10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 001-38320

KALEYRA, INC.

(Exact name of registrant as specified in its charter)

Delaware	82-3027430
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

17 State Street, New York, NY	10004
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: +1 917 508 9185

(Former name or former address, if changed since last report): N/A

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbols	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	KLR	New York Stock Exchange
Warrants, at an exercise price of $11.50 per share of Common Stock	KLR WS	NYSE American LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company.  See definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of August 5, 2022, there were 44,344,364 shares of the Company’s common stock issued and outstanding.

KALEYRA, INC.

Quarterly Report on Form 10-Q

Table of Contents

PART I – FINANCIAL INFORMATION		Page
Item 1.	Condensed Consolidated Financial Statements (unaudited):	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Comprehensive Loss	3
	Condensed Consolidated Statements of Stockholders’ Equity (Deficit)	4
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	43
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3.	Defaults Upon Senior Securities	45
Item 4.	Mine Safety Disclosures	46
Item 5.	Other Information	46
Item 6.	Exhibits	47
Signatures		48

Item 1 – Financial Statements

KALEYRA, INC.

Condensed Consolidated Balance Sheets

(Unaudited, in thousands, except share and per share data)

	June 30, 2022			December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	73,622		$	90,001
Restricted cash		468			1,701
Short-term investments		680			6,236
Trade receivables, net		95,768			85,945
Deferred cost		329			341
Prepaid expenses		4,340			5,357
Other current assets		1,436			2,599
Total current assets		176,643			192,180
Property and equipment, net		20,384			18,811
Intangible assets, net		115,146			125,396
Goodwill		111,893			110,465
Deferred tax assets		376			1,230
Other long-term assets		1,525			399
Total Assets	$	425,967		$	448,481
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	71,934		$	70,942
Lines of credit		3,182			5,256
Current portion of bank and other borrowings		10,581			10,508
Current portion of notes payable		405			—
Deferred revenue		6,934			9,553
Payroll and payroll related accrued liabilities		6,567			6,907
Other current liabilities		6,327			8,274
Total current liabilities		105,930			111,440
Long-term portion of bank and other borrowings		15,928			22,910
Long-term portion of notes payable		190,733			190,147
Long-term portion of employee benefit obligation		2,377			2,338
Deferred tax liabilities		5,205			2,384
Other long-term liabilities		892			1,840
Total Liabilities		321,065			331,059
Commitments and contingencies (Note 13)
Stockholders’ equity (deficit):
Preferred stock, par value of $0.0001 per share; 1,000,000 shares authorized; no shares issued or outstanding		—			—
Common stock, par value of $0.0001 per share; 100,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 47,142,422 shares issued and 44,344,364 shares outstanding as of June 30, 2022 and 44,831,695 shares issued and 42,033,637 shares outstanding as of December 31, 2021		5			4
Additional paid-in capital		270,672			251,659
Treasury stock, at cost; 2,798,058 shares as of June 30, 2022 and December 31, 2021		(30,431	)		(30,431	)
Accumulated other comprehensive loss		(4,535	)		(2,010	)
Accumulated deficit		(130,809	)		(101,800	)
Total stockholders’ equity		104,902			117,422
Total liabilities and stockholders’ equity (deficit)	$	425,967		$	448,481

__________________

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

1

KALEYRA, INC.

Condensed Consolidated Statements of Operations

(Unaudited, in thousands, except share and per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Revenue	$	81,109		$	53,992		$	161,590		$	93,706
Cost of revenue		62,459			43,529			125,202			76,919
Gross profit		18,650			10,463			36,388			16,787
Operating expenses:
Research and development		6,265			4,282			11,155			7,150
Sales and marketing		7,226			4,660			14,326			7,519
General and administrative		16,594			12,364			31,974			22,966
Total operating expenses		30,085			21,306			57,455			37,635
Loss from operations		(11,435	)		(10,843	)		(21,067	)		(20,848	)
Other income, net		37			47			83			92
Financial expense, net		(3,417	)		(908	)		(6,569	)		(1,627	)
Foreign currency income (loss)		(1,117	)		(191	)		(860	)		164
Loss before income tax expense (benefit)		(15,932	)		(11,895	)		(28,413	)		(22,219	)
Income tax expense (benefit)		(95	)		(7,408	)		596			(7,374	)
Net loss	$	(15,837	)	$	(4,487	)	$	(29,009	)	$	(14,845	)
Net loss per common share, basic and diluted	$	(0.36	)	$	(0.13	)	$	(0.68	)	$	(0.46	)
Weighted-average shares used in computing net loss per common share, basic and diluted		43,410,858			34,292,874			42,829,188			32,328,909

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

2

KALEYRA, INC.

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited, in thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Net loss	$	(15,837	)	$	(4,487	)	$	(29,009	)	$	(14,845	)
Other comprehensive income (loss):
Foreign currency translation adjustments		(1,900	)		(602	)		(2,534	)		503
Net change in unrealized gain on marketable securities, net of tax		4			23			9			19
Total other comprehensive income (loss)		(1,896	)		(579	)		(2,525	)		522
Total comprehensive loss	$	(17,733	)	$	(5,066	)	$	(31,534	)	$	(14,323	)

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

3

KALEYRA, INC.

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(Unaudited, in thousands, except share data)

	Three Months Ended June 30, 2022
	Common Stock				Additional Paid-in		Treasury Stock					Accumulated Other Comprehensive			Accumulated			Total Stockholders' Equity
	Shares		Amount		Capital		Shares		Amount			Income (Loss)			Deficit			(Deficit)
Balance as of March 31, 2022		42,361,833	$	4	$	258,418		2,798,058	$	(30,431	)	$	(2,639	)	$	(114,972	)	$	110,380
Stock-based compensation (RSUs)		1,982,531		1		12,254		—		—			—			—			12,255
Net loss		—		—		—		—		—			—			(15,837	)		(15,837	)
Other comprehensive loss		—		—		—		—		—			(1,896	)		—			(1,896	)
Balance as of June 30, 2022		44,344,364	$	5	$	270,672		2,798,058	$	(30,431	)	$	(4,535	)	$	(130,809	)	$	104,902

	Three Months Ended June 30, 2021
	Common Stock				Additional Paid-in		Treasury Stock					Accumulated Other Comprehensive			Accumulated			Total Stockholders' Equity
	Shares		Amount		Capital		Shares		Amount			Income (Loss)			Deficit			(Deficit)
Balance as of March 31, 2021		30,930,617	$	3	$	122,252		2,798,058	$	(30,431	)	$	(1,725	)	$	(78,161	)	$	11,938
Stock-based compensation (RSUs)		376,719		—		5,318		—		—			—			—			5,318
Proceeds from issuance of common stock in Private Investment in Public Equity offering, net of issuance costs		8,400,000		1		99,050		—		—			—			—			99,051
Common stock issued to Vivial equity holders (mGage acquisition) (2)		1,600,000		—		18,832		—		—			—			—			18,832
Net loss		—		—		—		—		—			—			(4,487	)		(4,487	)
Other comprehensive income		—		—		—		—		—			(579	)		—			(579	)
Balance as of June 30, 2021		41,307,336	$	4	$	245,452		2,798,058	$	(30,431	)	$	(2,304	)	$	(82,648	)	$	130,073

	Six Months Ended June 30, 2022
	Common Stock				Additional Paid-in		Treasury Stock					Accumulated Other Comprehensive			Accumulated			Total Stockholders' Equity
	Shares		Amount		Capital		Shares		Amount			Income (Loss)			Deficit			(Deficit)
Balance as of December 31, 2021		42,033,637	$	4	$	251,659		2,798,058	$	(30,431	)	$	(2,010	)	$	(101,800	)	$	117,422
Stock-based compensation (RSUs)		2,310,727		1		19,013		—		—			—			—			19,014
Net loss		—		—		—		—		—			—			(29,009	)		(29,009	)
Other comprehensive income		—		—		—		—		—			(2,525	)		—			(2,525	)
Balance as of June 30, 2022		44,344,364	$	5	$	270,672		2,798,058	$	(30,431	)	$	(4,535	)	$	(130,809	)	$	104,902

4

	Six Months Ended June 30, 2021
	Common Stock					Additional Paid-in			Treasury Stock					Accumulated Other Comprehensive			Accumulated			Total Stockholders' Equity
	Shares			Amount		Capital			Shares		Amount			Income (Loss)			Deficit			(Deficit)
Balance as of December 31, 2020		30,288,687		$	3	$	93,628			2,798,058	$	(30,431	)	$	(2,826	)	$	(67,803	)	$	(7,429	)
Conversion of Cowen Note		303,171			—		2,295			—		—			—			—			2,295
Forfeiture of 2020 Sponsors' Earnout Shares (1)		(469,343	)		—		1,244			—		—			—			—			1,244
Forward share purchase agreement transactions		—			—		17,528			—		—			—			—			17,528
Stock-based compensation (RSUs)		935,115			—		10,329			—		—			—			—			10,329
Warrants exercised for common stock		249,706			—		2,872			—		—			—			—			2,872
Fair value of warrants		—			—		(326	)		—		—			—			—			(326	)
Proceeds from issuance of common stock in Private Investment in Public Equity offering, net of issuance costs		8,400,000			1		99,050			—		—			—			—			99,051
Common stock issued to Vivial equity holders (mGage acquisition) (2)		1,600,000			—		18,832			—		—			—			—			18,832
Net loss		—			—		—			—		—			—			(14,845	)		(14,845	)
Other comprehensive loss		—			—		—			—		—			522			—			522
Balance as of June 30, 2021		41,307,336		$	4	$	245,452			2,798,058	$	(30,431	)	$	(2,304	)	$	(82,648	)	$	130,073

____________________

(1) On March 16, 2021, upon the final determination that GigAcquisitions, LLC, Cowen Investments II LLC (“Cowen”), Irwin Silverberg and Jeffrey Bernstein (the “Sponsors”) were not entitled to receive the final 50% of the Earnout Shares (“2020 Sponsors’ Earnout Shares”) pursuant to the terms of the Purchase Agreement entered into on February 22, 2019, such number of 2020 Sponsors’ Earnout Shares that did not vest were forfeited by all but one Sponsor. On March 26, 2021, that remaining Sponsor settled its portion of the 2020 Sponsors’ Earnout Shares in cash in lieu of forfeiting its shares.

(2) On June 1, 2021, the Company completed its acquisition of mGage for a total purchase price of $ 218.0 million, consisting of both cash and common stock consideration. On August 30, 2021, the Company prepared and delivered to the Stockholder Representative a written statement (the “Post-Closing Statement”) setting forth the calculation of closing cash and closing net working capital which ultimately resulted in the final Merger consideration to be equal to $217.0 million, pursuant to the terms of the Merger Agreement. The original cash consideration amounted to $199.2 million of which $198.6 million was paid on June 1, 2021 and the remaining amount was settled through the period ended September 30, 2021. The original cash consideration was reduced by $997,000 due to a working capital adjustment. The common stock consideration was paid with the issuance to Vivial’s former equity holders of a total of 1,600,000 shares of Kaleyra common stock at $11.77 per share closing price of the Company’s common stock on the date of issuance, equal to $18.8 million.

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

5

KALEYRA, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)

	Six Months Ended June 30,
	2022			2021
Cash Flows from Operating Activities:
Net loss	$	(29,009	)	$	(14,845	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		11,838			3,460
Stock-based compensation		15,249			9,270
Provision for doubtful accounts		925			808
Realized gains on marketable securities		9			21
Employee benefit obligation		752			122
Change in fair value of warrant liability		(810	)		830
Reversal of accrued interest on forward share purchase agreement		—			(659	)
Non-cash interest expense		1,014			325
Deferred taxes		176			(6,804	)
Change in operating assets and liabilities:
Trade receivables		(13,319	)		(7,259	)
Other current assets		1,916			(2,359	)
Deferred cost		12			46
Other long-term assets		(1,187	)		1,483
Accounts payable		5,361			(1,882	)
Other current liabilities		1,678			(2,508	)
Deferred revenue		(2,389	)		6,920
Long-term liabilities		(87	)		(82	)
Net cash used in operating activities		(7,871	)		(13,113	)
Cash Flows from Investing Activities:
Purchase of short-term investments		(1,165	)		(1,882	)
Sale of short-term investments		6,459			546
Purchase of property and equipment		(966	)		(177	)
Capitalized software development costs		(4,502	)		(1,633	)
Purchase of intangible assets		(17	)		(3	)
Acquisition of mGage, net of cash acquired		—			(195,709	)
Acquisition of Bandyer, net of cash acquired		(1,005	)		—
Net cash used in investing activities		(1,196	)		(198,858	)
Cash Flows from Financing Activities:
Proceeds from (repayments on) line of credit, net		(1,776	)		203
Repayments on term loans		(4,493	)		(3,451	)
Proceeds from issuance of convertible notes, net of issuance costs		—			188,637
Repayments on notes		—			(7,500	)
Receipts related to forward share purchase agreements		—			17,045
Proceeds from issuance of common stock in Private Investment in Public Equity offering, net of issuance costs		—			99,051
Proceeds related to settlement of non-forfeited 2020 Sponsor Earnout Shares		—			1,244
Proceeds from the exercise of common stock warrants		—			2,872
Repayments on capital lease		(46	)		(66	)
Net cash provided by (used in) financing activities		(6,315	)		298,035
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(2,230	)		(409	)
Net increase (decrease) in cash, cash equivalents and restricted cash		(17,612	)		85,655
Cash, cash equivalents and restricted cash, beginning of period (1)		91,702			32,970
Cash, cash equivalents and restricted cash, end of period (1)	$	74,090		$	118,625
Supplemental disclosures of cash flow information:
Cash paid for interest	$	6,460		$	763
Non-cash investing and financing activities

6

Change in value of forward share purchase agreements	$	—	$	(483	)
Common stock issued to Vivial equity holders (mGage acquisition)	$	—	$	18,832
Stock-based compensation capitalized as software development costs	$	—	$	363
Conversion of convertible note to common stock	$	—	$	2,295
Restricted stock units granted to employees for bonuses	$	3,764	$	—
Fair value of warrant liability	$	—	$	344
Reclassification of warrant liability to additional paid-in capital upon exercise of warrants	$	—	$	(18	)
Consideration payable	$	468	$	633

______________________

(1) As of June 30, 2022, includes $73.6 million of cash and cash equivalents and $468,000 of restricted cash; as of December 31, 2021, includes $90.0 million of cash and cash equivalents and $1.7 million of restricted cash.

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

7

KALEYRA, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Kaleyra, Inc., formerly GigCapital, Inc., (hereinafter “Kaleyra” or the “Company”), was incorporated in Delaware on October 9, 2017. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

On February 22, 2019, the Company entered into a stock purchase agreement (the “Stock Purchase Agreement”) by and among the Company, Kaleyra S.p.A., Shareholder Representative Services LLC (the “Seller Representative”), as representative for the holders of the ordinary shares of Kaleyra S.p.A. immediately prior to the closing of the business combination with Kaleyra (the “Business Combination”), and all of the stockholders of all of the Kaleyra S.p.A. stock (collectively, such Kaleyra S.p.A. stockholders, the “Sellers”), for the purpose of the Company acquiring all of the shares of Kaleyra S.p.A.

As a result of the Business Combination, which closed on November 25, 2019, the Company (headquartered in Milan, Italy) became a multi-channel integrated communication services provider on a global scale. Kaleyra operates in the Communications Platform as a Service (“CPaaS”) market with operations primarily in the United States, Italy, India, UK and Dubai. In connection with the closing, the Company changed its name from GigCapital, Inc. to Kaleyra, Inc.

Kaleyra’s underlying technology used in the platform is the same across all its communication services which can generally be described as “omni-channel mobile first interactive notifications via a public or private cloud implementation”.

Kaleyra provides mobile communication services to financial institutions, e-commerce players, OTTs, software companies, logistic enablers, healthcare providers, retailers, and other large organizations worldwide. Through its proprietary cloud communications platforms (collectively, the “Platforms”), Kaleyra manages multi-channel integrated communication services on a global scale, consisting of inbound/outbound messaging solutions, programmable voice and Interactive Voice Response (IVR) configurations, hosted telephone numbers, conversational marketing solutions, RCS, and other types of IP communications services such as e-mail, push notifications, video/audio/chat, and WhatsApp®.

On July 29, 2020, Kaleyra registered a German branch of Kaleyra S.p.A. with the German Chamber Tax Authority of Commerce. Kaleyra established its branch in Germany to expand Kaleyra’s footprint in Central Europe and the Nordic countries and allow it to leverage Kaleyra’s trusted business solutions for customers in additional jurisdictions.

Kaleyra’s subsidiary, Campaign Registry Inc., a systems initiative to reduce spam by collecting robotically driven campaign information and processing and sharing that information with mobile operators and the messaging ecosystem, began its soft launch during the second quarter of fiscal year 2020, ending up with its first revenue contracts in the second half of fiscal year 2020.

On February 18, 2021, Kaleyra entered into an agreement and plan of merger (the “Merger Agreement”) with Vivial, Inc. (“Vivial”) for the acquisition of the business known as mGage (“mGage”), a leading global mobile messaging provider in the United States (the transaction contemplated by the Merger Agreement, the “Merger”).

On June 1, 2021, Kaleyra completed its acquisition of mGage for a total purchase price of $218.0 million. The Merger consideration consisted of both cash consideration and common stock consideration. On August 30, 2021, the Company prepared and delivered to the Stockholder Representative a written statement (the “Post-Closing Statement”) setting forth the calculation of closing cash and closing net working capital which ultimately resulted in the final Merger consideration to be equal to $217.0 million, pursuant to the terms of the Merger Agreement. The cash consideration amounted to $199.2 million of which $198.6 million was paid on June 1, 2021 and the remaining amount was settled during the period ended September 30, 2021, including a working capital adjustment of $997,000. The common stock consideration was paid with the issuance to Vivial’s former equity holders of a total of 1,600,000 shares of Kaleyra common stock at the $11.77 per share closing price of Kaleyra common stock on the date of issuance, equal to $18.8 million in value. In support of the consummation of the Merger, on February 18, 2021, Kaleyra entered into subscription agreements (the “PIPE Subscription Agreements”) with certain institutional investors (the “PIPE Investors”), pursuant to which, among other things, Kaleyra agreed to issue and sell, in private placements to close immediately prior to the closing of the Merger, an aggregate of 8,400,000 shares of Kaleyra common stock to the PIPE Investors at $12.50 per share. Kaleyra also entered into convertible note subscription agreements (the “Convertible Note Subscription Agreements”) with certain institutional investors (the “Convertible Note Investors”), pursuant to which Kaleyra agreed to issue and sell, in private placements to close immediately prior to the closing of the Merger, $200 million aggregate principal amount of unsecured convertible notes (the “Merger Convertible Notes”).

On July 1, 2021, Kaleyra completed a company reorganization of the acquired business of mGage through the initial dissolution of the Delaware single member LLCs of Vivial Holdings, LLC, Vivial Networks, LLC, and the following merger of mGage, LLC into the surviving holding company, Vivial Inc., which subsequently changed its name into Kaleyra US Inc., as a result of the

8

reorganization. As a result of the Merger, Kaleyra US Inc. became the holding company and one hundred percent (100%) owner of mGage Europe Ltd. (UK) and mGage SA de SV (Mexico).

On July 8, 2021, Kaleyra completed the acquisition of Bandyer Srl (“Bandyer”) for cash consideration of $15.4 million. Bandyer offers cloud-based audio/video communications services via Web Real Time Communication (“WebRTC”) technology to financial institutions, retail companies, utilities, industries, insurance companies, human resources, and digital healthcare organizations. Bandyer provides customers with programmable audio/video APIs and Software Development Kits (“SDKs”) based on WebRTC technology for a variety of uses, including Augmented Reality (“AR”) applications for smart glasses.

Effective August 31, 2021, the common stock of the Company ceased trading on the NYSE American and commenced trading on the NYSE under the ticker symbol “KLR”. Kaleyra’s warrants continue to trade on the NYSE American under the symbol “KLR WS”.

On October 11, 2021, Kaleyra Africa Ltd, a wholly owned subsidiary of Kaleyra Inc., was incorporated under the laws of South Africa with the registered office in Waterfall City, Gauteng. This newly established subsidiary is part of Kaleyra's broader strategic plan of expanding into emerging markets whereby South Africa will serve as Kaleyra's hub to enter the entire African market.

On November 15, 2021, pursuant to the provisions of the Merger Agreement, Kaleyra Dominicana, S.R.L., the ninety-nine percent (99%) direct owner of Kaleyra US Inc. and one percent (1%) direct owner of Kaleyra Inc., was incorporated under the laws of the Dominican Republic with the registered office in Santo Domingo. This newly established subsidiary is aimed to provide the Kaleyra group with back-office technology support and engage in product development and innovation.

On January 13, 2022, Kaleyra completed a company reorganization of the acquired business of Bandyer by means of the merger of the Italian legal entity of Bandyer into the holding company, Kaleyra S.p.A.. As a result of the merger, Bandyer ceased to exist as a separate legal entity and all its assets and liabilities have been incorporated under Kaleyra S.p.A. effective January 13, 2022.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying condensed consolidated financial statements of the Company are unaudited, and have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, this interim quarterly financial report does not include all disclosures required by US GAAP. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, considered necessary to present fairly the financial position, results of operations and cash flows of the Company and its consolidated subsidiaries for all periods presented. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected in the future or for the full fiscal year. It is recommended that these condensed consolidated financial statements be read in conjunction with the Company’s consolidated financial statements and the notes thereto included in its 2021 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 8, 2022.

These condensed consolidated financial statements have been prepared in conformity with US GAAP applicable for an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). The JOBS Act provides, in part, that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. In particular, an emerging growth company can delay the adoption of certain accounting standards until those standards would apply to private companies. For the purpose of these condensed consolidated financial statements, the Company availed itself of an extended transition period for complying with new or revised accounting standards and, as a result, did not adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for public companies.

Liquidity

The Company evaluated its ability to continue as a going concern. The Company has negative cash flows from operating activities through June 30, 2022, mainly as the consequence of the payment of interest bearing on existing notes payable and bank borrowings. The condensed consolidated balance sheet as of June 30, 2022 includes total current assets of $176.6 million and total current liabilities of $105.9 million, resulting in net current assets of $70.7 million and a short-term net financial position of $60.6 million.

On February 18, 2021, and for the purposes of raising the cash portion of the consideration for the Merger, the Company entered into the PIPE Subscription Agreements with the PIPE Investors and the Convertible Note Subscription Agreements with the Convertible Note Investors. Pursuant to these agreements, and prior to the closing of the Merger on June 1, 2021, the Company issued and sold in private placements an aggregate of $105 million or 8,400,000 shares of the Company’s common stock to the PIPE Investors at $12.50 per share, and $200 million aggregate principal amount of unsecured Merger Convertible Notes, bearing interest at a rate of 6.125% per annum, payable semi-annually, in arrears on each June 1 and December 1 of each year.

9

Considering the effects of the financings described above and the typical financial cycle of the Company, the Company’s management believes that the Company’s cash and availability of borrowings will be sufficient to support its planned operations for at least the next 12 months from the date these condensed consolidated financial statements were issued.

Business seasonality

Historically, the Company has experienced clear seasonality in its revenue generation, with slower traction in the first calendar quarter, and increasing revenues as the year progresses. The Company typically experiences higher revenues in messaging and notification services during the fourth calendar quarter. This patterned revenue generation behavior takes place due to the Company’s customers sending more messages to their end-user customers who are engaged in consumer transactions at the end of the calendar year, resulting in an increase in notifications of electronic payments, credit card transactions and e-commerce orders.

Principles of Consolidation

The condensed consolidated financial statements include the Company and its wholly owned subsidiaries, including Kaleyra S.p.A., Solutions Infini, Buc Mobile, mGage Europe Limited, Campaign Registry and Kaleyra US Inc., which represent its major operations. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are used for, but not limited to, revenue recognition; allowance for doubtful accounts; valuation of the Company’s stock-based awards; recoverability of goodwill, long-lived and intangible assets; capitalization and useful life of the Company’s capitalized internal-use software development costs; fair value of acquired intangible assets and goodwill; accruals, including tax related provision and valuation allowance on deferred taxes. Estimates are based on historical experience and on various assumptions that the Company believes are reasonable under current circumstances. However, future events are subject to change and best estimates and judgments may require further adjustments; therefore, actual results could differ materially from those estimates. Management periodically evaluates such estimates and they are adjusted prospectively based upon such periodic evaluation. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties, including uncertainty in the current economic environment due to the disruptive effects of global inflation, the continuing impact of the novel strain of the coronavirus (“COVID-19”) and the armed conflict between Russia and Ukraine.

Concentration of Credit Risk

Financial instruments that potentially expose the Company to a concentration of credit risk consist primarily of cash and cash equivalents, restricted cash, short-term investments and trade receivables. The Company maintains its cash and cash equivalents, restricted cash and short-term investments with financial institutions that management believes are financially sound.

The Company sells its services to a wide variety of customers. If the financial condition or results of operations of any significant customers deteriorate substantially, the Company’s operating results could be adversely affected. To reduce credit risk, management performs ongoing credit evaluations of the financial condition of significant customers. The Company maintains reserves for estimated credit losses on customer accounts when considered necessary. Actual credit losses may differ from the Company’s estimates. In both of the six months ended June 30, 2022 and 2021, there was no customer that individually accounted for more than 10% of the Company’s consolidated total revenue. As of June 30, 2022 and December 31, 2021, zero and one individual customer, respectively, accounted for more than 10% of the Company’s consolidated total trade receivables. Trade receivables accounted for by that one customer amounted to $9.6 million as of December 31, 2021.

Warrant Liability

The Company accounts for warrants for shares of the Company’s common stock that are not indexed to its own stock as liabilities at fair value on the condensed consolidated balance sheets. The warrants are subject to remeasurement at each balance sheet date and any change in fair value is recognized in “Financial expense, net” on the condensed consolidated statements of operations. The liability is included in the condensed consolidated balance sheet line item “Other long-term liabilities”. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the common stock warrants. At that time, the portion of the warrant liability related to the common stock warrants will be reclassified as additional paid-in capital.

Recent Accounting Pronouncements

In May 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-04 “Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation— Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815- 40) Issuer’s Accounting

10

for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options” which clarifies and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. An entity should measure the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as follows: i) for a modification or an exchange that is a part of or directly related to a modification or an exchange of an existing debt instrument or line-of-credit or revolving-debt arrangements (hereinafter, referred to as a “debt” or “debt instrument”), as the difference between the fair value of the modified or exchanged written call option and the fair value of that written call option immediately before it is modified or exchanged; ii) for all other modifications or exchanges, as the excess, if any, of the fair value of the modified or exchanged written call option over the fair value of that written call option immediately before it is modified or exchanged. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the amendments prospectively to modifications or exchanges occurring on or after the effective date of the amendments. The Company adopted the amendments, and the adoption did not have a material impact on its condensed consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06 “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” which is aimed to address issues identified as a result of the complexity associated with applying generally accepted accounting principles for certain financial instruments with characteristics of liabilities and equity. In addressing the complexity, the FASB focused on amending the guidance on convertible instruments and the guidance on the derivatives scope exception for contracts in an entity’s own equity. For convertible instruments, the Board decided to reduce the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models results in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The Company adopted the amendments in this update as of the beginning of its annual fiscal year 2021, which resulted in the embedded conversion features of the Merger Convertible Note not being separately recognized from the host contract pursuant to their scope exception from derivative accounting under ASC 815-10-15-74(a). Interest Make-Whole Payment feature met the definition of a derivative but did not fall within the above scope exception, nonetheless its value was de minimis and as such no amount was recorded in the consolidated financial statements at the time of the issuance of the Merger Convertible Notes nor at any subsequent reporting date.

In June 2020, the FASB issued ASU 2020-05 “Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective dates for certain entities” (“ASU 2020-05”), which provides a limited one year deferral of the effective dates of the following updates (including amendments issued after the issuance of the original update) to provide immediate, near-term relief for certain entities for whom these updates are either currently effective or imminently effective: i) ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“Revenue”); ii) ASU No. 2016-02, Leases (Topic 842) (“Leases”). The updates in ASU 2020-05 followed the updates to effective dates set forth within ASU 2019-10 “Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates” (“ASU 2019-10”). The amendments in this ASU amended certain effective dates for the above ASU 2016-02, Leases (including amendments issued after the issuance of the original ASU). The effective dates for Leases after applying ASU 2019-10 were as follows: public business entities, excluding emerging growth companies and smaller reporting companies, for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. All other entities for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. Early application continues to be allowed. In ASU 2019-10, the FASB noted that challenges associated with transition to a major update are often magnified for private companies and smaller public companies. Those challenges have been significantly amplified by the current business and capital market disruptions caused by the COVID-19 pandemic. For this reason, the FASB issued the amendments in ASU 2020-05 by deferring the effective date for one additional year for entities in the “all other” category that have not yet issued their financial statements (or made financial statements available for issuance) reflecting the adoption of Leases. Therefore, under the amendments of ASU 2020-05, Leases (Topic 842) is effective for entities within the “all other” category for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early application continues to be permitted, which means that an entity may choose to implement Leases before those deferred effective dates. The Company expects the adoption to have a material impact to the consolidated balance sheets for the recording of the "right-to-use" asset and corresponding lease liability. The Company plans to adopt ASC Topic 842 – Leases in its fiscal year ending December 31, 2022, by utilizing the modified retrospective transition approach, which will result in an estimated current period adjustment as of January 1, 2022 related to the recognition of a right-of-use asset and corresponding lease liability between $3.0 million and $4.0 million on its condensed consolidated balance sheet.

In February 2020, the FASB issued ASU 2020-02 “Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842), Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842). This ASU applies to all registrants that are creditors in loan transactions that, individually or in the aggregate, have a material effect on the registrant’s financial condition. This ASU

11

guidance is applicable upon a registrant’s adoption of Accounting Standards Codification (“ASC”) Topic 326. On November 15, 2019, the FASB delayed the effective date of ASC Topic 326 (ASU 2019-10), as noted below.

In November 2019, the FASB issued ASU 2019-10 “Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates”. The amendments in ASU 2019-10 amend certain effective dates for the following major ASUs (including amendments issued after the issuance of the original ASU):

a)ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (Credit Losses) (“ASU 2016-13”). The amendments in this ASU amend the mandatory effective dates for Credit Losses for all entities as follows: Public business entities that meet the definition of a SEC filer, excluding entities eligible to be smaller reporting companies, as defined by the SEC, at the time the ASU was issued, for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. All other entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early application continues to be allowed. The Company is currently evaluating the impact of this standard on its condensed consolidated financial statements.

b)ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (Hedging). The effective dates for Hedging after applying this ASU are as follows: Public business entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. All other entities for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. Early application continues to be allowed. The Company adopted the amendments in this update as of the beginning of its annual fiscal year 2021, and the adoption did not have a material impact on its condensed consolidated financial statements.

c) ASU 2016-02, Leases (Topic 842). The effective dates for Leases after applying ASU 2019-10 are as follows: public business entities, excluding emerging growth companies and smaller reporting companies, for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. All other entities for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. As noted above, the effective date of this ASU has now been delayed for one additional year by the issuance of ASU 2020-05.

In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract”. This standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The standard is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. For all other entities, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2021. The Company adopted the amendments in this update as of the beginning of its annual fiscal year 2021, and the adoption did not have a material impact on its condensed consolidated financial statements.

In August 2018, the FASB issued ASU 2018-14, “Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20)”, which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The amendments are effective for fiscal years ending after December 15, 2020 for public business entities and for fiscal years ending after December 15, 2021 for all other entities. The Company is currently evaluating the impact of this standard on its condensed consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment”, which removes the second step of the goodwill impairment test that requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The Company adopted the amendments in this update as of the beginning of its annual fiscal year 2021, and the adoption did not have a material impact on its condensed consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments”, which changes the impairment model for most financial assets. The new model uses a forward-looking expected loss method, which will generally result in earlier recognition of allowances for losses. In November 2018, the FASB issued ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments— Credit Losses”, which clarifies that receivables arising from operating leases are not within the scope of Topic 326, Financial Instruments—Credit Losses. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. These ASUs are effective for public entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, and for other entities for fiscal years beginning after December 15, 2020 and interim periods within fiscal years beginning after December 15, 2021. Earlier application is permitted. As noted above, the effective date of this ASU was delayed for two years by the issuance of ASU 2019-10. The Company is currently evaluating the impact of this standard on its condensed consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, “Leases”, which was further clarified by ASU 2018-10, “Codification Improvements to Topic 842, Leases”, and ASU 2018-11, “Leases—Targeted Improvements”, both issued in July 2018. ASU 2016-02

12

affects all entities that lease assets and will require lessees to recognize a lease liability and a right-of-use asset for all leases (except for short-term leases that have a duration of less than one year) as of the date on which the lessor makes the underlying asset available to the lessee. For lessors, accounting for leases is substantially the same as in prior periods. ASU 2018-10 clarifies or corrects unintended application of guidance related to ASU 2016-02. The amendment affects narrow aspects of ASU 2016-02 related to the implicit rate in the lease, impairment of the net investment in the lease, lessee reassessment of lease classification, lessor reassessment of lease term and purchase options, variable payments that depend on an index or rate and certain transition adjustments. ASU 2018-11 adds a transition option for all entities and a practical expedient only for lessors. The transition option allows entities to not apply the new lease standard in the comparative periods they present in their financial statements in the year of adoption. Under the transition option, entities can opt to continue to apply the legacy guidance in ASC 840, “Leases”, including its disclosure requirements, in the comparative prior periods presented in the year they adopt the new lease standard. Entities that elect this transition option will still be required to adopt the new leases standard using the modified retrospective transition method required by the standard, but they will recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption rather than in the earliest period presented. The new standards are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years for a public business entity. For all other entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Earlier application is permitted. As noted above, the effective date of this ASU was delayed for two years by the issuance of ASU 2019-10 as amended by ASU 2020-05.

3. BUSINESS COMBINATIONS

Acquisition of mGage

On June 1, 2021, the Company completed its Merger with Vivial and the resulting acquisition of the business owned by Vivial known as mGage, a leading global mobile messaging provider. The acquisition of mGage provided an opportunity for the Company to expand its network operator connections and become one of only four companies providing direct connectivity to all tier-1 US carriers.

Pursuant to the Merger Agreement dated as of February 18, 2021, by and among the Company, Merger Sub, Vivial and GSO Special Situations Master Fund LP, solely in its capacity as the Stockholder Representative, Vivial was merged with and into Merger Sub, with Vivial surviving as a wholly-owned subsidiary of the Company. The name of Vivial was changed to mGage Group Holdings, Inc. (“mGage Group Holdings”) as a result of the Merger. Subsequently, on July 1, 2021, mGage Group Holdings changed its name to Kaleyra US Inc.

The Merger consideration consisted of cash consideration and common stock consideration and was subject to post-closing price adjustments as set forth in the Merger Agreement. On August 30, 2021, the Company prepared and delivered to the Stockholder Representative a written statement (the “Post-Closing Statement”) setting forth the calculation of closing cash and closing net working capital which ultimately resulted in the final Merger consideration to be equal to $217.0 million, pursuant to the terms of the Merger Agreement. The original cash consideration amounted to $199.2 million of which $198.6 million was paid on June 1, 2021 and the remaining amount was settled through the period ended September 30, 2021, including a working capital adjustment of $997,000. The common stock consideration was paid with the issuance to Vivial’s former equity holders of a total of 1,600,000 shares of Kaleyra common stock. The resulting value of the common stock consideration, which was based upon the $11.77 per share closing price of Kaleyra common stock as of June 1, 2021, was equal to $18.8 million and has been recognized as part of the consideration transferred.

The Merger was financed through (i) the proceeds from the issuance and sale by the Company, of an aggregate of 8,400,000 shares of Kaleyra common stock to PIPE Investors at $12.50 per share, pursuant to the subscription agreements dated February 18, 2021; and (ii) the proceeds from the issuance in a private placement, of $200 million aggregate principal amount of Merger Convertible Notes to certain institutional investors. See Note 9 – Notes Payable – for additional details on the Merger Convertible Notes.

The Merger was accounted for as a business combination and the total fair value of the consideration transferred of $217 million was allocated on a preliminary basis to the net tangible and intangible assets and liabilities based on their estimated fair values as of the acquisition date and the excess was recorded as goodwill. The Company evaluated certain assets, liabilities and tax estimates that were subject to change throughout the measurement period ended on June 1, 2022 (one year from the acquisition date).

During the three months ended September 30, 2021, Kaleyra redetermined the estimated fair value of certain identified finite-lived intangible assets, net of deferred tax liabilities and the resulting residual goodwill. The measurement period adjustment was recognized through a decrease of $8.9 million in the current period condensed consolidated balance sheet line item “Intangible assets, net” mostly relating to the acquired developed technology, a net decrease of $1.9 million in the current period condensed consolidated balance sheet line item “Deferred tax liability” and an increase of $5.9 million in the current period condensed consolidated balance sheet line item “Goodwill”.

During the three months ended June 30, 2022, Kaleyra redetermined the value of Deferred tax assets on loss carryforward following the filing of mGage Group Holding’s pre-affiliation tax return and remeasured the tax effected values of its identified finite-

13

lived intangible assets based upon the tax rates calculated in each domestic and foreign tax jurisdiction, including the UK. The measurement period adjustment was recognized through a net decrease of $5.1 million in the current period condensed consolidated balance sheet line item “Deferred tax assets”, a decrease of $2.0 million in the current period condensed consolidated balance sheet line item “Deferred tax liability” and a net increase of $3.1 million in the current period condensed consolidated balance sheet line item “Goodwill”.

As referred to above, the measurement period adjustment also included a working capital adjustment of $997,000, pursuant to the terms of the Merger Agreement. The acquired entity’s results of operations have been included in the condensed consolidated financial statements of the Company from the date of acquisition.

The following table summarizes the fair value amount recognized for the assets acquired and liabilities assumed as of the acquisition date (in thousands):

Customer relationships (1)	$	76,256
Developed technology (1)		30,033
Trade names (1)		13,060
Deferred tax assets on loss carryforward		19,899
Goodwill (2)		89,391
Accounts receivable and other current assets		29,996
Property and equipment		8,450
Cash and cash equivalents		2,856
Total assets acquired		269,941
Deferred tax liabilities		30,242
Accounts payable and other current liabilities		22,665
Total liabilities assumed		52,907
Net assets acquired	$	217,034

(1) Identified finite-lived intangible assets. The estimated fair value of the intangible assets acquired was determined by the Company, which considered or relied in part upon a valuation report of a third-party expert. The Company used income approaches to estimate the fair values of the identifiable intangible assets. The estimated useful life is 7 to 9 years for customer relationships, 6 years for developed technology and 8 years for trade names.

(2) Goodwill is the excess of fair value of the consideration transferred over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed and represents expected synergies of the combination of the acquired business. Goodwill is not deductible for income tax purposes.

In 2021, the Company incurred costs related to this acquisition of $5.5 million that were expensed in general and administrative expenses in the accompanying condensed consolidated statements of operations.

The contribution of Kaleyra US Inc. to the consolidated revenue and consolidated net loss for the three months ended June 30, 2022 was $30.2 million, and net loss of $1.9 million.

The contribution of Kaleyra US Inc. to the consolidated revenue and consolidated net loss for the six months ended June 30, 2022 was $62.3 million, and net loss of $2.9 million.

Acquisition of Bandyer

On July 8, 2021, Kaleyra completed the acquisition of the entire share capital of Bandyer, a company based in Italy that offers cloud based audio/video communications services to Italian financial institutions, retail companies, utilities, insurance, human resources and digital healthcare organizations (the “Bandyer Acquisition”). Bandyer’s services are suitable for different industries and completely compatible with any device and expand and complete Kaleyra’s already wide offering of communication channels.

The consideration for the Bandyer Acquisition consisted of cash consideration of $15.4 million (€13 million) of which $13.3 million (€11.5 million) was paid at the acquisition date and the remaining amount was retained in an escrow account. The acquisition of Bandyer was financed through the available financial resources of Kaleyra.

The Bandyer Acquisition was accounted for as a business combination and the total fair value of the consideration transferred of $15.4 million was allocated to the net tangible and intangible assets and liabilities based on their estimated fair values as of the acquisition date and the excess was recorded as goodwill. The Company evaluated certain assets, liabilities and tax estimates that were subject to change throughout the measurement period ended on July 8, 2022 (one year from the acquisition date).

During the three months ended March 31, 2022, and pursuant to the Bandyer purchase agreement, the above purchase consideration was decreased by $58,000, which is an amount equal to the sum of the acquisition date net debt and the portion of the

14

acquisition date net working capital that was collected by December 31, 2021 (the “Price Adjustment”). The Price Adjustment favorable to Kaleyra was considered in the calculation of the final goodwill balance as of March 31, 2022.

During the three months ended March 31, 2022, Kaleyra adjusted the deferred tax liabilities arising from the acquired tangible and intangible assets and the resulting residual goodwill. The measurement period adjustment was recognized through an increase of $164,000 in the current period condensed consolidated balance sheet line item “Deferred tax liability” and a corresponding increase in the current period condensed consolidated balance sheet line item “Goodwill”.

As referred to above, the measurement period adjustment also included the above Price Adjustment of $58,000. The acquired entity’s results of operations have been included in the condensed consolidated financial statements of Kaleyra from the date of acquisition.

The following table summarizes the fair value amount recognized for the assets acquired and liabilities assumed as of the acquisition date (in thousands):

Property and equipment, net	$	116
Developed technology (1)		7,999
Customer relationship (1)		1,798
Goodwill (2)		8,146
Cash and cash equivalents		349
Trade receivables and other current assets		671
Other non current assets		21
Total assets acquired		19,100
Deferred tax liabilities		2,616
Accounts payable and other current liabilities		986
Long term portion of employee benefit obligation		126
Current portion of bank and other borrowings		39
Total liabilities assumed		3,767
Net assets acquired	$	15,333

(1) Identified finite-lived intangible assets. The estimated fair value of the intangible assets acquired was determined by Kaleyra, which considered or relied in part upon a valuation report of a third-party expert. The Company used income approaches to estimate the fair values of the identifiable intangible assets. The estimated useful life is 8 years for customer relationships and 15 years for developed technology.

(2) Goodwill is the excess of fair value of the consideration transferred over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed and represents expected synergies of the combination of the acquired business. Goodwill is not deductible for income tax purposes.

On January 13, 2022, Kaleyra completed a company reorganization of the acquired business of Bandyer by means of the merger of the Italian legal entity of Bandyer into the holding company, Kaleyra S.p.A.. As a result of the merger, Bandyer ceased to exist as a separate legal entity and all its assets and liabilities have been incorporated under Kaleyra S.p.A. effective January 13, 2022.

On April 4, 2022, following the above Price Adjustment and pursuant to the terms of the purchase agreement, Kaleyra paid an aggregate of $1.1 million (€1.0 million) out of the escrow account as remaining consideration for the Bandyer Acquisition. As of June 30, 2022 the resulting balance of the escrow account that was originally retained at the acquisition date amounted to $468,000 (€451,000).

Unaudited supplemental pro-forma information

The results of operations for the three and six months ended June 30, 2022 are included in the condensed consolidated financial statements. The following table presents unaudited supplemental pro-forma information for the three and six months ended June 30, 2021 as if the Merger had occurred on January 1, 2021. The main adjustments reflected in the unaudited pro-forma financial information for the three and six months ended June 30, 2021 are as follows:

(i) the amortization of intangible assets arising from the purchase price allocation amounting to $1.9 million and $4.6 million, respectively, for three and six months ended June 30, 2021, net of the related tax effect of $687,000 and $1.7 million, respectively, which are referred to the period starting on January 1, 2021 through the date of the business combination;

(ii) the financial expenses incurred in connection with the Merger Convertible Notes amounting to $2.4 million and $5.9 million, respectively, for three and six months ended June 30, 2021, which are referred to the period starting on January 1, 2021 through the date of the Merger. No pro forma tax benefit has been reflected in connection with the pro forma

15

adjustment to financial income (expense), net as Kaleyra is in a net loss tax position and a valuation allowance would be established for the amount of any deferred tax assets.

Transaction costs incurred in connection with the transaction were not eliminated. The pro-forma financial information is not necessarily indicative of the results of operation that would have occurred had the transaction been affected on the assumed dates.

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands, except share and per share amounts)	2022			2021			2022			2021
Revenue	$	81,109		$	76,552		$	161,590		$	148,892
Net loss		(15,837	)		(5,792	)		(29,009	)		(19,772	)
Net loss per common share, basic and diluted	$	(0.36	)	$	(0.14	)	$	(0.68	)	$	(0.48	)
Weighted-average shares used in computing net loss per common share, basic and diluted		43,410,858			41,181,763			42,829,188			40,773,353

The contribution of Kaleyra US Inc. to the consolidated and pro-forma consolidated revenue was $30.2 million and $32.7 million for the three months ended June 30, 2022 and 2021, respectively.

The contribution of Kaleyra US Inc. to the consolidated and pro-forma consolidated revenue was $62.3 million and $64.6 million for the six months ended June 30, 2022 and 2021, respectively.

The contribution of Kaleyra US Inc. to the consolidated and pro-forma consolidated net loss was a loss of $1.9 million and an income of $3.9 million for the three months ended June 30, 2022 and 2021, respectively.

The contribution of Kaleyra US Inc. to the consolidated and pro-forma consolidated net loss was a loss of $2.9 million and an income of $7.5 million for the six months ended June 30, 2022 and 2021, respectively.

4. FAIR VALUE MEASUREMENTS

The following tables provide the assets and liabilities measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021 (in thousands):

	Fair Value Hierarchy as of June 30, 2022						Aggregate
	Level 1		Level 2		Level 3		Fair Value
Assets:
Mutual funds (1)	$	579	$	—	$	—	$	579
Certificates of deposit (2)		—		101		—		101
Interest rate swap (3)		—		8		—		8
Total Assets	$	579	$	109	$	—	$	688
Liabilities:
Warrant liability (4)	$	—	$	78	$	—	$	78
Total Liabilities	$	—	$	78	$	—	$	78

(1) Included in the condensed consolidated balance sheet line item “Short-term investments”.

(2) Included in the condensed consolidated balance sheet line item “Short-term investments”, with maturity terms between 4 and 12 months held in India.

(3) Included in the condensed consolidated balance sheet line item “Other long-term assets”.

(4) Included in the condensed consolidated balance sheet line item “Other long-term liabilities”. See Note 16 – Warrants – for further details.

16

	Fair Value Hierarchy as of December 31, 2021						Aggregate
	Level 1		Level 2		Level 3		Fair Value
Assets:
Mutual funds (1)	$	602	$	—	$	—	$	602
Certificates of deposit (2)		—		5,634		—		5,634
Total Assets	$	602	$	5,634	$	—	$	6,236
Liabilities
Interest rate swap (3)	$	—	$	35	$	—	$	35
Warrant liability (4)		—		889		—		889
Total Liabilities	$	—	$	924	$	—	$	924

(1) Included in the condensed consolidated balance sheet line item “Short-term investments”.

(2) Included in the condensed consolidated balance sheet line item “Short-term investments”, with maturity terms between 4 and 12 months held in India.

(3) Included in the condensed consolidated balance sheet line item “Other long-term liabilities”.

(4) Included in the condensed consolidated balance sheet line item “Other long-term liabilities”. See Note 16 – Warrants – for further details.

The values of short-term investments as of June 30, 2022 and as of December 31, 2021 were as follows (in thousands):

	As of June 30, 2022								As of December 31, 2021
	Cost		Unrealized Gains		Unrealized Losses		Fair Value		Cost		Unrealized Gains		Unrealized Losses		Fair Value
Mutual funds	$	570	$	9	$	—	$	579	$	572	$	30	$	—	$	602
Certificates of deposit		101		—		—		101		5,634		—		—		5,634

There were no transfers into or out of Level 2 or Level 3 for the six months ended June 30, 2022 and the year ended December 31, 2021.

5. DERIVATIVE FINANCIAL INSTRUMENTS

The gross notional amount of interest rate swap derivative contracts not designated as hedging instruments, outstanding as of June 30, 2022 and December 31, 2021, was €4.0 million ($4.2 million) and €5.8 million ($6.6 million), respectively.

The amount and location of the gains (losses) in the condensed consolidated statements of operations related to derivative contracts is as follows (in thousands):

		Three Months Ended June 30,				Six Months Ended June 30,
Derivatives Not Designed As Hedging Instruments	Line Items	2022		2021		2022		2021
Interest rate swap	Financial income (expense), net	$	20	$	28	$	42	$	41

The following table presents the fair value and the location of derivative contracts reported in the condensed consolidated balance sheets (in thousands):

		As of June 30,		As of December 31,
Derivatives Not Designed As Hedging Instruments	Line Items	2022		2021
Interest rate swap	Other long-term liabilities	$	—	$	(35	)
Interest rate swap	Other long-term assets		8		—

6. GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

17

Goodwill as of June 30, 2022 and December 31, 2021 was as follows (in thousands):

Balance as of December 31, 2021	$	110,465
Purchase price adjustment in the period		3,161
Effect of exchange rate		(1,733	)
Balance as of June 30, 2022	$	111,893

Intangible assets, net

Intangible assets consisted of the following (in thousands):

	As of June 30, 2022						As of December 31, 2021
	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Amortizable Intangible Assets:
Developed technology	$	39,557	$	8,452	$	31,105	$	40,416	$	5,393	$	35,023
Customer relationships		85,939		13,196		72,743		86,792		8,597		78,195
Trade names		12,981		1,758		11,223		13,060		952		12,108
Patent		141		66		75		131		61		70
Total amortizable intangible assets	$	138,618	$	23,472	$	115,146	$	140,399	$	15,003	$	125,396

Amortization expense was $8.8 million and $2.2 million for the six months ended June 30, 2022 and 2021, respectively.

Total estimated future amortization expense as of June 30, 2022 is as follows (in thousands):

	As of June 30, 2022
2022 (remaining six months)	$	8,333
2023		16,587
2024		16,488
2025		16,416
2026		16,345
2027 and thereafter		40,977
Total	$	115,146

7. OTHER ASSETS

Other current assets consisted of the following (in thousands):

	As of June 30,		As of December 31,
	2022		2021
Receivables from suppliers	$	530	$	483
Credit for tax other than income tax		112		675
Income tax receivables		216		1,195
Other receivables		578		246
Total other current assets	$	1,436	$	2,599

Other long-term assets consisted of the following (in thousands):

	As of June 30,		As of December 31,
	2022		2021
Non-current income tax credit (advances and tax reduced at sources)	$	1,148	$	53
Interest rate swaps		8		—
Miscellaneous		369		346
Total other long-term assets	$	1,525	$	399

18

8. BANK AND OTHER BORROWINGS

As of June 30, 2022 and December 31, 2021, the current portion of bank and other borrowings amounts to $13.8 million and $15.8 million, respectively. As of June 30, 2022, this item was comprised of $10.6 million of the current portion of bank and other borrowings and $3.2 million of credit line facilities. As of December 31, 2021, this item was comprised of $10.5 million of the current portion of bank and other borrowings and $5.3 million of credit line facilities.

Credit line facilities

As of June 30, 2022, the Company had credit line facilities denominated in Euro for a total amount of $5.2 million, of which $3.2 million had been used. As of December 31, 2021, the Company had credit line facilities denominated in Euro for $6.7 million, of which $5.3 million had been used.

The credit lines denominated in Euro may be drawn upon at variable interest rates in the following range: 0.5% - 2.2%. The weighted average interest rate on those credit line facilities outstanding as of June 30, 2022 was 1.08%.

Long-term bank and other borrowings

Long-term bank and other borrowings consist of the following (in thousands):

									Interest Nominal Rate
	As of June 30,		As of December 31,			Interest Contractual Rate			As of June 30,			As of December 31,
	2022		2021		Maturity	as of June 30, 2022			2022			2021
UniCredit S.p.A.    (Line A Tranche 1)	$	1,534	$	2,330	July 2023	Euribor 3 months + 3.10%				2.80	%		2.80	%
UniCredit S.p.A.    (Line A Tranche 2)		78		113	November 2023	Euribor 3 months + 3.10%				2.80	%		2.80	%
UniCredit S.p.A. (Line B)		1,723		2,337	May 2024	Euribor 3 months + 2.90%				2.60	%		2.60	%
UniCredit S.p.A. (Line C)		1,217		1,833	August 2023	Euribor 3 months + 3.90%				3.71	%		3.33	%
Intesa Sanpaolo S.p.A.    (Line 1)		—		290	April 2022	Euribor 3 months + 2.30%				2.11	%		1.73	%
Intesa Sanpaolo S.p.A.    (Line 2)		2,135		2,872	April 2024	Euribor 3 months + 3.10%				2.91	%		2.53	%
Intesa Sanpaolo S.p.A.    (Line 3)		8,256		8,961	June 2026	Euribor 3 months + 2.15%				1.96	%		1.58	%
Intesa Sanpaolo S.p.A.    (Line 4)		4,914		5,927	July 2026	Euribor 3 months + 2.20%				2.01	%		1.63	%
Monte dei Paschi di    Siena S.p.A. (Line 1)		—		76	April 2022		0.95	%		0.95	%		0.95	%
Monte dei Paschi di    Siena S.p.A. (Line 2)		696		1,132	June 2023		1.50	%		1.50	%		1.50	%
Banco BPM S.p.A. (Line 1)		367		593	June 2023	Euribor 3 months + 2.00%				2.00	%		2.00	%
Banco BPM S.p.A. (Line 3)		3,802		5,014	September 2024	Euribor 3 months + 3.00%				2.81	%		2.43	%
Simest 1		174		189	December 2023		0.50	%		0.50	%		0.50	%
Simest 2		173		188	December 2023		0.50	%		0.50	%		0.50	%
Simest 3		318		345	December 2023		0.50	%		0.50	%		0.50	%
Simest 4		1,122		1,218	April 2027		0.50	%		0.50	%		0.50	%
Total bank and other borrowings		26,509		33,418
Less: current portion		10,581		10,508
Total long-term portion	$	15,928	$	22,910

All bank and other borrowings are unsecured borrowings of the Company.

On February 23, 2021, the Company entered into an amendment to the existing unsecured loan agreement with Intesa Sanpaolo S.p.A. (the “Intesa Sanpaolo S.p.A. - Line 1”) and an amendment to the existing unsecured loan agreement with Intesa Sanpaolo S.p.A. (the “Intesa Sanpaolo S.p.A. - Line 2”). The amendments each provide that certain financial covenants be amended, in particular as they relate to the previously agreed net financial position/equity ratio and the net financial position/gross operating income ratio. Upon

19

the approval of the audited statutory financial statements of Kaleyra S.p.A. for the year ended December 31, 2020 in June 2021, the calculated net financial position/gross operating income ratio failed to comply with the amended terms of the unsecured loan agreement with Intesa Sanpaolo S.p.A. As a result of such failure, Intesa Sanpaolo S.p.A. was entitled to raise the interest rate bearing on the existing financing agreements of Intesa Sanpaolo S.p.A. by fifty (50) bps. No principal amount was subject to early reimbursement under the amended terms of the loan agreement. On August 3, 2021, the Company was notified by Intesa Sanpaolo S.p.A. of their resolution to apply the incremental fifty (50) bps to the interest rate bearing on future payments of interest. In the audited fiscal year ended December 31, 2021, Kaleyra successfully complied with financial covenants in place with Intesa Sanpaolo S.p.A..

On March 9, 2021 and March 10, 2021, respectively, Kaleyra S.p.A. received the approval by UniCredit to postpone repayment of the principal amounts due under the existing Line A Tranche (2), Line B and Line C of the long-term financing agreements with UniCredit S.p.A. for a period of six (6) months starting from March 1, 2021 until August 31, 2021, and under Line A Tranche (1) of the long-term financing agreement with UniCredit S.p.A. starting from February 1, 2021 until July 31, 2021. Consequently, the repayment schedule under all financing agreements mentioned above was extended for the period equal to that of the six (6) month suspension period.

On April 15, 2021, Kaleyra S.p.A. and Banco Popolare di Milano S.p.A. entered into an agreement to postpone repayment of the principal amounts due under the existing Line 3 of the long-term unsecured financing agreement for a period of six (6) months starting from March 31, 2021 until September 30, 2021, without prejudice to Kaleyra S.p.A.’s obligations to continue to pay interest in relation to the principal amount at the original due dates.

On April 15, 2021, the Company entered into a general unsecured loan agreement with Simest S.p.A for a total of $3.6 million (€3.0 million at the April 15, 2021 exchange rate) relating to the Fund 394/81 (the “Simest Financing”) and Fund for Integrated Promotion (the “Co-financing”) for implementation of a program to break into foreign markets. The principal amount of $3.1 million (€2.6 million at the April 15, 2021 exchange rate) applies to the Simest Financing. The Simest Financing bears a subsidized interest rate of 0.055% and a reference interest rate of 0.55%. The loan has a duration of six (6) years starting from the date of disbursement and is to be repaid in half-yearly installments starting after a two-year pre-amortization period. The principal amount of $505,000 (€422,000 at the April 15, 2021 exchange rate) of the financing applies to the Co-financing and was granted in accordance with Section 3.1 of the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak of the European Commission, and as such is non-refundable as long as the funds are used for the purposes stated within the Framework.

On September 15, 2021, the principal amount of $1.3 million (€1.1 million at the September 15, 2021 exchange rate) and $208,000 (€176,000 at the September 15, 2021 exchange rate) relating to the first installment of the Simest Financing and Co-financing, respectively, was disbursed to the Company pursuant to the terms of the loan agreement with Simest S.p.A.

As of June 30, 2022, all of the available long-term facilities were drawn in full except for the Simest Financing as described above.

Interest expense on bank and other borrowings was $133,000 and $180,000 for the three months ended June 30, 2022 and 2021, respectively.

Interest expense on bank and other borrowings was $289,000 and $370,000 for the six months ended June 30, 2022 and 2021, respectively.

As of June 30, 2022, the Company is obliged to make payments as follows (in thousands):

	As of June 30, 2022
2022 (remaining six months)	$	5,334
2023		9,522
2024		5,776
2025		3,523
2026		2,214
2027 and thereafter		140
Total	$	26,509

20

9. NOTES PAYABLE

Notes payable to the Sellers

As consideration for the Business Combination, on November 25, 2019 the Company issued unsecured convertible promissory notes to each of Esse Effe and Maya in the amount of $6.0 million and $1.5 million, respectively, (the “Business Combination Convertible Notes”) and also issued other unsecured promissory notes to each of Esse Effe and Maya in the identical respective amounts (the “Non-convertible Notes”). The Non-convertible Notes held by Esse Effe and Maya were paid in full during fiscal year 2020 and no amount remains outstanding for such notes as of June 30, 2022.

Business Combination Convertible Notes

As of June 30, 2022, the outstanding balance on the Business Combination Convertible Notes held by Esse Effe and Maya amounted to zero.

The Business Combination Convertible Notes are classified as “Notes payable due to related parties” in the accompanying condensed consolidated balance sheets. Any accrued interest payable is included in “Other current liabilities” in the accompanying condensed consolidated balance sheets.

On the fifteen-month anniversary of the Business Combination Date or February 25, 2021, the fifty percent (50%) of the previously outstanding amount of Business Combination Convertible Notes held by Esse Effe and Maya was repaid, with a total of $3.0 million and $750,000 in principal and $176,000 and $44,000 in accrued interest being paid to Esse Effe and Maya, respectively, pursuant to the terms of the Business Combination Convertible Notes.

Under the terms of the Business Combination Convertible Notes, the outstanding principal balance of the Business Combination Convertible Notes, plus all accrued and unpaid interest and fees due under these notes, became due and payable, upon the receipt by the Company of cash proceeds of an equity financing in an aggregate gross amount of $105.0 million or 8,400,000 shares of Kaleyra common stock at $12.50 per share issued to the PIPE Investors in the private placement equity financing event immediately prior to the closing of the Merger Agreement of June 1, 2021. The principal amount of $3.8 million plus accrued interest of $84,000 for the Business Combination Convertible Notes held by Esse Effe and Maya was paid in full on June 2, 2021. Following the repayment, the Business Combination Convertible Notes terminated pursuant to their terms and no further amounts were due.

Notes payable - Other

On April 16, 2020, the Company entered into a Settlement Agreement and Release (the “Settlement Agreement”) with its Business Combination financial advisory service firms, Cowen and Company, LLC (“Cowen”) and Chardan Capital Markets, LLC, (“Chardan” and, collectively, the “Service Firms”), pursuant to which it agreed to pay an affiliate of Cowen, Cowen Investments II LLC (“Cowen Investments”), and Chardan, in full satisfaction of all amounts owed to the Service Firms as of December 31, 2019, $5.4 million in the aggregate, as follows: (i) $2.7 million in the aggregate in common stock of the Company (the “Settlement Shares”) to be issued the business day prior to the filing of a resale registration statement for such Settlement Shares (the “Bank Resale Registration Statement”), (ii) convertible notes totaling $2.7 million in the aggregate with a maturity date three years after issuance and bearing interest at five percent (5%) per annum (but with lower interest rates if the notes are repaid earlier than one year or two years after issuance) and with interest paid in arrears to the payee on March 15, June 15, September 15 and December 15 of each year, with such convertible notes to also be issued the business day prior to the filing of the Resale Registration Statement and (iii) in the event that the Beneficial Ownership Limitation (as defined below) would otherwise be exceeded upon delivery of the Settlement Shares above, a warrant agreement also to be entered into with and issued to the Services Firms the business day prior to the filing of the Resale Registration Statement, whereby the amount of common stock of the Company by which the Beneficial Ownership Limitation would otherwise have been exceeded upon delivery of the Settlement Shares will be substituted for by warrants with an exercise price of $0.01 per share issued pursuant to a Warrant Agreement (the “Warrant Agreement”) and the common stock underlying the Warrant Agreement (the “Warrant Shares”). The Beneficial Ownership Limitation shall initially be 4.99% of the number of shares of the common stock outstanding of the Company immediately after giving effect to the issuance of these shares of common stock. The number of Settlement Shares was calculated using as the price per Settlement Share an amount equal to a fifteen percent (15%) discount to the ten-day (10-day) trailing dollar volume-weighted average price for the common stock of the Company on the NYSE American LLC stock exchange (the “VWAP”) on the business day immediately prior to the date on which the Company filed the Resale Registration Statement. In addition, the price per share for determining the number of shares of common stock of the Company to be issued upon the conversion of the convertible notes shall be a five percent (5%) premium to the ten-day (10-day) trailing VWAP as of the date immediately prior to the issuance date of the convertible notes, rounded down to the nearest whole number.

On May 1, 2020, in connection with the Settlement Agreement, the Company issued: (i) an aggregate of 440,595 Settlement Shares to Cowen Investments and Chardan, consisting of 374,506 Settlement Shares issued to Cowen Investments, and 66,089 Settlement Shares issued to Chardan, which resulted in a $0.2 million loss on settlement on the issuance date of May 1, 2020; and (ii)

21

convertible promissory notes in the aggregate principal amount of $2.7 million to Cowen Investments and Chardan, consisting of a convertible promissory note in the principal amount of $2.3 million issued to Cowen Investments (the “Cowen Note”) and a convertible promissory note in the principal amount of $405,000 issued to Chardan (the “Chardan Note”). The unpaid principal of the Cowen Note was convertible at the option of Cowen Investments into 303,171 shares of common stock of the Company, if there was no principal reduction, and the unpaid principal of the Chardan Note was convertible at the option of Chardan into 53,501 shares of common stock of the Company, if there was no principal reduction. As the Beneficial Ownership Limitation was not triggered by the issuance of the Settlement Shares, no Warrant Agreement was necessary and no warrants were issued.

On February 4, 2021, Cowen Investments elected to convert the outstanding amount of the Cowen Note into 303,171 shares of common stock pursuant to the terms of the Cowen Note, and as a result the Company has no further obligations with respect to the Cowen Note.

As of June 30, 2022, the outstanding amount of the Chardan Note was $405,000 and accrued interest was $44,000. This note payable is included in “Current portion of notes payable” and the accrued interest payable is included in “Other current liabilities” in the accompanying condensed consolidated balance sheets.

Merger Convertible Notes

On February 18, 2021, in support of the consummation of the Merger, Kaleyra entered into Convertible Note Subscription Agreements, each dated February 18, 2021, with the Convertible Note Investors. On June 1, 2021, the Company issued the Merger Convertible Notes with an aggregate principal amount of $200 million. The Company incurred $11.4 million of issuance costs as a result of the issuance of the Merger Convertible Notes.

In connection with the issuance of the Merger Convertible Notes pursuant to the terms of the Convertible Note Subscription Agreements, the Company entered into an indenture (the “Indenture”) with Wilmington Trust, National Association, a national banking association, in its capacity as trustee thereunder (the “Indenture Trustee”), in respect of the $200 million of Merger Convertible Notes that were issued to the Convertible Note Investors.

The Merger Convertible Notes bear interest at a rate of 6.125% per annum, payable semi-annually, in arrears on each June 1 and December 1 of each year, commencing on December 1, 2021, to holders of record at the close of business on the preceding May 15 and November 15, respectively. The Merger Convertible Notes are convertible into 11,851,852 shares of Kaleyra common stock at a conversion price of $16.875 per share of Kaleyra common stock in accordance with the terms of the Indenture, and mature five years after their issuance. The Company may, at its election, force conversion of the Merger Convertible Notes after (i) the first anniversary of the issuance of the Merger Convertible Notes, subject to a holder’s prior right to convert, if the last reported sale price of the Kaleyra common stock exceeds 150% of the conversion price for at least 20 trading days during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter and (ii) the second anniversary of the issuance of the Merger Convertible Notes, subject to a holder’s prior right to convert, if the last reported sale price of the Kaleyra common stock exceeds 130% of the conversion price for at least 20 trading days during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter. Following certain corporate events that occur prior to the maturity date or if the Company forces a mandatory conversion, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its Merger Convertible Notes in connection with such a corporate event or has its Merger Convertible Notes mandatorily converted, as the case may be. In addition, in the event that a holder of the Merger Convertible Notes elects to convert its Merger Convertible Notes prior to the third anniversary of the issuance of the Merger Convertible Notes, the Company will be obligated to pay an amount equal to twelve months of interest, or if on or after such third anniversary of the issuance of the Merger Convertible Notes, any remaining amounts that would be owed to, but excluding, the fourth anniversary of the issuance of the Merger Convertible Notes (the “Interest Make-Whole Payment”). The Interest Make-Whole Payment will be payable in cash or shares of Kaleyra common stock as set forth in the Indenture.

Upon the issuance of the Merger Convertible Notes, management made the assessment whether the convertible instrument contained embedded conversion features for bifurcation and concluded that such embedded conversion features met the definition of a derivative but qualified for the scope exception under ASC 815-10-15-74(a) as they are indexed to the Company’s stock and qualify for classification within stockholders’ equity. Management determined that the Interest Make-Whole Payment met the definition of a derivative, but the value was de minimis and as such no amount was recorded at the time of the issuance of the Merger Convertible Notes nor at any subsequent reporting date. Management will continue to monitor the valuation of the Interest Make-Whole Payment provision and assess the need to record a liability in future periods.

As of June 30, 2022, the outstanding amount of the Merger Convertible Notes was $190.7 million, net of issuance costs. During the three and six months ended June 30, 2022, contractual interest expense amounted to $3.1 million and $6.1 million, respectively, and amortization of the debt issuance costs amounted to $513,000 and $1.0 million, respectively. The liability is included in the condensed consolidated balance sheet line item “Long-term portion of notes payable” and the interest expense is included in “Financial expense, net” on the condensed consolidated statements of operations.

22

10. ACCUMULATED OTHER COMPREHENSIVE LOSS

The accumulated balances related to each component of accumulated other comprehensive loss are as follows (in thousands):

	Cumulative Foreign Currency Translation Adjustment			Cumulative Net Unrealized Gain (Loss) on Marketable Securities, Net of Tax		Accumulated Other Comprehensive Income (Loss)
As of December 31, 2021	$	(2,046	)	$	36	$	(2,010	)
Other comprehensive income (loss)		(634	)		5		(629	)
As of March 31, 2022	$	(2,680	)	$	41	$	(2,639	)
Other comprehensive income (loss)		(1,900	)		4		(1,896	)
As of June 30, 2022	$	(4,580	)	$	45	$	(4,535	)

	Cumulative Foreign Currency Translation Adjustment			Cumulative Net Unrealized Gain (Loss) on Marketable Securities, Net of Tax			Accumulated Other Comprehensive Income (Loss)
As of December 31, 2020	$	(2,836	)	$	10		$	(2,826	)
Other comprehensive income (loss)		1,105			(4	)		1,101
As of March 31, 2021	$	(1,731	)	$	6		$	(1,725	)
Other comprehensive income (loss)		(602	)		23			(579	)
As of June 30, 2021	$	(2,333	)	$	29		$	(2,304	)

11. OTHER CURRENT AND LONG-TERM LIABILITIES

Other current liabilities consisted of the following (in thousands):

	As of June 30,		As of December 31,
	2022		2021
Liabilities for tax other than income tax	$	1,466	$	1,210
VAT payables		36		476
Social security liabilities		578		522
Current tax liabilities		887		945
Accrued financial interest		—		139
Accrued contractual interests on Merger Convertible Notes		1,064		1,024
Capital leases		49		65
Other miscellaneous		2,247		3,893
Total other current liabilities	$	6,327	$	8,274

Other long-term liabilities consisted of the following (in thousands):

	As of June 30,		As of December 31,
	2022		2021
Warrant liability	$	78	$	889
Interest rate swaps		—		35
Capital leases		94		129
Other miscellaneous		720		787
Total other long-term liabilities	$	892	$	1,840

23

12. GEOGRAPHIC INFORMATION

Revenue by geographic area is determined on the basis of the location of the customer, unless the delivery location is triggered by concentration criteria. The Company generates its revenue primarily in the United States, India and Italy. The following table sets forth revenue by geographic area for the three and six months ended June 30, 2022 and 2021 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
United States	$	27,402	$	10,971	$	52,037	$	16,092
India		19,586		13,595		40,762		25,313
Italy		16,646		19,164		33,155		35,251
Europe (excluding Italy)		5,923		1,839		12,924		3,257
South America		5,594		2,452		11,558		2,452
Rest of the world		5,958		5,971		11,154		11,341
Total	$	81,109	$	53,992	$	161,590	$	93,706

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
United States		33.8	%		20.3	%		32.2	%		17.2	%
India		24.2	%		25.2	%		25.2	%		27.0	%
Italy		20.5	%		35.5	%		20.5	%		37.6	%
Europe (excluding Italy)		7.3	%		3.4	%		8.0	%		3.5	%
South America		6.9	%		4.5	%		7.2	%		2.6	%
Rest of the world		7.3	%		11.1	%		6.9	%		12.1	%

As of June 30, 2022, the majority of the Company’s long-lived assets are located in United States and Italy. The following table sets forth long-lived assets by geographic area as of June 30, 2022 and December 31, 2021 (in thousands):

	As of June 30,		As of December 31,
	2022		2021
United States	$	10,611	$	10,027
Italy		4,567		4,391
India		4,552		3,778
Rest of the world		654		615
Total	$	20,384	$	18,811

	As of June 30,			As of December 31,
	2022			2021
United States		52.1	%		53.3	%
Italy		22.4	%		23.3	%
India		22.3	%		20.1	%
Rest of the world		3.2	%		3.3	%

13. COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Company entered into various operating lease agreements that expire over various years in the next seven years. The Company’s Milan office lease contains an option to renew the lease for six years under terms and conditions set forth in the lease agreement. Certain of the Company’s leases contain provisions for rental adjustments. Operating lease rentals are expensed on a straight-line basis over the life of the lease beginning on the date the Company takes possession of the property. Rent expense was $399,000 and $249,000 for the three months ended June 30, 2022 and 2021, respectively. Rent expense was $819,000 and $441,000 for the six months ended June 30, 2022 and 2021, respectively.

24

Future minimum lease payments under leasing obligations as of June 30, 2022 are as follows (in thousands):

	As of June 30, 2022
	Operating Leases		Capital Leases		Total
2022 (remaining six months)	$	1,081	$	27	$	1,108
2023		888		55		943
2024		767		55		822
2025		735		16		751
2026		563		—		563
2027 and thereafter		576		—		576
Total minimum lease payments	$	4,610	$	153	$	4,763

Future minimum lease payment under capital leases as of June 30, 2022 consisted of the following (in thousands):

	As of June 30, 2022
	Capital Leases
Total payments	$	153
Less: interest portion		10
Net capital lease obligation	$	143
Less: current portion		49
Long term portion	$	94

The current and long-term portion of the future minimum lease payments under capital lease are included in the condensed consolidated balance sheet line item “Other current liabilities” and “Other long-term liabilities”, respectively.

Contingencies

As of June 30, 2022, the Company had contingent liabilities of $119,000, relating to a tax appeal of Solutions Infini for which no provision was recognized as its occurrence was deemed remote.

14. RESTRICTED STOCK UNITS (RSUs)

The following table sets forth the activity related to the number of outstanding RSUs for the six months ended June 30, 2022:

	Number of shares			Weighted- average grant date fair value (per share)
Non-vested as of December 31, 2021		4,374,021		$	10.33
Vested		(2,311,039	)	$	7.04
Granted		2,927,186		$	5.66
Cancelled		(191,818	)	$	9.97
Non-vested as of June 30, 2022		4,798,350		$	9.08

RSUs compensation expense for the three and six months ended June 30, 2022 was $8.5 million and $15.2 million, respectively, which was recorded as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Research and development	$	1,602	$	806	$	2,622	$	1,777
Sales and marketing		1,162		866		1,945		1,388
General and administrative		5,726		3,038		10,682		6,105
Total	$	8,490	$	4,710	$	15,249	$	9,270

As of June 30, 2022, there was $21.1 million of unrecognized compensation cost related to non-vested RSUs to be recognized over a weighted-average remaining period of 1.39 years.

25

15. INCOME TAXES

The tax expense and the effective tax rate resulting from operations were as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Loss before income taxes	$	(15,932	)	$	(11,895	)	$	(28,413	)	$	(22,219	)
Income tax expense (benefit)		(95	)		(7,408	)		596			(7,374	)
Effective tax rate		0.60	%		62.28	%		(2.10	%)		33.19	%

The decrease in the effective tax rate for the three and six months ended June 30, 2022, as compared to three and six months ended June 30, 2021, is mainly driven by the release of the valuation allowance related to previously reserved deferred tax assets following the mGage acquisition in the prior period.

The Company’s recorded effective tax rate is less than the U.S. statutory rate primarily due to the valuation allowance caused by a reduction in deferred tax liabilities, current tax expense in tax jurisdictions that provide for a valuation allowance, and foreign tax rate differentials from the U.S. domestic statutory tax rate.

The Company currently has valuation allowances recorded against its deductible temporary differences and net operating loss carryforwards in certain jurisdictions where the non-realizability of such deferred tax assets is concluded to be more likely than not. Each quarter, the Company evaluates all available evidence to assess the recoverability of its deferred tax assets in each jurisdiction, including significant events and transactions, both positive and negative, and the reversal of taxable temporary differences and forecasted earnings. As a result of the Company’s analysis, management concluded that it is more likely than not that a portion of its deferred tax assets will not be realized. Therefore, the Company continues to provide a valuation allowance against its deferred tax assets in certain jurisdictions. The Company continues to monitor available evidence and may reverse some or all of its remaining valuation allowance in future periods, if appropriate.

As of January 1, 2022, new tax regulations are in place in the US. In order to fully comply with internal revenue requirements, research and development expenses can no longer be deducted when incurred but instead they will be capitalized only for tax purposes and they will be amortized over a five or fifteen-year period.

Under the acquisition method of accounting for business combinations, if changes are identified to acquired deferred tax asset valuation allowances or liabilities related to uncertain tax positions during the measurement period, and they are related to new information obtained about facts and circumstances that existed as of the acquisition date, those changes are considered a measurement-period adjustment, and offsets to goodwill are recorded. Kaleyra US, Inc.’s acquired deferred tax asset valuation measurement period is now closed as of June 30, 2022. All pre-acquisition income tax return filings were filed.

16. WARRANTS

The Company’s warrants are only exercisable for whole shares at $11.50 per share. Under the terms of the warrant agreement dated December 12, 2017 (the “Warrant Agreement”), the Company agreed to use its best efforts to file a new registration statement following the completion of the Business Combination, for the registration of the shares of common stock issuable upon exercise of the warrants. That registration statement was filed by the Company on May 4, 2020 and declared effective by the SEC on May 8, 2020. No fractional shares are issuable upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, the Company will, upon exercise, round down to the nearest whole number for the number of shares of common stock to be issued to the warrant holder. Each warrant became exercisable 30 days after the completion of the Business Combination and will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation. Once the warrants became exercisable, the Company could redeem the outstanding warrants in whole and not in part at a price of $0.01 per warrant upon a minimum of 30 days’ prior written notice of redemption, only in the event that the last sale price of the Company’s shares of common stock equals or exceeds $18.00 per share for any 20 trading days within the 30-trading day period ending on the third trading day before the Company sends the notice of redemption to the warrant holders.

On April 12, 2021, the SEC issued a SEC Staff Statement on “Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”) (the “SEC Staff Statement”). The SEC Staff Statement addresses certain accounting and reporting considerations related to warrants of a kind similar to those issued by the Company at the time of its initial public offering in December 2019. Based on ASC 815-40, “Contracts in Entity’s Own Equity”, warrant instruments that do not meet the criteria to be considered indexed to an entity’s own stock shall be initially classified as liabilities at their estimated fair values. In periods subsequent to issuance, changes in the estimated fair value of the derivative instruments should be reported in the consolidated statements of operations. Following the SEC Staff Statement, management evaluated the fact pattern set forth within the Company’s Warrant Agreement and concluded that the warrants issued in connection with private placements that occurred in December 2017 and January 2018 concurrently with its initial public offering (the “Private Placement Warrants”) should have been recorded as a liability at fair value as the Private Placement Warrants were not considered to be indexed to the entity’s own stock. Because the transfer of

26

Private Placement Warrants to anyone other than the initial purchasers or their permitted transferees would result in the Private Placement Warrants having substantially the same terms as warrants issued in the Company’s initial public offering, management determined that the fair value of each Private Placement Warrant approximated the fair value of its publicly traded warrants.

Management analyzed the impact of this error on the Company’s prior consolidated financial statements beginning from the date when the Private Placement Warrants were issued and concluded that the adjustments were immaterial to any period presented in previously issued consolidated financial statements and corrected this error in the three months ended March 31, 2021.

During the three and six months ended June 30, 2022, the Company recorded $276,000 and $810,000, respectively, in “Financial expense, net” on the condensed consolidated statements of operation for the change in fair value of the Private Placement Warrants.

On August 24, 2021, the Company entered into Warrant Repurchase Agreements with certain holders to repurchase warrants held by these holders for the purchase of an aggregate amount of 1,684,470 shares of the Company’s common stock. The warrants were initially issued by the Company in its initial public offering on December 7, 2017. Pursuant to the Warrant Repurchase Agreements, on August 27, 2021, the Company paid $3.25 per underlying share of common stock to repurchase these warrants, at an aggregate purchase price of $5.5 million for the surrender and cancellation of these warrants held by such holders.

As of June 30, 2022, there were 5,440,662 warrants outstanding.

17. NET LOSS PER SHARE

The following table sets forth the calculation of basic and diluted net loss per share during the period presented (in thousands, except share and per share data):

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Net loss	$	(15,837	)	$	(4,487	)	$	(29,009	)	$	(14,845	)
Weighted average shares used to compute net loss per common share, basic and diluted		43,410,858			34,292,874			42,829,188			32,328,909
Net loss per common share, basic and diluted	$	(0.36	)	$	(0.13	)	$	(0.68	)	$	(0.46	)

The Company generated a net loss for each of the three and six months ended June 30, 2022 and 2021. Accordingly, the effect of dilutive securities is not considered in the net loss per share for such periods because their effect would be anti-dilutive on the net loss per share.

For the three months ended June 30, 2022, the weighted average number of outstanding shares of common stock equivalents, which were excluded from the calculation of the diluted net loss per share as their effect would be anti-dilutive, was 10,338,759, and 10,653,658 for the three months ended June 30, 2021.

For the six months ended June 30, 2022, the weighted average number of outstanding shares of common stock equivalents, which were excluded from the calculation of the diluted net loss per share as their effect would be anti-dilutive, was 10,096,382, and 11,679,120 for the six months ended June 30, 2021.

18. TRANSACTIONS WITH RELATED PARTIES

During the three and six months ended June 30, 2022 and 2021, related party transactions, other than compensation and similar arrangements in the ordinary course of business, were as follows:

i. Unsecured convertible promissory notes, received by Esse Effe and Maya at the closing of the Business Combination, pursuant to the terms of the Stock Purchase Agreement. Maya is affiliated with Dario Calogero and the shares are beneficially owned by a shareholder, Mr. Calogero, who is the Chief Executive Officer and a director of the Company. Esse Effe is affiliated with Dr. Emilio Hirsch, and its shares are beneficially owned by Dr. Hirsch, a shareholder and a director of the Company. Under the terms of Business Combination Convertible Notes, the previously outstanding principal balance of these notes, plus all accrued and unpaid interest, became due and payable following the private placement equity financing event in support for the consummation of the Merger Agreement for the acquisition of mGage of June 1, 2021. The outstanding principal amount of $3.8 million plus accrued interest of $84,000 was paid in full on June 2, 2021 and the obligation terminated pursuant to its terms. No outstanding amount was due by the Company as of June 30, 2022. See Note 9 – Notes Payable – for additional information;

27

ii. Legal services rendered by a partner of Studio Legale Chiomenti, a family member of a key manager of the Company. Costs incurred by the Company for the above services were zero and $12,000, respectively, in the three and six months ended June 30, 2022 (zero and $80,000, respectively, in the three and six months ended June 30, 2021);

iii. Alessandra Levy, the spouse of the Company’s Chief Executive Officer, Dario Calogero, is an employee within the marketing team of Kaleyra S.p.A. Ms. Levy received salary and benefits in the amount of $57,000 and $113,000, respectively, for the three and six months ended June 30, 2022 ($63,000 and $123,000, respectively, in the three and six months ended June 30, 2021);

iv. Pietro Calogero, the son of the Company’s Chief Executive Officer, Dario Calogero, is an employee within the research and development team of Kaleyra S.p.A. Mr. Pietro Calogero received salary and benefits in the amount of $18,000 and $28,000, respectively, for the three and six months ended June 30, 2022 ($13,000 and $25,000, respectively, in the three and six months ended June 30, 2021); and

The following table presents the expenses for transactions with related parties reported in the condensed consolidated statements of operations (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Research and development	$	18	$	13	$	28	$	25
Sales and marketing		57		63		113		123
General and administrative		—		—		12		80
Financial expense, net		—		19		—		63

19. REVENUE

Revenue Recognition

Revenue is recognized upon transfer of control of promised products or services to customers using the Company’s Platforms in an amount that reflects the consideration Kaleyra expects to receive in exchange for those products or services. Kaleyra enters into contracts that can include various combinations of products and services, which are generally not capable of being distinct and are therefore accounted for as a series of distinct services under a single performance obligation in accordance with ASC 606-10-25-14 and ASC 606-10-25-15.

Revenue is recognized net of allowances for any credits and any taxes collected from customers, which are subsequently remitted to governmental authorities.

Kaleyra determines revenue recognition through the following steps:

• Identification of the contract, or contracts, with a customer;

• Identification of the performance obligations in the contract;

• Determination of the transaction price;

• Allocation of the transaction price to the performance obligations in the contract; and

• Recognition of revenue when, or as, the Company satisfies a performance obligation.

No significant judgments are required in determining whether products and services are considered distinct performance obligations and should be accounted for separately versus together, or to determine the stand-alone selling price.

Kaleyra’s arrangements do not contain general rights of return. The contracts do not provide customers with the right to take possession of the software supporting the applications. Amounts that have been invoiced are recorded in trade receivables and in revenue or deferred revenue depending on whether the revenue recognition criteria have been met.

Nature of Products and Services

Kaleyra's revenue is primarily derived from usage-based fees earned from the sale of communications services offered through access to the Company’s Platforms typically to large enterprises as well as medium-sized customers.

Revenue is recognized upon the sending of a SMS, a voice pulse (a measurement unit of call duration, typically of thirty or sixty seconds), a license attributed to a user for the platform usage, message or by the authentication of a financial transaction of an end-

28

user of the Company’s customer using the Company’s Platforms in an amount that reflects the consideration the Company expects to receive in exchange for those services which is generally based upon agreed fixed prices per unit.

Platforms access services are considered a monthly series comprised of one performance obligation and usage-based fees are recognized as revenue in the period in which the usage occurs. After usage occurs, there are no remaining obligations that would preclude revenue recognition. Revenue from usage-based fees represented 93% of total revenue for both the three and six months ended June 30, 2022, and (96% and 97%, respectively, of total revenue for the three and six months ended June 30, 2021).

Subscription-based fees are derived from certain term-based contracts, such as with the sales of short code subscriptions and customer support, which is generally one year. Term-based contract revenue is recognized on a ratable basis over the contractual term of the arrangement beginning on the date that the service is made available to the customer. Revenue from term-based fees represented 7% of total revenue for both the three and six months ended June 30, 2022 (4% and 3%, respectively, of total revenue for the three and six months ended June 30, 2021).

Deferred Revenue

Deferred revenue consists of advance cash payments from customers to be applied against future usage and customer billings in advance of revenues being recognized under the Company’s non-cancellable contracts. Deferred revenue is generally expected to be recognized during the succeeding 12-month period and is thus recorded as a current liability.

As of June 30, 2022 and December 31, 2021, the Company recorded $6.9 million and $9.6 million, respectively, as deferred revenue in its condensed consolidated balance sheets. In the three and six months ended June 30, 2022, the Company recognized $1.7 million and $5.6 million, respectively, of revenue in its condensed consolidated statements of operations that was included in deferred revenue as of December 31, 2021.

Disaggregated Revenue

In general, revenue disaggregated by geography is aligned according to the nature and economic characteristics of the Company’s business and provides meaningful disaggregation of the Company’s results of operations. See Note 12 – Geographic Information – for details of revenue by geographic area.

20. SUBSEQUENT EVENTS

On July 28, 2022, Kaleyra entered into a new unsecured loan agreement with Banco Popolare di Milano S.p.A. for a total principal amount of $

29

2.5 million (€2.5 million at the July 28, 2022 exchange rate) with a duration of 36 months and bearing interest rate equal to Euribor 3 months + 1.95%.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following management’s discussion and analysis in conjunction with the condensed consolidated financial statements of Kaleyra, Inc. (“Kaleyra,” the “Company,” “we,” “us,” and “our” refer to Kaleyra, Inc. and all of its consolidated subsidiaries) and the related notes included elsewhere in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022. The discussion below includes forward-looking statements about Kaleyra’s business, operations and industry that are based on current expectations that are subject to uncertainties and unknown or changed circumstances. Kaleyra’s actual results may differ materially from these expectations as a result of many factors, including, but not limited to, those risks and uncertainties described under “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2021 and this Quarterly Report on Form 10-Q. We assume no obligation to update the forward-looking statements or such risk factors.

This Quarterly Report on Form 10-Q and the documents incorporated herein by reference include forward‑looking statements within the meaning and protections of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These forward-looking statements are also made in reliance upon the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements with respect to Kaleyra’s beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.

Overview

1. History

Kaleyra is a result of the expansion of the former Ubiquity, which was founded in Milan, Italy in 1999. Ubiquity secured a leading market position in mobile messaging on behalf of the Italian financial services industry and then sought to expand its products and geographic offerings. Ubiquity acquired Solutions Infini of Bangalore, India in 2017 and Buc Mobile of Vienna, Virginia in 2018. It was rebranded as Kaleyra S.p.A. in February 2018. Following the integration of the acquired entities, the combined company is collectively engaged in the operation of the Platforms on behalf of Kaleyra’s customers.

On February 22, 2019, the Company (f/k/a GigCapital, Inc.) entered into a stock purchase agreement (the “Stock Purchase Agreement”) by and among the Company, Kaleyra S.p.A., Shareholder Representative Services LLC, as representative for the holders of the ordinary shares of Kaleyra S.p.A. immediately prior to the closing of the Business Combination, and all of the stockholders of all of the Kaleyra S.p.A. stock (collectively, such Kaleyra S.p.A. stockholders, the “Sellers”), for the purpose of the Company acquiring all of the shares of Kaleyra S.p.A.. GigCapital Inc. was incorporated in Delaware on October 9, 2017 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

As a result of the Business Combination, which closed on November 25, 2019, the Company (headquartered in Milan, Italy) became a multi-channel integrated communication services provider on a global scale. Kaleyra operates in the Communications Platform as a Service (“CPaaS”) market with operations in Italy, India, UK, Dubai and the United States. In connection with the closing, the Company changed its name from GigCapital, Inc. to Kaleyra, Inc.

Kaleyra provides mobile communication services to financial institutions, e-commerce players, OTTs, software companies, logistic enablers, healthcare providers, retailers, and other large organizations worldwide. Through its proprietary cloud communications platforms (collectively as the “Platforms”), Kaleyra manages multi-channel integrated communication services on a global scale, consisting of inbound/outbound messaging solutions, programmable voice and Interactive Voice Response (IVR) configurations, hosted telephone numbers, conversational marketing solutions, RCS, and other types of IP communications services such as e-mail, push notifications, video/audio/chat, and WhatsApp®.

On July 29, 2020, Kaleyra registered a German branch of Kaleyra S.p.A. with the German Chamber Tax Authority of Commerce. Kaleyra established its branch in Germany to expand Kaleyra’s footprint in Central Europe and the Nordic countries and allow it to leverage Kaleyra’s trusted business solutions for customers in additional jurisdictions.

Kaleyra’s subsidiary, Campaign Registry Inc., a systems initiative to reduce spam by collecting robotically driven campaign information and processing and sharing that information with mobile operators and the messaging ecosystem, began its soft launch during the second quarter of fiscal year 2020, ending up with its first revenue contracts in the second half of 2020.

On February 18, 2021, Kaleyra entered into an agreement and plan of merger (the “Merger Agreement”) with Vivial, Inc. (“Vivial”) for the acquisition of the business known as mGage (“mGage”), a leading global mobile messaging provider (the transaction contemplated by the Merger Agreement, the “Merger”).

30

On June 1, 2021, Kaleyra completed its acquisition of mGage for a total purchase price of $218.0 million. The Merger consideration consisted of both cash consideration and common stock consideration. On August 30, 2021, the Company prepared and delivered to the Stockholder Representative a written statement (the “Post-Closing Statement”) setting forth the calculation of closing cash and closing net working capital which ultimately resulted in the final Merger consideration to be equal to $217.0 million, pursuant to the terms of the Merger Agreement. The cash consideration amounted to $199.2 million of which $198.6 million was paid on June 1, 2021 and the remaining amount was settled during the period ended September 30, 2021, including a working capital adjustment of $997,000. The common stock consideration was paid with the issuance to Vivial’s former equity holders of a total of 1,600,000 shares of Kaleyra common stock at the $11.77 per share closing price of Kaleyra common stock on the date of issuance, equal to $18.8 million in value. In support of the consummation of the Merger, on February 18, 2021, Kaleyra entered into subscription agreements (the “PIPE Subscription Agreements”), with certain institutional investors (the “PIPE Investors”), pursuant to which, among other things, Kaleyra agreed to issue and sell, in private placements to close immediately prior to the closing of the Merger, an aggregate of 8,400,000 shares of Kaleyra common stock to the PIPE Investors at $12.50 per share. Kaleyra also entered into convertible note subscription agreements (the “Convertible Note Subscription Agreements”) with certain institutional investors (the “Convertible Note Investors”), pursuant to which Kaleyra agreed to issue and sell, in private placements to close immediately prior to the closing of the Merger, $200 million aggregate principal amount of unsecured convertible notes (the “Merger Convertible Notes”).

On July 1, 2021, Kaleyra completed a company reorganization of the acquired business of mGage through the initial dissolution of the Delaware single member LLCs of Vivial Holdings, LLC, Vivial Networks, LLC, and the following merger of mGage, LLC into the surviving holding company, Vivial Inc., which subsequently changed its name into Kaleyra US Inc., as a result of the reorganization. As a result of the merger, Kaleyra US Inc. became the holding company and one hundred percent (100%) owner of mGage Europe Ltd. (UK) and mGage SA de SV (Mexico).

On July 8, 2021, Kaleyra completed the acquisition of Bandyer Srl (“Bandyer”) for cash consideration of $15.4 million. Bandyer offers cloud-based audio/video communications services via Web Real Time Communication (“WebRTC”) technology to financial institutions, retail companies, utilities, industries, insurance companies, human resources, and digital healthcare organizations. Bandyer provides customers with programmable audio/video APIs and Software Development Kits (“SDKs”) based on WebRTC technology for a variety of use cases, including Augmented Reality (“AR”) applications for smart glasses.

Effective August 31, 2021, the common stock of the Company ceased trading on the NYSE American and commenced trading on the NYSE under the ticker symbol “KLR”. Kaleyra’s warrants continue to trade on the NYSE American under the symbol “KLR WS”.

On October 11, 2021, Kaleyra Africa Ltd, a wholly owned subsidiary of Kaleyra Inc., was incorporated under the law of South Africa with the registered office in Waterfall City, Gauteng. This newly established subsidiary is part of Kaleyra's broader strategic plan of expanding into emerging markets whereby South Africa will serve as Kaleyra's hub to enter the entire African market.

On November 15, 2021, pursuant to the provisions of the Merger Agreement, Kaleyra Dominicana, S.R.L., the ninety-nine percent (99%) direct owner of Kaleyra US Inc. and one percent (1%) direct owner of Kaleyra Inc., was incorporated under the laws of the Dominican Republic with the registered office in Santo Domingo. This newly established subsidiary is aimed to provide the Kaleyra group with back-office technology support and engage in product development and innovation.

On January 13, 2022, Kaleyra completed a company reorganization of the acquired business of Bandyer by means of the merger of the Italian legal entity of Bandyer into the holding company, Kaleyra S.p.A.. As a result of the merger, Bandyer ceased to exist as a separate legal entity and all its assets and liabilities have been incorporated under Kaleyra S.p.A. effective January 13, 2022.

2. Positioning

The demand for cloud communications is increasingly driven by the growing, and often mandated, need for enterprises to undertake a digital transformation that includes omnichannel, mobile-first and interactive customer communications. Mobile network operators and OTTs typically are the gateway to reach end-user consumers’ mobile devices. Kaleyra enables its customers and business partners to connect enterprise software and applications to mobile network operators by providing carefully documented Application Programming Interfaces (“APIs”). APIs allow building omnichannel journeys in a seamless way, with failover capabilities from one channel to another. In addition, Kaleyra also offers an extensive set of no-coding cloud-based visual interfaces to programme communications to the customers across multiple channels. Kaleyra’s Platforms couple the possibility of sending communications to end-user customers to a “Software as a Service” or SaaS business model, creating what is generally referred to as a “Communications Platform as a Service”, or simply CPaaS.

Kaleyra’s vision is to be the CPaaS provider which best aligns with its customers’ and business partners’ communication requirements, and the most trusted provider, in the world. This requires a combination of security, compliance and integration capabilities that protects the integrity and privacy of Kaleyra’s customers’ transactions and includes other key features such as ease of provisioning, reliable network connectivity, high availability for scaling, redundancy, embedded regulatory compliance, configurable monitoring and reporting. Kaleyra believes the percentage of CPaaS customers that will require security, compliance and integration

31

will represent an increasingly larger portion of the market, particularly with the expected exponential growth of transactional-by-nature cloud communications applications, better enabling Kaleyra to set itself apart from its competition.

Kaleyra’s customers are primarily enterprises which use digital mobile communications in the conduct of their business. Kaleyra provides multiple levels of global customer support 24x7, SLAs and network reliability to meet the expectations and requirements of its customers. Customers and business partners which use the Platforms value the Platforms’ network reliability, and Kaleyra’s responsive customer support, competitive pricing, and collaborative approach. In particular, Kaleyra is listed by Gartner (Gartner, Market Guide for Communications Platform as a Service, Worldwide, Daniel O’Connell, Lisa Under-Farboud, October 2021) as a co-creator, in other words, a CPaaS focused on a consultative business model that charges customers charge through a combination of CPaaS usage, platform fee and professional service fees. Kaleyra also partners with consulting companies and digital transformation players worldwide to go-to-market together. Also, Kaleyra was given the Gold award for “CPaaS Provider of the Year” by Juniper Research in February 2022.

Kaleyra services a broad base of customers and business partners throughout the world operating in diverse sectors and regions. Kaleyra’s key customers are large Business to Consumer (“B2C”) and Business to Business to Consumer (“B2B2C”) enterprises that use digital and mobile communications in the conduct of their business. Kaleyra has a concentration of business within the financial services industry that serves its major European banking end-user customers. With each relationship, Kaleyra is the link between the financial institutions and their end-user customers. In linking these two parties, Kaleyra’s Platforms leverage the telecommunications provider to transmit critical message data to these end-user customers.

3. Business

During the three and six months ended June 30, 2022, Kaleyra processed nearly 13.4 billion and 27.9 billion billable messages, respectively, and 1.8 billion and 3.4 billion voice calls, respectively. Kaleyra organizes its efforts in four regions, Americas, Europe, APAC and MEA. Its workforce is spread across the globe either in full-remote or office-based mode, in one of its principal offices based in New York, New York, Vienna, Virginia, Los Angeles, California, Atlanta, Georgia, Milan, Italy, Munich, Germany, London, United Kingdom, and Bangalore, India. Kaleyra has over 600 employees across the four regions.

Kaleyra has more than 3,800 customers and business partners worldwide across industry verticals such as financial services, e-commerce and transportation. In both the three and six months ended June 30, 2022 and 2021, Kaleyra had no indivual customer which accounted for more than 10% of Kaleyra’s revenues.

For the three and six months ended June 30, 2022, 94.9% and 95.6% of revenues, respectively, came from customers which have been on the Platforms for at least one year. Although Kaleyra continues to expand by introducing new customers to the Platforms, the breadth and stability of its existing customers provide it with a solid base of revenue upon which it can continue to innovate and make investment to strengthen its product portfolio, expand its global presence, and in particular into the North America markets following the recent acquisition of mGage, recruit world-class talent and target accretive acquisitions to capitalize on its growing market penetration opportunities and value creation.

For the three and six months ended June 30, 2022 and 2021, the majority of Kaleyra’s revenue was derived from its multi-channel CPaaS product offering market.

Kaleyra’s revenue is primarily driven by the number of messages delivered and voice calls connected to its customers and business partners. Kaleyra’s fees vary depending on the contract. In the three months ended June 30, 2022, the number of messages delivered to customers increased by 58.4%, compared to the three months ended June 30, 2021, and the number of voice calls connected to customers increased by 31.7%, compared to the three months ended June 30, 2021. In the six months ended June 30, 2022, the number of messages delivered to customers increased by 79.9%, compared to the six months ended June 30, 2021, and the number of voice calls connected to customers increased by 32.3%, compared to the six months ended June 30, 2021. The increase in the number of messages delivered to customers is mainly driven by the volume additions following the business combination with mGage. The increase in voice calls connected to its customers was mainly the result of higher voice activities in India, as compared to the same period of prior year. The number of messages delivered and voice calls connected to customers is still affected by the spread of the COVID-19 pandemic, including the most recent surge in the Omicron variant strains, which resulted in significant fluctuations in Kaleyra’s services carrying less revenue-generating traffic in areas subject to government orders and restrictions.

Volume increase has been driven by the increased number of digital payments transactions made by the end-user customers (such as credit card transactions and other digital payments), by the increasing usage of mobile banking features, and by the increasing penetration rate of digital payments in the underlying payments markets. Kaleyra is exposed to fluctuations of the currencies in which its transactions are denominated. Specifically, a material portion of Kaleyra’s revenues and purchases are denominated in Euro, Indian Rupees and United Arab Emirates Dirham.

32

FACTORS AFFECTING COMPARABILITY OF RESULTS

The business combination with mGage

On June 1, 2021, Kaleyra completed its Merger with Vivial, and the resulting acquisition of the business owned by Vivial known as mGage, a leading global mobile messaging provider. The acquisition of mGage, subsequently renamed Kaleyra US Inc. following its reorganization, provided an opportunity for Kaleyra to expand its network operator connections and become one of only four companies providing direct connectivity to all tier-1 US carriers.

The purchase consideration amounting to $217.0 million consisted of cash consideration and common stock consideration. Cash consideration amounted to $199.2 million of which $198.6 million was paid on June 1, 2021 and the remaining amount was settled during the period ended September 30, 2021, including a working capital adjustment of $997,000, pursuant to the terms of the Merger Agreement. The common stock consideration was paid with the issuance to Vivial’s former equity holders of a total of 1,600,000 shares of Kaleyra common stock. The resulting value of the common stock consideration, which was based upon the $11.77 per share closing price of Kaleyra common stock as of June 1, 2021, was equal to $18.8 million and has been recognized as part of the consideration transferred.

Kaleyra US Inc. contributed $30.2 million and $62.3 million, respectively, to the consolidated total revenues in the three and six months ended June 30, 2022 after it was consolidated and represented 37.2% and 38.5% of the consolidated revenues, respectively, for the three and six months ended June 30, 2022.

In 2021, the Company incurred costs related to the acquisition of mGage of $5.5 million that were expensed in General and Administrative expenses in the condensed consolidated statement of operations.

The business combination with Bandyer

On July 8, 2021, the Company announced the acquisition of Bandyer for cash consideration of $15.4 million. Bandyer offers cloud-based audio/video communications services via WebRTC technology to financial institutions, retail companies, utilities, industries, insurance, human resources and digital healthcare organizations. Bandyer provides customers with programmable audio/video APIs and SDKs based on WebRTC technology for a variety of use cases, including Augmented Reality (“AR”) applications for smart glasses. The acquisition of Bandyer adds video capabilities to Kaleyra’s already wide offering of communication channels. With the addition of Bandyer’s video offering, Kaleyra’s offerings become a complete suite of tools for omnichannel customer engagement designed for cross-channel customer experiences.

On January 13, 2022, Kaleyra completed a company reorganization of the acquired business of Bandyer by means of the merger of the Italian legal entity of Bandyer into the holding company, Kaleyra S.p.A.. As a result of the merger, Bandyer ceased to exist as a separate legal entity and all its assets and liabilities have been incorporated under Kaleyra S.p.A. effective January 13, 2022.

COVID-19

The current COVID-19 pandemic has affected and will continue to affect economies and businesses around the world. Notwithstanding the recent improvements in the spread of the pandemic, mostly as a result of the worldwide vaccine campaigns and the numerous measures implemented by various governmental authorities and private enterprises to contain the pandemic, disruptions to the global economies caused by COVID-19 may continue to trigger an extended period of economic uncertainties. The magnitude and duration of the disruptive effects of the pandemic in business activity and operations cannot be measured with any degree of certainty, also considering the severity of the recent surge in the Omicron variant strains, and the resulting fluctuations in Kaleyra’s services carrying less revenue generating traffic in areas subject to government orders and restrictions. Kaleyra is actively monitoring and managing its response and assessing actual and potential impacts to its operating results and financial condition, which could also impact trends and expectations.

Critical Accounting Policies and Management Estimates

Our critical accounting policies and significant estimates are detailed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Our critical accounting policies and significant estimates have not changed substantially from those previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties, including uncertainty in the current economic environment due to the disruptive effects of global inflation, the outbreak of a novel strain of the coronavirus and the armed conflict between Russia and Ukraine.

33

Key Business Metrics

Revenue

Kaleyra’s revenue is generated primarily from usage-based fees earned from the sale of communication services offered through access to the Company’s Platforms to large enterprises as well as small and medium-sized customers. Revenue can be billed in advance or in arrears depending on the terms of the agreement; for the majority of customers, revenue is invoiced on a monthly basis in arrears.

Cost of Revenue and Gross Profit

Cost of revenue consists primarily of costs of communications services purchased from network service providers. Cost of revenue also includes the cost of Kaleyra’s cloud infrastructure and technology platform, amortization of capitalized internal-use software development costs related to the platform applications and amortization of developed technology acquired in past business combinations.

Gross profit is equal to the revenue less cost of revenue associated with delivering the communication services to Kaleyra’s customers.

Operating Expenses

Kaleyra’s operating expenses include research and development expense, sales and marketing expense, general and administrative expense, transactions costs and depreciation and amortization, excluding the depreciation and amortization expense related to the technology platform, which is included in cost of revenues as per above.

Research and Development Expense

Research and development expense consists primarily of personnel costs, including stock-based compensation, the costs of the technology platform used for staging and development, outsourced engineering services, amortization of capitalized internal-use software development costs (other than those related to the technology platform) and an allocation of general overhead expenses. Kaleyra capitalizes the portion of its software development costs that meet the criteria for capitalization.

Sales and Marketing Expense

Sales and marketing expense is comprised of compensation, variable incentive compensation, benefits related to Kaleyra’s sales personnel, along with travel expenses, other employee related costs including stock-based compensation, and expenses related to advertising, marketing campaigns and events.

General and Administrative Expense

General and administrative expense is comprised of compensation and benefits of administrative personnel, including variable incentive pay and stock-based compensation, and other administrative costs such as facilities expenses, professional fees, and travel expenses.

34

Results of Operations

Comparison of the three months ended June 30, 2022 and 2021

	Three Months Ended June 30,
	2022			2021			$ Change			% Change
Revenue	$	81,109		$	53,992		$	27,117			50	%
Cost of revenue		62,459			43,529			18,930			43	%
Gross profit		18,650			10,463			8,187			78	%
Operating expenses:
Research and development		6,265			4,282			1,983			46	%
Sales and marketing		7,226			4,660			2,566			55	%
General and administrative		16,594			12,364			4,230			34	%
Total operating expenses		30,085			21,306			8,779			41	%
Loss from operations		(11,435	)		(10,843	)		592			5	%
Other income, net		37			47			(10	)		(21	%)
Financial expense, net		(3,417	)		(908	)		2,509		NM
Foreign currency loss		(1,117	)		(191	)		926		NM
Loss before income tax benefit		(15,932	)		(11,895	)		4,037			34	%
Income tax benefit		(95	)		(7,408	)		(7,313	)		(99	%)
Net loss	$	(15,837	)	$	(4,487	)	$	11,350		NM

NM = Not meaningful

Revenue

In the three months ended June 30, 2022, revenue increased by $27.1 million, or 50%, compared to the three months ended June 30, 2021. This increase was mainly driven by the effects of the business combination with mGage, which contributed $30.2 million for the three months ended June 30, 2022 as compared to $10.2 million from the date of the business combination through June 30, 2021, and the organic growth of the Kaleyra legacy businesses, representing 16% of the aggregate growth period over period.

Cost of Revenue and Gross Profit

In the three months ended June 30, 2022, cost of revenue increased by $18.9 million, or 43%, compared to the three months ended June 30, 2021. The increase in cost of revenue was primarily attributable to the consolidation of the newly acquired business of mGage and the amortization of acquired intangible assets. In the three months ended June 30, 2022, gross profit increased by 78% compared to the three months ended June 30, 2021, mainly driven by the effects of the business combination with mGage.

Operating Expenses

In the three months ended June 30, 2022, research and development expenses increased by $2.0 million, or 46%, compared to the three months ended June 30, 2021. Research and development expenses included the allocation of $1.6 million of stock-based compensation in the three months ended June 30, 2022, compared to $806,000 in the three months ended June 30, 2021. Excluding such costs and $2.2 million in capitalized software development costs, compared to $865,000 capitalized costs in the three months ended June 30, 2021, research and development expenses would have increased by $2.5 million mainly due to Kaleyra US Inc. research and development expenses of the period equal to $3.1 million, compared to $1.3 million, which are referred to the period starting from the business combination through June 30, 2021, and to an increase in headcount compared to the prior period.

In the three months ended June 30, 2022, sales and marketing expenses increased by $2.6 million, or 55%, compared to the three months ended June 30, 2021. Sales and marketing expenses included the allocation of $1.2 million of stock-based compensation in the three months ended June 30, 2022, compared to $866,000 in the three months ended June 30, 2021. Excluding such costs, sales and marketing expenses would have increased by $2.3 million. Such increase was primarily driven by Kaleyra US Inc. sales and marketing expenses of the period equal to $4.2 million, compared to $1.4 million, which are referred to the period starting from the business combination through June 30, 2021.

In the three months ended June 30, 2022, general and administrative expenses increased by $4.2 million, or 34%, compared to the three months ended June 30, 2021. General and administrative expenses included (i) $5.7 million of stock-based compensation in the three months ended June 30, 2022, compared to $3.0 million in the three months ended June 30, 2021; and (ii) $75,000 of mGage acquisition transaction costs and $3.7 million of transaction costs in the three months ended June 30, 2022 and 2021, respectively. Excluding such costs, general and administrative expenses would have increased by $5.1 million, mainly due to Kaleyra US Inc.

35

general and administrative expenses of the period equal to $3.1 million, compared to $398,000, which are referred to the period starting from the business combination through June 30, 2021, and to an increase in headcount compared to the prior period.

Financial Expense, Net

In the three months ended June 30, 2022, financial expense, net increased by $2.5 million, compared to the same period last year. Such increase in financial expense is mainly attributable to the accrued contractual interest expense and amortization of issuance costs amounting to $3.1 million and $513,000, respectively, partially offset by the decrease in the fair value of the private warrant liability of $276,000. The same period last year accounted for the accrued contractual interest expense and amortization of issuance costs amounting to $973,000 and $196,000, respectively, partially offset by $433,000 in change in fair value of the private warrant liability. Excluding the net change in fair value of the warrant of $276,000 and the interest expense on convertible notes of $3.6 million, financial expense, net would have decreased by $46,000.

Foreign Currency Loss

In the three months ended June 30, 2022, foreign currency loss increased by $926,000, compared to the three months ended June 30, 2021. Such change was mainly attributable to the effects of the fluctuation of the Indian Rupee and Euro against the U.S. dollar.

Income Tax Benefit

In the three months ended June 30, 2022, income tax benefit decreased by $7.3 million, from an income tax benefit of $7.4 million to an income tax benefit of $95,000. The material amount of income tax benefit from the prior period is mainly driven by the $5.8 million release of the valuation allowance related to previously reserved deferred tax assets which the Company has determined will be utilized in the future to offset net deferred tax liabilities related to the mGage acquisition.

Comparison of the six months ended June 30, 2022 and 2021

	Six Months Ended June 30,
	2022			2021			$ Change			% Change
Revenue	$	161,590		$	93,706		$	67,884			72	%
Cost of revenue		125,202			76,919			48,283			63	%
Gross profit		36,388			16,787			19,601		NM
Operating expenses:
Research and development		11,155			7,150			4,005			56	%
Sales and marketing		14,326			7,519			6,807			91	%
General and administrative		31,974			22,966			9,008			39	%
Total operating expenses		57,455			37,635			19,820			53	%
Loss from operations		(21,067	)		(20,848	)		219			1	%
Other income, net		83			92			(9	)		(10	%)
Financial expense, net		(6,569	)		(1,627	)		4,942		NM
Foreign currency income (loss)		(860	)		164			(1,024	)	NM
Loss before income tax expense (benefit)		(28,413	)		(22,219	)		6,194			28	%
Income tax expense (benefit)		596			(7,374	)		(7,970	)	NM
Net loss	$	(29,009	)	$	(14,845	)	$	14,164			95	%

NM = Not meaningful

Revenue

In the six months ended June 30, 2022, revenue increased by $67.9 million, or 72%, compared to the six months ended June 30, 2021. This increase was mainly driven by the effects of the business combination with mGage, which contributed $62.3 million in the three months ended June 30, 2022 as compared to $10.2 million from the date of the business combination through June 30, 2021, and the organic growth of the Kaleyra legacy businesses, representing 19% of the aggregate growth period over period.

Cost of Revenue and Gross Profit

In the six months ended June 30, 2022, cost of revenue increased by $48.3 million, or 63%, compared to the six months ended June 30, 2021. The increase in cost of revenue was primarily attributable to the consolidation of the newly acquired business of mGage and the amortization of acquired intangible assets. In the six months ended June 30, 2022, gross profit increased by 117% compared to the six months ended June 30, 2021, mainly driven by the effects of the business combination with mGage.

36

Operating Expenses

In the six months ended June 30, 2022, research and development expenses increased by $4.0 million, or 56%, compared to the six months ended June 30, 2021. Research and development expenses included the allocation of $2.6 million of stock-based compensation in the six months ended June 30, 2022, compared to $1.8 million of stock-based compensation in the six months ended June 30, 2021. Excluding such costs and $4.5 million in capitalized software development costs, compared to $1.6 capitalized costs in the six months ended June 30, 2021, research and development expenses would have increased by $6.0 million. This increase was primarily due to Kaleyra US Inc. research and development expenses of the period equal to $5.9 million, compared to $1.3 million, which are referred to the period starting from the business combination through June 30, 2021, and to an increase in headcount compared to the prior period.

In the six months ended June 30, 2022, sales and marketing expenses increased by $6.8 million, or 91%, compared to the six months ended June 30, 2021. Sales and marketing expenses included the allocation of $1.9 million of stock-based compensation in the six months ended June 30, 2022, compared to $1.4 million in the six months ended June 30, 2021. Excluding such costs, sales and marketing expenses would have increased by $6.3 million. Such increase was primarily driven by Kaleyra US Inc. sales and marketing expenses of the period equal to $8.5 million, compared to $1.4 million, which are referred to the period starting from the business combination through June 30, 2021.

In the six months ended June 30, 2022, general and administrative expenses increased by $9.0 million, or 39%, compared to the six months ended June 30, 2021. General and administrative expenses included (i) $10.7 million of stock-based compensation in the six months ended June 30, 2022, compared to $6.1 million in the six months ended June 30, 2021; and (ii) $156,000 of mGage and Bandyer acquisition transaction costs and $5.5 million of transaction costs in the six months ended June 30, 2022 and 2021, respectively. Excluding such costs, general and administrative expenses would have increased by $9.8 million, mainly due to Kaleyra US Inc. general and administrative expenses of the period equal to $6.5 million, compared to $398,000, which are referred to the period starting from the business combination through June 30, 2021, and to an increase in headcount compared to the prior period.

Financial Expense, Net

In the six months ended June 30, 2022, financial expense, net increased by $4.9 million, compared to the same period last year. Such increase in financial expense is mainly attributable to the accrued contractual interest expense and amortization of issuance costs amounting to $6.1 million and $1.0 million, respectively, partially offset by the decrease in the fair value of the private warrant liability of $810,000. The same period last year accounted for the accrued contractual interest expense and amortization of issuance costs amounting to $973,000 and $196,000, respectively, and $830,000 in change in fair value of the private warrant liability, partially offset by the non-recurring reversal of interest expense on a forward share purchase agreement of $659,000. Excluding the net change in fair value of the warrant of $810,000 and the interest expense on convertible notes of $7.1 million, financial expense, net would have increased by $26,000.

Foreign Currency Income (Loss)

In the six months ended June 30, 2022, foreign currency loss increased by $1.0 million, compared to the six months ended June 30, 2021. Such change was mainly attributable to the effects of the fluctuation of the Indian Rupee and Euro against the U.S. dollar.

Income Tax Expense (Benefit)

In the six months ended June 30, 2022, income tax expense increased by $8.0 million, from an income tax benefit of $7.4 million to an income tax expense of $596,000. The material amount of income tax benefit from the prior period is mainly driven by the $5.8 million release of the valuation allowance related to previously reserved deferred tax assets which the Company has determined will be utilized in the future to offset net deferred tax liabilities related to the mGage acquisition.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2022, the Company had $73.6 million of cash and cash equivalents, $468,000 of restricted cash and $680,000 of short-term investments with maturity terms between 4 and 12 months held in India. Of the $74.8 million in cash, restricted cash and short-term investments, $38.0 million was held in U.S. banks, $25.7 million was held in Italy, $9.1 million was held in India with the remainder held in other banks. As of December 31, 2021, the Company had $90.0 million of cash and cash equivalents, $1.7 million of restricted cash and $6.2 million of short-term investments.

The condensed consolidated balance sheets as of June 30, 2022 includes total current assets of $176.6 million and total current liabilities of $105.9 million, resulting in net current assets of $70.7 million and a short-term net financial position of $60.6 million.

On February 18, 2021, and for the purposes of raising the cash portion of the consideration for the Merger, Kaleyra entered into the PIPE Subscription Agreements with the PIPE Investors and the Convertible Note Subscription Agreements with the Convertible Note Investors. Pursuant to these agreements, and prior to the closing of the Merger on June 1, 2021, Kaleyra issued an aggregate of

37

$105 million or 8,400,000 shares of Kaleyra common stock to the PIPE Investors at $12.50 per share and $200 million aggregate principal amount of unsecured Merger Convertible Notes.

Management currently plans to retain the cash in the jurisdictions where these funds are currently held. Kaleyra believes its cash, cash flows from operations and availability of borrowings will be sufficient to support its planned operations for at least the next 12 months.

Kaleyra finances its operations through a combination of cash generated from operations and from borrowings under Kaleyra bank facilities primarily with banks located in Italy, as well as proceeds from equity offerings and convertible note arrangements. Kaleyra’s long-term cash needs primarily include meeting debt service requirements, working capital requirements and capital expenditures.

Kaleyra may also pursue strategic acquisition opportunities that may impact its future cash requirements. There are a number of factors that may negatively impact its available sources of funds in the future including the ability to generate cash from operations, obtain additional financing or refinance existing short-term debt obligations, including those related to acquisitions completed in prior periods. The amount of cash generated from operations is dependent upon factors such as the successful execution of Kaleyra’s business strategies and worldwide economic conditions. The amount of debt available under future financings is dependent on Kaleyra’s ability to maintain adequate cash flow for debt service and sufficient collateral, and general financial conditions in Kaleyra’s market.

As noted above, Kaleyra entered into the Convertible Note Subscription Agreements with the Convertible Note Investors pursuant to which Kaleyra agreed to issue $200 million in aggregate principal of Merger Convertible Notes. Subject to the terms of the Merger Convertible Notes, Kaleyra may opportunistically raise debt capital, subject to market and other conditions, to refinance its existing capital structure at a lower cost of capital and extend the maturity period of certain debt. Additionally, Kaleyra may also raise debt capital for strategic opportunities which may include acquisitions of additional companies, and general corporate purposes. If additional financing is required from outside sources, Kaleyra may not be able to raise it on terms acceptable to it or at all. If Kaleyra is unable to raise additional capital when desired, Kaleyra’s business, operating results and financial condition may be adversely affected.

Kaleyra has a number of long-standing business and banking relationships with major Italian commercial banks where it maintains both cash accounts and a credit relationship. Historically, Kaleyra has used cash generated from operations and other sources to fund its growth and investment opportunities. As Kaleyra’s management made the decision to expand its operations outside of Italy and acquire additional companies, it took on certain additional financing in order to fund cash payments due on the acquisitions. As of June 30, 2022, Kaleyra’s total bank and other borrowings, including amounts drawn under the revolving credit line facilities was $29.7 million ($38.7 million as of December 31, 2021).

Kaleyra has credit line facilities of $5.2 million as of June 30, 2022, of which $3.2 million has been used. As of December 31, 2021, Kaleyra had credit line facilities of $6.7 million, of which $5.3 million had been used. Amounts drawn under the credit line facilities are collateralized by specific customer trade receivables and funds available under the line are limited based on eligible receivables.

Notes Payable - Other

On April 16, 2020, in connection with the Business Combination, Kaleyra entered into a Settlement Agreement and Release (the “Settlement Agreement”) with its financial advisory service firms, Cowen and Company, LLC (“Cowen”) and Chardan Capital Markets, LLC, (“Chardan” and collectively the “Service Firms”), pursuant to which it agreed to pay an affiliate of Cowen, Cowen Investments II LLC (“Cowen Investments”), and Chardan, in full satisfaction of all amounts owed to the Service Firms as of December 31, 2019, $5.4 million in the aggregate, as follows: (i) $2.7 million in the aggregate in common stock of Kaleyra (the “Settlement Shares”) to be issued the business day prior to the filing of a resale registration statement for such Settlement Shares (the “Resale Registration Statement”), (ii) convertible notes totaling $2.7 million in the aggregate with a maturity date three years after issuance and bearing interest at five percent (5%) per annum (but with lower interest rates if the notes are repaid earlier than one year or two years after issuance) and with interest paid in arrears to the payee on March 15, June 15, September 15 and December 15 of each year, with such convertible notes to also be issued the business day prior to the filing of the Resale Registration Statement and (iii) in the event that the Beneficial Ownership Limitation (as defined below) would otherwise be exceeded upon delivery of the Settlement Shares above, a warrant agreement also to be entered into with and issued to the Services Firms the business day prior to the filing of the Resale Registration Statement, whereby the amount of common stock of Kaleyra by which the Beneficial Ownership Limitation would otherwise have been exceeded upon delivery of the Settlement Shares will be substituted for by warrants with an exercise price of $0.01 per share issued pursuant to a Warrant Agreement (the “Warrant Agreement”) and the common stock underlying the Warrant Agreement (the “Warrant Shares”). The Beneficial Ownership Limitation shall initially be 4.99% of the number of shares of the common stock outstanding of Kaleyra immediately after giving effect to the issuance of these shares of common stock. The number of Settlement Shares was calculated using as the price per Settlement Share an amount equal to a fifteen percent (15%) discount to the ten-day (10-day) trailing dollar volume-weighted average price for the common stock of Kaleyra on the NYSE American LLC stock

38

exchange (the “VWAP”) on the business day immediately prior to the date on which Kaleyra files the Resale Registration Statement. In addition, the price per share for determining the number of shares of common stock of Kaleyra to be issued upon the conversion of the convertible notes shall be a five percent (5%) premium to the ten-day (10-day) trailing VWAP as of the date immediately prior to the issuance date of the convertible notes, rounded down to the nearest whole number.

On May 1, 2020, in connection with the Settlement Agreement, Kaleyra issued: (i) an aggregate of 440,595 Settlement Shares to Cowen Investments and Chardan, consisting of 374,506 Settlement Shares issued to Cowen Investments, and 66,089 Settlement Shares issued to Chardan; and (ii) convertible promissory notes in the aggregate principal amount of $2.7 million to Cowen Investments and Chardan, consisting of a convertible promissory note in the principal amount of $2.3 million issued to Cowen Investments (the “Cowen Note”) and a convertible promissory note in the principal amount of $405,000 issued to Chardan (the “Chardan Note”). The unpaid principal of the Cowen Note is convertible at the option of Cowen Investments into 303,171 shares of common stock of Kaleyra, if there has been no principal reduction, and the unpaid principal of the Chardan Note is convertible at the option of Chardan into 53,501 shares of common stock of Kaleyra, if there has been no principal reduction. As the Beneficial Ownership Limitation was not triggered by the issuance of the Settlement Shares, no Warrant Agreement was necessary and no warrants were issued.

On February 4, 2021, Cowen Investments elected to convert the outstanding amount of the Cowen Note into 303,171 shares of common stock pursuant to the terms of the Cowen Note, and as a result the Company has no further obligations with respect to the Cowen Note.

As of June 30, 2022, the outstanding amount of the Chardan Note was $405,000 and accrued interest was $44,000.

Notes Payable to the Sellers

As mentioned above, at the Closing of the Business Combination, Kaleyra issued unsecured convertible promissory notes to each of Esse Effe and Maya in the amount of $6.0 million and $1.5 million, respectively, and also issued other unsecured promissory notes to each of Esse Effe and Maya in the identical respective amounts (the “Notes payable to the Sellers”). Interest on the Notes Payable to the Sellers shall accrue at a fixed interest rate equal to the one-year U.S. dollar LIBOR interest rate published in The Wall Street Journal on the date of the Business Combination, plus a margin of one percent (1%) per annum. The unsecured promissory notes held by Esse Effe and Maya were paid in full during fiscal year 2020 and no amount remains outstanding for such notes as of June 30, 2022.

On the fifteen-month anniversary of the Business Combination date, or February 25, 2021, fifty percent (50%) of the previously outstanding amount of the unsecured convertible promissory notes held by Esse Effe and Maya was repaid, with a total of $3.0 million and $750,000 in principal and $176,000 and $44,000 in accrued interest being paid to Esse Effe and Maya, respectively, pursuant to the terms of the unsecured convertible promissory notes.

Under the terms of the unsecured convertible promissory notes, the outstanding principal balance of the notes, plus all accrued and unpaid interest and fees due under these notes, became due and payable, upon the receipt by the Company of cash proceeds of an equity financing in an aggregate gross amount of $105.0 million or 8,400,000 shares of Kaleyra common stock at $12.50 per share issued to the PIPE Investors in the private placement equity financing event immediately prior to the closing of the Merger Agreement of June 1, 2021. The principal amount of $3.8 million plus accrued interest of $84,000 for the unsecured convertible promissory notes held by Esse Effe and Maya was paid in full on June 2, 2021. Following the payment of the previously outstanding amount of convertible notes, the Notes Payable to the Sellers terminated pursuant to their terms and no further amounts were due.

Merger Convertible Notes

On February 18, 2021, in support of the consummation of the Merger, Kaleyra entered into Convertible Note Subscription Agreements, each dated February 18, 2021, with the Convertible Note Investors. In June 2021, the Company issued the Merger Convertible Notes with an aggregate principal amount of $200 million. The Company incurred $11.4 million of issuance costs as a result of the issuance of the Merger Convertible Notes.

In connection with the issuance of the Merger Convertible Notes pursuant to the terms of the Convertible Note Subscription Agreements, the Company entered into an indenture (the “Indenture”) with Wilmington Trust, National Association, a national banking association, in its capacity as trustee thereunder (the “Indenture Trustee”), in respect of the $200 million of Merger Convertible Notes that were issued to the Convertible Note Investors.

The Merger Convertible Notes bear interest at a rate of 6.125% per annum, payable semi-annually, in arrears on each June 1 and December 1 of each year, commencing on December 1, 2021, to holders of record at the close of business on the preceding May 15 and November 15, respectively. The Merger Convertible Notes are convertible into 11,851,852 shares of Kaleyra common stock at a conversion price of $16.875 per share of Kaleyra common stock in accordance with the terms of the Indenture, and mature five years after their issuance. The Company may, at its election, force conversion of the Merger Convertible Notes after (i) the first anniversary of the issuance of the Merger Convertible Notes, subject to a holder’s prior right to convert, if the last reported sale price of the Kaleyra common stock exceeds 150% of the conversion price for at least 20 trading days during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter and (ii) the second anniversary of the issuance of the Merger Convertible Notes, subject to a holder’s prior right to convert, if the last reported sale price of the

39

Kaleyra common stock exceeds 130% of the conversion price for at least 20 trading days during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter. Following certain corporate events that occur prior to the maturity date or if the Company forces a mandatory conversion, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its Merger Convertible Notes in connection with such a corporate event or has its Merger Convertible Notes mandatorily converted, as the case may be. In addition, in the event that a holder of the Merger Convertible Notes elects to convert its Merger Convertible Notes prior to the third anniversary of the issuance of the Merger Convertible Notes, the Company will be obligated to pay an amount equal to twelve months of interest, or if on or after such third anniversary of the issuance of the Merger Convertible Notes, any remaining amounts that would be owed to, but excluding, the fourth anniversary of the issuance of the Merger Convertible Notes (the “Interest Make-Whole Payment”). The Interest Make-Whole Payment will be payable in cash or shares of Kaleyra common stock as set forth in the Indenture.

Upon the issuance of the Merger Convertible Notes management made the assessment whether the convertible instrument contained embedded conversion features for bifurcation and concluded that such embedded conversion features met the definition of a derivative but qualified for the scope exception under ASC 815-10-15-74(a) as they are indexed to the Company’s stock and qualify for classification within stockholders’ equity. Management determined that the Interest Make-Whole Payment feature met the definition of a derivative but did not fall within the above scope exception, nonetheless its value was de minimis and as such no amount was recorded at the time of the issuance of the Merger Convertible Notes nor at any subsequent reporting date. Management will continue to monitor the valuation of the Interest Make-Whole Payment provision and assess the need to record a liability in future periods.

As of June 30, 2022, the outstanding amount of the Merger Convertible Notes was $190.7 million, net of issuance costs. During the three and six months ended June 30, 2022, contractual interest expense on the Merger Convertible Notes amounted to $3.1 million and $6.1 million, respectively, and amortization of the debt issuance costs amounted to $513,000 and $1.0 million, respectively. The liability is included in the condensed consolidated balance sheet line item “Long-term portion of notes payable” and the interest expense is included in “Financial expense, net” on the condensed consolidated statements of operations.

40

Long-term financial obligations

Long-term financial obligations, excluding the Notes Payable to the Sellers, Merger Convertible Notes and credit line facilities, consisted of the following (in thousands):

									Interest Nominal Rate
	As of June 30,		As of December 31,			Interest Contractual Rate			As of June 30,			As of December 31,
	2022		2021		Maturity	as of June 30, 2022			2022			2021
UniCredit S.p.A.    (Line A Tranche 1)	$	1,534	$	2,330	July 2023	Euribor 3 months + 3.10%				2.80	%		2.80	%
UniCredit S.p.A.    (Line A Tranche 2)		78		113	November 2023	Euribor 3 months + 3.10%				2.80	%		2.80	%
UniCredit S.p.A. (Line B)		1,723		2,337	May 2024	Euribor 3 months + 2.90%				2.60	%		2.60	%
UniCredit S.p.A. (Line C)		1,217		1,833	August 2023	Euribor 3 months + 3.90%				3.71	%		3.33	%
Intesa Sanpaolo S.p.A.    (Line 1)		—		290	April 2022	Euribor 3 months + 2.30%				2.11	%		1.73	%
Intesa Sanpaolo S.p.A.    (Line 2)		2,135		2,872	April 2024	Euribor 3 months + 3.10%				2.91	%		2.53	%
Intesa Sanpaolo S.p.A.    (Line 3)		8,256		8,961	June 2026	Euribor 3 months + 2.15%				1.96	%		1.58	%
Intesa Sanpaolo S.p.A.    (Line 4)		4,914		5,927	July 2026	Euribor 3 months + 2.20%				2.01	%		1.63	%
Monte dei Paschi di    Siena S.p.A. (Line 1)		—		76	April 2022		0.95	%		0.95	%		0.95	%
Monte dei Paschi di    Siena S.p.A. (Line 2)		696		1,132	June 2023		1.50	%		1.50	%		1.50	%
Banco BPM S.p.A. (Line 1)		367		593	June 2023	Euribor 3 months + 2.00%				2.00	%		2.00	%
Banco BPM S.p.A. (Line 3)		3,802		5,014	September 2024	Euribor 3 months + 3.00%				2.81	%		2.43	%
Simest 1		174		189	December 2023		0.50	%		0.50	%		0.50	%
Simest 2		173		188	December 2023		0.50	%		0.50	%		0.50	%
Simest 3		318		345	December 2023		0.50	%		0.50	%		0.50	%
Simest 4		1,122		1,218	April 2027		0.50	%		0.50	%		0.50	%
Total bank and other borrowings		26,509		33,418
Less: current portion		10,581		10,508
Total long-term portion	$	15,928	$	22,910

All bank and other borrowings are unsecured borrowings of Kaleyra.

Cash Flows

The following table summarizes cash flows for the periods indicated (in thousands):

	Six Months Ended June 30,
	2022			2021
Net cash used in operating activities	$	(7,871	)	$	(13,113	)
Net cash used in investing activities		(1,196	)		(198,858	)
Net cash provided by (used in) financing activities		(6,315	)		298,035
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(2,230	)		(409	)
Net increase (decrease) in cash, cash equivalents and restricted cash	$	(17,612	)	$	85,655

In the six months ended June 30, 2022, cash used in operating activities was $7.9 million, primarily consisting of $8.0 million of changes in operating assets and liabilities, partially offset by non-cash items, mainly $15.2 million of stock-based compensation, $11.8 million of depreciation and amortization expense, $1.0 million of non-cash interest expense, $925,000 of provision for doubtful

41

accounts and $752,000 of employee benefit obligation, and net loss of $29.0 million, partially offset by $810,000 of change in the fair value of the warrant liability.

In the six months ended June 30, 2021, cash used in operating activities was $13.1 million, primarily consisting of net loss of $14.8 million and $5.6 million of net changes in operating assets and liabilities, partially offset by non-cash items, mainly $9.3 million of stock-based compensation, $830,000 of change in the fair value of the warrant liability, $3.5 million of depreciation and amortization expense and $325,000 of non-cash interest expense, partially offset by $6.8 million of deferred tax benefit.

In the six months ended June 30, 2022, cash used in investing activities was $1.2 million, primarily consisting of $4.5 million to fund the cost of internally developed software, $1.2 million of purchases in short-term investments, $1.0 million of consideration paid for the Bandyer Acquisition and $966,000 of purchases of property and equipment, partially offset by $6.5 million of sale in short-term investments.

In the six months ended June 30, 2021, cash used in investing activities was $198.9 million, primarily consisting of $195.7 million of cash consideration paid for the acquisition of mGage, $1.9 million of purchases in short-term investments, $1.6 million to fund the cost of internally developed software and $177,000 of purchases in property and equipment, partially offset by $546,000 of proceeds from sale of short-term investments.

In the six months ended June 30, 2022, cash used in financing activities was $6.3 million, primarily consisting of $4.5 million of repayments on term loans and $1.8 million of repayments on lines of credit.

In the six months ended June 30, 2021, cash provided by financing activities was $298.0 million, primarily consisting of $188.6 million of proceeds from issuance of convertible notes, net of issuance costs, $99.1 million of proceeds from issuance of common stock in Private Investment in Public Equity offering, net of issuance costs, $17.0 million of receipts related to forward share purchase agreements, $2.9 million in proceeds received from the exercise of warrants, $1.2 million in proceeds related to the settlement of non-forfeited 2020 Sponsor Earnout Shares, partially offset by $7.5 million of repayments on notes and $3.5 million of repayments on term loans.

Seasonality

Historically, Kaleyra has experienced clear seasonality in its revenue generation, with slower traction in the first calendar quarter, and increasing revenues as the year progresses. Kaleyra typically experiences higher revenues in messaging and notification services during the fourth calendar quarter. This patterned revenue generation behavior takes place due to Kaleyra’s customers sending more messages to their end-user customers who are engaged in consumer transactions at the end of the calendar year, resulting in an increase in notifications of electronic payments, credit card transactions and e-commerce.

Taxes

The Company files income tax returns in the United States and in foreign jurisdictions including Italy, Germany, United Kingdom, Dominican Republic, Greece and India. As of June 30, 2022, the tax years 2016 through the current period remain open to examination in each of the major jurisdictions in which the Company is subject to tax.

The Company recorded an income tax benefit of $95,000 and an income tax benefit of $7.4 million for the three months ended June 30, 2022 and 2021, respectively.

The Company recorded an income tax expense of $596,000 and an income tax benefit of $7.4 million for the six months ended June 30, 2022 and 2021, respectively.

Recent Accounting Pronouncements

See Note 2 - Summary of Significant Accounting Policies – to the condensed consolidated financial statements included in Part I of this Quarterly Report on Form 10-Q for more information on new accounting pronouncements.

42

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

Interest rates are highly sensitive to many factors including international economic and political considerations, as well as other factors beyond Kaleyra’s control. Interest rate risk is the exposure to loss resulting from changes in the level of interest rates and the spread between different interest rates. Kaleyra’s interest rates on the bank borrowing held by Italian commercial banks is at market in Italy and well below market in other geographical locations. Therefore, Kaleyra does not believe there is material exposure to market risk from changes in interest rates on debt.

Foreign Currency Risk

Kaleyra’s condensed consolidated financial statements are presented in U.S. dollars while the functional currency of Kaleyra S.p.A. is the Euro. The functional currency of Solutions Infini is the Indian Rupee, the functional currency of Kaleyra Inc., Buc Mobile, Campaign Registry and Kaleyra US Inc. is the U.S. Dollar, the functional currency of mGage Europe Limited is the Great Britain Pound and the functional currency of Solutions Infini FZE is the United Arab Emirates Dirham.

Each company remeasures monetary assets and liabilities denominated in currencies other than its functional currency at period-end exchange rates and non-monetary items are remeasured at historical rates.

Remeasurement adjustments are recognized in the condensed consolidated statement of operations as foreign currency income (loss) in the period of occurrence.

For legal entities where the functional currency is a currency other than the U.S. dollar, including Kaleyra S.p.A., adjustments resulting from translating the financial statements into U.S. dollar are recorded as a component of accumulated other comprehensive income (loss) in stockholders’ equity (deficit). Monetary assets and liabilities denominated in a currency that is other than the U.S. dollar are translated into U.S. dollar at the exchange rate on the balance sheet date. Revenue and expenses are translated at the weighted average exchange rates during the period. Equity transactions are translated using historical exchange rates. Kaleyra does not engage on a regular basis in any hedging activity to reduce Kaleyra’s potential exposure to currency fluctuations, although Kaleyra may elect to do so in the future if use of derivatives would be beneficial to Kaleyra.

Item 4. Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Evaluation of Disclosure Controls and Procedures

As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2022. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective as of June 30, 2022.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended June 30, 2022, which were identified in connection with our evaluation required pursuant to Rules 13a-15 or 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

43

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, Kaleyra may be involved in litigation relating to claims arising out of its operations in the normal course of business. Kaleyra is not currently involved in any material legal proceedings as a defendant.

On October 17, 2018, Kaleyra filed a claim against Vodafone Italia S.p.A. (“Vodafone”) before the Court of Milan seeking compensation in the amount of €6.1 million ($6.9 million at the December 31, 2021 exchange rate) for all the damages suffered as a consequence of the illicit and anticompetitive conduct of Vodafone, as previously determined by the Italian Antitrust Authority (namely, Autorità Garante della Concorrenza e del Mercato or AGCM) in their decisions issued on December 13, 2017; Vodafone has appealed that sanctioning resolution before the Italian Regional Administrative Court.

The deadline for filing a counterclaim by Vodafone has passed and according to Italian Law, Vodafone is no longer entitled to file a counterclaim against Kaleyra in these proceedings. Both Kaleyra and Vodafone filed their final pleadings on October 1, 2019 and October 21, 2019.

The Court of Milan has decided to suspend the procedure, through order no. 1570 on May 18, 2020. The decision of the Court of Milan is based on procedural reasons only (concerning the unprecedented definition of the relationship between administrative and civil proceedings in the case at hand) and does not analyze or take into any consideration the merits of the action brought by Kaleyra. The procedural suspension ordered by the Court of Milan shall last until the appeal brought by Vodafone before the Italian Regional Administrative Court against the decision of the Italian Antitrust Authority (the “ICA”) is concluded with a definitive judgment. Accordingly, following the order of suspension issued by the Civil Court of Milan, on August 10, 2020, Kaleyra filed a request to speed up the scheduling of the hearing in relation to the pending appeal before the Italian Regional Administrative Court brought by Vodafone Italia. The Court upheld Kaleyra’s request and the hearing took place on February 24, 2021. Accordingly, the parties submitted their final defenses. On September 15, 2021, the Administrative Court issued its first instance decision that upheld Vodafone’s appeal and annulled the sanctioning resolution issued by the Italian Competition Authority (decision no. 9803/2021). On December 10, 2021, the ICA filed its appeal to the second instance Court (Council of State) against the Administrative Court first instance decision no. 9803/2021 asking to overrule it. Both Vodafone and Kaleyra submitted their appearances in the judicial proceeding, but no hearing has been scheduled yet by the Council of State. Until a final decision is reached by the Council of State there will be no effect on the civil proceeding that will therefore remain suspended.

The outcome of such action cannot be determined at this time. Therefore, no recognition of these actions has been made in the consolidated financial statements of the Company.

On April 16, 2019, Kaleyra filed a claim against Telecom Italia S.p.A. (“Telecom”) and Telecom Italia Sparkle S.p.A. (“Sparkle”, jointly with Telecom “Defendants”) before the Court of Milan seeking compensation in the amount of €8.3 million ($10.2 million at the December 31, 2020 exchange rate) for damages suffered after the illicit conduct of both counterparts, determined by the Italian Antitrust Authority in the decision issued on December 13, 2017.

At the first hearing before the Court of Milan held for the appearance of the parties on December 11, 2019, the judge reserved the decision on the possible suspension of the case in consideration of the appeal brought by Telecom Italia S.p.A and Telecom Italia Sparkle S.p.A. against the Italian Antitrust Authority’s decision of December 13, 2017 before the Regional Administrative Court, which is currently pending.

By order issued on December 14, 2019, the judge released his reserve and referred the issue concerning the relation between the assessment of the pending administrative case and the one to be carried out in the civil case to a panel composed of three judges. The case was therefore adjourned for a hearing on April 29, 2020 where the parties had to file their final pleadings.

On April 9, 2020, following the measures taken by the Italian legislator for the COVID-19 pandemic, the above-mentioned hearing was postponed to and then held on October 7, 2020. At the hearing of October 7, 2020, the parties exposed their closing arguments and the decision on the preliminary question as to the suspension of the civil proceedings has been reserved to a panel composed of three judges. The parties also submitted written observations concerning the preliminary question.

On January 7, 2021, the Court issued an order by which the civil proceedings have been suspended until the decision in the pending administrative case – which was deemed to be prejudicial to the civil one – becomes final (i.e., it is no longer subject to appeal). The order was communicated to the parties via certified electronic mail on January 11, 2021.

In light of the average duration of cases before the Italian Administrative Courts and the Defendants’ interest in both having the Italian Competition Authority’s decision annulled and procrastinating the administrative case (on which the civil proceedings now depend pursuant to the above-mentioned order) for dilatory purposes, the civil case is unlikely to proceed in the short term. In order to speed up the administrative proceedings (and thus the civil case), on February 9, 2021, Kaleyra filed an application with the Administrative Court of Latium requesting that the hearing on the merits of the case be held as soon as possible (“istanza di prelievo”). On September 23, 2021, the Defendants filed with the Administrative Court of Latium their “istanza di prelievo” aimed at requesting a

44

prompt schedule of the hearing on the merits of the case. The request is motivated taking into consideration, inter alia, the decision, dated September 15, 2021, by which – in a parallel case – the same Administrative Court annulled the decision by which the Italian Competition Authority (decision no. 9803/2021) ascertained that Vodafone Italia S.p.A. committed an abuse of a dominant position in violation of art. 102 TFEU for margin squeeze (i.e., for behaviors similar to those attributed to the Defendants in the decision). The hearing has taken place on March 23, 2022. On April 11, 2022, the Administrative Court issued its first instance decision that upheld Telecom and Sparkle’s appeal and annulled the sanctioning resolution issued by the Italian Competition Authority (decision no. 4333/2022). The decision was notified to Kaleyra on April 12, 2022. All the Parties that took part in the proceeding have respectively filed their appeal or cross appeal to the second instance Court (Council of State). The public hearing to discuss the appeal has been scheduled before the Council of State on May 5th, 2023. Until a final decision is reached by the Council of State there will be no effect on the civil proceeding that will therefore remain suspended.

Also, in light of the above, the outcome of Kaleyra’s civil action nor its duration is predictable at this time.

The outcome of such civil action cannot be determined at this time. Therefore, no recognition of these actions has been made in the consolidated financial statements of the Company.

In addition to the above, Kaleyra appealed the resolutions issued by the Italian Communications Authority (namely, Autorità per le Garanzie nelle Comunicazioni or AGCom) concerning their request for the annual fee to AGCom for years 2016, 2017, 2018, 2019 and 2020.

The first instance proceeding against AGCom’s resolutions for the 2016 contribution was successful for Kaleyra and the Italian Regional Administrative Court annulled the resolutions Kaleyra had appealed (judgement no. 2161/2019). However, AGCom filed its second instance appeal before the Council of State seeking the overruling of the Court’s decision. The appeal has been regularly discussed at the hearing of September 17, 2020 and the Council of State issued its decision number 6175/2020 on October 13, 2020, overruling in part the Regional Court decision. AGCom will have to recalculate the annual contribution due from Kaleyra for year 2016. However, the annual contribution is not considered material to Kaleyra’s consolidated financial statements.

For the annual contribution to AGCom relating the years 2017, 2018, 2019 and 2020 the legal proceedings are currently pending before the Italian Regional Administrative Court and no hearing has been scheduled yet. However, the European Court of Justice (“ECJ”) has already delivered its decision on the request for a preliminary ruling submitted by the Council of State on the relevant EU law (case C-399/18). Such decision was delivered on April 29, 2020, in accordance with a simplified procedure due to the previous issuance by the ECJ of a number of judgements on the matter.

Finally, Kaleyra took part in two appeals brought before the Regional Administrative Court of Lazio (TAR Lazio) by, respectively, an Association of Content Service Providers (“CSP”) for Value Added Services on mobile network (“VAS”), and one singular CSP, against a specific resolution of the Italian Communications Authority regarding the rules for applying a barring mechanism on the SIM of the final users of VAS (resolution no. 10/21/CONS). Kaleyra filed its interventions in both the judicial proceedings to support the measures issued by AGCom.

Specifically, following the hearing before TAR Lazio that took place on March 17, 2021, the Court has issued two orders (no. 1748 and no. 1751, dated March 18, 2021) that rejected the precautionary measures requested by both the plaintiffs, upholding the position represented by Kaleyra to support the legitimacy of the abovementioned resolution. Following the definition of the precautionary phase, both appeals are likely to be discussed on the merits in the next months. As of today, TAR Lazio has not scheduled any further hearing, hence there is no imminent deadline with regard to those judicial proceedings. For the sake of completeness, the final judgments of TAR Lazio on the two appeals above shall not result in any economic direct impact on Kaleyra.

Item 1A. Risk Factors

There have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. We encourage investors to review the risk factors and uncertainties relating to our business disclosed in that Form 10-K, as well as those contained in Part 1, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, above.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

45

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

46

Item 6. Exhibits

Exhibit No.	Description
31.1*	Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed herewith

47

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	KALEYRA, INC.
Dated: August 8, 2022	By:	/s/ Dario Calogero
	Name:	Dario Calogero
	Title:	Chief Executive Officer, and President (Principal Executive Officer)

	KALEYRA, INC.
Dated: August 8, 2022	By:	/s/ Giacomo Dall’Aglio
	Name:	Giacomo Dall’Aglio
	Title:	Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

48

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

Pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the

Securities Exchange Act of 1934

(Section 302 of the Sarbanes-Oxley Act of 2002)

I, Dario Calogero, certify that:

1.  I have reviewed this Quarterly Report on Form 10-Q of Kaleyra, Inc.;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)      designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)      designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)      evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)      disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)      all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)      any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2022	By:	/s/ Dario Calogero
	Name:	Dario Calogero
	Title:	Chief Executive Officer and President (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

Pursuant to Rule 13a-14(a) and Rule 15d-14(e) under the

Securities Exchange Act of 1934

(Section 302 of the Sarbanes-Oxley Act of 2002)

I, Giacomo Dall’Aglio, certify that:

1.  I have reviewed this Quarterly Report on Form 10-Q of Kaleyra, Inc.;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)      designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)      designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)      evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)      disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)      all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)      any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: August 8, 2022	By:	/s/ Giacomo Dall’Aglio
	Name:	Giacomo Dall’Aglio
	Title:	Executive Vice President and Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

Pursuant to 18 U.S.C. 1350

(Section 906 of the Sarbanes-Oxley Act of 2002)

In connection with the Quarterly Report on Form 10-Q of Kaleyra, Inc. (the “Company”) for the quarter ended June 30, 2022, as filed with the Securities and Exchange Commission (the “Report”), I, Dario Calogero, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1)           The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)           The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 8, 2022	By:	/s/ Dario Calogero
	Name:	Name: Dario Calogero
	Title:	Chief Executive Officer and President (Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

Pursuant to 18 U.S.C. 1350

(Section 906 of the Sarbanes-Oxley Act of 2002)

In connection with the Quarterly Report on Form 10-Q of Kaleyra, Inc. (the “Company”) for the quarter ended June 30, 2022, as filed with the Securities and Exchange Commission (the “Report”), I, Giacomo Dall’Aglio, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1)           The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)           The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 8, 2022	By:	/s/ Giacomo Dall’Aglio
	Name:	Giacomo Dall’Aglio
	Title:	Executive Vice President and Chief Financial Officer (Principal Financial Officer)

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2022	Aug. 05, 2022
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2022
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2
Entity Registrant Name	KALEYRA, INC.
Entity Central Index Key	0001719489
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Shell Company	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Common Stock, Shares Outstanding		44,344,364
Entity Interactive Data Current	Yes
Entity File Number	001-38320
Entity Tax Identification Number	82-3027430
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	17 State Street
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10004
City Area Code	+1 917
Local Phone Number	508 9185
Document Quarterly Report	true
Document Transition Report	false
Common Stock, Par Value $0.0001 Per Share
Document Information [Line Items]
Title of Each Class	Common Stock, par value $0.0001 per share
Trading Symbol	KLR
Name of Each Exchange on Which Registered	NYSE
Warrants, at an Exercise Price of $11.50 per Share of Common Stock
Document Information [Line Items]
Title of Each Class	Warrants, at an exercise price of $11.50 per share of Common Stock
Trading Symbol	KLR WS
Name of Each Exchange on Which Registered	NYSEAMER

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 73,622	$ 90,001
Restricted cash	468	1,701
Short-term investments	680	6,236
Trade receivables, net	95,768	85,945
Deferred cost	329	341
Prepaid expenses	4,340	5,357
Other current assets	1,436	2,599
Total current assets	176,643	192,180
Property and equipment, net	20,384	18,811
Intangible assets, net	115,146	125,396
Goodwill	111,893	110,465
Deferred tax assets	376	1,230
Other long-term assets	1,525	399
Total Assets	425,967	448,481
Current liabilities:
Accounts payable	71,934	70,942
Lines of credit	3,182	5,256
Current portion of bank and other borrowings	10,581	10,508
Current portion of notes payable	405
Deferred revenue	6,934	9,553
Payroll and payroll related accrued liabilities	6,567	6,907
Other current liabilities	6,327	8,274
Total current liabilities	105,930	111,440
Long-term portion of bank and other borrowings	15,928	22,910
Long-term portion of notes payable	190,733	190,147
Long-term portion of employee benefit obligation	2,377	2,338
Deferred tax liabilities	5,205	2,384
Other long-term liabilities	892	1,840
Total Liabilities	321,065	331,059
Commitments and contingencies (Note 13)
Stockholders’ equity (deficit):
Preferred stock, par value of $0.0001 per share; 1,000,000 shares authorized; no shares issued or outstanding
Common stock, par value of $0.0001 per share; 100,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 47,142,422 shares issued and 44,344,364 shares outstanding as of June 30, 2022 and 44,831,695 shares issued and 42,033,637 shares outstanding as of December 31, 2021	5	4
Additional paid-in capital	270,672	251,659
Treasury stock, at cost; 2,798,058 shares as of June 30, 2022 and December 31, 2021	(30,431)	(30,431)
Accumulated other comprehensive loss	(4,535)	(2,010)
Accumulated deficit	(130,809)	(101,800)
Total stockholders’ equity	104,902	117,422
Total liabilities and stockholders’ equity (deficit)	$ 425,967	$ 448,481

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2022	Dec. 31, 2021
Statement Of Financial Position [Abstract]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	47,142,422	44,831,695
Common stock, shares outstanding	44,344,364	42,033,637
Treasury stock, shares	2,798,058	2,798,058

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Income Statement [Abstract]
Revenue	$ 81,109	$ 53,992	$ 161,590	$ 93,706
Cost of revenue	62,459	43,529	125,202	76,919
Gross profit	18,650	10,463	36,388	16,787
Operating expenses:
Research and development	6,265	4,282	11,155	7,150
Sales and marketing	7,226	4,660	14,326	7,519
General and administrative	16,594	12,364	31,974	22,966
Total operating expenses	30,085	21,306	57,455	37,635
Loss from operations	(11,435)	(10,843)	(21,067)	(20,848)
Other income, net	37	47	83	92
Financial expense, net	(3,417)	(908)	(6,569)	(1,627)
Foreign currency income (loss)	(1,117)	(191)	(860)	164
Loss before income tax expense (benefit)	(15,932)	(11,895)	(28,413)	(22,219)
Income tax expense (benefit)	(95)	(7,408)	596	(7,374)
Net loss	$ (15,837)	$ (4,487)	$ (29,009)	$ (14,845)
Net loss per common share, basic	$ (0.36)	$ (0.13)	$ (0.68)	$ (0.46)
Net loss per common share, diluted	$ (0.36)	$ (0.13)	$ (0.68)	$ (0.46)
Weighted-average shares used in computing net loss per common share, basic	43,410,858	34,292,874	42,829,188	32,328,909
Weighted-average shares used in computing net loss per common share,diluted	43,410,858	34,292,874	42,829,188	32,328,909

XML

Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Statement Of Income And Comprehensive Income [Abstract]
Net loss	$ (15,837)	$ (4,487)	$ (29,009)	$ (14,845)
Other comprehensive income (loss):
Foreign currency translation adjustments	(1,900)	(602)	(2,534)	503
Net change in unrealized gain on marketable securities, net of tax	4	23	9	19
Total other comprehensive income (loss)	(1,896)	(579)	(2,525)	522
Total comprehensive loss	$ (17,733)	$ (5,066)	$ (31,534)	$ (14,323)

XML

Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited) - USD ($) $ in Thousands		Total	mGage	Cowen Investments	Common Stock	Common Stock mGage	Common Stock Cowen Investments	Additional Paid-in Capital	Additional Paid-in Capital mGage	Additional Paid-in Capital Cowen Investments	Treasury Stock	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficict
Beginning balance at Dec. 31, 2020		$ (7,429)			$ 3			$ 93,628			$ (30,431)	$ (2,826)	$ (67,803)
Beginning balance, shares at Dec. 31, 2020					30,288,687						2,798,058
Conversion of Note				$ 2,295						$ 2,295
Conversion of Note, shares							303,171
Forfeiture of 2020 Sponsors' Earnout Shares	[1]	1,244						1,244
Forfeiture of 2020 Sponsors' Earnout Shares, shares	[1]				(469,343)
Forward share purchase agreement transactions		17,528						17,528
Stock-based compensation (RSUs)		10,329						10,329
Stock-based compensation (RSUs), shares					935,115
Proceeds from issuance of common stock in public offering, net of issuance costs		99,051			$ 1			99,050
Proceeds from issuance of common stock in public offering, net of issuance costs, shares					8,400,000
Common stock issued to sellers	[2]		$ 18,832						$ 18,832
Common stock issued to sellers, shares	[2]					1,600,000
Warrants exercised for common stock		2,872						2,872
Warrants exercised for common stock, shares					249,706
Fair value of warrants		(326)						(326)
Net loss		(14,845)											(14,845)
Other comprehensive (loss) income		522										522
Ending balance at Jun. 30, 2021		130,073			$ 4			245,452			$ (30,431)	(2,304)	(82,648)
Ending balance, shares at Jun. 30, 2021					41,307,336						2,798,058
Beginning balance at Mar. 31, 2021		11,938			$ 3			122,252			$ (30,431)	(1,725)	(78,161)
Beginning balance, shares at Mar. 31, 2021					30,930,617						2,798,058
Stock-based compensation (RSUs)		5,318						5,318
Stock-based compensation (RSUs), shares					376,719
Common stock issued to sellers	[2]		$ 18,832						$ 18,832
Common stock issued to sellers, shares	[2]					1,600,000
Proceeds from issuance of common stock in Private Investment in Public Equity offering, net of issuance costs		99,051			$ 1			99,050
Proceeds from issuance of common stock in Private Investment in Public Equity offering, net of issuance costs, shares					8,400,000
Net loss		(4,487)											(4,487)
Other comprehensive (loss) income		(579)										(579)
Ending balance at Jun. 30, 2021		130,073			$ 4			245,452			$ (30,431)	(2,304)	(82,648)
Ending balance, shares at Jun. 30, 2021					41,307,336						2,798,058
Beginning balance at Dec. 31, 2021		117,422
Net loss		(29,009)
Other comprehensive (loss) income		(2,525)
Ending balance at Jun. 30, 2022		104,902			$ 5			270,672			$ (30,431)	(4,535)	(130,809)
Ending balance, shares at Jun. 30, 2022					44,344,364						2,798,058
Beginning balance at Mar. 31, 2022		110,380			$ 4			258,418			$ (30,431)	(2,639)	(114,972)
Beginning balance, shares at Mar. 31, 2022					42,361,833						2,798,058
Stock-based compensation (RSUs)		12,255			$ 1			12,254
Stock-based compensation (RSUs), shares					1,982,531
Net loss		(15,837)											(15,837)
Other comprehensive (loss) income		(1,896)										(1,896)
Ending balance at Jun. 30, 2022		$ 104,902			$ 5			$ 270,672			$ (30,431)	$ (4,535)	$ (130,809)
Ending balance, shares at Jun. 30, 2022					44,344,364						2,798,058

[1] On March 16, 2021, upon the final determination that GigAcquisitions, LLC, Cowen Investments II LLC (“Cowen”), Irwin Silverberg and Jeffrey Bernstein (the “Sponsors”) were not entitled to receive the final 50% of the Earnout Shares (“2020 Sponsors’ Earnout Shares”) pursuant to the terms of the Purchase Agreement entered into on February 22, 2019, such number of 2020 Sponsors’ Earnout Shares that did not vest were forfeited by all but one Sponsor. On March 26, 2021, that remaining Sponsor settled its portion of the 2020 Sponsors’ Earnout Shares in cash in lieu of forfeiting its shares.

[2] On June 1, 2021, the Company completed its acquisition of mGage for a total purchase price of $ 218.0 million, consisting of both cash and common stock consideration. On August 30, 2021, the Company prepared and delivered to the Stockholder Representative a written statement (the “Post-Closing Statement”) setting forth the calculation of closing cash and closing net working capital which ultimately resulted in the final Merger consideration to be equal to $217.0 million, pursuant to the terms of the Merger Agreement. The original cash consideration amounted to $199.2 million of which $198.6 million was paid on June 1, 2021 and the remaining amount was settled through the period ended September 30, 2021. The original cash consideration was reduced by $997,000 due to a working capital adjustment. The common stock consideration was paid with the issuance to Vivial’s former equity holders of a total of 1,600,000 shares of Kaleyra common stock at $11.77 per share closing price of the Company’s common stock on the date of issuance, equal to $18.8 million.

XML

Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited) (Parenthetical)	Mar. 16, 2021
Sponsors
Percentage of 2020 sponsor earnout shares that have not vested been forfeited.	50.00%

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands		6 Months Ended
		Jun. 30, 2022	Jun. 30, 2021
Cash Flows from Operating Activities:
Net loss		$ (29,009)	$ (14,845)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		11,838	3,460
Stock-based compensation		15,249	9,270
Provision for doubtful accounts		925	808
Realized gains on marketable securities		9	21
Employee benefit obligation		752	122
Change in fair value of warrant liability		(810)	830
Reversal of accrued interest on forward share purchase agreement			(659)
Non-cash interest expense		1,014	325
Deferred taxes		176	(6,804)
Change in operating assets and liabilities:
Trade receivables		(13,319)	(7,259)
Other current assets		1,916	(2,359)
Deferred cost		12	46
Other long-term assets		(1,187)	1,483
Accounts payable		5,361	(1,882)
Other current liabilities		1,678	(2,508)
Deferred revenue		(2,389)	6,920
Long-term liabilities		(87)	(82)
Net cash used in operating activities		(7,871)	(13,113)
Cash Flows from Investing Activities:
Purchase of short-term investments		(1,165)	(1,882)
Sale of short-term investments		6,459	546
Purchase of property and equipment		(966)	(177)
Capitalized software development costs		(4,502)	(1,633)
Purchase of intangible assets		(17)	(3)
Net cash used in investing activities		(1,196)	(198,858)
Cash Flows from Financing Activities:
Proceeds from (repayments on) line of credit, net		(1,776)	203
Repayments on term loans		(4,493)	(3,451)
Proceeds from issuance of convertible notes, net of issuance costs			188,637
Repayments on notes			(7,500)
Receipts related to forward share purchase agreements			17,045
Proceeds from issuance of common stock in Private Investment in Public Equity offering, net of issuance costs			99,051
Proceeds related to settlement of non-forfeited 2020 Sponsor Earnout Shares			1,244
Proceeds from the exercise of common stock warrants			2,872
Repayments on capital lease		(46)	(66)
Net cash provided by (used in) financing activities		(6,315)	298,035
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(2,230)	(409)
Net increase (decrease) in cash, cash equivalents and restricted cash		(17,612)	85,655
Cash, cash equivalents and restricted cash, beginning of period	[1]	91,702	32,970
Cash, cash equivalents and restricted cash, end of period	[1]	74,090	118,625
Supplemental disclosures of cash flow information:
Cash paid for interest		6,460	763
Non-cash investing and financing activities
Change in value of forward share purchase agreements			(483)
Common stock issued to Vivial equity holders (mGage acquisition)			18,832
Stock-based compensation capitalized as software development costs			363
Conversion of convertible note to common stock			2,295
Restricted stock units granted to employees for bonuses		3,764
Fair value of warrant liability			344
Reclassification of warrant liability to additional paid-in capital upon exercise of warrants			(18)
Consideration payable		468	633
M Gage Europe Ltd
Cash Flows from Investing Activities:
Acquisition, net of cash acquired			(195,709)
Acquisition, net of cash acquired			$ (195,709)
Bandyer Srl
Cash Flows from Investing Activities:
Acquisition, net of cash acquired		(1,005)
Acquisition, net of cash acquired		$ (1,005)

[1] As of June 30, 2022, includes $73.6 million of cash and cash equivalents and $468,000 of restricted cash; as of December 31, 2021, includes $90.0 million of cash and cash equivalents and $1.7 million of restricted cash.

XML

Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Statement Of Cash Flows [Abstract]
Cash and cash equivalents	$ 73,622	$ 90,001
Restricted cash	$ 468,000	$ 1,700

XML

Description of Organization and Business Operations

6 Months Ended

Jun. 30, 2022

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Description of Organization and Business Operations

1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Kaleyra, Inc., formerly GigCapital, Inc., (hereinafter “Kaleyra” or the “Company”), was incorporated in Delaware on October 9, 2017. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

On February 22, 2019, the Company entered into a stock purchase agreement (the “Stock Purchase Agreement”) by and among the Company, Kaleyra S.p.A., Shareholder Representative Services LLC (the “Seller Representative”), as representative for the holders of the ordinary shares of Kaleyra S.p.A. immediately prior to the closing of the business combination with Kaleyra (the “Business Combination”), and all of the stockholders of all of the Kaleyra S.p.A. stock (collectively, such Kaleyra S.p.A. stockholders, the “Sellers”), for the purpose of the Company acquiring all of the shares of Kaleyra S.p.A.

As a result of the Business Combination, which closed on November 25, 2019, the Company (headquartered in Milan, Italy) became a multi-channel integrated communication services provider on a global scale. Kaleyra operates in the Communications Platform as a Service (“CPaaS”) market with operations primarily in the United States, Italy, India, UK and Dubai. In connection with the closing, the Company changed its name from GigCapital, Inc. to Kaleyra, Inc.

Kaleyra’s underlying technology used in the platform is the same across all its communication services which can generally be described as “omni-channel mobile first interactive notifications via a public or private cloud implementation”.

Kaleyra provides mobile communication services to financial institutions, e-commerce players, OTTs, software companies, logistic enablers, healthcare providers, retailers, and other large organizations worldwide. Through its proprietary cloud communications platforms (collectively, the “Platforms”), Kaleyra manages multi-channel integrated communication services on a global scale, consisting of inbound/outbound messaging solutions, programmable voice and Interactive Voice Response (IVR) configurations, hosted telephone numbers, conversational marketing solutions, RCS, and other types of IP communications services such as e-mail, push notifications, video/audio/chat, and WhatsApp®.

On July 29, 2020, Kaleyra registered a German branch of Kaleyra S.p.A. with the German Chamber Tax Authority of Commerce. Kaleyra established its branch in Germany to expand Kaleyra’s footprint in Central Europe and the Nordic countries and allow it to leverage Kaleyra’s trusted business solutions for customers in additional jurisdictions.

Kaleyra’s subsidiary, Campaign Registry Inc., a systems initiative to reduce spam by collecting robotically driven campaign information and processing and sharing that information with mobile operators and the messaging ecosystem, began its soft launch during the second quarter of fiscal year 2020, ending up with its first revenue contracts in the second half of fiscal year 2020.

On February 18, 2021, Kaleyra entered into an agreement and plan of merger (the “Merger Agreement”) with Vivial, Inc. (“Vivial”) for the acquisition of the business known as mGage (“mGage”), a leading global mobile messaging provider in the United States (the transaction contemplated by the Merger Agreement, the “Merger”).

On June 1, 2021, Kaleyra completed its acquisition of mGage for a total purchase price of $218.0 million. The Merger consideration consisted of both cash consideration and common stock consideration. On August 30, 2021, the Company prepared and delivered to the Stockholder Representative a written statement (the “Post-Closing Statement”) setting forth the calculation of closing cash and closing net working capital which ultimately resulted in the final Merger consideration to be equal to $217.0 million, pursuant to the terms of the Merger Agreement. The cash consideration amounted to $199.2 million of which $198.6 million was paid on June 1, 2021 and the remaining amount was settled during the period ended September 30, 2021, including a working capital adjustment of $997,000. The common stock consideration was paid with the issuance to Vivial’s former equity holders of a total of 1,600,000 shares of Kaleyra common stock at the $11.77 per share closing price of Kaleyra common stock on the date of issuance, equal to $18.8 million in value. In support of the consummation of the Merger, on February 18, 2021, Kaleyra entered into subscription agreements (the “PIPE Subscription Agreements”) with certain institutional investors (the “PIPE Investors”), pursuant to which, among other things, Kaleyra agreed to issue and sell, in private placements to close immediately prior to the closing of the Merger, an aggregate of 8,400,000 shares of Kaleyra common stock to the PIPE Investors at $12.50 per share. Kaleyra also entered into convertible note subscription agreements (the “Convertible Note Subscription Agreements”) with certain institutional investors (the “Convertible Note Investors”), pursuant to which Kaleyra agreed to issue and sell, in private placements to close immediately prior to the closing of the Merger, $200 million aggregate principal amount of unsecured convertible notes (the “Merger Convertible Notes”).

On July 1, 2021, Kaleyra completed a company reorganization of the acquired business of mGage through the initial dissolution of the Delaware single member LLCs of Vivial Holdings, LLC, Vivial Networks, LLC, and the following merger of mGage, LLC into the surviving holding company, Vivial Inc., which subsequently changed its name into Kaleyra US Inc., as a result of the

reorganization. As a result of the Merger, Kaleyra US Inc. became the holding company and one hundred percent (100%) owner of mGage Europe Ltd. (UK) and mGage SA de SV (Mexico).

On July 8, 2021, Kaleyra completed the acquisition of Bandyer Srl (“Bandyer”) for cash consideration of $15.4 million. Bandyer offers cloud-based audio/video communications services via Web Real Time Communication (“WebRTC”) technology to financial institutions, retail companies, utilities, industries, insurance companies, human resources, and digital healthcare organizations. Bandyer provides customers with programmable audio/video APIs and Software Development Kits (“SDKs”) based on WebRTC technology for a variety of uses, including Augmented Reality (“AR”) applications for smart glasses.

Effective August 31, 2021, the common stock of the Company ceased trading on the NYSE American and commenced trading on the NYSE under the ticker symbol “KLR”. Kaleyra’s warrants continue to trade on the NYSE American under the symbol “KLR WS”.

On October 11, 2021, Kaleyra Africa Ltd, a wholly owned subsidiary of Kaleyra Inc., was incorporated under the laws of South Africa with the registered office in Waterfall City, Gauteng. This newly established subsidiary is part of Kaleyra's broader strategic plan of expanding into emerging markets whereby South Africa will serve as Kaleyra's hub to enter the entire African market.

On November 15, 2021, pursuant to the provisions of the Merger Agreement, Kaleyra Dominicana, S.R.L., the ninety-nine percent (99%) direct owner of Kaleyra US Inc. and one percent (1%) direct owner of Kaleyra Inc., was incorporated under the laws of the Dominican Republic with the registered office in Santo Domingo. This newly established subsidiary is aimed to provide the Kaleyra group with back-office technology support and engage in product development and innovation.

On January 13, 2022, Kaleyra completed a company reorganization of the acquired business of Bandyer by means of the merger of the Italian legal entity of Bandyer into the holding company, Kaleyra S.p.A.. As a result of the merger, Bandyer ceased to exist as a separate legal entity and all its assets and liabilities have been incorporated under Kaleyra S.p.A. effective January 13, 2022.

XML

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying condensed consolidated financial statements of the Company are unaudited, and have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, this interim quarterly financial report does not include all disclosures required by US GAAP. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, considered necessary to present fairly the financial position, results of operations and cash flows of the Company and its consolidated subsidiaries for all periods presented. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected in the future or for the full fiscal year. It is recommended that these condensed consolidated financial statements be read in conjunction with the Company’s consolidated financial statements and the notes thereto included in its 2021 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 8, 2022.

These condensed consolidated financial statements have been prepared in conformity with US GAAP applicable for an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). The JOBS Act provides, in part, that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. In particular, an emerging growth company can delay the adoption of certain accounting standards until those standards would apply to private companies. For the purpose of these condensed consolidated financial statements, the Company availed itself of an extended transition period for complying with new or revised accounting standards and, as a result, did not adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for public companies.

Liquidity

The Company evaluated its ability to continue as a going concern. The Company has negative cash flows from operating activities through June 30, 2022, mainly as the consequence of the payment of interest bearing on existing notes payable and bank borrowings. The condensed consolidated balance sheet as of June 30, 2022 includes total current assets of $176.6 million and total current liabilities of $105.9 million, resulting in net current assets of $70.7 million and a short-term net financial position of $60.6 million.

On February 18, 2021, and for the purposes of raising the cash portion of the consideration for the Merger, the Company entered into the PIPE Subscription Agreements with the PIPE Investors and the Convertible Note Subscription Agreements with the Convertible Note Investors. Pursuant to these agreements, and prior to the closing of the Merger on June 1, 2021, the Company issued and sold in private placements an aggregate of $105 million or 8,400,000 shares of the Company’s common stock to the PIPE Investors at $12.50 per share, and $200 million aggregate principal amount of unsecured Merger Convertible Notes, bearing interest at a rate of 6.125% per annum, payable semi-annually, in arrears on each June 1 and December 1 of each year.

Considering the effects of the financings described above and the typical financial cycle of the Company, the Company’s management believes that the Company’s cash and availability of borrowings will be sufficient to support its planned operations for at least the next 12 months from the date these condensed consolidated financial statements were issued.

Business seasonality

Historically, the Company has experienced clear seasonality in its revenue generation, with slower traction in the first calendar quarter, and increasing revenues as the year progresses. The Company typically experiences higher revenues in messaging and notification services during the fourth calendar quarter. This patterned revenue generation behavior takes place due to the Company’s customers sending more messages to their end-user customers who are engaged in consumer transactions at the end of the calendar year, resulting in an increase in notifications of electronic payments, credit card transactions and e-commerce orders.

Principles of Consolidation

The condensed consolidated financial statements include the Company and its wholly owned subsidiaries, including Kaleyra S.p.A., Solutions Infini, Buc Mobile, mGage Europe Limited, Campaign Registry and Kaleyra US Inc., which represent its major operations. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are used for, but not limited to, revenue recognition; allowance for doubtful accounts; valuation of the Company’s stock-based awards; recoverability of goodwill, long-lived and intangible assets; capitalization and useful life of the Company’s capitalized internal-use software development costs; fair value of acquired intangible assets and goodwill; accruals, including tax related provision and valuation allowance on deferred taxes. Estimates are based on historical experience and on various assumptions that the Company believes are reasonable under current circumstances. However, future events are subject to change and best estimates and judgments may require further adjustments; therefore, actual results could differ materially from those estimates. Management periodically evaluates such estimates and they are adjusted prospectively based upon such periodic evaluation. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties, including uncertainty in the current economic environment due to the disruptive effects of global inflation, the continuing impact of the novel strain of the coronavirus (“COVID-19”) and the armed conflict between Russia and Ukraine.

Concentration of Credit Risk

Financial instruments that potentially expose the Company to a concentration of credit risk consist primarily of cash and cash equivalents, restricted cash, short-term investments and trade receivables. The Company maintains its cash and cash equivalents, restricted cash and short-term investments with financial institutions that management believes are financially sound.

The Company sells its services to a wide variety of customers. If the financial condition or results of operations of any significant customers deteriorate substantially, the Company’s operating results could be adversely affected. To reduce credit risk, management performs ongoing credit evaluations of the financial condition of significant customers. The Company maintains reserves for estimated credit losses on customer accounts when considered necessary. Actual credit losses may differ from the Company’s estimates. In both of the six months ended June 30, 2022 and 2021, there was no customer that individually accounted for more than 10% of the Company’s consolidated total revenue. As of June 30, 2022 and December 31, 2021, zero and one individual customer, respectively, accounted for more than 10% of the Company’s consolidated total trade receivables. Trade receivables accounted for by that one customer amounted to $9.6 million as of December 31, 2021.

Warrant Liability

The Company accounts for warrants for shares of the Company’s common stock that are not indexed to its own stock as liabilities at fair value on the condensed consolidated balance sheets. The warrants are subject to remeasurement at each balance sheet date and any change in fair value is recognized in “Financial expense, net” on the condensed consolidated statements of operations. The liability is included in the condensed consolidated balance sheet line item “Other long-term liabilities”. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the common stock warrants. At that time, the portion of the warrant liability related to the common stock warrants will be reclassified as additional paid-in capital.

Recent Accounting Pronouncements

In May 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-04 “Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation— Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815- 40) Issuer’s Accounting

for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options” which clarifies and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. An entity should measure the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as follows: i) for a modification or an exchange that is a part of or directly related to a modification or an exchange of an existing debt instrument or line-of-credit or revolving-debt arrangements (hereinafter, referred to as a “debt” or “debt instrument”), as the difference between the fair value of the modified or exchanged written call option and the fair value of that written call option immediately before it is modified or exchanged; ii) for all other modifications or exchanges, as the excess, if any, of the fair value of the modified or exchanged written call option over the fair value of that written call option immediately before it is modified or exchanged. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the amendments prospectively to modifications or exchanges occurring on or after the effective date of the amendments. The Company adopted the amendments, and the adoption did not have a material impact on its condensed consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06 “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” which is aimed to address issues identified as a result of the complexity associated with applying generally accepted accounting principles for certain financial instruments with characteristics of liabilities and equity. In addressing the complexity, the FASB focused on amending the guidance on convertible instruments and the guidance on the derivatives scope exception for contracts in an entity’s own equity. For convertible instruments, the Board decided to reduce the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models results in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The Company adopted the amendments in this update as of the beginning of its annual fiscal year 2021, which resulted in the embedded conversion features of the Merger Convertible Note not being separately recognized from the host contract pursuant to their scope exception from derivative accounting under ASC 815-10-15-74(a). Interest Make-Whole Payment feature met the definition of a derivative but did not fall within the above scope exception, nonetheless its value was de minimis and as such no amount was recorded in the consolidated financial statements at the time of the issuance of the Merger Convertible Notes nor at any subsequent reporting date.

In June 2020, the FASB issued ASU 2020-05 “Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective dates for certain entities” (“ASU 2020-05”), which provides a limited one year deferral of the effective dates of the following updates (including amendments issued after the issuance of the original update) to provide immediate, near-term relief for certain entities for whom these updates are either currently effective or imminently effective: i) ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“Revenue”); ii) ASU No. 2016-02, Leases (Topic 842) (“Leases”). The updates in ASU 2020-05 followed the updates to effective dates set forth within ASU 2019-10 “Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates” (“ASU 2019-10”). The amendments in this ASU amended certain effective dates for the above ASU 2016-02, Leases (including amendments issued after the issuance of the original ASU). The effective dates for Leases after applying ASU 2019-10 were as follows: public business entities, excluding emerging growth companies and smaller reporting companies, for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. All other entities for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. Early application continues to be allowed. In ASU 2019-10, the FASB noted that challenges associated with transition to a major update are often magnified for private companies and smaller public companies. Those challenges have been significantly amplified by the current business and capital market disruptions caused by the COVID-19 pandemic. For this reason, the FASB issued the amendments in ASU 2020-05 by deferring the effective date for one additional year for entities in the “all other” category that have not yet issued their financial statements (or made financial statements available for issuance) reflecting the adoption of Leases. Therefore, under the amendments of ASU 2020-05, Leases (Topic 842) is effective for entities within the “all other” category for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early application continues to be permitted, which means that an entity may choose to implement Leases before those deferred effective dates. The Company expects the adoption to have a material impact to the consolidated balance sheets for the recording of the "right-to-use" asset and corresponding lease liability. The Company plans to adopt ASC Topic 842 – Leases in its fiscal year ending December 31, 2022, by utilizing the modified retrospective transition approach, which will result in an estimated current period adjustment as of January 1, 2022 related to the recognition of a right-of-use asset and corresponding lease liability between $3.0 million and $4.0 million on its condensed consolidated balance sheet.

In February 2020, the FASB issued ASU 2020-02 “Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842), Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842). This ASU applies to all registrants that are creditors in loan transactions that, individually or in the aggregate, have a material effect on the registrant’s financial condition. This ASU

guidance is applicable upon a registrant’s adoption of Accounting Standards Codification (“ASC”) Topic 326. On November 15, 2019, the FASB delayed the effective date of ASC Topic 326 (ASU 2019-10), as noted below.

In November 2019, the FASB issued ASU 2019-10 “Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates”. The amendments in ASU 2019-10 amend certain effective dates for the following major ASUs (including amendments issued after the issuance of the original ASU):

a)ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (Credit Losses) (“ASU 2016-13”). The amendments in this ASU amend the mandatory effective dates for Credit Losses for all entities as follows: Public business entities that meet the definition of a SEC filer, excluding entities eligible to be smaller reporting companies, as defined by the SEC, at the time the ASU was issued, for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. All other entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early application continues to be allowed. The Company is currently evaluating the impact of this standard on its condensed consolidated financial statements.

b)ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (Hedging). The effective dates for Hedging after applying this ASU are as follows: Public business entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. All other entities for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. Early application continues to be allowed. The Company adopted the amendments in this update as of the beginning of its annual fiscal year 2021, and the adoption did not have a material impact on its condensed consolidated financial statements.

c) ASU 2016-02, Leases (Topic 842). The effective dates for Leases after applying ASU 2019-10 are as follows: public business entities, excluding emerging growth companies and smaller reporting companies, for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. All other entities for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. As noted above, the effective date of this ASU has now been delayed for one additional year by the issuance of ASU 2020-05.

In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract”. This standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The standard is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. For all other entities, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2021. The Company adopted the amendments in this update as of the beginning of its annual fiscal year 2021, and the adoption did not have a material impact on its condensed consolidated financial statements.

In August 2018, the FASB issued ASU 2018-14, “Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20)”, which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The amendments are effective for fiscal years ending after December 15, 2020 for public business entities and for fiscal years ending after December 15, 2021 for all other entities. The Company is currently evaluating the impact of this standard on its condensed consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment”, which removes the second step of the goodwill impairment test that requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The Company adopted the amendments in this update as of the beginning of its annual fiscal year 2021, and the adoption did not have a material impact on its condensed consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments”, which changes the impairment model for most financial assets. The new model uses a forward-looking expected loss method, which will generally result in earlier recognition of allowances for losses. In November 2018, the FASB issued ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments— Credit Losses”, which clarifies that receivables arising from operating leases are not within the scope of Topic 326, Financial Instruments—Credit Losses. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. These ASUs are effective for public entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, and for other entities for fiscal years beginning after December 15, 2020 and interim periods within fiscal years beginning after December 15, 2021. Earlier application is permitted. As noted above, the effective date of this ASU was delayed for two years by the issuance of ASU 2019-10. The Company is currently evaluating the impact of this standard on its condensed consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, “Leases”, which was further clarified by ASU 2018-10, “Codification Improvements to Topic 842, Leases”, and ASU 2018-11, “Leases—Targeted Improvements”, both issued in July 2018. ASU 2016-02

affects all entities that lease assets and will require lessees to recognize a lease liability and a right-of-use asset for all leases (except for short-term leases that have a duration of less than one year) as of the date on which the lessor makes the underlying asset available to the lessee. For lessors, accounting for leases is substantially the same as in prior periods. ASU 2018-10 clarifies or corrects unintended application of guidance related to ASU 2016-02. The amendment affects narrow aspects of ASU 2016-02 related to the implicit rate in the lease, impairment of the net investment in the lease, lessee reassessment of lease classification, lessor reassessment of lease term and purchase options, variable payments that depend on an index or rate and certain transition adjustments. ASU 2018-11 adds a transition option for all entities and a practical expedient only for lessors. The transition option allows entities to not apply the new lease standard in the comparative periods they present in their financial statements in the year of adoption. Under the transition option, entities can opt to continue to apply the legacy guidance in ASC 840, “Leases”, including its disclosure requirements, in the comparative prior periods presented in the year they adopt the new lease standard. Entities that elect this transition option will still be required to adopt the new leases standard using the modified retrospective transition method required by the standard, but they will recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption rather than in the earliest period presented. The new standards are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years for a public business entity. For all other entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Earlier application is permitted. As noted above, the effective date of this ASU was delayed for two years by the issuance of ASU 2019-10 as amended by ASU 2020-05.

XML

Business Combinations

6 Months Ended

Jun. 30, 2022

Business Combinations [Abstract]

Business Combinations

3. BUSINESS COMBINATIONS

Acquisition of mGage

On June 1, 2021, the Company completed its Merger with Vivial and the resulting acquisition of the business owned by Vivial known as mGage, a leading global mobile messaging provider. The acquisition of mGage provided an opportunity for the Company to expand its network operator connections and become one of only four companies providing direct connectivity to all tier-1 US carriers.

Pursuant to the Merger Agreement dated as of February 18, 2021, by and among the Company, Merger Sub, Vivial and GSO Special Situations Master Fund LP, solely in its capacity as the Stockholder Representative, Vivial was merged with and into Merger Sub, with Vivial surviving as a wholly-owned subsidiary of the Company. The name of Vivial was changed to mGage Group Holdings, Inc. (“mGage Group Holdings”) as a result of the Merger. Subsequently, on July 1, 2021, mGage Group Holdings changed its name to Kaleyra US Inc.

The Merger consideration consisted of cash consideration and common stock consideration and was subject to post-closing price adjustments as set forth in the Merger Agreement. On August 30, 2021, the Company prepared and delivered to the Stockholder Representative a written statement (the “Post-Closing Statement”) setting forth the calculation of closing cash and closing net working capital which ultimately resulted in the final Merger consideration to be equal to $217.0 million, pursuant to the terms of the Merger Agreement. The original cash consideration amounted to $199.2 million of which $198.6 million was paid on June 1, 2021 and the remaining amount was settled through the period ended September 30, 2021, including a working capital adjustment of $997,000. The common stock consideration was paid with the issuance to Vivial’s former equity holders of a total of 1,600,000 shares of Kaleyra common stock. The resulting value of the common stock consideration, which was based upon the $11.77 per share closing price of Kaleyra common stock as of June 1, 2021, was equal to $18.8 million and has been recognized as part of the consideration transferred.

The Merger was financed through (i) the proceeds from the issuance and sale by the Company, of an aggregate of 8,400,000 shares of Kaleyra common stock to PIPE Investors at $12.50 per share, pursuant to the subscription agreements dated February 18, 2021; and (ii) the proceeds from the issuance in a private placement, of $200 million aggregate principal amount of Merger Convertible Notes to certain institutional investors. See Note 9 – Notes Payable – for additional details on the Merger Convertible Notes.

The Merger was accounted for as a business combination and the total fair value of the consideration transferred of $217 million was allocated on a preliminary basis to the net tangible and intangible assets and liabilities based on their estimated fair values as of the acquisition date and the excess was recorded as goodwill. The Company evaluated certain assets, liabilities and tax estimates that were subject to change throughout the measurement period ended on June 1, 2022 (one year from the acquisition date).

During the three months ended September 30, 2021, Kaleyra redetermined the estimated fair value of certain identified finite-lived intangible assets, net of deferred tax liabilities and the resulting residual goodwill. The measurement period adjustment was recognized through a decrease of $8.9 million in the current period condensed consolidated balance sheet line item “Intangible assets, net” mostly relating to the acquired developed technology, a net decrease of $1.9 million in the current period condensed consolidated balance sheet line item “Deferred tax liability” and an increase of $5.9 million in the current period condensed consolidated balance sheet line item “Goodwill”.

During the three months ended June 30, 2022, Kaleyra redetermined the value of Deferred tax assets on loss carryforward following the filing of mGage Group Holding’s pre-affiliation tax return and remeasured the tax effected values of its identified finite-

lived intangible assets based upon the tax rates calculated in each domestic and foreign tax jurisdiction, including the UK. The measurement period adjustment was recognized through a net decrease of $5.1 million in the current period condensed consolidated balance sheet line item “Deferred tax assets”, a decrease of $2.0 million in the current period condensed consolidated balance sheet line item “Deferred tax liability” and a net increase of $3.1 million in the current period condensed consolidated balance sheet line item “Goodwill”.

As referred to above, the measurement period adjustment also included a working capital adjustment of $997,000, pursuant to the terms of the Merger Agreement. The acquired entity’s results of operations have been included in the condensed consolidated financial statements of the Company from the date of acquisition.

The following table summarizes the fair value amount recognized for the assets acquired and liabilities assumed as of the acquisition date (in thousands):

Customer relationships (1)	$	76,256
Developed technology (1)		30,033
Trade names (1)		13,060
Deferred tax assets on loss carryforward		19,899
Goodwill (2)		89,391
Accounts receivable and other current assets		29,996
Property and equipment		8,450
Cash and cash equivalents		2,856
Total assets acquired		269,941
Deferred tax liabilities		30,242
Accounts payable and other current liabilities		22,665
Total liabilities assumed		52,907
Net assets acquired	$	217,034

(1) Identified finite-lived intangible assets. The estimated fair value of the intangible assets acquired was determined by the Company, which considered or relied in part upon a valuation report of a third-party expert. The Company used income approaches to estimate the fair values of the identifiable intangible assets. The estimated useful life is 7 to 9 years for customer relationships, 6 years for developed technology and 8 years for trade names.

(2) Goodwill is the excess of fair value of the consideration transferred over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed and represents expected synergies of the combination of the acquired business. Goodwill is not deductible for income tax purposes.

In 2021, the Company incurred costs related to this acquisition of $5.5 million that were expensed in general and administrative expenses in the accompanying condensed consolidated statements of operations.

The contribution of Kaleyra US Inc. to the consolidated revenue and consolidated net loss for the three months ended June 30, 2022 was $30.2 million, and net loss of $1.9 million.

The contribution of Kaleyra US Inc. to the consolidated revenue and consolidated net loss for the six months ended June 30, 2022 was $62.3 million, and net loss of $2.9 million.

Acquisition of Bandyer

On July 8, 2021, Kaleyra completed the acquisition of the entire share capital of Bandyer, a company based in Italy that offers cloud based audio/video communications services to Italian financial institutions, retail companies, utilities, insurance, human resources and digital healthcare organizations (the “Bandyer Acquisition”). Bandyer’s services are suitable for different industries and completely compatible with any device and expand and complete Kaleyra’s already wide offering of communication channels.

The consideration for the Bandyer Acquisition consisted of cash consideration of $15.4 million (€13 million) of which $13.3 million (€11.5 million) was paid at the acquisition date and the remaining amount was retained in an escrow account. The acquisition of Bandyer was financed through the available financial resources of Kaleyra.

The Bandyer Acquisition was accounted for as a business combination and the total fair value of the consideration transferred of $15.4 million was allocated to the net tangible and intangible assets and liabilities based on their estimated fair values as of the acquisition date and the excess was recorded as goodwill. The Company evaluated certain assets, liabilities and tax estimates that were subject to change throughout the measurement period ended on July 8, 2022 (one year from the acquisition date).

During the three months ended March 31, 2022, and pursuant to the Bandyer purchase agreement, the above purchase consideration was decreased by $58,000, which is an amount equal to the sum of the acquisition date net debt and the portion of the

acquisition date net working capital that was collected by December 31, 2021 (the “Price Adjustment”). The Price Adjustment favorable to Kaleyra was considered in the calculation of the final goodwill balance as of March 31, 2022.

During the three months ended March 31, 2022, Kaleyra adjusted the deferred tax liabilities arising from the acquired tangible and intangible assets and the resulting residual goodwill. The measurement period adjustment was recognized through an increase of $164,000 in the current period condensed consolidated balance sheet line item “Deferred tax liability” and a corresponding increase in the current period condensed consolidated balance sheet line item “Goodwill”.

As referred to above, the measurement period adjustment also included the above Price Adjustment of $58,000. The acquired entity’s results of operations have been included in the condensed consolidated financial statements of Kaleyra from the date of acquisition.

The following table summarizes the fair value amount recognized for the assets acquired and liabilities assumed as of the acquisition date (in thousands):

Property and equipment, net	$	116
Developed technology (1)		7,999
Customer relationship (1)		1,798
Goodwill (2)		8,146
Cash and cash equivalents		349
Trade receivables and other current assets		671
Other non current assets		21
Total assets acquired		19,100
Deferred tax liabilities		2,616
Accounts payable and other current liabilities		986
Long term portion of employee benefit obligation		126
Current portion of bank and other borrowings		39
Total liabilities assumed		3,767
Net assets acquired	$	15,333

(1) Identified finite-lived intangible assets. The estimated fair value of the intangible assets acquired was determined by Kaleyra, which considered or relied in part upon a valuation report of a third-party expert. The Company used income approaches to estimate the fair values of the identifiable intangible assets. The estimated useful life is 8 years for customer relationships and 15 years for developed technology.

(2) Goodwill is the excess of fair value of the consideration transferred over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed and represents expected synergies of the combination of the acquired business. Goodwill is not deductible for income tax purposes.

On January 13, 2022, Kaleyra completed a company reorganization of the acquired business of Bandyer by means of the merger of the Italian legal entity of Bandyer into the holding company, Kaleyra S.p.A.. As a result of the merger, Bandyer ceased to exist as a separate legal entity and all its assets and liabilities have been incorporated under Kaleyra S.p.A. effective January 13, 2022.

On April 4, 2022, following the above Price Adjustment and pursuant to the terms of the purchase agreement, Kaleyra paid an aggregate of $1.1 million (€1.0 million) out of the escrow account as remaining consideration for the Bandyer Acquisition. As of June 30, 2022 the resulting balance of the escrow account that was originally retained at the acquisition date amounted to $468,000 (€451,000).

Unaudited supplemental pro-forma information

The results of operations for the three and six months ended June 30, 2022 are included in the condensed consolidated financial statements. The following table presents unaudited supplemental pro-forma information for the three and six months ended June 30, 2021 as if the Merger had occurred on January 1, 2021. The main adjustments reflected in the unaudited pro-forma financial information for the three and six months ended June 30, 2021 are as follows:

(i) the amortization of intangible assets arising from the purchase price allocation amounting to $1.9 million and $4.6 million, respectively, for three and six months ended June 30, 2021, net of the related tax effect of $687,000 and $1.7 million, respectively, which are referred to the period starting on January 1, 2021 through the date of the business combination;

(ii) the financial expenses incurred in connection with the Merger Convertible Notes amounting to $2.4 million and $5.9 million, respectively, for three and six months ended June 30, 2021, which are referred to the period starting on January 1, 2021 through the date of the Merger. No pro forma tax benefit has been reflected in connection with the pro forma

adjustment to financial income (expense), net as Kaleyra is in a net loss tax position and a valuation allowance would be established for the amount of any deferred tax assets.

Transaction costs incurred in connection with the transaction were not eliminated. The pro-forma financial information is not necessarily indicative of the results of operation that would have occurred had the transaction been affected on the assumed dates.

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands, except share and per share amounts)	2022			2021			2022			2021
Revenue	$	81,109		$	76,552		$	161,590		$	148,892
Net loss		(15,837	)		(5,792	)		(29,009	)		(19,772	)
Net loss per common share, basic and diluted	$	(0.36	)	$	(0.14	)	$	(0.68	)	$	(0.48	)
Weighted-average shares used in computing net loss per common share, basic and diluted		43,410,858			41,181,763			42,829,188			40,773,353

The contribution of Kaleyra US Inc. to the consolidated and pro-forma consolidated revenue was $30.2 million and $32.7 million for the three months ended June 30, 2022 and 2021, respectively.

The contribution of Kaleyra US Inc. to the consolidated and pro-forma consolidated revenue was $62.3 million and $64.6 million for the six months ended June 30, 2022 and 2021, respectively.

The contribution of Kaleyra US Inc. to the consolidated and pro-forma consolidated net loss was a loss of $1.9 million and an income of $3.9 million for the three months ended June 30, 2022 and 2021, respectively.

The contribution of Kaleyra US Inc. to the consolidated and pro-forma consolidated net loss was a loss of $2.9 million and an income of $7.5 million for the six months ended June 30, 2022 and 2021, respectively.

XML

Fair Value Measurements

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

4. FAIR VALUE MEASUREMENTS

The following tables provide the assets and liabilities measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021 (in thousands):

	Fair Value Hierarchy as of June 30, 2022						Aggregate
	Level 1		Level 2		Level 3		Fair Value
Assets:
Mutual funds (1)	$	579	$	—	$	—	$	579
Certificates of deposit (2)		—		101		—		101
Interest rate swap (3)		—		8		—		8
Total Assets	$	579	$	109	$	—	$	688
Liabilities:
Warrant liability (4)	$	—	$	78	$	—	$	78
Total Liabilities	$	—	$	78	$	—	$	78

(1) Included in the condensed consolidated balance sheet line item “Short-term investments”.

(2) Included in the condensed consolidated balance sheet line item “Short-term investments”, with maturity terms between 4 and 12 months held in India.

(3) Included in the condensed consolidated balance sheet line item “Other long-term assets”.

(4) Included in the condensed consolidated balance sheet line item “Other long-term liabilities”. See Note 16 – Warrants – for further details.

	Fair Value Hierarchy as of December 31, 2021						Aggregate
	Level 1		Level 2		Level 3		Fair Value
Assets:
Mutual funds (1)	$	602	$	—	$	—	$	602
Certificates of deposit (2)		—		5,634		—		5,634
Total Assets	$	602	$	5,634	$	—	$	6,236
Liabilities
Interest rate swap (3)	$	—	$	35	$	—	$	35
Warrant liability (4)		—		889		—		889
Total Liabilities	$	—	$	924	$	—	$	924

(1) Included in the condensed consolidated balance sheet line item “Short-term investments”.

(2) Included in the condensed consolidated balance sheet line item “Short-term investments”, with maturity terms between 4 and 12 months held in India.

(3) Included in the condensed consolidated balance sheet line item “Other long-term liabilities”.

(4) Included in the condensed consolidated balance sheet line item “Other long-term liabilities”. See Note 16 – Warrants – for further details.

The values of short-term investments as of June 30, 2022 and as of December 31, 2021 were as follows (in thousands):

	As of June 30, 2022								As of December 31, 2021
	Cost		Unrealized Gains		Unrealized Losses		Fair Value		Cost		Unrealized Gains		Unrealized Losses		Fair Value
Mutual funds	$	570	$	9	$	—	$	579	$	572	$	30	$	—	$	602
Certificates of deposit		101		—		—		101		5,634		—		—		5,634

There were no transfers into or out of Level 2 or Level 3 for the six months ended June 30, 2022 and the year ended December 31, 2021.

XML

Derivative Financial Instrument

6 Months Ended

Jun. 30, 2022

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

5. DERIVATIVE FINANCIAL INSTRUMENTS

The gross notional amount of interest rate swap derivative contracts not designated as hedging instruments, outstanding as of June 30, 2022 and December 31, 2021, was €4.0 million ($4.2 million) and €5.8 million ($6.6 million), respectively.

The amount and location of the gains (losses) in the condensed consolidated statements of operations related to derivative contracts is as follows (in thousands):

		Three Months Ended June 30,				Six Months Ended June 30,
Derivatives Not Designed As Hedging Instruments	Line Items	2022		2021		2022		2021
Interest rate swap	Financial income (expense), net	$	20	$	28	$	42	$	41

The following table presents the fair value and the location of derivative contracts reported in the condensed consolidated balance sheets (in thousands):

		As of June 30,		As of December 31,
Derivatives Not Designed As Hedging Instruments	Line Items	2022		2021
Interest rate swap	Other long-term liabilities	$	—	$	(35	)
Interest rate swap	Other long-term assets		8		—

XML

Goodwill and Intangible Assets, Net

6 Months Ended

Jun. 30, 2022

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets, Net

6. GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

Goodwill as of June 30, 2022 and December 31, 2021 was as follows (in thousands):

Balance as of December 31, 2021	$	110,465
Purchase price adjustment in the period		3,161
Effect of exchange rate		(1,733	)
Balance as of June 30, 2022	$	111,893

Intangible assets, net

Intangible assets consisted of the following (in thousands):

	As of June 30, 2022						As of December 31, 2021
	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Amortizable Intangible Assets:
Developed technology	$	39,557	$	8,452	$	31,105	$	40,416	$	5,393	$	35,023
Customer relationships		85,939		13,196		72,743		86,792		8,597		78,195
Trade names		12,981		1,758		11,223		13,060		952		12,108
Patent		141		66		75		131		61		70
Total amortizable intangible assets	$	138,618	$	23,472	$	115,146	$	140,399	$	15,003	$	125,396

Amortization expense was $8.8 million and $2.2 million for the six months ended June 30, 2022 and 2021, respectively.

Total estimated future amortization expense as of June 30, 2022 is as follows (in thousands):

	As of June 30, 2022
2022 (remaining six months)	$	8,333
2023		16,587
2024		16,488
2025		16,416
2026		16,345
2027 and thereafter		40,977
Total	$	115,146

XML

Other Assets

6 Months Ended

Jun. 30, 2022

Other Assets [Abstract]

Other Assets

7. OTHER ASSETS

Other current assets consisted of the following (in thousands):

	As of June 30,		As of December 31,
	2022		2021
Receivables from suppliers	$	530	$	483
Credit for tax other than income tax		112		675
Income tax receivables		216		1,195
Other receivables		578		246
Total other current assets	$	1,436	$	2,599

Other long-term assets consisted of the following (in thousands):

	As of June 30,		As of December 31,
	2022		2021
Non-current income tax credit (advances and tax reduced at sources)	$	1,148	$	53
Interest rate swaps		8		—
Miscellaneous		369		346
Total other long-term assets	$	1,525	$	399

XML

Bank and Other Borrowings

6 Months Ended

Jun. 30, 2022

Bank And Other Borrowings [Abstract]

Bank and Other Borrowings

8. BANK AND OTHER BORROWINGS

As of June 30, 2022 and December 31, 2021, the current portion of bank and other borrowings amounts to $13.8 million and $15.8 million, respectively. As of June 30, 2022, this item was comprised of $10.6 million of the current portion of bank and other borrowings and $3.2 million of credit line facilities. As of December 31, 2021, this item was comprised of $10.5 million of the current portion of bank and other borrowings and $5.3 million of credit line facilities.

Credit line facilities

As of June 30, 2022, the Company had credit line facilities denominated in Euro for a total amount of $5.2 million, of which $3.2 million had been used. As of December 31, 2021, the Company had credit line facilities denominated in Euro for $6.7 million, of which $5.3 million had been used.

The credit lines denominated in Euro may be drawn upon at variable interest rates in the following range: 0.5% - 2.2%. The weighted average interest rate on those credit line facilities outstanding as of June 30, 2022 was 1.08%.

Long-term bank and other borrowings

Long-term bank and other borrowings consist of the following (in thousands):

									Interest Nominal Rate
	As of June 30,		As of December 31,			Interest Contractual Rate			As of June 30,			As of December 31,
	2022		2021		Maturity	as of June 30, 2022			2022			2021
UniCredit S.p.A.    (Line A Tranche 1)	$	1,534	$	2,330	July 2023	Euribor 3 months + 3.10%				2.80	%		2.80	%
UniCredit S.p.A.    (Line A Tranche 2)		78		113	November 2023	Euribor 3 months + 3.10%				2.80	%		2.80	%
UniCredit S.p.A. (Line B)		1,723		2,337	May 2024	Euribor 3 months + 2.90%				2.60	%		2.60	%
UniCredit S.p.A. (Line C)		1,217		1,833	August 2023	Euribor 3 months + 3.90%				3.71	%		3.33	%
Intesa Sanpaolo S.p.A.    (Line 1)		—		290	April 2022	Euribor 3 months + 2.30%				2.11	%		1.73	%
Intesa Sanpaolo S.p.A.    (Line 2)		2,135		2,872	April 2024	Euribor 3 months + 3.10%				2.91	%		2.53	%
Intesa Sanpaolo S.p.A.    (Line 3)		8,256		8,961	June 2026	Euribor 3 months + 2.15%				1.96	%		1.58	%
Intesa Sanpaolo S.p.A.    (Line 4)		4,914		5,927	July 2026	Euribor 3 months + 2.20%				2.01	%		1.63	%
Monte dei Paschi di    Siena S.p.A. (Line 1)		—		76	April 2022		0.95	%		0.95	%		0.95	%
Monte dei Paschi di    Siena S.p.A. (Line 2)		696		1,132	June 2023		1.50	%		1.50	%		1.50	%
Banco BPM S.p.A. (Line 1)		367		593	June 2023	Euribor 3 months + 2.00%				2.00	%		2.00	%
Banco BPM S.p.A. (Line 3)		3,802		5,014	September 2024	Euribor 3 months + 3.00%				2.81	%		2.43	%
Simest 1		174		189	December 2023		0.50	%		0.50	%		0.50	%
Simest 2		173		188	December 2023		0.50	%		0.50	%		0.50	%
Simest 3		318		345	December 2023		0.50	%		0.50	%		0.50	%
Simest 4		1,122		1,218	April 2027		0.50	%		0.50	%		0.50	%
Total bank and other borrowings		26,509		33,418
Less: current portion		10,581		10,508
Total long-term portion	$	15,928	$	22,910

All bank and other borrowings are unsecured borrowings of the Company.

On February 23, 2021, the Company entered into an amendment to the existing unsecured loan agreement with Intesa Sanpaolo S.p.A. (the “Intesa Sanpaolo S.p.A. - Line 1”) and an amendment to the existing unsecured loan agreement with Intesa Sanpaolo S.p.A. (the “Intesa Sanpaolo S.p.A. - Line 2”). The amendments each provide that certain financial covenants be amended, in particular as they relate to the previously agreed net financial position/equity ratio and the net financial position/gross operating income ratio. Upon

the approval of the audited statutory financial statements of Kaleyra S.p.A. for the year ended December 31, 2020 in June 2021, the calculated net financial position/gross operating income ratio failed to comply with the amended terms of the unsecured loan agreement with Intesa Sanpaolo S.p.A. As a result of such failure, Intesa Sanpaolo S.p.A. was entitled to raise the interest rate bearing on the existing financing agreements of Intesa Sanpaolo S.p.A. by fifty (50) bps. No principal amount was subject to early reimbursement under the amended terms of the loan agreement. On August 3, 2021, the Company was notified by Intesa Sanpaolo S.p.A. of their resolution to apply the incremental fifty (50) bps to the interest rate bearing on future payments of interest. In the audited fiscal year ended December 31, 2021, Kaleyra successfully complied with financial covenants in place with Intesa Sanpaolo S.p.A..

On March 9, 2021 and March 10, 2021, respectively, Kaleyra S.p.A. received the approval by UniCredit to postpone repayment of the principal amounts due under the existing Line A Tranche (2), Line B and Line C of the long-term financing agreements with UniCredit S.p.A. for a period of six (6) months starting from March 1, 2021 until August 31, 2021, and under Line A Tranche (1) of the long-term financing agreement with UniCredit S.p.A. starting from February 1, 2021 until July 31, 2021. Consequently, the repayment schedule under all financing agreements mentioned above was extended for the period equal to that of the six (6) month suspension period.

On April 15, 2021, Kaleyra S.p.A. and Banco Popolare di Milano S.p.A. entered into an agreement to postpone repayment of the principal amounts due under the existing Line 3 of the long-term unsecured financing agreement for a period of six (6) months starting from March 31, 2021 until September 30, 2021, without prejudice to Kaleyra S.p.A.’s obligations to continue to pay interest in relation to the principal amount at the original due dates.

On April 15, 2021, the Company entered into a general unsecured loan agreement with Simest S.p.A for a total of $3.6 million (€3.0 million at the April 15, 2021 exchange rate) relating to the Fund 394/81 (the “Simest Financing”) and Fund for Integrated Promotion (the “Co-financing”) for implementation of a program to break into foreign markets. The principal amount of $3.1 million (€2.6 million at the April 15, 2021 exchange rate) applies to the Simest Financing. The Simest Financing bears a subsidized interest rate of 0.055% and a reference interest rate of 0.55%. The loan has a duration of six (6) years starting from the date of disbursement and is to be repaid in half-yearly installments starting after a two-year pre-amortization period. The principal amount of $505,000 (€422,000 at the April 15, 2021 exchange rate) of the financing applies to the Co-financing and was granted in accordance with Section 3.1 of the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak of the European Commission, and as such is non-refundable as long as the funds are used for the purposes stated within the Framework.

On September 15, 2021, the principal amount of $1.3 million (€1.1 million at the September 15, 2021 exchange rate) and $208,000 (€176,000 at the September 15, 2021 exchange rate) relating to the first installment of the Simest Financing and Co-financing, respectively, was disbursed to the Company pursuant to the terms of the loan agreement with Simest S.p.A.

As of June 30, 2022, all of the available long-term facilities were drawn in full except for the Simest Financing as described above.

Interest expense on bank and other borrowings was $133,000 and $180,000 for the three months ended June 30, 2022 and 2021, respectively.

Interest expense on bank and other borrowings was $289,000 and $370,000 for the six months ended June 30, 2022 and 2021, respectively.

As of June 30, 2022, the Company is obliged to make payments as follows (in thousands):

	As of June 30, 2022
2022 (remaining six months)	$	5,334
2023		9,522
2024		5,776
2025		3,523
2026		2,214
2027 and thereafter		140
Total	$	26,509

XML

Notes Payable

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Notes Payable

9. NOTES PAYABLE

Notes payable to the Sellers

As consideration for the Business Combination, on November 25, 2019 the Company issued unsecured convertible promissory notes to each of Esse Effe and Maya in the amount of $6.0 million and $1.5 million, respectively, (the “Business Combination Convertible Notes”) and also issued other unsecured promissory notes to each of Esse Effe and Maya in the identical respective amounts (the “Non-convertible Notes”). The Non-convertible Notes held by Esse Effe and Maya were paid in full during fiscal year 2020 and no amount remains outstanding for such notes as of June 30, 2022.

Business Combination Convertible Notes

As of June 30, 2022, the outstanding balance on the Business Combination Convertible Notes held by Esse Effe and Maya amounted to zero.

The Business Combination Convertible Notes are classified as “Notes payable due to related parties” in the accompanying condensed consolidated balance sheets. Any accrued interest payable is included in “Other current liabilities” in the accompanying condensed consolidated balance sheets.

On the fifteen-month anniversary of the Business Combination Date or February 25, 2021, the fifty percent (50%) of the previously outstanding amount of Business Combination Convertible Notes held by Esse Effe and Maya was repaid, with a total of $3.0 million and $750,000 in principal and $176,000 and $44,000 in accrued interest being paid to Esse Effe and Maya, respectively, pursuant to the terms of the Business Combination Convertible Notes.

Under the terms of the Business Combination Convertible Notes, the outstanding principal balance of the Business Combination Convertible Notes, plus all accrued and unpaid interest and fees due under these notes, became due and payable, upon the receipt by the Company of cash proceeds of an equity financing in an aggregate gross amount of $105.0 million or 8,400,000 shares of Kaleyra common stock at $12.50 per share issued to the PIPE Investors in the private placement equity financing event immediately prior to the closing of the Merger Agreement of June 1, 2021. The principal amount of $3.8 million plus accrued interest of $84,000 for the Business Combination Convertible Notes held by Esse Effe and Maya was paid in full on June 2, 2021. Following the repayment, the Business Combination Convertible Notes terminated pursuant to their terms and no further amounts were due.

Notes payable - Other

On April 16, 2020, the Company entered into a Settlement Agreement and Release (the “Settlement Agreement”) with its Business Combination financial advisory service firms, Cowen and Company, LLC (“Cowen”) and Chardan Capital Markets, LLC, (“Chardan” and, collectively, the “Service Firms”), pursuant to which it agreed to pay an affiliate of Cowen, Cowen Investments II LLC (“Cowen Investments”), and Chardan, in full satisfaction of all amounts owed to the Service Firms as of December 31, 2019, $5.4 million in the aggregate, as follows: (i) $2.7 million in the aggregate in common stock of the Company (the “Settlement Shares”) to be issued the business day prior to the filing of a resale registration statement for such Settlement Shares (the “Bank Resale Registration Statement”), (ii) convertible notes totaling $2.7 million in the aggregate with a maturity date three years after issuance and bearing interest at five percent (5%) per annum (but with lower interest rates if the notes are repaid earlier than one year or two years after issuance) and with interest paid in arrears to the payee on March 15, June 15, September 15 and December 15 of each year, with such convertible notes to also be issued the business day prior to the filing of the Resale Registration Statement and (iii) in the event that the Beneficial Ownership Limitation (as defined below) would otherwise be exceeded upon delivery of the Settlement Shares above, a warrant agreement also to be entered into with and issued to the Services Firms the business day prior to the filing of the Resale Registration Statement, whereby the amount of common stock of the Company by which the Beneficial Ownership Limitation would otherwise have been exceeded upon delivery of the Settlement Shares will be substituted for by warrants with an exercise price of $0.01 per share issued pursuant to a Warrant Agreement (the “Warrant Agreement”) and the common stock underlying the Warrant Agreement (the “Warrant Shares”). The Beneficial Ownership Limitation shall initially be 4.99% of the number of shares of the common stock outstanding of the Company immediately after giving effect to the issuance of these shares of common stock. The number of Settlement Shares was calculated using as the price per Settlement Share an amount equal to a fifteen percent (15%) discount to the ten-day (10-day) trailing dollar volume-weighted average price for the common stock of the Company on the NYSE American LLC stock exchange (the “VWAP”) on the business day immediately prior to the date on which the Company filed the Resale Registration Statement. In addition, the price per share for determining the number of shares of common stock of the Company to be issued upon the conversion of the convertible notes shall be a five percent (5%) premium to the ten-day (10-day) trailing VWAP as of the date immediately prior to the issuance date of the convertible notes, rounded down to the nearest whole number.

On May 1, 2020, in connection with the Settlement Agreement, the Company issued: (i) an aggregate of 440,595 Settlement Shares to Cowen Investments and Chardan, consisting of 374,506 Settlement Shares issued to Cowen Investments, and 66,089 Settlement Shares issued to Chardan, which resulted in a $0.2 million loss on settlement on the issuance date of May 1, 2020; and (ii)

convertible promissory notes in the aggregate principal amount of $2.7 million to Cowen Investments and Chardan, consisting of a convertible promissory note in the principal amount of $2.3 million issued to Cowen Investments (the “Cowen Note”) and a convertible promissory note in the principal amount of $405,000 issued to Chardan (the “Chardan Note”). The unpaid principal of the Cowen Note was convertible at the option of Cowen Investments into 303,171 shares of common stock of the Company, if there was no principal reduction, and the unpaid principal of the Chardan Note was convertible at the option of Chardan into 53,501 shares of common stock of the Company, if there was no principal reduction. As the Beneficial Ownership Limitation was not triggered by the issuance of the Settlement Shares, no Warrant Agreement was necessary and no warrants were issued.

On February 4, 2021, Cowen Investments elected to convert the outstanding amount of the Cowen Note into 303,171 shares of common stock pursuant to the terms of the Cowen Note, and as a result the Company has no further obligations with respect to the Cowen Note.

As of June 30, 2022, the outstanding amount of the Chardan Note was $405,000 and accrued interest was $44,000. This note payable is included in “Current portion of notes payable” and the accrued interest payable is included in “Other current liabilities” in the accompanying condensed consolidated balance sheets.

Merger Convertible Notes

On February 18, 2021, in support of the consummation of the Merger, Kaleyra entered into Convertible Note Subscription Agreements, each dated February 18, 2021, with the Convertible Note Investors. On June 1, 2021, the Company issued the Merger Convertible Notes with an aggregate principal amount of $200 million. The Company incurred $11.4 million of issuance costs as a result of the issuance of the Merger Convertible Notes.

In connection with the issuance of the Merger Convertible Notes pursuant to the terms of the Convertible Note Subscription Agreements, the Company entered into an indenture (the “Indenture”) with Wilmington Trust, National Association, a national banking association, in its capacity as trustee thereunder (the “Indenture Trustee”), in respect of the $200 million of Merger Convertible Notes that were issued to the Convertible Note Investors.

The Merger Convertible Notes bear interest at a rate of 6.125% per annum, payable semi-annually, in arrears on each June 1 and December 1 of each year, commencing on December 1, 2021, to holders of record at the close of business on the preceding May 15 and November 15, respectively. The Merger Convertible Notes are convertible into 11,851,852 shares of Kaleyra common stock at a conversion price of $16.875 per share of Kaleyra common stock in accordance with the terms of the Indenture, and mature five years after their issuance. The Company may, at its election, force conversion of the Merger Convertible Notes after (i) the first anniversary of the issuance of the Merger Convertible Notes, subject to a holder’s prior right to convert, if the last reported sale price of the Kaleyra common stock exceeds 150% of the conversion price for at least 20 trading days during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter and (ii) the second anniversary of the issuance of the Merger Convertible Notes, subject to a holder’s prior right to convert, if the last reported sale price of the Kaleyra common stock exceeds 130% of the conversion price for at least 20 trading days during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter. Following certain corporate events that occur prior to the maturity date or if the Company forces a mandatory conversion, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its Merger Convertible Notes in connection with such a corporate event or has its Merger Convertible Notes mandatorily converted, as the case may be. In addition, in the event that a holder of the Merger Convertible Notes elects to convert its Merger Convertible Notes prior to the third anniversary of the issuance of the Merger Convertible Notes, the Company will be obligated to pay an amount equal to twelve months of interest, or if on or after such third anniversary of the issuance of the Merger Convertible Notes, any remaining amounts that would be owed to, but excluding, the fourth anniversary of the issuance of the Merger Convertible Notes (the “Interest Make-Whole Payment”). The Interest Make-Whole Payment will be payable in cash or shares of Kaleyra common stock as set forth in the Indenture.

Upon the issuance of the Merger Convertible Notes, management made the assessment whether the convertible instrument contained embedded conversion features for bifurcation and concluded that such embedded conversion features met the definition of a derivative but qualified for the scope exception under ASC 815-10-15-74(a) as they are indexed to the Company’s stock and qualify for classification within stockholders’ equity. Management determined that the Interest Make-Whole Payment met the definition of a derivative, but the value was de minimis and as such no amount was recorded at the time of the issuance of the Merger Convertible Notes nor at any subsequent reporting date. Management will continue to monitor the valuation of the Interest Make-Whole Payment provision and assess the need to record a liability in future periods.

As of June 30, 2022, the outstanding amount of the Merger Convertible Notes was $190.7 million, net of issuance costs. During the three and six months ended June 30, 2022, contractual interest expense amounted to $3.1 million and $6.1 million, respectively, and amortization of the debt issuance costs amounted to $513,000 and $1.0 million, respectively. The liability is included in the condensed consolidated balance sheet line item “Long-term portion of notes payable” and the interest expense is included in “Financial expense, net” on the condensed consolidated statements of operations.

XML

Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2022

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

10. ACCUMULATED OTHER COMPREHENSIVE LOSS

The accumulated balances related to each component of accumulated other comprehensive loss are as follows (in thousands):

	Cumulative Foreign Currency Translation Adjustment			Cumulative Net Unrealized Gain (Loss) on Marketable Securities, Net of Tax		Accumulated Other Comprehensive Income (Loss)
As of December 31, 2021	$	(2,046	)	$	36	$	(2,010	)
Other comprehensive income (loss)		(634	)		5		(629	)
As of March 31, 2022	$	(2,680	)	$	41	$	(2,639	)
Other comprehensive income (loss)		(1,900	)		4		(1,896	)
As of June 30, 2022	$	(4,580	)	$	45	$	(4,535	)

	Cumulative Foreign Currency Translation Adjustment			Cumulative Net Unrealized Gain (Loss) on Marketable Securities, Net of Tax			Accumulated Other Comprehensive Income (Loss)
As of December 31, 2020	$	(2,836	)	$	10		$	(2,826	)
Other comprehensive income (loss)		1,105			(4	)		1,101
As of March 31, 2021	$	(1,731	)	$	6		$	(1,725	)
Other comprehensive income (loss)		(602	)		23			(579	)
As of June 30, 2021	$	(2,333	)	$	29		$	(2,304	)

XML

Other Current and Long-Term Liabilities

6 Months Ended

Jun. 30, 2022

Other Liabilities Disclosure [Abstract]

Other Current and Long-Term Liabilities

11. OTHER CURRENT AND LONG-TERM LIABILITIES

Other current liabilities consisted of the following (in thousands):

	As of June 30,		As of December 31,
	2022		2021
Liabilities for tax other than income tax	$	1,466	$	1,210
VAT payables		36		476
Social security liabilities		578		522
Current tax liabilities		887		945
Accrued financial interest		—		139
Accrued contractual interests on Merger Convertible Notes		1,064		1,024
Capital leases		49		65
Other miscellaneous		2,247		3,893
Total other current liabilities	$	6,327	$	8,274

Other long-term liabilities consisted of the following (in thousands):

	As of June 30,		As of December 31,
	2022		2021
Warrant liability	$	78	$	889
Interest rate swaps		—		35
Capital leases		94		129
Other miscellaneous		720		787
Total other long-term liabilities	$	892	$	1,840

XML

Geographic Information

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Geographic Information

12. GEOGRAPHIC INFORMATION

Revenue by geographic area is determined on the basis of the location of the customer, unless the delivery location is triggered by concentration criteria. The Company generates its revenue primarily in the United States, India and Italy. The following table sets forth revenue by geographic area for the three and six months ended June 30, 2022 and 2021 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
United States	$	27,402	$	10,971	$	52,037	$	16,092
India		19,586		13,595		40,762		25,313
Italy		16,646		19,164		33,155		35,251
Europe (excluding Italy)		5,923		1,839		12,924		3,257
South America		5,594		2,452		11,558		2,452
Rest of the world		5,958		5,971		11,154		11,341
Total	$	81,109	$	53,992	$	161,590	$	93,706

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
United States		33.8	%		20.3	%		32.2	%		17.2	%
India		24.2	%		25.2	%		25.2	%		27.0	%
Italy		20.5	%		35.5	%		20.5	%		37.6	%
Europe (excluding Italy)		7.3	%		3.4	%		8.0	%		3.5	%
South America		6.9	%		4.5	%		7.2	%		2.6	%
Rest of the world		7.3	%		11.1	%		6.9	%		12.1	%

As of June 30, 2022, the majority of the Company’s long-lived assets are located in United States and Italy. The following table sets forth long-lived assets by geographic area as of June 30, 2022 and December 31, 2021 (in thousands):

	As of June 30,		As of December 31,
	2022		2021
United States	$	10,611	$	10,027
Italy		4,567		4,391
India		4,552		3,778
Rest of the world		654		615
Total	$	20,384	$	18,811

	As of June 30,			As of December 31,
	2022			2021
United States		52.1	%		53.3	%
Italy		22.4	%		23.3	%
India		22.3	%		20.1	%
Rest of the world		3.2	%		3.3	%

XML

Commitments and Contingencies

6 Months Ended

Jun. 30, 2022

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

13. COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Company entered into various operating lease agreements that expire over various years in the next seven years. The Company’s Milan office lease contains an option to renew the lease for six years under terms and conditions set forth in the lease agreement. Certain of the Company’s leases contain provisions for rental adjustments. Operating lease rentals are expensed on a straight-line basis over the life of the lease beginning on the date the Company takes possession of the property. Rent expense was $399,000 and $249,000 for the three months ended June 30, 2022 and 2021, respectively. Rent expense was $819,000 and $441,000 for the six months ended June 30, 2022 and 2021, respectively.

Future minimum lease payments under leasing obligations as of June 30, 2022 are as follows (in thousands):

	As of June 30, 2022
	Operating Leases		Capital Leases		Total
2022 (remaining six months)	$	1,081	$	27	$	1,108
2023		888		55		943
2024		767		55		822
2025		735		16		751
2026		563		—		563
2027 and thereafter		576		—		576
Total minimum lease payments	$	4,610	$	153	$	4,763

Future minimum lease payment under capital leases as of June 30, 2022 consisted of the following (in thousands):

	As of June 30, 2022
	Capital Leases
Total payments	$	153
Less: interest portion		10
Net capital lease obligation	$	143
Less: current portion		49
Long term portion	$	94

The current and long-term portion of the future minimum lease payments under capital lease are included in the condensed consolidated balance sheet line item “Other current liabilities” and “Other long-term liabilities”, respectively.

Contingencies

As of June 30, 2022, the Company had contingent liabilities of $119,000, relating to a tax appeal of Solutions Infini for which no provision was recognized as its occurrence was deemed remote.

XML

Restricted Stock Units

6 Months Ended

Jun. 30, 2022

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Restricted Stock Units

14. RESTRICTED STOCK UNITS (RSUs)

The following table sets forth the activity related to the number of outstanding RSUs for the six months ended June 30, 2022:

	Number of shares			Weighted- average grant date fair value (per share)
Non-vested as of December 31, 2021		4,374,021		$	10.33
Vested		(2,311,039	)	$	7.04
Granted		2,927,186		$	5.66
Cancelled		(191,818	)	$	9.97
Non-vested as of June 30, 2022		4,798,350		$	9.08

RSUs compensation expense for the three and six months ended June 30, 2022 was $8.5 million and $15.2 million, respectively, which was recorded as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Research and development	$	1,602	$	806	$	2,622	$	1,777
Sales and marketing		1,162		866		1,945		1,388
General and administrative		5,726		3,038		10,682		6,105
Total	$	8,490	$	4,710	$	15,249	$	9,270

As of June 30, 2022, there was $21.1 million of unrecognized compensation cost related to non-vested RSUs to be recognized over a weighted-average remaining period of 1.39 years.

XML

Income Taxes

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

15. INCOME TAXES

The tax expense and the effective tax rate resulting from operations were as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Loss before income taxes	$	(15,932	)	$	(11,895	)	$	(28,413	)	$	(22,219	)
Income tax expense (benefit)		(95	)		(7,408	)		596			(7,374	)
Effective tax rate		0.60	%		62.28	%		(2.10	%)		33.19	%

The decrease in the effective tax rate for the three and six months ended June 30, 2022, as compared to three and six months ended June 30, 2021, is mainly driven by the release of the valuation allowance related to previously reserved deferred tax assets following the mGage acquisition in the prior period.

The Company’s recorded effective tax rate is less than the U.S. statutory rate primarily due to the valuation allowance caused by a reduction in deferred tax liabilities, current tax expense in tax jurisdictions that provide for a valuation allowance, and foreign tax rate differentials from the U.S. domestic statutory tax rate.

The Company currently has valuation allowances recorded against its deductible temporary differences and net operating loss carryforwards in certain jurisdictions where the non-realizability of such deferred tax assets is concluded to be more likely than not. Each quarter, the Company evaluates all available evidence to assess the recoverability of its deferred tax assets in each jurisdiction, including significant events and transactions, both positive and negative, and the reversal of taxable temporary differences and forecasted earnings. As a result of the Company’s analysis, management concluded that it is more likely than not that a portion of its deferred tax assets will not be realized. Therefore, the Company continues to provide a valuation allowance against its deferred tax assets in certain jurisdictions. The Company continues to monitor available evidence and may reverse some or all of its remaining valuation allowance in future periods, if appropriate.

As of January 1, 2022, new tax regulations are in place in the US. In order to fully comply with internal revenue requirements, research and development expenses can no longer be deducted when incurred but instead they will be capitalized only for tax purposes and they will be amortized over a five or fifteen-year period.

Under the acquisition method of accounting for business combinations, if changes are identified to acquired deferred tax asset valuation allowances or liabilities related to uncertain tax positions during the measurement period, and they are related to new information obtained about facts and circumstances that existed as of the acquisition date, those changes are considered a measurement-period adjustment, and offsets to goodwill are recorded. Kaleyra US, Inc.’s acquired deferred tax asset valuation measurement period is now closed as of June 30, 2022. All pre-acquisition income tax return filings were filed.

XML

Warrants

6 Months Ended

Jun. 30, 2022

Warrants And Rights Note Disclosure [Abstract]

Warrants

16. WARRANTS

The Company’s warrants are only exercisable for whole shares at $11.50 per share. Under the terms of the warrant agreement dated December 12, 2017 (the “Warrant Agreement”), the Company agreed to use its best efforts to file a new registration statement following the completion of the Business Combination, for the registration of the shares of common stock issuable upon exercise of the warrants. That registration statement was filed by the Company on May 4, 2020 and declared effective by the SEC on May 8, 2020. No fractional shares are issuable upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, the Company will, upon exercise, round down to the nearest whole number for the number of shares of common stock to be issued to the warrant holder. Each warrant became exercisable 30 days after the completion of the Business Combination and will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation. Once the warrants became exercisable, the Company could redeem the outstanding warrants in whole and not in part at a price of $0.01 per warrant upon a minimum of 30 days’ prior written notice of redemption, only in the event that the last sale price of the Company’s shares of common stock equals or exceeds $18.00 per share for any 20 trading days within the 30-trading day period ending on the third trading day before the Company sends the notice of redemption to the warrant holders.

On April 12, 2021, the SEC issued a SEC Staff Statement on “Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”) (the “SEC Staff Statement”). The SEC Staff Statement addresses certain accounting and reporting considerations related to warrants of a kind similar to those issued by the Company at the time of its initial public offering in December 2019. Based on ASC 815-40, “Contracts in Entity’s Own Equity”, warrant instruments that do not meet the criteria to be considered indexed to an entity’s own stock shall be initially classified as liabilities at their estimated fair values. In periods subsequent to issuance, changes in the estimated fair value of the derivative instruments should be reported in the consolidated statements of operations. Following the SEC Staff Statement, management evaluated the fact pattern set forth within the Company’s Warrant Agreement and concluded that the warrants issued in connection with private placements that occurred in December 2017 and January 2018 concurrently with its initial public offering (the “Private Placement Warrants”) should have been recorded as a liability at fair value as the Private Placement Warrants were not considered to be indexed to the entity’s own stock. Because the transfer of

Private Placement Warrants to anyone other than the initial purchasers or their permitted transferees would result in the Private Placement Warrants having substantially the same terms as warrants issued in the Company’s initial public offering, management determined that the fair value of each Private Placement Warrant approximated the fair value of its publicly traded warrants.

Management analyzed the impact of this error on the Company’s prior consolidated financial statements beginning from the date when the Private Placement Warrants were issued and concluded that the adjustments were immaterial to any period presented in previously issued consolidated financial statements and corrected this error in the three months ended March 31, 2021.

During the three and six months ended June 30, 2022, the Company recorded $276,000 and $810,000, respectively, in “Financial expense, net” on the condensed consolidated statements of operation for the change in fair value of the Private Placement Warrants.

On August 24, 2021, the Company entered into Warrant Repurchase Agreements with certain holders to repurchase warrants held by these holders for the purchase of an aggregate amount of 1,684,470 shares of the Company’s common stock. The warrants were initially issued by the Company in its initial public offering on December 7, 2017. Pursuant to the Warrant Repurchase Agreements, on August 27, 2021, the Company paid $3.25 per underlying share of common stock to repurchase these warrants, at an aggregate purchase price of $5.5 million for the surrender and cancellation of these warrants held by such holders.

As of June 30, 2022, there were 5,440,662 warrants outstanding.

XML

Net Loss Per Share

6 Months Ended

Jun. 30, 2022

Earnings Per Share [Abstract]

Net Loss Per Share

17. NET LOSS PER SHARE

The following table sets forth the calculation of basic and diluted net loss per share during the period presented (in thousands, except share and per share data):

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Net loss	$	(15,837	)	$	(4,487	)	$	(29,009	)	$	(14,845	)
Weighted average shares used to compute net loss per common share, basic and diluted		43,410,858			34,292,874			42,829,188			32,328,909
Net loss per common share, basic and diluted	$	(0.36	)	$	(0.13	)	$	(0.68	)	$	(0.46	)

The Company generated a net loss for each of the three and six months ended June 30, 2022 and 2021. Accordingly, the effect of dilutive securities is not considered in the net loss per share for such periods because their effect would be anti-dilutive on the net loss per share.

For the three months ended June 30, 2022, the weighted average number of outstanding shares of common stock equivalents, which were excluded from the calculation of the diluted net loss per share as their effect would be anti-dilutive, was 10,338,759, and 10,653,658 for the three months ended June 30, 2021.

For the six months ended June 30, 2022, the weighted average number of outstanding shares of common stock equivalents, which were excluded from the calculation of the diluted net loss per share as their effect would be anti-dilutive, was 10,096,382, and 11,679,120 for the six months ended June 30, 2021.

XML

Transactions with Related Parties

6 Months Ended

Jun. 30, 2022

Related Party Transactions [Abstract]

Transactions with Related Parties

18. TRANSACTIONS WITH RELATED PARTIES

During the three and six months ended June 30, 2022 and 2021, related party transactions, other than compensation and similar arrangements in the ordinary course of business, were as follows:

i. Unsecured convertible promissory notes, received by Esse Effe and Maya at the closing of the Business Combination, pursuant to the terms of the Stock Purchase Agreement. Maya is affiliated with Dario Calogero and the shares are beneficially owned by a shareholder, Mr. Calogero, who is the Chief Executive Officer and a director of the Company. Esse Effe is affiliated with Dr. Emilio Hirsch, and its shares are beneficially owned by Dr. Hirsch, a shareholder and a director of the Company. Under the terms of Business Combination Convertible Notes, the previously outstanding principal balance of these notes, plus all accrued and unpaid interest, became due and payable following the private placement equity financing event in support for the consummation of the Merger Agreement for the acquisition of mGage of June 1, 2021. The outstanding principal amount of $3.8 million plus accrued interest of $84,000 was paid in full on June 2, 2021 and the obligation terminated pursuant to its terms. No outstanding amount was due by the Company as of June 30, 2022. See Note 9 – Notes Payable – for additional information;

ii. Legal services rendered by a partner of Studio Legale Chiomenti, a family member of a key manager of the Company. Costs incurred by the Company for the above services were zero and $12,000, respectively, in the three and six months ended June 30, 2022 (zero and $80,000, respectively, in the three and six months ended June 30, 2021);

iii. Alessandra Levy, the spouse of the Company’s Chief Executive Officer, Dario Calogero, is an employee within the marketing team of Kaleyra S.p.A. Ms. Levy received salary and benefits in the amount of $57,000 and $113,000, respectively, for the three and six months ended June 30, 2022 ($63,000 and $123,000, respectively, in the three and six months ended June 30, 2021);

iv. Pietro Calogero, the son of the Company’s Chief Executive Officer, Dario Calogero, is an employee within the research and development team of Kaleyra S.p.A. Mr. Pietro Calogero received salary and benefits in the amount of $18,000 and $28,000, respectively, for the three and six months ended June 30, 2022 ($13,000 and $25,000, respectively, in the three and six months ended June 30, 2021); and

The following table presents the expenses for transactions with related parties reported in the condensed consolidated statements of operations (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Research and development	$	18	$	13	$	28	$	25
Sales and marketing		57		63		113		123
General and administrative		—		—		12		80
Financial expense, net		—		19		—		63

XML

Revenue

6 Months Ended

Jun. 30, 2022

Revenue From Contract With Customer [Abstract]

Revenue

19. REVENUE

Revenue Recognition

Revenue is recognized upon transfer of control of promised products or services to customers using the Company’s Platforms in an amount that reflects the consideration Kaleyra expects to receive in exchange for those products or services. Kaleyra enters into contracts that can include various combinations of products and services, which are generally not capable of being distinct and are therefore accounted for as a series of distinct services under a single performance obligation in accordance with ASC 606-10-25-14 and ASC 606-10-25-15.

Revenue is recognized net of allowances for any credits and any taxes collected from customers, which are subsequently remitted to governmental authorities.

Kaleyra determines revenue recognition through the following steps:

• Identification of the contract, or contracts, with a customer;

• Identification of the performance obligations in the contract;

• Determination of the transaction price;

• Allocation of the transaction price to the performance obligations in the contract; and

• Recognition of revenue when, or as, the Company satisfies a performance obligation.

No significant judgments are required in determining whether products and services are considered distinct performance obligations and should be accounted for separately versus together, or to determine the stand-alone selling price.

Kaleyra’s arrangements do not contain general rights of return. The contracts do not provide customers with the right to take possession of the software supporting the applications. Amounts that have been invoiced are recorded in trade receivables and in revenue or deferred revenue depending on whether the revenue recognition criteria have been met.

Nature of Products and Services

Kaleyra's revenue is primarily derived from usage-based fees earned from the sale of communications services offered through access to the Company’s Platforms typically to large enterprises as well as medium-sized customers.

Revenue is recognized upon the sending of a SMS, a voice pulse (a measurement unit of call duration, typically of thirty or sixty seconds), a license attributed to a user for the platform usage, message or by the authentication of a financial transaction of an end-

user of the Company’s customer using the Company’s Platforms in an amount that reflects the consideration the Company expects to receive in exchange for those services which is generally based upon agreed fixed prices per unit.

Platforms access services are considered a monthly series comprised of one performance obligation and usage-based fees are recognized as revenue in the period in which the usage occurs. After usage occurs, there are no remaining obligations that would preclude revenue recognition. Revenue from usage-based fees represented 93% of total revenue for both the three and six months ended June 30, 2022, and (96% and 97%, respectively, of total revenue for the three and six months ended June 30, 2021).

Subscription-based fees are derived from certain term-based contracts, such as with the sales of short code subscriptions and customer support, which is generally one year. Term-based contract revenue is recognized on a ratable basis over the contractual term of the arrangement beginning on the date that the service is made available to the customer. Revenue from term-based fees represented 7% of total revenue for both the three and six months ended June 30, 2022 (4% and 3%, respectively, of total revenue for the three and six months ended June 30, 2021).

Deferred Revenue

Deferred revenue consists of advance cash payments from customers to be applied against future usage and customer billings in advance of revenues being recognized under the Company’s non-cancellable contracts. Deferred revenue is generally expected to be recognized during the succeeding 12-month period and is thus recorded as a current liability.

As of June 30, 2022 and December 31, 2021, the Company recorded $6.9 million and $9.6 million, respectively, as deferred revenue in its condensed consolidated balance sheets. In the three and six months ended June 30, 2022, the Company recognized $1.7 million and $5.6 million, respectively, of revenue in its condensed consolidated statements of operations that was included in deferred revenue as of December 31, 2021.

Disaggregated Revenue

In general, revenue disaggregated by geography is aligned according to the nature and economic characteristics of the Company’s business and provides meaningful disaggregation of the Company’s results of operations. See Note 12 – Geographic Information – for details of revenue by geographic area.

XML

Subsequent Events

6 Months Ended

Jun. 30, 2022

Subsequent Events [Abstract]

Subsequent Events

20. SUBSEQUENT EVENTS

On July 28, 2022, Kaleyra entered into a new unsecured loan agreement with Banco Popolare di Milano S.p.A. for a total principal amount of $

2.5 million (€2.5 million at the July 28, 2022 exchange rate) with a duration of 36 months and bearing interest rate equal to Euribor 3 months + 1.95%.

XML

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying condensed consolidated financial statements of the Company are unaudited, and have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, this interim quarterly financial report does not include all disclosures required by US GAAP. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, considered necessary to present fairly the financial position, results of operations and cash flows of the Company and its consolidated subsidiaries for all periods presented. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected in the future or for the full fiscal year. It is recommended that these condensed consolidated financial statements be read in conjunction with the Company’s consolidated financial statements and the notes thereto included in its 2021 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 8, 2022.

These condensed consolidated financial statements have been prepared in conformity with US GAAP applicable for an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). The JOBS Act provides, in part, that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. In particular, an emerging growth company can delay the adoption of certain accounting standards until those standards would apply to private companies. For the purpose of these condensed consolidated financial statements, the Company availed itself of an extended transition period for complying with new or revised accounting standards and, as a result, did not adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for public companies.

Liquidity

Liquidity

The Company evaluated its ability to continue as a going concern. The Company has negative cash flows from operating activities through June 30, 2022, mainly as the consequence of the payment of interest bearing on existing notes payable and bank borrowings. The condensed consolidated balance sheet as of June 30, 2022 includes total current assets of $176.6 million and total current liabilities of $105.9 million, resulting in net current assets of $70.7 million and a short-term net financial position of $60.6 million.

On February 18, 2021, and for the purposes of raising the cash portion of the consideration for the Merger, the Company entered into the PIPE Subscription Agreements with the PIPE Investors and the Convertible Note Subscription Agreements with the Convertible Note Investors. Pursuant to these agreements, and prior to the closing of the Merger on June 1, 2021, the Company issued and sold in private placements an aggregate of $105 million or 8,400,000 shares of the Company’s common stock to the PIPE Investors at $12.50 per share, and $200 million aggregate principal amount of unsecured Merger Convertible Notes, bearing interest at a rate of 6.125% per annum, payable semi-annually, in arrears on each June 1 and December 1 of each year.

Considering the effects of the financings described above and the typical financial cycle of the Company, the Company’s management believes that the Company’s cash and availability of borrowings will be sufficient to support its planned operations for at least the next 12 months from the date these condensed consolidated financial statements were issued.

Business seasonality

Business seasonality

Historically, the Company has experienced clear seasonality in its revenue generation, with slower traction in the first calendar quarter, and increasing revenues as the year progresses. The Company typically experiences higher revenues in messaging and notification services during the fourth calendar quarter. This patterned revenue generation behavior takes place due to the Company’s customers sending more messages to their end-user customers who are engaged in consumer transactions at the end of the calendar year, resulting in an increase in notifications of electronic payments, credit card transactions and e-commerce orders.

Principles of Consolidation

Principles of Consolidation

The condensed consolidated financial statements include the Company and its wholly owned subsidiaries, including Kaleyra S.p.A., Solutions Infini, Buc Mobile, mGage Europe Limited, Campaign Registry and Kaleyra US Inc., which represent its major operations. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are used for, but not limited to, revenue recognition; allowance for doubtful accounts; valuation of the Company’s stock-based awards; recoverability of goodwill, long-lived and intangible assets; capitalization and useful life of the Company’s capitalized internal-use software development costs; fair value of acquired intangible assets and goodwill; accruals, including tax related provision and valuation allowance on deferred taxes. Estimates are based on historical experience and on various assumptions that the Company believes are reasonable under current circumstances. However, future events are subject to change and best estimates and judgments may require further adjustments; therefore, actual results could differ materially from those estimates. Management periodically evaluates such estimates and they are adjusted prospectively based upon such periodic evaluation. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties, including uncertainty in the current economic environment due to the disruptive effects of global inflation, the continuing impact of the novel strain of the coronavirus (“COVID-19”) and the armed conflict between Russia and Ukraine.

Concentration of Credit Risk

Concentration of Credit Risk

Financial instruments that potentially expose the Company to a concentration of credit risk consist primarily of cash and cash equivalents, restricted cash, short-term investments and trade receivables. The Company maintains its cash and cash equivalents, restricted cash and short-term investments with financial institutions that management believes are financially sound.

The Company sells its services to a wide variety of customers. If the financial condition or results of operations of any significant customers deteriorate substantially, the Company’s operating results could be adversely affected. To reduce credit risk, management performs ongoing credit evaluations of the financial condition of significant customers. The Company maintains reserves for estimated credit losses on customer accounts when considered necessary. Actual credit losses may differ from the Company’s estimates. In both of the six months ended June 30, 2022 and 2021, there was no customer that individually accounted for more than 10% of the Company’s consolidated total revenue. As of June 30, 2022 and December 31, 2021, zero and one individual customer, respectively, accounted for more than 10% of the Company’s consolidated total trade receivables. Trade receivables accounted for by that one customer amounted to $9.6 million as of December 31, 2021.

Warrant Liability

Warrant Liability

The Company accounts for warrants for shares of the Company’s common stock that are not indexed to its own stock as liabilities at fair value on the condensed consolidated balance sheets. The warrants are subject to remeasurement at each balance sheet date and any change in fair value is recognized in “Financial expense, net” on the condensed consolidated statements of operations. The liability is included in the condensed consolidated balance sheet line item “Other long-term liabilities”. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the common stock warrants. At that time, the portion of the warrant liability related to the common stock warrants will be reclassified as additional paid-in capital.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-04 “Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation— Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815- 40) Issuer’s Accounting

for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options” which clarifies and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. An entity should measure the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as follows: i) for a modification or an exchange that is a part of or directly related to a modification or an exchange of an existing debt instrument or line-of-credit or revolving-debt arrangements (hereinafter, referred to as a “debt” or “debt instrument”), as the difference between the fair value of the modified or exchanged written call option and the fair value of that written call option immediately before it is modified or exchanged; ii) for all other modifications or exchanges, as the excess, if any, of the fair value of the modified or exchanged written call option over the fair value of that written call option immediately before it is modified or exchanged. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the amendments prospectively to modifications or exchanges occurring on or after the effective date of the amendments. The Company adopted the amendments, and the adoption did not have a material impact on its condensed consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06 “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” which is aimed to address issues identified as a result of the complexity associated with applying generally accepted accounting principles for certain financial instruments with characteristics of liabilities and equity. In addressing the complexity, the FASB focused on amending the guidance on convertible instruments and the guidance on the derivatives scope exception for contracts in an entity’s own equity. For convertible instruments, the Board decided to reduce the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models results in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The Company adopted the amendments in this update as of the beginning of its annual fiscal year 2021, which resulted in the embedded conversion features of the Merger Convertible Note not being separately recognized from the host contract pursuant to their scope exception from derivative accounting under ASC 815-10-15-74(a). Interest Make-Whole Payment feature met the definition of a derivative but did not fall within the above scope exception, nonetheless its value was de minimis and as such no amount was recorded in the consolidated financial statements at the time of the issuance of the Merger Convertible Notes nor at any subsequent reporting date.

In June 2020, the FASB issued ASU 2020-05 “Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective dates for certain entities” (“ASU 2020-05”), which provides a limited one year deferral of the effective dates of the following updates (including amendments issued after the issuance of the original update) to provide immediate, near-term relief for certain entities for whom these updates are either currently effective or imminently effective: i) ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“Revenue”); ii) ASU No. 2016-02, Leases (Topic 842) (“Leases”). The updates in ASU 2020-05 followed the updates to effective dates set forth within ASU 2019-10 “Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates” (“ASU 2019-10”). The amendments in this ASU amended certain effective dates for the above ASU 2016-02, Leases (including amendments issued after the issuance of the original ASU). The effective dates for Leases after applying ASU 2019-10 were as follows: public business entities, excluding emerging growth companies and smaller reporting companies, for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. All other entities for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. Early application continues to be allowed. In ASU 2019-10, the FASB noted that challenges associated with transition to a major update are often magnified for private companies and smaller public companies. Those challenges have been significantly amplified by the current business and capital market disruptions caused by the COVID-19 pandemic. For this reason, the FASB issued the amendments in ASU 2020-05 by deferring the effective date for one additional year for entities in the “all other” category that have not yet issued their financial statements (or made financial statements available for issuance) reflecting the adoption of Leases. Therefore, under the amendments of ASU 2020-05, Leases (Topic 842) is effective for entities within the “all other” category for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early application continues to be permitted, which means that an entity may choose to implement Leases before those deferred effective dates. The Company expects the adoption to have a material impact to the consolidated balance sheets for the recording of the "right-to-use" asset and corresponding lease liability. The Company plans to adopt ASC Topic 842 – Leases in its fiscal year ending December 31, 2022, by utilizing the modified retrospective transition approach, which will result in an estimated current period adjustment as of January 1, 2022 related to the recognition of a right-of-use asset and corresponding lease liability between $3.0 million and $4.0 million on its condensed consolidated balance sheet.

In February 2020, the FASB issued ASU 2020-02 “Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842), Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842). This ASU applies to all registrants that are creditors in loan transactions that, individually or in the aggregate, have a material effect on the registrant’s financial condition. This ASU

guidance is applicable upon a registrant’s adoption of Accounting Standards Codification (“ASC”) Topic 326. On November 15, 2019, the FASB delayed the effective date of ASC Topic 326 (ASU 2019-10), as noted below.

In November 2019, the FASB issued ASU 2019-10 “Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates”. The amendments in ASU 2019-10 amend certain effective dates for the following major ASUs (including amendments issued after the issuance of the original ASU):

a)ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (Credit Losses) (“ASU 2016-13”). The amendments in this ASU amend the mandatory effective dates for Credit Losses for all entities as follows: Public business entities that meet the definition of a SEC filer, excluding entities eligible to be smaller reporting companies, as defined by the SEC, at the time the ASU was issued, for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. All other entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early application continues to be allowed. The Company is currently evaluating the impact of this standard on its condensed consolidated financial statements.

b)ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (Hedging). The effective dates for Hedging after applying this ASU are as follows: Public business entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. All other entities for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. Early application continues to be allowed. The Company adopted the amendments in this update as of the beginning of its annual fiscal year 2021, and the adoption did not have a material impact on its condensed consolidated financial statements.

c) ASU 2016-02, Leases (Topic 842). The effective dates for Leases after applying ASU 2019-10 are as follows: public business entities, excluding emerging growth companies and smaller reporting companies, for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. All other entities for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. As noted above, the effective date of this ASU has now been delayed for one additional year by the issuance of ASU 2020-05.

In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract”. This standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The standard is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. For all other entities, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2021. The Company adopted the amendments in this update as of the beginning of its annual fiscal year 2021, and the adoption did not have a material impact on its condensed consolidated financial statements.

In August 2018, the FASB issued ASU 2018-14, “Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20)”, which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The amendments are effective for fiscal years ending after December 15, 2020 for public business entities and for fiscal years ending after December 15, 2021 for all other entities. The Company is currently evaluating the impact of this standard on its condensed consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment”, which removes the second step of the goodwill impairment test that requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The Company adopted the amendments in this update as of the beginning of its annual fiscal year 2021, and the adoption did not have a material impact on its condensed consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments”, which changes the impairment model for most financial assets. The new model uses a forward-looking expected loss method, which will generally result in earlier recognition of allowances for losses. In November 2018, the FASB issued ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments— Credit Losses”, which clarifies that receivables arising from operating leases are not within the scope of Topic 326, Financial Instruments—Credit Losses. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. These ASUs are effective for public entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, and for other entities for fiscal years beginning after December 15, 2020 and interim periods within fiscal years beginning after December 15, 2021. Earlier application is permitted. As noted above, the effective date of this ASU was delayed for two years by the issuance of ASU 2019-10. The Company is currently evaluating the impact of this standard on its condensed consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, “Leases”, which was further clarified by ASU 2018-10, “Codification Improvements to Topic 842, Leases”, and ASU 2018-11, “Leases—Targeted Improvements”, both issued in July 2018. ASU 2016-02

affects all entities that lease assets and will require lessees to recognize a lease liability and a right-of-use asset for all leases (except for short-term leases that have a duration of less than one year) as of the date on which the lessor makes the underlying asset available to the lessee. For lessors, accounting for leases is substantially the same as in prior periods. ASU 2018-10 clarifies or corrects unintended application of guidance related to ASU 2016-02. The amendment affects narrow aspects of ASU 2016-02 related to the implicit rate in the lease, impairment of the net investment in the lease, lessee reassessment of lease classification, lessor reassessment of lease term and purchase options, variable payments that depend on an index or rate and certain transition adjustments. ASU 2018-11 adds a transition option for all entities and a practical expedient only for lessors. The transition option allows entities to not apply the new lease standard in the comparative periods they present in their financial statements in the year of adoption. Under the transition option, entities can opt to continue to apply the legacy guidance in ASC 840, “Leases”, including its disclosure requirements, in the comparative prior periods presented in the year they adopt the new lease standard. Entities that elect this transition option will still be required to adopt the new leases standard using the modified retrospective transition method required by the standard, but they will recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption rather than in the earliest period presented. The new standards are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years for a public business entity. For all other entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Earlier application is permitted. As noted above, the effective date of this ASU was delayed for two years by the issuance of ASU 2019-10 as amended by ASU 2020-05.

XML

Business Combinations (Tables)

6 Months Ended

Jun. 30, 2022

Business Acquisition [Line Items]

Unaudited Supplemental Pro-forma Information

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands, except share and per share amounts)	2022			2021			2022			2021
Revenue	$	81,109		$	76,552		$	161,590		$	148,892
Net loss		(15,837	)		(5,792	)		(29,009	)		(19,772	)
Net loss per common share, basic and diluted	$	(0.36	)	$	(0.14	)	$	(0.68	)	$	(0.48	)
Weighted-average shares used in computing net loss per common share, basic and diluted		43,410,858			41,181,763			42,829,188			40,773,353

mGage

Business Acquisition [Line Items]

Summary of Fair Value Amount Recognized for Assets Acquired and Liabilities Assumed

The following table summarizes the fair value amount recognized for the assets acquired and liabilities assumed as of the acquisition date (in thousands):

Customer relationships (1)	$	76,256
Developed technology (1)		30,033
Trade names (1)		13,060
Deferred tax assets on loss carryforward		19,899
Goodwill (2)		89,391
Accounts receivable and other current assets		29,996
Property and equipment		8,450
Cash and cash equivalents		2,856
Total assets acquired		269,941
Deferred tax liabilities		30,242
Accounts payable and other current liabilities		22,665
Total liabilities assumed		52,907
Net assets acquired	$	217,034

(1) Identified finite-lived intangible assets. The estimated fair value of the intangible assets acquired was determined by the Company, which considered or relied in part upon a valuation report of a third-party expert. The Company used income approaches to estimate the fair values of the identifiable intangible assets. The estimated useful life is 7 to 9 years for customer relationships, 6 years for developed technology and 8 years for trade names.

(2) Goodwill is the excess of fair value of the consideration transferred over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed and represents expected synergies of the combination of the acquired business. Goodwill is not deductible for income tax purposes.

Bandyer

Business Acquisition [Line Items]

Summary of Fair Value Amount Recognized for Assets Acquired and Liabilities Assumed

The following table summarizes the fair value amount recognized for the assets acquired and liabilities assumed as of the acquisition date (in thousands):

Property and equipment, net	$	116
Developed technology (1)		7,999
Customer relationship (1)		1,798
Goodwill (2)		8,146
Cash and cash equivalents		349
Trade receivables and other current assets		671
Other non current assets		21
Total assets acquired		19,100
Deferred tax liabilities		2,616
Accounts payable and other current liabilities		986
Long term portion of employee benefit obligation		126
Current portion of bank and other borrowings		39
Total liabilities assumed		3,767
Net assets acquired	$	15,333

(1) Identified finite-lived intangible assets. The estimated fair value of the intangible assets acquired was determined by Kaleyra, which considered or relied in part upon a valuation report of a third-party expert. The Company used income approaches to estimate the fair values of the identifiable intangible assets. The estimated useful life is 8 years for customer relationships and 15 years for developed technology.

(2) Goodwill is the excess of fair value of the consideration transferred over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed and represents expected synergies of the combination of the acquired business. Goodwill is not deductible for income tax purposes.

XML

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables provide the assets and liabilities measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021 (in thousands):

	Fair Value Hierarchy as of June 30, 2022						Aggregate
	Level 1		Level 2		Level 3		Fair Value
Assets:
Mutual funds (1)	$	579	$	—	$	—	$	579
Certificates of deposit (2)		—		101		—		101
Interest rate swap (3)		—		8		—		8
Total Assets	$	579	$	109	$	—	$	688
Liabilities:
Warrant liability (4)	$	—	$	78	$	—	$	78
Total Liabilities	$	—	$	78	$	—	$	78

(1) Included in the condensed consolidated balance sheet line item “Short-term investments”.

(2) Included in the condensed consolidated balance sheet line item “Short-term investments”, with maturity terms between 4 and 12 months held in India.

(3) Included in the condensed consolidated balance sheet line item “Other long-term assets”.

(4) Included in the condensed consolidated balance sheet line item “Other long-term liabilities”. See Note 16 – Warrants – for further details.

	Fair Value Hierarchy as of December 31, 2021						Aggregate
	Level 1		Level 2		Level 3		Fair Value
Assets:
Mutual funds (1)	$	602	$	—	$	—	$	602
Certificates of deposit (2)		—		5,634		—		5,634
Total Assets	$	602	$	5,634	$	—	$	6,236
Liabilities
Interest rate swap (3)	$	—	$	35	$	—	$	35
Warrant liability (4)		—		889		—		889
Total Liabilities	$	—	$	924	$	—	$	924

(1) Included in the condensed consolidated balance sheet line item “Short-term investments”.

(2) Included in the condensed consolidated balance sheet line item “Short-term investments”, with maturity terms between 4 and 12 months held in India.

(3) Included in the condensed consolidated balance sheet line item “Other long-term liabilities”.

(4) Included in the condensed consolidated balance sheet line item “Other long-term liabilities”. See Note 16 – Warrants – for further details.

Summary of Values of Short-term Investments

The values of short-term investments as of June 30, 2022 and as of December 31, 2021 were as follows (in thousands):

	As of June 30, 2022								As of December 31, 2021
	Cost		Unrealized Gains		Unrealized Losses		Fair Value		Cost		Unrealized Gains		Unrealized Losses		Fair Value
Mutual funds	$	570	$	9	$	—	$	579	$	572	$	30	$	—	$	602
Certificates of deposit		101		—		—		101		5,634		—		—		5,634

XML

Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2022

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Schedule of Gain (Losses) in the Condensed Consolidated Statement of Operations Related to Derivative Contracts

The amount and location of the gains (losses) in the condensed consolidated statements of operations related to derivative contracts is as follows (in thousands):

		Three Months Ended June 30,				Six Months Ended June 30,
Derivatives Not Designed As Hedging Instruments	Line Items	2022		2021		2022		2021
Interest rate swap	Financial income (expense), net	$	20	$	28	$	42	$	41

Schedule of Fair Value Derivative Contracts Reported in Condensed Consolidated Balance Sheet

The following table presents the fair value and the location of derivative contracts reported in the condensed consolidated balance sheets (in thousands):

		As of June 30,		As of December 31,
Derivatives Not Designed As Hedging Instruments	Line Items	2022		2021
Interest rate swap	Other long-term liabilities	$	—	$	(35	)
Interest rate swap	Other long-term assets		8		—

XML

Goodwill and Intangible Assets, Net (Tables)

6 Months Ended

Jun. 30, 2022

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Goodwill

Goodwill as of June 30, 2022 and December 31, 2021 was as follows (in thousands):

Balance as of December 31, 2021	$	110,465
Purchase price adjustment in the period		3,161
Effect of exchange rate		(1,733	)
Balance as of June 30, 2022	$	111,893

Summary of Intangible Assets

Intangible assets consisted of the following (in thousands):

	As of June 30, 2022						As of December 31, 2021
	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Amortizable Intangible Assets:
Developed technology	$	39,557	$	8,452	$	31,105	$	40,416	$	5,393	$	35,023
Customer relationships		85,939		13,196		72,743		86,792		8,597		78,195
Trade names		12,981		1,758		11,223		13,060		952		12,108
Patent		141		66		75		131		61		70
Total amortizable intangible assets	$	138,618	$	23,472	$	115,146	$	140,399	$	15,003	$	125,396

Summary of Estimated Future Amortization Expense

Total estimated future amortization expense as of June 30, 2022 is as follows (in thousands):

	As of June 30, 2022
2022 (remaining six months)	$	8,333
2023		16,587
2024		16,488
2025		16,416
2026		16,345
2027 and thereafter		40,977
Total	$	115,146

XML

Other Assets (Tables)

6 Months Ended

Jun. 30, 2022

Other Assets [Abstract]

Schedule of Other Current Assets

Other current assets consisted of the following (in thousands):

	As of June 30,		As of December 31,
	2022		2021
Receivables from suppliers	$	530	$	483
Credit for tax other than income tax		112		675
Income tax receivables		216		1,195
Other receivables		578		246
Total other current assets	$	1,436	$	2,599

Schedule of Other Long-Term Assets

Other long-term assets consisted of the following (in thousands):

	As of June 30,		As of December 31,
	2022		2021
Non-current income tax credit (advances and tax reduced at sources)	$	1,148	$	53
Interest rate swaps		8		—
Miscellaneous		369		346
Total other long-term assets	$	1,525	$	399

XML

Bank and Other Borrowings (Tables)

6 Months Ended

Jun. 30, 2022

Bank And Other Borrowings [Abstract]

Summary of Long-term Bank and Other Borrowings

Long-term bank and other borrowings consist of the following (in thousands):

									Interest Nominal Rate
	As of June 30,		As of December 31,			Interest Contractual Rate			As of June 30,			As of December 31,
	2022		2021		Maturity	as of June 30, 2022			2022			2021
UniCredit S.p.A.    (Line A Tranche 1)	$	1,534	$	2,330	July 2023	Euribor 3 months + 3.10%				2.80	%		2.80	%
UniCredit S.p.A.    (Line A Tranche 2)		78		113	November 2023	Euribor 3 months + 3.10%				2.80	%		2.80	%
UniCredit S.p.A. (Line B)		1,723		2,337	May 2024	Euribor 3 months + 2.90%				2.60	%		2.60	%
UniCredit S.p.A. (Line C)		1,217		1,833	August 2023	Euribor 3 months + 3.90%				3.71	%		3.33	%
Intesa Sanpaolo S.p.A.    (Line 1)		—		290	April 2022	Euribor 3 months + 2.30%				2.11	%		1.73	%
Intesa Sanpaolo S.p.A.    (Line 2)		2,135		2,872	April 2024	Euribor 3 months + 3.10%				2.91	%		2.53	%
Intesa Sanpaolo S.p.A.    (Line 3)		8,256		8,961	June 2026	Euribor 3 months + 2.15%				1.96	%		1.58	%
Intesa Sanpaolo S.p.A.    (Line 4)		4,914		5,927	July 2026	Euribor 3 months + 2.20%				2.01	%		1.63	%
Monte dei Paschi di    Siena S.p.A. (Line 1)		—		76	April 2022		0.95	%		0.95	%		0.95	%
Monte dei Paschi di    Siena S.p.A. (Line 2)		696		1,132	June 2023		1.50	%		1.50	%		1.50	%
Banco BPM S.p.A. (Line 1)		367		593	June 2023	Euribor 3 months + 2.00%				2.00	%		2.00	%
Banco BPM S.p.A. (Line 3)		3,802		5,014	September 2024	Euribor 3 months + 3.00%				2.81	%		2.43	%
Simest 1		174		189	December 2023		0.50	%		0.50	%		0.50	%
Simest 2		173		188	December 2023		0.50	%		0.50	%		0.50	%
Simest 3		318		345	December 2023		0.50	%		0.50	%		0.50	%
Simest 4		1,122		1,218	April 2027		0.50	%		0.50	%		0.50	%
Total bank and other borrowings		26,509		33,418
Less: current portion		10,581		10,508
Total long-term portion	$	15,928	$	22,910

Summary of Payments Obliged

As of June 30, 2022, the Company is obliged to make payments as follows (in thousands):

	As of June 30, 2022
2022 (remaining six months)	$	5,334
2023		9,522
2024		5,776
2025		3,523
2026		2,214
2027 and thereafter		140
Total	$	26,509

XML

Accumulated Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2022

Equity [Abstract]

Schedule of Accumulated Balances Related to Each Component of Accumulated Other Comprehensive Loss

The accumulated balances related to each component of accumulated other comprehensive loss are as follows (in thousands):

	Cumulative Foreign Currency Translation Adjustment			Cumulative Net Unrealized Gain (Loss) on Marketable Securities, Net of Tax		Accumulated Other Comprehensive Income (Loss)
As of December 31, 2021	$	(2,046	)	$	36	$	(2,010	)
Other comprehensive income (loss)		(634	)		5		(629	)
As of March 31, 2022	$	(2,680	)	$	41	$	(2,639	)
Other comprehensive income (loss)		(1,900	)		4		(1,896	)
As of June 30, 2022	$	(4,580	)	$	45	$	(4,535	)

	Cumulative Foreign Currency Translation Adjustment			Cumulative Net Unrealized Gain (Loss) on Marketable Securities, Net of Tax			Accumulated Other Comprehensive Income (Loss)
As of December 31, 2020	$	(2,836	)	$	10		$	(2,826	)
Other comprehensive income (loss)		1,105			(4	)		1,101
As of March 31, 2021	$	(1,731	)	$	6		$	(1,725	)
Other comprehensive income (loss)		(602	)		23			(579	)
As of June 30, 2021	$	(2,333	)	$	29		$	(2,304	)

XML

Other Current and Long-Term Liabilities (Tables)

6 Months Ended

Jun. 30, 2022

Other Liabilities Disclosure [Abstract]

Schedule of Other Current Liabilities

Other current liabilities consisted of the following (in thousands):

	As of June 30,		As of December 31,
	2022		2021
Liabilities for tax other than income tax	$	1,466	$	1,210
VAT payables		36		476
Social security liabilities		578		522
Current tax liabilities		887		945
Accrued financial interest		—		139
Accrued contractual interests on Merger Convertible Notes		1,064		1,024
Capital leases		49		65
Other miscellaneous		2,247		3,893
Total other current liabilities	$	6,327	$	8,274

Schedule of Other Long-term Liabilities

Other long-term liabilities consisted of the following (in thousands):

	As of June 30,		As of December 31,
	2022		2021
Warrant liability	$	78	$	889
Interest rate swaps		—		35
Capital leases		94		129
Other miscellaneous		720		787
Total other long-term liabilities	$	892	$	1,840

XML

Geographic Information (Tables)

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Summary of Revenue by Geographic Area

The following table sets forth revenue by geographic area for the three and six months ended June 30, 2022 and 2021 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
United States	$	27,402	$	10,971	$	52,037	$	16,092
India		19,586		13,595		40,762		25,313
Italy		16,646		19,164		33,155		35,251
Europe (excluding Italy)		5,923		1,839		12,924		3,257
South America		5,594		2,452		11,558		2,452
Rest of the world		5,958		5,971		11,154		11,341
Total	$	81,109	$	53,992	$	161,590	$	93,706

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
United States		33.8	%		20.3	%		32.2	%		17.2	%
India		24.2	%		25.2	%		25.2	%		27.0	%
Italy		20.5	%		35.5	%		20.5	%		37.6	%
Europe (excluding Italy)		7.3	%		3.4	%		8.0	%		3.5	%
South America		6.9	%		4.5	%		7.2	%		2.6	%
Rest of the world		7.3	%		11.1	%		6.9	%		12.1	%

Summary of Long-lived Assets by Geographic Area

The following table sets forth long-lived assets by geographic area as of June 30, 2022 and December 31, 2021 (in thousands):

	As of June 30,		As of December 31,
	2022		2021
United States	$	10,611	$	10,027
Italy		4,567		4,391
India		4,552		3,778
Rest of the world		654		615
Total	$	20,384	$	18,811

	As of June 30,			As of December 31,
	2022			2021
United States		52.1	%		53.3	%
Italy		22.4	%		23.3	%
India		22.3	%		20.1	%
Rest of the world		3.2	%		3.3	%

XML

Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2022

Commitments And Contingencies Disclosure [Abstract]

Schedule of Future Minimum Lease Payments under Leasing Obligations

Future minimum lease payments under leasing obligations as of June 30, 2022 are as follows (in thousands):

	As of June 30, 2022
	Operating Leases		Capital Leases		Total
2022 (remaining six months)	$	1,081	$	27	$	1,108
2023		888		55		943
2024		767		55		822
2025		735		16		751
2026		563		—		563
2027 and thereafter		576		—		576
Total minimum lease payments	$	4,610	$	153	$	4,763

Schedule of Future Minimum Lease Payments under Capital Leases

Future minimum lease payment under capital leases as of June 30, 2022 consisted of the following (in thousands):

	As of June 30, 2022
	Capital Leases
Total payments	$	153
Less: interest portion		10
Net capital lease obligation	$	143
Less: current portion		49
Long term portion	$	94

XML

Restricted Stock Units (Tables) - Restricted Stock Units (RSUs)

6 Months Ended

Jun. 30, 2022

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Summary of Outstanding RSUs

The following table sets forth the activity related to the number of outstanding RSUs for the six months ended June 30, 2022:

	Number of shares			Weighted- average grant date fair value (per share)
Non-vested as of December 31, 2021		4,374,021		$	10.33
Vested		(2,311,039	)	$	7.04
Granted		2,927,186		$	5.66
Cancelled		(191,818	)	$	9.97
Non-vested as of June 30, 2022		4,798,350		$	9.08

Summary of RSUs Compensation Expense

RSUs compensation expense for the three and six months ended June 30, 2022 was $8.5 million and $15.2 million, respectively, which was recorded as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Research and development	$	1,602	$	806	$	2,622	$	1,777
Sales and marketing		1,162		866		1,945		1,388
General and administrative		5,726		3,038		10,682		6,105
Total	$	8,490	$	4,710	$	15,249	$	9,270

XML

Income Taxes (Tables)

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Schedule of Tax Expense and Effective Tax Rate Resulting from Operations

The tax expense and the effective tax rate resulting from operations were as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Loss before income taxes	$	(15,932	)	$	(11,895	)	$	(28,413	)	$	(22,219	)
Income tax expense (benefit)		(95	)		(7,408	)		596			(7,374	)
Effective tax rate		0.60	%		62.28	%		(2.10	%)		33.19	%

XML

Net Loss Per Share (Tables)

6 Months Ended

Jun. 30, 2022

Earnings Per Share [Abstract]

Schedule of Calculation of Basic and Diluted Net Loss Per Share

The following table sets forth the calculation of basic and diluted net loss per share during the period presented (in thousands, except share and per share data):

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Net loss	$	(15,837	)	$	(4,487	)	$	(29,009	)	$	(14,845	)
Weighted average shares used to compute net loss per common share, basic and diluted		43,410,858			34,292,874			42,829,188			32,328,909
Net loss per common share, basic and diluted	$	(0.36	)	$	(0.13	)	$	(0.68	)	$	(0.46	)

XML

Transactions with Related Parties (Tables)

6 Months Ended

Jun. 30, 2022

Related Party Transactions [Abstract]

Schedule of Expenses for Related Parties

The following table presents the expenses for transactions with related parties reported in the condensed consolidated statements of operations (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Research and development	$	18	$	13	$	28	$	25
Sales and marketing		57		63		113		123
General and administrative		—		—		12		80
Financial expense, net		—		19		—		63

XML

Description of Organization and Business Operations - Additional Information (Details) - USD ($)					3 Months Ended	6 Months Ended	9 Months Ended
	Aug. 30, 2021	Jul. 08, 2021	Jun. 01, 2021	Feb. 18, 2021	Sep. 30, 2021	Jun. 30, 2022	Sep. 30, 2021	Nov. 15, 2021	Jul. 01, 2021
mGage
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Acquisition date				Feb. 18, 2021		Feb. 18, 2021
Total purchase price consideration	$ 217,000,000.0		$ 218,000,000.0	$ 217,034,000
Cash consideration	199,200,000		$ 198,600,000	$ 199,200,000
Closing of business combination share consideration			1,600,000	1,600,000
Business combination, share price per share			$ 11.77
Business combination, purchase price			$ 18,800,000
Working capital adjustment	$ 997,000				$ 997,000		$ 997,000
mGage | PIPE Subscription Agreements
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Closing of business combination share consideration				8,400,000
Business combination, share price per share				$ 12.50
Business combination, purchase price				$ 200,000,000
MGage Europe Ltd
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Ownership percentage									100.00%
MGage SA DE SV
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Ownership percentage									100.00%
Bandyer Srl
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Cash consideration		$ 15,400,000
Kaleyra US Inc
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Ownership percentage								99.00%
Kaleyra Inc
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Ownership percentage								1.00%

XML

Summary of Significant Accounting Policies - Additional Information (Details) $ / shares in Units, $ in Thousands			3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 01, 2021 USD ($) $ / shares shares	Feb. 18, 2021 USD ($) $ / shares shares	Jun. 30, 2022 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2022 USD ($) Customer	Jun. 30, 2021 USD ($) Customer	Dec. 31, 2021 USD ($) Customer
Schedule Of Significant Accounting Policies [Line Items]
Total current assets			$ 176,643		$ 176,643		$ 192,180
Total current liabilities			105,930		105,930		$ 111,440
Net assets current			70,700		70,700
Short-term net financial position			60,600		60,600
Revenue			81,109	$ 53,992	161,590	$ 93,706
Minimum
Schedule Of Significant Accounting Policies [Line Items]
Right-of-use asset			$ 3,000		$ 3,000
Operating Lease Right Of Use Asset Statement Of Financial Position Extensible List			Other current assets		Other current assets
Lease liability			$ 3,000		$ 3,000
Maximum
Schedule Of Significant Accounting Policies [Line Items]
Right-of-use asset			$ 4,000		$ 4,000
Operating Lease Right Of Use Asset Statement Of Financial Position Extensible List			Other current assets		Other current assets
Lease liability			$ 4,000		$ 4,000
Customers | Customer Concentration Risk | Revenue
Schedule Of Significant Accounting Policies [Line Items]
Concentration risk percentage					10.00%	10.00%
Number of customers | Customer					0	0
Customers | Customer Concentration Risk | Trade Receivables
Schedule Of Significant Accounting Policies [Line Items]
Concentration risk percentage					10.00%		10.00%
Number of customers | Customer					0		1
Customer 1 | Customer Concentration Risk | Trade Receivables
Schedule Of Significant Accounting Policies [Line Items]
Revenue							$ 9,600
Convertible Notes
Schedule Of Significant Accounting Policies [Line Items]
Interest rate			6.125%		6.125%
Debt instrument, frequency of fee					semi-annually
mGage
Schedule Of Significant Accounting Policies [Line Items]
Acquisition date		Feb. 18, 2021			Feb. 18, 2021
Business combination, purchase price	$ 18,800
Closing of business combination share consideration | shares	1,600,000	1,600,000
Business combination, share price per share | $ / shares	$ 11.77
mGage | PIPE Subscription Agreements
Schedule Of Significant Accounting Policies [Line Items]
Business combination, purchase price		$ 200,000
Closing of business combination share consideration | shares		8,400,000
Business combination, share price per share | $ / shares		$ 12.50
mGage | PIPE Subscription Agreements | Convertible Notes
Schedule Of Significant Accounting Policies [Line Items]
Interest rate		6.125%
Debt instrument, frequency of fee		semi-annually
mGage | PIPE Subscription Agreements | Private Placements
Schedule Of Significant Accounting Policies [Line Items]
Business combination, purchase price		$ 105,000

XML

Business Combinations - Additional Information (Details)										3 Months Ended				6 Months Ended		9 Months Ended
	Apr. 04, 2022 USD ($)	Apr. 04, 2022 EUR (€)	Aug. 30, 2021 USD ($)	Jul. 08, 2021 USD ($)	Jul. 08, 2021 EUR (€)	Jul. 07, 2021 USD ($)	Jul. 07, 2021 EUR (€)	Jun. 01, 2021 USD ($) $ / shares shares	Feb. 18, 2021 USD ($) $ / shares shares	Jun. 30, 2022 USD ($)	Mar. 31, 2022 USD ($)	Sep. 30, 2021 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2021 USD ($)	Sep. 30, 2021 USD ($)	Jun. 30, 2022 EUR (€)
Business Acquisition [Line Items]
Increase (Decrease) in deferred tax liability										$ (2,000,000.0)
Increase (Decrease) in deferred tax assets										(5,100,000)
Net Income (loss)										(15,837,000)			$ (4,487,000)	$ (29,009,000)	$ (14,845,000)
Amortization of intangible assets														$ 8,800,000	2,200,000
mGage
Business Acquisition [Line Items]
Acquisition date									Feb. 18, 2021					Feb. 18, 2021
Total purchase price consideration			$ 217,000,000.0					$ 218,000,000.0	$ 217,034,000
Cash consideration			199,200,000					$ 198,600,000	$ 199,200,000
Working capital adjustment			$ 997,000									$ 997,000				$ 997,000
Business combination, share price per share | shares								1,600,000	1,600,000
Closing price of common stock in the date of issuance | $ / shares								$ 11.77
Closing price of common stock in the date of issuance								$ 18,800,000
Business Acquisition description														The Company evaluated certain assets, liabilities and tax estimates that were subject to change throughout the measurement period ended on June 1, 2022 (one year from the acquisition date).
Increase (Decrease) in deferred tax liability												(1,900,000)
Increase in goodwill										3,100,000		5,900,000
mGage | Pro-forma
Business Acquisition [Line Items]
Consolidated revenue										30,200,000			32,700,000	$ 62,300,000	64,600,000
Net Income (loss)										1,900,000			(3,900,000)	2,900,000	(7,500,000)
mGage | General and Administrative Expenses
Business Acquisition [Line Items]
Acquisition related costs															5,500,000
mGage | Acquired Developed Technology
Business Acquisition [Line Items]
Decrease in intangible assets, net												$ (8,900,000)
mGage | PIPE Subscription Agreements
Business Acquisition [Line Items]
Business combination, share price per share | shares									8,400,000
Closing price of common stock in the date of issuance | $ / shares									$ 12.50
Closing price of common stock in the date of issuance									$ 200,000,000
Kaleyra US Inc
Business Acquisition [Line Items]
Cash consideration	$ 1,100,000	€ 1,000,000.0
Consolidated revenue										30,200,000				62,300,000
Net Income (loss)										1,900,000				2,900,000
Escrow account balance										468,000				468,000			€ 451,000
Bandyer
Business Acquisition [Line Items]
Total purchase price consideration				$ 15,333,000						$ 15,400,000				$ 15,400,000
Cash consideration				$ 13,300,000	€ 11,500,000	$ 15,400,000	€ 13,000,000
Increase (Decrease) in deferred tax liability											$ 164,000
Increase in goodwill											164,000
Decrease in purchase consideration											$ 58,000
MGage and Bandyer | Pro-forma
Business Acquisition [Line Items]
Amortization of intangible assets													1,900,000		4,600,000
Amortization of intangible assets, net of related tax effect													687,000		1,700,000
Financial expenses													$ 2,400,000		$ 5,900,000

XML

Business Combinations - Summary of Fair Value Amount Recognized for Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021	Aug. 30, 2021	Jul. 08, 2021	Jun. 01, 2021	Feb. 18, 2021
Of which:
Goodwill	$ 111,893	$ 110,465
mGage
Business Acquisition [Line Items]
Property and equipment, net						$ 8,450
Of which:
Customer relationships						76,256
Developed technology						30,033
Trade names						13,060
Deferred tax assets on loss carryforward						19,899
Goodwill						89,391
Accounts receivable and other current assets						29,996
Cash and cash equivalents						2,856
Total assets acquired						269,941
Deferred tax liabilities						30,242
Accounts payable and other current liabilities						22,665
Total liabilities assumed						52,907
Net assets acquired			$ 217,000		$ 218,000	$ 217,034
Bandyer
Business Acquisition [Line Items]
Property and equipment, net				$ 116
Of which:
Customer relationships				1,798
Developed technology				7,999
Goodwill				8,146
Accounts receivable and other current assets				671
Cash and cash equivalents				349
Other non current assets				21
Total assets acquired				19,100
Deferred tax liabilities				2,616
Accounts payable and other current liabilities				986
Long term portion of employee benefit obligation				126
Current portion of bank and other borrowings				39
Total liabilities assumed				3,767
Net assets acquired	$ 15,400			$ 15,333

XML

Business Combinations - Summary of Fair Value Amount Recognized for Assets Acquired and Liabilities Assumed (Parenthetical) (Details)	Jul. 08, 2021	Feb. 18, 2021
Customer Relationships | mGage | Minimum
Business Acquisition [Line Items]
Estimated useful life		7 years
Customer Relationships | mGage | Maximum
Business Acquisition [Line Items]
Estimated useful life		9 years
Customer Relationships | Bandyer
Business Acquisition [Line Items]
Estimated useful life	8 years
Developed Technology | mGage
Business Acquisition [Line Items]
Estimated useful life		6 years
Developed Technology | Bandyer
Business Acquisition [Line Items]
Estimated useful life	15 years
Trade Names | mGage
Business Acquisition [Line Items]
Estimated useful life		8 years

XML

Business Combinations - Unaudited Supplemental Pro-forma Information (Details) - MGage and Bandyer - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Business Acquisition [Line Items]
Revenue	$ 81,109	$ 76,552	$ 161,590	$ 148,892
Net loss	$ (15,837)	$ (5,792)	$ (29,009)	$ (19,772)
Net loss per common share, basic and diluted	$ (0.36)	$ (0.14)	$ (0.68)	$ (0.48)
Weighted-average shares used in computing net loss per common share, basic and diluted	43,410,858	41,181,763	42,829,188	40,773,353

XML

Fair Value Measurements - Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Recurring Basis - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Assets:
Total Assets	$ 688	$ 6,236
Liabilities:
Total Liabilities	78	924
Mutual Fund
Assets:
Total Assets	579	602
Interest Rate Swap
Assets:
Total Assets	8
Liabilities:
Total Liabilities		35
Warrant Liability
Liabilities:
Total Liabilities	78	889
Certificates of Deposit
Assets:
Total Assets	101	5,634
Level 1
Assets:
Total Assets	579	602
Level 1 | Mutual Fund
Assets:
Total Assets	579	602
Level 2
Assets:
Total Assets	109	5,634
Liabilities:
Total Liabilities	78	924
Level 2 | Interest Rate Swap
Assets:
Total Assets	8
Liabilities:
Total Liabilities		35
Level 2 | Warrant Liability
Liabilities:
Total Liabilities	78	889
Level 2 | Certificates of Deposit
Assets:
Total Assets	$ 101	$ 5,634

XML

Fair Value Measurements - Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Parenthetical) (Details)	6 Months Ended	12 Months Ended
	Jun. 30, 2022	Dec. 31, 2021
Minimum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Short term investments maturity term	4 months	4 months
Maximum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Short term investments maturity term	12 months	12 months

XML

Fair Value Measurements - Summary of Values of Short-term Investments (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Mutual Fund
Schedule Of Available For Sale Securities [Line Items]
Short-term investments, Cost	$ 570	$ 572
Short-term investments, Unrealized Gains	9	30
Short-term investments, Fair Value	579	602
Certificates of Deposit
Schedule Of Available For Sale Securities [Line Items]
Short-term investments, Cost	101	5,634
Short-term investments, Fair Value	$ 101	$ 5,634

XML

Fair Value Measurements - Additional Information (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2022	Dec. 31, 2021
Fair Value Disclosures [Abstract]
Transfers into or out of level 2 or level 3	$ 0	$ 0

XML

Derivative Financial Instruments - Additional Information (Details) € in Millions, $ in Millions	Jun. 30, 2022 USD ($)	Jun. 30, 2022 EUR (€)	Dec. 31, 2021 USD ($)	Dec. 31, 2021 EUR (€)
Interest Rate Swap | Not Designated as Hedging Instruments
Derivative Instruments Gain Loss [Line Items]
Derivative, notional amount	$ 4.2	€ 4.0	$ 6.6	€ 5.8

XML

Derivative Financial Instruments - Schedule of Gain (Losses) in Condensed Consolidated Statement of Operations Related to Derivative Contracts (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Interest Rate Swap | Financial Income (Expense), Net
Derivative Instruments Gain Loss [Line Items]
Gain loss on interest rate derivative instruments	$ 20	$ 28	$ 42	$ 41

XML

Derivative Financial Instruments - Schedule of Fair Value Derivative Contracts Reported in Condensed Consolidated Balance Sheet (Details) - Interest Rate Swap - Not Designated as Hedging Instruments - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Other Long Term Liabilities
Derivative Instruments Gain Loss [Line Items]
Derivative on interest rate		$ (35)
Other Long Term Assets
Derivative Instruments Gain Loss [Line Items]
Derivative on interest rate	$ 8

XML

Goodwill and Intangible Assets, Net- Summary of Goodwill (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2022 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
Balance as of December 31, 2021	$ 110,465
Purchase price adjustment in the period	3,161
Effect of exchange rate	(1,733)
Balance as of June 30, 2022	$ 111,893

XML

Goodwill and Intangible Assets, Net- Summary of Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Acquired Finite Lived Intangible Assets [Line Items]
Gross	$ 138,618	$ 140,399
Accumulated Amortization	23,472	15,003
Net	115,146	125,396
Developed Technology
Acquired Finite Lived Intangible Assets [Line Items]
Gross	39,557	40,416
Accumulated Amortization	8,452	5,393
Net	31,105	35,023
Customer Relationships
Acquired Finite Lived Intangible Assets [Line Items]
Gross	85,939	86,792
Accumulated Amortization	13,196	8,597
Net	72,743	78,195
Trade Names
Acquired Finite Lived Intangible Assets [Line Items]
Gross	12,981	13,060
Accumulated Amortization	1,758	952
Net	11,223	12,108
Patent
Acquired Finite Lived Intangible Assets [Line Items]
Gross	141	131
Accumulated Amortization	66	61
Net	$ 75	$ 70

XML

Goodwill and Intangible Assets, Net - Additional Information (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Goodwill And Intangible Assets Disclosure [Abstract]
Amortization expense	$ 8.8	$ 2.2

XML

Goodwill and Intangible Assets, Net - Summary of Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Goodwill And Intangible Assets Disclosure [Abstract]
2022 (remaining six months)	$ 8,333
2023	16,587
2024	16,488
2025	16,416
2026	16,345
2027 and thereafter	40,977
Net	$ 115,146	$ 125,396

XML

Other Assets - Schedule of Other Current Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Other Assets [Abstract]
Receivables from suppliers	$ 530	$ 483
Credit for tax other than income tax	112	675
Income tax receivables	216	1,195
Other receivables	578	246
Total other current assets	$ 1,436	$ 2,599

XML

Other Assets - Schedule of Other Long-Term Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Other Assets [Line Items]
Non-current income tax credit (advances and tax reduced at sources)	$ 1,148	$ 53
Miscellaneous	369	346
Total other long-term assets	1,525	$ 399
Interest Rate Swap
Other Assets [Line Items]
Interest rate swaps	$ 8

XML

Bank and Other Borrowings - Additional Information (Details)				3 Months Ended		6 Months Ended
	Jul. 28, 2022 USD ($)	Aug. 03, 2021	Apr. 15, 2021 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2021 USD ($)	Jul. 28, 2022 EUR (€)	Dec. 31, 2021 USD ($)	Sep. 15, 2021 USD ($)	Sep. 15, 2021 EUR (€)	Apr. 15, 2021 EUR (€)
Bank and Other Borrowings [Line Items]
Current portion of bank and other borrowings, credit line facilities				$ 13,800,000		$ 13,800,000			$ 15,800,000
Current portion of bank and other borrowings				10,581,000		10,581,000			10,508,000
Lines of credit				3,182,000		3,182,000			5,256,000
Line of credit facility, maximum borrowing capacity				5,200,000		5,200,000			6,700,000
Line of credit facility, used				$ 3,200,000		$ 3,200,000			$ 5,300,000
Weighted average interest rate				1.08%		1.08%
Interest expense				$ 133,000	$ 180,000	$ 289,000	$ 370,000
Unsecured Loan Agreement
Bank and Other Borrowings [Line Items]
Debt instrument face amount	$ 2,500,000							€ 2,500,000
Debt instrument term	36 months
New General Unsecured Loan Agreement
Bank and Other Borrowings [Line Items]
Debt instrument term			6 years
Debt instrument, payment terms						The loan has a duration of six (6) years starting from the date of disbursement and is to be repaid in half-yearly installments starting after a two-year pre-amortization period.
New General Unsecured Loan Agreement | Simest S.p.A
Bank and Other Borrowings [Line Items]
Debt instrument face amount			$ 3,600,000									€ 3,000,000.0
New General Unsecured Loan Agreement | Fund for Integrated Promotion
Bank and Other Borrowings [Line Items]
Debt instrument face amount			505,000							$ 208,000	€ 176,000	422,000
New General Unsecured Loan Agreement | Fund 394/81
Bank and Other Borrowings [Line Items]
Debt instrument face amount			$ 3,100,000							$ 1,300,000	€ 1,100,000	€ 2,600,000
Debt instrument, subsidized interest rate			0.055%									0.055%
Debt instrument, reference interest rate			0.55%									0.55%
Minimum
Bank and Other Borrowings [Line Items]
Interest variable rates						0.50%
Maximum
Bank and Other Borrowings [Line Items]
Interest variable rates						2.20%
Kaleyra Inc | Unsecured Loan Agreement | Intesa San Paolo S.p.A.
Bank and Other Borrowings [Line Items]
Percentage of incremental interest rate on future payments of interest		0.50%				0.50%
Debt instrument subject to early reimbursement						$ 0

XML

Bank and Other Borrowings - Summary of Long-term Bank and Other Borrowings (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Dec. 31, 2021
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 26,509	$ 33,418
Less: current portion	10,581	10,508
Total long-term portion	15,928	22,910
UniCredit S.p.A. (Line A Tranche (1)
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 1,534	$ 2,330
Maturity	2023-07
Contractual Interest Rate	Euribor 3 months + 3.10%
Contractual Interest Rate, Percentage	3.10%
Interest Nominal Rate	2.80%	2.80%
UniCredit S.p.A. (Line A Tranche (2)
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 78	$ 113
Maturity	2023-11
Contractual Interest Rate	Euribor 3 months + 3.10%
Contractual Interest Rate, Percentage	3.10%
Interest Nominal Rate	2.80%	2.80%
UniCredit S.p.A. (Line B)
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 1,723	$ 2,337
Maturity	2024-05
Contractual Interest Rate	Euribor 3 months + 2.90%
Contractual Interest Rate, Percentage	2.90%
Interest Nominal Rate	2.60%	2.60%
UniCredit S.p.A. (Line C)
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 1,217	$ 1,833
Maturity	2023-08
Contractual Interest Rate	Euribor 3 months + 3.90%
Contractual Interest Rate, Percentage	3.90%
Interest Nominal Rate	3.71%	3.33%
Intesa Sanpaolo S.p.A. (Line 1)
Bank and Other Borrowings [Line Items]
Total Financial Liabilities		$ 290
Maturity	2022-04
Contractual Interest Rate	Euribor 3 months + 2.30%
Contractual Interest Rate, Percentage	2.30%
Interest Nominal Rate	2.11%	1.73%
Intesa Sanpaolo S.p.A. (Line 2)
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 2,135	$ 2,872
Maturity	2024-04
Contractual Interest Rate	Euribor 3 months + 3.10%
Contractual Interest Rate, Percentage	3.10%
Interest Nominal Rate	2.91%	2.53%
Intesa Sanpaolo S.p.A. (Line 3)
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 8,256	$ 8,961
Maturity	2026-06
Contractual Interest Rate	Euribor 3 months + 2.15%
Contractual Interest Rate, Percentage	2.15%
Interest Nominal Rate	1.96%	1.58%
Intesa Sanpaolo S.p.A. (Line 4)
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 4,914	$ 5,927
Maturity	2026-07
Contractual Interest Rate	Euribor 3 months + 2.20%
Contractual Interest Rate, Percentage	2.20%
Interest Nominal Rate	2.01%	1.63%
Monte dei Paschi di Siena S.p.A. (Line 1)
Bank and Other Borrowings [Line Items]
Total Financial Liabilities		$ 76
Maturity	2022-04
Contractual Interest Rate, Percentage	0.95%
Interest Nominal Rate	0.95%	0.95%
Monte dei Paschi di Siena S.p.A. (Line 2)
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 696	$ 1,132
Maturity	2023-06
Contractual Interest Rate, Percentage	1.50%
Interest Nominal Rate	1.50%	1.50%
Banco BPM S.p.A. (Line 1)
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 367	$ 593
Maturity	2023-06
Contractual Interest Rate	Euribor 3 months + 2.00%
Contractual Interest Rate, Percentage	2.00%
Interest Nominal Rate	2.00%	2.00%
Banco BPM S.p.A. (Line 3)
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 3,802	$ 5,014
Maturity	2024-09
Contractual Interest Rate	Euribor 3 months + 3.00%
Contractual Interest Rate, Percentage	3.00%
Interest Nominal Rate	2.81%	2.43%
Simest 1
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 174	$ 189
Maturity	2023-12
Contractual Interest Rate, Percentage	0.50%
Interest Nominal Rate	0.50%	0.50%
Simest 2
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 173	$ 188
Maturity	2023-12
Contractual Interest Rate, Percentage	0.50%
Interest Nominal Rate	0.50%	0.50%
Simest 3
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 318	$ 345
Maturity	2023-12
Contractual Interest Rate, Percentage	0.50%
Interest Nominal Rate	0.50%	0.50%
Simest 4
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 1,122	$ 1,218
Maturity	2027-04
Contractual Interest Rate, Percentage	0.50%
Interest Nominal Rate	0.50%	0.50%

XML

Bank and Other Borrowings - Summary of Payments Obliged (Details) $ in Thousands	Jun. 30, 2022 USD ($)
Bank And Other Borrowings [Abstract]
2022 (remaining six months)	$ 5,334
2023	9,522
2024	5,776
2025	3,523
2026	2,214
2027 and thereafter	140
Total	$ 26,509

XML

Notes Payable - Additional Information (Details)						3 Months Ended	6 Months Ended
	Jun. 02, 2021 USD ($)	Feb. 04, 2021 USD ($) shares	May 01, 2020 USD ($) shares	Apr. 16, 2020 USD ($) d $ / shares	Nov. 25, 2019 USD ($)	Jun. 30, 2022 USD ($) $ / shares shares	Jun. 30, 2022 USD ($) $ / shares shares	Dec. 31, 2021 USD ($) shares	Jun. 01, 2021 USD ($)
Debt Instrument [Line Items]
Common stock, shares issued | shares						47,142,422	47,142,422	44,831,695
Common stock value						$ 5,000	$ 5,000	$ 4,000
Warrants issued | shares			0
Long-term portion of notes payable						190,733,000	190,733,000	$ 190,147,000
Cowen Investments and Chardan
Debt Instrument [Line Items]
Debt instrument face amount			$ 2,700,000
Aggregate settlement of investment shares | shares			440,595
Cowen Investments
Debt Instrument [Line Items]
Debt instrument face amount			$ 2,300,000
Aggregate settlement of investment shares | shares			374,506
Conversion of common stock shares | shares		303,171	303,171
Business combination contingent consideration liability except accrued interest payable		$ 0
Conversion of Note, shares | shares		303,171	303,171
Chardan
Debt Instrument [Line Items]
Debt instrument face amount			$ 405,000			405,000	405,000
Aggregate settlement of investment shares | shares			66,089
Loss on settlement			$ (200,000)
Conversion of common stock shares | shares			53,501
Conversion of Note, shares | shares			53,501
Chardan | Other Current Liabilities
Debt Instrument [Line Items]
Accrued interest						44,000	44,000
Cowen and Company, LLC and Chardan Capital markets, LLC
Debt Instrument [Line Items]
Business combination transaction related costs				$ 5,400,000
Resale Registration Statement | Cowen and Company, LLC and Chardan Capital markets, LLC
Debt Instrument [Line Items]
Common stock value				$ 2,700,000
Warrants exercise price | $ / shares				$ 0.01
Beneficial ownership limitation percentage				4.99%
Settlement shares, threshold percentage				15.00%
Settlement shares, trailing days | d				10
Non-convertible Notes
Debt Instrument [Line Items]
Notes payable						$ 0	$ 0
Convertible Notes
Debt Instrument [Line Items]
Debt instrument face amount									$ 200,000,000
Debt instrument term							5 years
Interest rate						6.125%	6.125%
Conversion of common stock shares | shares							11,851,852
Debt issuance costs									$ 11,400,000
Interest Nominal Rate						6.125%	6.125%
Debt instrument, frequency of fee							semi-annually
Debt instrument, commencement date							Dec. 01, 2021
Conversion of Note, shares | shares							11,851,852
Debt instrument, convertible price per share | $ / shares						$ 16.875	$ 16.875
Debt instrument interest rate terms							i) the first anniversary of the issuance of the Merger Convertible Notes, subject to a holder’s prior right to convert, if the last reported sale price of the Kaleyra common stock exceeds 150% of the conversion price for at least 20 trading days during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter and (ii) the second anniversary of the issuance of the Merger Convertible Notes, subject to a holder’s prior right to convert, if the last reported sale price of the Kaleyra common stock exceeds 130% of the conversion price for at least 20 trading days during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter.
Derivative liabilities						$ 0	$ 0
Outstanding amount of convertible notes						190,700,000	190,700,000
Contractual interest expense						3,100,000	6,100,000
Amortization of debt issuance costs						513,000	$ 1,000,000.0
Convertible Notes | First Anniversary
Debt Instrument [Line Items]
Convertible notes, threshold percentage							150.00%
Convertible Notes | Second Anniversary
Debt Instrument [Line Items]
Convertible notes, threshold percentage							130.00%
Convertible Notes | Resale Registration Statement | Cowen and Company, LLC and Chardan Capital markets, LLC
Debt Instrument [Line Items]
Convertible notes				$ 2,700,000
Debt instrument term				3 years
Repaid earlier interest rate issuance term				1 year
Repaid after interest rate issuance term				2 years
Interest rate				5.00%
Convertible notes, threshold percentage				5.00%
Convertible notes, trailing days | d				10
Interest Nominal Rate				5.00%
Convertible Notes
Debt Instrument [Line Items]
Outstanding principal balance							50.00%
Proceeds of equity financing in an aggregate gross amount						$ 105,000,000.0	$ 105,000,000.0
Common stock, shares issued | shares						8,400,000	8,400,000
Common stock issued per share | $ / shares						$ 12.50	$ 12.50
Esse Effe S.p.A
Debt Instrument [Line Items]
Cash consideration					$ 6,000,000.0
Debt instrument face amount	$ 3,800,000
Debt instrument, accrued interest	84,000,000
Esse Effe S.p.A | Convertible Notes
Debt Instrument [Line Items]
Business combination convertible notes						$ 0	$ 0
Esse Effe S.p.A | Convertible Notes
Debt Instrument [Line Items]
Notes payable						3,000,000.0	3,000,000.0
Accrued interest						176,000	176,000
Maya
Debt Instrument [Line Items]
Cash consideration					$ 1,500,000
Maya | Convertible Notes
Debt Instrument [Line Items]
Business combination convertible notes						0	0
Maya | Convertible Notes
Debt Instrument [Line Items]
Notes payable						750,000	750,000
Accrued interest						44,000	44,000
Debt instrument face amount	3,800,000
Debt instrument, accrued interest	$ 84,000,000
Wilmington Trust National Association | Convertible Notes
Debt Instrument [Line Items]
Debt issuance costs						$ 200,000,000	$ 200,000,000

XML

Accumulated Accumulated Other Comprehensive Loss - Schedule of Accumulated Balances Related to Each Component of Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2021	Mar. 31, 2021
Cumulative Foreign Currency Translation Adjustment
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	$ (2,680)	$ (2,046)	$ (1,731)	$ (2,836)
Other comprehensive income (loss)	(1,900)	(634)	(602)	1,105
Ending balance	(4,580)	(2,680)	(2,333)	(1,731)
Cumulative Net Unrealized Gain (Loss) on Marketable Securities, Net of Tax
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	41	36	6	10
Other comprehensive income (loss)	4	5	23	(4)
Ending balance	45	41	29	6
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	(2,639)	(2,010)	(1,725)	(2,826)
Other comprehensive income (loss)	(1,896)	(629)	(579)	1,101
Ending balance	$ (4,535)	$ (2,639)	$ (2,304)	$ (1,725)

XML

Other Current and Long-Term Liabilities - Other Current Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Other Liabilities Current [Abstract]
Liabilities for tax other than income tax	$ 1,466	$ 1,210
VAT payables	36	476
Social security liabilities	578	522
Current tax liabilities	887	945
Accrued financial interest		139
Accrued contractual interests on Merger Convertible Notes	1,064	1,024
Capital leases	$ 49	$ 65
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Total other current liabilities	Total other current liabilities
Other miscellaneous	$ 2,247	$ 3,893
Total other current liabilities	$ 6,327	$ 8,274

XML

Other Current and Long-Term Liabilities - Other Long-Term Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Other Liabilities Noncurrent [Line Items]
Warrant liability	$ 78	$ 889
Capital leases	$ 94	$ 129
Finance Lease Liability Noncurrent Statement Of Financial Position Extensible List	Total other long-term liabilities	Total other long-term liabilities
Other miscellaneous	$ 720	$ 787
Total other long-term liabilities	$ 892	1,840
Interest Rate Swap
Other Liabilities Noncurrent [Line Items]
Interest rate swaps		$ 35

XML

Geographic Information - Summary of Revenue by Geographic Area (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Segment Reporting Information [Line Items]
Revenue	$ 81,109	$ 53,992	$ 161,590	$ 93,706
Italy
Segment Reporting Information [Line Items]
Revenue	$ 16,646	$ 19,164	$ 33,155	$ 35,251
Italy | Geographic Concentration Risk | Revenue
Segment Reporting Information [Line Items]
Concentration risk percentage	20.50%	35.50%	20.50%	37.60%
India
Segment Reporting Information [Line Items]
Revenue	$ 19,586	$ 13,595	$ 40,762	$ 25,313
India | Geographic Concentration Risk | Revenue
Segment Reporting Information [Line Items]
Concentration risk percentage	24.20%	25.20%	25.20%	27.00%
United States
Segment Reporting Information [Line Items]
Revenue	$ 27,402	$ 10,971	$ 52,037	$ 16,092
United States | Geographic Concentration Risk | Revenue
Segment Reporting Information [Line Items]
Concentration risk percentage	33.80%	20.30%	32.20%	17.20%
Europe (excluding Italy)
Segment Reporting Information [Line Items]
Revenue	$ 5,923	$ 1,839	$ 12,924	$ 3,257
Europe (excluding Italy) | Geographic Concentration Risk | Revenue
Segment Reporting Information [Line Items]
Concentration risk percentage	7.30%	3.40%	8.00%	3.50%
South America
Segment Reporting Information [Line Items]
Revenue	$ 5,594	$ 2,452	$ 11,558	$ 2,452
South America | Geographic Concentration Risk | Revenue
Segment Reporting Information [Line Items]
Concentration risk percentage	6.90%	4.50%	7.20%	2.60%
Rest of the World
Segment Reporting Information [Line Items]
Revenue	$ 5,958	$ 5,971	$ 11,154	$ 11,341
Rest of the World | Geographic Concentration Risk | Revenue
Segment Reporting Information [Line Items]
Concentration risk percentage	7.30%	11.10%	6.90%	12.10%

XML

Geographic Information - Summary of Long-lived Assets by Geographic Area (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2022	Dec. 31, 2021
Segment Reporting Information [Line Items]
Long-lived assets	$ 20,384	$ 18,811
Italy
Segment Reporting Information [Line Items]
Long-lived assets	$ 4,567	$ 4,391
Italy | Geographic Concentration Risk | Long-Lived Assets
Segment Reporting Information [Line Items]
Long-lived assets, Percentage	22.40%	23.30%
India
Segment Reporting Information [Line Items]
Long-lived assets	$ 4,552	$ 3,778
India | Geographic Concentration Risk | Long-Lived Assets
Segment Reporting Information [Line Items]
Long-lived assets, Percentage	22.30%	20.10%
United States
Segment Reporting Information [Line Items]
Long-lived assets	$ 10,611	$ 10,027
United States | Geographic Concentration Risk | Long-Lived Assets
Segment Reporting Information [Line Items]
Long-lived assets, Percentage	52.10%	53.30%
Rest of the World
Segment Reporting Information [Line Items]
Long-lived assets	$ 654	$ 615
Rest of the World | Geographic Concentration Risk | Long-Lived Assets
Segment Reporting Information [Line Items]
Long-lived assets, Percentage	3.20%	3.30%

XML

Commitments and Contingencies - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Other Commitments [Line Items]
Operating lease, rent expense	$ 399,000	$ 249,000	$ 819,000	$ 441,000
Amount of contingent liabilities payable	$ 119,000		119,000
Provision for contingent liabilities			$ 0
Milan office
Other Commitments [Line Items]
Operating lease, option to renew			true
Operating lease, renewal term	6 years		6 years

XML

Commitments and Contingencies - Schedule of Future Minimum Lease Payments under Leasing Obligations (Details) $ in Thousands	Jun. 30, 2022 USD ($)
Operating Lease Liabilities Payments Due [Abstract]
Operating leases, 2022 (remaining six months)	$ 1,081
Operating leases, 2023	888
Operating leases, 2024	767
Operating leases, 2025	735
Operating leases, 2026	563
Operating leases, 2027 and thereafter	576
Total minimum lease payments	4,610
Capital leases, 2022 (remaining six months)	27
Capital leases, 2023	55
Capital leases, 2024	55
Capital leases, 2025	16
Total minimum capital lease payments	153
2022 (remaining six months)	1,108
2023	943
2024	822
2025	751
2026	563
2027 and thereafter	576
Total minimum lease payments	$ 4,763

XML

Commitments and Contingencies - Schedule of Future Minimum Lease Payments under Capital Leases (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Operating Lease Liabilities Payments Due [Abstract]
Total payments	$ 153
Less: interest portion	10
Net capital lease obligation	143
Less: current portion	49
Long term portion	$ 94	$ 129

XML

Restricted Stock Units - Summary of Outstanding RSUs (Details) - Restricted Stock Units (RSUs)	6 Months Ended
	Jun. 30, 2022 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares, Non-vested as of December 31, 2021 | shares	4,374,021
Number of shares, Shares vested | shares	(2,311,039)
Number of shares, Shares granted | shares	2,927,186
Number of shares, Shares cancelled | shares	(191,818)
Number of shares, Non-vested as of March 31 2022 | shares	4,798,350
Weighted-average grant date fair value (per share), Non-vested as of December 31, 2020 | $ / shares	$ 10.33
Weighted-average grant date fair value (per share), Vested | $ / shares	7.04
Weighted-average grant date fair value (per share), Granted | $ / shares	5.66
Weighted-average grant date fair value (per share), Cancelled | $ / shares	9.97
Weighted-average grant date fair value (per share), Non-vested as of September 30, 2021 | $ / shares	$ 9.08

XML

Restricted Stock Units - Additional Information (Details) - Restricted Stock Units (RSUs) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended
	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Compensation expense	$ 8,490		$ 4,710	$ 15,249	$ 9,270
Unrecognized compensation cost	$ 21,100			$ 21,100
Unrecognized compensation cost weighted-average remaining period		1 year 4 months 20 days

XML

Restricted Stock Units - Summary of RSUs Compensation Expense (Details) - Restricted Stock Units (RSUs) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total	$ 8,490	$ 4,710	$ 15,249	$ 9,270
Research and Development
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total	1,602	806	2,622	1,777
Sales and Marketing
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total	1,162	866	1,945	1,388
General and Administrative
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total	$ 5,726	$ 3,038	$ 10,682	$ 6,105

XML

Income Taxes - Schedule of Tax Expense and Effective Tax Rate Resulting from Operations (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Income Tax Disclosure [Abstract]
Loss before income taxes	$ (15,932)	$ (11,895)	$ (28,413)	$ (22,219)
Income tax expense (benefit)	$ (95)	$ (7,408)	$ 596	$ (7,374)
Effective tax rate	0.60%	62.28%	(2.10%)	33.19%

XML

Income Taxes - Additional Information (Details)	6 Months Ended
	Jun. 30, 2022
Minimum
Income Taxes [Line Items]
Research and development expenses amortization period	5 years
Maximum
Income Taxes [Line Items]
Research and development expenses amortization period	15 years

XML

Warrants - Additional Information (Details) - USD ($)		3 Months Ended	6 Months Ended
	Aug. 24, 2021	Jun. 30, 2022	Jun. 30, 2022
Warrant
Class Of Warrant Or Right [Line Items]
Warrants exercisable price per share		$ 11.50	$ 11.50
Warrant agreement date			Dec. 12, 2017
Number of fractional shares issued upon exercise of warrants			0
Period after business combination when warrants become exercisable			30 days
Warrants exercisable expiration period after completion of business combination			5 years
Redemption price per warrant		0.01	$ 0.01
Minimum period of prior written notice of redemption of warrants			30 days
Minimum price per share required for redemption of warrants		$ 18.00	$ 18.00
Warrants redemption covenant, threshold trading days			20 days
Warrants redemption covenant, threshold consecutive trading days			30 days
Change in fair value of private placement warrants		$ 276,000	$ 810,000
Warrants exercise price		$ 11.50	$ 11.50
Warrants or rights outstanding		5,440,662	5,440,662
Warrant Repurchase Agreements
Class Of Warrant Or Right [Line Items]
Warrants exercisable price per share	$ 3.25
Aggregate amount of shares that can be purchased by warrants	1,684,470
Warrants exercise price	$ 3.25
Aggregate purchase price of warrants	$ 5,500,000

XML

Net Loss Per Share - Schedule of Calculation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Earnings Per Share [Abstract]
Net loss	$ (15,837)	$ (4,487)	$ (29,009)	$ (14,845)
Weighted-average shares used in computing net loss per common share, basic	43,410,858	34,292,874	42,829,188	32,328,909
Weighted-average shares used in computing net loss per common share,diluted	43,410,858	34,292,874	42,829,188	32,328,909
Net loss per common share, basic	$ (0.36)	$ (0.13)	$ (0.68)	$ (0.46)
Net loss per common share, diluted	$ (0.36)	$ (0.13)	$ (0.68)	$ (0.46)

XML

Net Loss Per Share - Additional Information (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Earnings Per Share [Abstract]
Weighted-average number of outstanding shares of common stock excluded from calculation of diluted net loss per share	10,338,759	10,653,658	10,096,382	11,679,120

XML

Transactions with Related Parties - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Jun. 02, 2021
Studio Legale Chiomenti | Legal Services
Related Party Transaction [Line Items]
Cost incurred for related party services	$ 0	$ 0	$ 12,000	$ 80,000
Esse Effe and Maya
Related Party Transaction [Line Items]
Notes payable outstanding principal amount due	0		0		$ 3,800,000
Alessandra Levy | Kaleyra S.p.A
Related Party Transaction [Line Items]
Cost incurred for related party services	57,000	63,000	113,000	123,000
Pietro Calogero | Kaleyra S.p.A
Related Party Transaction [Line Items]
Cost incurred for related party services	$ 18,000	$ 13,000	$ 28,000	$ 25,000
Accrued Interest | Esse Effe and Maya
Related Party Transaction [Line Items]
Notes payable outstanding principal amount due					$ 84,000

XML

Transactions with Related Parties - Schedule of Expenses for Related Parties (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Research and Development
Related Party Transaction [Line Items]
Expenses for related parties	$ 18	$ 13	$ 28	$ 25
Sales and Marketing
Related Party Transaction [Line Items]
Expenses for related parties	$ 57	63	113	123
General and Administrative Expenses
Related Party Transaction [Line Items]
Expenses for related parties			$ 12	80
Financial Expense, Net
Related Party Transaction [Line Items]
Expenses for related parties		$ 19		$ 63

XML

Revenue - Additional Information (Details) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022 USD ($)	Jun. 30, 2021	Jun. 30, 2022 USD ($)	Jun. 30, 2021	Dec. 31, 2021 USD ($)
Disaggregation Of Revenue [Abstract]
Number of performance obligations	1	1	1	1
Revenue from usage-based fees in total revenue	93.00%	96.00%	93.00%	97.00%
Subscription-based fee contractual period			1 year
Revenue from term-based fees in total revenue	7.00%	4.00%	7.00%	3.00%
Deferred revenue	$ 6.9		$ 6.9		$ 9.6
Deferred revenue, revenue recognized	$ 1.7		$ 5.6

XML

Subsequent Events - Additional Information (Details) - Jul. 28, 2022 - Unsecured Loan Agreement € in Millions, $ in Millions	USD ($)	EUR (€)
Subsequent Event [Line Items]
Debt instrument face amount	$ 2.5	€ 2.5
Contractual Interest Rate	bearing interest rate equal to Euribor 3 months + 1.95%.
Debt instrument term	36 months