Kaltura Q1 Earnings Call Highlights

Key Points

• Kaltura beat Q1 guidance on both revenue and adjusted EBITDA, and posted positive operating cash flow for the first time in company history. Total revenue was $44.6 million, while adjusted EBITDA rose 37% year over year to $5.7 million.
• The company’s profitability improved even as revenue declined, with gross margin rising to 72% and operating expenses down 3% year over year. Net loss widened on non-cash and acquisition-related costs, but non-GAAP net profit came in at $2.1 million.
• Kaltura is pushing a major AI-driven strategic transition, highlighted by the PathFactory acquisition, broader conversational avatar tools, and early customer interest across enterprise, education, employee, and media use cases. Management also raised and narrowed full-year 2026 guidance, expecting gradual revenue improvement in the second half of the year.

Kaltura NASDAQ: KLTR reported first-quarter 2026 results that exceeded its guidance for revenue and adjusted EBITDA, while also generating positive operating cash flow in a first quarter for the first time in the company’s history, executives said on the company’s earnings call.

Co-founder, Chairman, President and CEO Ron Yekutiel said total revenue was $44.6 million, down 5% year over year, while subscription revenue was $43.2 million, down 4%. Adjusted EBITDA rose 37% year over year to $5.7 million, which Yekutiel described as the company’s highest first-quarter result to date.

“These results reflect continued operating discipline, improving retention trends, and steady progress as we execute on our strategic transition,” Yekutiel said.

Revenue declines, but profitability improves

Liron Sharon, executive vice president of FP&A and interim principal financial officer, said total revenue exceeded the company’s guidance range of $42.6 million to $43.4 million. Subscription revenue also topped the guided range of $41.2 million to $42 million.

Sharon attributed the year-over-year revenue decline primarily to elevated Media & Telecom churn experienced in 2025, as well as the timing of activity from a large Enterprise, Education & Technology customer that shifted from large virtual events to smaller events expected later in the year.

Professional services revenue was $1.4 million, down 50% sequentially and 31% year over year, which Sharon said was consistent with Kaltura’s focus on recurring subscription revenue.

By segment, Enterprise, Education & Technology total revenue was $34.2 million, down 1% year over year, while subscription revenue was flat at $33.7 million. Media & Telecom total revenue was $10.5 million, down 17%, and subscription revenue was $9.5 million, down 16%.

GAAP gross profit was $32.1 million, representing a gross margin of 72%, up 200 basis points from the prior-year quarter. Subscription gross margin was 77%, in line with the first quarter of 2025. GAAP operating expenses declined 3% year over year to $33.3 million, despite incremental costs tied to the eSelf acquisition and foreign exchange headwinds.

GAAP net loss was $3.8 million, or $0.03 per diluted share, compared with a net loss of $1.1 million, or $0.01 per diluted share, in the prior-year period. Sharon said the change primarily reflected non-cash and non-recurring expenses, including $3.8 million in stock-based compensation and $1.9 million in acquisition costs and other strategic initiatives. Non-GAAP net profit was $2.1 million, or $0.01 per diluted share.

Retention trends and bookings

Yekutiel said first-quarter new subscription bookings followed the company’s typical seasonal pattern and included one seven-figure deal, 14 six-figure deals and three AI-related deals. New customers included a global content delivery network, a healthcare system, two U.S. universities and a major broadcaster in the Asia-Pacific region.

He said most bookings came from expansions within Kaltura’s existing enterprise customer base across technology, financial services, healthcare, education and media.

Gross retention improved to its highest level in five quarters, according to Yekutiel. Net dollar retention was 95%, compared with 107% in the prior-year period and 97% in the fourth quarter of 2025. Sharon said the metric remains affected by last year’s Media & Telecom churn and is expected to improve as retention and bookings recover.

Remaining performance obligations were $154.5 million, flat year over year, with 67% expected to be recognized as revenue over the next 12 months. Annualized recurring revenue was $168.8 million, flat sequentially and down 3% year over year.

AI and acquisitions drive strategic transition

A central theme of the call was Kaltura’s shift from a video platform to what Yekutiel called an “AI-powered, rich agentic digital experience platform.” He said the company is combining its existing video capabilities with technologies from eSelf and PathFactory.

Kaltura completed its acquisition of PathFactory on April 1 after signing the definitive agreement during the first quarter. Yekutiel said PathFactory adds content intelligence and journey orchestration, helping enterprises understand user intent and deliver personalized digital experiences.

The company also announced general availability of its conversational avatar technology and developer tools, and moved its Avatar Video Production Studio from beta to general availability. Yekutiel said the studio enables automated creation of avatar-based video content from text and other materials. Kaltura also achieved ISO/IEC 42001 certification for artificial intelligence management systems during the quarter.

Yekutiel said the company is seeing early validation across four customer “journeys”: customers, employees, learners and audiences. Customer-facing use cases are the most advanced, with proof-of-concept discussions involving large enterprises across technology, financial services, healthcare, and media and telecom. Use cases include personalized content journeys, AI-powered conversational interfaces, digital agents for customer and partner engagement, and AI-powered sales development representative agents.

For employee use cases, Yekutiel cited interest in AI-assisted interactions, internal communications, knowledge bases and training. In education, he said universities are discussing AI tutors, teaching assistants, instructional content creation and role-play simulations. In Media & Telecom, he said conversations include recommendations, personalized viewing and conversational interfaces.

Guidance raised for 2026

For the second quarter, Kaltura expects subscription revenue of $43.3 million to $44.1 million, representing 2% to 4% year-over-year growth. Total revenue is expected to be $45.2 million to $46 million, up 2% to 3%. Adjusted EBITDA is expected to be between $2 million and $3 million.

For full-year 2026, the company raised and narrowed its guidance. Kaltura now expects subscription revenue of $174.5 million to $176.7 million, representing 1% to 3% growth, and total revenue of $182.6 million to $184.8 million, up 1% to 2%. Adjusted EBITDA is expected to be between $13.8 million and $15.2 million.

Sharon said the company expects revenue to pick up gradually throughout the year, with contributions from PathFactory and the new product portfolio beginning in the second half and becoming more meaningful in 2027. She said Media & Telecom revenue is still expected to decline year over year in 2026 due to prior churn, but new bookings and retention are expected to improve.

Executives discuss sales cycles and platform integration

During the question-and-answer portion, Needham & Company analyst Ryan Koontz asked about the expanded product portfolio and how customer engagements are changing. Yekutiel said Kaltura is seeing a pipeline of “a few dozen opportunities” around its new solutions, roughly split between North America and Europe and between upsells and new logos. He said customer journey opportunities are the largest, followed by employee, learner and audience use cases.

In response to a question from Canaccord Genuity about whether the broader platform could lengthen sales cycles, Yekutiel said he did not necessarily expect that, though he noted Kaltura has historically sold through large enterprise sales cycles.

Asked about opening the platform to AI coding agents, Yekutiel said Kaltura is enabling easier integration of its tools into enterprise workflows and third-party systems, while not open-sourcing its core technology.

“We want to enable the lowest barrier for folks to take our tools and customize them, integrate them, insert them into workflows, and have them embedded within the environments that things are happening now,” Yekutiel said.

About Kaltura NASDAQ: KLTR

Kaltura, Inc NASDAQ: KLTR is a leading provider of video technology solutions designed to empower organizations to create, manage, distribute and monetize video content at scale. The company's cloud-native platform supports an array of use cases including enterprise communications, online learning, virtual events, media delivery and over-the-top (OTT) television services. By combining open-source roots with software-as-a-service (SaaS) flexibility, Kaltura offers organizations the ability to tailor their video workflows and integrate seamlessly with existing collaboration, learning management and content management systems.

Key offerings from Kaltura include a comprehensive video management system, live streaming and video conferencing capabilities, lecture capture for educational institutions, virtual events and webinars, and turnkey OTT solutions.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.