Summary
Kaltura's first quarter of fiscal 2026 delivered a smaller top line and a wider net loss, even as operating efficiency improved. Total revenue for the quarter ended March 31, 2026 was $44.6 million, down 5% from $47.0 million in the prior-year quarter. The decline was uneven across the two reporting segments. Enterprise, Education and Technology revenue slipped 1%, while Media and Telecom revenue dropped 17%, a slide management attributed to elevated gross churn throughout 2025. Gross profit was $32.1 million, down 1.9% from $32.7 million a year earlier. Gross margin moved the other way, rising to 71.9% from 69.7%. New subscription bookings followed typical seasonal patterns, with one seven-digit and fourteen six-digit new deals plus three new AI-related deals, and the company reported its highest gross retention level in the past five quarters.
Profitability split along the GAAP and non-GAAP lines. The GAAP operating loss narrowed to $1.2 million from $1.6 million, and operating margin improved to -2.7% from -3.4%. Net loss widened to $3.8 million from $1.1 million, and diluted loss per share widened to $0.03 from $0.01. Adjusted EBITDA, a non-GAAP measure, was $5.7 million, up from $4.1 million. Non-GAAP operating profit was $4.6 million, up from $3.1 million. The gap between the two sets of numbers reflects stock-based compensation, amortization of acquired intangibles, strategic initiative costs tied to the PathFactory deal, and a change in the fair value of contingent consideration.
Cash generation was the bright spot. Operating cash flow was $0.66 million for the quarter, up from -$1.05 million in the prior-year quarter, the first positive first-quarter operating cash flow in company history. Capital expenditures were $0.06 million, down from $0.30 million. Deferred revenue was $53.9 million, essentially flat against $53.9 million a year earlier. Remaining performance obligations were $154.5 million, down 16.4% from $184.9 million, and management expects to recognize 67% of that backlog as revenue over the next 12 months. Annualized recurring revenue was $168.8 million, down 3% from $174.8 million. Net dollar retention rate was 95%, down from 107%.
Guidance points to modest growth. For the second quarter of 2026, Kaltura expects total revenue of $45.2 million to $46.0 million, subscription revenue of $43.3 million to $44.1 million, and adjusted EBITDA of $2.0 million to $3.0 million. For the full year ending December 31, 2026, the company guides to total revenue of $182.6 million to $184.8 million, subscription revenue of $174.5 million to $176.7 million, and adjusted EBITDA of $13.8 million to $15.2 million. The outlook assumes the recurring nature of the business, expected revenue timing patterns, foreign exchange trends, and investment in recently acquired AI capabilities. Kaltura also expanded its platform during the quarter, reaching general availability for its conversational Agentic Avatar and its software development kit, and announced partnerships with Cornerstone and Descript.
Risks cluster around churn and integration. Media and Telecom carries lower gross margins than Enterprise, Education and Technology, and its 17% revenue decline shows how much damage customer losses can do to the top line. The PathFactory acquisition closed on April 1, 2026, after the quarter ended, and the eSelf AI deal closed in 2025, so integration and expansion spending will weigh on near-term profitability. Management flagged foreign exchange trends and the macro-economic climate as factors behind the outlook. The company also operates under a credit agreement with financial covenants, and it said it was in compliance as of March 31, 2026.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2026 | Q4 FY2025 | QoQ | Q1 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $44.6M | $45.5M | -2.0% | $47.0M | -5.0% |
| Gross profit | $32.1M | $33.0M | -2.7% | $32.7M | -1.9% |
| Gross margin | 72.0% | 72.4% | -0.5 pp | 69.7% | +2.3 pp |
| Research & development | $10.7M | $10.9M | -1.1% | $12.1M | -11.2% |
| Sales & marketing | $11.8M | $10.4M | +13.8% | $11.9M | -0.6% |
| General & administrative | $10.7M | $10.7M | -0.0% | $10.3M | +4.3% |
| Total operating expenses | $33.3M | $32.1M | +3.8% | $34.3M | -2.9% |
| Operating income (loss) | -$1.2M | $874.0K | -240.0% | -$1.6M | +22.4% |
| Operating margin | -2.7% | 1.9% | -4.7 pp | -3.4% | +0.6 pp |
| Net income (loss) | -$3.8M | -$575.0K | -555.5% | -$1.1M | -236.8% |
| Net margin | -8.4% | -1.3% | -7.2 pp | -2.4% | -6.1 pp |
| Diluted EPS | -$0.03 | $0.00 | -$0.03 | — | — |
| Net retention rate | 95.0% | 100.0% | -5.0 pp | 107.0% | -12.0 pp |
Risks
Global economic volatility, including uncertainty around U.S. and foreign tariffs and trade barriers, rising inflation, interest rate uncertainty, supply chain issues, and political, economic, and military conditions in Israel, may disrupt financial markets and reduce the company's ability to access capital.
The Credit Agreement requires maintenance of a minimum Consolidated Adjusted EBITDA and Liquidity of at least $20.0 million as of the last day of any calendar month; as of March 31, 2026, $27.8 million was outstanding under the Term Loan Facility, with the remaining unpaid balance due December 21, 2026, and an April 2026 amendment reduced permitted Restricted Payments to zero.
Net Dollar Retention Rate was 95% for Q1 2026 versus 107% for Q1 2025, primarily reflecting the lagging impact of elevated churn in the Media & Telecom segment in 2025; M&T revenue decreased 17% to $10.5 million for Q1 2026 from $12.6 million in the prior-year quarter.
Total revenue decreased 5.0% to $44.63 million for Q1 2026 from $46.98 million in the prior-year quarter; Annualized Recurring Revenue declined 3% in Q1 2026 versus the prior-year quarter, and Remaining Performance Obligations decreased 16.4% to $154.47 million from $184.86 million.
The company completed the PathFactory acquisition in April 2026 and incurred $1.6 million of strategic initiatives expenses in Q1 2026, plus a $0.3 million change in fair value of contingent consideration, creating integration and execution risk.
Provision for income taxes increased 83% to $2.5 million for Q1 2026 from $1.3 million in the prior-year quarter, primarily due to increased tax liability related to income generated by subsidiaries organized under the laws of Israel and the United Kingdom.
Financial expenses, net increased 105% to $0.1 million of expense for Q1 2026 from $1.8 million of income in the prior-year quarter, primarily due to exchange rate differences.
Cash and cash equivalents are maintained at financial institutions in amounts that exceed federally insured limits, and failure of any such institution could prevent timely access to uninsured funds.
SaaS KPIs
All quarters →Net Dollar Retention Rate
Remaining Performance Obligations
Annualized Recurring Revenue (ARR)
Adjusted EBITDA
Non-GAAP Operating Margin
Summary, forecast, risks and KPIs are extracted from KALTURA INC's SEC filings for Q1 FY2026 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.