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    KLTR
    Earnings call· Jun 2026(Q2 FY26)

    KALTURA Q2 FY26 earnings call KLTR

    Aug 5, 2026 Source

    Executive summary

    Kaltura Q2 FY26 — Strong AI Product Adoption and Exceeding Guidance

    Kaltura delivered a strong second quarter, surpassing revenue and adjusted EBITDA guidance, driven by record non-GAAP gross margins and significant traction in AI product adoption. The company is actively integrating PathFactory and expanding its agentic digital experience platform, with a growing AI-related pipeline indicating future revenue contributions. While some legacy contracts and the M&T segment face headwinds, management remains confident in its strategic transition and long-term growth trajectory.

    Highlights

    5

    • Total revenue reached $46.9 million, up 5% year-over-year, exceeding the high end of guidance.

    • Adjusted EBITDA was $5.9 million, a 44% year-over-year increase, also above the high end of guidance.

    • Achieved a record non-GAAP gross margin of 75% and a record non-GAAP subscription gross margin of 79%.

    • Signed a record 14 new deals including AI offerings, doubling previous records, with 9 featuring Agentic Avatars.

    • Delivered the strongest growth retention performance since Q4 2022.

    Concerns

    4

    • Professional services revenue declined 13% sequentially and 40% year-over-year to $1.3 million.

    • Media and Telecommunications (M&T) total revenue decreased 10% year-over-year to $10.1 million.

    • Remaining Performance Obligations (RPO) were down 1% year-over-year to $164.3 million.

    • Net cash used in operating activities was $2 million, compared to $2.7 million generated in the prior year quarter.

    Guidance & targets

    10
    CategoryTargetConfidence
    Subscription revenue
    $43.9M-$44.6M
    high materiality
    High
    Total revenue
    $45.8M-$46.5M
    high materiality
    High
    Adjusted EBITDA
    $2M-$3M
    high materiality
    High
    Subscription revenue
    $176.6M-$178.6M
    high materiality
    High
    Total revenue
    $183M-$185M
    high materiality
    High
    Adjusted EBITDA
    $15.8M-$17.2M
    high materiality
    High
    M&T new bookings and retention
    higher
    medium materiality
    Medium
    M&T revenue growth
    decline
    medium materiality
    High
    Professional services revenue
    material year-over-year reduction
    medium materiality
    High
    AI product revenue contribution
    initial revenue contributions
    high materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    EENT (Enterprise, Education, and Technology)
    Strong year-over-year growth in total and subscription revenue, supported by contributions from the PathFactory customer base and early AI product contributions.
    Subscription revenue: $36.4MSubscription revenue growth YoY: 12%Professional services revenue: $0.4MProfessional services revenue growth YoY: -43%
    		$36.8M11%——
    M&T (Media and Telecommunications)
    Experienced year-over-year revenue decline due to elevated churn in 2025, but new bookings and retention are expected to improve, leading to sequential quarterly revenue growth in 2027.
    Subscription revenue: $9.2MSubscription revenue growth YoY: -6%Professional services revenue: $0.9MProfessional services revenue growth YoY: -38%
    		$10.1M-10%——

    Operational metrics

    15
    Non-GAAP gross margin
    75%
    Q2 FY26
    Non-GAAP subscription gross margin
    79%
    Q2 FY26
    GAAP gross margin
    74%up 300 bps from Q2 2025
    Q2 FY26

    Reflects continued benefit of shift toward higher margin subscription revenue, operating efficiencies, and unit economics.

    GAAP subscription gross margin
    78%up 100 bps from Q2 2025
    Q2 FY26
    Adjusted EBITDA
    $5.9Mup $1.8M from $4.1M in Q2 2025
    Q2 FY26

    Above the high end of guidance range of $2M to $3M.

    Adjusted EBITDA margin
    12%up 300 bps year over year
    Q2 FY26

    Demonstrates ability to expand non-GAAP profitability while investing in AI roadmap, product innovation, and acquisition integration.

    Non-GAAP net profit
    $2.3M
    Q2 FY26

    Compared to $2.5M or $0.01 per diluted share in Q2 2025.

    Cash and investments balance
    $35.5M
    Q2 FY26

    Ended the quarter with cash equivalents and marketable securities.

    Total revenue growth
    5%YoY
    Q2 FY26

    Exceeded high end of guidance.

    Subscription revenue growth
    8%YoY
    Q2 FY26
    Professional services revenue growth
    -40%YoY
    Q2 FY26

    Consistent with focus on recurring subscription revenue.

    GAAP operating expenses growth
    4%YoY
    Q2 FY26

    Includes impact of acquisitions, integration costs, investment in new product portfolio, and $1M FX add-ins.

    AI-related pipeline opportunities
    >500
    H2 FY26 and FY27

    Includes full value of all deals across pipeline stages. Viewed as an encouraging initial indicator rather than a mature presentation.

    AI deals
    14doubling of previous records
    Q2 FY26

    Initial footholds expected to expand over time. Contribution to revenue remains limited.

    PathFactory revenue contribution
    $4.9M
    Q2 FY26

    Contributed to total revenue of $46.9M. Higher than expected.

    Industry KPIs

    10
    MetricValueDetails
    Revenue growth$46.9MUSD
    Arr net new arr$184.6MUSD
    Rpo current rpo$164.3MUSD
    Bookings billings13deals
    Customer account count5new logos
    Large deal new logo metrics13deals
    Gross retention renewal rateStrongest
    Operating FCF margin rule of 4012%%
    Ai product adoption monetization14deals
    Net revenue net dollar retention96%%

    Orderbook & backlog

    2
    Remaining Performance Obligations (RPOs)$164.3M2026-06-30

    up 6% sequentially, down 1% YoY

    71% expected to be recognized as revenue over the next 12 months.

    Annualized Recurring Revenue (ARR)$184.6MQ2 FY26

    up 9% sequentially, 8% YoY

    Product announcements

    5
    ProductTypeDetails
    Agentic Avatarslaunch
    Avatar Video Production Studiolaunch
    Agentic Revenue Engagement solutionlaunch
    Agentic Learning and Enablement solutionlaunch
    Avatar capabilitiesroadmap

    Deals & partnerships

    1
    PathFactoryAcquisition of content intelligence platform to serve as the 'brains' for Kaltura's agentic motion.

    Integration of PathFactory and Kaltura platforms is progressing, synchronizing content and workflows. The acquisition is key to building agentic digital experience platform.

    Risks & headwinds

    4
    Legacy contract pressure and PathFactory customer roll-offNear-term (next few quarters)

    Anticipated roll-off of certain PathFactory customers; PathFactory revenue expected to come down from Q2 levels over next couple of quarters.

    Mitigation: Strategic integration of PathFactory into broader agentic solutions; focus on new AI product adoption and cross-sales.

    M&T segment revenue declineFY26

    10% YoY decline in Q2 FY26 total revenue; 6% YoY decline in Q2 FY26 subscription revenue. Forecasted year-over-year revenue decline for FY26.

    Mitigation: Expect to post higher M&T new bookings and retention in FY26, forecasted to regenerate sequential quarterly M&T revenue growth in 2027.

    Professional services revenue reductionFY26

    40% YoY decline in Q2 FY26 to $1.3M. Forecasted material year-over-year reduction for FY26.

    Mitigation: Aligned with strategic focus on recurring subscription revenues.

    FX headwindsFY26

    Approximately $1M impact on GAAP operating expenses in Q2 FY26.

    Mitigation: Incorporated into guidance.

    What to watch in Q3 FY26

    5

    AI product revenue contribution

    H2 FY26
    CurrentLimited at this stage (combined TCV ~$1M for 14 deals in Q2)
    TargetInitial revenue contributions in H2 FY26

    Why it matters

    This is a key indicator of the monetization of Kaltura's strategic shift to AI and its future growth drivers.

    Consistent with the outlook we shared last quarter, we continue to expect initial revenue contributions from our new products in the second half of 2026, followed by a more meaningful ramp in 2027.

    Q&A highlights

    4

    How is Kaltura building pipeline and breaking into new verticals with AI products like Agentic Avatars, and where are the most interesting opportunities?

    Management noted a pickup in new logos, with 33% of the AI pipeline from new customers. The pipeline includes over 200 Agentic Avatar opportunities and 100 Avatar Video Production Studio opportunities. Go-to-market is vertically segmented (EDU, M&T, enterprise sub-segments) and geographically. Four main GTM motions are conversational agents, AI content creation, cross-sales between PathFactory and Kaltura, and full bundle wins.

    “Now, with the advent of the agentic offerings that we're offering, along with and together with the rest of what we're doing, people are excited to go ahead and make that move and they're happy to make that move across both.”

    asked by DJ Hines · answered by Unknown Speaker

    2 min read5 chapters

    Detailed Narrative

    01

    AI Product Adoption & Pipeline Growth

    Kaltura reported a record 14 new deals in Q2 FY26 that included one or more AI offerings, doubling previous records. Nine of these deals featured the new Agentic Avatars product, with four having six-digit total contract values and eight being with new logos. The AI-related pipeline for H2 FY26 and FY27 currently comprises over 500 opportunities, representing approximately $17 million in non-weighted potential Annual Contract Value (ACV). This pipeline is broadly distributed across industries, with over one-third from educational institutions and 40% from enterprises, indicating diverse adoption.

    02

    PathFactory Integration & Strategic Shift

    The integration of PathFactory into Kaltura's platform is progressing, with content and workflows now synchronizable across both. PathFactory contributed $4.9 million in Q2 revenue, exceeding initial cautious expectations. While some near-term pressure📎 from legacy PathFactory contracts is anticipated, the acquisition's primary goal is to leverage its content intelligence as the 'brains' for Kaltura's agentic motion. This strategic shift aims to combine PathFactory's content and user intelligence with Kaltura's platform to create comprehensive agentic digital experiences, driving long-term growth.

    03

    Product Development & Platform Evolution

    Kaltura enhanced its avatar production workflows with B-roll and URL to video automation, expanded multilingual capabilities, and introduced enterprise templates. Significant progress was made in integrating content management and intelligence, creating a unified first-party signal layer. The company also continued embedding conversational AI across its product portfolio, enabling interactive experiences with intelligent agents. Looking ahead, Kaltura plans to expand avatar capabilities with richer gestures and emotional expression, and develop real-time generative user interface experiences.

    04

    Market Opportunity & Solution Focus

    Kaltura is packaging its AI capabilities into two comprehensive solutions: Agentic Revenue Engagement and Agentic Learning and Enablement. The Agentic Revenue Engagement solution, showcased at recent industry events, combines video, content intelligence, and conversational AI to help organizations understand customer buying intent and personalize buyer journeys. This solution addresses an estimated market opportunity of over $20 billion, growing at more than 15% annually. The Agentic Learning and Enablement solution aims to transform traditional learning systems into adaptive, conversational, and personalized experiences for employees, customers, partners, and students, also targeting an estimated $20 billion market.

    05

    Retention Performance & Outlook

    The company delivered its strongest growth retention results since Q4 2022. Net dollar retention (NDR) for Q2 FY26 was 96%, up from 95% in the prior quarter but down from 101% YoY, reflecting legacy dynamics. Management expects NDR to gradually improve over time⏳ as the transition towards powering agentic digital experiences supports sustainable growth retention. While some pressure from legacy contracts, including anticipated roll-off of certain PathFactory customers, is expected, the overall trend in retention is positive.

    AI-generated summary of the company’s earnings call. Not investment advice.