KALTURA INC Q3 FY2025 earnings

Kaltura closed the third quarter of 2025 with revenue of $43.9 million, down 1% from $44.3 million in the prior-year quarter. Subscription revenue was $42.0 million, almost flat against $42.1 million a year earlier. The top line was not the story. Gross profit rose 4% to $30.7 million, and gross margin climbed to 70% from 67%. Operating loss narrowed to $1.5 million from $4.5 million, and net loss narrowed to $2.6 million from $3.6 million. Diluted loss per share was $0.02, flat with the prior-year quarter.

Profitability metrics improved across the board. Adjusted EBITDA reached $4.2 million, up from $2.4 million a year earlier. Non-GAAP operating profit was $3.1 million against $1.3 million. Non-GAAP net profit was $2.0 million, or $0.01 per diluted share, compared with $0.0 million, or $0.00 per diluted share. Management described the quarter as a record for adjusted EBITDA profit. Total operating expenses declined 5% year over year, with research and development down 8% and general and administrative down 9%. Operating cash flow for the quarter was $9.3 million, down 13% from $10.7 million. Through the first nine months, operating cash flow was $10.9 million, up 37.5% from $7.9 million. Capital expenditures were $0.1 million in the quarter.

The demand picture is mixed. Annualized recurring revenue was $169.1 million, a slight increase from $168.9 million. Net Dollar Retention Rate slipped to 97% from 101%. Remaining performance obligations stood at $159.3 million, down 15.2% from $187.8 million, though the prior-year figure carried a $21.7 million negative adjustment tied to a reassessment of contracts with termination for convenience clauses. Of the current balance, $61.1 million is billed consideration and $98.2 million is unbilled. Current deferred revenue was $61.1 million, down 3.4% from $63.2 million. Segment trends diverged. The Enterprise, Education and Technology segment held roughly flat, while Media and Telecom revenue declined and its gross profit improved on lower headcount and subcontractor costs.

Management guided fourth-quarter total revenue to $45.0 million to $45.7 million, with subscription revenue of $41.6 million to $42.3 million and adjusted EBITDA of $4.2 million to $5.2 million. For the full year 2025, the company expects total revenue of $180.3 million to $181.0 million, subscription revenue of $170.9 million to $171.6 million, and adjusted EBITDA of $16.6 million to $17.6 million. Kaltura has not provided a quantitative reconciliation of forecasted adjusted EBITDA to forecasted GAAP net loss. The company said it entered the fourth quarter with a strong pipeline and continues to project growth in new bookings, supported by customer consolidation around its platform and interest in its AI-powered offerings.

Two corporate actions reshape the story. Kaltura signed a definitive agreement on November 5, 2025 to acquire eSelf.ai, a provider of AI-based real-time conversational avatars, with closing expected in the fourth quarter of 2025. Separately, it repurchased 14,443,739 shares from affiliates of Goldman Sachs for about $16.6 million, at a 25% discount to the 30-day volume-weighted average price ending November 5, 2025. The company also completed a reorganization plan announced in August 2025 that cut roughly 10% of the workforce, with expected annualized cost savings of about $8.5 million and $0.8 million of pre-tax charges booked in the third quarter.

Risks remain familiar. The company cites a volatile economic climate, customer consolidation, and political, economic and military conditions in Israel. It flags its ability to retain customers and achieve and maintain profitability, competition, reliance on key personnel, and compliance costs tied to EU legislation such as the EU AI Act and EU Data Act. The pending eSelf.ai deal adds integration risk. With net dollar retention below 100% and remaining performance obligations down year over year, growth depends on new bookings and the AI product line carrying more weight.