Kaltura Q3 2026 net loss narrows to $1.50M
Kaltura reported $184.705 million in annualized recurring revenue and $161.590 million in remaining performance obligations at September 30, 2026.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
10-Q
Kaltura, Inc. (KLTR) reported third-quarter 2026 revenue of $47.265 million, compared with $43.866 million a year earlier, while net loss narrowed to $1.499 million from $2.628 million. Operating loss was $668,000, versus $1.504 million. Enterprise, Education and Technology revenue rose to $36.923 million from $32.365 million; Media and Telecom revenue declined to $10.342 million from $11.501 million.
For the nine months ended September 30, revenue was $138.786 million versus $135.312 million, while cash provided by operating activities fell to $6.287 million from $10.893 million. Annualized recurring revenue was $184.705 million, up 9% from September 2025; remaining performance obligations were $161.590 million, and net dollar retention was 97% in both comparison periods. Kaltura completed its acquisition of PathFactory on April 1 and acquired substantially all assets and certain liabilities of BlueRush on June 17 for $644,000 in cash. PathFactory contributed $9.520 million in revenue and $3.096 million in net income from acquisition through September 30. The term loan's remaining unpaid balance is due December 21, 2026, and the revolving facility matures on that date.
2 points · 0 major0 major · 1 point
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointThird-quarter revenue: $47.265 million, versus $43.866 million.
- Moderate pointThird-quarter net loss: $1.499 million, versus $2.628 million.
Negative
- Moderate pointNine-month operating cash flow: $6.287 million, versus $10.893 million.
Key Figures
Third-quarter revenue: $47.265 million
Third-quarter net loss: $1.499 million
Operating cash flow: $6.287 million
+4 more
7 metrics
Third-quarter revenue
$47.265 million
Three months ended September 30, 2026; $43.866 million in 2025
Third-quarter net loss
$1.499 million
Three months ended September 30, 2026; $2.628 million in 2025
Operating cash flow
$6.287 million
Nine months ended September 30, 2026; $10.893 million in 2025
Annualized recurring revenue
$184.705 million
As of September 2026; $169.094 million in 2025
Remaining performance obligations
$161.590 million
As of September 30, 2026
Net dollar retention rate
97%
Three months ended September 30, 2026 and 2025
Current portion of long-term loans
$25.338 million
As of September 30, 2026
Key Terms
Annualized Recurring Revenue, Net Dollar Retention Rate, Remaining performance obligations, Adjusted Term SOFR, +1 more
5 terms
Annualized Recurring Revenue financial
"We use Annualized Recurring Revenue ("ARR") as a measure"
Annualized recurring revenue is the predictable income a business expects to earn over a year from ongoing customer subscriptions or contracts. It’s similar to estimating how much money you would make in a year if your current monthly income stayed the same. Investors use this figure to assess the stability and growth potential of a company's revenue stream.
Net Dollar Retention Rate financial
"Our Net Dollar Retention Rate, which we use to measure"
Net dollar retention rate measures how much revenue a company keeps from its existing customers over a set period after accounting for additional sales to them, reduced spending, and customers who leave. It matters to investors because it shows whether a company’s customer base is growing in value or shrinking—like checking whether the same garden produces more or fewer fruits over time—which signals the health and sustainability of recurring revenue.
Remaining performance obligations financial
"Remaining performance obligations represent the amount"
Remaining performance obligations are the work a company still needs to complete for its customers, like finishing a service or delivering a product. It’s important because it shows how much future income the company has coming in from current agreements, giving a clearer picture of its ongoing business.
Adjusted Term SOFR financial
"the Adjusted Term SOFR is subject to a 1.00% floor"
Adjusted term SOFR is a forward‑looking interest benchmark based on short‑term overnight Treasury repo rates, with a small extra amount added to reflect differences from legacy rates. Think of it as a quoted price that has been nudged to make payments comparable to older benchmarks; it matters to investors because it directly influences borrowing costs, bond yields and cash‑flow forecasts, affecting valuations and hedging outcomes.
contingent earn-out consideration financial
"Balance as of December 31, 2025"
Contingent earn-out consideration is extra money a buyer may pay a seller after a deal closes only if the acquired business hits agreed future targets (for example sales, profits, or milestones). For investors it matters because it adjusts the effective price paid, shifts risk between buyer and seller, can change future cash flows and accounting, and creates incentives tied to the business’s performance — like receiving a bonus only if certain goals are met.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much revenue did KLTR report for the third quarter of 2026?
Kaltura reported $47.265 million in revenue for the three months ended September 30, 2026, compared with $43.866 million for the same period in 2025.
How much did KLTR pay for the BlueRush acquisition?
Kaltura's total purchase consideration for acquiring substantially all assets and certain liabilities of BlueRush Inc. and BlueRush Digital Media Corp. was $644,000, paid in cash at closing on June 17, 2026.
AI-generated analysis. How Rhea-AI works. Not financial advice.
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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended | |||||
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from ___________ to ____________ | |||||
Commission File Number: 001-40644
(Exact name of Registrant as specified in its Charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
| (Address of principal executive offices) | (Zip Code) | ||||
Registrant’s telephone number, including area code: (646 ) 290-5445
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
The | ||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | ||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
| Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of shares of the registrant’s common stock, par value $0.0001, outstanding as of November 2, 2026 was 154,082,280 .
Table of Contents
TABLE OF CONTENTS
| Page | ||||||||
| PART I | FINANCIAL INFORMATION | |||||||
| Item 1. | Consolidated Financial Statements (unaudited) | |||||||
Condensed Consolidated Balance Sheets as of September 30, 2026 (unaudited) and December 31, 2025 | 4 | |||||||
Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2026 and 2025 (unaudited) | 6 | |||||||
Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2026 and 2025 (unaudited) | 7 | |||||||
Condensed Consolidated Statement of Stockholders’ Equity for the three and nine months ended September 30, 2026 and 2025 (unaudited) | 8 | |||||||
Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2026 and 2025 (unaudited) | 10 | |||||||
Notes to Condensed Consolidated Interim Financial Statements (unaudited) | 12 | |||||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 40 | ||||||
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 63 | ||||||
| Item 4. | Controls and Procedures | 64 | ||||||
| PART II | OTHER INFORMATION | |||||||
| Item 1. | Legal Proceedings | 65 | ||||||
| Item 1A. | Risk Factors | 65 | ||||||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 74 | ||||||
| Item 3. | Defaults Upon Senior Securities | 74 | ||||||
| Item 4. | Mine Safety Disclosures | 74 | ||||||
| Item 5. | Other Information | 74 | ||||||
| Item 6. | Exhibits | 64 | ||||||
Signatures | 66 | |||||||
Table of Contents
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions or terminology. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements regarding our future results of operations and financial position, industry and business trends, projections of demand, growth prospects, product development, expected impact of strategic transactions, competitive pressure, cost savings, stock-based compensation, revenue recognition, business strategy, plans, market growth, the economic climate and its impact on us, and other financial and market matters.
The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current assumptions, expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to the following:
•We may not be able to successfully assess or mitigate the current volatile economic climate and its direct and indirect impact on our business and operations, or to correctly predict the duration and depth of the current instability of the global economy and take the right or sufficient measures to address it;
•Political, economic, and military conditions in Israel could materially and adversely affect our business;
•Our dependency on existing customer demand and exposure to changes in demand by our customers, loss of one or more of our significant customers, or any other reduction in the amount of revenue we derive from any such customer makes it difficult to evaluate our current business and future prospects and may adversely affect our business, financial condition, results of operations and growth prospects;
•We have a history of losses and may not be able to achieve or maintain profitability;
•Our future success depends on the growth and expansion of the markets for our offerings, which are constantly evolving and may develop more slowly or differently than we expect, and on our ability to adapt and respond effectively to evolving market conditions;
•If we are not able to keep pace with technological and competitive developments and develop or otherwise introduce new products and solutions and enhancements to our existing offerings, our offerings may become less marketable, less competitive or obsolete, and our business, financial condition and results of operations may be adversely affected;
•We may face risks associated with our use of certain artificial intelligence (“AI”) and machine learning models, including generative artificial intelligence (“generative AI” or “Gen AI” collectively with AI, the "AI Technologies"), as well as data-driven conversational AI-based avatars, and compliance with the evolving regulatory framework around AI development and use;
•Increased breaches of network or information technology security along with an increase in cyber-attack activities, including as a result of the use of AI Technologies and large language models by us, by third parties and by potential unauthorized parties or threat actors, increases the risk that we shall be subject to cybersecurity threats that could have an adverse effect on our business;
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•Security breaches and incidents, data loss or other data and security compromises that we or our third-party service providers experience including unauthorized parties obtaining access to our customers’ data, could result in harm to our reputation reduced demand for our platform, products and solutions, and significant liabilities;
•Data privacy, data protection, cybersecurity and technology regulations, are rapidly evolving and present increasing compliance challenges that may adversely impact our business, financial condition and results of operations;
•If we do not maintain the interoperability of our offerings across devices, operating systems and third-party applications that we do not control, and if we are not able to maintain and expand our relationships with third-party technology partners to integrate our offerings with their products and solutions (and vice-versa), our business, financial condition and results of operations may be adversely affected;
•Part of our Application Programming Interfaces (APIs) and other components in our offerings are licensed to the public under an open-source license, which could negatively affect our ability to monetize our offerings and protect our intellectual property rights;
•The markets in which we compete are nascent and highly fragmented, and we may not be able to compete successfully against current and future competitors, which could harm our business, financial condition and results of operations;
•If we are unable to increase sales of our subscriptions to new customers, expand the offerings to which our existing customers subscribe or the value of their subscriptions, or have them renew their subscriptions in terms that are economically beneficial to us, our future revenue and results of operations would be adversely affected;
•Political, economic, and military conditions in Ukraine, Russia and other countries following the Russian invasion of Ukraine, geopolitical instability and hostilities in the Middle East and Gulf region and their possible impact on global trade and financial markets, or such and other conditions in other regions in which we operate, or changes in the business environment in those regions, could materially and adversely affect our business;
•We recognize a significant portion of revenue from subscriptions over the term of the relevant subscription period, and as a result, downturns or upturns in sales are not immediately reflected in full in our results of operations;
•If we fail to meet contractual commitments under our customer agreements, we could be obligated to provide credits for future service, face contract termination with refunds of prepaid amounts, be charged penalties, or could experience a decrease in customer renewals in future periods, any of which would lower our revenue and adversely affect our business, financial condition and results of operations;
•We rely on third parties, including third parties outside the United States, for some of our software development, quality assurance, operations, and customer support;
•We depend on our management team and other key employees, and the loss of one or more of these employees or an inability to attract and retain highly skilled employees could adversely affect our business;
•Failure to effectively develop and expand our marketing and sales capabilities or to maintain or expand our international business could harm our ability to increase our customer base and achieve broader market acceptance of our offerings;
•We expect our revenue mix to vary over time, which could negatively impact our gross margin and results of operations;
•Our international operations and expansion expose us to risk;
•A portion of our revenue is generated by sales to government entities, which subjects us to specific challenges and risks;
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•If we are unable to consummate acquisitions at acceptable rate or prices or achieve our expected goals, to integrate prior acquisitions successfully, and to enter into other strategic transactions and relationships that support our long-term strategy, our growth rate and the trading price of our common stock could be negatively affected;
•A real or perceived bug, defect, security vulnerability, error, or other performance failure involving our platform, products or solutions could cause us to lose revenue, damage our reputation, and expose us to liability;
•Failure to protect our proprietary technology, or to obtain, maintain, protect and enforce sufficiently broad intellectual property rights therein could substantially harm our business, financial condition and results of operations;
•Our failure to raise additional capital or generate the significant capital necessary to promote and expand our operations and invest in new offerings could reduce our ability to compete and could adversely affect our business;
•Significant changes or developments in U.S. or international laws or policies, including with respect to trade policies and tariffs, may have a material adverse effect on our business, results of operations, and financial condition; and
•The other important factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission (the “SEC”) on March 16, 2026.
The forward-looking statements in this Quarterly Report on Form 10-Q are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q, whether as a result of any new information, future events or otherwise.
As used in this Quarterly Report on Form 10-Q, unless otherwise stated or the context requires otherwise, references to “Kaltura,” the “Company,” “we,” “us,” and “our,” refer to Kaltura, Inc. and its subsidiaries on a consolidated basis.
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PART I—FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
| KALTURA, INC. AND SUBSIDIARIES | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (U.S. dollars in thousands, except share and per share data) | ||
| (unaudited) | ||
| September 30, 2026 | December 31, 2025 | ||||||||||
| ASSETS | |||||||||||
| CURRENT ASSETS: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Marketable securities | |||||||||||
| Trade receivables | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Deferred contract acquisition and fulfillment costs, current | |||||||||||
| Total current assets | |||||||||||
| NONCURRENT ASSETS: | |||||||||||
| Marketable securities | |||||||||||
| Property and equipment, net | |||||||||||
| Other assets, noncurrent | |||||||||||
| Deferred contract acquisition and fulfillment costs, noncurrent | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Intangible assets, net | |||||||||||
| Goodwill | |||||||||||
| Total noncurrent assets | |||||||||||
| TOTAL ASSETS | $ | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| CURRENT LIABILITIES: | |||||||||||
| Current portion of long-term loans | $ | $ | |||||||||
| Trade payables | |||||||||||
| Employees and payroll accruals | |||||||||||
| Accrued expenses and other current liabilities | |||||||||||
| Operating lease liabilities, current | |||||||||||
| Deferred revenue, current | |||||||||||
| Total current liabilities | |||||||||||
| NONCURRENT LIABILITIES: | |||||||||||
| Deferred revenue, noncurrent | |||||||||||
| Operating lease liabilities, noncurrent | |||||||||||
| Other liabilities, noncurrent | |||||||||||
| Total noncurrent liabilities | |||||||||||
| TOTAL LIABILITIES | $ | $ | |||||||||
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| KALTURA, INC. AND SUBSIDIARIES | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (U.S. dollars in thousands, except share and per share data) | ||
| (unaudited) | ||
| September 30, 2026 | December 31, 2025 | |||||||||||||
| COMMITMENTS AND CONTINGENCIES (NOTE 9) | ||||||||||||||
| STOCKHOLDERS' EQUITY: | ||||||||||||||
Preferred stock, $ | ||||||||||||||
Common stock, $ | ||||||||||||||
Treasury stock – | ( | ( | ||||||||||||
| Additional paid-in capital | ||||||||||||||
| Accumulated other comprehensive income (loss) | ( | |||||||||||||
| Accumulated deficit | ( | ( | ||||||||||||
| Total stockholders' equity | ||||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | $ | ||||||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
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| KALTURA, INC. AND SUBSIDIARIES | ||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||
(U.S. dollars in thousands, except share and per share data) | ||
| (unaudited) | ||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||
| Subscription | $ | $ | $ | $ | ||||||||||||||||||||||
| Professional services | ||||||||||||||||||||||||||
| Total revenue | ||||||||||||||||||||||||||
| Cost of revenue: | ||||||||||||||||||||||||||
| Subscription | ||||||||||||||||||||||||||
| Professional services | ||||||||||||||||||||||||||
| Total cost of revenue | ||||||||||||||||||||||||||
| Gross profit | ||||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||
| Research and development | ||||||||||||||||||||||||||
| Sales and marketing | ||||||||||||||||||||||||||
| General and administrative | ||||||||||||||||||||||||||
| Restructuring | ||||||||||||||||||||||||||
| Total operating expenses | ||||||||||||||||||||||||||
| Operating loss | ||||||||||||||||||||||||||
| Financial expense (income), net | ( | ( | ||||||||||||||||||||||||
| Loss (income) before provision for income taxes | ( | |||||||||||||||||||||||||
| Provision for income taxes | ||||||||||||||||||||||||||
| Net loss | ||||||||||||||||||||||||||
| Net loss per share attributable to common stockholders, basic and diluted | $ | $ | $ | $ | ||||||||||||||||||||||
| Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted | ||||||||||||||||||||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
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| KALTURA, INC. AND SUBSIDIARIES | ||
| CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||
| (U.S. dollars in thousands, except for share data) | ||
| (unaudited) | ||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Net loss | $ | $ | $ | $ | ||||||||||||||||||||||
| Other comprehensive income (loss): | ||||||||||||||||||||||||||
| Net unrealized gains (losses) on cash flow hedges | ( | ( | ( | |||||||||||||||||||||||
| Net unrealized gains (losses) on available-for-sale marketable securities | ( | ( | ||||||||||||||||||||||||
| Other comprehensive income (loss) | ( | ( | ( | |||||||||||||||||||||||
| Comprehensive loss | $ | $ | $ | $ | ||||||||||||||||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
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| KALTURA, INC. AND SUBSIDIARIES | ||
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | ||
U.S. dollars in thousands (except share data) | ||
| (unaudited) | ||
| Common stock | Treasury stock | Additional paid-in capital | Accumulated other comprehensive loss | Accumulated deficit | Total stockholders' equity | |||||||||||||||||||||||||||||||||||||||||||||
| Number | Amount | Number | Amount | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of July 1, 2026 | $ | $ | ( | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options, and vesting of restricted stock units | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive losses | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2026 | $ | $ | ( | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||
| Common stock | Treasury stock | Additional paid-in capital | Accumulated other comprehensive income | Accumulated deficit | Total stockholders' equity | |||||||||||||||||||||||||||||||||||||||||||||
| Number | Amount | Number | Amount | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of July 1, 2025 | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options, and vesting of restricted stock units | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive losses | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2025 | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
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| KALTURA, INC. AND SUBSIDIARIES | ||
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | ||
U.S. dollars in thousands (except share data) | ||
| (unaudited) | ||
| Common stock | Treasury stock | Additional paid-in capital | Accumulated other comprehensive income (loss) | Accumulated deficit | Total stockholders' equity | |||||||||||||||||||||||||||||||||||||||||||||
| Number | Amount | Number | Amount | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of January 1, 2026 | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options, and vesting of restricted stock units | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive losses | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2026 | $ | $ | ( | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||
| Common stock | Treasury stock | Additional paid-in capital | Accumulated other comprehensive income | Accumulated deficit | Total stockholders' equity | |||||||||||||||||||||||||||||||||||||||||||||
| Number | Amount | Number | Amount | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of January 1, 2025 | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Cash settlement of equity classified share based payment awards | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | ( | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options, and vesting of restricted stock units | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2025 | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
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| KALTURA, INC. AND SUBSIDIARIES | ||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| U.S. dollars in thousands | ||
| (unaudited) | ||
| Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||
| Net loss | $ | ( | $ | ( | ||||||||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||
| Depreciation and amortization | ||||||||||||||
| Stock-based compensation expenses | ||||||||||||||
| Amortization of deferred contract acquisition and fulfillment costs | ||||||||||||||
| Loss on sale of property and equipment | ||||||||||||||
| Non-cash interest expenses (Income), net | ( | |||||||||||||
| Gain on foreign exchange | ( | ( | ||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||
| Increase in trade receivables | ( | ( | ||||||||||||
| Decrease in prepaid expenses and other current assets and other assets, noncurrent | ||||||||||||||
| Increase in deferred contract acquisition and fulfillment costs | ( | ( | ||||||||||||
| Increase (Decrease) in trade payables | ( | |||||||||||||
| Increase (decrease) in accrued expenses and other current liabilities | ( | |||||||||||||
| Decrease in employees and payroll accruals | ( | ( | ||||||||||||
| Increase in other liabilities, noncurrent | ||||||||||||||
| Decrease in deferred revenue | ( | ( | ||||||||||||
| Operating lease right-of-use assets and lease liabilities, net | ( | |||||||||||||
| Net cash provided by operating activities | ||||||||||||||
| Cash flows from investing activities: | ||||||||||||||
| Investment in available-for-sale marketable securities | ( | ( | ||||||||||||
| Proceeds from maturities of available-for-sale marketable securities | ||||||||||||||
| Purchases of property and equipment | ( | ( | ||||||||||||
| Capitalized internal-use software development costs | ( | |||||||||||||
| Payments for businesses acquired, net of acquired cash | ( | |||||||||||||
| Net cash provided by (used in) investing activities | ( | |||||||||||||
| Cash flows from financing activities: | ||||||||||||||
| Repayment of long-term loans | ( | ( | ||||||||||||
| Proceeds from exercise of stock options | ||||||||||||||
| Cash settlement of equity-classified share-based payment awards | — | ( | ||||||||||||
| Repurchase of common stock | ( | |||||||||||||
| Change in prepayments for repurchase of common stock | ||||||||||||||
| Net cash used in financing activities | ( | ( | ||||||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | ||||||||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | ( | |||||||||||||
| Cash, cash equivalents and restricted cash at the beginning of the period | ||||||||||||||
| Cash, cash equivalents and restricted cash at the end of the period | $ | $ | ||||||||||||
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| KALTURA, INC. AND SUBSIDIARIES | ||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| U.S. dollars in thousands | ||
| (unaudited) | ||
| Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Supplemental disclosure of non-cash activity: | ||||||||||||||
| Purchase of property, equipment and internal-use software in credit | $ | $ | ||||||||||||
| Capitalized stock-based compensation cost | $ | $ | ||||||||||||
| Supplemental disclosure of cash flow information | ||||||||||||||
| Net cash received (paid), net for income taxes | $ | $ | ( | |||||||||||
| Cash paid for interest | $ | $ | ||||||||||||
| Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheet | ||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Restricted cash included in other assets, noncurrent | ||||||||||||||
| Total cash, cash equivalents, and restricted cash | $ | $ | ||||||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
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| KALTURA, INC. AND SUBSIDIARIES | ||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (unaudited) | ||
NOTE 1: GENERAL
Description of Business
Kaltura, Inc. (together with its subsidiaries, the “Company”) was incorporated in October 2006 and commenced operations in January 2007. The Company’s business operations are allocated between two main segments, Enterprise, Education, and Technology (“EE&T”) and Media and Telecom (“M&T”). The Company is a provider of video and rich media offerings for enterprises, with a mission to power rich, agentic digital experiences across organizational journeys for customers, employees, learners, and audiences. The Company’s cloud-based rich media platform is designed to help organizations create, manage, and deliver rich media experiences at scale across customer-facing, employee-facing, learner-facing, and audience-facing use cases. The Company’s core offerings consist of various Software-as-a-Service (“SaaS”) products and solutions and a Platform-as-a-Service (“PaaS”).
NOTE 2: BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting.
The consolidated balance sheet as of December 31, 2025 was derived from the audited consolidated financial statements as of that date, but does not include all of the disclosures, including certain notes required by U.S. GAAP on an annual reporting basis. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2025, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 16, 2026.
In management’s opinion, the unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements with normal recurring adjustments necessary for the fair presentation of the Company’s financial position as of September 30, 2026, and the Company’s consolidated results of operations, stockholders’ equity, and cash flows for the nine months ended September 30, 2026 and 2025. The results for the three and nine months ended September 30, 2026, are not necessarily indicative of the results to be expected for the full year ending December 31, 2026, or any other future interim or annual period.
Use of Estimates
Concentration of Credit Risks
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, marketable securities, restricted cash and trade receivables.
The majority of the Company's and its subsidiaries' cash and cash equivalents and restricted cash are invested with major banks in Israel, the United Kingdom and the United States. Such investments in the United States may be in excess of insured limits and are not insured in other jurisdictions. However, in general, these investments may be redeemed upon demand and therefore bear minimal risk.
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| KALTURA, INC. AND SUBSIDIARIES | ||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (unaudited) | ||
The Company's trade receivables are geographically dispersed and derived from sales to customers mainly in the United States, Europe and Asia. Concentration of credit risk with respect to trade receivables is limited by credit limits, ongoing credit evaluation and account monitoring procedures.
Major customer data as a percentage of total revenues:
The following table sets forth customers that represented 10% or more of the Company’s total revenue in each of the periods set forth below:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Customer A (M&T) | % | % | % | % | ||||||||||||||||||||||
Significant Accounting Policies and Estimates
The Company’s significant accounting policies are discussed in Note 2 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which was filed with the SEC on March 16, 2026. There have been no significant changes to these policies during the nine months ended September 30, 2026 except as noted below.
Recently Adopted Pronouncements
As an "emerging growth company," the Jumpstart Our Business Startups Act ("JOBS Act") allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act. The adoption dates discussed below reflect this election.
In July 2025, the FASB issued ASU 2025-05, to address complexities in applying current expected credit losses for current accounts receivable and contract assets. The amendments allow entities to make an accounting policy election to apply a practical expedient when estimating expected credit losses for certain assets, which allows entities to assume that economic conditions at the balance sheet date will remain unchanged for the remaining life of those assets. The Company adopted the provisions of the amendments as of January 1, 2026. The adoption of these amendments did not have a material impact on the Company’s consolidated financial statements.
Recent Accounting Guidance Not Yet Adopted
In November 2024, the Financial Accounting Standards Board issued ASU 2024-03, “Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures”, which requires disclosure, on an annual and interim basis, of disaggregated information about certain income statement expense line items. The ASU does not change the expense captions presented on the face of the income statement; rather, it mandates the disaggregation of certain expense captions into specified categories within the footnotes to the financial statements. This ASU is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. The Company is currently evaluating the impact of adopting this standard.
In September 2025, the Financial Accounting Standards Board issued ASU 2025-06, "Intangibles —Goodwill and Other — Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software" (“ASU 2025-06”), to modernize the accounting guidance for the costs to develop software for internal use. The standard applies to costs incurred to develop or obtain software for internal use.
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| KALTURA, INC. AND SUBSIDIARIES | ||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (unaudited) | ||
ASU 2025-06 amends the existing standard that refers to various stages of a software development project to align better with current software development methods, such as agile programming. Under the new standard, entities will commence capitalizing eligible costs when (i) management has authorized and committed to funding the software project, and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. The new standard also supersedes the guidance related to costs incurred to develop a website. ASU 2025-06 guidance is effective for annual periods beginning after December 15, 2027. The guidance can be applied on a prospective basis, a modified basis for in-process projects or on a retrospective basis. The Company is currently evaluating the impact of the adoption of this standard.
ASU 2025-09 derivatives and hedging - “In November 2025, the FASB issued ASU 2025-09 to amend the guidance in Derivatives and Hedging (Topic 815). The update provides targeted improvements intended to enhance the application of hedge accounting, including expanded eligibility of forecasted transactions, additional flexibility in measuring hedge effectiveness, and clarifications related to hedging non-financial items. The guidance is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements or related disclosures.
ASU 2025-11 interim reporting - “In December 2025, the FASB issued ASU 2025-11 to amend the guidance in Interim Reporting (Topic 270). The update provides clarifications intended to improve the consistency and usability of interim disclosure requirements, including a comprehensive listing of required interim disclosures and a new disclosure principle for reporting material events occurring after the most recent annual period. The amendments do not change the underlying objectives of interim reporting but are designed to enhance clarity in application. The guidance is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years. The Company is currently evaluating the impact on its consolidated financial statement disclosures.
ASU 2025-12 codification improvements - “In December 2025, the FASB issued ASU 2025-12 Codification Improvements to address suggestions received from stakeholders on the Accounting Standards Codification and to make other incremental improvements to U.S. GAAP. The update represents changes to the Codification that (1) clarify, (2) correct errors, or (3) make minor improvements. The amendments make the Codification easier to understand and apply. The guidance is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. The Company is currently evaluating the impact on its consolidated financial statement.
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| KALTURA, INC. AND SUBSIDIARIES | ||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (unaudited) | ||
NOTE 3: BUSINESS COMBINATIONS
On April 1, 2026, the Company acquired 100 % of the outstanding shares of PathFactory Holdings ULC (“PathFactory”), a provider of content intelligence, engagement analytics and journey orchestration solutions that help organizations deliver personalized digital experiences, understand user intent, and optimize content engagement across multiple channels and enterprise systems. PathFactory’s acquisition is intended to support the Company’s strategy to further expand its suite of AI-driven solutions and access to the application development market.
The total purchase consideration for the acquisition of PathFactory was $22,000 , all of which was paid in cash at the acquisition date.
The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations (“ASC 805”).
The following table summarizes the preliminary purchase price allocation of the fair values of the assets acquired and liabilities assumed at the acquisition date:
| Fair Value | ||||||||
| Cash and cash equivalents | $ | |||||||
| Accounts receivable | ||||||||
| Other current assets | ||||||||
| Fixed assets, net | ||||||||
| Intangible assets | ||||||||
| Goodwill | ||||||||
| Total assets | ||||||||
| Accrued expenses and other current liabilities | ||||||||
| Accounts payable | ||||||||
| Deferred revenues | ||||||||
| Total liabilities | ||||||||
| Total purchase consideration | $ | |||||||
The identified intangible assets acquired consist of technology and customer relations, with preliminary acquisition-date fair values of $3,300 and $4,023 , respectively. The weighted-average useful lives of the acquired intangible assets are 5 and 6 years, respectively.
The goodwill, which is not deductible for tax purposes, generated from the acquisition of PathFactory is primarily attributable to the anticipated synergies between the Company’s and PathFactory’s products and services, and the assembled workforce acquired.
Transaction costs incurred in connection with the acquisition during the nine months ended September 30, 2026 totaled $1,800 and were recorded within general and administrative expenses in the consolidated statement of operations.
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| KALTURA, INC. AND SUBSIDIARIES | ||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (unaudited) | ||
The stand-alone results of operations of PathFactory have been included in the consolidated financial statements since the acquisition date. PathFactory revenue and net income included in the Company's consolidated statement of operations from the acquisition date through September 30, 2026, were $9,520 and $3,096 , respectively.
The following table presents the unaudited supplemental consolidated financial results of the Company on a pro forma basis, as if the acquisition of PathFactory had been completed on January 1, 2025. The unaudited pro forma financial information includes adjustments primarily related to amortization of the acquired intangible assets, elimination of historical amortization expense, transactions cost and adjustment to financial expenses:
| Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Unaudited | ||||||||||||||
| Revenue | $ | $ | ||||||||||||
| Net loss | $ | $ | ||||||||||||
On June 17, 2026, the Company completed the acquisition of substantially all of the assets and certain liabilities of BlueRush Inc. and BlueRush Digital Media Corp. in an asset purchase transaction. The acquisition was undertaken to expand the Company's digital engagement and personalized video capabilities and to strengthen its product offering and customer base. The acquisition was accounted for as a business combination in accordance with ASC 805. The total purchase consideration was $644 , paid in cash at closing. Based on the purchase price allocation, the Company recognized identifiable intangible assets of $1,013 , consisting of developed technology and customer relationships, goodwill of $428 , accounts receivable of $119 and assumed liabilities consisting of deferred revenue of $790 and accounts payable of $128 .
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| KALTURA, INC. AND SUBSIDIARIES | ||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (unaudited) | ||
NOTE 4: REVENUES FROM CONTRACTS WITH CUSTOMERS
Disaggregation of Revenue
The following tables present disaggregated revenue by category:
| Three Months Ended September 30, 2026 | ||||||||||||||||||||||||||
| Enterprise, Education and Technology | Media and Telecom | |||||||||||||||||||||||||
| Amount | Percentage of revenue | Amount | Percentage of revenue | |||||||||||||||||||||||
| Subscription | $ | % | $ | % | ||||||||||||||||||||||
| Professional services | % | % | ||||||||||||||||||||||||
| $ | % | $ | % | |||||||||||||||||||||||
| Three Months Ended September 30, 2025 | ||||||||||||||||||||||||||
| Enterprise, Education and Technology | Media and Telecom | |||||||||||||||||||||||||
| Amount | Percentage of revenue | Amount | Percentage of revenue | |||||||||||||||||||||||
| Subscription | $ | % | $ | % | ||||||||||||||||||||||
| Professional services | % | % | ||||||||||||||||||||||||
| $ | % | $ | % | |||||||||||||||||||||||
| Nine Months Ended September 30, 2026 | ||||||||||||||||||||||||||
| Enterprise, Education and Technology | Media and Telecom | |||||||||||||||||||||||||
| Amount | Percentage of revenue | Amount | Percentage of revenue | |||||||||||||||||||||||
| Subscription | $ | % | $ | % | ||||||||||||||||||||||
| Professional services | % | % | ||||||||||||||||||||||||
| $ | % | $ | % | |||||||||||||||||||||||
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| KALTURA, INC. AND SUBSIDIARIES | ||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (unaudited) | ||
| Nine Months Ended September 30, 2025 | ||||||||||||||||||||||||||
| Enterprise, Education and Technology | Media and Telecom | |||||||||||||||||||||||||
| Amount | Percentage of revenue | Amount | Percentage of revenue | |||||||||||||||||||||||
| Subscription | $ | % | $ | % | ||||||||||||||||||||||
| Professional services | % | % | ||||||||||||||||||||||||
| $ | % | $ | % | |||||||||||||||||||||||
The following tables summarize revenue by region based on the billing address of customers:
| Three Months Ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| Amount | Percentage of revenue | Amount | Percentage of revenue | |||||||||||||||||||||||
| United States (“US”) | $ | % | $ | % | ||||||||||||||||||||||
| Europe, the Middle East and Africa ("EMEA") | % | % | ||||||||||||||||||||||||
| Other | % | % | ||||||||||||||||||||||||
| $ | % | $ | % | |||||||||||||||||||||||
| Nine Months Ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| Amount | Percentage of revenue | Amount | Percentage of revenue | |||||||||||||||||||||||
| US | $ | % | $ | % | ||||||||||||||||||||||
| EMEA | % | % | ||||||||||||||||||||||||
| Other | % | % | ||||||||||||||||||||||||
| $ | % | $ | % | |||||||||||||||||||||||
Remaining Performance Obligations
Remaining performance obligations represent the amount of contracted future revenue that has not yet been recognized, including both deferred revenue and contracted amounts that will be invoiced and recognized as revenue in future periods. As of September 30, 2026, the aggregate amount of the transaction price allocated to remaining performance obligations was $161,590 , which consists of both billed consideration in the amount of $66,451 and unbilled consideration in the amount of $95,139 that the Company expects to recognize as revenue but that was not yet recognized on the balance sheet. The Company expects to recognize 70 % of its remaining performance obligations as revenue over the next 12 months and the remainder over the next four years .
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| KALTURA, INC. AND SUBSIDIARIES | ||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (unaudited) | ||
Costs to Obtain a Contract
The following table represents a roll forward of costs to obtain a contract:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Beginning balance | $ | $ | $ | $ | ||||||||||||||||||||||
| Additions to deferred contract acquisition costs during the period | ||||||||||||||||||||||||||
| Amortization of deferred contract acquisition costs | ( | ( | ( | ( | ||||||||||||||||||||||
| Ending balance | $ | $ | $ | $ | ||||||||||||||||||||||
| Deferred contract acquisition costs, current | $ | $ | $ | $ | ||||||||||||||||||||||
| Deferred contract acquisition costs, noncurrent | ||||||||||||||||||||||||||
| Total deferred costs to obtain a contract | $ | $ | $ | $ | ||||||||||||||||||||||
Costs to Fulfill a Contract
The following table represents a roll forward of costs to fulfill a contract:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Beginning balance | $ | $ | $ | $ | ||||||||||||||||||||||
| Amortization of deferred costs to fulfill a contract | ( | ( | ( | ( | ||||||||||||||||||||||
| Ending balance | $ | $ | $ | $ | ||||||||||||||||||||||
| Deferred fulfillment costs, current | $ | $ | $ | $ | ||||||||||||||||||||||
| Deferred fulfillment costs, noncurrent | ||||||||||||||||||||||||||
| Total deferred costs to fulfill a contract | $ | $ | $ | $ | ||||||||||||||||||||||
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| KALTURA, INC. AND SUBSIDIARIES | ||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (unaudited) | ||
NOTE 5: MARKETABLE SECURITIES
The following is a summary of available-for-sale marketable securities as of September 30, 2026 and December 31, 2025, respectively:
September 30, 2026 | ||||||||||||||||||||||||||
| Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||||||
| Available-for-sale – matures within one year: | ||||||||||||||||||||||||||
| Corporate bonds | $ | $ | $ | ( | $ | |||||||||||||||||||||
| U.S. Treasury | ( | |||||||||||||||||||||||||
| ( | ||||||||||||||||||||||||||
| Available-for-sale – matures after one year: | ||||||||||||||||||||||||||
| Corporate bonds | ( | |||||||||||||||||||||||||
| Agency bonds | ( | |||||||||||||||||||||||||
| U.S. Treasury | ( | |||||||||||||||||||||||||
| ( | ||||||||||||||||||||||||||
| Total | $ | $ | $ | ( | $ | |||||||||||||||||||||
December 31, 2025 | ||||||||||||||||||||||||||
| Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||||||
| Available-for-sale – matures within one year: | ||||||||||||||||||||||||||
| Corporate bonds | $ | $ | $ | $ | ||||||||||||||||||||||
| U.S. Treasury | ||||||||||||||||||||||||||
| Commercial paper | ||||||||||||||||||||||||||
| Agency bonds | ||||||||||||||||||||||||||
| Municipal bonds | ||||||||||||||||||||||||||
| Available-for-sale – matures after one year: | ||||||||||||||||||||||||||
| Corporate bonds | ||||||||||||||||||||||||||
| U.S. Treasury | ||||||||||||||||||||||||||
| Agency bonds | ||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||||||||||
As of September 30, 2026 and December 31, 2025, the Company did not record an allowance for credit losses for its available-for-sale marketable debt securities and all of the gross unrealized losses of the Company's marketable securities have been in a continuous loss position for less than 12 months. There were no gains or losses from available-for-sale marketable securities that were reclassified out of accumulated other comprehensive income during the periods presented.
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| KALTURA, INC. AND SUBSIDIARIES | ||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (unaudited) | ||
NOTE 6: FAIR VALUE MEASUREMENTS
In accordance with ASC 820, the Company measures its cash equivalents and marketable securities at fair value using the market approach valuation technique. Cash equivalents and marketable securities are classified within Level 1 or Level 2 because these assets are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs. Foreign currency derivative contracts are classified within the Level 2 value hierarchy, as the valuation inputs are based on quoted prices and market observable data of similar instruments.
The following table sets forth the Company’s assets and liabilities that were measured at fair value as of September 30, 2026 and December 31, 2025 by level within the fair value hierarchy:
| Fair Value Measurements As Of | ||||||||||||||||||||
| Description | Fair Value Hierarchy | September 30, 2026 | December 31, 2025 | |||||||||||||||||
| Measured at fair value on a recurring basis: | ||||||||||||||||||||
| Assets: | ||||||||||||||||||||
| Cash equivalents: | ||||||||||||||||||||
| Money market funds | Level 1 | $ | $ | |||||||||||||||||
| Short-term marketable securities: | ||||||||||||||||||||
| Corporate bonds | Level 2 | $ | $ | |||||||||||||||||
| U.S. Treasury | Level 2 | $ | $ | |||||||||||||||||
| Commercial paper | Level 2 | $ | $ | |||||||||||||||||
| Agency bonds | Level 2 | $ | $ | |||||||||||||||||
| Municipal bonds | Level 2 | $ | $ | |||||||||||||||||
| Long-term marketable securities: | ||||||||||||||||||||
| Corporate bonds | Level 2 | $ | $ | |||||||||||||||||
| U.S. Treasury | Level 2 | $ | $ | |||||||||||||||||
| Agency bonds | Level 2 | $ | $ | |||||||||||||||||
| Prepaid expenses and other current assets: | ||||||||||||||||||||
| Restricted bank deposits | Level 2 | $ | $ | |||||||||||||||||
| Options and forward contracts designated as hedging instruments | Level 2 | $ | $ | |||||||||||||||||
| Other assets, noncurrent: | ||||||||||||||||||||
| Restricted bank deposit | Level 2 | $ | $ | |||||||||||||||||
| Liabilities: | ||||||||||||||||||||
| Derivative instruments liability included in accrued expenses and other current liabilities: | ||||||||||||||||||||
| Options and forward contracts designated as hedging instruments | Level 2 | $ | $ | |||||||||||||||||
| Contingent consideration | Level 3 | $ | $ | |||||||||||||||||
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| KALTURA, INC. AND SUBSIDIARIES | ||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (unaudited) | ||
Under the eSelf purchase agreement, the former shareholders of eSelf are entitled to contingent earn out payments based on the Company’s achievement of certain revenue metrics for 2026 to 2028. If all targets are achieved (100 %), the payments would total $12,500 .
We recorded $6,493 as the initial fair value of contingent earn-out consideration. The fair value was estimated using a Monte-Carlo simulation model, which included significant unobservable Level 3 inputs, such as projected revenue over the earn-out period along with estimates for market volatility and the discount rate applicable to potential cash payouts.
The following table presents changes in the fair value of the earn-out consideration, which were recognized in general and administrative expenses in the condensed consolidated statements of operations for the nine months ended September 30, 2026 :
| Balance as of December 31, 2025 | $ | |||||||
| Income from changes in the fair value | ( | |||||||
| Balance as of September 30, 2026 | $ | |||||||
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| KALTURA, INC. AND SUBSIDIARIES | ||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (unaudited) | ||
NOTE 7: DERIVATIVES AND HEDGING
The Company enters into forward contracts to hedge certain forecasted payroll costs denominated in New Israeli shekel ("NIS") against exchange rate fluctuations of the U.S. dollar for a period of up to twelve months. The Company recorded the cash flows associated with these derivatives under operating activities. The Company does not use derivative instruments for trading or speculative purposes.
Notional Amount of Foreign Currency Contracts
The Company had outstanding contracts designated as hedging instruments in the aggregate notional amount of $10,910 as of September 30, 2026 and $15,864 as of December 31, 2025. The fair value of the Company’s outstanding contracts amounted to an asset of $0 and $2,697 , and a liability of $163 and $0 as of September 30, 2026 and December 31, 2025, respectively. These assets and liabilities were recorded under prepaid expenses and other current assets and accrued expenses and other current liabilities, respectively. Losses of $116 and gains of $1,213 were reclassified from accumulated other comprehensive income (loss) during the three months ended September 30, 2026, and 2025, respectively. Gains of $3,439 and $2,355 were reclassified from accumulated other comprehensive income (loss) during the nine months ended September 30, 2026 and 2025, respectively. These gains and losses were reclassified from accumulated other comprehensive income when the related expenses were incurred.
Effect of Foreign Currency Contracts on the Condensed Consolidated Statements of Operations
The effect of foreign currency contracts on the condensed consolidated statements of operations during the three and nine months ended September 30, 2026 and 2025 was as follows:
| Condensed Statement of Operations Location: | Three Months Ended September 30, 2026 | Three Months Ended September 30, 2025 | Nine Months Ended September 30, 2026 | Nine Months Ended September 30, 2025 | ||||||||||||||||||||||
| Cost of revenue | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
| Research and development | ( | ( | ( | |||||||||||||||||||||||
| Sales and marketing | ( | ( | ( | ( | ||||||||||||||||||||||
| General and administrative | ( | ( | ( | |||||||||||||||||||||||
| Restructuring | ( | ( | ( | |||||||||||||||||||||||
| Financial expense (income), net | ( | |||||||||||||||||||||||||
| Total | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
NOTE 8: LEASES
The Company leases its office facilities under non-cancelable agreements that expire at various dates through November 2027. The Company has a lease agreement for offices in Israel which includes two extension options for five years each. The Company estimates that it is reasonably certain that it will exercise the option for the first extension period. Therefore, for the purposes of determining the amount of the expense and the value of the right of use asset and lease liability according to ASC 842, the Company determined that the lease term would end in November 2032.
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| KALTURA, INC. AND SUBSIDIARIES | ||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (unaudited) | ||
Components of operating lease expense were as follows:
| Three Months Ended September 30, 2026 | Three Months Ended September 30, 2025 | Nine Months Ended September 30, 2026 | Nine Months Ended September 30, 2025 | |||||||||||||||||||||||
| Operating lease cost | $ | $ | $ | $ | ||||||||||||||||||||||
| Variable lease cost | ||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||||||||||
Supplementary cash flow information related to operating leases was as follows:
| Three Months Ended September 30, 2026 | Three Months Ended September 30, 2025 | Nine Months Ended September 30, 2026 | Nine Months Ended September 30, 2025 | |||||||||||||||||||||||
| Cash paid for operating leases | $ | $ | $ | $ | ||||||||||||||||||||||
As of September 30, 2026 and September 30, 2025, the weighted-average discount rates were 4.7 Maturities of the Company’s operating lease liabilities as of September 30, 2026 were as follows:
| Year Ending December 31, | ||||||||
| 2026 (Remainder) | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| 2031 and thereafter | ||||||||
| Total operating lease payments | ||||||||
| Less: imputed interest | ||||||||
| Total operating lease liabilities | $ | |||||||
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| KALTURA, INC. AND SUBSIDIARIES | ||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (unaudited) | ||
NOTE 9: COMMITMENTS AND CONTINGENCIES
Purchase Commitments
The Company has entered into various non-cancelable agreements with third-party providers for use of mainly cloud and other services, under which it committed to minimum and fixed purchases through the year ending December 31, 2029. The following table presents details of the aggregate future non-cancelable purchase commitments under such agreements as of September 30, 2026:
| Year Ending December 31, | ||||||||
| 2026 (Remainder) | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| Total purchase commitment | $ | |||||||
Litigation
The Company is occasionally a party to claims or litigation in the normal course of the business. The Company does not believe that it is a party to any pending legal proceeding that is likely to have a material adverse effect on its business, financial condition, or results of operations.
NOTE 10: CONDENSED CONSOLIDATED BALANCE SHEET COMPONENTS
Prepaid expenses and other current assets
Prepaid expenses and other current assets consisted of the following:
| September 30, 2026 | December 31, 2025 | |||||||||||||
| Prepaid expenses | $ | $ | ||||||||||||
| Derivative instrument | ||||||||||||||
| Restricted bank deposits | ||||||||||||||
| Other current assets | ||||||||||||||
| $ | $ | |||||||||||||
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| KALTURA, INC. AND SUBSIDIARIES | ||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (unaudited) | ||
Property and Equipment, net
Composition of property and equipment is as follows:
| September 30, 2026 | December 31, 2025 | |||||||||||||
| Cost: | ||||||||||||||
| Computers and peripheral equipment | $ | $ | ||||||||||||
| Office furniture and equipment | ||||||||||||||
| Leasehold improvements | ||||||||||||||
| Internal use software | ||||||||||||||
| Accumulated depreciation | ( | ( | ||||||||||||
| Depreciated cost | $ | $ | ||||||||||||
Depreciation expenses for the three months ended September 30, 2026 and 2025, and for the nine months ended September 30, 2026 and 2025 were $1,125 , $1,091 , $3,284 and $3,247 , respectively.
Other assets, noncurrent
| September 30, 2026 | December 31, 2025 | |||||||||||||
| Restricted cash | $ | $ | ||||||||||||
| Severance pay fund | ||||||||||||||
| Restricted deposit | ||||||||||||||
| Other | ||||||||||||||
| $ | $ | |||||||||||||
Accrued expenses and other current liabilities
| September 30, 2026 | December 31, 2025 | |||||||||||||
| Accrued expenses | $ | $ | ||||||||||||
| Accrued taxes | ||||||||||||||
| Derivative instruments | ||||||||||||||
| Other current liabilities | ||||||||||||||
| $ | $ | |||||||||||||
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| KALTURA, INC. AND SUBSIDIARIES | ||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (unaudited) | ||
Other liabilities, noncurrent
| September 30, 2026 | December 31, 2025 | |||||||||||||
| Accrued taxes, noncurrent | $ | $ | ||||||||||||
| Deferred tax liability | ||||||||||||||
| Contingent consideration | ||||||||||||||
| Other | ||||||||||||||
| $ | $ | |||||||||||||
NOTE 11: GOODWILL AND INTANGIBLE ASSETS
The carrying amounts and accumulated amortization expenses of the intangible assets, as of September 30, 2026 and December 31, 2025, were as follows:
| September 30, 2026 | December 31, 2025 | |||||||||||||||||||
| Weighted average remaining useful life (in years) | Balance | Balance | ||||||||||||||||||
| Gross carrying amount: | ||||||||||||||||||||
| Technology | $ | $ | ||||||||||||||||||
| Customer relationship | ||||||||||||||||||||
| Accumulated amortization and impairments: | ||||||||||||||||||||
| Technology | ( | ( | ||||||||||||||||||
| Customer relationship | ( | ( | ||||||||||||||||||
| ( | ( | |||||||||||||||||||
| Intangible assets, net | $ | $ | ||||||||||||||||||
During the three months ended September 30, 2026 and 2025, and the nine months ended September 30, 2026 and 2025, the Company recorded amortization expenses in the amount of $514 , $13 , $1,104 and $136 , respectively, included in cost of revenue and sales and marketing expenses in the consolidated statements of operations.
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| KALTURA, INC. AND SUBSIDIARIES | ||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (unaudited) | ||
The estimated future amortization expense of intangible assets as of September 30, 2026, is as follows:
| Year Ending December 31, | ||||||||
| 2026 (Remainder) | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| 2031 | ||||||||
| 2032 | ||||||||
| 2033 | ||||||||
| $ | ||||||||
Changes in the carrying amount of goodwill:
| Enterprise, Education and Technology | Media and Telecom | Total | ||||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | $ | |||||||||||||||||
Goodwill acquired(1) | ||||||||||||||||||||
| Balance as of September 30, 2026 | $ | $ | $ | |||||||||||||||||
(1) Includes $22,274 of goodwill recognized in connection with the acquisitions of PathFactory and BlueRush completed during the nine months ended September 30, 2026 (see Note 3), partially offset by a $32 measurement period adjustment resulting from the finalization of the purchase price allocation for the eSelf acquisition.
NOTE 12: INCOME TAXES
The Company recognized an income tax expense of $1,559 , $1,209 , $6,479 and $2,978 for the three and nine months ended September 30, 2026 and 2025, respectively. The tax expense for these periods was primarily attributable to pre-tax foreign earnings.
The Company has a full valuation allowance on its deferred tax assets. Deferred tax liability is from indefinite life goodwill intangibles. Management currently believes that it is more likely than not that the deferred tax regarding the tax loss carry forwards and other temporary differences will not be realized in the foreseeable future in the U.S.
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| KALTURA, INC. AND SUBSIDIARIES | ||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (unaudited) | ||
NOTE 13: NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS
The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders for the periods presented:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Numerator: | ||||||||||||||||||||||||||
| Net loss | $ | $ | $ | $ | ||||||||||||||||||||||
| Denominator: | ||||||||||||||||||||||||||
| Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted | ||||||||||||||||||||||||||
| Net loss per share attributable to common stockholders, basic and diluted | $ | $ | $ | $ | ||||||||||||||||||||||
Instruments potentially exercisable for common stock that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been anti-dilutive are as follows:
| As of September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Outstanding stock options and RSUs | ||||||||||||||
NOTE 14: REPORTABLE SEGMENTS AND GEOGRAPHICAL INFORMATION
Reportable segments
ASC 280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company's chief operating decision maker ("CODM") is its Chief Executive Officer. The Company's CODM does not regularly review asset information by segments and, therefore, the Company does not report asset information by segment. The Company organizes its operations in two
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| KALTURA, INC. AND SUBSIDIARIES | ||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (unaudited) | ||
| Three Months Ended September 30, 2026 | ||||||||||||||||||||
| Enterprise, Education and Technology | Media and Telecom | Total | ||||||||||||||||||
| Revenue | $ | $ | $ | |||||||||||||||||
| Cost of revenue | ||||||||||||||||||||
| Production costs | ||||||||||||||||||||
| Compensation | ||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||
| Other segment items | ||||||||||||||||||||
| Total cost of revenue | ||||||||||||||||||||
| Gross profit | ||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||
| Financial expense (income), net | ( | |||||||||||||||||||
| Provision for income taxes | ||||||||||||||||||||
| Net loss | $ | |||||||||||||||||||
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| KALTURA, INC. AND SUBSIDIARIES | ||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (unaudited) | ||
| Three Months Ended September 30, 2025 | ||||||||||||||||||||
| Enterprise, Education and Technology | Media and Telecom | Total | ||||||||||||||||||
| Revenue | $ | $ | $ | |||||||||||||||||
| Cost of revenue | ||||||||||||||||||||
| Production costs | ||||||||||||||||||||
| Compensation | ||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||
| Other segment items | ||||||||||||||||||||
| Total cost of revenue | ||||||||||||||||||||
| Gross profit | ||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||
| Financial expense (income), net | ( | |||||||||||||||||||
| Provision for income taxes | ||||||||||||||||||||
| Net loss | $ | |||||||||||||||||||
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| KALTURA, INC. AND SUBSIDIARIES | ||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (unaudited) | ||
| Nine Months Ended September 30, 2026 | ||||||||||||||||||||
| Enterprise, Education and Technology | Media and Telecom | Total | ||||||||||||||||||
| Revenue | $ | $ | $ | |||||||||||||||||
| Cost of revenue | ||||||||||||||||||||
| Production costs | ||||||||||||||||||||
| Compensation | ||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||
| Other segment items | ||||||||||||||||||||
| Total cost of revenue | ||||||||||||||||||||
| Gross profit | ||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||
| Financial expense (income), net | ||||||||||||||||||||
| Provision for income taxes | ||||||||||||||||||||
| Net loss | $ | |||||||||||||||||||
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| KALTURA, INC. AND SUBSIDIARIES | ||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (unaudited) | ||
| Nine Months Ended September 30, 2025 | ||||||||||||||||||||
| Enterprise, Education and Technology | Media and Telecom | Total | ||||||||||||||||||
| Revenue | $ | $ | $ | |||||||||||||||||
| Cost of revenue | ||||||||||||||||||||
| Production costs | ||||||||||||||||||||
| Compensation | ||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||
| Other segment items | ||||||||||||||||||||
| Total cost of revenue | ||||||||||||||||||||
| Gross profit | ||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||
| Financial expense (income), net | ||||||||||||||||||||
| Provision for income taxes | ||||||||||||||||||||
| Net loss | $ | |||||||||||||||||||
Other segment items include costs related to subcontractors and consultants, allocated rent, IT expenses related to employee use and other general costs.
Geographical information
See Note 4 for disaggregated revenue by geographic region.
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| KALTURA, INC. AND SUBSIDIARIES | ||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (unaudited) | ||
NOTE 15: LONG-TERM LOAN
In January 2021, the Company refinanced all amounts outstanding under the then-existing loan agreements, terminated all outstanding commitments, and entered into a new credit agreement (the “Credit Agreement”) with an existing lender, which provides for a new senior secured term loan facility in the aggregate principal amount of $40,000 (the “Term Loan Facility”) and a new senior secured revolving credit facility in the aggregate principal amount of $10,000 (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Credit Facilities”), which subsequently has been amended according to the Company's needs and other developments.
In May 2023, the Company entered into an amendment (the "Fourth Amendment") to the then-existing Credit Agreement to replace the London Interbank Offered Rate (“LIBOR”) with the Secured Overnight Financing Rate (“SOFR”) as the benchmark rate under the Credit Agreement. Prior to the Fourth Amendment, borrowings under the Credit Agreement would bear interest, at the Company's election, at (a) the Eurodollar Rate (as defined in the Credit Agreement as in effect prior to the Fourth Amendment) plus a margin of 3.50 % or (b) Alternative Base Rate (“ABR”) (as defined in the Credit Agreement) plus a margin of 2.50 %.
In December 2023, the Company entered into a new amendment to the then-existing Credit Agreement (the “Fifth Amendment”), which provides for a new term loan facility in the aggregate principal amount of $35,000 , while the commitments under the Revolving Credit Facility decreased to $25,000 .
In July 2024, the Company entered into an amendment to the then-existing Credit Agreement in connection with the Company’s repurchase programs, which updated the aggregate amount of permitted Restricted Payments (as defined in the Credit Agreement; which term includes, among others, repurchase of the Company’s outstanding common stock) and conditions for making such payments.
In March and October 2025, the Company entered into amendments to the Credit Agreement that, among other things, increased the aggregate amount of permitted Restricted Payments and modified the conditions applicable to such payments to facilitate the Company’s repurchases of securities. In November 2025, the Company entered into an additional amendment to the Credit Agreement to permit the Company to enter into certain strategic transactions, including an increase to the aggregate amount of Permitted Acquisitions (as defined in the Credit Agreement). In April 2026, the Company entered into a further amendment to the Credit Agreement that, among other things, reduced the aggregate amount of permitted Restricted Payments to zero and updated the amount of Permitted Acquisitions.
Following the effectiveness of the Fifth Amendment, borrowings under the Credit Facilities are subject to interest, determined as follows: (a) SOFR loans accrue interest at a rate per annum equal to Term SOFR (as defined in the Credit Agreement) plus 0.10 % per annum plus a margin of 2.50 % (the Adjusted Term SOFR (as defined in the Credit Agreement) is subject to a 1.00 % floor), and (b) ABR loans accrue interest at a rate per annum equal to the ABR plus a margin of 1.50 % (ABR is equal to the highest of (i) the prime rate and (ii) the Federal Funds Effective Rate plus 0.50 %, subject to a 2.00 % floor). As of September 30, 2026, the current rate of interest under the Credit Facilities was equal to a rate per annum of 6.67 %, consisting of 4.07 % (the 3-month SOFR rate as of September 28, 2026), 0.10 % credit spread adjustment and the margin of 2.50 %.
The Term Loan Facility is payable in consecutive quarterly installments on the last day of each fiscal quarter in an amount equal to (i) $438 for installments payable on December 31, 2023 (deferred to January 9, 2024) through September 30, 2024, (ii) $656 for installments payable on December 31, 2024 ($218 of the amount deferred to January 2025) through September 30, 2025, and (iii) $1,313 for installments payable on and after December 31, 2025. The remaining unpaid balance on the Term Loan Facility is due and payable on December 21, 2026, together with accrued and unpaid interest on the principal amount to be paid to, but excluding, the payment date. In addition, the Revolving Credit Facility matures on December 21, 2026. Amounts outstanding under the Credit Facilities may be voluntarily prepaid at any time and from time to time, in whole or in part, without premium or penalty.
Under the terms of the Credit Facilities, the Company is obligated to maintain compliance with certain covenants as defined therein. As of September 30, 2026, the Company met these covenants.
The aggregate principal annual maturities according to the Credit Facilities agreements are as follows:
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| KALTURA, INC. AND SUBSIDIARIES | ||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (unaudited) | ||
| Year Ending December 31, | ||||||||
| 2026 (Remainder) | $ | |||||||
| $ | ||||||||
The carrying amounts of the loans approximate their fair value.
NOTE 16: STOCKHOLDERS' EQUITY AND EQUITY INCENTIVE PLANS
Equity Incentive Plans
On January 1, 2026, the number of shares of common stock authorized for issuance under the 2021 Incentive Award Plan (the “2021 Plan”) automatically increased by 7,387,746 shares pursuant to the terms of the 2021 Plan.
Stock Options
A summary of the Company's stock option activity with respect to options granted under the 2021 Plan is as follows:
| Number of Options | Weighted Average exercise price | Weighted remaining contractual term (years) | Aggregate Intrinsic Value | |||||||||||||||||||||||
Outstanding as of January 1, 2026 | $ | $ | ||||||||||||||||||||||||
Granted | — | — | ||||||||||||||||||||||||
Exercised | ( | $ | — | $ | ||||||||||||||||||||||
Forfeited | ( | $ | — | |||||||||||||||||||||||
Outstanding and exercisable as of September 30, 2026 | $ | $ | ||||||||||||||||||||||||
RSUs
The following table summarizes the RSU activity with respect to the 2021 Plan for the nine months ended September 30, 2026:
RSUs Outstanding | Weighted Average Grant Date Fair Value per Share | |||||||||||||
Outstanding as of December 31, 2025 | $ | |||||||||||||
RSUs granted | $ | |||||||||||||
RSUs vested | ( | $ | ||||||||||||
RSUs forfeited | ( | $ | ||||||||||||
Unvested and Outstanding as of September 30, 2026 | $ | |||||||||||||
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| KALTURA, INC. AND SUBSIDIARIES | ||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (unaudited) | ||
Stock-Based Compensation Expense
The stock-based compensation expense by line item in the accompanying consolidated statement of operations is summarized as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Cost of revenue | $ | $ | $ | $ | ||||||||||||||||||||||
| Research and development | ||||||||||||||||||||||||||
| Sales and marketing | ||||||||||||||||||||||||||
| General and administrative | ||||||||||||||||||||||||||
| Total expenses | $ | $ | $ | $ | ||||||||||||||||||||||
As of September 30, 2026, there were $21,373 of total unrecognized compensation costs related to non-vested stock-based compensation arrangements granted under the Company's equity incentive plans. These costs are expected to be recognized over a weighted-average period of approximately two years .
Shares Reserved for Future Issuance
The Company has the following common stock reserved for future issuance under the 2021 Plan:
| September 30, 2026 | ||||||||
| Outstanding options | ||||||||
| Outstanding RSUs | ||||||||
| Shares reserved under 2021 Plan | ||||||||
| Total | ||||||||
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| KALTURA, INC. AND SUBSIDIARIES | ||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (unaudited) | ||
NOTE 17: SELECTED STATEMENTS OF OPERATIONS DATA
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Financial income: | ||||||||||||||||||||||||||
| Interest income | $ | $ | $ | $ | ||||||||||||||||||||||
| Foreign currency translation adjustments, net | — | — | — | |||||||||||||||||||||||
| Financial expenses: | ||||||||||||||||||||||||||
| Foreign currency translation adjustments, net | — | |||||||||||||||||||||||||
| Bank fees | ||||||||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||
| Financial expense (income), net | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||
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| KALTURA, INC. AND SUBSIDIARIES | ||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (unaudited) | ||
NOTE 18: ACCUMULATED OTHER COMPREHENSIVE INCOME
The following table summarizes the changes in accumulated other comprehensive income by component, net of tax (AOCI), during the nine months ended September 30, 2026 and 2025:
| Net Unrealized Gains (Losses) on Available-for-Sale Securities Instruments | Net Unrealized Gains (Losses) on Derivatives Designated as Hedging Instruments | Total | ||||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | $ | |||||||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | |||||||||||||||||||
| Net realized losses reclassified from accumulated other comprehensive income | ( | ( | ||||||||||||||||||
| Other comprehensive loss | ( | ( | ( | |||||||||||||||||
| Balance as of September 30, 2026 | $ | ( | $ | ( | $ | ( | ||||||||||||||
| Net Unrealized Gains on Available-for-Sale Securities Instruments | Net Unrealized Gains on Derivatives Designated as Hedging Instruments | Total | ||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | |||||||||||||||||
| Other comprehensive income before reclassifications | ||||||||||||||||||||
| Net realized losses reclassified from accumulated other comprehensive income | ( | ( | ||||||||||||||||||
| Other comprehensive income | ||||||||||||||||||||
| Balance as of September 30, 2025 | $ | $ | $ | |||||||||||||||||
NOTE 19: RESTRUCTURING ACTIVITIES
Restructuring Plans
On April 1, 2026, in connection with the acquisition of PathFactory, the Company implemented a restructuring plan (the "PathFactory Restructuring Plan") to integrate the acquired operations into the Company's existing organizational structure and streamline operations. As part of the PathFactory Restructuring Plan, approximately 50 % of the employees of the acquired business were terminated. During the three and nine months ended September 30, 2026, the Company recorded restructuring expenses of $61 and $764 , respectively primarily related to employee termination benefits.
On May 7, 2026, the Company approved a cost-reduction and re-organization plan that included, among other things, downsizing approximately 5 % of the Company's workforce (the "2026 Reorganization Plan" and together with PathFactory Restructuring Plan, the "2026 Restructuring Plans"). During the three and nine months ended September 30, 2026, the Company recorded restructuring expenses of $386 and $956 , respectively, primarily related to employee termination benefits.
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| KALTURA, INC. AND SUBSIDIARIES | ||
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||
| (unaudited) | ||
These charges were recorded within restructuring expenses in the Company's condensed consolidated statements of operations and were not included as part of the consideration transferred or the allocation of the purchase price related to the acquisition.The Company does not expect to incur any material additional costs related to these plans.
Restructuring Accruals
The following table is a reconciliation of the beginning and ending restructuring liability for the nine months ended September 30, 2026 :
| Enterprise, Education and Technology | Media and Telecom | Total | ||||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | $ | |||||||||||||||||
| Accrual and accrual adjustments | ||||||||||||||||||||
| Cash payments | ( | ( | ( | |||||||||||||||||
| Balance as of September 30, 2026 | $ | $ | $ | |||||||||||||||||
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 16, 2026 (the "2025 10-K"). This discussion contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in Part I, Item 1A, “Risk Factors” of our 2025 10-K and elsewhere in this Quarterly Report on Form 10-Q.
Overview
We, Kaltura, Inc. (“Kaltura,” “we,” “us,” or “our”), are a market-leading provider of video and rich media offerings for enterprises. Our mission is to power rich, agentic digital experiences across organizational journeys for customers, employees, learners, and audiences.
Kaltura's Digital Experience Platform enables organizations to create, manage, and deliver video and rich media experiences that increasingly incorporate agentic artificial intelligence (“AI”) capabilities, including conversational interfaces, workflow automation, and outcome-oriented engagement across digital touchpoints. We believe this combination of video, rich media and agentic capabilities enables organizations to move beyond static, one-size-fits-all digital experiences toward more personalized, contextual, and interactive agentic digital experiences at scale.
Video and other forms of rich media - including interactive, data-driven, and conversational media - are central to digital interaction and engagement, transforming how people communicate, work, learn, and consume content. For organizations, rich media increasingly sits at the core of digital transformation initiatives, with businesses adopting media-driven solutions to engage customers, employees, learners, and audiences across a growing range of use cases. At the same time, advances in generative artificial intelligence (“Gen AI”) are enabling the real-time and automated creation of highly personalized and contextually relevant content, including video and other forms of rich media. We believe the convergence of rich media and AI is increasing the scale, speed, and strategic importance of digital experiences and driving demand for platforms that support more interactive, contextual, and outcome-oriented engagement.
Founded in 2006, Kaltura was among the pioneers to recognize the potential of integrating video into enterprise workflows and to offer a system for enterprise video content management and online video publishing. Over time, we expanded our platform to support additional experiences, including virtual events and webinars and cloud-based television services. Today, Kaltura provides a cloud-based rich media platform designed to help organizations create, manage, and deliver rich media experiences at scale across customer-facing, employee-facing, learner-facing, and audience-facing use cases.
Our Digital Experience platform is designed around three core layers: rich media content creation, rich media content management, and rich media experiences. Together, these layers enable organizations to produce and generate live and on-demand video and other forms of rich media, securely manage content, users, permissions, and metadata across enterprise and media environments, and deliver media-rich experiences across a wide range of internal and external workflows. The platform increasingly incorporates agentic AI-driven capabilities designed to enable more interactive, contextual, and goal-oriented experiences, while maintaining enterprise-grade security, privacy, and governance.
As video usage continues to accelerate across communication, work, and learning environments, organizations are increasingly deploying sophisticated video solutions to further engage with their customers, partners, and employees. The introduction of Gen AI further amplifies this demand and is expected to have a substantial impact on our business by enabling the automatic production of hyper-personalized and contextually relevant video experiences in real time. We believe this powerful new tool will expand opportunities for increased video creation, consumption, and monetization, and drives a need for advanced video content management solutions.
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To support our AI capabilities, in 2025, we acquired eSelf AI, a multimodal AI lab developing technology for agentic interactions with live avatars. Through this acquisition, we expanded our content creation and experience capabilities to include AI-generated video and avatar-based interactions, enhancing our rich media content creation layer. In addition, in April, 2026, we completed our previously announced acquisition of PathFactory Holdings ULC (“PathFactory”), a provider of content journey orchestration and engagement analytics solutions. We believe this acquisition, will strengthen our position in the emerging conversation automation and agentic engagement solutions market and complement the eSelf AI acquisition by adding journey-level orchestration, intent data, analytics, and integrations across additional content types and enterprise systems.
We generate revenue primarily from the sale of Software-as-a-Service (“SaaS”) subscriptions, and we also derive revenue from platform usage license subscriptions and associated professional services. Our sales typically target medium to large enterprises, educational institutions, technology providers, and media and telecom companies. In addition, we are expanding our go-to-market approaches to support a wider range of adoption models and customer sizes. Our professional services revenue is generally driven by implementation and support services for new and existing customers.
We organize our business into two reporting segments: (i) Enterprise, Education, and Technology (“EE&T”); and (ii) Media and Telecom (“M&T”). Accordingly, our financial reporting distinguishes between revenue and gross profit from Subscription and Professional Services from customers who use our products and services to address Entertainment & Monetization use cases (for their audiences), reported in our M&T segment, and those that are attained from customers who are using us to address all other use cases (for their customers, employees, and learners), reported in our EE&T segment. These segments share a common underlying platform consisting of our API-based architecture, as well as unified product development, operations, and administrative resources.
•Enterprise, Education & Technology: In the EE&T segment, subscription revenue is primarily generated on a per full‑time equivalent or platform usage‑license basis for all of our products, in addition to revenue derived from associated professional services. This segment encompasses customers utilizing Kaltura’s solutions to deliver agentic rich-media experiences for their customers, employees, and learners such as buyer enablement, employee recruiting, learning and teaching. Contracts in this segment typically range from 12 to 24 months, with billing generally executed on an annual basis.
•Media & Telecom: The M&T segment includes revenue from customers using Kaltura to deliver entertainment and streaming use cases to their audiences, along with the associated professional services. For customers of our telecom TVCMS and TV Streaming Applications, revenue is recognized primarily on a per end‑subscriber basis, while media customers leveraging our Online Video Platform are billed on a platform usage‑license basis. Contracts in this segment generally extend for two to five years, with billing performed on either a quarterly or annual basis. Implementation of TV offerings typically requires six to 12 months, with upfront resource requirements generally higher than those for our other offerings. Consequently, there is an extended period from initial booking to go‑live, accompanied by a higher proportion of professional services revenue relative to overall revenue. Additionally, a greater share of revenue in this segment is derived from customers licensing our offerings through private cloud and on‑premise deployments, which has an impact on our gross margin.
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Reflected below is a summary of reportable segment revenue and reportable segment gross profit for the three and nine months ended September 30, 2026 and 2025.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||
| Enterprise, Education & Technology | $ | 36,923 | $ | 32,365 | $ | 107,879 | $ | 100,023 | |||||||||||||||
| Media & Telecom | 10,342 | 11,501 | 30,907 | 35,289 | |||||||||||||||||||
| Total Revenue | $ | 47,265 | $ | 43,866 | $ | 138,786 | $ | 135,312 | |||||||||||||||
| Gross Profit | |||||||||||||||||||||||
| Enterprise, Education & Technology | $ | 28,485 | $ | 24,542 | $ | 84,179 | $ | 76,977 | |||||||||||||||
| Media & Telecom | 5,449 | 6,185 | 16,401 | 17,706 | |||||||||||||||||||
| Total Gross Profit | $ | 33,934 | $ | 30,727 | $ | 100,580 | $ | 94,683 | |||||||||||||||
We employ a "land and expand strategy" with the aim of having our customers increase their usage of our offerings and/or purchase additional offerings over time. Our Net Dollar Retention Rate (as defined below) measures our success in retaining and growing recurring revenue from our existing customers over a given period. For the three months ended September 30, 2026 and 2025, our Net Dollar Retention Rate was 97%. Our Annualized Recurring Revenue (as defined below) increased by 9% in three months ended September 30, 2026, compared to three months ended September 30, 2025. The increase includes the contribution of the PathFactory acquisition, together with growth from new customers.
For any given year, a large majority of our revenue comes from existing customers, with whom we are in active dialogue and tend to have visibility into their expected usage of our offerings.
We are expanding our go-to-market approaches to support a wider range of adoption models and customer sizes. We believe certain of our newer offerings, particularly AI-assisted content creation tools and conversational rich media agents, are well suited for more targeted departmental deployments, self-service adoption, and product-led growth (“PLG”) motions. These offerings may enable us to engage smaller organizations, teams, and departments, including small and medium enterprises (“SMEs”) and individual groups within larger enterprises, while remaining complementary to our core enterprise business. In addition, we are investing in developer-led growth (“DLG”) initiatives by expanding our APIs, SDKs, and developer tools, including planned offerings such as an Agentic Avatar SDK. These capabilities are designed to enable independent software vendors (“ISVs”), system integrators, partners, and developers to embed Kaltura-powered rich media and conversational interfaces into their own products, workflows, and applications. We also intend to continue expanding our ecosystem of channel partners, including co-sell, resell, OEM, and marketplace relationships. We believe that broader partner distribution, including through cloud marketplaces and digital channels, may increase reach, reduce customer acquisition costs, and accelerate adoption across both enterprise and self-service use cases. Recent partnerships with platforms such as Descript and Cornerstone illustrate this strategy: by integrating the Company’s AI-powered video, avatar, content management, and engagement capabilities into adjacent creation, learning, and workforce-development workflows, the Company intends to meet customers where they already work, package its capabilities into higher-value solutions, and unlock partner-led demand from established enterprise ecosystems.
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Key Factors Affecting Our Performance
Expansion of our Platform
We believe our platform is ideally suited for expansion across solutions, industries, and use cases. For example, in 2020, we entered the real-time conferencing market with the introduction of our Virtual and Hybrid Events, Webinars, and Online Learning products, focusing on learning, training, events, and marketing. Since then, we expanded the capabilities of our Virtual & Hybrid Events product to support a broader range of event types and use cases, fitted them to also address low-touch and self-serve sales and introduced a set of Gen AI-powered capabilities designed to increase productivity in creating content and setting up events and to foster user engagement. Our acquisition of PathFactory further expanded our platform by adding AI-powered content intelligence, personalized content experiences, journey orchestration, and engagement analytics built to enable customers to better understand user intent and deliver more relevant experiences throughout the buyer journey. We plan to continue enhancing our platform’s capabilities—including by further integrating Gen AI features that enable automatic video creation, advanced personalization, and real-time analytics. Our robust API-first architecture supports deep integration into multiple workflows, which we believe is critical for driving adoption and delivering enhanced value for our customers. One example of recently growing use-case being adopted by our customers is customer-support and call-centers, where Kaltura Genie and Agents are used to improve support ticket resolution times and training of support personnel and customers.
Acquiring New Customers
We remain focused on acquiring customers across our key verticals (technology, education, regulated industries, professional and commercial services, and media & telecom). Our approach includes direct enterprise sales for larger customers, as well as channel partnerships and more self-serve or inside sales–led motions to capture SMEs. We believe that increasing brand awareness and continued product innovation will help us attract new customers across geographies and industries. We also continue to provide our self-serve offering that can be purchased completely online, which serves as a demand generation engine for our low-touch and enterprise offerings. We believe this will enable us to efficiently acquire smaller customers across all industries over time – expanding beyond enterprises into SMEs, beyond universities into K-12 schools, beyond tier 1 media and telecom companies to tier 2 and 3 media and telecom companies, and beyond providing Media Services to large technology companies to also addressing smaller technology firms and startups.
Increasing Revenue from Existing Customers
Many of our customers run multiple Kaltura products for various use cases, ranging from employee training and collaboration to external marketing and virtual events. By cross-selling and upselling additional solutions — such as our newly introduced Gen AI-powered capabilities and expanded application suites — we aim to drive higher usage and expand overall revenue. Our strong integration, ongoing support, and a commitment to evolving security and compliance requirements also helps us support sustained customer adoption and usage growth. We are focused on increasing sales within our existing customer base through increased usage of our platform and the cross-selling of additional products and solutions. For the three months ended September 30, 2026, our Net Dollar Retention Rate was 97%. In order for us to increase revenue within our customer base, we will need to maintain engineering-level customer support and continue to introduce new products and features as well as innovative new use cases that are tailored to our customers' needs.
Continued Investment in Growth
Although we have invested significantly in our business to date, we believe that we still have a significant market opportunity ahead of us. We intend to continue to make investments to support the growth and expansion of our business and to increase revenue. We believe there is a significant opportunity to continue our growth. We expect that our cost of revenue and operating expenses will fluctuate over time.
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Key Financial and Operating Metrics
We measure our business using both financial and operating metrics. We use these metrics to assess the progress of our business, make decisions on where to allocate capital, time, and technology investments, and assess the near-term and long-term performance of our business. The key financial and operating metrics we use are:
| Three Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (in thousands, except percentages) | ||||||||||||||
| Net Dollar Retention Rate | 97 | % | 97 | % | ||||||||||
As of September | ||||||||||||||
| 2026 | 2025 | |||||||||||||
(in thousands) | ||||||||||||||
| Remaining Performance Obligations | $ | 161,590 | $ | 159,330 | ||||||||||
| Annualized Recurring Revenue | $ | 184,705 | $ | 169,094 | ||||||||||
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Annualized Recurring Revenue
We use Annualized Recurring Revenue ("ARR") as a measure of our revenue trend and an indicator of our future revenue opportunity from existing recurring customer contracts. We calculate ARR by annualizing our recurring revenue for the most recently completed fiscal quarter. Recurring revenues are generated from SaaS and PaaS subscriptions, as well as term licenses for software installed on the customer’s premises (“On-Prem”). For the SaaS and PaaS components, we calculate ARR by annualizing the actual recurring revenue recognized for the latest fiscal quarter.
For the On-Prem components for which revenue recognition is not ratable across the license term, we calculate ARR for each contract by dividing the total contract value (excluding professional services) as of the last day of the specified period by the number of days in the contract term and then multiplying by 365.
Recurring revenue excludes revenue from one-time professional services and setup fees. ARR is not adjusted for the impact of any known or projected future customer cancellations, upgrades or downgrades, or price increases or decreases.
The amount of actual revenue that we recognize over any 12-month period is likely to differ from ARR at the beginning of that period, sometimes significantly. This may occur due to new bookings, cancellations, upgrades or downgrades, pending renewals, professional services revenue, foreign exchange rate fluctuations and acquisitions or divestitures. ARR should be viewed independently of revenue as it is an operating metric and is not intended to be a replacement or forecast of revenue. Our calculation of ARR may differ from similarly titled metrics presented by other companies.
Net Dollar Retention Rate
Our Net Dollar Retention Rate, which we use to measure our success in retaining and growing recurring revenue from our existing customers, compares our recognized recurring revenue from a set of customers across comparable periods. We calculate our Net Dollar Retention Rate for a given period as the recognized recurring revenue from the latest reported fiscal quarter from the set of customers whose revenue existed in the reported fiscal quarter from the prior year (the numerator), divided by recognized recurring revenue from such customers for the same fiscal quarter in the prior year (denominator). For annual periods, we report Net Dollar Retention Rate as the arithmetic average of the Net Dollar Retention Rate for all fiscal quarters included in the period. We consider subdivisions of the same legal entity (for example, divisions of a parent company or separate campuses that are part of the same state university system) ,as well as Value-add Resellers (“VARs”) (meaning resellers that directly manage the relationship with the customer) and the customers they manage, to be a single customer for purposes of calculating our Net Dollar Retention Rate. Our calculation of Net Dollar Retention Rate for any fiscal period includes the positive recognized recurring revenue impacts of selling new services to existing customers and the negative recognized recurring revenue impacts of contraction and attrition among this set of customers. Our Net Dollar Retention Rate may fluctuate as a result of a number of factors, including the growing level of our revenue base, the level of penetration within our customer base, expansion of products and features, and our ability to retain our customers. Our calculation of Net Dollar Retention Rate may differ from similarly titled metrics presented by other companies.
Remaining Performance Obligations
Remaining Performance Obligations represents the amount of contracted future revenue that has not yet been delivered, including both subscription and professional services revenues. Remaining Performance Obligations consists of both deferred revenue and contracted non-cancelable amounts that will be invoiced and recognized in future periods. As of September 30, 2026, our Remaining Performance Obligations was $161.6 million, which consists of both billed consideration in the amount of $66.5 million and unbilled consideration in the amount of $95.1 million that we expect to invoice and recognize in future periods.
We expect to recognize 70% of our Remaining Performance Obligations as revenue over the next 12 months and the remainder over the next four years, in each case, in accordance with our revenue recognition policy.
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Non-GAAP Financial Measures
In addition to our results determined in accordance with GAAP, we believe that EBITDA and Adjusted EBITDA, non-GAAP financial measures, are useful in evaluating the performance of our business.
We define EBITDA as net profit (loss) before financial expenses (income), net, provision for income taxes and depreciation and amortization expenses. Adjusted EBITDA is defined as EBITDA (as defined above), adjusted for the impact of certain non-cash and other items that we believe are not indicative of our core operating performance, such as non-cash stock-based compensation expenses, restructuring expenses, acquisition-related compensation costs, certain professional consulting and other expenses associated with strategic initiatives and change in the fair value of the contingent consideration.
EBITDA and Adjusted EBITDA are supplemental measures of our performance, are not defined by or presented in accordance with GAAP, and should not be considered in isolation or as an alternative to net profit (loss) or any other performance measure prepared in accordance with GAAP.
EBITDA and Adjusted EBITDA are presented because we believe that they provide useful supplemental information to investors and analysts regarding our operating performance and are frequently used by these parties in evaluating companies in our industry. By presenting EBITDA and Adjusted EBITDA, we provide a basis for comparison of our business operations between periods by excluding items that we do not believe are indicative of our core operating performance. We believe that investors’ understanding of our performance is enhanced by including these non-GAAP financial measures as a reasonable basis for comparing our ongoing results of operations. Additionally, our management uses Adjusted EBITDA as a supplemental measure of our performance because it assists us in comparing the operating performance of our business on a consistent basis between periods, as described above.
Although we use EBITDA and Adjusted EBITDA, as described above, EBITDA and Adjusted EBITDA, have significant limitations as analytical tools. Some of these limitations include:
•such measures do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;
•such measures do not reflect changes in, or cash requirements for, our working capital needs;
•such measures do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments on our debt;
•such measures do not reflect our tax expense or the cash requirements to pay our taxes;
•although depreciation and amortization expense and non-cash stock-based compensation expense are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and such measures do not reflect any cash requirements for such replacements; and
•other companies in our industry may calculate such measures differently than we do, thereby further limiting their usefulness as comparative measures.
Due to these limitations, EBITDA and Adjusted EBITDA should not be considered as measures of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using these non-GAAP measures only supplementally. Adjusted EBITDA includes an adjustment for non-cash stock-based compensation expenses. It is reasonable to expect that this item will occur in future periods. However, we believe this adjustment is appropriate because the amount recognized can vary significantly from period to period, does not directly relate to the ongoing operations of our business, and complicates comparisons of our internal operating results between periods and with the operating results of other companies over time. Each of the normal recurring adjustments and other adjustments described above help to provide management with a measure of our core operating performance over time by removing items that are not related to day-to-day operations. Nevertheless, because of the limitations described above, management does not view EBITDA, or Adjusted EBITDA in isolation and also uses other measures, such as revenue, operating loss, and net loss, to measure operating performance.
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The following table reconciles EBITDA and Adjusted EBITDA to the most directly comparable GAAP financial performance measure, which is net loss:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Net loss | $ | (1,499) | $ | (2,628) | $ | (10,812) | $ | (11,497) | |||||||||||||||
Financial expense (income), net (a) | (728) | (85) | 1,666 | 2,682 | |||||||||||||||||||
| Provision for income taxes | 1,559 | 1,209 | 6,479 | 2,978 | |||||||||||||||||||
| Depreciation and amortization | 1,639 | 1,104 | 4,388 | 3,383 | |||||||||||||||||||
| EBITDA | 971 | (400) | 1,721 | (2,454) | |||||||||||||||||||
| Non-cash stock-based compensation expense | 4,216 | 4,051 | 11,717 | 12,675 | |||||||||||||||||||
Strategic initiatives (b) | 109 | (301) | 2,437 | 1,331 | |||||||||||||||||||
| Change in fair value of contingent consideration | 270 | — | (692) | — | |||||||||||||||||||
Restructuring (c) | 447 | 804 | 1,720 | 804 | |||||||||||||||||||
Acquisition-related compensation costs(d) | — | — | 633 | — | |||||||||||||||||||
| Adjusted EBITDA | $ | 6,013 | $ | 4,154 | $ | 17,536 | $ | 12,356 | |||||||||||||||
(a)The three months ended September 30, 2026 and 2025, and the nine months ended September 30, 2026 and 2025, include $514, $527, $1,589 and $1,737 respectively, of interest expenses and $349, $751, $1,551 and $2,383, respectively of interest income.
(b)Strategic initiatives for the three and nine months ended September 30, 2026 and 2025 relate to professional fees, consulting services, and transaction-related costs incurred in connection with the acquisition of PathFactory and other costs associated with strategic initiatives. The three and nine months ended September 30, 2025 include vendor credit and discounted pricing for expenses recognized during the three months ended June 30, 2025.
(c)The three and nine months ended September 30, 2026 and 2025 include one-time employee termination benefits incurred in connection with the Company's reorganization plans.
(d)Acquisition-related compensation costs for the nine months ended September 30, 2026 relate to statutory termination costs and other severance payments associated with integrating the PathFactory acquisition.
Components of Our Results of Operations
Revenue
Subscriptions
Our revenues are mainly comprised of revenue from SaaS and PaaS subscriptions. SaaS and PaaS subscriptions provide access to our Video Experience Cloud which powers all types of video experiences: live, real-time, and on-demand video. We provide access to our platform either as a cloud-based service, which represent most of our SaaS and PaaS subscriptions, or, less commonly, as a term license to software installed on the customer's premises. Revenue from SaaS and PaaS subscriptions is recognized ratably over the time of the subscription, beginning from the date on which the customer is granted access to our Video Experience Cloud. Revenue from the sale of a term license is recognized at a point in time in which the license is delivered to the customer. Revenue from post-contract services ("PCS") included in On-Prem deals is recognized ratably over the period of the PCS.
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Professional Services
Our revenue also includes professional services, which consist of consulting, integration and customization services, technical solution services and training related to our video experience. In some of our arrangements, professional services are accounted for as a separate performance obligation, and revenue is recognized upon rendering of the service.
In some of our SaaS and PaaS subscriptions, we determined that the professional services are solely set up activities that do not transfer goods or services to the customer and therefore are not accounted for as a separate performance obligation and are recognized ratably over the time of the subscription.
Cost of Revenue
Cost of subscription revenue consists primarily of employee-related costs including payroll, benefits and stock-based compensation expense for operations and customer support teams, costs of cloud hosting providers and other third-party service providers, amortization of capitalized software development costs and acquired technology and allocated overhead costs.
Cost of professional services consists primarily of personnel costs of our professional services organization, including payroll, benefits, and stock-based compensation expense, allocated overhead costs and other third-party service providers.
The costs associated with providing professional services are significantly higher as a percentage of related revenue than the costs associated with delivering our subscriptions due to the labor costs of providing professional services. As such, the implementation and professional services costs relating to an arrangement with a new customer are more significant than the costs to renew an existing customer’s license and support arrangement.
For the three months ended September 30, 2026 and 2025, and for the nine months ended September 30, 2026 and 2025, our cost of revenue was $13,331, $13,139, $38,206 and $40,629, respectively.
Gross Margins
Gross margins have improved year-over-year since 2020, and while this measure has and will continue to vacillate between quarters, we expect it to continue the growth trend in the coming years. Gross margins have been, and will continue to be, affected by a variety of factors, including the average sales price of our products and services, volume growth, the mix of revenue between software licenses, maintenance and support, professional services, onboarding of new media and telecom customers, hosting of major virtual events, and changes in cloud infrastructure and personnel costs. In particular, the gross margins in the M&T segment are lower than in the EE&T segment because of resources required for implementing solutions for TV experiences, which generally exceed those of other offerings. This results in a longer period for M&T from initial booking to go-live and a higher proportion of professional services revenue as a percentage of overall revenue. Additionally, a higher proportion of M&T revenue comes from customers who choose to license our offerings through private cloud and on-premise deployments, which also impacts our M&T gross margin. Going forward, over the long term, we expect to see an improvement in gross margins for both EE&T and M&T, driven by enhanced efficiencies in both production and professional services costs.
For the three months ended September 30, 2026 and 2025, our gross margins were 72% (77% for subscriptions and (100)% for professional services) and 70% (77% for subscriptions and (74)% for professional services), respectively. For the nine months ended September 30, 2026 and 2025, our gross margins were 72% (78% for subscriptions and (97)% for professional services) and 70% (77% for subscriptions and (77)% for professional services), respectively.
For our EE&T segment, gross margins for the three months ended September 30, 2026 and 2025, were 77% (82% for subscription and (350)% for professional services), and 76% (82% for subscription and (317)% for professional services), respectively. For the nine months ended September 30, 2026 and 2025, our gross margins were 78% (83% for subscriptions and (331)% for professional services) and 77% (83% for subscriptions and (225)% for professional services), respectively.
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For our M&T segment, gross margins for the three months ended September 30, 2026 and 2025 were 53% (56% for subscriptions and 16% for professional services) and 54% (58% for subscriptions and 20% for professional services), respectively. For the nine months ended September 30, 2026 and 2025, our gross margins were 53% (57% for subscription and 11% for professional services) and 50% (57% for subscription and (2)% for professional services), respectively.
Research and Development
Our research and development expenses consist primarily of costs incurred for personnel-related expenses for our technical staff, including salaries and other direct personnel-related costs. Additional expenses include consulting and professional fees for third-party development resources and software subscriptions. Going forward, over the long term, we expect our research and development expenses to decrease as a percentage of revenue. Subsequent costs incurred for the development of future upgrades and enhancements, which are expected to result in additional functionality, may qualify for capitalization under internal-use software and therefore may cause research and development expenses to fluctuate.
Sales and Marketing Expenses
Our sales and marketing expenses consist primarily of personnel related costs for our sales and marketing functions, including salaries and other direct personnel-related costs, such as sales commissions.
Additional expenses include marketing program costs and amortization of acquired customer relationships intangible assets. Going forward, over the long term, we expect our sales and marketing expenses to increase as a percentage of revenue.
General and Administrative Expenses
Our general and administrative expenses consist primarily of personnel-related costs for our executive, finance, human resources, information technology, and legal functions, including salaries and other direct personnel-related costs. Going forward, over the long term, we expect our general and administrative expenses to decrease as a percentage of revenue.
We allocate overhead costs such as rent, utilities, and supplies to all departments based on relative headcount to each operating expense category.
Financial expense (income), net
Financial expense (income), net consists of interest expense accrued or paid on our indebtedness, net of interest income earned on our cash balances and marketable securities. Financial expense (income), net also includes foreign exchange gains and losses and bank fees.
We expect interest expenses to vary each reporting period depending on the amount of outstanding indebtedness and prevailing interest rates.
We expect interest income will vary in each reporting period depending on our average cash and marketable securities balances during the period and applicable interest rates.
Provision for Income Taxes
We are subject to taxes in the United States as well as other tax jurisdictions or countries in which we conduct business. Earnings from our non-U.S. activities are subject to local country income tax and may be subject to current U.S. income tax. Due to cumulative losses, we maintain a valuation allowance against our deferred tax assets. We consider all available evidence, both positive and negative, in assessing the extent to which a valuation allowance should be applied against our deferred tax assets. Realization of our U.S. deferred tax assets depends upon future earnings, the timing and amount of which are uncertain. Our effective tax rate is affected by tax rates in foreign jurisdictions and the relative amounts of income we earn in those jurisdictions, as well as non-deductible expenses, such as share-based compensation, and changes in our valuation allowance.
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Results of Operations
The following tables summarize key components of our results of operations for the periods presented. The period-to-period comparisons of our historical results are not necessarily indicative of the results that may be expected in the future.
| Three Months Ended September 30, | Period-over-Period Change | Nine Months Ended September 30, | Period-over-Period Change | ||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Dollar | Percentage | 2026 | 2025 | Dollar | Percentage | ||||||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | (in thousands, except percentages) | ||||||||||||||||||||||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||||||||||||||||||||
| Enterprise, Education & Technology | $ | 36,923 | $ | 32,365 | $ | 4,558 | 14 | % | $ | 107,879 | $ | 100,023 | $ | 7,856 | 8 | % | |||||||||||||||||||||||||||||||
| Media & Telecom | 10,342 | 11,501 | (1,159) | (10) | % | 30,907 | 35,289 | (4,382) | (12) | % | |||||||||||||||||||||||||||||||||||||
| Total revenue | 47,265 | 43,866 | 3,399 | 8 | % | 138,786 | 135,312 | 3,474 | 3 | % | |||||||||||||||||||||||||||||||||||||
| Cost of revenue | 13,331 | 13,139 | 192 | 1 | % | 38,206 | 40,629 | (2,423) | (6) | % | |||||||||||||||||||||||||||||||||||||
| Total gross profit | 33,934 | 30,727 | 3,207 | 10 | % | 100,580 | 94,683 | 5,897 | 6 | % | |||||||||||||||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||||||||||||||||
| Research and development expenses | 12,463 | 11,481 | 982 | 9 | % | 35,909 | 35,137 | 772 | 2 | % | |||||||||||||||||||||||||||||||||||||
| Sales and marketing expenses | 12,025 | 11,047 | 978 | 9 | % | 36,713 | 34,489 | 2,224 | 6 | % | |||||||||||||||||||||||||||||||||||||
| General and administrative expenses | 9,667 | 8,899 | 768 | 9 | % | 28,905 | 30,090 | (1,185) | (4) | % | |||||||||||||||||||||||||||||||||||||
| Restructuring | 447 | 804 | (357) | (44) | % | 1,720 | 804 | 916 | 114 | % | |||||||||||||||||||||||||||||||||||||
| Total operating expenses | 34,602 | 32,231 | 2,371 | 7 | % | 103,247 | 100,520 | 2,727 | 3 | % | |||||||||||||||||||||||||||||||||||||
| Loss from operations | 668 | 1,504 | (836) | (56) | % | 2,667 | 5,837 | (3,170) | (54) | % | |||||||||||||||||||||||||||||||||||||
| Financial expense (income), net | (728) | (85) | (643) | 756 | % | 1,666 | 2,682 | (1,016) | (38) | % | |||||||||||||||||||||||||||||||||||||
| Loss (income) before provision for income taxes | (60) | 1,419 | (1,479) | (104) | % | 4,333 | 8,519 | (4,186) | (49) | % | |||||||||||||||||||||||||||||||||||||
| Provision for income taxes | 1,559 | 1,209 | 350 | 29 | % | 6,479 | 2,978 | 3,501 | 118 | % | |||||||||||||||||||||||||||||||||||||
| Net loss | $ | 1,499 | $ | 2,628 | $ | (1,129) | (43) | % | $ | 10,812 | $ | 11,497 | $ | (685) | (6) | % | |||||||||||||||||||||||||||||||
Segments
We manage and report operating results through two reportable segments.
•Enterprise, Education & Technology (78% and 74% of revenue for the three months ended September 30, 2026 and 2025, respectively, and 78% and 74% for the nine months ended September 30, 2026 and 2025): Our EE&T segment represents revenues from all of our products, industry solutions for education customers, and Media Services (except for M&T customers), as well as associated professional services for those offerings.
•Media & Telecom (22% and 26% of revenue for the three months ended September 30, 2026 and 2025, respectively, and 22% and 26% for the nine months ended September 30, 2026 and 2025): Our M&T segment primarily represents revenues from our TV Solution and Media Services sold to media and telecom customers.
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Comparison of the three months ended September 30, 2026 and 2025
Enterprise, Education & Technology
The following table presents our EE&T segment revenue and gross profit (loss) for the periods indicated:
| Three Months Ended September 30, | Period-over-Period Change | |||||||||||||||||||||||||
| 2026 | 2025 | Dollar | Percentage | |||||||||||||||||||||||
| (in thousands, except percentages) | ||||||||||||||||||||||||||
| Enterprise, Education & Technology revenue: | ||||||||||||||||||||||||||
| Subscription revenue | $ | 36,497 | $ | 31,835 | $ | 4,662 | 15 | % | ||||||||||||||||||
| Professional services revenue | 426 | 530 | (104) | (20) | % | |||||||||||||||||||||
| Total Enterprise, Education & Technology revenue | $ | 36,923 | $ | 32,365 | $ | 4,558 | 14 | % | ||||||||||||||||||
| Enterprise, Education & Technology gross profit: | ||||||||||||||||||||||||||
| Subscription gross profit | $ | 29,977 | $ | 26,222 | $ | 3,755 | 14 | % | ||||||||||||||||||
| Professional services gross loss | (1,492) | (1,680) | 188 | (11) | % | |||||||||||||||||||||
| Total Enterprise, Education & Technology gross profit | $ | 28,485 | $ | 24,542 | $ | 3,943 | 16 | % | ||||||||||||||||||
Enterprise, Education & Technology Revenue
EE&T revenue increased by $4.6 million, or 14% to $36.9 million for the three months ended September 30, 2026, from $32.4 million for the three months ended September 30, 2025. The increase is mainly attributable to a $5.4 million increase in revenue generated from new customers, partially offset by $0.8 million decrease in revenue from existing customers. These figures include contributions from the PathFactory acquisition.
EE&T subscription revenue increased by $4.7 million, or 15%, to $36.5 million for the three months ended September 30, 2026, from $31.8 million for the three months ended September 30, 2025.
EE&T professional services revenue decreased by $0.1 million, or 20%, to $0.4 million for the three months ended September 30, 2026, from $0.5 million for the three months ended September 30, 2025.
Enterprise, Education & Technology Gross Profit
EE&T gross profit increased by $3.9 million, or 16%, to $28.5 million for the three months ended September 30, 2026, from $24.5 million for the three months ended September 30, 2025. The increase was primarily driven by higher revenue and a lower proportion of personnel-related costs included in cost of revenues.
EE&T subscription gross profit increased by $3.8 million, or 14%, to $30.0 million for the three months ended September 30, 2026, from $26.2 million for the three months ended September 30, 2025.
EE&T professional services gross loss decreased by $0.2 million, or 11%, to a gross loss of $1.5 million for the three months ended September 30, 2026, from a gross loss of $1.7 million for the three months ended September 30, 2025.
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Media & Telecom
The following table presents our M&T segment revenue and gross profit for the periods indicated:
| Three Months Ended September 30, | Period-over-Period Change | ||||||||||||||||||||||
| 2026 | 2025 | Dollar | Percentage | ||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||
| Media & Telecom revenue: | |||||||||||||||||||||||
| Subscription revenue | $ | 9,418 | $ | 10,141 | $ | (723) | (7) | % | |||||||||||||||
| Professional services revenue | 924 | 1,360 | (436) | (32) | % | ||||||||||||||||||
| Total Media & Telecom revenue | $ | 10,342 | $ | 11,501 | $ | (1,159) | (10) | % | |||||||||||||||
| Media & Telecom gross profit: | |||||||||||||||||||||||
| Subscription gross profit | $ | 5,302 | $ | 5,910 | $ | (608) | (10) | % | |||||||||||||||
| Professional services gross profit | 147 | 275 | (128) | (47) | % | ||||||||||||||||||
| Total Media & Telecom gross profit | $ | 5,449 | $ | 6,185 | $ | (736) | (12) | % | |||||||||||||||
Media & Telecom Revenue
M&T revenue decreased by $1.2 million, or 10%, to $10.3 million for the three months ended September 30, 2026, from $11.5 million for the three months ended September 30, 2025. The decrease is mainly attributable to a $1.3 million decrease in revenue from existing customers, partially offset by $0.2 million increase in revenue from new customers.
M&T subscription revenue decreased by $0.7 million, or 7%, to $9.4 million for the three months ended September 30, 2026, from $10.1 million for the three months ended September 30, 2025.
M&T professional services revenue decreased by $0.4 million, or 32% to $0.9 million for the three months ended September 30, 2026, from $1.4 million for the three months ended September 30, 2025.
Media & Telecom Gross Profit
M&T gross profit decreased by $0.7 million, or 12%, to $5.4 million for the three months ended September 30, 2026, from $6.2 million for the three months ended September 30, 2025. The decrease was primarily driven by lower revenue, partially offset by a lower proportion of personnel-related costs included in cost of revenues.
M&T subscription gross profit decreased by $0.6 million, or 10%, to $5.3 million for the three months ended September 30, 2026, from $5.9 million for the three months ended September 30, 2025.
M&T professional services gross profit decreased by $0.1 million, or 47%, to $0.1 million for the three months ended September 30, 2026, from $0.3 million for the three months ended September 30, 2025.
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Operating Expenses
Research and Development expenses
| Three Months Ended September 30, | Period-over-Period Change | |||||||||||||||||||||||||
| 2026 | 2025 | Dollar | Percentage | |||||||||||||||||||||||
| (in thousands, except percentages) | ||||||||||||||||||||||||||
| Employee compensation | $ | 8,724 | $ | 7,922 | $ | 802 | 10 | % | ||||||||||||||||||
| Subcontractors and consultants | 1,482 | 1,516 | (34) | (2) | % | |||||||||||||||||||||
| IT related | 1,363 | 1,107 | 256 | 23 | % | |||||||||||||||||||||
| Other | 894 | 936 | (42) | (4) | % | |||||||||||||||||||||
| Total research and development expenses | $ | 12,463 | $ | 11,481 | $ | 982 | 9 | % | ||||||||||||||||||
Research and development expenses increased by $1.0 million, or 9%, to $12.5 million for the three months ended September 30, 2026, from $11.5 million for the three months ended September 30, 2025. The increase was primarily attributable to a $0.8 million increase in compensation expenses, mainly driven by the depreciation of the U.S. dollar against the New Israeli Shekel compared to the prior-year period and a higher proportion of personnel-related costs attributable to research and development, partially offset by the capitalization of compensation costs related to the development of internal-use software. The increase also reflected a $0.3 million increase in IT-related costs, primarily attributable to higher utilization of third-party generative artificial intelligence services and tools.
Sales and Marketing expenses
| Three Months Ended September 30, | Period-over-Period Change | |||||||||||||||||||||||||
| 2026 | 2025 | Dollar | Percentage | |||||||||||||||||||||||
| (in thousands, except percentages) | ||||||||||||||||||||||||||
| Employee compensation & commission | $ | 9,245 | $ | 9,061 | $ | 184 | 2 | % | ||||||||||||||||||
| Marketing expenses | 890 | 746 | 144 | 19 | % | |||||||||||||||||||||
| Travel and entertainment | 327 | 173 | 154 | 89 | % | |||||||||||||||||||||
| IT related | 479 | 299 | 180 | 60 | % | |||||||||||||||||||||
| Other | 1,084 | 768 | 316 | 41 | % | |||||||||||||||||||||
| Total sales and marketing expenses | $ | 12,025 | $ | 11,047 | $ | 978 | 9 | % | ||||||||||||||||||
Sales and marketing expenses increased by $1.0 million, or 9%, to $12.0 million for the three months ended September 30, 2026, from $11.0 million for the three months ended September 30, 2025. The increase was primarily due to a $0.2 million increase in compensation expenses, mainly due to changes in the allocation of certain employee-related costs to Sales and Marketing. In addition, IT-related costs increased by $0.2 million, primarily due to higher expenses associated with software applications supporting the operations of the acquired PathFactory business, and other expenses increased by $0.3 million mainly due to amortization of identified intangible assets recognized as part of the PathFactory purchase price allocation.
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General and Administrative expenses
| Three Months Ended September 30, | Period-over-Period Change | |||||||||||||||||||||||||
| 2026 | 2025 | Dollar | Percentage | |||||||||||||||||||||||
| (in thousands, except percentages) | ||||||||||||||||||||||||||
| Employee compensation | $ | 6,237 | $ | 6,816 | $ | (579) | (8) | % | ||||||||||||||||||
| Professional fees and insurance | 1,138 | 596 | 542 | 91 | % | |||||||||||||||||||||
| IT related | 767 | 645 | 122 | 19 | % | |||||||||||||||||||||
| Human resources related | 212 | 208 | 4 | 2 | % | |||||||||||||||||||||
| Subcontractors and consultants | 189 | 169 | 20 | 12 | % | |||||||||||||||||||||
| Travel and entertainment | 129 | 169 | (40) | (24) | % | |||||||||||||||||||||
| Strategic initiatives | 109 | (301) | 410 | 136 | % | |||||||||||||||||||||
| Change in fair value of contingent consideration | 270 | — | 270 | NM | ||||||||||||||||||||||
| Other | 616 | 597 | 19 | 3 | % | |||||||||||||||||||||
| Total general and administrative expenses | $ | 9,667 | $ | 8,899 | $ | 768 | 9 | % | ||||||||||||||||||
General and administrative expenses increased by $0.8 million, or 9%, to $9.7 million for the three months ended September 30, 2026, from $8.9 million for the three months ended September 30, 2025. The increase was primarily attributable to a $0.5 million increase in professional fees and insurance costs, a $0.4 million increase in costs related to strategic initiatives, primarily reflecting supplier credits recognized in the third quarter of 2025, and a $0.3 million expense resulting from the remeasurement of contingent consideration to fair value during the current quarter. These increases were partially offset by a $0.6 million decrease in compensation costs, primarily due to the reallocation of certain personnel to sales functions and lower stock-based compensation expense, mainly reflecting the full vesting of certain higher fair value options and RSUs granted in December 2021, which were fully expensed prior to 2025.
Financial Income, net
Financial Income, net increased by $0.6 million, to $0.7 million for the three months ended September 30, 2026, from $0.1 million for the three months ended September 30, 2025. The increase was primarily due to $0.9 million related to exchange rate differences.
Provision for Income Taxes
Provision for income taxes increased by $0.4 million, or 29%, to $1.6 million for the three months ended September 30, 2026, from $1.2 million for the three months ended September 30, 2025, primarily due to increased tax liability related to income generated by our subsidiaries organized under the laws of Israel and the United Kingdom.
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Comparison of the nine months ended September 30, 2026 and 2025
Enterprise, Education & Technology
The following table presents our EE&T segment revenue and gross profit (loss) for the periods indicated:
| Nine Months Ended September 30, | Period-over-Period Change | |||||||||||||||||||||||||
| 2026 | 2025 | Dollar | Percentage | |||||||||||||||||||||||
| (in thousands, except percentages) | ||||||||||||||||||||||||||
| Enterprise, Education & Technology revenue: | ||||||||||||||||||||||||||
| Subscription revenue | $ | 106,602 | $ | 98,016 | $ | 8,586 | 9 | % | ||||||||||||||||||
| Professional services revenue | 1,277 | 2,007 | (730) | (36) | % | |||||||||||||||||||||
| Total Enterprise, Education & Technology revenue | $ | 107,879 | $ | 100,023 | $ | 7,856 | 8 | % | ||||||||||||||||||
| Enterprise, Education & Technology gross profit: | ||||||||||||||||||||||||||
| Subscription gross profit | $ | 88,411 | $ | 81,488 | $ | 6,923 | 8 | % | ||||||||||||||||||
| Professional services gross loss | (4,232) | (4,511) | 279 | (6) | % | |||||||||||||||||||||
| Total Enterprise, Education & Technology gross profit | $ | 84,179 | $ | 76,977 | $ | 7,202 | 9 | % | ||||||||||||||||||
Enterprise, Education & Technology Revenue
Total EE&T revenue increased by $7.9 million, or 8%, to $107.9 million for the nine months ended September 30, 2026, from $100.0 million for the nine months ended September 30, 2025. The increase was primarily driven by a $10.8 million increase in revenue from new customers, partially offset by $2.9 million decrease in revenue from existing customers. These figures include contributions from the PathFactory acquisition.
EE&T subscription revenue increased by $8.6 million, or 9%, to $106.6 million for the nine months ended September 30, 2026, from $98.0 million for the nine months ended September 30, 2025.
EE&T professional services revenue decreased by $0.7 million, or 36%, to $1.3 million for the nine months ended September 30, 2026 from $2.0 million for the nine months ended September 30, 2025.
Enterprise, Education & Technology Gross Profit
EE&T gross profit increased by $7.2 million, or 9%, to $84.2 million for the nine months ended September 30, 2026, from $77.0 million for the nine months ended September 30, 2025. This increase was mainly due to a $7.9 million increase in revenue and reduction in compensation costs, from improved operational efficiency, driven by workforce reductions.
EE&T subscription gross profit increased by $6.9 million, or 8%, to $88.4 million for the nine months ended September 30, 2026, from $81.5 million for the nine months ended September 30, 2025.
EE&T professional services gross loss decreased by $0.3 million, or 6%, to a gross loss of $4.2 million for the nine months ended September 30, 2026, from a gross loss of $4.5 million for the nine months ended September 30, 2025.
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Media & Telecom
The following table presents our M&T segment revenue and gross profit for the periods indicated:
| Nine Months Ended September 30, | Period-over-Period Change | ||||||||||||||||||||||
| 2026 | 2025 | Dollar | Percentage | ||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||
| Media & Telecom revenue: | |||||||||||||||||||||||
| Subscription revenue | $ | 28,145 | $ | 31,250 | $ | (3,105) | (10) | % | |||||||||||||||
| Professional services revenue | 2,762 | 4,039 | (1,277) | (32) | % | ||||||||||||||||||
| Total Media & Telecom revenue | $ | 30,907 | $ | 35,289 | $ | (4,382) | (12) | % | |||||||||||||||
| Media & Telecom gross profit: | |||||||||||||||||||||||
| Subscription gross profit | $ | 16,091 | $ | 17,806 | $ | (1,715) | (10) | % | |||||||||||||||
| Professional services gross profit (loss) | 310 | (100) | 410 | 410 | % | ||||||||||||||||||
| Total Media & Telecom gross profit | $ | 16,401 | $ | 17,706 | $ | (1,305) | (7) | % | |||||||||||||||
Media & Telecom Revenue
M&T revenue decreased by $4.4 million, or 12%, to $30.9 million for the nine months ended September 30, 2026, from $35.3 million for the nine months ended September 30, 2025. This decrease is mainly attributable to a $4.6 million decrease in revenue from existing customers, partially offset by $0.2 million increase in revenue from new customers.
M&T subscription revenue decreased by $3.1 million, or 10%, to $28.1 million for the nine months ended September 30, 2026, from $31.3 million for the nine months ended September 30, 2025.
M&T professional services revenue decreased by $1.3 million, or 32%, to $2.8 million for the nine months ended September 30, 2026, from $4.0 million for the nine months ended September 30, 2025.
Media & Telecom Gross Profit
M&T gross profit decreased by $1.3 million, or 7%, to $16.4 million for the nine months ended September 30, 2026, from $17.7 million for the nine months ended September 30, 2025. The decrease was primarily driven by lower revenue, partially offset by a lower proportion of personnel-related costs included in cost of revenues.
M&T subscription gross profit decreased by $1.7 million, or 10%, to $16.1 million for the nine months ended September 30, 2026, from $17.8 million for the nine months ended September 30, 2025.
M&T professional services gross profit increased by $0.4 million, or 410%, to $0.3 million profit for the nine months ended September 30, 2026, from $0.1 million gross loss for the nine months ended September 30, 2025.
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Operating Expenses
Research and Development expenses
| Nine Months Ended September 30, | Period-over-Period Change | |||||||||||||||||||||||||
| 2026 | 2025 | Dollar | Percentage | |||||||||||||||||||||||
| (in thousands, except percentages) | ||||||||||||||||||||||||||
| Employee compensation | $ | 24,759 | $ | 24,227 | $ | 532 | 2 | % | ||||||||||||||||||
| Subcontractors and consultants | 4,543 | 4,582 | (39) | (1) | % | |||||||||||||||||||||
| IT related | 3,992 | 3,527 | 465 | 13 | % | |||||||||||||||||||||
| Other | 2,615 | 2,801 | (186) | (7) | % | |||||||||||||||||||||
| Total research and development expenses | $ | 35,909 | $ | 35,137 | $ | 772 | 2 | % | ||||||||||||||||||
Research and development expenses increased by $0.8 million, or 2%, to $35.9 million for the nine months ended September 30, 2026, from $35.1 million for the nine months ended September 30, 2025. The increase was primarily due to a $0.5 million increase in compensation expenses, mainly driven by the depreciation of the U.S. dollar against the New Israeli Shekel compared to the prior-year period and a higher proportion of personnel-related costs attributable to research and development, partially offset by the capitalization of compensation costs related to the development of internal-use software. The increase also reflected a $0.5 million increase in IT-related costs, primarily attributable to higher utilization of third-party generative artificial intelligence services and tools.
Sales and Marketing expenses
| Nine Months Ended September 30, | Period-over-Period Change | |||||||||||||||||||||||||
| 2026 | 2025 | Dollar | Percentage | |||||||||||||||||||||||
| (in thousands, except percentages) | ||||||||||||||||||||||||||
| Employee compensation & commission | $ | 28,243 | $ | 27,460 | $ | 783 | 3 | % | ||||||||||||||||||
| Marketing expenses | 2,728 | 2,625 | 103 | 4 | % | |||||||||||||||||||||
| Travel and entertainment | 966 | 906 | 60 | 7 | % | |||||||||||||||||||||
| IT related | 1,392 | 918 | 474 | 52 | % | |||||||||||||||||||||
| Other | 3,384 | 2,580 | 804 | 31 | % | |||||||||||||||||||||
| Total sales and marketing expenses | $ | 36,713 | $ | 34,489 | $ | 2,224 | 6 | % | ||||||||||||||||||
Sales and marketing expenses increased by $2.2 million, or 6%, to $36.7 million for the nine months ended September 30, 2026, from $34.5 million for the nine months ended September 30, 2025. The increase was primarily due to a $0.8 million increase in compensation expenses mainly due to organizational realignment initiatives, including the reclassification of certain personnel into the sales organization, partially offset by a decrease in commission expenses. In addition, other expenses increased by $0.8 million, primarily due to higher IT-related expenses associated with software applications supporting the operations of the acquired PathFactory business, as well as higher amortization expense related to the identified intangible assets recognized as part of the PathFactory purchase price allocation.
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General and Administrative expenses
| Nine Months Ended September 30, | Period-over-Period Change | |||||||||||||||||||||||||
| 2026 | 2025 | Dollar | Percentage | |||||||||||||||||||||||
| (in thousands, except percentages) | ||||||||||||||||||||||||||
| Employee compensation | $ | 17,983 | $ | 20,772 | $ | (2,789) | (13) | % | ||||||||||||||||||
| Professional fees and insurance | 3,366 | 2,758 | 608 | 22 | % | |||||||||||||||||||||
| IT related | 2,062 | 1,890 | 172 | 9 | % | |||||||||||||||||||||
| Human resources related | 753 | 813 | (60) | (7) | % | |||||||||||||||||||||
| Subcontractors and consultants | 503 | 772 | (269) | (35) | % | |||||||||||||||||||||
| Travel and entertainment | 573 | 652 | (79) | (12) | % | |||||||||||||||||||||
| Strategic initiatives | 2,437 | 1,331 | 1,106 | 83 | % | |||||||||||||||||||||
| Change in fair value of contingent consideration | (692) | — | (692) | NM | ||||||||||||||||||||||
| Other | 1,920 | 1,102 | 818 | 74 | % | |||||||||||||||||||||
| Total general and administrative expenses | $ | 28,905 | $ | 30,090 | $ | (1,185) | (4) | % | ||||||||||||||||||
General and administrative expenses decreased by $1.2 million, or 4%, to $28.9 million for the nine months ended September 30, 2026, from $30.1 million for the nine months ended September 30, 2025. The decrease was primarily due to a $2.8 million decrease in compensation costs, which primarily reflects lower stock-based compensation costs, largely driven by the full recognition of high fair value options and RSUs granted in December 2021, which were fully expensed prior to 2025, and the reallocation of certain personnel to sales functions. The decrease was also due to a gain of $0.7 million recognized from the remeasurement of contingent consideration to fair value. These were partially offset by a $1.1 million increase in strategic initiatives costs, primarily related to acquisition-related expenses, incurred in connection with the acquisition of PathFactory and professional fees, consulting, and other expenses associated with strategic initiatives, and $0.8 million in other expenses, primarily due to the absence of a prior-year benefit related to the release of a withholding tax accrual following a favorable tax assessment.
Financial expense, net
Financial expense, net decreased by $1.0 million to $1.7 million for the nine months ended September 30, 2026, from $2.7 million for the nine months ended September 30, 2025. The decrease was primarily due to a $1.5 million decrease in expense related to exchange rate differences partially offset by $0.8 million lower interest income primarily due to a reduction in the marketable securities portfolio following the PathFactory acquisition.
Provision for Income Taxes
Provision for income taxes increased by $3.5 million, or 118%, to $6.5 million for the nine months ended September 30, 2026, from $3.0 million for the nine months ended September 30, 2025 primarily due to increased tax liability related to income generated by our subsidiaries organized under the laws of Israel and the United Kingdom.
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Liquidity and Capital Resources
Overview
Since our inception, we have financed our operations primarily through net cash provided by operating activities, equity issuances, and borrowings under our long-term debt arrangements. Our primary requirements for liquidity and capital are to finance working capital, capital expenditures and general corporate purposes. Our principal sources of liquidity are expected to be our cash on hand and borrowings available under our Revolving Credit Facility. As of September 30, 2026, we had no balance outstanding under the Revolving Credit Facility and the total revolving commitment of $25.0 million is available for future borrowings.
We believe that our net cash provided by operating activities, cash on hand, and availability under our Revolving Credit Facility will be adequate to meet our operating, investing, and financing needs for at least the next 12 months. Our future capital requirements will depend on many factors, including our revenue growth, the timing and extent of investments to support such growth, the expansion of sales and marketing activities, increases in general and administrative costs and many other factors as described under Part I, Item 1A. “Risk Factors” of our 2025 10-K, and “—Key Factors Affecting Our Performance.” above. In addition, our cash and cash equivalents are maintained at financial institutions in amounts that exceed federally insured limits. In the event of failure of any of the financial institutions where we maintain our cash and cash equivalents, there can be no assurance that we will be able to access uninsured funds in a timely manner or at all.
If necessary, we may borrow funds under our Revolving Credit Facility to finance our liquidity requirements, subject to customary borrowing conditions. To the extent additional funds are necessary to meet our long-term liquidity needs as we continue to execute our business strategy, we anticipate that they will be obtained through the incurrence of additional indebtedness, additional equity financings or a combination of these potential sources of funds; however, such financing may not be available on favorable terms, or at all. In particular, the current global economic volatility, including due to uncertainty around U.S. and foreign tariffs and other trade barriers, rising inflation and uncertainty with respect to interest rates, price increases and supply chain issues, and various other factors, has resulted in, and may continue to result in, significant disruption of global financial markets, reducing our ability to access capital. Our ability to access capital may also be impacted by political, economic, and military conditions in Israel, including the current security situation or any escalation of conflicts with Israel, and in other regions in which we operate, or changes in the business environment in those regions. If we are unable to raise additional funds when desired, our business, financial condition and results of operations could be adversely affected.
Credit Facilities
In January 2021, we entered into a new credit agreement (as amended, the “Credit Agreement”) with one of our existing lenders, which provides for a new senior secured term loan facility in the aggregate principal amount of $40.0 million (the “Term Loan Facility”) and a new senior secured revolving credit facility in the aggregate principal amount of $10.0 million (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Credit Facilities”), which thereafter were extended and amended to align with our business needs and other developments. In December 2023, we refinanced all amounts outstanding under the then-existing Credit Agreement, and entered into a new amendment to the credit agreement (the “Fifth Amendment”) with an existing lender, which provides for an additional term loan facility of $3.5 million in addition to the existing $31.5 million in term loans outstanding immediately prior to the Fifth Amendment. Commitments under the Revolving Credit Facility decreased to $25.0 million.
In July 2024, we entered into an amendment to the Credit Agreement with an existing lender, in connection with our share repurchase program, which updated the aggregate amount of permitted Restricted Payments (as defined in the Credit Agreement; which term includes, among others, repurchase of the Company’s outstanding common stock) and conditions for making such payments.
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In March and October 2025, the Company entered into amendments to the Credit Agreement that, among other things, increased the aggregate amount of permitted Restricted Payments and modified the conditions applicable to such payments to facilitate the Company’s repurchases of securities. In November 2025, the Company entered into an additional amendment to the Credit Agreement to permit the Company to enter into certain strategic transactions, including an increase to the aggregate amount of Permitted Acquisitions (as defined in the Credit Agreement). In April 2026, the Company entered into a further amendment to the Credit Agreement that, among other things, reduced the aggregate amount of permitted Restricted Payments to zero and updated the amount of Permitted Acquisitions.
The amount available for borrowing under the Revolving Credit Facility is limited to a borrowing base, which is equal to the product of (a) 500% (which will automatically reduce to 350% on the date the Term Loan Facility is repaid in full), multiplied by (b) monthly Recurring Revenue for the most recently ended monthly period, multiplied by (c) the Retention Rate (in each case, as defined in the Credit Agreement).
Following the effectiveness of the Fifth Amendment, borrowings under the Credit Facilities are subject to interest, determined as follows: (a) SOFR loans accrue interest at a rate per annum equal to Term SOFR (as defined in the Credit Agreement) plus 0.10% per annum plus a margin of 2.50% (the Adjusted Term SOFR (as defined in the Credit Agreement) is subject to a 1.00% floor), and (b) Alternative Base Rate ("ABR") loans (as defined in the Credit Agreement) accrue interest at a rate per annum equal to the ABR plus a margin of 1.50% (ABR is equal to the highest of (i) the prime rate and (ii) the Federal Funds Effective Rate plus 0.50%, subject to a 2.00% floor). As of September 30, 2026, the current rate of interest under the Credit Facilities was equal to a rate per annum of 6.67%, consisting of 4.07% (the 3-month SOFR rate as of September 28, 2026), 0.10% credit spread adjustment and the margin of 2.50%.
Amounts outstanding under the Credit Facilities may be voluntarily prepaid at any time and from time to time, in whole or in part, without premium or penalty. We are required to prepay amounts outstanding under the Term Loan Facility with 100% of the net cash proceeds of any indebtedness incurred by us or any of our subsidiaries other than certain permitted indebtedness. In addition, we are required to prepay amounts outstanding under the Credit Facilities with the net cash proceeds of any Asset Sale or Recovery Event (each as defined in the Credit Agreement), subject to certain limited reinvestment rights.
All voluntary prepayments (other than ABR loans borrowed under the Revolving Credit Facility) must be accompanied by accrued and unpaid interest on the principal amount being prepaid and customary “breakage” costs, if any, with respect to prepayments of SOFR loans.
The Term Loan Facility is payable in consecutive quarterly installments on the last day of each fiscal quarter in an amount equal to (i) $0.4 million for installments payable on December 31, 2023 (deferred to January 9, 2024) through September 30, 2024, (ii) $0.7 million for installments payable on December 31, 2024 ($0.2 million of the amount deferred to January 2025) through September 30, 2025, and (iii) $1.3 million for installments payable on and after December 31, 2025. The remaining unpaid balance on the Term Loan Facility is due and payable on December 21, 2026, together with accrued and unpaid interest on the principal amount to be paid to, but excluding, the payment date. In addition, the Revolving Credit Facility matures on December 21, 2026.
Our obligations under the Credit Facilities are currently guaranteed by Kaltura Europe Limited, and are required to be guaranteed by all of our future direct and indirect subsidiaries other than certain excluded subsidiaries and immaterial foreign subsidiaries. Our obligations and those of Kaltura Europe Limited are, and the obligations of any future guarantors are required to be, secured by a first priority lien on substantially all of our respective assets.
The Credit Agreement contains a number of covenants that, among other things and subject to certain exceptions, restrict our ability, and the ability of our subsidiaries, to:
•create, issue, incur, assume, become liable in respect of or suffer to exist any debt or liens;
•consummate any merger, consolidation or amalgamation, or liquidate, wind up or dissolve, or dispose of all or substantially all of our or their respective property or business;
•dispose of property or, in the case of our subsidiaries, issue or sell any shares of such subsidiary’s capital stock;
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•repay, prepay, redeem, purchase, retire or defease subordinated debt;
•declare or pay dividends or make certain other restricted payments;
•make certain investments;
•enter into transactions with affiliates;
•enter into new lines of business; and
•make certain amendments to our or their respective organizational documents or certain material contracts.
The Credit Agreement also contains certain financial covenants that require us to maintain (i) a minimum amount of Consolidated Adjusted EBITDA (as defined in the Credit Agreement) as of the last day of each fiscal quarter (which minimum amount increased through the fiscal quarter ended December 31, 2023) (the “Adjusted EBITDA Covenant”), and (ii) Liquidity (as defined in the Credit Agreement) of at least $20.0 million as of the last day of any calendar month. We were in compliance with these covenants as of September 30, 2026.
The Credit Agreement also contains certain customary representations and warranties and affirmative covenants, and certain reporting obligations. In addition, the lenders under the Credit Facilities will be permitted to accelerate all outstanding borrowings and other obligations, terminate outstanding commitments and exercise other specified remedies upon the occurrence of certain events of default (subject to certain grace periods and exceptions), which include, among other things, payment defaults, breaches of representations and warranties, covenant defaults, certain cross-defaults and cross-accelerations to other indebtedness, certain events of bankruptcy and insolvency, certain judgments and Change of Control events (as defined in the Credit Agreement).
As of September 30, 2026, we had no balance outstanding under the Revolving Credit Facility and the total revolving commitment of $25.0 million remained available for future borrowings. As of September 30, 2026, we had approximately $25.3 million of borrowings outstanding under the Term Loan Facility.We currently expect to refinance or extend the Credit Facilities prior to maturity in December 2026.
Cash Flows
The following table summarizes our cash flows for the periods presented:
| Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (in thousands) | ||||||||||||||
| Net cash provided by operating activities | $ | 6,287 | $ | 10,893 | ||||||||||
| Net cash provided by (used in) investing activities | (8,989) | 8,872 | ||||||||||||
| Net cash used in financing activities | (3,661) | (11,855) | ||||||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 65 | 544 | ||||||||||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash | (6,298) | 8,454 | ||||||||||||
| Cash, cash equivalents, and restricted cash at beginning of period | 27,621 | 33,159 | ||||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 21,323 | $ | 41,613 | ||||||||||
Operating Activities
Net cash flows provided by operating activities decreased by $4.6 million for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025.
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Net cash provided by operating activities of $6.3 million for nine months ended September 30, 2026, was primarily due to a $10.8 million net loss, adjusted for non-cash charges of $23.3 million, and net cash outflows of $6.2 million due to changes in operating assets and liabilities. Non-cash charges primarily consisted of depreciation and amortization of $4.4 million, stock-based compensation expenses of $11.7 million, amortization of deferred contract acquisitions and fulfillment costs of $7.0 million and non-cash interest expense, net of $0.2 million, partially offset by gain on foreign exchange of $0.1 million. The changes in operating assets and liabilities were related to an increase in deferred contract acquisition and fulfillment costs of $3.2 million, a decrease in deferred revenue of $6.2 million, an increase in trade receivables of $4.1 million and a decrease in trade payables of $0.8 million, partially offset by a net change in operating right-of-use asset and lease liability of $0.1 million, a total increase in employee accruals, accrued expenses, and other liabilities of $7.1 million and a decrease of $1.0 million in prepaid expenses and other current assets and other assets.
Net cash provided by operating activities of $10.9 million for nine months ended September 30, 2025, was primarily due to a $11.5 million net loss, adjusted for non-cash charges of $23.8 million, and net cash outflows of $1.4 million due to changes in operating assets and liabilities. Non-cash charges primarily consisted of depreciation and amortization of $3.4 million, stock-based compensation expenses of $12.7 million and amortization of deferred contract acquisitions and fulfillment costs of $8.5 million partially offset by non-cash interest income, net of $0.2 million and gain on foreign exchange of $0.5 million. The changes in operating assets and liabilities were related to an increase in deferred contract acquisition and fulfillment costs of $2.8 million, a decrease in deferred revenue of $2.1 million and an increase in trade receivables of $0.3 million, partially offset by an increase in trade payables of $1.8 million, a net change in operating right-of-use asset and lease liability of $1.2 million, a total increase in employee accruals, accrued expenses, and other liabilities of $0.4 million and a decrease of $0.4 million in prepaid expenses and other current assets and other assets.
Investing Activities
Net cash used in investing activities increased by $17.9 million for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025.
Net cash used in investing activities amounted to $9.0 million for the nine months ended September 30, 2026. This was primarily due to payments for businesses acquired of $22.5 million, purchases of marketable securities of $21.2 million, capitalized internal-use software development costs of $1.6 million and $0.3 million of capital expenditures, partially offset by $36.6 million of proceeds from maturities of available-for-sale marketable securities.
Net cash provided by investing activities amounted to $8.9 million for the nine months ended September 30, 2025. This was primarily due to proceeds from maturities of available-for-sale marketable securities of $59.6 million, partially offset by purchases of marketable securities of $50.2 million and $0.5 million of capital expenditures.
Financing Activities
Net cash used in financing activities decreased by $8.2 million for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025.
Net cash used in financing activities of $3.7 million for the nine months ended September 30, 2026 was primarily due to repayment of long-term loans of $3.9 million, partially offset by $0.3 million of proceeds from the exercise of stock options.
Net cash used in financing activities of $11.9 million for the nine months ended September 30, 2025 was primarily due to repurchase of common stock of $9.6 million, cash settlement of equity classified share-based payment awards of $3.1 million and repayment of long-term loans of $2.2 million, partially offset by $3.0 million of proceeds from the exercise of stock options.
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Contractual Obligations and Commitments
Our principal commitments consist of obligations under operating and finance leases, purchase obligations with third-party providers for the use of cloud hosting and other services and outstanding debt. There were no material changes to our commitments and contractual obligations during the nine months ended September 30, 2026 from the commitments and contractual obligations disclosed in Part II, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations," of our 2025 10-K. For further information on our commitments and contractual obligations, refer also to Note 8, Note 9 and Note 15 of the notes to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Our management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.
Our critical accounting policies and estimates were disclosed in Part II, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations," of our 2025 10-K. There have been no significant changes to these policies and estimates during the nine months ended September 30, 2026
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are exposed to market risk from changes in exchange rates, interest rates and inflation. All of these market risks arise in the ordinary course of business, as we do not engage in speculative trading activities. The following analysis provides additional information regarding these risks.
Foreign Currency Exchange Risk
Our revenue and expenses are primarily denominated in U.S. dollars. Our functional currency is the U.S. dollar. Our sales are mainly denominated in U.S. dollars and Euros. A significant portion of our operating costs are in Israel, consisting principally of salaries and related personnel expenses, and facility expenses, which are denominated in NIS. These foreign currency exposures give rise to market risk associated with exchange rate movements of the U.S. dollar against the NIS and Euros. Furthermore, we anticipate that a significant portion of our expenses will continue to be denominated in NIS as well as that a significant portion of our revenue will continue to be denominated in Euros.
To reduce the impact of foreign currency exchange risks associated with forecasted future cash flows and certain existing assets and liabilities and the volatility in our consolidated statements of operations, we established a hedging program. Currently, our hedging activity relates to U.S. dollar/NIS exchange rate exposure. We do not intend to enter into derivative instruments for trading or speculative purposes. We account for our derivative instruments as either assets or liabilities and carry them at fair value in the consolidated balance sheets. The accounting for changes in the fair value of the derivative depends on the intended use of the derivative and the resulting designation. Our hedging activities are expected to reduce but not eliminate the impact of currency exchange rate movements.
A hypothetical 10% change in foreign currency exchange rates applicable to our business would have had an impact on our results for the three and nine months ended September 30, 2026, of $0.5 million and $1.5 million, respectively due to NIS (after considering cash-flow hedges) and $0.5 million and $3.1 million, respectively due to Euros.
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Interest Rate Risk
As of September 30, 2026, we had outstanding floating rate debt obligations of $25.3 million (consisting of the outstanding principal balance under our credit facilities). Accordingly, fluctuations in market interest rates may increase or decrease our interest expense which will, in turn, increase or decrease our net income and cash flow. We seek to manage exposure to adverse interest rate changes through our normal operating and financing activities. At this time, we do not use derivative instruments to mitigate our interest rate risk. A hypothetical 10% change in interest rates during the periods presented would have resulted in a change to interest expense of $0.1 million and $0.2 million for the three and nine months ended September 30, 2026, respectively.
Impact of Inflation
While it is difficult to accurately measure the impact of inflation due to the imprecise nature of the estimates required, we do not believe inflation has had a material effect on our historical results of operations and financial condition. However, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset higher costs through price increases or other corrective measures, and our inability or failure to do so could adversely affect our business, financial condition, and results of operations.
Item 4. Controls and Procedures.
Limitations on effectiveness of controls and procedures
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Evaluation of disclosure controls and procedures
Our management, with the participation and supervision of our Chief Executive Officer and our Interim Principal Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief Executive Officer and Interim Principal Financial Officer have concluded that as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in internal control over financial reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we are involved in various legal proceedings arising from the normal course of business activities. We are not presently a party to any litigation the outcome of which, we believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, cash flows or financial condition. Defending such proceedings is costly and can impose a significant burden on management and employees. We may receive unfavorable preliminary or interim rulings in the course of litigation, and there can be no assurances that favorable final outcomes will be obtained.
Item 1A. Risk Factors.
Except as set forth below, there have been no material changes from the risk factors previously disclosed in our 2025 10-K.
If we or our third-party service providers experience a security breach, data loss or other compromise, including if unauthorized parties obtain access to our customers’ data, our reputation may be harmed, demand for our platform, products and solutions may be reduced, and we may incur significant liabilities.
Our IT Systems, and those of third-party providers we rely on, involve the collection, storage, processing, transmission, and other use of data, including certain proprietary, confidential, sensitive, and Personal Information of ours and our customers (collectively, “Confidential Information”).
Cyberattacks are expected to accelerate on a global basis in frequency and magnitude as threat actors are becoming increasingly sophisticated in using techniques and tools-including artificial intelligence-that circumvent security controls, evade detection and remove forensic evidence. As a result, we face numerous and evolving cybersecurity risks that threaten the confidentiality, integrity and availability of Confidential Information and our IT Systems, business platform, products and solutions. Additionally, the use of AI, Gen-AI and large language models (“LLMs”), including those of third parties, by us, our customers that host files in our environment, or other third parties, is expected to pose new or unknown cybersecurity risks and challenges, including increasing data leakage and data compromise risks.
Any security breach, data loss, or other compromise, including those resulting from a cybersecurity attack, social engineering, phishing attack, human or technological error, or any unauthorized access, unauthorized usage (including malfeasance by insiders), malware (including ransomware), malicious code, or misconfigurations, bugs or other vulnerabilities in commercial software that is integrated into our (or our suppliers’ or service providers’) IT Systems, products or services, virus or similar breach or disruption could result in the loss or destruction of or unauthorized access to, or use, alteration, disclosure, or acquisition of, Confidential Information, damage to our reputation, litigation (such as class actions), regulatory investigations and enforcement actions, reputational harm, loss of existing or future customers, imposition of fines, or other liabilities. These attacks may come from diverse threat actors, such as individual hackers, hacktivists, criminal groups, and state-sponsored organizations. For example, ransomware attacks, including those from organized criminal threat actors, nation-states, and nation-state supported actors, are becoming increasingly prevalent and severe, and can lead to significant interruptions in our operations, loss of data and income, reputational loss, diversion of funds, and may result in fines, litigation and unwanted media attention. Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting payments.
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If our security measures are breached as a result of third-party action, employee error or negligence, a defect or bug in our offerings or those of our third-party service providers or customers using our platforms, malfeasance or otherwise and, as a result, someone obtains unauthorized access to any data, including our Confidential Information or that of our customers, or other persons, or any of these types of information is lost, destroyed, or used, altered, disclosed, or acquired without authorization, our reputation may be damaged, our business may suffer, we may be subject to regulatory investigations, and we could incur significant liability, including significant incident response, system restoration or remediation and future compliance costs, insurance costs, and penalties or fines under applicable data privacy and security laws and regulations. Even the perception of inadequate security may damage our reputation and negatively impact our ability to win new customers and retain and receive timely payments from existing customers. We experience cyber-attacks and other security incidents of varying degrees from time to time, and future incidents or threat actors' successful attacks may result in significant liability, costs, and reputational harm.
Moreover, there can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, effectively protect our IT Systems and Confidential Information. Additionally, there can be no assurance that our cybersecurity measures and tools will not be circumvented or penetrated by attackers or would keep pace with the constantly evolving threats in a timely manner.For example, use of AI Technologies by threat actors may make any existing vulnerabilities easier to expose and exploit. We are unable to comprehensively apply patches or confirm that measures are in place to mitigate all such vulnerabilities, or that patches will be applied before vulnerabilities are exploited by a threat actor. We could be required to expend significant capital and other resources to protect against and address any data security incident or breach, which may not be covered or fully covered by our insurance and which may involve payments for investigations, forensic analyses, regulatory compliance, breach notification, legal advice, public relations advice, system repair or replacement, data recovery or other services. The successful assertion of one or more large claims against us that exceeds our available insurance coverage, or results in changes to our insurance policies (including premium increases or the imposition of large deductible or co-insurance requirements), could have an adverse effect on our business. In addition, we cannot be sure that our existing insurance coverage will continue to be available on economically reasonable terms or at all or that our insurers will not deny coverage as to any future claim.
In addition, we do not directly control content that our customers store or use in our products. If our customers use our products for the transmission or storage of Confidential Information, including such information about individuals, and our security measures are or are believed to have been breached as a result of third-party action, employee error, malfeasance or otherwise, our reputation could be damaged, our business may suffer, and we could incur significant liability, including related to breach notification and incident response.
We engage third-party vendors and service providers to store and otherwise process some of our and our customers’ data, including Confidential Information. Our vendors and service providers, including providers of open source platforms, may also be the targets of cyberattacks, malicious software, phishing schemes, and fraud.
Our ability to monitor our vendors and service providers’ data security is limited, and, in any event, third parties may be able to circumvent those security measures, resulting in the unauthorized access to, misuse, acquisition, disclosure, loss, alteration, or destruction of our and our customers’ data, including Confidential Information and other information about individuals. Any such unauthorized access could materially adversely affect our business, operating results, and financial condition.
Data security breaches could also expose us to liability under various laws and regulations across jurisdictions and increase the risk of litigation and governmental or regulatory investigation.
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Due to concerns about data security and integrity, a growing number of legislative and regulatory bodies have adopted breach notification and other requirements in the event that information subject to such laws is accessed by unauthorized persons and additional regulations regarding security of such data are possible. We may need to notify governmental authorities and affected individuals with respect to such incidents. For example, laws in the EU and UK and all 50 U.S. states may require businesses to provide notice to regulators and/or individuals whose Personal Information has been disclosed as a result of a data security breach. Complying with such numerous and complex regulations in the event of a data security breach would be expensive and difficult, and failure to comply with these regulations could subject us to regulatory scrutiny and additional liability. We may also be contractually required to notify regulators, customers or other counterparties of a security incident, including a data security breach. Regardless of our contractual protections, any actual or perceived data security breach, or breach of our contractual obligations, could harm our reputation and brand, expose us to potential liability or require us to expend significant resources on data security and in responding to any such actual or perceived breach.
Techniques used to sabotage or obtain unauthorized access to systems or networks are constantly evolving and, leveraging more sophisticated techniques and tools (including artificial intelligence) and, in some instances, are not identified until after they have been launched against a target. We and our service providers may be unable to anticipate these techniques, react in a timely manner, or implement adequate preventative and mitigating measures.
If we or our cybersecurity solutions providers are unable to efficiently and effectively maintain and upgrade our system safeguards, we may incur unexpected costs and certain of our systems may become more vulnerable to unauthorized access or disruption. Any of the foregoing could have a material adverse effect on our business, including our financial condition, results of operations and reputation.
We are subject to stringent and changing laws, regulations, standards, and contractual obligations related to privacy, data protection, and data security. Our actual or perceived failure to comply with such obligations could adversely affect our business
We receive, collect, store, process, transfer, share and otherwise use or host Personal Information, including data relating to users of our offerings, our employees and contractors, and other persons. We have legal and contractual obligations regarding the protection of confidentiality and appropriate use of certain data, including Personal Information and other sensitive information about individuals. We are subject to numerous federal, state, local, and international laws, directives, and regulations regarding privacy, data protection, and data security and the collection, storing, sharing, use, processing, transfer, disclosure, disposal, and protection of Personal Information and other data, the scope of which are changing, subject to differing interpretations, and may be inconsistent among jurisdictions or conflict with other legal and regulatory requirements. We are also subject to certain contractual obligations to customers and other third parties related to privacy, data protection and data security. The regulatory framework for privacy, data protection and data security worldwide is, and is likely to remain for the foreseeable future, uncertain, complex and lacking worldwide unified standards, and it is possible that these or other actual or alleged obligations may be interpreted and applied in a manner that we do not anticipate or that is inconsistent from one jurisdiction to another and may conflict with other legal obligations or our practices. Further, any significant change to applicable laws, regulations or industry practices regarding the collection, use, retention, hosting, security, processing, transfer or disclosure of Personal Information, or their interpretation, or any changes regarding the manner in which the consent of users or other data subjects for the collection, use, retention, security, processing, transfer or disclosure of such Personal Information must be obtained, could increase our costs and require us to modify our services and features, possibly in a material manner, which we may be unable to complete, and may limit our ability to receive, collect, store, host, process, transfer, and otherwise use user data or develop new services and features. Further, there has been a substantial increase in legislative activity and regulatory focus on data privacy and security in the United States and elsewhere, including in relation to cybersecurity incidents. In addition, some such requirements place restrictions on our ability to process Personal Information across our business or across country borders.
In the United States, the FTC and many state attorneys general are interpreting federal and state consumer protection laws to impose standards for the online collection, use, dissemination, and security of data. Such standards require us to publish statements that describe how we handle Personal Information and choices individuals may have about the way we handle their Personal Information.
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If such information that we publish is considered untrue or inaccurate, we may be subject to government claims of unfair or deceptive trade practices, which could lead to significant liabilities and consequences. Moreover, according to the FTC, violating consumers’ privacy rights or failing to take appropriate steps to keep consumers’ Personal Information secure may constitute unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act.
State consumer protection laws provide similar causes of action for unfair or deceptive practices. Further, data privacy advocates and industry groups have regularly proposed and sometimes approved, and may propose and approve in the future, self-regulatory standards with which we must legally comply or that contractually apply to us.
Our communications with our clients are subject to certain laws and regulations, including the Controlling the Assault of Non-Solicited Pornography and Marketing Act (the “CAN-SPAM Act”), the Telephone Consumer Protection Act (the “TCPA”), and the Telemarketing Sales Rule and analogous state laws, that could expose us to significant damages awards, fines and other penalties that could materially impact our business. For example, the TCPA imposes various consumer consent requirements and other restrictions in connection with certain telemarketing activity and other communication with consumers by phone, fax or text message. The CAN-SPAM Act and the Telemarketing Sales Rule and analogous state laws also impose various restrictions on marketing conducted use of email, telephone, fax or text message.
As laws and regulations, including FTC enforcement, rapidly evolve to govern the use of these communications and marketing platforms, the failure by us, our employees or third parties acting at our direction to abide by applicable laws and regulations could adversely impact our business, financial condition and results of operations or subject us to fines or other penalties.
In addition, the Video Privacy Protection Act (“VPPA”), which restricts the disclosure of consumers’ video viewing information, and state wiretapping statutes, such as the California Invasion of Privacy Act (“CIPA”), have become the basis for a significant increase in class action litigation targeting companies that deliver video content online or deploy cookies and similar tracking technologies. Given the nature of our business and our use of cookies and similar technologies, we may be exposed to claims under these or similar statutes. Such claims could result in class action litigation and statutory damages, which could adversely affect our business, financial condition, and results of operations.
Various other U.S. federal privacy laws are relevant to our business, including the Family Educational Rights and Privacy Act (“FERPA”) and the Children’s Online Privacy Protection Act (“COPPA”), While we are not directly subject to FERPA or COPPA, our contracts with certain educational institution customers impose obligations on us related to FERPA and COPPA. Any actual or perceived failure to comply with these laws could result in a costly investigation or litigation resulting in potentially significant liability, injunctions and other consequences, loss of trust by our users, and a material and adverse impact on our reputation and business.
In addition, many state legislatures have adopted legislation that regulates how businesses operate online, including measures relating to privacy, data security, and data breaches. For example, the CCPA, provides data privacy rights for California residents and imposes operational requirements on covered companies, such as obligations to provide disclosures to California residents and receive and respond to data privacy rights requests. The CCPA marked the beginning of a trend toward more stringent data privacy legislation in the United States, which could also increase our potential liability and adversely affect our business, with “copycat” laws or other similar laws being passed or proposed in numerous states across the country.
This legislation may add additional complexity, variation in requirements, restrictions, and potential legal risk, require additional investment in resources to compliance programs, could impact strategies and availability of previously useful data and could result in increased compliance costs and/or changes in business practices and policies.
In addition, in the EU and the UK, we are subject to the European Union General Data Protection Regulation (the “EU GDPR”) and to the United Kingdom General Data Protection Regulation and UK Data Protection Act 2018 (collectively, the “UK GDPR”) (the EU GDPR and UK GDPR together referred to as the “GDPR”).
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The GDPR imposes comprehensive data privacy compliance obligations in relation to our collection, use, sharing, disclosure and other processing of Personal Information, including a principle of accountability and the obligation to demonstrate compliance through policies, procedures, training and audit.
Among other requirements, the GDPR regulates the transfer of Personal Information outside of the European Economic Area (“EEA”) and the UK to third countries that have not been found to provide adequate protection for such Personal Information, including the United States.
We are certified under the EU-US Data Privacy Framework (“DPF”) and currently rely on the DPF and on the UK Extension to the DPF to transfer Personal Information from the EEA and the UK to our affiliates in the United States and other DPF-certified entities in the United States.
We also rely on the EU standard contractual clauses (“SCCs”) and the UK Addendum to the SCCs, as relevant, to transfer Personal Information outside the EEA and the UK to countries other than the United States and to entities in the United States not certified under the DPF.
Recent legal developments in Europe, including decisions from the Court of Justice of the European Union and regulatory guidance from regulators in the EEA and UK, have created complexity and uncertainty regarding data transfers, and we expect this legal complexity and uncertainty to continue. In particular, we expect international transfers to the United States and to other jurisdictions more generally to continue to be subject to enhanced scrutiny by regulators. As the regulatory guidance and enforcement landscape in relation to data transfers continue to develop, we could suffer additional costs, complaints and/or regulatory investigations or fines; we may have to stop using certain tools and vendors, implement alternative data transfer mechanisms and/or take additional compliance and operational measures; and/or it could otherwise affect the manner in which we provide our services, and could adversely affect our business, operations and financial condition.
Since we are subject to the supervision of relevant data protection authorities under both the EU GDPR and the UK GDPR, we could be fined under each of these regimes independently in respect of the same breach. Penalties for certain breaches are up to the greater of €20 million / GBP 17.5 million or 4% of global annual turnover for the preceding financial year for the most serious violations. The GDPR also provides for a right to compensation for material or non-material damage claimed by individuals. In addition to the foregoing, a breach of the GDPR could result in regulatory investigations, reputational damage, orders to cease or change our processing of our data, enforcement notices and/or assessment notices (for a compulsory audit).
We are also subject to evolving EU and UK privacy laws on cookies, tracking technologies and e-marketing. Recent European court and regulator decisions are driving increased attention to cookies and tracking technologies. If the trend of increasing enforcement by regulators of the strict approach to opt-in consent for all but essential use cases, as seen in recent guidance and decisions continues, this could lead to additional costs, require systems changes, limit the effectiveness of our marketing and personalization activities, divert the attention of our technology personnel, adversely affect our margins, increase costs and subject us to additional liabilities. There can be no assurances that we will be successful in our efforts to comply with such laws; violations of such laws could result in regulatory investigations, fines, orders to cease or change our use of such technologies, as well as civil claims including class actions, and reputational damage.
EU data-related laws apply to some of our offerings, including the EU Data Act, which established new requirements for providers of data processing services (including cloud and SaaS, among other service models) in the EU. The EU Data Act requires providers to facilitate customers switching to other providers or solutions and port their data within certain timeframes; remove technical, contractual, and commercial obstacles to service switching; and include certain mandatory terms in customer contracts, amongst other requirements. Failure to comply with the EU Data Act can result in regulatory enforcement and fines, civil claims, and reputational damage. The EU Data Act, together with developing guidance in this area, may require changes to our customer contracts, operations, and business practices, increase our compliance costs, require adjustments to our financial measurements and reporting practices, and adversely affect our financial condition, business, and operations. We are continuing to monitor the application and impact of the EU Data Act as further guidance, practice and enforcement trends emerge.
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Additionally, as our products and services continue to evolve, we may be subject to certain cybersecurity and technology regulations in the EU and UK, including the UK Network and Information Systems Regulations, the EU Network and Information Systems Directive 2 as transposed into member state law, the Cyber Resilience Act, and the Digital Operational Resilience Act. These laws impose various obligations, including in relation to implementing cybersecurity risk measures, ensuring the security and integrity of our products and services, and reporting of security incidents and vulnerabilities to competent regulators. To the extent these laws apply to us, a failure to comply could result in regulatory enforcement and fines, reputational damage, and/or require us to change our business practices, products and services.
We may be subject to online content regulations, and our actual or perceived failure to comply with applicable regulations could adversely affect our business.
The EU, UK and certain other jurisdictions have enacted, or may enact in the future, regulations that may govern the content that we or our users share or make available via the solutions we offer. In the EU, the Digital Services Act (the “DSA”) sets out rules regarding, in addition to other related matters, the potential liability of providers of certain online solutions for content shared or made available via those solutions. In the United Kingdom, the Online Safety Act 2023 (the “OSA”) similarly imposes requirements on providers of certain online user-to-user (and search) services to protect users from illegal and harmful content. The DSA and OSA may increase our compliance costs, expose us to potential regulatory action and liability and/or require changes to our user interfaces, processes, operations, and business practices, which may adversely affect our ability to attract, retain, and provide our services to customers, and may otherwise adversely affect our business, results of operations, and financial condition. Failure to comply with the DSA can result in fines of up to 6% of total annual worldwide turnover and recipients of services have the right to seek compensation from providers in respect of damage or loss suffered due to infringement by the provider to comply with the DSA. Failure to comply with the OSA can result in fines of up to 10% of total annual worldwide turnover or GBP 18 million (whichever is greater).
We may face risks associated with our use of certain AI and machine learning model technologies and compliance with the evolving regulatory framework around AI development and use.
We have developed, integrated and interfaced, and continue to develop, integrate and interface, certain AI-based solutions, applications and features as part of our offerings, including through our acquisitions of eSelf and PathFactory. The underlying AI algorithms, digital processing or software, analyze and processes video and audio content, processes, and use of our products by developers, administrators and users, while performing intellectual processes characteristic of intelligent beings, such as deep learning, natural language processing, reasoning, discovering meaning, generalizing, processing, summarizing and representing knowledge, planning, and learning from past experience. The technologies and solutions pursued by us include also generative AI, namely, a type of artificial intelligence technology that can produce various types of content or data, such as text, images, videos, audio, synthetic data or other media, using generative models ,as well as agentic AI capabilities that can take actions or execute workflows with limited human involvement. Artificial intelligence and machine learning are rapidly evolving fields of study, and bear risks associated with the introduction of new technologies and the lack of learning curve and technology maturity. Thus, the Company cannot assure nor guarantee the accuracy of any output generated therefrom or other results obtained from use thereof, or that actions taken by agentic features will be appropriate or as intended . Given the probabilistic nature of machine learning and AI, use of such AI processing and tools may in some situations result in an inaccurate output.
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If our solutions (including those of our vendors and subcontractors) fail to perform as intended, our business, financial condition, and results of operations would be adversely affected. In addition, although the Company seeks, in accordance with its policies and customer agreements, to limit its retention and use of its customers' contents or metadata provided or uploaded by them or otherwise generated from their use of the Company's AI tools, and does not use its customers' data or content for the creation of any AI-output for other users of the Company's systems and solutions, the processing of its customers' data may nonetheless result in the creation of residual know how, experience and information, statistical models, and training of deep learning, algorithms, simulations, statistics, predictability and other AI features and capabilities. If we fail to establish processes, policies, rules and contractual frameworks to avoid misuse or unauthorized use of our customers data, or to establish and secure the Company's rights with respect to its own developments, technologies and AI products and tools, or if evolving regulation of AI and machine learning model technologies would develop differently from our standards and policies, and as a consequence we may suffer claims for intellectual property infringement, misuse or abuse, then our business, financial condition, and results of operations would be adversely affected.
The regulatory framework around the development and use of machine learning, AI and automated decision making is rapidly evolving, and many federal, state and foreign government bodies and agencies have introduced and/or are currently considering additional laws and regulations. For example, in the United States,the regulatory framework for AI Technologies faces significant uncertainty. At the federal level, Congress has yet to enact meaningful AI legislation. Instead, federal policy on AI has been shaped by a series of executive orders that have shifted priorities and requirements substantially depending on the administration in power. Any such changes at the federal level could require us to expend significant resources to modify our products, services, or operations to ensure compliance or remain competitive.
In the absence of federal AI legislation, states have filled the void by enacting laws and regulating different aspects of AI Technologies. For example, California has enacted laws and regulations related to AI safety protocols, reporting and transparency, among other AI-related topics. Moreover, various state AI laws and comprehensive state privacy laws, including the California Consumer Privacy Act (“CCPA”), regulate the use of automated decision-making technology that results in legal or similarly significant effects on individuals, and provide rights to individuals with respect to that automated decision making. California also enacted numerous new laws that further regulate use of AI Technologies and provide consumers with additional protections around companies’ use of AI Technologies, such as requiring companies to disclose certain uses of generative AI. Other states have also passed AI-focused legislation, such as Colorado’s Artificial Intelligence Act, which will require developers and deployers of “high-risk” AI systems to implement certain safeguards against algorithmic discrimination, and Utah’s Artificial Intelligence Policy Act, which establishes disclosure requirements and accountability measures for the use of generative AI in certain consumer interactions. Such additional regulations may impact our ability to develop, use, procure and commercialize AI Technologies in the future.
Numerous other states have enacted, passed, or are considering AI-focused legislation, creating a patchwork of regulations and a complex compliance challenge. However, the durability of these laws and the potential for additional state-level legislative activity face uncertainty following President Trump’s December 2025 Executive Order “Ensuring a National Policy Framework for Artificial Intelligence.” This Executive Order establishes a federal policy favoring a uniform national AI regulatory framework designed to promote innovation and U.S. global competitiveness. The order directs federal agencies to identify, challenge, and potentially pre-empt state and local AI laws that are viewed as inconsistent with or burdensome to this national approach. It remains to be seen how agencies will effectuate this directive, and how states will approach AI legislation moving forward
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In Europe, on August 1, 2024, the EU Artificial Intelligence Act (the “EU AI Act”) entered into force, and establishes a comprehensive, risk-based governance framework for AI in the EU market. The majority of the substantive requirements apply from August 2, 2026. The EU AI Act applies to companies that develop, use and/or provide artificial intelligence in the EU and, in relation to AI developed or deployed by the Company depending on the artificial intelligence use case, includes requirements around transparency, conformity assessments and monitoring, risk assessments, human oversight, security, accuracy, general purpose artificial intelligence and foundation models, with fines for breaches of up to 7% of worldwide annual turnover. In addition, the revised EU Product Liability Directive came into force in December 2024, to be implemented into EU member state national law by December 2026. This Directive extends the EU’s existing strict product liability regime to AI Technologies and AI-enabled products, and facilitates civil claims in respect of harm caused by AI. Once fully applicable, the EU AI Act and the EU Product Liability Directive will have a material impact on the way artificial intelligence is regulated in the EU, and together with developing guidance and/or decisions in this area, may affect our use of artificial intelligence and our ability to provide and to improve our services, require additional compliance measures and changes to our operations and processes, result in increased compliance costs and potential increases in civil claims against us.
Both in the United States and internationally, AI usage and development are the subject of evolving review by various governmental and regulatory agencies, including the SEC and the FTC, and changes in laws, rules, directives and regulations governing the use of AI may adversely affect the ability of our business to use or rely on AI. Implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine the impact future laws, regulations, standards, or perception of their requirements may have on our business. Any actual or perceived failure to comply with evolving regulatory frameworks around the development and use of AI could adversely affect our business, operations and financial condition.
See “Our expanded use of AI and generative AI technologies, including their incorporation into our offerings, may expose us to increased liability and new regulatory, compliance, and ethical risks” below for further information.
Our expanded use of AI and generative AI technologies, including their incorporation into our offerings, may expose us to increased liability and new regulatory, compliance, and ethical risks.
We have launched and recently further enhanced AI-driven offerings, including Work Genie and Class Genie, Agentic Avatars, Publishing Agents and Content Lab, that rely on generative models or other advanced algorithms.
The continuous development, maintenance and operation of our AI-driven offerings is expensive and complex, and may involve unforeseen difficulties including material performance problems, undetected defects or errors. These AI tools may inadvertently produce inaccurate, misleading or biased outputs or other discriminatory or unexpected results such as hallucinatory behavior, in each case potentially leading to harm to our reputation, business or customer relationships and to potential claims by customers and other third parties. For example, the underlying model can experience decay (also known as “model drift”) in which its performance and accuracy decreases over time without further human intervention to correct such decay.
Our efforts to develop AI-driven offerings could increase our operating costs, and our ability to develop any such offerings may be limited by our access to processing infrastructure or training data, as we do not train our models on customers' data and our access to third-party data is limited to data that we are able to license on acceptable terms. Additionally, we may be dependent on third-party providers for processing infrastructure resources such as cloud facilities providers and others, which could increase our operating costs. Nonetheless, the expansion of AI based usage and offering, may create a need for additional data sources for training, which in turn could require us to explore more alternatives and accommodate the risks associated therewith, such as such data source integrity and freedom from third party rights or bias information.
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Certain of the data that we use in developing our AI solutions is licensed from third parties, and we are dependent upon our ability to obtain necessary data licenses within appropriate time frames and on commercially reasonable terms, and such third parties’ assurances that such data was obtained and provided to us lawfully. Our data suppliers may withhold their data from us in certain circumstances, for example: if there is a competitive reason to do so; if we breach our contract with a supplier; if they are acquired by one of our competitors; or if new laws or case law restrict the use or dissemination of the data they provide. Additionally, we could terminate relationships with our data suppliers if they fail to adhere to our data quality, vendor or other standards. If a substantial number of data suppliers were to withdraw or withhold their data from us, or if we sever ties with our data suppliers based on their inability to meet our standards, our ability to provide products and services to our customers, and our revenue prospects, could be materially adversely impacted.
Our AI-driven offerings could generate output that is infringing or that otherwise violates third-party rights, and we could be subject to claims or lawsuits, including for infringement of third-party intellectual property rights as a result of the output of such AI offerings. In addition, certain of our offerings, including our Agentic Avatars and AI-powered virtual humans, generate or use synthetic representations of individuals’ likenesses and voices, which could expose us to claims under right of publicity, privacy, or similar laws, and an increasing number of jurisdictions have adopted or are considering laws regulating digital replicas and synthetic or manipulated media, which could restrict or impose consent, disclosure or other requirements on such offerings.
We may also experience difficulties in enforcing the intellectual property rights in output generated by generative AI. The United States Copyright Office has taken the position, and U.S. courts have held, that material generated by AI without sufficient human authorship is not eligible for copyright protection, and the United States Patent and Trademark Office and U.S. courts have similarly determined that an AI tool cannot be an “inventor” of a patent, rendering it impossible to obtain patent protection for inventions created solely by AI.
More broadly, whether a work of authorship or an invention developed by humans and AI together can be adequately protected by copyright or patent law is still an unresolved area of law in the U.S. In addition, if we are deemed to not have sufficient rights to the data we use to train our generative AI, we may be subject to litigation by the owners of the content or other materials that comprise such data, similar to the litigation that is currently pending in various U.S. courts against other developers of certain generative AI tools, and in which the outcome of such litigation is uncertain. Similarly, the third-party LLM providers on which our offerings rely are subject to such litigation, and an adverse outcome, settlement or injunction could restrict the availability or functionality of, or increase the cost of, such models, or expose us or our customers to claims relating to their use.
A number of aspects of intellectual property protection in the field of AI and machine learning are currently under development, and there is uncertainty and ongoing litigation in different jurisdictions as to the degree and extent of protection warranted for AI and machine learning systems and relevant system input and outputs. The law is also uncertain across jurisdictions regarding the copyright ownership of content that is produced in whole or in part by generative AI tools. If we fail to obtain protection for the intellectual property rights concerning our AI offerings or later have our intellectual property rights invalidated or otherwise diminished, our competitors may be able to take advantage of our research and development efforts to develop competing products which could adversely affect our business, reputation and financial condition. Given the extensive patenting activity in the field of AI, other parties may also have (or in the future may obtain) patents or other proprietary rights that would prevent, limit, or interfere with our ability to make, use, or sell our own AI offerings.
Further, the market for AI-driven offerings is rapidly evolving, and important assumptions about the characteristics of targeted markets, pricing, sales cycles, cost, performance, and perceived value associated with our offerings may be inaccurate. We cannot be sure that the market will continue to grow or that it will grow in ways we anticipate. In addition, market acceptance and consumer perceptions of products and services that incorporate AI is uncertain. Our failure to successfully develop and commercialize our products or services involving AI could negatively impact our stock and finances.
Moreover, the regulatory environment around AI is rapidly evolving, with new measures under discussion or adoption in the U.S., EU (including the EU AI Act), UK, and elsewhere. See “Risk Factors – Risks Related to Our Business and Industry”- “We may face risks associated with our use of certain AI and machine learning model technologies and compliance with the evolving regulatory framework around AI development and use”.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Purchases of Equity Securities by the Issuer or Affiliated Purchaser
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information
During the three months ended September 30, 2026, the following directors and officers of the Company adopted terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K:
| Action | Date Adopted | Total Shares to be Sold | Termination Date | ||||||||||||||
| Rule 10b5-1* | Non-Rule 10b5-1** | ||||||||||||||||
12-Aug-25 | — | ||||||||||||||||
* Intended to satisfy the affirmative defense of Rule 10b5-1(c)
** Not intended to satisfy the affirmative defense of Rule 10b5-1(c)
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Item 6. Exhibits
The documents listed below are incorporated by reference or are filed with this Quarterly Report on Form 10-Q, in each case as indicated below.
| Incorporated by Reference | |||||||||||||||||||||||||||||||||||
| Exhibit Number | Exhibit Description | Form | File No. | Exhibit | Filing Date | Filed/Furnished Herewith | |||||||||||||||||||||||||||||
| 3.1 | Amended and Restated Certificate of Incorporation of Kaltura, Inc. | 8-K | 001-40644 | 3.1 | 07/23/2021 | ||||||||||||||||||||||||||||||
| 3.2 | Certificate of Designations of Series A Junior Participating Preferred Stock of Kaltura, Inc. | 8-K | 001-40644 | 3.1 | 08/08/2022 | ||||||||||||||||||||||||||||||
| 3.3 | Amended and Restated Bylaws of Kaltura, Inc. | 8-K | 001-40644 | 3.2 | 07/23/2021 | ||||||||||||||||||||||||||||||
| 4.1 | Specimen Common Stock Certificate of Kaltura, Inc. | S-1/A | 333-253699 | 4.1 | 03/23/2021 | ||||||||||||||||||||||||||||||
| 4.2 | Sixth Amended and Restated Investor Rights Agreement, dated as of July 22, 2016, by and among Kaltura, Inc. and each of the investors listed on Exhibit A thereto, as amended. | S-1/A | 333-253699 | 4.2 | 03/23/2021 | ||||||||||||||||||||||||||||||
| 31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a). | * | |||||||||||||||||||||||||||||||||
| 31.2 | Certification of Interim Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a). | * | |||||||||||||||||||||||||||||||||
| 32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350. | ** | |||||||||||||||||||||||||||||||||
| 32.2 | Certification of Interim Principal Financial Officer pursuant to 18 U.S.C. Section 1350. | ** | |||||||||||||||||||||||||||||||||
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document | * | |||||||||||||||||||||||||||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | * | |||||||||||||||||||||||||||||||||
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| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | * | |||||||||||||||||||||||||||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | * | |||||||||||||||||||||||||||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | * | |||||||||||||||||||||||||||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | * | |||||||||||||||||||||||||||||||||
| 104 | Cover Page Interactive Data File (as formatted as Inline XBRL and contained in Exhibit 101) | * | |||||||||||||||||||||||||||||||||
* Filed herewith.
** Furnished herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| KALTURA, INC. | |||||||||||
Date: November 9, 2026 | By: | /s/ Ron Yekutiel | |||||||||
| Ron Yekutiel | |||||||||||
Chairman, President and Chief Executive Officer | |||||||||||
(Principal Executive Officer) | |||||||||||
Date: November 9, 2026 | By: | /s/ Claire Rotshten | |||||||||
| Claire Rotshten | |||||||||||
| Executive Vice President of Finance | |||||||||||
| (Interim Principal Accounting Officer) | |||||||||||
Date: November 9, 2026 | By: | /s/ Liron Sharon | |||||||||
| Liron Sharon | |||||||||||
| Executive Vice President of Financial Planning and Analysis | |||||||||||
| (Interim Principal Financial Officer) | |||||||||||
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