularly active with six transactions spanning instructional content creation, AI tutors, student practice and role play, alumni engagement and workflow automation. We also saw adoption across technology, financial services, and other industries for employee learning and onboarding, enterprise knowledge sharing, marketing, and customer engagement. After quarter end, we announced a partnership with Israel's Ministry of Education in their new AI-based learning initiative for schools called Project 720. Because this is a Q4 transaction, it is not included in the Q3 AI-related transaction figures I just discussed. The initial one-year pilot, launched last week, focuses on AI-based STEM learning for approximately 2,000 students across 20 middle schools using our rich conversational agent-led learning experiences. We believe the ministry can become an important channel for scaling the solution into additional subjects, grades, and schools across Israel's education system. Internationally, We plan to pursue similar opportunities with other ministries of education, K-12 districts, and schools alongside our continued work with higher education institutions. More broadly, this deployment demonstrates how the same agentic learning and enablement solution can also support employees, customers, and partners in enterprise use cases, which remains a major strategic focus for us. Let me now turn to our pipeline and how it has evolved since last quarter. Q3 represented an important step toward the second half bookings growth potential we discussed on our previous earnings call with new subscription bookings more than doubling sequentially. Our current AI-related sales pipeline continues to include approximately 500 opportunities. These are opportunities that include one or more of our AI offerings, and were assigned, their values reflect the opportunity as currently scoped, which in some cases also includes other Filtura products. These values should therefore not be interpreted as standalone AI product ACV, nor as the full future revenue potential of the customer relationships. Roughly half of these opportunities currently have an assigned potential commercial value representing approximately 24 million of non-weighted potential ACV, meaning annual contract value rather than multi-year total contract value. This quantified AI-related potential ACV pipeline increased by more than 40% sequentially from last quarter. It now includes 45 opportunities with potential ACV of at least 100,000, of which 11 are about 500,000, and three above one million. The remaining roughly half of the opportunities have not yet been commercially sized and therefore contribute zero to the 24 million today. In addition, many opportunities begin as focused evaluations or initial deployments and may expand over time across additional users, use cases, business units or products. So while not all quantified opportunities will ultimately close, The currently assigned values also do not capture the potential for future expansion within those customer relationships. New logos represent approximately one-third of the qualified AI-related pipeline opportunities, but nearly half of their potential ACV. Learning-related opportunities remain the largest category by number, while customer-facing opportunities have become the largest category by potential ACV. This supports the opportunity we see in agentic revenue engagement alongside our more established activity in agentic learning and enablement. Moving on to AI-related proofs of concept, or POCs. Customer evaluation activity also continued to expand. We now have more than 80 AI-related POCs that are active, planned, or being scoped compared with over 60 last quarter. Approximately three-quarters of the POCs are with existing customers, reinforcing the opportunity to introduce our newer capabilities across the Kotor install base. Approximately one-quarter are with prospective new customers, providing an additional revenue for new logo growth. As noted, the POCs are at different stages and will not all convert, but they provide validation as we refine our products and strengthen our go-to-market execution. Turning from bookings to retention, as anticipated and discussed on our previous call, gross churn increased during Q3 due to several legacy contracts across both Kaltura and the acquired PathFactory customer base. We expect some of this near-term pressure to continue in Q4. Looking at the full year, however, we expect median telecom gross retention to improve materially compared with 2025. In ENT, we expect full-year growth retention to normalize from last year's unusually strong level and remain in line with its multi-year average. Overall, we continue to expect consolidated full-year growth retention to improve compared with 2025. Over time, we expect our transition towards more strategic, agentic digital experiences to support stronger retention and gradually improve net dollar retention. Let me now briefly turn to product development. During Q3, we continued to bring Kaltura, eSelf, and PathFactory together into one agentic digital experience platform. This included embedding conversational avatars more deeply within our core products, enabling content lab workflows within PathFactory, and allowing content engagement signals, identity, and intelligence to operate increasingly across the common platform. This integration work is less visible than an individual product launch, but it is strategically important because it will help enable us to sell complete solutions rather than a collection of separate products. We also advance the intelligence of our conversational agents. They can increasingly use known context to personalize interactions, adapt their communication based on conversation, and capture structured insights, for example, a buyer's priorities or learner's areas of understanding, that can flow into the customer systems. One of our most important developments was dynamic UI. Rather than requiring every user to navigate the same static interface, our agents can assemble rich, personalized experiences in real time using conversation, video, avatar, images, charts, and interactive elements based on each user's intent. This brings us closer to our vision of transforming static digital touch points into rich, personalized, and interactive experiences generated in real time around each person's intent. These capabilities are also strengthening our two strategic solutions. In agentic revenue engagement, we are connecting rich conversation and content intelligence directly to commercial workflows such as lead capture, meeting scheduling, and next best content recommendations. and Agenic Learning and Enablement, we're building adaptive learning experiences designed to track progress, assess knowledge, support practice and role play, and deliver personalized coaching. We also plan to enable books, curricula, and other learning materials to be transformed into interactive, agent-led experiences that remember each learner's progress and adapt over time. A major foundation we're developing for both solutions is our digital experience draft, which is intended to create a shared intelligence and memory layer of what each person watched, read, asked, and did and the outcomes that followed. This should allow revenue agents to carry buyer intent across interactions and learning agents to remember progress and adapt each learner's path. Our media and telecom business also demonstrated the scale and resilience of our platform during the 2026 FIFA World Cup. which concluded in the third quarter. Across the tournament, Kaltura Powered Services supported more than 1.3 billion playback sessions and peaked at approximately 7 million concurrent sessions across roughly 40 million registered devices. Demand was approximately 86% higher than during the 2022 tournament. For the first time at this scale, AI agents also worked alongside our engineering teams to monitor and investigate live operations. Our progress also received important external recognition. Gartner published a research report titled AI Vendor Race. Cultura is the company to beat for video platform services AI. And Digiday named our agentic avatars best interactive content platform. We believe these recognitions validate our product leadership and our strategy of moving beyond AI that simply creates or narrates content towards agents that understand enterprise knowledge, personalize experiences, and take action. To summarize, we delivered a strong third quarter with record revenue, continued adjusted EBITDA growth, positive cash generation, and our strongest new subscription bookings performance since 2024. We are also seeing increasing commercial traction for our AI offerings. Our newer capabilities are beginning to participate in larger strategic transactions, our install base is becoming an important channel for adoption, and our pipeline and customer evaluation activity continue to develop across both learning and enablement and revenue engagement. At the same time, we continue integrating KOTURA, ESOP, and PathFactory into a unified platform and advancing our two strategic solutions, agentic revenue engagement and agentic learning and enablement. We have begun to see initial revenue contribution from our new AI-based offerings and are entering Q4 with stronger bookings momentum, broader customer validation and increased confidence in the opportunity for these products to contribute more meaningfully in 2027. Reflecting our year-to-date execution and outlook, We are raising our full-year guidance for subscription revenue, total revenue, and adjusted EBITDA for the third time this year. As a reminder, at the onset of 2026, our initial adjusted EBITDA profitability outlook incorporated the estimated cost of integrated eSelf and PathFactory. At that time, we said we may outperform that initial outlook and aim to approach the adjusted EBITDA level we delivered in 2025. We are pleased that our full-year adjusted EBITDA is now expected to exceed the $18.6 million we delivered in 2025 while we continue to invest significantly in post-merger integration and in the development and commercialization of our new products and solutions. With that, I will turn the call over to Liron.

Thanks, Ron, and hello to everyone on the call today. As Ron noted, in the third quarter, we continued to execute well, exceeding the high end of our guidance for subscription revenue, total revenue, and adjusted EBITDA. Total revenue, subscription revenue, and ARR all reached record levels, and we delivered our highest third quarter gross margin, adjusted EBITDA, and adjusted EBITDA margin to date. This also marks the third consecutive quarter in which we exceeded our guidance and raised our full-year revenue and adjusted EBITDA outlook. Let me now walk through the quarter in more detail. Total revenue for the quarter ended September 30, 2026 was a record, 47.3 million, up 8% year-over-year The highest growth rate since the first quarter of 2022 and 1% sequentially. Subscription revenue was a record, 45.9 million, up 9% year-over-year and 1% sequentially. Professional services revenue was 1.4 million, down 29% year-over-year, consistent with our focus on recurring subscription revenue and up 8% sequentially. On a segment basis, EENT total revenue was $36.9 million, up 14% year over year, which was the segment's highest growth rate since 2021. Subscription revenue was $36.5 million, up 15% year-over-year, while professional services revenue contributed 0.4 million, down 20% year-over-year. Within M&T, total revenue was 10.3 million, down 10% year-over-year, and subscription revenue was 9.4 million, down 7% year-over-year. while professional services revenue contributed $0.9 million, down 32% year-over-year. GAAP gross profit for the third quarter was $33.9 million, resulting in gross margin of 72%, up 175 basis points from Q3 2025. GAAP subscription gross margin was 77%, A bit higher than Q3 2025. Gap operating expenses for the quarter were $34.6 million, representing a 7% year-over-year increase and a 2% sequential improvement compared to $35.3 million in the previous quarter. This includes the impact of the ESOP and past factory acquisitions integration costs, continued investment in our new product portfolio, and FX headwinds. Adjusted EBITDA for the quarter was $6 million, reflecting an improvement of approximately $1.9 million from $4.2 million in the third quarter of 2025. Adjusted EBITDA margin was 13% A record for third quarter and an increase of 325 basis points year over year. For the first nine months of the year, adjusted EBITDA reached $17.5 million, up 42% year over year. Gap net loss for the quarter was $1.5 million, or $0.01 per diluted share, compared to a net loss of $2.6 million or $0.02 per diluted share in Q3 2025. Non-GAAP net profit for the quarter was $3.1 million or $0.02 per diluted share compared to a non-GAAP net profit of $2 million or $0.01 per diluted share in Q3 2025. Remaining performance obligation, or RPO, were $161.6 million, up 1% year-over-year and down 2% sequentially. We expect to recognize 70% of this amount as revenue over the next 12 months. Annualized recurring revenue for the third quarter was $184.7 million, up 9% year-over-year. and a record level for the second consecutive quarter. Turning to retention, we continue to see positive momentum in net dollar retention, which improved to 97% this quarter, from 96% in the prior quarter and 95% in the quarter before that. NDR was 97% also in the third quarter of last year. As we noted last quarter, we are experiencing some near-term pressure from certain legacy contracts, including the anticipated roll-off of certain past factory customers and expect this to continue in the fourth quarter. Despite this, we expect full-year 2026 growth retention rate to be better than that of 2025. Over time, We expect the transition toward powering agentic digital experiences to support sustainable growth retention and gradually improve net dollar retention. Moving to the balance sheet and cash flow. We ended the quarter with $41 million in cash, cash equivalents, and marketable securities, up $5.4 million from the end of the prior quarter Net cash generated from operating activities in the quarter was 7.6 million, reflecting a significant sequential improvement of 9.6 million. In the third quarter of 2025, we generated 9.3 million from operating activities. We expect to continue generating cash flow from operation in the fourth quarter of the year, consistent with historical seasonality. Also pertaining to balance sheet and cash, we are in the process of refinancing our credit facility prior to maturity with a new three-year term agreement, which we expect to close in Q4. Beyond the reported financial results, the third quarter marked continued progress in our strategic evolution toward a broader Agenti digital experience platform. As Ron discussed, New subscription booking more than doubled sequentially from Q2, fueled also by AI-related bookings, making Q3 our strongest booking quarter since 2024. Our AI-related pipeline and PLCs also grew meaningfully during the quarter. This gives us increasing confidence in our commercial momentum and in the continued progress of our newer AI offerings. At the same time, we remain disciplined in how we allocate capital and manage expenses as reflected in our adjusted EBITDA profitability and cash generation this quarter. I will now turn to our outlook for the fourth quarter of 2026 and for the full fiscal year ending December 31, 2026. For the fourth quarter of 2026, we expect subscription revenue to be between 44.3 million and 45 million, representing year-over-year growth of 4% to 5%. Total revenue to be between 46.2 million and 46.9 million, representing year-over-year growth of 1% For the full year 2026, we are raising our full year guidance numbers across subscription revenue, total revenue, and adjusted EBITDA, while further narrowing the guidance ranges. We now expect subscription revenue to be between $179 million and 179.7 million, representing year-over-year growth of 4% to 5%, total revenue to be between 185 million and 185.7 million, representing year-over-year growth of 2% to 3%, and adjusted EBITDA to be between 19.5 million and 20.5 million. Our adjusted EBITDA outlook incorporates AFIX headwinds and investment in post-merger integration, new products and solutions. To summarize, the third quarter demonstrated strong business results as well as continued execution against both our financial and strategic priorities. We exceeded the high-end of all our guidance ranges, and delivered record total revenue, subscription revenue, and ARR, generated cash form operation, improved NDR for the second consecutive quarter, and most importantly, achieved as expected material growth in our new bookings and sales pipeline, driven by growing demand for our exciting new AI Looking ahead, we remain focused on disciplined execution, balancing investment in our AI-driven agentic platform with continued adjusted EBITDA profitability and cash generation. While the revenue contribution from our newer AI offering is still early, our result to date Give us confidence that it will become more meaningful in the quarters ahead. With that, we will open the call for questions. Operators?

Thank you. We'll now be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

One moment, please, while we poll for questions. Our first question is from Ryan Kuntz with Needham and Company.

Great. Thanks for the questions and, yeah, terrific results, guys, and great to hear about the bookings inflection. Ron, I know you have a lot of comments around your subscription ARR there. Maybe you can dumb it down for me a little bit relative to, you know, the renewals that are going on. Are you seeing some price impact there on renewals and down sales? You had, I know, some churn out of legacy contracts. I'm sure you have some. Some new logos coming on, but can you maybe just qualitatively describe how we should think about the trajectory of your subscription revenue here?

Yeah, I appreciate that. Thank you, Ryan. Thanks for the great question. So, yeah, we're seeing on one end the booking, on the other end some churn. We already said that the yearly churn is not going to be worse than last year. It's actually going to be better than last year. We are seeing improvement in M&T. We're seeing some headwinds. and E&T that are short-term and we expect them to turn around. But when you throw it all together, churn is not higher. If you think about bookings, well, we've given you a lot of what's happening there. I mean, if you look at the six, seven-digit deals, you can look at the cross-section of industries that are wide between financial services being the higher and then higher education and media and technology driving our big bookings growth. So we got more than double Not just sequential, but also more than double year-over-year growth. And it's the highest new book in quarter since 2024. It's across geo. We had half and half between EMEA and APEC and North America and a little bit in APEC. And we had some very large deals, the three seven-digit deals. At the beginning of this year, we had zero. In quarter two, we had one in quarter one. And now we have three, which is the highest that we had since 2024. So that's picking up. And also, when you think about the AI-related deals, It's a record 15 deals, and it was a large TCV, 3.8 million versus 1 million in quarter two, and that's without the MOE deal. 12 of the 15 were expansions and renewals, so it's going strong. At the same time, from an industry perspective, also very wide, like six were higher ed, four were tech. We had energy, financial services, also a good geo-dispersion. So we look at all these things plus the AI pipeline, We still have 500 ops, but as noted, it grew from 17 million to 24 million. It's a 40% growth, and some of them are quite large and growing, and a lot of them are also new logos. Half of them are now new logos. It used to have been only a third, and that part of new logo grew 100% sequentially quarter over quarter. So there's a lot of pull there that's hopefully pushing towards growth in bookings. POCs also support that. We're excited. Let's see where it goes. Again, it's early days, but we're in the right direction.

That's great. Maybe dig a little deeper there in terms of your selling process. Obviously, you're a very focused team. I'm able to move pretty nimbly here. Where would you say the company is in terms of maturing your broader portfolio selling motion now relative to standalone, siloed legacy companies?

Thank you. Everybody's enabled to the quote-unquote newer product. There's not one single salesperson or customer success person or customer care person or marketing person that has to do solely with legacy. And our products touch, you know, the new products touch all journeys, all use cases, all industries, and they're all selling well and are fully enabled. It's really just a question of how quickly one goes through the process and how the pipeline advances and the time it takes to go through this because a fair bit of the POCs will be at that they're growing or still ahead of us because it takes a bit of time to go through this whole thing. And we all know that large enterprise sales take time. New AI products take time. We do have the advantage of it being sold to existing customers. So they have the relationship with us as it pertains to contracts, as it pertains to trust, as it pertains to integration into the workflows. And we have 1200 of these. So we have a leg up. And yeah, like I said, we have a balance between the fact that that's a major portion of But when you think about the pipeline, the AI-related pipeline, as just noted, the biggest growth there is new logos. So I think we have a good balance between pushing forward with speed with existing customers while filling up our coffers with new logos, which we have not had before in recent years in the pure video. So coming back to your question, people are selling, and it's evident by the pipeline growing. Deals are closing. They know how to do this. It's just going through the motion that takes a bit of time.

Great, Colin. Thank you. And one last if I could around AI inference, you know, token costs and gross margin. And, you know, do you feel like you have a good handle on that? Are costs coming down, costs going up? I mean, how should investors think about your trajectory of your AI costs in terms of tokenization? Thank you.

Yeah, that's a good question. And so, look, we've been monitoring AI costs. We have a little bit of impact on our gross margin, but not materially. So it's a few points. and many more. have shown very nice growth in gross margins in recent years, picking up a lot. That trend, we believe, will continue. Could there be a short-term opposite effect to the tune of a couple points, one or two points, or the other direction? It might be the case. But that's going to be a rich man's problem because that means that we're going to have a lot more AI, and AI is driving top line. So we'd be happy to have that issue.

Got it. Thanks so much. Appreciate it, Donald. Thank you.

Thank you.

Our next question is from James Kisner with Water Tower Research.

Hi, thanks for taking my questions. Congrats again on a solid quarter. So, Ron, you've described genetic avatars as kind of the entry point into the broader platform, just kind of as the first waves of proofs of concepts mature. What are you learning about how customers move from pilot production? What kind of tends to tip them over into full production?

Yeah, James, thank you for that great question. So I kind of noted a little bit about that earlier. So when you think about the POCs, we got now about 80 and we had 60 before and they're picking up. But when you think about all their plans and scope and all that, there's a certain portion of them that are still ahead of us. So a lot of them are still going to take time. So activities continues to expand. That's consistent also with a 40% sequential growth that I said earlier. But the majority, again, of the POCs are still in planning or scoping mode and have been reached. So large enterprises, it takes them a bit of time. They need to work through AI governance. They need to work through security. They need to work through privacy. They need to go through legal. And, you know, these agents, they're mission critical and they're touching everybody. So, you know, what tends to move them quicker into production within all that parentheses is obviously when you have a clear business use case. If you have an owner that can measure up to value, if you have integrations, into the customer's knowledge, content, and workflows. And that's where we actually shine because our install base really, really helps there. And I mentioned earlier about three-quarters of our POCs are with existing customers. Twelve of our 15 Q3 AI-related transactions were expansions or renewals. And we got all these existing customers as a big advantage. But like I noted earlier, at the same time, we have this good balance because we have the broadening of our install base with new log opportunities about half the ECV and roughly that was the third last quarter. So that grew, doubled from a nominal value on a quarter over quarter. So we're pleased by the funnel being broadened. By the way, it's also broadened by the employee learner journeys that were originally the bigger ones. Now, customer is told to be the bigger ones and audience is still growing. So the pipeline is not just larger, but also becoming more diversified across both customer type, industries, and use cases. So kind of when you put it all together, there is a certain process to go by that's taking them to get over the hump and make a decision. There's more ahead to make these come true and bring them to life, but we're headed in the right direction.

That's helpful. Maybe you can talk about a competitive situation. You were in a competitive agentic engagement deal, like who have you seen across the table these days, and We're just kind of the video-first conversational experience really sort of win or hunt well against is perhaps a text-only solution from a CRM or a chat vendor.

So, James, we see there's avatar specialists. We've got horizontal AI agent platforms. We do have CRM and customer engagement vendors. Sometimes we've got customers considering also to build internally, but I would not frame this simply as video versus text. You know, text works very well for many people, transactional interactions, but our differentiation is strongest where the interaction is involving other human beings. So think about nursing student role playing with a patient or a law student participating and practicing with a client or sales training or management coaching or onboarding or a customer trying to understand complex projects and products. So these experiences generally benefit from realistic conversations. They need rich media. They need personalized dynamic UI. They need the ability to take action. And to that end, when you consider some of the other options out there, we bring much more than just the avatars, right? We provide the market-leading platform for enterprise content creation and management with the user intelligence and the journey orchestration. We have the cutting-edge experiences like a video portal and the LMSs and the virtual events and the webinars and the Cloud TV. And then we have years and years of expertise and learning and training and more recently with PathFactory also marketing and buyer journey. So our thesis is that it's really about the rich multi-model engagement layer that sits on top of systems like CRMs and not replace them. So when you put it all together, we feel relatively well and I can tell you that the fact that things are taking a bit of time is less so from a competitive standpoint and more so from just going through the motions which I said earlier.

That's a great clarification. Just last one, just maybe an update on the channel strategy, like, you know, how's it going? And, you know, what does a channel deal think they look like compared to a direct one, you know, in general?

We're making good progress with channels. I mean, definitely we see them more as a second wave opportunity after the first wave of direct, you know, as a company that's been historically almost only direct. This is what we do, but, you know, Thank you very much. Thank you. This, by the way, touches also on our PLG motion because the simpler the products are going to be, the easier they're going to also be sold with channels, albeit the PLG is also to go down market and also to sell departmental, but that's going to be helpful and that's around the corner and that's that. But I will say, and I just mentioned earlier in our conversation, the Israeli Minister of Education, that's a channel. and they helped us deploy across 20 schools, approximately 2,000 students. And it's only starting with STEM education. We believe it's going to grow to other subjects. It's going to go to other students. It's going to go to other schools. And of course, this is just in one country. We expect that we're going to work in other countries and also obviously other industries because the learning and enablement is far, far beyond education. So channels are coming. The beginning is already here now and we just started talking about it. And MOE, there's going to be more of it.

Thanks for my questions.

Thank you, James. Thank you. This concludes our question and answer session. I would like to hand the floor back over to Ron Yekutiel for any closing remarks.

Thank you all, everyone, for joining us today. We're pleased with the progress we made this quarter, both from a financial performance, also in the growing commercial traction, especially with our new AI offerings. We said that bookings were expected to grow in the second half. We're seeing that happen. We're seeing POCs grow. We do remain very much focused on executing through the end of the year and then building on that momentum as we head into 2027. So we want to thank you for your continued support, and we do look forward to updating you again next quarter. And have a wonderful, great week. Thank you all.

This concludes today's conference. You may disconnect your lines at this time. Thank you again for your participation.