Kaltura — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue for the third quarter of 2026 was $47.3 million, an 8% increase year-over-year compared to $43.9 million in Q3 2025.
• Subscription revenue reached $45.9 million, a 9% increase year-over-year compared to $42.0 million in Q3 2025.
• GAAP net loss was $1.5 million ($0.01 per diluted share), improving from a $2.6 million loss ($0.02 per share) in Q3 2025.
• Non-GAAP net profit was $3.1 million ($0.02 per diluted share), compared to $2.0 million ($0.01 per share) in Q3 2025.
• Adjusted EBITDA was $6.0 million, a 45% increase year-over-year compared to $4.2 million in Q3 2025.
• GAAP gross profit was $33.9 million (72% margin), up from $30.7 million (70% margin) in Q3 2025.
• Non-GAAP gross profit was $34.3 million (73% margin), up from $30.8 million (70% margin) in Q3 2025.
• Subscription gross margin remained stable at 77% year-over-year.
• GAAP operating loss narrowed to $0.7 million from $1.5 million in Q3 2025.
• Non-GAAP operating profit increased to $4.9 million from $3.1 million in Q3 2025.
• Net cash provided by operating activities was $7.6 million for the quarter, compared to $9.3 million in Q3 2025.
• Cash, cash equivalents, and marketable securities totaled $41.0 million at the end of the quarter.
• Annualized Recurring Revenue (ARR) was $184.7 million, a 9% increase year-over-year compared to $169.1 million in Q3 2025.
• Net Dollar Retention Rate was 97%, matching the rate from Q3 2025.
• Remaining Performance Obligations were $161.6 million at the end of the quarter, up from $159.3 million in Q3 2025.

Guidance and Future Outlook:

• Kaltura raised full-year guidance for subscription revenue, total revenue, and adjusted EBITDA for the third time in 2026, projecting record high annual results.
• Q4 2026 guidance: Subscription revenue between $44.3 million and $45.0 million; Total revenue between $46.2 million and $46.9 million; Adjusted EBITDA between $2.0 million and $3.0 million.
• Full-year 2026 guidance: Subscription revenue between $179.0 million and $179.7 million; Total revenue between $185.0 million and $185.7 million; Adjusted EBITDA between $19.5 million and $20.5 million.
• Management expressed confidence in continued commercial momentum and expects more meaningful revenue contribution from new offerings in 2027.

Business Segments and Product Lines:

• Enterprise, Education and Technology (EE&T) segment revenue increased 14% year-over-year in Q3 2026.
• Media & Telecom (M&T) segment revenue declined 10% year-over-year in Q3 2026, primarily due to elevated gross churn throughout 2025.
• Signed 15 transactions including AI offerings with a combined total contract value of $3.8 million, compared to $1.0 million in Q2 2026.
• New subscription bookings more than doubled sequentially, marking the strongest bookings quarter since 2024.
• Signed 11 new transactions with total contract values of at least six figures, including three seven-figure transactions.
• Nine transactions included Agentic Avatars or related capabilities; eight included Content Lab.
• Use cases for AI offerings span instructional-content creation, AI tutoring, practice and role-play, workflow automation, employee learning, enterprise knowledge sharing, marketing, and customer engagement.
• Announced "Project 720" with Israel's Ministry of Education, a one-year pilot delivering AI-based STEM learning to approximately 2,000 students across 20 middle schools.
• Continued integration of Kaltura, eSelf.ai, and PathFactory into a unified agentic digital experience platform.
• Kaltura-powered services supported over 1.3 billion playback sessions and peaked at approximately 7 million concurrent sessions during the 2026 FIFA World Cup, with demand 86% higher than the 2022 tournament.

Market and Competitive Landscape:

• Received Gartner research titled "AI Vendor Race: Kaltura Is the Company to Beat for Video Platform Services AI."
• Digiday named Kaltura Agentic Avatars the "Best Interactive Content Platform."
• Broadened commercial adoption of the AI portfolio across multiple industries and use cases.
• Expanded AI-related pipeline and customer-evaluation activity across existing customers and prospective new logos.

Risks and Challenges:

• Media & Telecom segment performance was impacted by elevated gross churn throughout 2025.
• Forward-looking statements are subject to risks including volatile economic climate, political and military conditions in Israel, ability to retain customers, and technological developments.
• Risks associated with AI and machine learning models, cybersecurity, data privacy, and regulatory compliance (including EU Data Act) are noted.
• The company has not provided a quantitative reconciliation of forecasted Adjusted EBITDA to forecasted GAAP net loss due to the inability to calculate certain reconciling items with confidence without unreasonable effort.

Management Commentary and Tone:

• Ron Yekutiel, Co-Founder, Chairman, President, and CEO, stated the company delivered a strong quarter exceeding the high end of guidance for total revenue, subscription revenue, and adjusted EBITDA.
• Management highlighted record quarterly total and subscription revenue and the highest third-quarter adjusted EBITDA to date.
• CEO noted strong commercial traction from the evolution toward powering rich, agentic digital experiences.
• Management expressed confidence in the execution over the quarter supporting the third increase to full-year guidance.

Other Key Points:

• The company's investor presentation showcasing agentic avatar technology is available at https://q3-26-avatar.kaltura.com/.
• A conference call to review results and discuss outlook was held on November 9, 2026.
• The reconciliation of non-GAAP financial measures includes adjustments for stock-based compensation, amortization of acquired intangibles, strategic initiatives costs, restructuring costs, acquisition-related compensation costs, changes in fair value of contingent consideration, and foreign currency translation adjustments.
• Payments for businesses acquired, net of acquired cash, totaled $22.5 million for the nine months ended September 30, 2026.
• Goodwill increased to $47.7 million at September 30, 2026, from $25.4 million at December 31, 2025.
• Intangible assets, net, increased to $9.4 million at September 30, 2026, from $2.1 million at December 31, 2025.