Summary
Kaltura's second quarter of 2025 showed modest top-line growth and much better profitability. Revenue was $44.5 million, up 1% from the prior-year quarter. Gross profit was $31.2 million, up 8.9%, and gross margin was 70.2%, up 5.1 percentage points. The GAAP operating loss narrowed to $2.8 million. The GAAP net loss narrowed to $7.8 million, or a loss of $0.05 per diluted share. Operating cash flow was $2.7 million, up from a negative prior-year quarter. Capital expenditures were $0.1 million, down 46.2%. Deferred revenue, current portion, was $55.1 million, down 0.7% from the prior-year quarter. Remaining performance obligations were $188.1 million, up 5.8%.
The quarter's operating leverage came from lower costs and a better revenue mix. Gross margin expanded to 70.2%, while operating margin improved to negative 6.2%. The company reported non-GAAP gross profit of $31.3 million and non-GAAP gross margin of 70%. Non-GAAP operating profit was $3.0 million. Non-GAAP net profit was $2.5 million, or $0.01 per diluted share. Adjusted EBITDA was $4.1 million. Those non-GAAP measures exclude stock-based compensation, amortization of acquired intangibles, strategic initiative costs, war-related costs, and foreign currency translation adjustments. The company also said it achieved record non-GAAP net profit and an adjusted EBITDA profit that matched the prior quarter's record high.
Operational highlights pointed to stabilization in customer spending. Annualized recurring revenue was $170.4 million, up 3% from the prior-year quarter. Net dollar retention rate was 101%, the fourth consecutive quarter above 100% and the third consecutive quarter of year-over-year improvement. Kaltura closed 21 new six-figure deals across technology, banking, financial services, manufacturing, pharma, education, and media telecom. It signed its first three AI-driven deals featuring Content Lab and Genie. The AI sales pipeline now includes more than 100 qualified opportunities. The company was recognized as a Leader by IDC in its inaugural MarketScape for AI-Enabled Enterprise Video Platforms. Class Genie won e-Learning Innovation of the Year at the EdTech Breakthrough Awards. The Virtual Events Webinars platform earned five Gold Awards at the 2025 Eventex Awards.
Management initiated a reorganization plan in August 2025. The plan includes a workforce reduction of approximately 10%. Kaltura expects total savings of about $2.6 million for the balance of 2025, or $8.5 million on an annualized basis. The one-time charge related to the reorganization is expected to be about $0.7 million in the third quarter of 2025. The company unified all engineering resources under a single research and development organization. It also consolidated customer experience and sales into one go-to-market team. The sales and marketing budget remains intact, with gradual growth expected to support pipeline momentum. Management said the changes support a longer-term goal to double adjusted EBITDA in 2026 and return to being a Rule of 30 company by or before 2028.
Guidance for the third quarter of 2025 calls for adjusted EBITDA of $1.5 million to $2.5 million. For the full year 2025, management guided adjusted EBITDA to $14.5 million to $16.0 million. The company did not provide a quantitative reconciliation of forecasted adjusted EBITDA to forecasted GAAP net loss. Risks include the volatile economic climate, political, economic, and military conditions in Israel, customer consolidation, competition, cybersecurity threats, data privacy compliance, reliance on third parties, and risks tied to artificial intelligence and machine learning models. Kaltura also faces execution risk around the reorganization and the need to retain key personnel.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2025 | Q1 FY2025 | QoQ | Q2 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $44.5M | $47.0M | -5.4% | $44.0M | +1.0% |
| Gross profit | $31.2M | $32.7M | -4.6% | $28.7M | +8.9% |
| Gross margin | 70.2% | 69.7% | +0.5 pp | 65.1% | +5.1 pp |
| Research & development | $11.6M | $12.1M | -4.3% | $12.0M | -3.8% |
| Sales & marketing | $11.5M | $11.9M | -3.4% | $11.8M | -2.2% |
| General & administrative | $10.9M | $10.3M | +5.7% | $13.4M | -18.8% |
| Total operating expenses | $34.0M | $34.3M | -1.0% | $37.2M | -8.7% |
| Operating income (loss) | -$2.8M | -$1.6M | -74.8% | -$8.6M | +67.8% |
| Operating margin | -6.2% | -3.4% | -2.8 pp | -19.4% | +13.2 pp |
| Net income (loss) | -$7.8M | -$1.1M | -592.6% | -$10.0M | +22.5% |
| Net margin | -17.4% | -2.4% | -15.1 pp | -22.7% | +5.3 pp |
| Diluted EPS | -$0.05 | — | — | -$0.07 | +$0.02 |
| Net retention rate | 101.0% | 107.0% | -6.0 pp | 98.0% | +3.0 pp |
Risks
The 2025 Reorganization Plan, approved August 4, 2025, downsizes approximately 10% of the workforce and targets about $8.5 million in annualized cost reductions, with expected pre-tax charges of approximately $0.7 million in Q3 2025. The company may not fully realize the anticipated cost savings or gross profit improvements, and implementation may be costly, disruptive, cause attrition beyond planned headcount reductions, reduce morale, and divert management attention.
MD&A states the 2025 Reorganization Plan was adopted partly to align strategy in light of uncertainties in the current macro-economic climate. Liquidity discussion cites global economic volatility, uncertainty around U.S. and foreign tariffs and trade barriers, rising inflation, interest rate uncertainty, price increases, and supply chain issues that could disrupt financial markets and reduce access to capital.
Media & Telecom revenue decreased 14% for the three months ended June 30, 2025 and 6% for the six months ended June 30, 2025, mainly due to lower revenue from existing customers. Total revenue rose only 1% for the quarter and 3% year to date, so the M&T decline is a material drag on growth.
EE&T professional services gross loss increased 45% to $1.5 million for the three months ended June 30, 2025 and increased 69% to $2.8 million for the six months ended June 30, 2025. Professional services carry significantly higher costs as a percentage of related revenue than subscriptions, pressuring overall margins.
Financial expense (income), net decreased by $5.6 million, or 552%, to $4.6 million expense for the three months ended June 30, 2025, primarily due to $5.5 million related to exchange rate differences. For the six months ended June 30, 2025, financial expense (income), net increased by $2.3 million, or 467%, to $2.8 million expense, primarily due to $2.4 million related to exchange rate differences.
SaaS KPIs
All quarters →Net Dollar Retention Rate
Remaining Performance Obligations
Annualized Recurring Revenue (ARR)
Adjusted EBITDA
Non-GAAP Operating Margin
Non-GAAP Gross Margin
Summary, forecast, risks and KPIs are extracted from KALTURA INC's SEC filings for Q2 FY2025 (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.