Kaltura Q3 Earnings Call Highlights

Key Points

• Kaltura reported record Q3 revenue of $47.3 million, up 8% year over year, and adjusted EBITDA rose 45% to $6 million; both exceeded the high end of guidance.
• AI-related transactions grew to 15, worth about $3.8 million in total contract value, while quantified AI pipeline opportunities represented roughly $24 million in potential annual contract value. Management cautioned these figures include other products and are not standalone AI revenue.
• The company raised its 2026 outlook for the third time, forecasting revenue of $185 million to $185.7 million and adjusted EBITDA of $19.5 million to $20.5 million. Net dollar retention improved to 97%, though gross churn increased and is expected to remain pressured in Q4.

Kaltura NASDAQ: KLTR reported record third-quarter revenue and raised its full-year outlook for the third time in 2026, as new subscription bookings more than doubled from the prior quarter and transactions involving its artificial intelligence products increased.

Revenue for the quarter ended September 30 rose 8% year over year to $47.3 million, while subscription revenue increased 9% to $45.9 million. Both figures exceeded the high end of the company’s guidance, as did adjusted EBITDA of $6 million.

Co-Founder and CEO Ron Yekutiel said the company recorded its strongest quarter for new subscription bookings since 2024. Kaltura signed 11 transactions with total contract values of at least six figures, including three seven-figure agreements. The larger deals included expansions with existing customers and two new customer wins.

AI transactions and pipeline expand

Kaltura signed 15 transactions during the quarter that included at least one AI offering, with a combined total contract value of approximately $3.8 million, up from approximately $1 million in the second quarter. Yekutiel cautioned that those amounts represent the full value of the transactions, not standalone AI product bookings.

A substantial portion of the increase came from a seven-figure expansion with a U.S. university seeking to support digital accessibility requirements. Yekutiel said AI-powered workflow automation and metadata enrichment were key factors in the customer’s decision.

Of the 15 AI-related transactions, 12 were expansions or renewals with existing customers. Nine included Agentic Avatars or related capabilities, while eight included Content Lab; some customers adopted both.

The company’s AI-related sales pipeline included approximately 500 opportunities, roughly half of which had been assigned a potential commercial value. Those quantified opportunities represented approximately $24 million in unweighted potential annual contract value, up more than 40% sequentially. Yekutiel said the figures can include other Kaltura products and should not be interpreted as standalone AI revenue. Not all opportunities will close, he added.

Kaltura had more than 80 AI-related proofs of concept active, planned or being scoped, compared with more than 60 in the prior quarter. During the question-and-answer session, Yekutiel said most were still in the planning or scoping stages and that large enterprises need time to address AI governance, security, privacy and legal requirements.

After the quarter ended, Kaltura announced a partnership with Israel’s Ministry of Education for a one-year pilot of AI-based STEM learning involving approximately 2,000 students across 20 middle schools. The transaction was not included in the third-quarter AI figures.

Profitability improves as retention pressure persists

Adjusted EBITDA rose 45% year over year to $6 million, with the margin reaching 13%. Kaltura reported a GAAP net loss of $1.5 million, or $0.01 per diluted share, compared with a loss of $2.6 million, or $0.02 per share, a year earlier.

Annualized recurring revenue reached $184.7 million, up 9% year over year. Net dollar retention improved to 97% from 96% in the second quarter, though it matched the level reported in the third quarter of 2025.

Yekutiel said gross churn increased in the third quarter because of several legacy contracts across Kaltura and the acquired PathFactory customer base, with some pressure expected to continue in the fourth quarter. Even so, management expects consolidated gross retention for the full year to improve from 2025.

By segment, EE&T revenue rose 14% year over year to $36.9 million, while Media & Telecom revenue declined 10% to $10.3 million. The company generated $7.6 million in operating cash flow during the quarter and ended September with $41 million in cash, equivalents and marketable securities.

Full-year outlook raised

For 2026, Kaltura now expects total revenue of $185 million to $185.7 million, subscription revenue of $179 million to $179.7 million and adjusted EBITDA of $19.5 million to $20.5 million. The adjusted EBITDA forecast exceeds the $18.6 million reported in 2025, despite investments in acquisition integration and new products.

For the fourth quarter, the company projected total revenue of $46.2 million to $46.9 million, subscription revenue of $44.3 million to $45 million and adjusted EBITDA of $2 million to $3 million.

Yekutiel said revenue from the newer AI offerings remains at an early stage, but the company expects their contribution to become more meaningful in 2027. He also said AI costs could put modest short-term pressure on gross margin, while maintaining that Kaltura expects margins to grow over the longer term.

About Kaltura (NASDAQ:KLTR)

Kaltura, Inc provides cloud-based video technology and software designed to help organizations create, manage, distribute and analyze video content. Its platform serves businesses, educational institutions, media companies and other organizations that use video for communications, collaboration, training, learning and audience engagement.

The company's offerings include video management and hosting, live and on-demand streaming, virtual events, webinars, video conferencing, virtual classrooms and interactive video experiences.

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