10-Q: Kaltura Reports Q2 2026 Results: EE&T Growth Offset by M&T Decline

Kaltura, Inc. reported its second quarter 2026 financial results, showing a slight increase in total revenue driven by its Enterprise, Education & Technology segment, while the Media & Telecom segment experienced a revenue decline.

Summary

• Kaltura reported total revenue of $46.9 million for the three months ended June 30, 2026, a 5% increase compared to $44.5 million in the prior year period.
• The Enterprise, Education & Technology (EE&T) segment revenue grew 11% to $36.8 million, while the Media & Telecom (M&T) segment revenue decreased 10% to $10.1 million.
• Gross profit increased by 11% to $34.5 million, with gross margin improving to 74% from 70% in the prior year period.
• The company reported a net loss of $5.5 million for the quarter, an improvement from a net loss of $7.8 million in the same period last year.
• Operating expenses increased slightly to $35.3 million from $34.0 million, primarily due to higher research and development and sales and marketing expenses.
• The company completed the acquisition of PathFactory Holdings ULC for $22 million and BlueRush Inc. for $0.6 million during the quarter.
• Remaining Performance Obligations stood at $164.3 million as of June 30, 2026.
• Cash and cash equivalents were $26.0 million as of June 30, 2026.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this filing as slightly negative due to a net loss, declining revenue in the Media & Telecom segment, and increased provision for income taxes, despite growth in the EE&T segment and improved gross margins.

Positives

• Total revenue increased by 5% to $46.9 million for the three months ended June 30, 2026.
• Enterprise, Education & Technology (EE&T) segment revenue grew by 11% to $36.8 million, driven by new customer acquisition.
• Gross profit increased by 11% to $34.5 million, with gross margin improving to 74% from 70%.
• Net loss improved to $5.5 million from $7.8 million in the prior year period.
• Net Dollar Retention Rate was 96% for the three months ended June 30, 2026.
• Annualized Recurring Revenue (ARR) grew by 8% to $184.6 million.

Negatives

• Media & Telecom (M&T) segment revenue decreased by 10% to $10.1 million.
• The company reported a net loss of $5.5 million for the quarter.
• Operating expenses increased by 4% to $35.3 million.
• Provision for income taxes increased significantly by 480% to $2.5 million.
• Net cash used in operating activities was $1.3 million for the six months ended June 30, 2026, compared to net cash provided by operating activities of $1.6 million in the prior year period.

Risks

• Dependency on existing customer demand and exposure to changes in demand, with potential loss of significant customers.
• History of losses and uncertainty in achieving or maintaining profitability.
• Market growth may develop slower or differently than expected, impacting future success.
• Inability to keep pace with technological and competitive developments could lead to obsolete offerings.
• Risks associated with the use of AI and machine learning models and evolving regulatory frameworks.
• Potential negative impact from open-source licenses on monetization and intellectual property protection.
• Intense competition in nascent and highly fragmented markets.
• Challenges in increasing sales to new customers, expanding offerings to existing customers, or securing renewals.

Future Outlook

The company expects its cost of revenue and operating expenses to fluctuate over time. It anticipates continued growth in its EE&T segment and aims for gradual improvement in gross margins for both segments over the long term. Research and development expenses are expected to gradually decrease as a percentage of revenue, while sales and marketing expenses are expected to increase as a percentage of revenue.

Management Comments

• 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.
• 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 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.
• We believe that increasing brand awareness and continued product innovation will help us attract new customers across geographies and industries.

Industry Context

StockSavvy.ai notes that Kaltura's focus on integrating AI, particularly generative AI, into its video and rich media platform aligns with broader industry trends towards personalized digital experiences and automation. The acquisitions of eSelf AI and PathFactory demonstrate a strategic push to enhance these capabilities and capture market share in the evolving digital engagement landscape.

Comparison to Industry Standards

• The Net Dollar Retention Rate of 96% for Q2 2026 is slightly below the 101% reported in Q2 2025, indicating a slight slowdown in expansion from existing customers, though still within a healthy range for SaaS companies.
• The decline in the Media & Telecom segment revenue (down 10% YoY) contrasts with the growth in the Enterprise, Education & Technology segment (up 11% YoY), suggesting a strategic shift or market pressure affecting different customer bases.
• The improvement in gross margin to 74% from 70% is a positive indicator of operational efficiency, which is a key benchmark for SaaS companies aiming for profitability.
• The company's continued net loss, though reduced, highlights the ongoing investment phase common in growth-oriented technology companies, where profitability is a longer-term objective.

Legal Proceedings

• The company is not presently a party to any litigation that is likely to have a material adverse effect on its business, financial condition, or results of operations.

Stakeholder Impact

• Shareholders may be impacted by the continued net loss and the slight slowdown in revenue growth, although the improvement in gross margin and reduced net loss are positive signs.
• Employees may be impacted by the restructuring plans, including workforce downsizing, which resulted in $1.3 million in restructuring expenses.
• Customers in the Media & Telecom segment may experience changes in service offerings or focus due to the revenue decline in that segment.
• Customers in the EE&T segment are likely to benefit from continued investment in AI and platform enhancements.

Next Steps

• Continue to enhance platform capabilities, including further integration of Gen AI features.
• Expand go-to-market approaches to support a wider range of adoption models and customer sizes.
• Invest in developer-led growth (DLG) initiatives by expanding APIs, SDKs, and developer tools.
• Continue expanding the ecosystem of channel partners.
• Focus on increasing sales within the existing customer base through increased platform usage and cross-selling.
• Continue to make investments to support business growth and expansion.

Key Dates

Recommendation

While the company shows growth in its EE&T segment and improved gross margins, the decline in the M&T segment, continued net loss, and slower overall revenue growth warrant a cautious approach. The strategic acquisitions and AI focus are positive long-term indicators, but near-term performance suggests holding the stock until a clearer path to sustained profitability and broader revenue growth emerges.

Keywords

Video Platform, SaaS, Digital Experiences, AI, Media, Telecom, Enterprise Software, Cloud