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KALTURA INC (KLTR)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 delivered revenue of $44.46M (+1% Y/Y) and non-GAAP diluted EPS of $0.01, both above the high end of guidance; Adjusted EBITDA of $4.06M matched last quarter’s record high .
  • Wall Street consensus had modeled a loss: EPS consensus at -$0.04 and normalized EPS -$0.005; actual non-GAAP diluted EPS was $0.01, a clear beat. Revenue beat consensus by ~$0.79M*.
  • FY25 guidance was tightened for revenue (unchanged midpoint) and raised for Adjusted EBITDA to $14.5–$16.0, up from $13.5–$15.5 previously .
  • Management announced a ~10% workforce reduction and organizational realignment to drive cost savings ($2.6M in 2H25; $8.5M annualized), a near-term margin catalyst alongside early AI product monetization (first 3 AI deals; >100 qualified AI opportunities) .
  • CEO: “We exceeded the upper end of all our second quarter guidance ranges, delivering record non-GAAP net profit…” and outlined a strategy to double Adjusted EBITDA in 2026 and return to “Rule of 30” by/before 2028 .

What Went Well and What Went Wrong

What Went Well

  • Beat on revenue and EPS vs guidance and consensus; non-GAAP operating profit rose to $2.98M (vs $0.47M a year ago), and GAAP gross margin improved to 70% (vs 65% Y/Y) .
  • Early AI monetization: closed first three AI-driven deals (Content Lab, Genie) and >100 qualified AI pipeline opportunities; CEO highlighted robust bookings momentum .
  • Quote: “We exceeded the upper end of all our second quarter guidance ranges, delivering record non-GAAP net profit… and strongest second-quarter operating cash flow since 2020.” — Ron Yekutiel, CEO .

What Went Wrong

  • GAAP net loss remained sizable at -$7.75M; net financial expense surged to $4.57M, contributing to the GAAP loss despite operational improvement .
  • Media & Telecom segment revenue fell 14% Y/Y ($11.22M vs $13.07M), offset by strength in Enterprise, Education & Technology (+7% Y/Y) .
  • Added FX translation adjustments into non-GAAP net income starting Q2, reflecting currency volatility, particularly USD/ILS; underscores external macro sensitivity .

Financial Results

Headline Financials (Sequential trend)

MetricQ4 2024Q1 2025Q2 2025
Total Revenue ($USD Millions)$45.61 $46.98 $44.46
GAAP Diluted EPS ($)-$0.04 -$0.01 -$0.05
Non-GAAP Diluted EPS ($)-$0.01 $0.02 $0.01
GAAP Gross Margin (%)71% 70% 70%
Non-GAAP Operating Margin (%)3% 7% 7%
Adjusted EBITDA ($USD Millions)$2.66 $4.14 $4.06

Q2 2025 vs Prior Year and vs Estimates

MetricQ2 2024 ActualQ2 2025 ActualConsensus Estimate
Total Revenue ($USD Millions)$44.03 $44.46 $43.68*
GAAP Diluted EPS ($)-$0.07 -$0.05 N/A
Non-GAAP Diluted EPS ($)-$0.01 $0.01 -$0.04 (Primary EPS); -$0.005 (Normalized EPS)

Values retrieved from S&P Global*

Segment Revenue ($USD Millions)

SegmentQ4 2024Q1 2025Q2 2025
Enterprise, Education & Technology (EE&T)$32.96 $34.42 $33.24
Media & Telecom (M&T)$12.65 $12.57 $11.22
Total$45.61 $46.98 $44.46

KPIs

KPIQ4 2024Q1 2025Q2 2025
ARR ($USD Millions)$173.90 $174.84 $170.36
RPO ($USD Millions)$203.38 $184.86 $188.12
Net Dollar Retention (%)103% 107% 101%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Subscription Revenue ($M)Q3 2025N/A$40.8–$41.6 New
Total Revenue ($M)Q3 2025N/A$42.8–$43.6 New
Adjusted EBITDA ($M)Q3 2025N/A$1.5–$2.5 New
Subscription Revenue ($M)FY 2025$170.4–$173.4 $170.9–$172.9 Narrowed (midpoint unchanged)
Total Revenue ($M)FY 2025$179.9–$182.9 $180.4–$182.4 Narrowed (midpoint unchanged)
Adjusted EBITDA ($M)FY 2025$13.5–$15.5 $14.5–$16.0 Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
AI/Technology InitiativesLaunched Class Genie and Work Genie; industry recognition, growing interest from 150+ customers .First 3 AI deals closed; >100 qualified AI opportunities; live captioning and multi-language ASR enhancements discussed on the call Accelerating adoption; monetization beginning
Cost Actions/Operating EfficiencyNo major workforce actions; focus on margin improvement .~10% workforce reduction; unified R&D and consolidated GTM; expected 2H25 savings $2.6M; $8.5M annualized .Cost discipline intensifying
Segment Mix (EE&T vs M&T)EE&T steady growth; M&T stable Q4 .EE&T +7% Y/Y; M&T -14% Y/Y; mgmt expects M&T to grow sequentially in Q4 (call commentary) Mixed; M&T recovery later
Accessibility/Regulatory (Education)Recognition and awards; accessibility focus .Title II compliance themes at education events; accessibility panels; award winners list .Continued emphasis
FX/Macro SensitivityMacro noted; war-related cost references; FX minor .Added FX translation adjustments to non-GAAP net income starting Q2; USD/ILS volatility cited .Heightened FX attention

Management Commentary

  • Strategic focus: “New bookings increased sequentially and included initial sales of our AI products… robust pipeline… adoption of our AI-powered offerings.” — Ron Yekutiel, CEO .
  • Long-term targets: “Reorganization… part of a longer-term strategy… to double adjusted EBITDA in 2026 and return to being a ‘Rule of 30’ company by or before 2028.” — Ron Yekutiel .
  • Operating model changes: Consolidation of engineering under one R&D org and CX/Sales into one GTM team; ~10% workforce reduction to drive savings starting Q3, primarily in engineering, professional services, and administrative spend .
  • Non-GAAP methodology: Beginning Q2, non-GAAP net income adjusts for FX translation gains/losses to better reflect operating performance amid currency fluctuations .

Q&A Highlights

  • AI monetization and product roadmap: Management discussed live captioning integration into live workflows, expanded languages, and dictionary features for ASR; core AI products are additive and aim to reduce costs and improve quality .
  • Segment trajectory: Despite M&T weakness in Q2, management indicated an expectation for sequential improvement in M&T by Q4, while EE&T remains a growth driver .
  • Guidance framing: Reaffirmed FY revenue ranges (narrowed) and raised FY Adjusted EBITDA guidance, citing pipeline and cost initiatives .
  • Cost savings cadence: Clarified reorg savings start in Q3 with one-time ~$0.7M charge; annualized savings of ~$8.5M targeted .

Estimates Context

  • Q2 actuals vs S&P Global consensus: EPS beat materially (Primary EPS: -$0.04 estimate vs $0.01 actual; Normalized EPS: -$0.005 estimate vs $0.01 actual); revenue beat (~$43.68M estimate vs $44.46M actual)*.
  • Estimate revisions likely: Non-GAAP profitability, cost actions, and AI monetization should support upward revisions to FY Adjusted EBITDA; segment mix (M&T softness) may temper top-line revisions near-term.

Values retrieved from S&P Global*

Key Takeaways for Investors

  • Clear beat-and-raise quarter on profitability: Non-GAAP EPS flipped positive vs expected loss; FY Adjusted EBITDA guidance raised — near-term multiple support *.
  • Cost restructuring is a tangible catalyst: ~10% workforce reduction and org consolidation should expand margins through 2H25 and into 2026 .
  • AI monetization inflecting: First AI deal wins and >100 qualified opportunities point to incremental ARR and potential upsell across the installed base .
  • Segment watch: EE&T is the growth engine; monitor M&T recovery into Q4 as guided in call commentary for top-line acceleration .
  • FX sensitivity in non-GAAP: New FX adjustment improves comparability but underscores macro exposure; consider into valuation and risk budgeting .
  • Operating cash flow improving: Q2 net cash from operations of $2.7M, strongest second-quarter OCF since 2020, supports balance sheet resilience .
  • Near-term trading: Stock may respond to cost actions and AI narrative; watch Q3 guide execution and any M&T sequential improvements as validation points .

Additional relevant press releases around Q2:

  • Vodafone long-term partnership extension and Cloud TV evolution; exploration of AI-infused offerings .
  • Telestream migration partnership (exclusive) — potential enterprise pipeline expansion .
  • Work Genie added to AWS Marketplace AI Agents category — lowers friction to adoption .
  • Education events emphasize accessibility and AI adoption, with recognized institutions (e.g., UCLA, Rutgers, Manhattan School of Music) .

All cited figures and statements are drawn from Kaltura’s Q2 2025 press release, 8-K earnings materials, prior quarter releases, and earnings call transcripts as referenced.
Values retrieved from S&P Global* for consensus comparisons.

Citations:
Transcript sources: