Kaltura NASDAQ: KLTR reported second-quarter 2026 results above the high end of its guidance range, citing subscription revenue growth, record non-GAAP gross margin and growing early commercial activity for its artificial-intelligence products.
Total revenue for the quarter ended June 30 was $46.9 million, up 5% both sequentially and from a year earlier. Subscription revenue rose 8% year over year to $45.6 million, while professional services revenue fell 14% to $1.3 million as the company continued to emphasize recurring subscription revenue.
Adjusted EBITDA increased 44% from the prior-year period to $5.9 million, above the company’s prior guidance of $2 million to $3 million. Kaltura reported a GAAP net loss of $5.5 million, or $0.04 per diluted share, compared with a $7.8 million loss, or $0.05 per share, a year earlier. Non-GAAP net profit was $2.3 million, or $0.01 per share.
Margins and Segment Performance
GAAP gross profit was $34.5 million, producing a 74% gross margin, up 300 basis points from the second quarter of 2025. Non-GAAP gross margin reached a record 75%, including a record 79% non-GAAP subscription gross margin, according to Executive Vice President of FP&A and interim Principal Financial Officer Liron Sharon.
Sharon attributed the year-over-year margin expansion to a greater mix of higher-margin subscription revenue, operating efficiencies and unit economics.
- Enterprise, Education and Technology revenue totaled $36.8 million, up 11% year over year, while subscription revenue in the segment rose 12% to $36.4 million.
- Media and Telecom revenue was $10.1 million, down 10% from a year earlier, with subscription revenue declining 6% to $9.2 million.
- Annualized recurring revenue was $184.6 million, up 9% sequentially and 8% year over year.
- Remaining performance obligations were $164.3 million, up 6% sequentially but down 1% from the prior year. Kaltura expects to recognize 71% of that amount as revenue over the next 12 months.
Net dollar retention was 96%, compared with 95% in the first quarter and 101% in the year-earlier quarter. Sharon said the company achieved its strongest gross retention performance since the fourth quarter of 2022, though management expects some near-term pressure from legacy contracts, including anticipated roll-offs among certain PathFactory customers.
AI Bookings and Pipeline Build
Chief Executive Officer Ron Yekutiel said the quarter’s most significant development was a rise in new customer deals involving Kaltura’s AI offerings. The company signed 14 AI-related deals during the period, double its prior record. Nine involved its Agentic Avatars product, four carried six-digit total contract values, and eight were with new customers.
The deals spanned education, real estate, technology, consulting and business-process outsourcing, financial services, and media and telecommunications. Use cases included employee onboarding and training, personalized learning, customer engagement, marketing, property discovery, lead qualification and conversational advertising.
The combined total contract value of the 14 AI-related deals was about $1 million. Yekutiel said the revenue impact remains limited, describing the contracts as initial footholds that could expand to more users, business units and use cases over time. Management continues to expect initial contributions from the newer products in the second half of 2026, with a more meaningful ramp anticipated in 2027.
Kaltura said its AI-related pipeline includes more than 500 opportunities across stages of engagement, representing approximately $17 million in non-weighted potential annual contract value. The company emphasized that the figure includes opportunities that may not convert and that many discussions remain in early stages.
More than 200 pipeline opportunities involve Agentic Avatars, while nearly 100 involve the Avatar Video Production Studio. The company also cited more than 60 active or in-development proofs of concept. Roughly one-third of potential AI pipeline value is associated with personalized employee journeys, another third with learner experiences, and the remainder with customer, partner and audience-facing applications.
PathFactory Integration and Product Strategy
Kaltura continued integrating PathFactory, which it acquired to add content intelligence and customer-journey orchestration capabilities. Yekutiel said PathFactory contributed $4.9 million in second-quarter revenue, but management expects revenue from its existing customer base to decline over the next several quarters before recovering.
He said Kaltura’s strategy is not centered on selling PathFactory as a standalone product, but on using its intelligence and orchestration capabilities as part of a broader agentic platform. The company is training its sales organization and introducing two packaged offerings: Agentic Revenue Engagement and Agentic Learning and Enablement.
The revenue-engagement offering combines rich media, content intelligence and conversational AI to support buyer-intent analysis, personalized engagement, next-best-content recommendations, follow-up automation and digital sales rooms. The learning-and-enablement offering is designed to combine AI-generated learning content, conversational avatars, tutoring, coaching simulations, assessments and personalized learning paths.
Outlook Raised for Full Year
For the third quarter, Kaltura expects subscription revenue of $43.9 million to $44.6 million, total revenue of $45.8 million to $46.5 million, and adjusted EBITDA of $2 million to $3 million.
For full-year 2026, the company raised and narrowed its outlook. It now expects subscription revenue of $176.6 million to $178.6 million, representing growth of 3% to 4%; total revenue of $183 million to $185 million, up 1% to 2%; and adjusted EBITDA of $15.8 million to $17.2 million.
Kaltura ended the quarter with $35.5 million in cash equivalents and marketable securities. Net cash used in operating activities was $2 million, and Sharon said the company expects to generate operating cash flow in the third and fourth quarters, consistent with its historical seasonality.
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.
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