Summary
Kaltura's fiscal 2026 second quarter delivered revenue of $46.9 million, up 5.5% from the prior-year quarter. Gross profit rose 10.6% to $34.5 million. Gross margin expanded to 73.6%, up 3.4 percentage points. The company still posted an operating loss of $0.8 million, but that loss narrowed from the prior-year quarter. Net loss was $5.5 million, also narrower than the prior-year quarter. Diluted EPS was -$0.04, an improvement from the prior-year quarter. Revenue growth was driven by the Enterprise, Education & Technology segment, which benefited from new customers and the PathFactory acquisition. Media & Telecom revenue fell as existing customers spent less. Gross margin benefited from lower production and compensation costs, including workforce reductions.
Year to date, revenue was $91.5 million, flat versus the prior-year period. Gross profit was $66.6 million, up 4.2%. Gross margin was 72.8%, up 2.9 percentage points. The year-to-date operating loss was $2.0 million, narrower than the prior-year period. Net loss year to date was $9.3 million, which widened 5.0% from the prior-year period. Diluted EPS year to date was -$0.06, flat versus the prior-year period. Operating margin was -1.7% in the quarter, up 4.5 percentage points, and -2.2% year to date, up 2.6 percentage points. The year-to-date revenue result was flat because the EE&T increase was offset by the M&T decline. Operating margin improved in both periods, reflecting the gross margin gains and lower operating expenses as a percentage of revenue.
The Enterprise, Education & Technology segment grew while Media & Telecom declined. Net Dollar Retention Rate was 96%, down from 101% in the prior-year quarter. Annualized Recurring Revenue was $184.6 million, up from $170.4 million, and the company grew ARR by 8% in the quarter compared with the prior-year quarter. Remaining performance obligations were $164.3 million, down 12.6% from the prior-year quarter. Deferred revenue was $58.3 million, up 5.9%. Management expects to recognize 71% of RPO over the next 12 months and the remainder over the next four years. Kaltura completed the PathFactory acquisition in April 2026, following the 2025 acquisition of eSelf AI. Management says these deals add content journey orchestration, engagement analytics, and agentic avatar capabilities. The company is pushing product-led growth and developer-led growth, including an Agentic Avatar SDK, and partnerships with Descript and Cornerstone. It also sees customer support and call centers as a growing use case for Kaltura Genie and Agents.
Cash generation weakened. Operating cash flow was -$1.95 million in the quarter, down from the prior-year quarter. Year-to-date operating cash flow was -$1.3 million, down 180.6% from the prior-year period. Capital expenditures were $0.12 million in the quarter, down 4.0%, and $0.18 million year to date, down 57.0%. Adjusted EBITDA was $5.9 million in the quarter and $11.5 million year to date. The year-to-date operating cash flow decline reflects the net loss, non-cash charges, and changes in operating assets and liabilities, including a decrease in deferred revenue. Management believes cash from operations, cash on hand, and revolver availability will meet operating, investing, and financing needs for at least the next 12 months. The company had no balance outstanding under its Revolving Credit Facility.
Risks remain. The Net Dollar Retention Rate signals contraction among existing customers. RPO declined, and the Media & Telecom segment declined. The year-to-date net loss widened, and operating cash flow turned negative. The company faces global economic volatility, tariffs, inflation, interest rate uncertainty, supply chain issues, and security conditions in Israel. It also has credit facility covenants and integration risk from the PathFactory acquisition. Foreign exchange movements affected results, and the company has significant operations in Israel. Management expects gross margins to improve gradually, research and development and general and administrative expenses to decrease as a percentage of revenue, and sales and marketing expenses to increase as a percentage of revenue. The filing does not include formal revenue guidance for the next quarter or the full fiscal year.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2026 | Q1 FY2026 | QoQ | Q2 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $46.9M | $44.6M | +5.1% | $44.5M | +5.5% |
| Gross profit | $34.5M | $32.1M | +7.6% | $31.2M | +10.6% |
| Gross margin | 73.7% | 72.0% | +1.7 pp | 70.2% | +3.4 pp |
| Research & development | $12.7M | $10.7M | +18.4% | $11.6M | +9.9% |
| Sales & marketing | $12.8M | $11.8M | +8.3% | $11.5M | +11.5% |
| General & administrative | $8.5M | $10.7M | -21.0% | $10.9M | -22.0% |
| Total operating expenses | $35.3M | $33.3M | +5.9% | $34.0M | +3.9% |
| Operating income (loss) | -$775.0K | -$1.2M | +36.7% | -$2.8M | +71.9% |
| Operating margin | -1.6% | -2.7% | +1.1 pp | -6.2% | +4.6 pp |
| Net income (loss) | -$5.5M | -$3.8M | -47.1% | -$7.8M | +28.5% |
| Net margin | -11.8% | -8.4% | -3.4 pp | -17.4% | +5.6 pp |
| Diluted EPS | -$0.04 | -$0.03 | -$0.01 | -$0.05 | +$0.01 |
| Net retention rate | 96.0% | 95.0% | +1.0 pp | 101.0% | -5.0 pp |
Risks
Net Dollar Retention Rate fell to 96% for the three months ended June 30, 2026 from 101% for the three months ended June 30, 2025, reflecting contraction and attrition within the existing customer base. EE&T revenue growth was driven by a $5.2 million increase from new customers partly offset by a $1.6 million decrease from existing customers in the quarter.
Media & Telecom revenue declined 10% to $10.1 million in the quarter and 14% to $20.6 million for the six months ended June 30, 2026, mainly from lower revenue from existing customers. M&T gross margin of 53% remains well below the EE&T segment's 79% in the quarter, and the segment carries longer implementation cycles and higher professional services mix.
Operating cash flow turned negative, with net cash used in operating activities of $1.3 million for the six months ended June 30, 2026 versus $1.6 million provided in the prior-year period, and cash, cash equivalents and restricted cash fell to $26.1 million from $35.5 million a year earlier. The remaining unpaid balance on the $26.6 million Term Loan Facility is due December 21, 2026, and the April 2026 credit amendment reduced permitted Restricted Payments to zero.
The filing cites current global economic volatility, including uncertainty around U.S. and foreign tariffs and other trade barriers, rising inflation, interest rate uncertainty, price increases and supply chain issues, as disrupting global financial markets and reducing the company's ability to access capital on favorable terms or at all.
The company states that its ability to access capital may be impacted by political, economic and military conditions in Israel, including the current security situation or any escalation of conflicts, and in other regions in which it operates. Research and development costs rose 10% in the quarter partly from depreciation of the U.S. dollar against the New Israeli Shekel.
The MD&A positions agentic AI and Gen AI capabilities as central to the platform and to demand, following the eSelf AI and PathFactory acquisitions. Failure to keep pace with rapid advances in generative and agentic AI, or to monetize these capabilities, could undermine the company's competitive position in rich media and conversational engagement.
The company completed the PathFactory acquisition in April 2026 for $22.5 million of cash payments for businesses acquired in the six months ended June 30, 2026, and incurred $0.6 million of acquisition-related compensation costs plus higher IT and amortization expenses. Integrating PathFactory and eSelf AI, and realizing expected synergies, carries execution risk.
The company recorded $1.3 million of restructuring expense in the quarter related to the 2026 Reorganization Plans, including employee termination benefits, and cited workforce reductions as a driver of improved gross profit. Continued reorganization and headcount reductions could disrupt operations and affect talent retention.
Provision for income taxes increased 480% to $2.5 million in the quarter and 178% to $4.9 million for the six months ended June 30, 2026, primarily from increased tax liability related to income generated by subsidiaries organized under the laws of Israel and the United Kingdom. The company maintains a valuation allowance against its deferred tax assets.
SaaS KPIs
All quarters →Net Dollar Retention Rate
Adjusted EBITDA
Annualized Recurring Revenue
Summary, forecast, risks and KPIs are extracted from KALTURA INC's SEC filings for Q2 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.