KLTR · Research
Kaltura Bets on Talking Avatars While Revenue Stays Flat and Stock Pay Eats the Cash
A small, Israel-linked video software company with flat revenue, negative owner cash, an interim finance chief and venture investors on its board.
Spreadsheet & IC Deliverables: Download the formula-linked KLTR 5-tab Excel (.xlsx) workbook and printable 1-page tearsheet.
Download KLTR .xlsx →- Owner cash after capex, capitalized software and all stock pay
- Minus 10.8% of revenue
- Venture funds with a seat, combined stake
- 17.2%
- Annualized recurring revenue
- $184.6M
1. Our call: Hold off, because a small video company is spending to reinvent itself
Our call: Hold off, conviction 3 of 5. Kaltura sells video software to companies, universities and media firms: tools to host, stream and manage video, run virtual events and now build talking digital avatars [1]. Two flags up front, stated plainly [1][3].
First, it is small. Total 2025 revenue was $180.9M, and the company had $35.5M of cash and marketable securities at Jun 30, 2026 [1][4].
Second, it is Israel-linked. Kaltura is a Delaware company with its head office in New York, but it had 294 full-time employees in Israel at the end of 2025, much of its research is done there, and several officers and directors live there [1].
Results for the third quarter are expected on Nov 9, 2026 [12].
Revenue barely grows. It rose 1.2% in 2025 and was flat in the first half of 2026, and the full year guide implies growth of 1.2% to 2.3%, our calculation [1][4].
2. A video platform trying to become an avatar company
| Metric | Value |
|---|---|
| What it sells | Video hosting, streaming, virtual events and digital avatar tools, sold by subscription [1] |
| Customers by segment | Enterprise, Education and Technology $134.4M and Media and Telecom $46.4M in 2025 [1] |
| Stock pay | $16.5M in 2025, 9.1% of revenue, our calculation [1] |
| Subscription gross margin | 78% in the second quarter [4] |
| API quality | 3 of 5, our scoring: open video APIs and integrations with learning and meeting systems, but a small developer base next to larger platforms [1] |
| Toll-gate score | 1 of 4 pass, 2 partial, 1 fail (section 2b) |
2b. Kaltura holds content, but others hold the gate
A gate is valuable when its owner holds a record others must check and prices what passes through. Kaltura stores and serves video libraries for universities and companies, which is sticky, but Microsoft, Zoom and YouTube offer video hosting too, often bundled [1].
| Test | Result | Evidence |
|---|---|---|
| Owns the record | Partial | Customers keep large video libraries on Kaltura, and moving them is a chore, but the files are theirs [1]. |
| Owns the connection | Partial | Gross retention had its best quarter since late 2022, but Media and Telecom revenue fell 10% on churn [4]. |
| Prices close to outcomes | Fail | Subscriptions are priced on usage and seats, not results [1]. |
| R&D on the gate vs features | Pass | Research and development was $46.0M in 2025, 25.4% of revenue, our calculation, much of it on the new avatar and agent products [1][4]. |
The verdict is one pass and two partials. Kaltura spends heavily on research, but a small company competing with bundled video from much larger platforms struggles to raise prices or lock customers in [1].
The new avatar products are its bid to change that [4].
3. Growth has been close to zero for three years
The second quarter was better. Revenue rose 5% to $46.9M and subscription revenue 8% to $45.6M, with annualized recurring revenue up 8% to $184.6M [4].
Enterprise, Education and Technology grew 11%, while Media and Telecom fell 10% [4].
Part of that growth was bought. Kaltura closed eSelf, an Israeli avatar start-up, in December 2025 for up to $20M in cash and up to 4,690,025 shares, and PathFactory, a content engagement company, on Apr 1, 2026 for $22.0M in cash [8][9].
Bookings improved in the quarter. New subscription bookings grew from the first quarter, with thirteen deals worth six figures in total contract value, five of them with new customers in financial services, healthcare and education [4].
Gross retention had its strongest quarter since the fourth quarter of 2022 [4].
Professional services keep shrinking, to $1.3M in the second quarter from $2.1M, as the company steers customers to self-service
4. The quarter on Nov 9
Third quarter guidance is total revenue of $45.8M to $46.5M, subscription revenue of $43.9M to $44.6M and adjusted EBITDA of $2.0M to $3.0M [4]. That is below the second quarter on every line [4].
The full year guide is subscription revenue of $176.6M to $178.6M and adjusted EBITDA of $15.8M to $17.2M [4]. Management promises stronger bookings in the second half and a more meaningful contribution from new products in 2027 [4].
The quarter will show whether the record fourteen new deals with its superintelligence products in the second quarter, nine of them including avatars, turn into revenue [4].
5. Losses are shrinking
The net loss was $12.1M in 2025, against $31.3M in 2024 and $46.4M in 2023 [1]. For the first half of 2026 it was $9.3M, and $5.5M in the second quarter [2][4].
Gross margin rose to 74% in the second quarter from 70% a year earlier, and the operating loss narrowed to $0.8M [4]. Adjusted EBITDA was $5.9M, the best second quarter in the company's history [4].
Cost of revenue fell 11% in 2025 to $53.2M while revenue rose, which lifted gross profit 7% to $127.7M [1]. Operating cash flow was minus $2.0M in the second quarter of 2026, against plus $2.7M a year earlier [4].
The improvement came mostly from lower stock pay and cost cuts: stock pay fell from $30.0M in 2023 to $16.5M in 2025 [1].
6. Owner cash is still negative
Owner cash is our calculation from the cash flow statements [1][2]. It improved from minus 24.2% of revenue in 2023 to minus 8.2% in 2024 and minus 1.5% in 2025, before slipping to minus 10.8% in the first half of 2026 [1][2].
The first half is weaker partly because of timing: deferred revenue fell by $12.9M as annual prepayments were used up [2]. The same period of 2025 was minus $7.4M, our calculation, so the trend has not improved this year [2].
Capital spending is tiny, so the gap between operating cash and owner cash is almost all stock pay [1]. Stock pay is the cost a buyer of this company should focus on [1].
7. Capital: a small loan, buybacks paused, and acquisitions
The term loan balance was $26.6M at Jun 30, 2026, all classified as current, at an interest rate of 6.33% [2]. It was $29.0M at the end of 2025, with $25.0M available on the revolver [1].
Cash, cash equivalents and marketable securities were $35.5M at Jun 30, 2026 [4]. Kaltura spent $22.5M on acquisitions in the first half [2].
Buybacks have stopped. The company repurchased 4,643,840 shares for $9.6M in the first half of 2025 and none in the first half of 2026 [2].
Shares outstanding were 152,551,223 on Aug 3, 2026 [2].
The lender has loosened terms to allow buybacks. Amendments in July 2024 and in March and October 2025 raised the amount of permitted restricted payments, which include share repurchases [2].
The revolver commitment was reduced to $25.0M [2].
The eSelf deal paid $7.5M in cash at closing, with $12.5M more due only if performance milestones are met
8. The main risks are scale, churn and Israel
Scale. A company with about $180M of revenue competes against Microsoft, Zoom and Google, which bundle video into larger suites [1].
Churn. Media and Telecom revenue fell 7% in 2025 and 10% in the second quarter, after elevated churn in 2025 [1][4].
Israel. With 294 employees there, military and political conditions in the region can affect operations, the 10-K warns [1].
Leadership. Chief financial officer John Doherty left in December 2025; finance is run by an interim principal financial officer and an interim principal accounting officer while a search goes on [7].
Acquisition risk. eSelf carries up to $12.5M of milestone cash payments and share issuance tied to retention of its founders, which adds cost and dilution if it works [8].
The bull case. Losses have narrowed for three years, subscription margin is 78%, annualized recurring revenue is growing 8%, and the avatar deals are doubling from a small base [4][1].
If growth reaches high single digits while stock pay keeps falling, owner cash could turn positive in 2027
9. A founder chief executive for twenty years
Ron Yekutiel co-founded Kaltura and has been chief executive and chairman since October 2006, and president since January 2024 [3]. He says the company is starting to see measurable commercial traction from what it calls agentic digital experiences [4].
Eynav Azaria runs product, engineering and marketing, and Natan Israeli runs customers and sales [3]. Liron Sharon, executive vice president of planning and analysis, is interim principal financial officer [7].
10. Superintelligence avatars are the bet
Kaltura now sells avatars that talk to customers, students and employees, built partly on eSelf technology, plus agent products for sales engagement and training [4][8]. Nine of fourteen new superintelligence deals in the second quarter included avatars [4].
We think this is a real product, but a crowded one. Superintelligence tools may make generic video hosting cheaper, which threatens Kaltura's core, while large platforms will offer avatars of their own [1].
Kaltura's advantage is its installed base in universities and companies [4].
11. No controller, but early investors sit on the board
Vote control. Each share has one vote and there is no controlling holder [3].
Point 406 Ventures held 11.2%, Nexus India Capital 10.7%, Avalon Ventures 6.0% and Sapphire Ventures 5.3% [3]. Ron Yekutiel held 11.1%, and directors and officers as a group 16.3% [3].
Board ties. Greg Dracon, 54, a general partner at Point 406 Ventures, rejoined the board in March 2026 after serving from 2015 to 2021 [6].
Richard Levandov, 71, has been a partner at Avalon Ventures since 2007 and on the board since 2007 [3].
Point 406's shares are controlled by its managing members Maria Cirino and Liam Donohue, and Nexus India Capital's stake is based on a 13G from February 2022 [3]. Mr. Dracon receives the standard $0.04M board retainer and received restricted stock units worth $0.18M, pro-rated, on joining [6].
Related parties. The proxy lists an investors' rights agreement from 2016 giving early investors registration rights, and indemnification agreements that also cover directors' related investment funds [3].
12. The questions we would ask management, and the calls we are tracking
Question one: when will a permanent chief financial officer be named? [7]
Question two: how much revenue did eSelf and PathFactory add, and what is organic growth? [8][9]
Question three: will Media and Telecom churn stop in 2026? [4]
Question four: when will buybacks resume, given the loan terms? [2]
Question five: will owner cash turn positive in 2027? That answer sets our conviction.
Prediction one: third quarter 2026 total revenue is at or above $45.8M (75%). [4]
Prediction two: 2026 owner cash as we define it is negative (70%). [2]
Prediction three: a permanent chief financial officer is named by Mar 31, 2027 (60%).
Bottom line: a sticky video base and a new avatar bet, but too small and too costly to own yet
Kaltura has loyal university and enterprise customers and a credible avatar product, and losses are shrinking. But revenue has barely grown for three years, stock pay still exceeds operating cash, the finance chief role is interim, and growth is now being bought.
We would turn positive on organic subscription growth near 8% with positive owner cash.
Stock Profiles & Comparable Companies
KLTR Stock Profile →More Published Research
View All →Mobility Global Owns the CARFAX Record and the Debt That Paid for the Spin
CARFAX grew 8% and no customer tops 10% of revenue, but the spin left $2.0B of notes and S&P Global's finance chief on the board.
Cerence Looks Fixed but a Samsung Patent Check Did Most of the Work
An in-car voice software supplier whose nine month growth falls to about 4% without one settlement, with no activist, a slipping pay vote and an ex-Intel board tie.