Core Insights - Kaltura has signed a definitive agreement to acquire eSelf.ai, enhancing its capabilities in immersive, AI-infused virtual agents and experiences for organizations [1][3][9] - The acquisition is expected to accelerate Kaltura's evolution from enterprise video experiences to more interactive and engaging solutions [1][9] Company Overview - Kaltura, Inc. is known for its AI Video Experience Cloud, which provides hyper-personalized video experiences aimed at boosting customer and employee engagement [12] - eSelf.ai, founded in 2023, specializes in multimodal AI technology for agentic interactions with live avatars and has been recognized as a significant player in tech by FastCompany [2][12] Technology Integration - Kaltura plans to integrate eSelf.ai's technology into its existing video products, allowing for the creation of conversational, visually expressive agents that can interact with users in real-time [3][4] - The new technology will enable Kaltura's Genies to analyze user screens and provide dynamic interactions, enhancing customer engagement and employee retention [3][4] Product Development - Kaltura aims to develop a new video-on-demand content creation tool that incorporates eSelf.ai's avatar technology, allowing users to add animated avatars to videos easily [4] - The acquisition will also support the creation of embeddable, self-served interactive avatars, contributing to Kaltura's product-led growth strategy [4][5] Market Opportunities - The acquisition is expected to create upsell opportunities within Kaltura's premium customer base and attract new enterprise clients, including small and medium-sized enterprises [5][10] - The immersive virtual agents will be applicable across various use cases, including marketing, sales, support, training, recruiting, and internal communications [8][13] Financial Details - The transaction includes a cash payment of $7.5 million upon closing, with an additional $12.5 million payable over three years based on performance milestones, and 4,690,025 shares of Kaltura stock [10] - The total deal value is approximately $27 million, contingent on achieving all earnout milestones and retention targets [10] Future Outlook - The acquisition is expected to close in Q4 2025, pending customary closing conditions and regulatory approvals [11]

Core Insights - Kaltura has launched a new AI-powered Accessibility Agent to help organizations comply with upcoming digital accessibility regulations, particularly for video content [1][3][4] Group 1: Regulatory Context - New Title II regulations in the U.S. and the European Accessibility Act mandate that all video content must be fully accessible, including captioning and audio descriptions, by April 2026 [2] - Institutions with extensive video libraries face significant challenges in assessing compliance due to the manual nature of the process [2] Group 2: Product Features and Benefits - The Kaltura Accessibility Agent automates the process of ensuring video content meets accessibility standards, including adding necessary features before publication [3] - The solution not only aids compliance but also enhances student engagement and retention through improved accessibility features like closed captions and interactive transcripts [4] Group 3: Market Trends and Future Directions - There is a growing trend among forward-thinking enterprises to prioritize accessibility for both employees and customers, seeking AI-powered solutions for inclusivity [5] - Kaltura will showcase its Accessibility Agent and other AI solutions at the upcoming EDUCAUSE annual conference, highlighting practical strategies for compliance and innovation in accessibility [5]

Core Insights - Kaltura will release its third quarter financial results for the period ended September 30, 2025, after market close on November 10, 2025 [1] - A conference call will be held to review the financial results and discuss the financial outlook [1] Company Overview - Kaltura's mission is to create AI-infused hyper-personalized video experiences that enhance customer and employee engagement [2] - The Video Experience Cloud includes a platform for enterprise and TV content management, along with various Gen AI-infused video-first products [2] - Kaltura engages millions of end-users across different environments, improving experiences in marketing, sales, education, communication, and entertainment [2]

Core Insights - The report emphasizes that ease of use is prioritized over perfection, with 72% of video producers preferring integrated software solutions over specialized tools [1][8] - Companies utilizing AI-powered video tools report significant effectiveness, with 76% of those employing advanced strategies and 52% with intermediate strategies describing their impact as 'very effective' [2] - Video is increasingly becoming a preferred learning and problem-solving tool in the workplace, with 65% of employees favoring on-demand videos over asking colleagues for help [4] Adoption and Usage - 75% of employees indicate that their organizations encourage video production for business purposes, yet 68% believe they could create more videos with easier-to-use tools [3][8] - Concerns about video quality and software usability persist, with 29% worried about content quality and 49% unsure of which software to use [8] - 55% of decision-makers consider the ability to secure content from unauthorized viewers as very important [8] Investment and Features - There is a strong willingness among tech leaders to invest in AI-enhanced video strategies, with 72% of CIOs willing to pay a premium for speech-to-text solutions to improve video searchability [8] - 77% of organizations are interested in implementing AI video features to enhance video production quality [8] - Employees express a desire for direct access to relevant video content, with 71% agreeing they would utilize archived videos if they could search using specific terms [8] Learning and Talent Acquisition - Seamless video experiences are crucial during talent acquisition, with 77% of candidates impressed by companies offering on-demand training for career exploration [8] - The report indicates a shift in employee preferences towards video as a primary tool for learning and problem-solving, reflecting a broader trend in workplace communication [4][5]

Core Points - Kaltura, Inc. announced the resignation of Chief Financial Officer John Doherty, effective December 5, 2025, as he transitions to a CFO role in the medical technology sector [1] - The company has engaged an external search firm to find a successor for the CFO position, and Doherty will remain as an advisor until March 31, 2026, to ensure a smooth transition [2] - Kaltura's leadership expressed gratitude for Doherty's contributions and reaffirmed confidence in the company's strategy and financial guidance for the third quarter [3] Company Overview - Kaltura's mission focuses on creating AI-infused hyper-personalized video experiences aimed at enhancing customer and employee engagement [4] - The company's offerings include a comprehensive platform for enterprise and TV content management, along with various AI-driven video products such as Video Portals, LMS and CMS Video Extensions, Virtual Events, and TV Streaming Applications [4]

Core Insights - Kaltura is set to unveil its new Media Publishing Agent at IBC 2025, aimed at delivering hyper-personalized, compliant, and revenue-optimized content experiences at scale [1][4] - The Media Publishing Agent automates the publishing workflow, enhancing efficiency and ensuring content consistency across various services [2][3] Company Developments - The Media Publishing Agent allows for precise publishing workflows, including compliance checks and metadata enrichment, which can be monitored and adjusted via dashboards [2] - Kaltura's Chief Product & Engineering Officer highlighted the agent as a critical tool for media companies to leverage AI for future-proofing their businesses and driving efficiency [3] Product Features - The Media Publishing Agent supports scalable monetization strategies by enabling faster turnaround for live and on-demand services, better personalization, and streamlined localization [3] - Kaltura's suite of AI-powered solutions includes the award-winning TV Genie, which enhances viewing experiences and recommendations [4] Market Positioning - Kaltura will also launch its new Cloud TV Marketplace at IBC, providing customers with the ability to explore and activate integrations and AI-powered features tailored to their needs [4]

Kaltura (KLTR) 2025 Conference Summary Company Overview - Kaltura is a leading provider of video technology, offering solutions for enterprises, educational institutions, and media companies globally. Their platform supports various applications, including virtual events, corporate communications, online learning, and streaming TV [1][3]. Core Business and Product Offerings - Kaltura's mission is to create AI-infused, hyper-personalized video experiences that enhance customer and employee engagement [3]. - The Kaltura Video Experience Cloud serves three main markets: 1. Enterprise Video Content Management (EVCM) and Online Video Platform (OVP) 2. Virtual events and webinars 3. Cloud TV software [6][7]. - The platform includes a video portal, LMS integrations, virtual event systems, conferencing products, and TV streaming applications [8][9]. Customer Base and Market Penetration - Kaltura serves over 850 large organizations, powering more than 10 million active users, including major companies like Amazon, Nvidia, and Salesforce [17][18]. - The company claims to cover 50% of R1 schools in the U.S. for various video-related needs [18]. - Kaltura has a long-standing relationship with Vodafone, extending their partnership for another ten years [18]. Financial Performance and Market Trends - Kaltura has maintained growth even during challenging market conditions, with a focus on profitability. The company reported a negative cash flow of $47 million in 2022 but expects to achieve $15 million in adjusted EBITDA for the current year [31][34]. - The company has seen a shift in its revenue streams, with non-media use cases (marketing, sales, training) performing better than media-related revenues [20][27]. - The average annual recurring revenue (ARR) is increasing as customers consume more products and use cases [19]. Future Outlook and Strategic Initiatives - Kaltura aims to double its adjusted EBITDA by 2026, targeting a long-term goal of at least 10% revenue growth and 20% adjusted EBITDA [34][35]. - The company is focusing on AI-infused experiences to enhance content creation and delivery, which is expected to drive future growth [23][39]. - Kaltura is positioned to capitalize on the rebound of the video market post-COVID, with increasing budgets and a hybrid workforce [36][37]. Competitive Landscape - Kaltura differentiates itself through deep API integration, flexibility, and a comprehensive platform that reduces vendor complexity [21][22]. - The company sees opportunities for consolidation in a fragmented market, where many smaller vendors are struggling [41][42]. - Kaltura's average revenue per unit (ARPU) for enterprise customers is significantly higher than competitors like Vimeo, indicating a strong position in the enterprise segment [57]. Conclusion - Kaltura is well-positioned to leverage its technology and customer base to capture growth in the evolving video market. The focus on AI and hyper-personalization, combined with a robust financial strategy, suggests a positive outlook for the company moving forward [49][50].

Core Insights - Kaltura announced the winners of the 2025 Kaltura Digital Engagement Awards in Education, recognizing educators and institutions that enhance digital engagement, accessibility, and personalization through AI Video Campus solutions [1][5] - The Kaltura Connect in Education conference featured discussions on the evolving role of video and AI in higher education, with a focus on accessibility and compliance with Title II [4][6] Event Highlights - The conference was held at prestigious universities such as The University of Michigan, Rutgers Business School, UCLA, and The Utah Education Network [2] - Panels included discussions on best practices for AI implementations that align with institutional accessibility standards, ensuring inclusivity and effectiveness in digital learning environments [4] Award Winners - Wharton Online received the Video-First Educator Award for its innovative use of video lectures and expert interviews to enhance business education [6] - The Manhattan School of Music was honored with the Live Performance Powerhouse Award for its extensive live music streaming and concert broadcasts [6] - Academy of Art University won the Video Innovation Excellence Award for its leadership in multi-camera visual instruction [6] - UC Santa Cruz (SCOUT) was recognized with the Video Education Excellence Award for its A-G course video library supporting college access [6] - UCLA received the Strategic Video Leadership Award for aligning digital media infrastructure with campus-wide strategies, including plans for the 2028 Olympics [6] Accessibility and Security Initiatives - UC Berkeley, Rutgers, and the University of Cincinnati were awarded the Accessibility Advocate Award for establishing standards for accessibility in content and pedagogy [9] - Rice University won the Security Superstar Award for its efforts in enhancing video security across the institution [9]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $44.5 million, up 1% year over year, while subscription revenue was $42.4 million, up 3% year over year [5][22] - Adjusted EBITDA was $4.1 million, consistent with the record from Q1 2025, marking the eighth consecutive quarter of adjusted EBITDA profitability [6][27] - Non-GAAP net profit reached $2.5 million, an improvement of $4.5 million year over year [6][29] - Cash flow from operations was $2.7 million, the highest second quarter result since 2020 [7][29] Business Line Data and Key Metrics Changes - E and T segment revenue grew by 7% year over year to $33.2 million, with subscription revenue up 9% to $32.6 million [24] - M and T segment revenue declined by 14% year over year to $11.2 million, with subscription revenue down 13% to $9.8 million [25] - Average ARR per customer reached a record high, indicating strong customer consolidation around the platform [8][19] Market Data and Key Metrics Changes - The company reported a net dollar retention rate of 101%, above 100% for the fourth consecutive quarter [10][23] - The company anticipates improved M and T gross retention rates in Q4 2025, supported by a renewed contract with Vodafone [6][25] Company Strategy and Development Direction - The company is focusing on enhancing its AI offerings, with plans to expand its AI agents and improve automation in content publishing [12][18] - A reorganization plan was announced, involving a 10% workforce reduction aimed at increasing efficiency and productivity [16][30] - The company aims to achieve double-digit revenue growth and adjusted EBITDA margin by 2028 or sooner [36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's trajectory despite market uncertainties and geopolitical turbulence [20][36] - The company expects to see sequential growth in M and T revenue in Q4 2025, driven by improved gross retention and new bookings [6][19] - Management highlighted the importance of customer consolidation and the maturity of newer products in driving future growth [20][36] Other Important Information - The company closed its first three AI deals in Q2 2025, indicating a strong sales pipeline with over 100 qualified opportunities [8][9] - The company received multiple industry awards, including recognition as a leader in AI-enabled enterprise video platforms [14][15] Q&A Session Summary Question: What is working well in your incremental new bookings momentum? - Management noted that the maturity of their events offering, customer consolidation, and the introduction of AI products are contributing to increased bookings [40][41] Question: Why do you think churn was elevated and what are you doing to address it? - Management explained that elevated churn in M and T was due to industry shifts towards IP and cloud, but they expect improvements with major customers like Vodafone [44][45] Question: How are your new AI products integrated into your selling motion and pricing? - The AI products are currently offered as upsells, with flexible pricing based on usage and integration into existing offerings [54][56] Question: Can you discuss the bookings mix in terms of new logos versus sales back into the base? - Management indicated that while upsells have been strong, they are seeing an increase in new logos, with a growing pipeline of potential new customers [72][74]

[Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) Forward-looking statements are subject to risks including volatile economic climate, political/military conditions, customer dependency, profitability, evolving markets, technological competition, AI/GenAI, and data privacy concerns - Forward-looking statements are subject to risks including **volatile economic climate**, **political/military conditions in Israel/Ukraine**, **customer dependency**, inability to achieve profitability, evolving markets, technological competition, **AI/GenAI risks**, and **data privacy concerns**[12](index=12&type=chunk)[13](index=13&type=chunk)[18](index=18&type=chunk) [PART I FINANCIAL INFORMATION](index=7&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Item 1. Consolidated Financial Statements (unaudited)](index=7&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20(unaudited)) Kaltura, Inc.'s unaudited condensed consolidated financial statements for Q2 and H1 2025 are presented, prepared under U.S. GAAP and SEC interim rules - The financial statements are unaudited and prepared under U.S. GAAP for interim reporting, with results for Q2 and H1 2025 not necessarily indicative of full-year performance[41](index=41&type=chunk)[43](index=43&type=chunk) - The Company operates in two main segments: **Enterprise, Education, and Technology (EE&T)** and **Media and Telecom (M&T)**, offering SaaS and PaaS video solutions[40](index=40&type=chunk)[89](index=89&type=chunk) - A cost-reduction and reorganization plan was approved on August 4, 2025, involving a **10% workforce reduction**, expected to incur **$687 thousand in pre-tax charges in Q3 2025** and result in **$8.5 million in annualized cost savings**[118](index=118&type=chunk)[255](index=255&type=chunk) [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Total Assets | $169,447 | $181,305 | | Total Liabilities | $152,493 | $156,918 | | Total Stockholders' Equity | $16,954 | $24,387 | [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $44,462 | $44,032 | $91,446 | $88,813 | | Gross profit | $31,219 | $28,676 | $63,955 | $57,284 | | Operating loss | $(2,757) | $(8,550) | $(4,334) | $(15,840) | | Net loss | $(7,750) | $(10,004) | $(8,869) | $(21,100) | | Net loss per share, basic and diluted | $0.05 | $0.07 | $0.06 | $0.14 | [Condensed Consolidated Statements of Comprehensive Loss](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Condensed Consolidated Statements of Comprehensive Loss (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(7,750) | $(10,004) | $(8,869) | $(21,100) | | Other comprehensive income (losses) | $3,859 | $(685) | $2,947 | $(1,430) | | Comprehensive loss | $(3,891) | $(10,689) | $(5,922) | $(22,530) | [Condensed Consolidated Statement of Stockholders' Equity](index=11&type=section&id=Condensed%20Consolidated%20Statement%20of%20Stockholders'%20Equity) - Total stockholders' equity decreased from **$24,387 thousand** as of January 1, 2025, to **$16,954 thousand** as of June 30, 2025, primarily due to **net loss ($8,869 thousand)** and **common stock repurchases ($9,595 thousand)**, partially offset by **stock-based compensation ($8,447 thousand)** and **other comprehensive income ($2,947 thousand)**[33](index=33&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $1,610 | $(2,751) | | Net cash provided by investing activities | $11,625 | $1,763 | | Net cash used in financing activities | $(11,335) | $(1,296) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $2,387 | $(2,416) | | Cash, cash equivalents and restricted cash at end of period | $35,546 | $34,368 | [Notes to Condensed Consolidated Interim Financial Statements](index=15&type=section&id=Notes%20to%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [NOTE 1: General](index=15&type=section&id=NOTE%201%3A%20General) - Kaltura, Inc. was incorporated in October 2006 and operates in two main segments: **Enterprise, Education, and Technology (EE&T)** and **Media and Telecom (M&T)**, providing a platform for video creation, management, and collaboration through SaaS and PaaS offerings[40](index=40&type=chunk) [NOTE 2: Basis of Presentation and Summary of Significant Accounting Policies](index=15&type=section&id=NOTE%202%3A%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) - The unaudited condensed consolidated financial statements are prepared in accordance with **U.S. GAAP** and **SEC interim reporting rules**, with certain disclosures condensed or omitted compared to annual reports[41](index=41&type=chunk)[42](index=42&type=chunk) - The Company, as an "emerging growth company," has elected to use the **extended transition period** for new accounting pronouncements[50](index=50&type=chunk) - New ASUs on income tax disclosures (**ASU 2023-09**, effective after Dec 15, 2024) and expense disaggregation (**ASU 2024-03**, effective after Dec 15, 2026) are being evaluated for impact[51](index=51&type=chunk)[52](index=52&type=chunk) [NOTE 3: Revenues from Contracts with Customers](index=17&type=section&id=NOTE%203%3A%20Revenues%20from%20Contracts%20with%20Customers) Disaggregated Revenue by Segment (in thousands) | Segment | Q2 2025 Revenue | Q2 2024 Revenue | H1 2025 Revenue | H1 2024 Revenue | | :------ | :-------------- | :-------------- | :-------------- | :-------------- | | EE&T | $33,242 | $30,965 | $67,658 | $63,405 | | M&T | $11,220 | $13,067 | $23,788 | $25,408 | | Total | $44,462 | $44,032 | $91,446 | $88,813 | Disaggregated Revenue by Region (in thousands) | Region | Q2 2025 Revenue | Q2 2024 Revenue | H1 2025 Revenue | H1 2024 Revenue | | :----- | :-------------- | :-------------- | :-------------- | :-------------- | | US | $24,182 | $23,547 | $48,372 | $46,737 | | EMEA | $16,987 | $16,884 | $35,755 | $34,404 | | Other | $3,293 | $3,601 | $7,319 | $7,672 | | Total | $44,462 | $44,032 | $91,446 | $88,813 | - Remaining performance obligations totaled **$188.1 million** as of June 30, 2025, with **61% expected to be recognized as revenue over the next 12 months**[56](index=56&type=chunk) [NOTE 4: Marketable Securities](index=19&type=section&id=NOTE%204%3A%20Marketable%20Securities) Available-for-Sale Marketable Securities (in thousands) | Category | June 30, 2025 Fair Value | December 31, 2024 Fair Value | | :------- | :----------------------- | :--------------------------- | | Current | $35,756 | $48,275 | | Long-term | $4,132 | $3,379 | | Total | $39,888 | $51,654 | [NOTE 5: Fair Value Measurements](index=21&type=section&id=NOTE%205%3A%20Fair%20Value%20Measurements) - Cash equivalents and marketable securities are measured at fair value using the **market approach (Level 1 or Level 2 inputs)**, while foreign currency derivative contracts are classified as **Level 2**[64](index=64&type=chunk) Fair Value of Assets (in thousands) | Asset Category | June 30, 2025 | December 31, 2024 | | :------------- | :------------ | :---------------- | | Money market funds | $21,719 | $12,212 | | Short-term marketable securities | $35,091 | $48,275 | | Long-term marketable securities | $4,132 | $3,379 | | Restricted bank deposits (current) | $3,507 | $3,507 | | Options and forward contracts (hedging) | $3,884 | $960 | | Restricted bank deposit (noncurrent) | $1,103 | $1,020 | [NOTE 6: Derivatives and Hedging](index=22&type=section&id=NOTE%206%3A%20Derivatives%20and%20Hedging) - The Company uses forward contracts to hedge forecasted payroll costs denominated in NIS against USD exchange rate fluctuations, with outstanding notional amounts of **$38.5 million** as of June 30, 2025[67](index=67&type=chunk)[68](index=68&type=chunk) - Gains from hedging instruments reclassified from accumulated other comprehensive income were **$817 thousand for Q2 2025** and **$1,143 thousand for H1 2025**[68](index=68&type=chunk) [NOTE 7: Leases](index=23&type=section&id=NOTE%207%3A%20Leases) - The Company leases office facilities with agreements expiring through November 2027, with an estimated lease term extending to **November 2032** due to a probable extension option[71](index=71&type=chunk) Operating Lease Costs (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :----- | :------ | :------ | :------ | :------ | | Total Operating Lease Cost | $754 | $721 | $1,716 | $1,439 | - As of June 30, 2025, total operating lease liabilities were **$17.8 million**, with a weighted-average remaining term of **6.90 years** and a weighted-average discount rate of **4.71%**[72](index=72&type=chunk)[73](index=73&type=chunk) [NOTE 8: Commitments and Contingencies](index=24&type=section&id=NOTE%208%3A%20Commitments%20and%20Contingencies) Future Non-Cancelable Purchase Commitments (in thousands) | Year Ending December 31, | Amount | | :----------------------- | :----- | | 2025 (Remainder) | $16,056 | | 2026 | $29,177 | | Total | $45,233 | - The Company is occasionally involved in legal proceedings but does not believe any pending litigation will have a **material adverse effect** on its business[76](index=76&type=chunk) [NOTE 9: Condensed Consolidated Balance Sheet Components](index=24&type=section&id=NOTE%209%3A%20Condensed%20Consolidated%20Balance%20Sheet%20Components) Prepaid Expenses and Other Current Assets (in thousands) | Component | June 30, 2025 | December 31, 2024 | | :-------- | :------------ | :---------------- | | Prepaid expenses | $3,984 | $4,085 | | Derivative instrument | $3,884 | $960 | | Restricted bank deposits | $3,507 | $3,507 | | Other current assets | $931 | $929 | | Total | $12,306 | $9,481 | Property and Equipment, Net (in thousands) | Component | June 30, 2025 | December 31, 2024 | | :-------- | :------------ | :---------------- | | Cost | $25,118 | $24,873 | | Accumulated depreciation | $(10,839) | $(8,683) | | Depreciated cost | $14,279 | $16,190 | - Depreciation expenses for H1 2025 were **$2,156 thousand**, down from **$2,343 thousand** in H1 2024[78](index=78&type=chunk) [NOTE 10: Goodwill and Intangible Assets](index=26&type=section&id=NOTE%2010%3A%20Goodwill%20and%20Intangible%20Assets) - Goodwill remained unchanged at **$11.1 million**[21](index=21&type=chunk)[81](index=81&type=chunk) Intangible Assets, Net (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :------- | :------------ | :---------------- | | Technology | $0 | $97 | | Customer relationship | $89 | $115 | | Total | $89 | $212 | - Estimated future amortization expense for intangible assets is **$27 thousand for the remainder of 2025**, **$50 thousand for 2026**, and **$12 thousand for 2027**[82](index=82&type=chunk) [NOTE 11: Income Taxes](index=27&type=section&id=NOTE%2011%3A%20Income%20Taxes) Income Tax Expense (in thousands) | Period | Income Tax Expense | Effective Tax Rate | | :----- | :----------------- | :----------------- | | Q2 2025 | $424 | (8)% | | Q2 2024 | $2,464 | (33)% | | H1 2025 | $1,769 | (36)% | | H1 2024 | $4,772 | (29)% | - The effective tax rates differ from the U.S. statutory rate primarily due to **U.S. losses with no benefit** and **tax rate differences in foreign countries**; the Company has a **full valuation allowance** on its net deferred tax assets[83](index=83&type=chunk)[84](index=84&type=chunk) [NOTE 12: Net Loss Per Share Attributable to Common Stockholders](index=27&type=section&id=NOTE%2012%3A%20Net%20Loss%20Per%20Share%20Attributable%20to%20Common%20Stockholders) Net Loss Per Share (Basic and Diluted) | Period | Net Loss Per Share | Weighted-Average Shares Outstanding | | :----- | :----------------- | :---------------------------------- | | Q2 2025 | $0.05 | 153,536,740 | | Q2 2024 | $0.07 | 147,607,504 | | H1 2025 | $0.06 | 153,771,875 | | H1 2024 | $0.14 | 145,939,847 | - As of June 30, 2025, **28,870,136 outstanding stock options and RSUs** were excluded from diluted EPS calculation as their inclusion would have been anti-dilutive[87](index=87&type=chunk) [NOTE 13: Reportable Segments and Geographical Information](index=28&type=section&id=NOTE%2013%3A%20Reportable%20Segments%20and%20Geographical%20Information) - The Company operates in two segments: **Enterprise, Education and Technology (EE&T)** and **Media and Telecom (M&T)**, with EE&T representing **75% of Q2 2025 revenue** and M&T **25%**[170](index=170&type=chunk) Segment Revenue and Gross Profit (Q2 2025, in thousands) | Segment | Revenue | Cost of Revenue | Gross Profit | | :------ | :------ | :-------------- | :----------- | | EE&T | $33,242 | $7,375 | $25,867 | | M&T | $11,220 | $5,868 | $5,352 | | Total | $44,462 | $13,243 | $31,219 | Segment Revenue and Gross Profit (H1 2025, in thousands) | Segment | Revenue | Cost of Revenue | Gross Profit | | :------ | :------ | :-------------- | :----------- | | EE&T | $67,658 | $15,223 | $52,435 | | M&T | $23,788 | $12,268 | $11,520 | | Total | $91,446 | $27,491 | $63,955 | [NOTE 14: Long-Term Loan](index=32&type=section&id=NOTE%2014%3A%20Long-Term%20Loan) - The Company has a Credit Agreement with a Term Loan Facility and a Revolving Credit Facility, which has been amended multiple times, most recently in **March 2025**, to increase permitted Restricted Payments[100](index=100&type=chunk)[102](index=102&type=chunk) - As of June 30, 2025, the Term Loan Facility had an outstanding balance of approximately **$31.0 million**, with an interest rate of **6.90% per annum**[103](index=103&type=chunk)[222](index=222&type=chunk) - The Company was in compliance with all loan covenants as of June 30, 2025[105](index=105&type=chunk) [NOTE 15: Stockholders' Equity and Equity Incentive Plans](index=34&type=section&id=NOTE%2015%3A%20Stockholders'%20Equity%20and%20Equity%20Incentive%20Plans) - The number of shares authorized under the **2021 Incentive Award Plan** increased by **7,602,857 shares** on January 1, 2025[107](index=107&type=chunk) - Total unrecognized stock-based compensation cost was **$28.1 million** as of June 30, 2025, expected to be recognized over approximately **two years**[110](index=110&type=chunk) - A new **$15.0 million stock repurchase program (2025 Repurchase Program)** was approved in March 2025, superseding the 2024 program; during Q2 2025, **3,468,731 shares** were repurchased for **$2.07 per share**, with **$6.9 million remaining authorization**[112](index=112&type=chunk)[113](index=113&type=chunk) [NOTE 16: Selected Statements of Operations Data](index=36&type=section&id=NOTE%2016%3A%20Selected%20Statements%20of%20Operations%20Data) Financial Expense (Income), Net (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :----- | :------ | :------ | :------ | :------ | | Financial income | $737 | $1,858 | $1,632 | $1,608 | | Financial expenses | $5,306 | $848 | $4,398 | $2,096 | | Financial expense (income), net | $4,569 | $(1,010) | $2,766 | $488 | [NOTE 17: Accumulated Other Comprehensive Income](index=36&type=section&id=NOTE%2017%3A%20Accumulated%20Other%20Comprehensive%20Income) Changes in Accumulated Other Comprehensive Income (Loss) (H1 2025, in thousands) | Component | Balance Dec 31, 2024 | Other Comprehensive Income (Loss) before reclassifications | Net realized losses reclassified | Balance June 30, 2025 | | :-------- | :------------------- | :--------------------------------------------------------- | :------------------------------- | :-------------------- | | Net Unrealized Gains (Losses) on Available-for-Sale Securities | $23 | $(1) | $0 | $22 | | Net Unrealized Gains (Losses) on Derivatives Designated as Hedging Instruments | $936 | $4,091 | $(1,143) | $3,884 | | Total | $959 | $4,090 | $(1,143) | $3,906 | [NOTE 18: Subsequent Events](index=37&type=section&id=NOTE%2018%3A%20Subsequent%20Events) - On August 4, 2025, the Board approved a cost-reduction and reorganization plan, including a **10% workforce reduction**, expected to incur **$687 thousand in pre-tax charges in Q3 2025**[118](index=118&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion and analysis covers Kaltura's financial condition and operational results, focusing on performance drivers, financial metrics, and liquidity - Kaltura is a market-leading provider of **AI-infused video offerings** for enterprises, focusing on enhancing customer and employee engagement[121](index=121&type=chunk) - The Company's **2025 Reorganization Plan**, approved in August 2025, includes a **10% workforce reduction** to increase efficiency and productivity, with expected annualized cost savings of **$8.5 million** and pre-tax charges of **$0.7 million in Q3 2025**[124](index=124&type=chunk) [Overview](index=38&type=section&id=Overview) - Kaltura provides live, real-time, and on-demand video offerings, leveraging **AI to create hyper-personalized video experiences** for organizations[121](index=121&type=chunk) - The company's Video Experience Cloud includes platforms for **Enterprise Video Content Management System** and **TV Content Management System**, powering various AI-infused video products[121](index=121&type=chunk) - Revenue is primarily generated from **SaaS subscriptions**, platform usage licenses, and associated professional services, targeting medium to large enterprises, educational institutions, technology providers, and media/telecom companies[123](index=123&type=chunk) [Key Factors Affecting Our Performance](index=40&type=section&id=Key%20Factors%20Affecting%20Our%20Performance) - Key performance drivers include expanding the platform with **Gen AI features**, acquiring new customers across verticals (direct sales, channel partnerships, self-serve for SMEs), and increasing revenue from existing customers through **cross-selling and upselling**[131](index=131&type=chunk)[132](index=132&type=chunk)[133](index=133&type=chunk) - The company plans continued investment in growth, expecting cost of revenue and operating expenses to fluctuate[134](index=134&type=chunk) [Key Financial and Operating Metrics](index=40&type=section&id=Key%20Financial%20and%20Operating%20Metrics) Key Financial and Operating Metrics (in thousands, except percentages) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | | Annualized Recurring Revenue | $170,364 | $165,167 | | Net Dollar Retention Rate | 101% | 98% | | Remaining Performance Obligations | $188,124 | $177,751 | - Remaining Performance Obligations as of June 30, 2025, were **$188.1 million**, with **61% expected to be recognized as revenue over the next 12 months**[142](index=142&type=chunk)[143](index=143&type=chunk) [Non-GAAP Financial Measures](index=42&type=section&id=Non-GAAP%20Financial%20Measures) - EBITDA and Adjusted EBITDA are non-GAAP measures used to evaluate performance, excluding items like financial expenses, taxes, depreciation, amortization, stock-based compensation, war-related expenses, and strategic initiative costs[145](index=145&type=chunk) EBITDA and Adjusted EBITDA Reconciliation (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(7,750) | $(10,004) | $(8,869) | $(21,100) | | EBITDA | $(1,663) | $(7,271) | $(2,055) | $(13,255) | | Adjusted EBITDA | $4,060 | $1,632 | $8,201 | $2,196 | [Components of Our Results of Operation](index=44&type=section&id=Components%20of%20Our%20Results%20of%20Operation) - Revenue is primarily from **SaaS and PaaS subscriptions**, recognized ratably, with professional services revenue recognized upon rendering or ratably if considered setup activities[150](index=150&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk) - Gross margins improved year-over-year, with **Q2 2025 at 70%** (**77% for subscriptions**, (73)% for professional services) compared to **Q2 2024 at 65%** (**74% for subscriptions**, (49)% for professional services)[158](index=158&type=chunk) - M&T segment gross margins are lower than EE&T due to **higher implementation costs** and a greater proportion of **private cloud/on-premise deployments**[157](index=157&type=chunk) [Results of Operations](index=47&type=section&id=Results%20of%20Operations) Consolidated Results of Operations (in thousands, except percentages) | Metric | Q2 2025 | Q2 2024 | Q2 YoY Change (%) | H1 2025 | H1 2024 | H1 YoY Change (%) | | :-------------------------- | :------ | :------ | :---------------- | :------ | :------ | :---------------- | | Total Revenue | $44,462 | $44,032 | 1% | $91,446 | $88,813 | 3% | | Total Gross Profit | $31,219 | $28,676 | 9% | $63,955 | $57,284 | 12% | | Total Operating Expenses | $33,976 | $37,226 | -9% | $68,289 | $73,124 | -7% | | Operating Loss | $(2,757) | $(8,550) | -68% | $(4,334) | $(15,840) | -73% | | Financial expense (income), net | $4,569 | $(1,010) | -552% | $2,766 | $488 | 467% | | Net Loss | $(7,750) | $(10,004) | -23% | $(8,869) | $(21,100) | -58% | - EE&T revenue increased by **7% for both Q2 and H1 2025**, driven by new and existing customers, while M&T revenue decreased by **14% in Q2** and **6% in H1 2025** due to existing customer decline[172](index=172&type=chunk)[178](index=178&type=chunk)[189](index=189&type=chunk)[195](index=195&type=chunk) - Operating expenses decreased across R&D, Sales & Marketing, and G&A for both Q2 and H1 2025, primarily due to **lower compensation costs** (including stock-based compensation) and **reduced subcontractor use**[183](index=183&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk)[202](index=202&type=chunk) - Financial expense (income), net shifted from income to expense, increasing by **$5.6 million in Q2 2025** and **$2.3 million in H1 2025**, primarily due to **exchange rate differences**[186](index=186&type=chunk)[203](index=203&type=chunk) [Liquidity and Capital Resources](index=55&type=section&id=Liquidity%20and%20Capital%20Resources) - The Company's liquidity is primarily from operating activities, **cash on hand ($35.5 million as of June 30, 2025)**, and a **$25.0 million Revolving Credit Facility with no outstanding balance**[205](index=205&type=chunk)[222](index=222&type=chunk)[223](index=223&type=chunk) - Net cash provided by operating activities improved significantly to **$1.6 million in H1 2025** from **$(2.8) million in H1 2024**[223](index=223&type=chunk)[224](index=224&type=chunk) - Net cash used in financing activities increased to **$(11.3) million in H1 2025**, primarily due to **$9.6 million in common stock repurchases** and **$3.1 million in cash settlement of equity awards**[223](index=223&type=chunk)[231](index=231&type=chunk) [Critical Accounting Policies and Estimates](index=60&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - The preparation of financial statements requires management to make estimates and judgments, which are believed to be reasonable, and there have been no significant changes to these policies during H1 2025[234](index=234&type=chunk)[235](index=235&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=60&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the Company's exposure to market risks, including foreign currency, interest rate, and inflation, and the strategies for their management - The Company is exposed to **foreign currency exchange risk**, primarily from NIS and Euro-denominated expenses and revenues, and uses hedging programs to mitigate this risk[237](index=237&type=chunk)[238](index=238&type=chunk) - A hypothetical **10% change in foreign currency exchange rates** would impact H1 2025 results by **$0.8 million due to NIS** (after hedges) and **$2.6 million due to Euros**[239](index=239&type=chunk) - With **$31.0 million in floating rate debt**, a hypothetical **10% change in interest rates** would impact H1 2025 interest expense by **$0.1 million**[240](index=240&type=chunk) [Item 4. Controls and Procedures](index=61&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the Company's disclosure controls and procedures as of June 30, 2025, and concluded they were effective at a reasonable assurance level - Disclosure controls and procedures were evaluated and deemed **effective at the reasonable assurance level** as of June 30, 2025[244](index=244&type=chunk) - No material changes in internal control over financial reporting occurred during the period[245](index=245&type=chunk) [PART II OTHER INFORMATION](index=61&type=section&id=PART%20II%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=61&type=section&id=Item%201.%20Legal%20Proceedings) The Company is involved in various legal proceedings, but none are expected to have a material adverse effect on its financial condition or operations - The Company is not currently a party to any legal proceedings expected to have a **material adverse effect** on its business, operating results, cash flows, or financial condition[247](index=247&type=chunk) [Item 1A. Risk Factors](index=62&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, highlighting new risks from the 2025 Reorganization Plan, such as unrealized cost savings, operational disruption, personnel attrition, and management distraction - New risk factors include the potential for the **2025 Reorganization Plan** to not fully achieve expected cost savings or benefits, incur higher-than-forecasted costs, lead to employee attrition or reduced morale, and divert management's focus[249](index=249&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=62&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the Company's common stock repurchases during Q2 2025 under the 2025 Repurchase Program, confirming no material change in IPO proceeds use Common Stock Repurchases (Q2 2025) | Period | Shares Purchased | Average Price Per Share | | :----- | :--------------- | :---------------------- | | April | 1,505,827 | $1.93 | | May | 1,135,743 | $2.20 | | June | 827,161 | $2.14 | | Total | 3,468,731 | $2.07 | - The **2025 Repurchase Program**, approved in March 2025, authorizes repurchases up to **$15.0 million**, with approximately **$6.9 million remaining** as of June 30, 2025[251](index=251&type=chunk) [Item 3. Defaults Upon Senior Securities](index=63&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities during the reported period - No defaults upon senior securities were reported[253](index=253&type=chunk) [Item 4. Mine Safety Disclosures](index=63&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety disclosures are not applicable to the Company - Not applicable[254](index=254&type=chunk) [Item 5. Other Information](index=63&type=section&id=Item%205.%20Other%20Information) The 2025 Reorganization Plan's approval, 10% workforce reduction, and financial impacts are reiterated, with no Rule 10b5-1 trading arrangements noted for directors or officers - The **2025 Reorganization Plan**, approved August 4, 2025, involves a **10% workforce reduction**, aiming for **$8.5 million in annualized cost savings** and incurring **$0.7 million in pre-tax charges in Q3 2025**[255](index=255&type=chunk) - No **Rule 10b5-1 trading arrangements** were adopted or terminated by directors or officers during Q2 2025[256](index=256&type=chunk) [Item 6. Exhibits](index=64&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, such as organizational documents, incentive plans, certifications, and XBRL documents - The report includes various exhibits such as the **Amended and Restated Certificate of Incorporation**, **Bylaws**, **Kaltura Severance Plan**, CEO/CFO certifications, and **Inline XBRL documents**[258](index=258&type=chunk)[259](index=259&type=chunk) [Signatures](index=66&type=section&id=Signatures) This section contains the signatures of Ron Yekutiel (Chairman, President, and CEO) and John Doherty (CFO), certifying the report's filing on August 7, 2025 - The report was signed by **Ron Yekutiel** (Chairman, President, and CEO) and **John Doherty** (CFO) on **August 7, 2025**[265](index=265&type=chunk)