KLTR 10-K & 10-Q changes, risk factors and insider trading

The nature of our activities and our global presence and operations expose us to global and local macro and micro effects, including the effects of global economic trends such as the current global economic volatility, rising inflation, risingunpredictable interest rates, price increases, armed conflicts in various regions including the Middle East and Eastern Europe, political changes and their impact on the economic markets, decrease in our customers' spend or available budget that causes decline in demand, up-sales or subscription renewals, and other adverse effects that might have direct or indirect effects on our business and results of operations that are hard to predict, monitor or assess. Such developments have caused and may continue to cause uncertainties and high volatility with respect to our estimated or expected results of operations, may develop differently from our estimations and expectations, and could have an adverse effect on our business, results of operations and financial condition.

If we are unable to accomplish any of these objectives, our revenue could be impaired or decline in future periods. Many factors may contribute to declines in our growth rate, including slower market penetration, increased competition, slowing demand for our offerings, a failure by us to capitalize on growth opportunities, the maturation of our business, failure to deliver under our commitments or to satisfy customer expectations, global or regional economic downturns, including as a result of the continuing geopolitical tensions and active armed conflicts, and failure to adapt to such downturns, among others. While market demand for our offerings was growing at a robust rate prior to the COVID-19 pandemic, we have since experienced a slowdown as the effects of the COVID-19 pandemic have weakened and as a result of the current volatile economic climate. As a result, it is difficult to evaluate our current business and future prospects and any of the risks highlighted herein or other adverse circumstances may increase the risk that we will not be successful. If our business, operations and financial results decline as a result of any of the factors described above, investors’ perceptions of our business and the market price of our common stock could be adversely affected.

Our future success is dependent on our ability to establish and maintain successful relationships with a diverse set of customers. We currently derive a significant portion of our revenue from a limited number of customers. Our top ten customers in the aggregate accounted for approximately 30.8%,31.5%, 28.9%30.0% and 27.8%28.9% of our revenue for the years ended December 31, 2024,2025, 20232024 and 2022,2023, respectively. For the years ended December 31, 2025, December 31, 2024 and December 31, 2023,2023 Vodafone accounted for approximately 10.1%, 10.7% and 10.2% of our revenue, respectively. In the year ended December 31, 2022, no individual customer accounted for more than 10% out of our total revenue. While the identity of the customers may vary from period to period, it is likely that we will continue to derive a significant portion of our revenue from a limited number of customers in the future and, in some cases, the portion of our revenue attributable to individual customers may increase. The loss of one or more significant customers or a reduction in the amount of revenue we derive from any such customer could significantly and adversely affect our business, financial condition, and results of operations. Customers may choose not to renew their subscriptions or may otherwise reduce the breadth of the offerings to which they subscribe for any number of reasons. See “—If our existing customers do not renew their subscriptions, or if they renew on terms that are less economically beneficial to us, it could have an adverse effect on our business, financial condition and results of operations.” We are also subject to the risk that any such customer will experience financial difficulties that prevent them from making payments to us on a timely basis or at all.

The markets in which we operate are relatively new and rapidly evolving. Accordingly, it is difficult to predict customer adoption, renewals and demand, the entry of new competitive products, the success of existing competitive products, and the future growth rate, expansion, longevity, and size of the markets for our platform, products, and solutions. The expansion of these new and evolving markets depends on a number of factors, including the cost, performance, and perceived value associated with the technologies that we and others in our industry develop. For example, customers may be slow to implement our new AI offerings, including due to budgetary or compliance constraints. Further if we or other companies in our industry experience security incidents, loss of customer data, or disruptions in delivery or service, the market for these applications as a whole, including the demand for our offerings, may be negatively affected. If video products and solutions such as ours do not continue to achieve market acceptance, or there is a reduction in demand caused by decreased customer acceptance, technological challenges, weakening economic conditions, privacy, data protection and data security concerns, governmental regulation, competing technologies and products, or decreases in information technology spending or otherwise, the market for our offerings might not continue to develop or might develop more slowly than we expect, which could adversely affect our business, financial condition, results of operations and growth prospects.

In addition, as a public company, we are required to document and test our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act so that our management can certify as to the effectiveness of our internal control over financial reporting. This assessment will need to include disclosure of any material weaknesses identified in our internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual and interim financial statements will not be detected or prevented in a timely manner. As an emerging growth company, our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 until our annual report for any fiscal year following such date that we are no longer an emerging growth company.company, which is expected to occur on December 31, 2026.

In addition, in connection with our product development efforts, we may introduce significant changes to our existing products or solutions, or develop or otherwise introduce new and unproven products or solutions, integrate new technologies such as AI models, including technologies with which we have little or no prior development or operating experience. This risk is amplified as we invest more heavily in AI-based technologies that rely on advanced algorithms and third-party large language models, reliance on which could potentially exposingexpose us to new, and potentially novel, allegations of trade secret misappropriation or intellectual property disputes. These new products, solutions and updates may not perform as expected, may fail to engage our customer base or other end users of our products, or may otherwise create a lag in adoption of such new products. New products may initially suffer from performance and quality issues that may negatively impact our ability to market and sell such products to new and existing customers or harm our reputation. We have in the past experienced bugs, errors, or other defects or deficiencies in new products and product updates and delays in releasing new products, deployment options, and product enhancements and may have similar experiences in the future. As a result, some of our customers may either defer purchasing our offerings until the next upgrade is released or switch to a competitor if we are not able to keep up with technological developments. To keep pace with technological and competitive developments we have in the past invested, and may in the future invest, in the acquisition of complementary businesses, technologies, services, products, and other assets that expand our offerings. We may make these investments without being certain that they will result in products or enhancements that will be accepted by existing or prospective customers or that will achieve market acceptance or successfully integrate with our existing products. The short- and long-term impact of any major change to our offerings, or the introduction of new products or solutions, is particularly difficult to predict. If new or enhanced offerings fail to engage our customer base or other end users of our products, or do not perform as expected, we may fail to generate sufficient revenue, operating margin, or other value to justify our investments in such products, any of which may adversely affect our reputation and negatively affect our business in the short-term, long-term, or both. If we are unable to successfully enhance our existing offerings to meet evolving customer requirements, increase adoption and use cases of our offerings, develop, or otherwise introduce new products and solutions and quickly resolve security vulnerabilities or other errors or defects, or if our efforts in any of these areas are more expensive or involved than we expect, our business, financial condition, and results of operations would be adversely affected.

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.Inaffected. In addition, although the Company does not retain or use any of its customers' contents or metadata provided or uploaded by them or otherwise generated from their use of the Company's AI tools, nor does the Company 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 Trump administration has rescinded an executive order relating to the safe and secure development of AI Technologies that was previously implemented by the Biden administration. The Trump administration then issued a new executive order that, among other things, requires certain agencies to develop and submit to the president action plans to “sustain and enhance America’s global AI dominance,” and to specifically review and, if possible, rescind rulemaking taken pursuant to the rescinded Biden executive order. Thus, the Trump administration may continue to rescind other existing federal orders and/or administrative policies relating to AI Technologies or may implement new executive orders and/or other rule making relating to AI Technologies in the future. 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.

U.S. legislation related to AI Technologies has also been introduced at the federal level and is advancing at the state level. For example, the California Privacy Protection Agency is currently in the process of finalizing regulations under the California Consumer Privacy Act (“CCPA”) regarding the use of automated decision-making. California also enacted seventeennumerous new laws in 2024 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.

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 willare expected to apply from August 2, 2026.2026, though this may be subject to change pending ongoing EU legislative developments. The EU AI Act will apply 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 facilities 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.

A version of our Rich Media ServicesContent Management System and its underlying APIs is 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.

AnyoneWe make a version of our Rich Media Content Management System and its underlying APIs, Kaltura Community Edition (“Kaltura CE”), available to the public at no charge under an open source license, the Affero General Public License version 3.0 (“AGPL”). Although Kaltura CE does not include many widely used Kaltura applications, it can be used on a self-hosted basis as a standalone video platform. The AGPL grants licensees broad freedom to view, use, copy, modify and redistribute the source code of Kaltura CE.Anyone can download a free copy of this version of our platform from the internet, and we neither know who all of our AGPL licensees are, nor have visibility into how Kaltura CE is being used by licensees, so our ability to detect violations of the open source license is extremely limited. Additionally, even if we become aware of any violations, open source licenses, including the AGPL, have not been widely interpreted by courts, leading to uncertainty surrounding any ability to enforce such licenses.

This competition can develop without the degree of overhead and lead time required by traditional proprietary software companies, due to the permissions allowed under AGPL. It is also possible for competitors to develop their own software based on Kaltura CE. Although under the terms of the AGPL the source code for this software would also need to be made available for free underto the AGPL,public, itsuch competitive products could reduce the demand for and put pricing pressure on our offerings. We cannot guarantee that we will be able to compete successfully against current and future competitors, some of which may have greater resources than we have, or that competitive pressure or the availability of new open source software will not result in price reductions, reduced operating margins, and loss of market share. Any of the foregoing could harm our business, financial condition, results of operations and cash flows.flows

The markets in which we compete, including "Enterprise Video and Rich Media Content Creation and Management (EVCM)Systems", "Conversation Automation and OnlineAgentic VideoEngagement Platforms (OVP)Solutions", "Virtual Events andEvents, Webinars, and Interactive Learning Experiences", and "Cloud TV Software,Software", are evolving rapidly and remain highly fragmented. Many of our current and potential competitors are larger organizations with significantly greater financial, technical, and marketing resources, broader customer bases, and stronger brand recognition than we have. These factors may enable them to compete more aggressively on pricing, invest in more extensive research and development, or bundle additional products and services alongside their video offerings. In addition, new market entrants and continued industry consolidation can further intensify competition, creating fewer but larger competitors with enhanced capabilities. We believe our ability to compete successfully depends on a variety of factors, some of which are beyond our control, including:

Additionally, we compete with home-grown, start-up, and open source technologies across the categories described above. With recent changes in workplace structures and flexible work policies, and the introduction of new technologies and the entrance of new market participants in response to these trends, competition has intensified, and we expect it to continue in the future. Established companies are also developing their own video platforms, products, and solutions within their own core product lines, and may continue to do so in the future. Established companies may also acquire or establish product integration, distribution, or other cooperative relationships with our current competitors. New competitors or alliances among competitors may emerge from time to time and rapidly acquire significant market share due to various factors such as their greater brand name recognition, larger existing user or customer base, consumer preferences for their offerings, a larger or more effective sales organization and greater financial, technical, marketing, and other resources and experience. Furthermore, with the recent increase in large merger and acquisition transactions in the technology industry, which has recently intensified due to the distressed and unstable economic climate, in particular with respect to transactions involving cloud-based technologies, there is a greater likelihood that we will compete with other larger technology companies in the future. Companies resulting from these potential consolidations may create more compelling product offerings and be able to offer more attractive pricing options, making it more difficult for us to compete effectively. Furthermore, if a sole-source technology provider on which we rely is acquired or otherwise experiences a change of control, we may be prevented from using, selling, supporting or having access to such technology. Additionally, we may also consider pursuing a business combination or other strategic transaction with another entity, such as to take advantage of market trends or in response to industry challenges. Alternatively, we could be identified as an acquisition target by one of our existing or potential competitors or other third parties. Such transactions may not be successful, may not achieve the expected results and may impose financial or operational burdens on the Company, which in turn may adversely impact our business, financial condition, results of operations and prospects. In addition, your ownership and voting power may be diluted in connection with an acquisition or other strategic transaction. For more information regarding the possible implications of and risks associated with such transactions, see Part I, Item 1A. “Risk Factors — If we are unable to consummate acquisitions at our desired rate and at acceptable prices, 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. These transactions and relationships also subject us to certain risks.” and, in addition, “Risk Factors — Your ownership and voting power may be diluted by the issuance of additional shares of our common stock in connection with financings, acquisitions, investments, our equity incentive plans or otherwise.”

In addition to our direct sales force, we also leverage reseller relationships and marketplace platforms to help market and sell our offerings to customers around the world, particularly in areas in which we have a limited presence. These relationships subject us to certain risks. Our resellers may prioritize selling their own offerings that compete with ours, or one of our competitors may be effective in causing a reseller or potential reseller to favor that competitor’s offerings or otherwise prevent or reduce sales of our offerings. In addition, recruiting and retaining qualified resellers and training them in our technology, offerings and culture, requires significant time and resources, and our efforts may not be successful. If we decide to further develop and expand our indirect sales channels, we must continue to scale and improve our processes and procedures to support these channels, including investing in systems and training. Many resellers may not be willing to invest the time and resources required to train their staff to effectively market and sell our offerings.

The sales prices for our offerings may be subject to change for a variety of reasons, including competitive pricing pressures, discounts, anticipation of the introduction of new products, promotional programs, general economic conditions, or our marketing, user acquisition and technology costs and, as a result, we anticipate that we will need to change our pricing model from time to time. In the past, we have sometimes adjusted our prices for individual customers in certain situations, and expect to continue to do so in the future. Moreover, demand for our offerings is price-sensitive. Competition continues to increase in the market segments in which we operate, and we expect competition to further increase in the future, in particular as a result of the volatile economic climate, thereby leading to increased pricing pressures. Larger competitors with more diverse offerings may reduce the price of offerings that compete with ours or may bundle them with other offerings and provide for free. Similarly, certain competitors may use marketing strategies that enable them to acquire users more rapidly or at a lower cost than us, or both, and we may be unable to attract new customers or grow and retain our customer base based on our historical pricing. Additionally, currency fluctuations in certain countries and regions may negatively impact actual prices that customers and resellers are willing to pay in those countries and regions. As we develop and introduce new offerings, as well as features, integrations, capabilities, and other enhancements, we may need to, or choose to, revise our pricing. There can be no assurance that we will not be forced to engage in price-cutting initiatives or to increase our marketing and other expenses to attract customers in response to competitive or other pressures. Any decrease in the sales prices for our products, without a corresponding decrease in costs, increase in volume or increase in revenue from our other offerings, would adversely affect our revenue and gross profit. This is particularly true with respect to our Events product and TVTVCMS Solution,solution, which generally entail significantly higher up-front costs compared to our other offerings. We cannot assure you that we will be able to maintain our prices and gross profits at levels that will allow us to achieve and maintain profitability.

Additionally, the industry in which we operate is generally characterized by significant competition for skilled personnel, especially in areas of our business that require expertise with AI and other emerging technologies, as well as high employee attrition. There is a shortage in personnel with the relevant know-how and experience for the development of our Video Productsplatform and Media Services,products, particularly for DevOps, engineering, research and development, sales, and support positions, and we may not be successful in attracting, integrating, and retaining qualified personnel to fulfill our current and future needs. Many of the companies against which we compete for personnel have greater financial resources, scale and branding than we do, and it may be more difficult for us to attract and retain qualified personnel predominately in Israel, where most of our research and development positions are located, and in New York, where our headquarters is located. These competitors may also actively seek to hire our existing personnel away from us, even if such employee has entered into a non-compete agreement. We may be unable to enforce these agreements under the laws of the jurisdictions in which our employees work. For example, Israeli labor courts have required employers seeking to enforce non-compete undertakings of a former employee to demonstrate that the competitive activities of the former employee will harm one of a limited number of material interests of the employer that have been recognized by the courts, such as the protection of a company’s confidential information or other intellectual property, taking into account, among other things, the employee’s tenure, position, and the degree to which the non-compete undertaking limits the employee’s freedom of occupation. We may not be able to make such a demonstration. Also, to the extent we hire personnel from competitors, we may be subject to allegations that they have been improperly solicited or that they have divulged their former employers’ proprietary or other confidential information or incorporated such information into our products, which could include claims that such former employers therefore own or otherwise have rights to their inventions or other work product developed while employed by us.

Our customers depend on our customer success managers to resolve issues and realize the full benefits relating to our platform, products, and solutions. If we do not succeed in helping our customers quickly resolve post-deployment issues or provide effective ongoing support and education, our ability to renew subscriptions with, or sell subscriptions for additional offerings to, existing customers, or expand the value of existing customers’ subscriptions, would be adversely affected and our reputation with potential customers could be damaged. In addition, most of our existing customers are large enterprises with complex information technology environments and, as a result, require significant levels of support. If we fail to meet the requirements of these customers, it may be more difficult to grow sales or maintain our relationships with them.

•limited or unfavorable—including greater difficulty in enforcing—intellectual property protection; and

•exposure to liabilities under anti-corruption and anti-money laundering laws, including the U.S. Foreign Corrupt Practices Act of 1977, as amended, and similar applicable laws and regulations in other jurisdictions; andjurisdictions.

Sales to government and semi-government entities are subject to a number of risks. Selling to government entities can be highly competitive, expensive, and time-consuming, often requiring significant upfront time and expense without any assurance that these efforts will generate a sale. Government certification requirements for products like ours may change, thereby restricting our ability to sell into the U.S. federal government, U.S. state governments, or non-U.S. government sectors until we have attained the revised certification. Government demand and payment for our offerings may be affected by public sector budgetary cycles and funding authorizations, with funding reductions or delays adversely affecting public sector demand for our products. Additionally, any actual or perceived privacy, data protection, or data security incident, or even any perceived defect with regard to our practices or measures in these areas, may negatively impact public sector demand for our products.

As part of our business strategy, we may acquire or make investments in complementary companies, products, or technologies, and enter into other strategic transactions and relationships in the ordinary course. For example, expanding our AI capabilities is a current focus,focus: in 2025, we acquired eSelf AI, a multimodal AI lab developing technology for agentic interactions with live avatars and in March 2026, we maysigned pursuea targeteddefinitive acquisitionsagreement orto investmentsacquire inPathFactory, specializeda verticals or AI-centric companies as partprovider of ourcontent strategyjourney toorchestration enhanceand ourengagement productanalytics offerings.solutions.

We may pursue other targeted acquisitions or investments in specialized verticals or AI-centric companies as part of our strategy to enhance our product offerings. Our ability to grow our revenues, earnings, and cash flow depends in part upon our ability to identify and successfully acquire and integrate businesses at acceptable prices, realize anticipated synergies and make appropriate investments that support our long-term strategy. We may not be able to consummate acquisitions at rates similar to the past, which could adversely impact our growth rate and the trading price of our common stock. Promising acquisitions, investments and other strategic transactions are difficult to identify and complete for a number of reasons, including high valuations, competition among prospective buyers, the availability of affordable funding in the capital markets, the need to satisfy applicable closing conditions and obtain applicable antitrust and other regulatory approvals on acceptable terms and cultural and other differences posing significant challenges hindering successful post-merger integration. In addition, competition for acquisitions, investments and other strategic transactions may result in higher purchase prices or other terms less economically favorable to us. Changes in accounting or regulatory requirements or instability in the credit markets or economic climate could also adversely impact our ability to consummate these transactions on acceptable terms or at all.

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 embedded in open-source software,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 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, 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 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, though none which individually or in the aggregate has led to third parties gaining access to our or our customers data, or to costs or consequences which have materially impacted our operations or business. 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.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.payments.

We recently launched or enhanced AI-driven offerings, including Work Genie and Class Genie, 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. For instance, 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. These AI tools may also inadvertently produce inaccurate or biased outputs, leading to reputational harm or potential claims by customers. Our efforts to develop AI-driven offerings could increase our operating costs.costs, Ourand our ability to develop AI-drivenany such offerings may be limited by our access to processing infrastructure or training data, as we do not license data from third parties nor train our models on third parties' or customers' data,data. and additionally,Additionally, we may be dependent on third-party providers for processing infrastructure resources such as cloud facilities providers and others.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.

We may also experience difficulties in enforcing the intellectual property rights in output generated by generative AI. The United States Copyright Office has previously denied copyright protection for content generated by AI, and the United States Patent and Trademark Office has similarly stated that an AI tool cannot be an “inventor” of a patent, rendering it impossible to obtain patent protection for inventions created solely by AI. The Supreme Court of the United Kingdom has reached a similar conclusion, stating that AI systems cannot be named as an “inventor” for UK patent law purposes. 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 generative AI, and in which the outcome of such litigation is uncertain.

Further, the market for AI-driven offerings is rapidly evolvingevolving, 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”.

In 2025, we acquired eSelf AI, a multimodal AI lab developing technology for agentic interactions with live avatars. We may pursue other targeted acquisitions or investments in specialized verticals or AI-centric companies as part of our 2025 strategy to expand our product offerings.

Customers of our offerings need to be able to access our platform at any time, without interruption or degradation of performance. Commencing in the third quarter of 2020, we accelerated our plans to move from our own data centers to public cloud infrastructure with the goal of providing improved stability, reliability, scalability and elasticity for our offerings. This transition is complex and time-consuming and involves risks inherent in the conversion to a new system, including potential loss of information and disruption to our normal operations. Furthermore, as a result of the application of certain data privacy and security regulations, we have also established a multi-region architecture to adhere to our customers' requirements and applicable domestic laws. We may discover deficiencies in our design, implementation or maintenance of our new cloud-based systems that could adversely affect our business, financial condition, and results of operations. For example, we experienced an initial period of unstable service during the first few months of this transition, causing us to fall below the service-level commitments in our customer agreements. Though service has since stabilized, we cannot guarantee that we will not experience similar instability in the future, including as a result of our multi-region and multi-cloud architecture. Furthermore, we cannot yet know the ultimate impact of this or any similar future event on our customer relationships, and it is possible customers may be less inclined to renew their subscriptions following the expiration of their current terms.

We also rely on cloud technologies from third parties in order to operate critical functions of our business, including financial management services, relationship management services, and lead generation management services. If these services become unavailable due to extended outages or interruptions or because they are no longer available on commercially reasonable terms or prices, our expenses could increase, our ability to manage our finances could be interrupted, our processes for managing sales of our products and supporting our customers could be impaired, and our ability to generate and manage sales leads could be weakened until equivalent services are identified, obtained, and implemented. Even if such services are available, we may not be able to identify, obtain and implement such services in time to avoid disruption to our business, and such services may only be available on a more costly basis or otherwise less favorable terms. Any of the foregoing could have a material adverse effect on our business, including our financial condition, results of operations and reputation.

Our success depends to a significant degree on our ability to protect our proprietary technology, methodologies, know-how, and brand. We rely on a combination of trademarks, copyrights, patents, trade secret laws, contractual restrictions, and other intellectual property laws and confidentiality procedures to establish and protect our proprietary rights. However, we make a version of our Media Services, Kaltura CE, available to the public at no charge under an open source license, contribute other source code to open source projects under open source licenses, and release internal software projects under open source licenses, and anticipate continuing to do so in the future. Because the source code for Kaltura CE and any other software we contribute to open source projects or distribute under open source licenses is publicly available, our ability to monetize and protect our intellectual property rights with respect to such source code may be limited or, in some cases, lost entirely. Our competitors or other third parties could access such source code and use it to create software and service offerings that compete with ours. While software can, in some cases, be protected under copyright law, in order to bring a copyright infringement lawsuit in the United States, the copyright must first be registered. We have chosen not to register any copyrights, and rely on trade secret protection in addition to unregistered copyrights to protect our proprietary software. Accordingly, the remedies and damages available to us for unauthorized use of our software may be limited.

We may not be able to register our intellectual property rights in all jurisdictions where we conduct or anticipate conducting business, may experience conflicts with third parties who contest our applications to register our intellectual property, andor may choose to register intellectual property rights providingthat insufficientdo coverage.not cover all aspects of an invention or work.

Even if registered or issued, we cannot guarantee that our trademarks, patents, copyrights or other intellectual property or proprietary rights will be of sufficient scope or strength to provide us with any meaningful protection or commercial advantage. Furthermore, in such case our copyrights, patents or other intellectual property rights would be made public without assuring adequate protection. We will not be able to protect our intellectual property and proprietary rights if we are unable to enforce our rights or if we do not detect infringement, misappropriation, dilution or other unauthorized use or violation thereof. If we fail to defend and protect our intellectual property rights adequately, our competitors and other third parties may gain access to our proprietary technology, information and know-how, reverse-engineer our software, and infringe upon or dilute the value of our brand, and our business may be harmed.

We areWe, Kaltura, Inc. (“Kaltura,” “we,” “us,” or “our”), are a market-leading provider of live, real-time,video and on-demandrich videomedia offerings for enterprises,enterprises. with aOur mission is to “createpower rich, agentic digital experiences across organizational journeys for customers, employees, learners, and power AI-infused hyper-personalized video experiences for organizations, that boost customer and employee engagement and success”.audiences.

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,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,cases (for their customers, employees, and learners), reported in our “EE&T segment“.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 and& Technology (“EE&T”): 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 acrossto Customerdeliver Experienceagentic rich-media experiences for their customers, employees, and Employeelearners Experiencesuch as buyer enablement, employee recruiting, learning and use cases - including Marketing, Sales & Customer Success; Teaching, Learning, Training & Certification; and Communication & Collaboration.teaching. Contracts in this segment typically range from 12 to 24 months, with billing generally executed on an annual basis.

•Media & Telecom (“M&T”): The M&T segment includes revenue from ourcustomers Entertainmentusing &Kaltura Monetizationto deliver entertainment and streaming use cases,cases to their audiences, along with the associated professional services. For customers of our telecom TV Content Management System (TVCMS) and TV Streaming Applications, revenue is recognized primarily on a per end‑subscriber basis, while media customers leveraging our Online Video Platform (OVP) 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.

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. For the years ended December 31, 20242025 and 2023,2024, our Net Dollar Retention Rate was 100%100%. and 101%, respectively. We also grew ourOur Annualized Recurring Revenue (as defined below), declined by 6%3% in the year ended December 31, 2024,2025, compared to the year ended December 31, 2023, demonstrating our ability to land new customers with higher spending levels and increase revenue from our existing customers.2024.

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 small and medium enterprises (“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 also 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 Mediaour Servicesplatform to large technology companies to also addressing smaller technology firms and startups.

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. Sustained customer adoption and usage growth are also supported byOur strong integration, ongoing support, and a commitment to evolving security and compliance requirements.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 year ended December 31, 2024,2025, our Net Dollar Retention Rate was 100%. 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.

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.fluctuate over time.

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.

AsOur previouslyNet disclosed,Dollar Retention Rate, which we use to measure our success in 2024retaining weand updatedgrowing recurring revenue from our customerexisting countcustomers, methodology,compares whichour isrecognized usedrecurring torevenue from a set of customers across comparable periods. We calculate our Net Dollar Retention Rate,Rate tofor treata 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,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.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 companiescompanies.

We define EBITDA as net profit (loss) before interestfinancial expense,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, facility exit and transition costs, war-related expenses, restructuring charges, certain professional consulting and other non-recurring operating expenses associated with strategic initiatives and costsacquisition related to conflicts in Israel.expenses.

(a)The yearyears ended December 31, 2024,2025, 2024 and 2023 andinclude 2022 includes $2.7$2.2 million, $3.2$2.7 million and $2.3$3.2 million, respectively, of interest expensesexpenses, ,andand $3.4$3.0 million, $2.7$3.4 million and $1.0$2.7 million, respectively, of interest income.

(b)Facility exit and transition costs for the yearsyear ended December 31, 2023 and December 31, 2022 include losses from sale of fixed assets and other costs associated with moving to our temporary office in Israel.

(d)The years ended December 31, 2024 and December 31, 2023 include costs related to conflicts in Israel. These costs are attributable to the temporary relocation of key employees from Israel for business continuity purposes, the purchase of emergency equipment for key employees, charitable donations to communities directly impacted by the war, and office fixes and modifications.

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.

For our M&T segment, gross margins for the years ended December 31, 2024,2025, 20232024 and 20222023, our gross margins were 44%71% (55%77% for subscription and (2554)% for professional services), 41%67% (55%75% for subscription and (3555)% for professional services) and 48%64% (63%73% for subscription and (1351)% for professional services), respectively.

Additional expenses include marketing program costs and amortization of acquired customer relationships intangible assets. We expect our sales and marketing expenses to be relatively stableincrease as a percentage of revenue.

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. Additional expenses include costs for other operational and administrative functions, professional fees for external legal, accounting, and consulting services, directors’ and officers’ insurance, and strategic initiatives. We expect our general and administrative expenses to gradually decrease as a percentage of revenue.

EE&T professional services revenue decreased by $0.1$0.9 million, or 1%,21%, to $3.6 million for the year ended December 31, 2025, from $4.5 million for the year ended December 31, 2024,2024. fromThe $4.6decrease millionin forprofessional services revenue mainly reflects the yeartransition endedof Decembercertain 31,development 2023.projects to ongoing support and maintenance, now recognized as subscription revenue.

EE&T gross profit increased by $5.3$7.0 million, or 6%,7%, to $104.0 million for the year ended December 31, 2025, from $96.9 million for the year ended December 31, 2024, from $91.6 million for the year ended December 31, 2023.2024. This increase was mainly due to a $3.6$5.7 million increase in revenue, lower headcount and reduction in production costs, which is a result of improved efficiency.

EE&T professional services gross loss increased by $0.8$0.6 million, or 23%,13%, to $4.9 million for the year ended December 31, 2025, from a gross loss of $4.4 million for the year ended December 31, 2024,2024. fromThe increase was primarily due to a grossreduction lossin ofprofessional $3.5services million for the year ended December 31, 2023.revenue.

Total M&T subscription revenue increaseddecreased by $1.3$3.6 million, or 3%,7% to $43.5$46.4 million for the year ended December 31, 2024,2025, from $42.2$50.0 million for the year ended December 31, 20232024. theThe increasedecrease is mainly attributable to $1.3$3.6 million increasedecrease in revenue from existing customers.

M&T gross profit increased by $1.6$1.5 million, or 8%,7%, to $23.7 million for the year ended December 31, 2025, from $22.2 million for the year ended December 31, 2024,2024. from $20.6 million for the year ended December 31, 2023. TheThis increase iswas primarilymainly drivendue byto reduced compensation costs resulting from improved efficiencyreduction in production and operations,other ascosts, wellwhich asis ana increaseresult of improved efficiency, and reductions in subscriptionheadcount revenue,and whichsubcontractor typicallycosts carriesfollowing higherorganizational grosschanges margins.implemented at the end of 2024 and in August 2025.

M&T subscription gross profit increaseddecreased by $0.5$0.3 million, or 2%,1%, to $23.6 million for the year ended December 31, 2025, from $23.8 million for the year ended December 31, 2024, from $23.4 million for the year ended December 31, 2023.2024.

M&T professional services gross lossprofit decreasedincreased by $1.1$1.8 million, or 39%,108%, to a gross profit of $0.1 million for the year ended December 31, 2025, from a gross loss of $1.7 million for the year ended December 31, 2024,2024. fromThe aincrease in professional services gross lossprofit was primarily driven by reductions in headcount and subcontractor costs following organizational changes implemented at the end of $2.72024 millionand forin theAugust year ended December 31, 2023.2025.

Research and development expenses decreased by $3.0$3.4 million, or 6%,7%, to $46.0 million for the year ended December 31, 2025, from $49.4 million for the year ended December 31, 2024, from $52.4 million for the year ended December 31, 2023.2024. The decrease was primarily due to a $2.3$2.9 million decrease in compensation expenses which mainlywere relateddriven by the full recognition of high fair value RSUs granted in December 2021, which were fully expensed prior to lower2025. headcount,In andaddition the decrease was also due to a $1.0 million decrease in IT related expenses, partially offset by a $0.4 million increase in subcontractorssubcontractor and consultantsconsultant expensescosts, mainlyprimarily asattributable ato resultreduced use of outsourcingoutsourced part of the efforts related to specific projects.resources.

Sales and marketing expenses decreased by $1.0$2.9 million, or 2%,6%, to $44.9 million for the year ended December 31, 2025, from $47.8 million for the year ended December 31, 2024, from $48.8 million for the year ended December 31, 2023.2024. The decrease was primarily due to a $0.6$3.2 million decrease in other marketingcompensation expenses mainly due to improvedlower efficiencyheadcount and full recognition of high fair value RSUs granted in managingDecember the2021, marketingwhich budgetwere andfully aexpensed $0.4prior millionto decrease in travel expenses.2025.

Reflected below is a summary of reportable segment revenue and reportable segment gross profit for the three and six months ended MarchJune 31,30, 2026 and 2025.

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 MarchJune 31,30, 2026 and 2025, our Net Dollar Retention Rate was 95%96% and 107%,101%, respectively,respectively. primarilyWe reflecting the lagging impact of elevated churn ingrew our M&T segment in 2025 . Our Annualized Recurring Revenue (as defined below), declined by 3%8% in the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025. The increase includes the contribution of the PathFactory acquisition, together with growth from 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.small and medium enterprises (“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.

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. Sustained customer adoption and usage growth are also supported byOur strong integration, ongoing support, and a commitment to evolving security and compliance requirements.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 MarchJune 31,30, 2026, our Net Dollar Retention Rate was 95%.96%. 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.

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.fluctuate over time.

(1) Remaining Performance Obligations as of MarchJune 31,30, 2025 reflect a reassessment of the historical treatment of certain customer contracts that contain “termination for convenience” clauses, which has resulted in a negative adjustment of $30,239.$22,710.

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 represents the amount of contracted future revenue that has not yet been recognized,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 June 30, 2026, our Remaining Performance Obligations was $164.3 million, which consists of both billed consideration in the amount of $59.8 million and unbilled consideration in the amount of $104.5 million that we expect to invoice and recognize in future periods.

As of March 31, 2026, our Remaining Performance Obligations was $154.5 million, which consists of both billed consideration in the amount of $55.7 million and unbilled consideration in the amount of $98.8 million that we expect to invoice and recognize in future periods. We expect to recognize 67%71% 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.

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 expenses and change in the fair value of the contingent consideration.

(a)The three months ended MarchJune 31,30, 2026 and 2025, and the six months ended June 30, 2026 and 2025 includedinclude $544$532, $602, $1,075 and $609$1,210, respectively, of interest expenses and $540$663, $737, $1,203 and $896$1,632, respectively, of interest income.

(b)Strategic initiatives expenses for the three and six months ended MarchJune 31,30, 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.

Components of Our Results of Operations

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 representrepresents most of our SaaS and PaaS subscriptions, or, less commonly, as a term license to On-Premsoftware 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.

Cost of revenue decreased in absolute dollars in the three and six months ended June 30, 2026 from the three monthsand ended March 31, 2025 to the threesix months ended MarchJune 31,30, 2026.2025. For the three months ended MarchJune 31,30, 2026 and 2025, and for the six months ended June 30, 2026 and 2025, our cost of revenue was $12,518$12,357, $13,243, $24,874 and $14,248,$27,491, respectively.

Gross marginmargins hashave improved year-over-year since 2020, on an aggregate basis, and while itthis measure has and will continue to vacillate between quarters, we expect ourit to continue the growth trend to continue 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 a gradual 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 MarchJune 31,30, 2026 and 2025, our gross margins were 72%74% (77%78% for subscriptions and (9399)% for professional services) and 70% (77% for subscriptions and (8173)% for professional services), respectively. For the six months ended June 30, 2026 and 2025, our gross margins were 73% (78% for subscriptions and (96)% 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 MarchJune 31,30, 2026 and 20252025, were 77%79% (84% for subscription and (348)% for professional services), and 78% (84% for subscription and (226)% for professional services), respectively. For the six months ended June 30, 2026 and 2025, our gross margins for our EE&T segment were 78% (83% for subscriptions and (301322)% for professional services) and 77%78% (83%84% for subscriptions and (163192)% for professional services), respectively.

For our M&T segment, gross margins for the three months ended MarchJune 31,30, 2026 and 2025 were 54%53% (58%57% for subscriptions and 9% for professional services) and 49%48% (58%55% for subscriptions and (291)% for professional services), respectively. For the six months ended June 30, 2026 and 2025, our gross margins for our M&T segment were 53% (58% for subscription and 9% for professional services) and 48% (56% for subscription and (14)% for professional services), respectively.

Our sales and marketing expenses consist primarily of personnel-relatedpersonnel related costs for our sales and marketing functions, including salaries and other direct personnel-related costs, such as sales commissions.

Financial Expenses (Income),Expenses, Net

Financial expenses (income),expenses, net consists of interest expense accrued or paid on our indebtedness, net of interest income earned on our cash balances and marketable securities. Financial expenses (income),expenses, net also includes foreign exchange gains and losses and bank fees.

The following tabletables summarizessummarize 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.

•Enterprise, Education & Technology (77%78% and 73%75% of revenue for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and 78% and 74% for the six months ended June 30, 2026 and 2025, respectively): 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 (23%22% and 27%25% of revenue for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and 22% and 26% for the six months ended June 30, 2026 and 2025, respectively): Our M&T segment primarily represents revenues from our TV Solution and Media Services sold to media and telecom customers.

Comparison of the three months ended MarchJune 31,30, 2026 and 2025

Total EE&T revenue decreasedincreased by $0.3$3.6 million, or 1%,11%, to $34.2$36.8 million for the three months ended MarchJune 31,30, 2026, from $34.4$33.2 million for the three months ended MarchJune 31,30, 2025. ThisThe decreaseincrease was dueprimarily todriven by a $1.0$5.2 million increase in revenue from new customers, partially offset by a $1.6 million decrease in revenue from existing customerscustomers. partiallyThese offsetfigures byinclude a $0.7 million increase in revenuecontributions from newthe customers.PathFactory acquisition.

EE&T professional servicessubscription revenue decreasedincreased by $0.3$3.9 million, or 42%,12%, to $0.5$36.4 million for the three months ended MarchJune 31,30, 2026, from $0.8$32.6 million for the three months ended MarchJune 31,30, 2025.

EE&T professional services gross lossprofit increased by $0.1$3.4 million, or 8%,13%, to $1.4$29.2 million for the three months ended MarchJune 31,30, 2026, from $1.3$25.9 million for the three months ended MarchJune 31,30, 2025.This2025. decreaseThis increase was mainly due to decreasethe increase in revenue.revenue and reduction in production and compensation costs, from improved operational efficiency, driven by workforce reductions.

Total M&T revenue decreased by $2.1$1.1 million, or 17%,10%, to $10.5$10.1 million for the three months ended MarchJune 31,30, 2026, from $12.6$11.2 million for the three months ended MarchJune 31,30, 2025. The decrease is mainly attributabledue to a revenue$1.2 million decrease in revenue from existing customers, partially offset by a $0.1 million increase in revenue from new customers.

M&T subscription revenue decreased by $1.8$0.6 million, or 16%,6%, to $9.5$9.2 million for the three months ended MarchJune 31,30, 2026, from $11.3$9.8 million for the three months ended MarchJune 31,30, 2025.

M&T professional services revenue decreased by $0.3$0.5 million, or 24%,38%, to $1.0$0.9 million for the three months ended MarchJune 31,30, 2026, from $1.3$1.4 million for the three months ended MarchJune 31,30, 2025.

Total M&T gross profit decreased by $0.5 million, or 8%,1%, to $5.6$5.3 million for the three months ended MarchJune 31,30, 2026, from $6.2$5.4 million for the three months ended MarchJune 31,30, 2025. This decrease was mainly due to the revenue decrease ofin $2.1 million,revenue partially offset by lower headcount and reduction in production costs, which is a result of improved efficiency.

M&T subscription gross profit decreased by $1.0$0.1 million, or 15%,2%, to $5.6$5.2 million for the three months ended MarchJune 31,30, 2026, from $6.5$5.4 million for the three months ended MarchJune 31,30, 2025.

M&T professional services gross profit increased by $0.5$0.1 million, or 124%,733%, to $0.1 million gross profit for the three months ended MarchJune 31,30, 2026, from $0.4$0.0 million gross loss for the three months ended MarchJune 31,30, 2025.

Research and development expenses decreasedincreased by $1.4$1.1 million, or 11%,10%, to $10.7$12.7 million for the three months ended MarchJune 31,30, 2026, from $12.1$11.6 million for the three months ended MarchJune 31,30, 2025. The decreaseincrease was primarily due to a $0.9$0.6 million decreaseincrease in compensation expenses,expenses mainly due to lowerthe headcountimpact andof the capitalizationdepreciation of compensationthe costsU.S. relateddollar against the New Israeli Shekel compared to a development internal use software. In addition the decreaseprior-year wasperiod also due toand a $0.2 million decreaseincrease in subcontractor and consultantconsultants costs, primarilymainly due to additional resources following the acquisition of PathFactory. In addition, research and development expenses were impacted by a $0.3 million increase in IT related expenses, also attributable to reducedsoftware useapplications supporting the operations of outsourcedthe resources.acquired PathFactory business.

Financial Expenses (Income),expense, net

Financial expenses,expense, net increaseddecreased by $1.9$2.3 million, or 105%,49%, to $0.1$2.3 million expensesexpense for the three months ended MarchJune 31,30, 2026, from $1.8$4.6 million incomeexpense for the three months ended MarchJune 31,30, 2025. The increasedecrease was primarily due to $2.1 million related to exchange rate differences.

Provision for income taxes increased by $1.1$2.0 million,million or 83%,480%, to $2.5 million for the three months ended MarchJune 31,30, 2026, from $1.3$0.4 million for the three months ended MarchJune 31,30, 2025,2025 primarily due to increased tax liability related to income generated by our subsidiaries organized under the laws of Israel and the United Kingdom.