KALTURA INC 10-K

Item 8. Financial Statements and Supplementary Data KALTURA, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm ( PCAOB ID: 1281 ) 108 Consolidated Balance Sheets 109 Consolidated Statements of Operations 111 Consolidated Statements of Comprehensive Loss 112 Consolidated Statements of Stockholders' Equity 113 Consolidated Statements of Cash Flows 114 Notes to Consolidated Financial Statements 116 107 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Kaltura, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Kaltura, Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive loss, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ KOST FORER GABBAY & KASIERER A Member of EY Global We have served as the Company's auditor since 2007. Tel-Aviv, Israel March 16, 2026 108 Table of Contents KALTURA, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (U.S. dollars in thousands, except share and per share data) December 31, 2025 2024 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 27,521 $ 33,059 Marketable securities 24,358 48,275 Trade receivables 16,358 19,978 Prepaid expenses and other current assets 13,938 9,481 Deferred contract acquisition and fulfillment costs, current 8,508 10,765 Total current assets 90,683 121,558 LONG-TERM ASSETS: Marketable securities 10,883 3,379 Property and equipment, net 12,361 16,190 Other assets, noncurrent 3,501 2,983 Deferred contract acquisition and fulfillment costs, noncurrent 9,403 13,605 Operating lease right-of-use assets 10,311 12,308 Intangible assets, net 2,137 212 Goodwill 25,418 11,070 Total noncurrent assets 74,014 59,747 TOTAL ASSETS $ 164,697 $ 181,305 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term loans 29,035 3,110 Trade payables 3,788 3,265 Employees and payroll accruals 14,876 15,399 Accrued expenses and other current liabilities 15,592 14,262 Operating lease liabilities 2,901 2,504 Deferred revenue, current 60,291 63,123 Total current liabilities 126,483 101,663 NONCURRENT LIABILITIES: Deferred revenue, noncurrent 2,159 67 Long-term loans, net of current portion — 29,153 Operating lease liabilities, noncurrent 14,398 15,263 Other liabilities, noncurrent 15,325 10,772 Total noncurrent liabilities 31,882 55,255 TOTAL LIABILITIES $ 158,365 $ 156,918 109 Table of Contents KALTURA, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (U.S. dollars in thousands, except share and per share data) December 31, 2025 2024 COMMITMENTS AND CONTINGENCIES (NOTE 9) STOCKHOLDERS' EQUITY: Preferred stock, $ 0.0001 par value per share, 20,000,000 shares authorized as of December 31, 2025, and 2024; 0 shares issued and outstanding as of December 31, 2025, and 2024 — — Common stock $ 0.0001 par value per share, 1,000,000,000 shares authorized as of December 31, 2025 and 2024; 176,766,256 and 161,980,907 , shares issued as of December 31, 2025 and 2024, respectively; 147,754,918 and 152,057,148 outstanding as of December 31, 2025 and 2024, respectively 18 15 Treasury stock – 29,011,338 and 9,923,759 shares of common stock, $ 0.0001 par value per share, as of December 31, 2025 and 2024, respectively ( 34,006 ) ( 7,801 ) Additional paid-in capital 518,443 500,024 Accumulated other comprehensive income 2,759 959 Accumulated deficit ( 480,882 ) ( 468,810 ) Total stockholders' equity 6,332 24,387 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 164,697 $ 181,305 The accompanying notes are an integral part of the consolidated financial statements. 110 Table of Contents KALTURA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. dollars in thousands, except share and per share data) Year Ended December 31, 2025 2024 2023 Revenue: Subscription $ 171,940 $ 167,681 $ 162,750 Professional services 8,914 11,036 12,422 Total revenue 180,854 178,717 175,172 Cost of revenue: Subscription 39,498 42,552 44,224 Professional services 13,687 17,059 18,714 Total cost of revenue 53,185 59,611 62,938 Gross profit 127,669 119,106 112,234 Operating expenses: Research and development 45,992 49,430 52,400 Sales and marketing 44,899 47,766 48,798 General and administrative 40,838 46,009 48,718 Restructuring 903 — 973 Total operating expenses 132,632 143,205 150,889 Operating loss 4,963 24,099 38,655 Financial expenses (Income), net 4,047 ( 434 ) ( 1,200 ) Loss before provision for income taxes 9,010 23,665 37,455 Provision for income taxes 3,062 7,650 8,911 Net loss $ 12,072 $ 31,315 $ 46,366 Net loss per share $ 0.08 $ 0.21 $ 0.34 Weighted-average shares used in computing net loss per share 152,914,221 147,925,797 138,237,017 The accompanying notes are an integral part of the consolidated financial statements. 111 Table of Contents KALTURA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (U.S. dollars in thousands) Year Ended December 31, 2025 2024 2023 Net loss $ 12,072 $ 31,315 $ 46,366 Other comprehensive loss: Net unrealized gains (losses) on cash flow hedges 1,760 ( 62 ) 1,118 Net unrealized gains (losses) on available-for-sale marketable securities 40 ( 26 ) 230 Other comprehensive income (loss) 1,800 ( 88 ) 1,348 Comprehensive loss $ 10,272 $ 31,403 $ 45,018 The accompanying notes are an integral part of the consolidated financial statements. 112 Table of Contents KALTURA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY U.S. dollars in thousands (except share data) Common stock Treasury stock Additional paid-in capital Accumulated other comprehensive income (loss) Accumulated deficit Total stockholders' equity Number Amount Number Amount Balance as of December 31, 2022 134,564,429 $ 13 7,685,190 $ ( 4,881 ) $ 439,644 $ ( 301 ) $ ( 391,129 ) $ 43,346 — — — — — — — — Stock-based compensation expenses — — — — 30,756 — — 30,756 Issuance of common stock upon exercise of stock options, and release of restricted stock units 8,024,488 1 — — 1,235 — — 1,236 Other comprehensive loss — — — — — 1,348 — 1,348 Net loss — — — — — — ( 46,366 ) ( 46,366 ) Balance of December 31, 2023 142,588,917 $ 14 7,685,190 $ ( 4,881 ) $ 471,635 $ 1,047 $ ( 437,495 ) $ 30,320 Stock-based compensation expenses — — — — 26,632 — — 26,632 Repurchase of common stock ( 2,238,569 ) — 2,238,569 ( 2,920 ) — — — ( 2,920 ) Issuance of common stock upon exercise of stock options, and release of restricted stock units 11,706,800 1 — — 1,757 — — 1,758 Other comprehensive loss — — — — — ( 88 ) — ( 88 ) Net loss — — — — — — ( 31,315 ) ( 31,315 ) Balance as of December 31, 2024 152,057,148 $ 15 9,923,759 $ ( 7,801 ) $ 500,024 $ 959 $ ( 468,810 ) $ 24,387 Stock-based compensation expenses — — — — 16,167 — — 16,167 Cash settlement of equity classified share based payment awards — — — — ( 3,089 ) — — ( 3,089 ) Repurchase of common stock ( 19,087,579 ) — 19,087,579 ( 26,205 ) — — — ( 26,205 ) Issuance of common stock upon exercise of stock options, and release of restricted stock units 10,095,324 3 — — 3,030 — — 3,033 Shares issued related to eSelf acquisition, net of issuance costs 4,690,025 — — — 2,311 — — 2,311 Other comprehensive income — — — — — 1,800 — 1,800 Net loss — — — — — — ( 12,072 ) ( 12,072 ) Balance as of December 31, 2025 147,754,918 $ 18 29,011,338 $ ( 34,006 ) $ 518,443 $ 2,759 $ ( 480,882 ) $ 6,332 The accompanying notes are an integral part of the consolidated financial statements. 113 Table of Contents KALTURA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS U.S. dollars in thousands Year ended December 31, 2025 2024 2023 Cash flows from operating activities: Net loss $ ( 12,072 ) $ ( 31,315 ) $ ( 46,366 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 4,503 5,064 4,717 Stock-based compensation expenses 16,492 26,264 29,980 Amortization of deferred contract acquisition and fulfillment costs 11,204 11,447 11,669 Non-cash interest income, net ( 349 ) ( 1,219 ) ( 1,023 ) Gain on foreign exchange ( 522 ) ( 90 ) ( 728 ) Changes in operating assets and liabilities: Decrease in trade receivables 3,620 3,334 5,475 Decrease (Increase) in prepaid expenses and other current assets and other assets, noncurrent ( 2,841 ) ( 949 ) 648 Increase in deferred contract acquisition and fulfillment costs ( 5,070 ) ( 7,497 ) ( 6,561 ) Increase (Decrease) in trade payables 706 ( 534 ) ( 5,884 ) Increase in accrued expenses and other current liabilities 1,145 5,376 797 Increase (Decrease) in employees and payroll accruals ( 682 ) 2,748 ( 2,233 ) Increase (Decrease) in other liabilities, noncurrent ( 2,366 ) ( 14 ) 443 Increase (Decrease) in deferred revenue ( 757 ) 458 1,626 Operating lease right-of-use assets and lease liabilities, net 1,530 ( 840 ) ( 863 ) Net cash provided by (used in) operating activities 14,541 12,233 ( 8,303 ) Cash flows from investing activities: Investment in available-for-sale marketable securities ( 54,141 ) ( 50,874 ) ( 47,708 ) Proceeds from maturities of available-for-sale marketable securities 70,999 38,981 51,976 Purchases of property and equipment ( 661 ) ( 521 ) ( 2,607 ) Payments for businesses acquired, net of acquired cash ( 7,147 ) — — Capitalized internal-use software development costs — — ( 1,493 ) Investment in restricted bank deposit — — ( 1,751 ) Net cash provided by (used in) investing activities 9,050 ( 12,414 ) ( 1,583 ) Cash flows from financing activities: Proceeds from long-term loans — — 3,500 Repayment of long-term loans ( 3,500 ) ( 2,187 ) ( 4,500 ) Proceeds from exercise of stock options 3,113 1,620 1,383 Cash settlement of equity classified share-based payment awards ( 3,089 ) — — Payment of debt issuance costs — ( 17 ) ( 274 ) Repurchase of common stock ( 26,205 ) ( 2,920 ) — Payments on account of repurchase of common stock 30 ( 30 ) — Net cash provided by (used in) financing activities ( 29,651 ) ( 3,534 ) 109 Effect of exchange rate changes on cash, cash equivalents and restricted cash 522 90 728 Net decrease in cash, cash equivalents and restricted cash $ ( 5,538 ) $ ( 3,625 ) $ ( 9,049 ) Cash, cash equivalents and restricted cash at the beginning of the year 33,159 36,784 45,833 Cash, cash equivalents and restricted cash at the end of the year $ 27,621 $ 33,159 $ 36,784 The accompanying otes are an integral part of the consolidated financial statements 114 Table of Contents KALTURA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS U.S. dollars in thousands Year ended December 31, 2025 2024 2023 Supplemental disclosure of non-cash activity: Purchase of property, equipment, internal-use software, and intangible asset in credit $ 81 $ 213 $ 43 Capitalized stock-based compensation cost $ — $ 645 $ 845 Issuance of common shares and warrants with respect to the business combination $ 2,311 $ — $ — Pending proceeds from option exercises $ 136 $ 217 $ 79 Lease incentive recognized as leasehold improvements $ — $ — $ 4,924 Supplemental disclosure of cash flow information Cash paid for income taxes, net $ 1,950 $ 3,774 $ 4,294 Cash paid for interest $ 2,226 $ 2,692 $ 2,953 Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheet Cash and cash equivalents $ 27,521 $ 33,059 $ 36,684 Restricted cash included in other assets, noncurrent 100 100 100 Total cash, cash equivalents, and restricted cash $ 27,621 $ 33,159 $ 36,784 The accompanying notes are an integral part of the consolidated financial statements 115 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) NOTE 1: GENERAL Kaltura, Inc. (together with its subsidiaries, the “Company”) was incorporated in October 2006 and commenced operations in January 2007. The Company’s business operations are allocated between two main segments, Enterprise, Education, and Technology (“EE&T”) and Media and Telecom (“M&T”). The Company is a provider of video and rich media offerings for enterprises, with a mission to power rich, agentic digital experiences across organizational journeys for customers, employees, learners, and audiences. The Company’s cloud-based rich media platform is designed to help organizations create, manage, and deliver rich media experiences at scale across customer-facing, employee-facing, learner-facing, and audience-facing use cases. The Company’s core offerings consist of various Software-as-a-Service (“SaaS”) products and solutions and a Platform-as-a-Service (“PaaS”). NOTE 2: SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP“). Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company evaluates on an ongoing basis its assumptions, including those related to contingencies, income tax uncertainties, incremental borrowing rate for operating leases, fair value of financial assets and liabilities, including fair value of derivatives, fair value and useful life of intangible assets, as well as in estimates used in applying the revenue recognition policy. The Company bases these estimates on historical and anticipated results, trends and various other assumptions that it believes are reasonable under the circumstances, including assumptions as to future events. Actual results could differ from those estimates . Financial Statements in U.S. Dollars The currency of the primary economic environment in which the operations of Kaltura Inc. and its subsidiaries are conducted is the U.S. dollar; thus, the dollar is the functional currency of Kaltura Inc. and its subsidiaries. Accordingly, monetary accounts maintained in currencies other than the U.S. dollar are remeasured into U.S. dollars in accordance with Statement of the Accounting Standard Codification (“ASC”) 830 “Foreign Currency Matters” (“ASC 830”). All transaction gains and losses of the remeasured monetary balance sheet items are reflected in the statements of operations as financial income or expenses, as appropriate. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany transactions and balances have been eliminated upon consolidation. Cash and Cash Equivalents Cash equivalents are short term, highly liquid investments that are readily convertible to cash with original maturities of three months or less, at the date acquired. Restricted Cash Restricted cash is primarily invested in deposits held to maturity, stated at cost, which also approximates their fair value, and are used as security for the Company's liabilities. These deposits are used mainly as security for rent payments, and the Company's credit cards. Restricted cash is presented in the balance sheet as part of other assets, noncurrent. Marketable Securities The Company accounts for investments in marketable securities in accordance with ASC No. 320, “Investments - Debt Securities”. Management determines the appropriate classification of its investments at the time of purchase and reevaluates such determinations at each balance sheet date. The Company classifies all of its debt securities as available-for-sale. Available-for-sale debt securities are carried at fair value, with the unrealized gains and losses, net of tax, reported in accumulated other comprehensive income (loss) in shareholders’ equity. 116 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) Realized gains and losses on sale of investments are included in financial expenses (income), net and are derived using the specific identification method for determining the cost of securities sold. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization together with interest on securities is included in financial income, net. The Company periodically evaluates its available-for-sale debt securities for impairment. If the amortized cost of an individual security exceeds its fair value, the Company considers its intent to sell the security or whether it is more likely than not that it will be required to sell the security before recovery of its amortized basis. If either of these criteria are met, the Company writes down the security to its fair value and records the impairment charge in financial expenses (income), net in the Consolidated Statements of Operations. If neither of these criteria are met, the Company determines whether credit loss exists. Credit loss is estimated by considering changes to the rating of the security by a rating agency, any adverse conditions specifically related to the security, as well as other factors. Trade Receivables Trade receivables are recorded at the invoiced amount and includes also amounts for which revenue has been recognized but not invoiced. The allowance for credit losses is based on the Company's assessments of factors that may affect a customer's ability to pay. The Company regularly reviews the adequacy of the allowance for credit losses based on a combination of factors, including an assessment of the current customer's aging balance, the nature and size of the customer, the financial condition of the customer, and the amount of any receivables in dispute. There were no material write-offs for allowance of doubtful accounts recognized in the periods presented. The Company does not have any off-balance sheet credit exposure related to its customers. Derivatives and Hedging Derivatives are recognized at fair value as either assets or liabilities in the consolidated balance sheets in accordance with ASC Topic 815, “Derivatives and Hedging.” The gain or loss of derivatives that are designated and qualify as hedging instruments in a cash flow hedge, is recorded under accumulated other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Derivatives are classified within Level 2 of the fair value hierarchy as the valuation inputs are based on quoted prices and market observable data of similar instruments . Property and Equipment, net Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets: Years Computers and peripheral equipment 3 Office furniture and equipment 7 - 15 Leasehold improvements Over the shorter of the related lease period or the life of the asset Impairment of Long-Lived Assets The long-lived assets of the Company are reviewed for impairment in accordance with ASC 360, “Property, Plant and Equipment” (“ASC 360”), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. There were no impairment charges to long-lived assets during the periods presented. 117 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) Intangible Assets, net Intangible assets consist primarily of customer relationships and technology. The intangible assets are amortized over their estimated useful lives in proportion to the economic benefits realized. Intangible assets consist primarily of customer relationships and technology. Amortization for the intangible assets was recognized over the following periods: Years Customer relationships 7 - 9 Technology 5 Goodwill Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations using the acquisition method of accounting, which requires that the assets acquired and liabilities assumed be recorded at the date of acquisition at their respective fair values. Goodwill is subject to an impairment test at the reporting unit level at least annually in the fourth quarter, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. The Company identified two reporting units - EE&T and M&T. Goodwill impairment is deemed to exist if the net book value of a reporting unit exceeds its estimated fair value. An impairment loss is recognized in an amount equal to the excess. There were no impairment charges to goodwill during the periods presented. Leases The Company determines if an arrangement is a lease at inception. The Company currently does not have any finance leases. Operating lease right-of-use (“ROU”) assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The Company elected the practical expedient to not separate lease and non-lease components for its lease. Operating lease ROU assets also include any prepaid lease payments and lease incentives. Certain lease agreements include rental payments adjusted periodically for the consumer price index (“CPI”). The ROU and lease liability were calculated using the initial CPI and will not be subsequently adjusted, unless the liability is reassessed for other reasons. Payments for variable lease costs are expensed as incurred and not included in the operating lease ROU assets and liabilities. For short-term leases with a term of 12 months or less, operating lease ROU assets and liabilities are not recognized and the Company records lease payments in the Consolidated Statements of Operations on a straight-line basis over the lease term. The interest rate used to determine the present value of the future lease payments is the Company’s incremental borrowing rate, because the interest rate implicit in the Company’s leases is not readily determinable. The Company’s incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. Many of the Company’s lease agreements provide one or more options to renew. When determining lease terms, the Company uses the non-cancellable period of the leases and do not assume renewals unless it is reasonably certain that the Company will exercise that option. Operating lease expense is recognized on a straight-line basis over the lease term. Severance Pay The majority of Kaltura Israel's agreements with its employees in Israel are in accordance with section 14 of the Israeli Severance Pay Law. Upon contribution of the full amount of the employee's monthly salary and release of the policy to the employee, no additional legal obligation exists between the parties and no additional payments are made by the Company to the employee; therefore, related assets and liabilities are not presented in the balance sheet. For Kaltura Israel employees who are not subject to section 14, the Company calculated the liability for severance pay pursuant to the Severance Pay Law based on the most recent salary of these employees multiplied by the number of years of employment as of the balance sheet date. Kaltura Israel's liability for these employees is fully provided for via monthly deposits with severance pay funds, insurance policies and an accrual. The value of these deposits is recorded as an asset on the Company's balance sheet in other assets, noncurrent. 118 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) Severance expenses recorded in Kaltura Israel for the years ended December 31, 2025, 2024 and 2023 amounted to $ 3,056 , $ 2,902 and $ 3,194 , respectively. The Company's employees in the U.S. receive severance benefits in the event of an involuntary termination that increase in accordance with their tenure and base salary. The Company accounts for post-employment benefits in accordance with ASC Topic No. 712, Compensation – Nonretirement Post-employment Benefits. These benefits, primarily severance, are not accrued until the amount can be reasonably estimated. Severance expenses recorded in Kaltura U.S. for the years ended December 31, 2025, 2024 and 2023, amounted to $ 27 , $ 343 and $ 2 , respectively. Israeli Employees Defined Contribution Plan The Company has established a pension contribution plan with respect to Kaltura Israel's employees. Under the plan, Kaltura Israel contributed up to 6.5 % of each employee's monthly salary toward the plan. Employees are entitled to amounts accumulated in the plan upon reaching retirement age, subject to any applicable law. Defined contribution pension plan expenses for the years ended December 31, 2025, 2024 and 2023 amounted to $ 2,336 , $ 2,316 and $ 2,397 , respectively. Revenue Recognition The Company recognizes revenue under Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies judgment in identifying and evaluating terms and conditions in contracts which may impact revenue recognition. To determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, the Company performs the following steps: 1. Identify the contract with a customer The Company considers the terms and conditions of contracts with customers and its customary business practices in identifying contracts under ASC 606. The Company determines it has a contract with a customer when the contract is approved, each party’s rights regarding the services to be transferred can be identified, payment terms for the services can be identified, it has been determined that the customer has the ability and intent to pay, and the contract has commercial substance. The Company applies judgment in determining the customer’s ability and intent to pay, which is based on a variety of factors, including the customer’s historical payment experience or, in the case of a new customer, credit and financial information pertaining to the customer. The Company engages in formal, written, and binding contracts with its customers that create enforceable rights and obligations between the parties and state each party’s rights regarding the license and services to be transferred and the terms of payment. The Company evaluates the probability of collection of the consideration that it is entitled to receive in exchange for the subscriptions and professional services it transfers to the customer. The Company records trade receivables and related contract liabilities for non-cancelable contracts with customers when the right to consideration is unconditional. 2. Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the goods or service either on its own or together with other resources that are readily available from the Company or from third-parties, and are distinct in the context of the contract, whereby the transfer of the goods or services is separately identifiable from other promises in the contract. The Company provides subscriptions and post-contract services (“PCS”) to its Video Experience Cloud, which powers live, real-time, and on-demand video experiences. The Company provides access to its platform either as a cloud-based service (“SaaS” or “PaaS”) or, less commonly, as a license to software installed on the customer's premises (“On-Prem”) all together defined as subscriptions in the statement of operations. Professional Services (“PS”) consist of integration, configuration and customization activities. In some of the Company's arrangements, PS are accounted for as a separate performance obligation. However, in some of the Company’s SaaS and PaaS arrangements the Company determined that the PS are solely set up activities that do not transfer goods or services to the customer and therefore are not accounted for as a separate performance obligation. 119 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) 3. Determine the transaction price The transaction price is determined based on the consideration which the Company is expected to be entitled to in exchange for transferring the promised goods or services to the customer. This transaction price is exclusive of amounts collected on behalf of third parties, such as sales tax and value-added tax. The Company rarely provides its customers with price concessions. The Company's contracts usually include a fixed amount of consideration, as well as variable consideration for overage usage that, in most cases, is not considered probable at the inception of the contract. Revenue accounted for as variable consideration for overages usage is recognized when the uncertainty is resolved, usually when the customer exceeds its committed usage threshold (i.e., overages are consumed) and the overages are invoiced. The Company rarely has contracts for which the difference between the payment date and the revenue recognition timing is more than 12 months. The primary purpose of the Company’s payment terms is to provide customers with a simple and predictable way to purchase the Company’s subscriptions, not to provide customers with financing. In addition, the Company has elected to apply the practical expedient for financing component for transactions in which the difference between the payment date and the revenue recognition timing is up to 12 months. 4. Allocate the transaction price to performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price (“SSP”). When applicable, the Company allocates the transaction price between the separate performance obligations according to their SSP, which is based on the price at which the performance obligation is sold separately. If the SSP is not observable through past transactions, the Company estimates the SSP taking into account available information, including, but not limited to, pricing practices, market conditions, and the economic life of the software. 5. Recognize revenue when or as the Company satisfies a performance obligation Revenue is recognized at the time the related performance obligation is satisfied by transferring the promised good or service to the customer. Revenue is recognized when control of the good or services is transferred to the customer, in an amount that reflects the consideration expected to be received in exchange for those services. A customer obtains control of a good or service if it has the ability to direct the use of and obtain substantially all of the remaining benefits from the good or service. Revenue from SaaS and PaaS subscriptions is recognized ratably over the time of the subscription,because the company transfers control evenly over the contractual period, beginning from the date in which the customer is granted access to the subscription. Revenue from the sale of a term license in On-Prem deals is recognized at a point in time in which the license is delivered to the customer. Revenue from post-contract services included in On-Prem projects is recognized ratably over the time of the PCS. Revenue from PS that is accounted for as a separate performance obligation is recognized upon rendering of the service. Contract Costs Some of the sales commissions and bonuses earned by the Company's employees and management are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions and bonuses for new contracts are deferred and then amortized consistently with the pattern of revenue recognition for each performance obligation for contracts for which the commissions were earned, mainly on a straight-line basis, over a period of benefit that the Company has estimated to be mainly five years . This period of benefit was determined by taking into consideration the technology's useful life. Sales bonuses for renewal contracts are deferred and then amortized on a straight-line basis over the related contractual renewal period. The Company classifies deferred costs as current or noncurrent based on the timing of when the Company expects to recognize the expense. 120 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) Amortization of sales commissions are consistent with the pattern of revenue recognition of each performance obligation and are included in sales and marketing expense in the consolidated statements of operations. The Company periodically reviews these deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit. There were no impairment losses recorded during the periods presented. The Company capitalizes costs incurred to fulfill its contracts when the costs relate directly to a contract and are expected to generate resources that will be used to satisfy the performance obligation under the contract and are expected to be recovered through revenues generated under the contract. Costs to fulfill contracts are expensed to cost of revenue on a straight-line basis over a period of five years which reflects the technological useful life. Cost of Revenue C ost of subscription revenue consists primarily of employee-related costs including payroll, benefits and stock-based compensation expense for operations and customer support teams, production costs mainly consist of cloud hosting providers and other third-party service providers, amortization of capitalized software development costs and acquired technology and allocated overhead costs. Cost of professional services consists primarily of personnel costs of our professional services organization, including payroll, benefits, and stock-based compensation expense, allocated overhead costs and other third-party service providers. Research and Development Costs Research and development costs are charged to the statements of operations as incurred, except to the extent that such costs are associated with internal-use software that qualifies for capitalization. Internal-Use Software Costs incurred to develop internal-use software are capitalized and amortized over the estimated useful life of the software, which is generally five years . In accordance with ASC Topic, 350-40, “Internal-Use Software,” capitalization of costs to develop internal-use software begins when preliminary development efforts are successfully completed, the Company has committed project funding and it is probable that the project will be completed and the software will be used as intended. Costs related to the maintenance of internal-use software are expensed as incurred. The Company periodically reviews internal-use software costs to determine whether the projects will be completed, placed in service, removed from service or replaced by other internally developed or third-party software. If the asset is not expected to provide any future benefit, the asset is retired, and any unamortized cost is expensed. Capitalized internal-use software costs are recorded under property and equipment, net. When events or changes in circumstances require, the Company assesses the likelihood of recovering the cost of internal-use software. If the net book value is not expected to be fully recoverable, internal-use software would be impaired to its fair value. During the year ended December 31, 2025 and December 31, 2024 the Company did not capitalize software development costs. During the year ended December 31, 2023, the Company capitalized $ 1,660 of software development costs. No impairment was recorded for the years ended December 31, 2025, 2024 and 2023. Advertising Costs Advertising costs are expensed as incurred and include marketing activities, demand generation, events, public relations and brand-building activities. Advertising costs for the years ended December 31, 2025, 2024 and 2023, amounted to $ 3,244 , $ 3,366 and $ 3,951 , respectively, and are included in sales and marketing expenses in the consolidated statements of operations. Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718,“Compensation - Stock Compensation” (“ASC 718”). ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award is recognized as an expense over the requisite service periods in the Company's consolidated statements of operations. 121 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) Service-Based Awards The Company grants stock option awards and restricted stock units (“RSUs”), that vest only based upon the satisfaction of a service condition. For RSUs with performance conditions, expenses are recognized when it is probable that the performance condition will be achieved. The probability of achievement is assessed periodically to determine whether the performance metric continues to be probable. When there is a change in the probability of achievement, any cumulative effect of the change is recognized in the period of the change and the remaining unrecognized compensation will be amortized prospectively over the respective vesting period. The Company selected the Black-Scholes option-pricing model as the most appropriate fair value method for its option awards. The option-pricing model requires a number of assumptions, of which the most significant are the fair value of its common stock, the expected stock price volatility, expected option term, risk-free interest rates and expected dividend yield. The assumptions used to determine the fair value of the option awards represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. For RSUs, the Company determines the grant-date fair value of the RSUs as the fair value of the Company’s common stock on the grant date. The Company recognizes compensation cost for options and stock awards that have a graded vesting schedule and contain only service condition on a straight-line basis over the requisite service period for the entire award. Forfeitures are accounted for as they occur instead of estimating the number of awards expected to be forfeited. Market-Based Awards The Company has granted three of its executives stock options that vest only upon the satisfaction of market-based conditions. The market-based conditions reflect specific prices for the Company’s common stock, which must be exceeded for each tranche of the grant to vest. For market-based awards, the Company determined the grant-date fair value utilizing a Monte Carlo simulation model, which incorporates various assumptions including expected stock price volatility, risk-free interest rates, expected exercise behavior for vested options, expected date of a qualifying event and expected form and timing of a liquidity event. The Company estimated the volatility of the common stock on the date of grant based on the weighted average historical stock price volatility of comparable publicly-traded companies. Because the option does not qualify as “plain vanilla” per SEC Staff Accounting Bulletin 107, the expected term cannot be estimated based on the simplified model described in the Bulletin. In order to address the term, the Monte Carlo simulation model includes an assumption about the price level at which vested options are expected to be exercised (the “Sub Optimal Exercise” factor). The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The rate used is based on the expected term of the option. The Company recognizes compensation expenses for the value of its market-based awards based on the accelerated attribution method over the estimated requisite service period of each of the awards. The Company has determined that there is no explicit or implicit service period for the awards, and therefore the requisite service period is based on the derived service period. The derived service period is the term calculated in the Monte Carlo valuation model as described above. The derived service period is the median duration of the simulated price paths in which the option tranche vests, which is determined by the above assumptions. Business Combination The Company accounted for business combination in accordance with ASC 805, “Business combinations”. ASC 805 requires recognition of assets acquired, liabilities assumed, and any non-controlling interest at the acquisition date, measured at fair values as of that date. Any excess of the fair value of net assets acquired over purchase price and any subsequent changes in estimated contingencies are to be recorded in earnings. Acquisition related costs are expensed to the statement of operations in the period incurred. Income Taxes The Company accounts for income taxes in accordance with ASC 740, “Income Taxes”. This codification prescribes the use of the asset and liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and for carry-forward tax losses. Deferred taxes are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value if it is more likely than not that some portion or all of the deferred tax asset will not be realized. 122 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740, “Income Taxes”. Accounting guidance addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements, under which a company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. Accordingly, the Company reports a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return (see also Note 12). Net Loss per Share Attributable to Common Stockholders The Company's basic net loss per share is calculated by dividing net loss by the weighted-average number of shares of common stock outstanding for the period, without consideration of potentially dilutive securities. The diluted net loss per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury share method or the if-converted method based on the nature of such securities. Diluted net loss per share is the same as basic net loss per share in periods when the effects of potentially dilutive shares of common stock are anti-dilutive. Concentration of Credit Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, marketable securities, restricted cash and trade receivables. The majority of the Company's and its subsidiaries' cash and cash equivalents and restricted cash are invested with major banks in Israel, the United Kingdom and the United States. Such investments in the United States may be in excess of insured limits and are not insured in other jurisdictions. However, in general, these investments may be redeemed upon demand and therefore bear minimal risk. The Company's trade receivables are geographically dispersed and derived from sales to customers mainly in the United States, Europe and Asia. Concentration of credit risk with respect to trade receivables is limited by credit limits, ongoing credit evaluation and account monitoring procedures. Major customer data as a percentage of total revenues: The following table sets forth a customer that represented 10% or more of the Company’s total revenue in each of the periods set forth below: Year ended December 31, 2025 2024 2023 Customer A (Media and Telecom) 10.11 % 10.73 % 10.22 % Fair Value of Financial Instruments ASC 820, “Fair Value Measurements and Disclosures”, defines fair value as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. 123 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1 - Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. Level 2 - Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The carrying amounts of cash and cash equivalents, restricted cash, trade receivables, prepaid expenses and other current assets, employees and payroll accruals, trade payables, accrued expenses and other current liabilities, current portion of long-term loans and current portion of long-term lease approximate their fair value due to the short-term maturities of such instruments. Legal Contingencies From time to time, the Company or one of its subsidiaries become involved in legal proceedings or is subject to claims arising in its ordinary course of business. Such matters are generally subject to many uncertainties and outcomes and are not predictable with assurance. Specifically, the Company might be subject to contractual penalties, including liquidated damages, as well as breach of contract claims, which could result in litigation and cause the Company to incur additional costs, including in the form of additional damages or settlement payments. The Company accrues for contingencies when the loss is probable and it can reasonably estimate the amount of any such loss. Recently Adopted Pronouncements In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes - Improvements to Income Tax Disclosures” requiring enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024 on a prospective basis and retrospective application is permitted. The Company adopted this guidance prospectively in the year ended December 31, 2025. See Note 12 Income taxes in the accompanying notes to the consolidated financial statements for further detail. Recent Accounting Guidance Not Yet Adopted In November 2024, the Financial Accounting Standards Board issued ASU 2024-03, “Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures”, which requires disclosure, on an annual and interim basis, of disaggregated information about certain income statement expense line items. The ASU does not change the expense captions presented on the face of the income statement; rather, it mandates the disaggregation of certain expense captions into specified categories within the footnotes to the financial statements. This ASU is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. The Company is currently evaluating the impact of adopting this standard. In July 2025, the Financial Accounting Standards Board issued ASU 2025-05, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets". The standard amends ASC 326-20 to provide a practical expedient (for all entities) and an accounting policy election (for all entities, other than public business entities that elect the practical expedient) related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. The standard should be applied prospectively, and is effective for annual periods, including interim reporting periods, beginning after December 15, 2025, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard. In September 2025, the Financial Accounting Standards Board issued ASU 2025-06, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software" (“ASU 2025-06”), to modernize the accounting guidance for the costs to develop software for internal use. The standard applies to costs incurred to develop or obtain software for internal use. 124 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) ASU 2025-06 amends the existing standard that refers to various stages of a software development project to align better with current software development methods, such as agile programming. Under the new standard, entities will commence capitalizing eligible costs when (i) management has authorized and committed to funding the software project, and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. The new standard also supersedes the guidance related to costs incurred to develop a website. ASU 2025-06 guidance is effective for annual periods beginning after December 15, 2027. The guidance can be applied on a prospective basis, a modified basis for in-process projects or on a retrospective basis. The Company is currently evaluating the impact of the adoption of this standard. ASU 2025-09 derivatives and hedging - “In November 2025, the FASB issued ASU 2025-09 to amend the guidance in Derivatives and Hedging (Topic 815). The update provides targeted improvements intended to enhance the application of hedge accounting, including expanded eligibility of forecasted transactions, additional flexibility in measuring hedge effectiveness, and clarifications related to hedging non-financial items. The guidance is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. The Company is currently evaluating the impact on its financial statement disclosures. ASU 2025-11 interim reporting - “In December 2025, the FASB issued ASU 2025-11 to amend the guidance in Interim Reporting (Topic 270). The update provides clarifications intended to improve the consistency and usability of interim disclosure requirements, including a comprehensive listing of required interim disclosures and a new disclosure principle for reporting material events occurring after the most recent annual period. The amendments do not change the underlying objectives of interim reporting but are designed to enhance clarity in application. The guidance is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years. The Company is currently evaluating the impact on its consolidated financial statement disclosures. ASU 2025-12 codification improvements - “In December 2025, the FASB issued ASU 2025-12 Codification Improvements to address suggestions received from stakeholders on the Accounting Standards Codification and to make other incremental improvements to U.S. GAAP. The update represents changes to the Codification that (1) clarify, (2) correct errors, or (3) make minor improvements. The amendments make the Codification easier to understand and apply. The guidance is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. The Company is currently evaluating the impact on its consolidated financial statement 125 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) NOTE 3: BUSINESS COMBINATIONS On December 1, 2025, the Company acquired 100 % of the outstanding shares of eSelf.AI Ltd. (“eSelf ”), an artificial intelligence technology company that develops a platform for creating and deploying interactive, AI-powered virtual humans capable of engaging users in real-time natural language conversations across multiple digital channels. eSelf’s acquisition is intended to support the Company’s strategy to further expand its suite of AI-driven solutions and access to the application development market. The total purchase consideration for the acquisition of eSelf was $ 16,392 , consisting of an initial cash payment of $ 7,588 (“cash consideration”), contingent consideration related to the earnout arrangement described below, with a preliminary acquisition-date fair value of $ 6,493 and 1,572,203 shares of the Company's common stock with an aggregate value of $ 2,311 (“equity consideration”). The equity consideration was placed in escrow and will be released ratably over a three-year period commencing one year from the acquisition date, to secure certain indemnification obligations. The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations (“ASC 805”). Under the purchase agreement, the former shareholders of eSelf are entitled to contingent earnout payments based on the Company’s achievement of certain revenue metrics for 2026–2028. If all targets are achieved ( 100 %), the payments would total $ 12,500 . The earnout is recorded as a liability-classified contingent consideration and included in the purchase price. It was initially recognized at preliminary fair value and will be remeasured at fair value on a recurring basis. In connection with the acquisition, the Company is also obligated to grant equity awards to the Founders and employees of eSelf with a total value of $ 4,583 , consisting of restricted stock units (“RSUs”). These awards relate to post-combination services and will be recognized as stock-based compensation expense over a three-year vesting period. The following table summarizes the preliminary purchase price allocation of the fair values of the assets acquired and liabilities assumed at the acquisition date: 126 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) Fair Value Cash and cash equivalents $ 441 Other current assets 84 Fixed assets, net 23 Intangible assets 2,109 Goodwill 14,348 Total Assets 17,005 Accrued expenses and other current liabilities 588 Accounts payable 8 Deferred revenues 17 Total Liabilities 613 Cash consideration 7,588 Contingent consideration 6,493 Equity consideration 2,311 Total purchase consideration $ 16,392 The identified intangible assets acquired consist of technology, with preliminary acquisition-date fair values of $ 2,109 . The Company utilized an income-based approach to determine the preliminary fair value of these assets. As of the acquisition date, the estimated useful lives are 5 years. The goodwill, which is not deductible for tax purposes, generated from the acquisition of eSelf is primarily attributable to the anticipated synergies between the Company’s and eSelf’s products and services, and the assembled workforce acquired. Transaction costs incurred in connection with the acquisition during the year ended December 31 ,2025 totaled $ 340 and were recorded within general and administrative expenses in the consolidated statement of operations. Pro forma results for this acquisition were not presented as the effects were not material to the Company's financial results. 127 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) NOTE 4: REVENUES FROM CONTRACTS WITH CUSTOMERS The following tables present disaggregated revenue by category: Year Ended December 31, 2025 Enterprise, Education and Technology Media and Telecom Amount Percentage of revenue Amount Percentage of revenue Subscription $ 130,885 97.4 % $ 41,055 88.4 % Professional services 3,550 2.6 % 5,364 11.6 % $ 134,435 100 % $ 46,419 100 % Year Ended December 31, 2024 Enterprise, Education and Technology Media and Telecom Amount Percentage of revenue Amount Percentage of revenue Subscription $ 124,215 96.5 % $ 43,466 86.9 % Professional services 4,489 3.5 % 6,547 13.1 % $ 128,704 100 % $ 50,013 100 % Year Ended December 31, 2023 Enterprise, Education and Technology Media and Telecom Amount Percentage of revenue Amount Percentage of revenue Subscription $ 120,600 96.4 % $ 42,150 84.3 % Professional services 4,554 3.6 % 7,868 15.7 % $ 125,154 100 % $ 50,018 100 % Contract Balances Contract liabilities consist of deferred revenue. Revenue is deferred when the Company invoices in advance of performance under a contract. The current portion of the deferred revenue balance is recognized as revenue during the 12-month period after the balance sheet date. The noncurrent portion of the deferred revenue balance is recognized as revenue following the 12-month period after the balance sheet date. Substantially all the revenue that was included in the deferred revenue, current as of January 1, 2025, was recognized as revenue during 2025. 128 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) Remaining Performance Obligations Remaining performance obligations represent the amount of contracted future revenue that has not yet been recognized, including both deferred revenue and contracted amounts that will be invoiced and recognized as revenue in future periods. As of December 31, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 166,347 , which consists of both billed consideration in the amount of $ 62,450 and unbilled consideration in the amount of $ 103,897 that the Company expects to recognize as revenue and was not yet recognized on the balance sheet. The Company expects to recognize 64 % of its remaining performance obligations as revenue in the year ending December 31, 2026, and the remainder over the next four years . Costs to Obtain a Contract The following table represents a roll forward of costs to obtain a contract: December 31, 2025 2024 2023 Beginning balance $ 22,203 $ 24,210 $ 26,928 Additions to deferred contract acquisition costs during the period 5,070 8,142 7,237 Amortization of deferred contract acquisition costs ( 10,472 ) ( 10,149 ) ( 9,955 ) Ending balance $ 16,801 $ 22,203 $ 24,210 Deferred contract acquisition costs, current $ 7,740 $ 9,770 $ 9,063 Deferred contract acquisition costs, noncurrent 9,061 12,433 15,147 Total deferred costs to obtain a contract $ 16,801 $ 22,203 $ 24,210 Costs to Fulfill a Contract The following table represents a roll forward of costs to fulfill a contract: December 31, 2025 2024 2023 Beginning balance $ 2,167 $ 3,740 $ 5,522 Additions to deferred costs to fulfill a contract during the period — — — Amortization of deferred costs to fulfill a contract ( 1,057 ) ( 1,573 ) ( 1,782 ) Ending balance $ 1,110 $ 2,167 $ 3,740 Deferred fulfillment costs, current $ 768 $ 995 $ 1,573 Deferred fulfillment costs, noncurrent 342 1,172 2,167 Total deferred costs to fulfill a contract $ 1,110 $ 2,167 $ 3,740 129 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) NOTE 5: MARKETABLE SECURITIES The following is a summary of available-for-sale marketable securities as of December 31, 2025 and December 31, 2024, respectively: December 31, 2025 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available-for-sale – matures within one year: Corporate bonds $ 15,474 $ 20 $ — $ 15,494 U.S. Treasury 6,490 13 — 6,503 Commercial paper 986 1 — 987 Agency bonds 1,135 2 — 1,137 Municipal bonds 236 1 — 237 $ 24,321 $ 37 $ — $ 24,358 Available-for-sale – matures after one year: Corporate bonds $ 8,324 $ 23 $ — $ 8,347 U.S. Treasury 2,026 3 — 2,029 Agency bonds 507 — — 507 $ 10,857 $ 26 $ — $ 10,883 December 31, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available-for-sale – matures within one year: Corporate bonds $ 27,301 $ 16 $ ( 9 ) $ 27,308 U.S. Treasury 16,938 20 ( 1 ) 16,957 Commercial paper 1,945 — ( 4 ) 1,941 Agency bonds 2,070 1 ( 2 ) 2,069 $ 48,254 $ 37 $ ( 16 ) $ 48,275 Available-for-sale – matures after one year: Corporate bonds $ 2,423 $ — $ — $ 2,423 U.S. Treasury 954 2 — 956 $ 3,377 $ 2 $ — $ 3,379 As of December 31, 2025 and December 31, 2024 the Company did not record an allowance for credit losses for its available-for-sale marketable debt securities and all of the gross unrealized losses of the Company's marketable securities have been in a continuous loss position for less than 12 months. During the year ended December 31, 2025, losses of $ 2 from available-for-sale marketable securities were reclassified out of accumulated other comprehensive loss. 130 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) NOTE 6: FAIR VALUE MEASUREMENTS In accordance with ASC 820, the Company measures its cash equivalents and marketable securities at fair value using the market approach valuation technique. Cash equivalents and marketable securities are classified within Level 1 or Level 2 because these assets are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs. Foreign currency derivative contracts are classified within the Level 2 value hierarchy, as the valuation inputs are based on quoted prices and market observable data of similar instruments. Fair Value Measurements As Of Description Fair Value Hierarchy December 31, 2025 December 31, 2024 Measured at fair value on a recurring basis: Assets: Cash equivalents: Money market funds Level 1 $ 15,783 $ 12,212 Short-term marketable securities: Corporate bonds Level 2 $ 15,494 $ 27,308 U.S. Treasury Level 2 $ 6,503 $ 16,957 Commercial paper Level 2 $ 987 $ 1,941 Agency bonds Level 2 $ 1,137 $ 2,069 Municipal bonds Level 2 $ 237 $ — Long-term marketable securities: Corporate bonds Level 2 $ 8,347 $ 2,423 U.S. Treasury Level 2 $ 2,029 $ 956 Agency bonds Level 2 $ 507 $ — Prepaid expenses and other current assets: Restricted bank deposits Level 2 $ 3,644 $ 3,507 Options and forward contracts designated as hedging instruments   Level 2 $ 2,697 $ 960 Other assets, noncurrent: Restricted bank deposit Level 2 $ 1,166 $ 1,020 Liabilities: Derivative instruments liability included in accrued expenses and other current liabilities: Options and forward contracts designated as hedging instruments   Level 2 $ — $ 24 Contingent consideration Level 3 $ 6,493 $ — 131 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) Under the eSelf purchase agreement, the former shareholders of eSelf are entitled to contingent earnout payments based on the Company’s achievement of certain revenue metrics for 2026 –2028. If all targets are achieved ( 100 %), the payments would total $ 12,500 . We recorded $ 6,493 as the initial fair value of contingent earn-out consideration. The fair value was estimated using a Monte-Carlo simulation model, which included significant unobservable Level 3 inputs, such as projected revenue over the earn-out period along with estimates for market volatility and the discount rate applicable to potential cash payouts. NOTE 7: DERIVATIVES AND HEDGING The Company enters into forward contracts to hedge certain forecasted payroll costs denominated in NIS against exchange rate fluctuations of the U.S. dollar for a period of up to twelve months. The Company recorded the cash flows associated with these derivatives under operating activities. The Company does not use derivative instruments for trading or speculative purposes. Notional Amount of Foreign Currency Contracts The Company had outstanding contracts designated as hedging instruments in the aggregate notional amount of $ 15,864 and $ 35,718 as of December 31, 2025 and December 31, 2024, respectively. The fair value of the Company’s outstanding contracts amounted to an asset of $ 2,697 and $ 960 as of December 31, 2025 and December 31, 2024, respectively and a liability of $ 24 as of December 31, 2024. These assets and liability were recorded under prepaid expenses and other current assets and accrued expenses and other current liabilities. Gains of $ 3,799 and $ 832 and losses of $ 2,273 was reclassified from accumulated other comprehensive income (loss) during the year ended December 31, 2025, 2024 and 2023, respectively. These gains and losses were reclassified from accumulated other comprehensive income when the related expenses were incurred. Effect of Foreign Currency Contracts on the Consolidated Statements of Operations The effect of foreign currency contracts on the consolidated statements of operations during the year ended December 31, 2025, 2024 and 2023 was as follows: Statement of Operations Location: Year Ended December 31, 2025 Year Ended December 31, 2024 Year Ended December 31, 2023 Cost of revenue $ ( 434 ) $ ( 123 ) $ 326 Research and development ( 1,976 ) ( 426 ) 1,182 Sales and marketing ( 460 ) ( 113 ) 278 General and administrative ( 825 ) ( 170 ) 427 Restructuring ( 48 ) — 28 Financial expense (income), net ( 56 ) — 32 Total $ ( 3,799 ) $ ( 832 ) $ 2,273 132 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) NOTE 8: LEASES The Company leases its office facilities under agreements that expire at various dates through July 2032. Components of operating lease expense were as follows: Year Ended December 31, 2025 Year Ended December 31, 2024 Year Ended December 31, 2023 Operating lease cost $ 3,047 $ 2,697 $ 2,875 Short-term lease cost — — 154 Variable lease cost 284 176 89 Total $ 3,331 $ 2,873 $ 3,118 Supplementary cash flow information related to operating leases was as follows: Year Ended December 31, 2025 Year Ended December 31, 2024 Year Ended December 31, 2023 Cash paid for operating leases $ 4,196 $ 3,906 $ 3,353 As of December 31, 2025, and December 31, 2024, the weighted-average discount rates were 4.5 % and 4.6 %, respectively. Maturities of the Company’s operating lease liabilities as of December 31, 2025 were as follows: Year Ending December 31, 2026 3,490 2027 3,061 2028 2,695 2029 2,695 2030 2,695 2031 and thereafter 4,942 Total operating lease payments 19,578 Less: imputed interest 2,279 Total operating lease liabilities $ 17,299 133 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) NOTE 9: COMMITMENTS AND CONTINGENCIES Commitments The Company has entered into various non-cancelable agreements with third-party providers for use of mainly cloud and other services, under which it committed to minimum and fixed purchases through the year ending December 31, 2027. The following table presents details of the aggregate future non-cancelable purchase commitments under such agreements as of December 31, 2025: Year ended December 31, 2026 30,466 2027 1,862 Total purchase commitment $ 32,328 Litigation The Company is occasionally a party to claims or litigation in the normal course of the business. The Company does not believe that it is a party to any pending legal proceeding that is likely to have a material adverse effect on its business, financial condition, or results of operations. NOTE 10: CONSOLIDATED BALANCE SHEET COMPONENTS Prepaid expenses and other current assets Prepaid expenses and other current assets consisted of the following: December 31, 2025 2024 Prepaid expenses $ 6,149 $ 4,085 Restricted bank deposits 3,644 3,507 Derivative instrument 2,697 960 Other current assets 1,448 929 $ 13,938 $ 9,481 134 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) Property and Equipment, net Composition of property and equipment is as follows: December 31, 2025 2024 Cost: Computers and peripheral equipment $ 2,238 $ 1,780 Office furniture and equipment 2,266 2,211 Leasehold improvements 7,127 7,127 Internal use software 13,755 13,755 25,386 24,873 Accumulated depreciation ( 13,025 ) ( 8,683 ) Depreciated cost $ 12,361 $ 16,190 Depreciation expenses for the years ended December 31, 2025, 2024 and 2023 were $ 4,319 , $ 4,586 and $ 4,162 , respectively. Other assets, noncurrent December 31, 2025 2024 Restricted cash $ 100 $ 100 Severance pay fund 2,002 1,577 Restricted deposit 1,166 1,020 Other 233 286 $ 3,501 $ 2,983 Accrued expenses and other current liabilities December 31, 2025 2024 Accrued expenses $ 3,358 $ 6,366 Accrued taxes 10,801 5,638 Derivative instruments — 24 Other current liabilities 1,433 2,234 $ 15,592 $ 14,262 135 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) Other liabilities, noncurrent December 31, 2025 2024 Accrued taxes $ 6,151 $ 8,599 Deferred tax 507 463 Contingent consideration 6,493 — Other 2,174 1,710 $ 15,325 $ 10,772 NOTE 11: GOODWILL AND INTANGIBLE ASSETS, NET The carrying amounts and accumulated amortization expenses of the intangible assets, as of December 31, 2025, and December 31, 2024, were as follows: December 31, 2025 Weighted average remaining useful life (in years) Balance Gross carrying amount: Technology 4.92 $ 6,809 Customer relationship 1.25 $ 1,822 $ 8,631 Accumulated amortization and impairments: Technology $ ( 4,735 ) Customer relationship $ ( 1,759 ) $ ( 6,494 ) Intangible assets, net $ 2,137 136 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) December 31, 2024 Weighted average remaining useful life (in years) Balance Gross carrying amount: Technology 0.25 $ 4,700 Customer relationship 2.25 1,822 6,522 Accumulated amortization and impairments Technology ( 4,603 ) Customer relationship ( 1,707 ) ( 6,310 ) Intangible assets, net $ 212 During the year ended December 31, 2025, 2024 and 2023, the Company recorded amortization expenses in the amount of $ 184 , $ 477 and $ 555 , respectively, included in cost of revenue, sales and marketing expenses in the consolidated statements of operations. The estimated future amortization expense of intangible assets as of December 31, 2025, is as follows: Year ended December 31, 2026 472 2027 433 2028 422 2029 422 2030 388 $ 2,137 Changes in the carrying amount of goodwill: Enterprise, Education and Technology Media and Telecom Total Balance as of December 31, 2024 $ 1,689 $ 9,381 $ 11,070 Goodwill acquired 14,348 — 14,348 Balance as of December 31, 2025 $ 16,037 $ 9,381 $ 25,418 137 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) NOTE 12: INCOME TAXES The Company's subsidiaries are separately taxed under the domestic tax laws of the jurisdiction of incorporation of each entity. Loss (income) before taxes on income is comprised as follows: Year Ended December 31, 2025 2024 2023 Domestic $ 19,884 $ 32,758 $ 45,625 Foreign ( 10,874 ) ( 9,093 ) ( 8,170 ) Loss before taxes on income $ 9,010 $ 23,665 $ 37,455 The provision for income taxes is as follows: Year Ended December 31, 2025 2024 2023 Current provision: Federal $ — $ — $ — State 202 69 83 Foreign 2,815 7,536 8,410 3,017 7,605 8,493 Deferred provision: Federal 18 18 171 State 27 27 247 Foreign — — — 45 45 418 Total provision for income taxes $ 3,062 $ 7,650 $ 8,911 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. As of December 31, 2025 and 2024, the Company has maintained a full valuation allowance on its net deferred tax assets. Management currently believes that it is more likely than not that the deferred tax regarding the tax loss carry forwards and other temporary differences will not be realized in the foreseeable future in the U.S. 138 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) Significant components of the Company's deferred tax assets are as follows: December 31, 2025 2024 Deferred tax assets: Net operating losses carryforward $ 50,838 $ 60,192 Disallowed business interest expense — 3,944 Capitalized R&D costs 42,718 34,645 Reserves & accruals 3,034 1,804 Deferred revenue 427 481 Lease liability 399 625 Stock based compensation 11,024 9,357 Unrealized FX gain/(loss) 568 — Other assets 72 70 Deferred tax assets before valuation allowance 109,080 111,118 Valuation allowance ( 101,347 ) ( 100,318 ) Total deferred tax assets, net of valuation allowance $ 7,733 $ 10,800 Deferred tax liabilities: Intangible assets ( 1,423 ) ( 1,151 ) Deferred contract acquisition and fulfillment costs ( 4,926 ) ( 6,711 ) Internal use software ( 1,423 ) ( 2,401 ) Operating lease right-of-use assets ( 336 ) ( 542 ) Other ( 132 ) ( 458 ) Total gross deferred tax liabilities $ ( 8,240 ) $ ( 11,263 ) Total net deferred tax liabilities $ ( 507 ) $ ( 463 ) As of December 31, 2025, the U.S. parent company had a net U.S. operating loss carry forward (“NOLs”) for federal income tax purposes of approximately $ 182,962 and U.S. state NOLs of approximately $ 161,616 . Out of the operating losses attributed to the U.S. parent company, $ 89,945 were generated before January 1, 2018, and are subject to the 20-year carryforward period. The remaining $ 93,017 can be carried forward indefinitely but are subject to the 80% taxable income limitation. Utilization of the U.S. net operating losses above may be subject to substantial annual limitations due to the “change in ownership” provisions of the Internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of substantial net operating losses before utilization (the 80% limitation was waived for NOLs utilized in 2019 and 2020 under the CARES Act). The Company has analyzed the impact of Section 382 on its NOLs through 2024 and believes that the NOLs are not materially limited by Section 382. However, any future changes of ownership could impact the Company’s ability to utilize NOLs. 139 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) A reconciliation of the Company's theoretical income tax expense to actual income tax expense is as follows: Year Ended December 31, 2025 Loss before tax as reported at the consolidated statement of operations $ 9,010 Statutory tax rate 21 % Theoretical tax benefit $ ( 1,892 ) 21 % State and local income tax, net of federal benefit (1) 229 ( 2.54 ) % Foreign tax effects: Israel Statutory tax rate difference between Israel and United States ( 557 ) 6.18 % Nontaxable or nondeductible items ( 748 ) 8.30 % Other 201 ( 2.20 ) % Change in valuation allowance ( 1,616 ) 17.94 % Other foreign jurisdictions ( 122 ) 1.35 % Effect of cross-border tax laws: Global intangible low-taxed income 5,890 ( 65.37 ) % Subpart F 161 ( 1.79 ) % Change in valuation allowance ( 733 ) 8.14 % Nontaxable or nondeductible items: Dividend received deduction ( 985 ) 10.93 % Officer compensation 384 ( 4.26 ) % Other 178 ( 1.98 ) % Changes in unrecognized tax benefits 3,373 ( 37.44 ) % Other adjustment ( 701 ) 7.78 % Total tax expenses $ 3,062 ( 33.99 ) % (1) The states that contribute to the majority (greater than 50%) of the tax effect in this category include Minnesota, Connecticut and Texas for 2025. 140 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) 2024 2023 Loss before tax as reported at the consolidated statement of operations $ 23,665 $ 37,455 Statutory tax rate 21 % 21 % Theoretical tax benefit $ ( 4,970 ) $ ( 7,866 ) Non-deductible expenses and other permanent differences 259 1,026 Stock based compensation 1,639 2,403 Change in valuation allowance ( 919 ) 16,842 State taxes, net of federal benefit ( 2,083 ) ( 2,898 ) Income tax at rate other than the U.S. statutory tax rate 11,454 1,613 Exchange rate differences ( 4,812 ) ( 511 ) Return to provision adjustments 6,406 ( 1,321 ) Other 676 ( 377 ) Total tax expenses $ 7,650 $ 8,911 The following is a supplemental schedule of cash paid for income taxes: Year Ended December 31, 2025 Cash paid during the period for income taxes, net of refunds: Federal $ — State 202 Foreign Israel 1,601 Other Foreign 147 Income taxes, net of amounts refunded $ 1,950 The only jurisdiction with cash taxes paid that equaled or exceeded 5% of total income taxes paid was Israel. 141 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act, a comprehensive tax law that includes significant changes to the taxation of business entities. These changes include several key tax provisions, among others: (i) a permanent reduction to the statutory federal corporate income tax rate from 35% to 21% effective for tax years beginning after December 31, 2017; (ii) a partial limitation on the tax deductibility of business interest expenses; (iii) a shift of the U.S. taxation of multinational corporations from a tax on worldwide income to a territorial system (along with certain rules designed to prevent erosion of the U.S. income tax base) and (iv) a one-time deemed repatriation tax on accumulated offshore earnings held in cash and illiquid assets, with the latter taxed at a lower rate. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, making permanent certain provisions of the Tax Cuts and Jobs Act, including reinstatement of 100% bonus depreciation and the ability to currently deduct domestic research and experimentation expenditures. In accordance with ASC 740, the Company recognized the effects of the enacted tax law change in the period of enactment. The Israeli corporate tax rate was 23% for the years ended December 31, 2025, 2024 and 2023. However, the effective tax rate payable by a company that derives income from a“Benefited Enterprise” or a “Preferred Enterprise” (as discussed below) may be considerably less. Capital gains derived by an Israeli company are generally subject to the prevailing corporate tax rate. Tax benefits by virtue of the Law for the Encouragement of Capital Investments, 1959 (“the Investment Law”): Until tax year 2014, Kaltura Israel utilized various tax benefits by virtue of the “Benefited Enterprise” status granted to its enterprise, pursuant to the Investment Law. Kaltura Israel elected benefits under the alternative track of benefits according to which it was exempt from income tax in the first two years (from the date Kaltura Israel earned taxable income). If a dividend is distributed out of tax exempt income earned by a Benefited Enterprise the amount distributed will be subject to corporate tax at the rate that would have otherwise been applicable on the Benefited Enterprise income. Dividends paid out of income attributed to a Beneficiary Enterprise are generally subject to withholding tax at source at the rate of 15% or such lower rate as may be provided in an applicable tax treaty. As of December 31, 2025, approximately $ 592 was derived from tax exempt profits earned by Kaltura Israel's “Beneficiary Enterprise.” The Company and its Board of Directors have determined that such tax-exempt income will not be distributed as dividends and intends to reinvest the amount of its tax-exempt income earned by Kaltura Israel. Accordingly, no provision for deferred income taxes has been provided on income attributable to Kaltura Israel's “Beneficiary Enterprise” as such income is essentially permanently reinvested. If Kaltura Israel's retained tax-exempt income is distributed, the income would be taxed at the applicable corporate tax rate as if it had not elected the alternative tax benefits under the Investment Law and an income tax liability of up to $ 148 would be incurred as of December 31, 2025. In 2011, new legislation amending the Investment Law was adopted. Under this new legislation, a unified corporate tax rate applied to all qualifying income generated by a “Preferred Company” through its Preferred Enterprise (as such terms are defined in the Investment Law) as of January 1, 2011. Industrial Companies under the Preferred Enterprise status according to the new law as amended in July 2013, and starting January 1, 2014 are entitled to a uniform reduced corporate tax rate of 9% in areas in Israel designated as Development Zone A and 16% elsewhere in Israel. The 2011 Amendment also provided transitional provisions to address companies already enjoying current benefits under the Investment Law. Under the transition provisions, the Company decided to irrevocably implement the new law, effective January 1, 2015. Dividends distributed from income which is attributed to a “Preferred Enterprise” will be subject to withholding tax at source at the rate of 20% or such lower rate as may be provided in an applicable tax treaty. 142 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) Kaltura Israel's income from other sources is subject to tax at the regular Corporate Income rate. The Company indefinitely reinvests earnings from its foreign subsidiaries and therefore no deferred tax liability has been recognized on the basis difference created by such earnings. The Company has not provided foreign withholding taxes for any undistributed earnings of its foreign subsidiaries. Generally, in U.S. federal and state taxing jurisdictions, tax periods in which certain loss and credit carryovers are generated remain open for audit until such time as the limitation period ends for the year in which such losses or credits are utilized. Kaltura Israel received final tax assessments through 2019 while the rest of the Company's subsidiaries did not have any final tax assessments as of December 31, 2025. A reconciliation of the opening and closing amounts of total unrecognized tax benefits is as follows: Unrecognized Tax Benefits Balance as of December 31, 2022 $ 5,326 Decreases related to prior years' tax positions — Increases related to current years' tax positions 1,815 Balance as of December 31, 2023 7,141 Decreases related to prior years' tax positions ( 353 ) Increases related to current years' tax positions 5,968 Balance as of December 31, 2024 12,756 Decreases related to prior years' tax positions ( 186 ) Increases related to prior year positions 2,310 Increases related to current years' tax positions 2,831 Balance as of December 31, 2025 $ 17,711 The total amount of unrecognized tax benefits that would affect the effective tax rate, if recognized, was $ 17,711 and $ 12,756 as of December 31, 2025 and 2024. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2025 and 2024, the Company had accrued $ 656 and $ 571 for the payment of interest and penalties relating to unrecognized tax benefits, respectively. In addition, the Company is subject to the continuous examination of its income tax returns by the IRS and other tax authorities. The Company’s federal and state income tax returns for years 2010 and forward remain open to examination. In the Company’s foreign jurisdictions – Israel and the United Kingdom – the tax years subsequent to 2020 remain open to examination. The Company believes that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in the Company’s tax audits are resolved in a manner not consistent with management’s expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs. Although the timing of the resolution or closure of audits is not certain, the Company believes that its unrecognized tax benefits would not change significantly within the next 12 months except in the case of settlement with tax authorities, the likelihood and timing of which is difficult to estimate. 143 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) NOTE 13: NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders for the periods presented: Year Ended December 31, 2025 2024 2023 Numerator: Net loss $ 12,072 $ 31,315 $ 46,366 Denominator: Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted 152,914,221 147,925,797 138,237,017 Net loss per share attributable to common stockholders, basic and diluted $ 0.08 $ 0.21 $ 0.34 Instruments potentially exercisable for common stock that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been anti-dilutive are as follows: Year Ended December 31, 2025 2024 2023 Outstanding stock options and RSUs 23,251,729 28,652,759 34,132,323 Total 23,251,729 28,652,759 34,132,323 NOTE 14: REPORTABLE SEGMENTS AND GEOGRAPHICAL INFORMATION Reportable segments ASC 280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company's chief operating decision maker is its Chief Executive Officer (“CODM”). The Company's CODM does not regularly review asset information by segments because assets are managed centrally and such information is not used in assessing segment performance or in making operating decisions and, therefore, the Company does not report asset information by segment. The Company organizes its operations in two segments: Enterprise, Education and Technology and Media and Telecom. The Enterprise, Education and Technology segment represents products related to industry solutions for education customers, and media services (except for Media and Telecom customers). The Media and Telecom segment primarily represents TV solutions that are sold to media and telecom operators. The measurement of the reportable operating segments is based on the same accounting principles applied in these financial statements, which includes certain corporate overhead allocations. Year Ended December 31, 2025 Enterprise, Education and Technology Media and Telecom Total Revenue $ 134,435 $ 46,419 $ 180,854 Cost of revenue Production costs 16,440 12,868 29,308 Compensation 10,366 4,511 14,877 Depreciation and amortization 1,006 2,160 3,166 Other segment items 2,668 3,166 5,834 Total cost of revenue 30,480 22,705 53,185 Gross profit 103,955 23,714 127,669 Operating expenses 132,632 Financial expense (income), net 4,047 Provision for income taxes 3,062 Net loss $ 12,072 Year Ended December 31, 2024 Enterprise, Education and Technology Media and Telecom Total Revenue $ 128,704 $ 50,013 $ 178,717 Cost of revenue Production costs 16,693 13,973 30,666 Compensation 10,868 6,464 17,332 Depreciation and amortization 1,354 2,370 3,724 Other segment items 2,861 5,028 7,889 Total cost of revenue 31,776 27,835 59,611 Gross profit 96,928 22,178 119,106 Operating expenses 143,205 Financial expense (income), net ( 434 ) Provision for income taxes 7,650 Net loss $ 31,315 Year Ended December 31, 2023 Enterprise, Education and Technology Media and Telecom Total Revenue $ 125,154 $ 50,018 $ 175,172 Cost of revenue Production costs 18,528 14,771 33,299 Compensation 11,080 8,876 19,956 Depreciation and amortization 1,022 2,389 3,411 Other segment items 2,900 3,372 6,272 Total cost of revenue 33,530 29,408 62,938 Gross profit 91,624 20,610 112,234 Operating expenses 150,889 Financial expense (income), net ( 1,200 ) Provision for income taxes 8,911 Net loss $ 46,366 Other segment items include costs related to subcontractors and consultants, allocated rent, IT expenses and other general costs. Geographical information Revenue by location is determined by the billing address of the customer. Total revenue from external customers on the basis of the Company's geographical areas are as follows: Year Ended December 31, 2025 2024 2023 United States (“US”) $ 96,198 $ 94,855 $ 91,319 Europe, the Middle East and Africa (“EMEA”) 71,232 68,396 65,831 Other 13,424 15,466 18,022 $ 180,854 $ 178,717 $ 175,172 No other individual country accounted for more than 10% of the Company’s revenue for all periods presented. The following table presents long-lived assets as of December 31, 2025 and 2024, based on geographical areas which consist of property and equipment, net and operating lease right-of-use assets: December 31, 2025 2024 US $ 6,664 $ 10,141 Israel 15,907 18,253 Rest of world 101 104 $ 22,672 $ 28,498 NOTE 15: LONG-TERM LOAN In January 2021, the Company entered into a new credit agreement (the “Credit Agreement”) with an existing lender, which provides for a new senior secured term loan facility in the aggregate principal amount of $ 40,000 (the “Term Loan Facility”) and a new senior secured revolving credit facility in the aggregate principal amount of $ 10,000 (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Credit Facilities”), which subsequently and has been amended according to the Company's needs and other developments. In May 2023, the Company entered into an amendment (the “Fourth Amendment”) to the then-existing Credit Agreement to replace the London Interbank Offered Rate (“LIBOR”) with the Secured Overnight Financing Rate (“SOFR”) as the benchmark rate under the Credit Agreement. Prior to the Fourth Amendment, borrowings under the Credit Agreement would bear interest, at the Company's election, at (a) the Eurodollar Rate (as defined in the Credit Agreement as in effect prior to the Fourth Amendment) plus a margin of 3.50 % or (b) Alternative Base Rate (“ABR”) (as defined in the Credit Agreement) plus a margin of 2.50 %. In December 2023, the Company entered into a new amendment to the then-existing Credit Agreement (the “Fifth Amendment”), which provides for a new term loan facility in the aggregate principal amount of $ 35,000 . Commitments under the Revolving Credit Facility decreased to $ 25,000 . In July 2024, the Company entered into a new amendment to the then-existing Credit Agreement in connection with its share repurchase program, which updated the aggregate amount of permitted Restricted Payments (as defined in the Credit Agreement; which term includes, among other things, repurchase of the Company’s outstanding common stock) and conditions for making such payments (see Note 16 for further information). In March 2025, the Company entered into another amendment to the Credit Agreement, also in connection with the Company’s repurchase programs, which provided for, among other things, an increase to the aggregate amount of permitted Restricted Payments and updates to the conditions for making such payments. On October 20, 2025, the Company entered into an amendment to the Credit Agreement, which provided for, among other things, an increase to the aggregate amount of permitted Restricted Payments and updates to the conditions for making such payments to facilitate the Company’s repurchases of securities Following the effectiveness of the Fifth Amendment, borrowings under the Credit Facilities bear interest, determined as follows: (a) SOFR loans accrue interest at a rate per annum equal to Term SOFR (as defined in the Credit Agreement) plus 0.10 % per annum plus a margin of 2.50 % (the Adjusted Term SOFR (as defined in the Credit Agreement) is subject to a 1.00 % floor), and (b) ABR loans accrue interest at a rate per annum equal to the ABR plus a margin of 1.50 % (ABR is equal to the highest of (i) the prime rate and (ii) the Federal Funds Effective Rate plus 0.50 %, subject to a 2.00 % floor). As of December 31, 2025, the current rate of interest under the Credit Facilities was equal to a rate per annum of 6.27 %, consisting of 3.67 % (the 3-months SOFR rate as of December 31, 2025), 0.10 % credit spread adjustment and the margin of 2.50 %. 144 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) The Term Loan Facility is payable in consecutive quarterly installments on the last day of each fiscal quarter in an amount equal to (i) $ 438 for installments payable on December 31, 2023 (deferred to January 9, 2024), through September 30, 2024 (ii) $ 656 for installments payable on December 31, 2025 ($ 218 of the amount deferred to January 2025) , through September 30, 2025, (iii) $ 1,313 for installments payable on and after December 31, 2025. The remaining unpaid balance on the Term Loan Facility is due and payable on December 21, 2026, together with accrued and unpaid interest on the principal amount to be paid to, but excluding, the payment date. Amounts outstanding under the Credit Facilities may be voluntarily prepaid at any time and from time to time, in whole or in part, without premium or penalty. Under the terms of the Credit Facilities, the Company is obligated to maintain compliance with certain financial covenants as defined therein. As of December 31, 2025, the Company met these covenants. The aggregate principal annual maturities according to the Credit Facilities agreements are as follows: Year ended December 31, 2026 $ 29,313 $ 29,313 The carrying amounts of the loans approximate their fair value. NOTE 16: STOCKHOLDERS' EQUITY Common Stock The shares of common stock confer upon their holders the right to receive notice to participate and vote in general stockholders meetings of the Company, and the right to receive dividends, if declared, and to participate in the distribution of the surplus assets of the Company upon liquidation of the Company, as more fully described in the Company's Certificate of Incorporation. In connection with the IPO, the Company amended and restated its Certificate of Incorporation to change the authorized common stock to 1,000,000,000 shares of common stock, all with a par value of $ 0.0001 per share. The Company has the following common stock reserved for future issuance as of December 31, 2025: December 31, 2025 Outstanding options 13,615,770 Outstanding RSUs 9,635,959 Shares reserved under 2021 Plan 7,331,910 Total 30,583,639 Equity Incentive Plans Under the Company's 2007 U.S. and Israeli Stock Option Plans (“the 2007 Plans”), options were granted to officers, directors, employees, advisors and consultants of the Company or its subsidiaries. In 2017, the Company adopted a new equity incentive plan, the “2017 Equity Incentive Plan” (the “2017 Plan” and together with the 2007 Plans, the “Old Plans”), and extended the term of the 2007 Israeli Stock Option Plan and the term of the options already granted thereunder for an additional ten-year period. Each option granted under the Old Plans is exercisable until the earlier of ten years (or 20 years if granted under the 2007 Israeli Stock Option Plan) from the date of the grant of the option. The options vest primarily over a four-year period. Any options that are forfeited or not exercised before expiration become available for future grants. 145 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) Following the Company’s IPO, no additional awards will be granted under the Old Plans. However, the Old Plans will continue to govern the terms and conditions of the outstanding awards previously granted under the Old Plans. Effective upon the effectiveness of the registration statement for the IPO, the Company adopted the 2021 Incentive Award Plan (the “2021 Plan”, and together with the Old Plans, the “Plans”). The 2021 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, RSUs, and other stock or cash-based awards to the Company’s officers, directors, employees, advisors, and consultants. The number of shares of common stock initially reserved for issuance under the 2021 Plan was 8,500,000 shares. in addition, certain shares of common stock subject to awards under the Old Plans, such as those subject to expirations, terminations, exercise and tax-related withholding, or failures to vest, will become available for issuance under the 2021 Plan. The number of shares of common stock available for issuance under the 2021 Plan will also include an annual increase on the first day of each fiscal year beginning on January 1, 2022, equal to the lesser of: • 5 % of the aggregate number of shares of common stock outstanding on the final day of the immediately preceding calendar year; and • Such smaller number of shares of common stock as is determined by the Board of Directors. Under the 2021 Plan, the exercise price of options granted is generally at least equal to the fair market value of the Company’s common stock on the date of grant. The term of the options generally may not exceed ten years . Additionally, the exercise price of any options granted to a 10% stockholder shall not be less than 110 % of the fair market value of the common stock on the date of grant, and the term of such option grant shall not exceed five years . On January 1, 2025, the number of shares of common stock authorized for issuance under the 2021 Plan automatically increased by 7,602,857 shares pursuant to the terms of the 2021 Plan. Stock Options A summary of the Company's stock option activity with respect to options granted under the Plans is as follows: Number of Options Weighted Average exercise price Weighted remaining contractual term (years) Aggregate Intrinsic Value Outstanding as of January 1, 2025 16,321,014 $ 3.29 4.34 $ 5,212 Exercised ( 1,647,450 ) $ 1.82 $ 715 Forfeited ( 1,057,794 ) $ 4.50 Outstanding and exercisable as of December 31, 2025 13,615,770 $ 3.37 3.76 $ 1,582 No stock options were granted during the years ended December 31, 2025, 2024 and 2023. The total grant-date fair value of the service-based awards that vested during the years ended December 31, 2025, 2024 and 2023, was $ 87 , $ 6,679 and $ 11,409 , respectively. The aggregate intrinsic value of options exercised during the years ended December 31, 2025, 2024 and 2023, was $ 715 , $ 1,449 and $ 3,169 , respectively. RSUs The following table summarizes the RSU activity for the year ended December 31, 2025: 146 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) RSUs Outstanding Weighted Average Grant Date Fair Value per Share Outstanding as of December 31, 2024 12,331,745 $ 1.56 RSUs granted 9,063,300 $ 2.54 RSUs vested ( 8,447,874 ) $ 1.83 RSUs forfeited (1) ( 3,311,212 ) $ 1.80 Unvested and Outstanding as of December 31, 2025 9,635,959 $ 2.16 (1) During the year ended December 31, 2025 the Company's Board of Directors approved the cash settlement of 1,661,000 RSUs for its officers based on the Company's closing stock price on March 19, 2025. These RSUs were vested upon achieving specific performance targets outlined in the 2024 Executive Compensation Plan. The total amount approved for cash settlement was $ 3,089 . Stock-Based Compensation Expense The stock-based compensation expense by line item in the accompanying consolidated statement of operations is summarized as follows: Year Ended December 31, 2025 2024 2023 Cost of revenue $ 459 $ 1,002 $ 1,128 Research and development 3,104 4,775 4,734 Sales and marketing 1,476 2,701 3,187 General and administrative 11,453 17,786 20,931 Total expenses $ 16,492 $ 26,264 $ 29,980 As of December 31, 2025, there were $ 21,984 of total unrecognized compensation cost related to non-vested stock-based compensation arrangements granted under the Plans. These costs are expected to be recognized over a weighted-average period of approximately 2 years. Stock Repurchase Program In June 2024, the Company’s board of directors authorized a stock repurchase program of the Company’s outstanding common stock (the “2024 Repurchase Program”), which provided for repurchases up to a total of $ 5,000 thereunder. Subsequently, in March 2025, the Board approved a new repurchase program (the “2025 Repurchase Program”), providing for repurchases up to a total of $ 15,000 thereunder, which superseded the 2024 Repurchase Program. On November 7, 2025, pursuant to additional repurchase authority approved by the Board, the Company entered into a stock purchase agreement (the “2025 Stock Purchase Agreement” ) with Special Situations Investing Group II, LLC (the “Sellers”), pursuant to which the Company repurchased 14,443,739 shares of Common Stock from the Sellers at a purchase price of $ 16,610 , representing a price per share of $ 1.15 for each of the Company’s share of common stock, calculated on the basis of a 25 % discount over the average daily VWAP over the 30-day period ending on November 5, 2025. In addition, the Board terminated the 2025 Repurchase Program. During the year ended December 31, 2025, the Company repurchased 19,087,579 shares of common stock at an weighted average price of $ 1.37 per share (excluding broker and transaction fees of $ 139 ). 147 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) NOTE 17: SELECTED STATEMENT OF OPERATIONS DATA Year Ended December 31, 2025 2024 2023 Financial income: Interest income $ 2,984 $ 3,355 $ 2,735 Foreign currency translation adjustments, net — 175 2,169 2,984 3,530 4,904 Financial expenses: Bank fees 159 135 153 Interest expense 2,243 2,682 3,178 Foreign currency translation adjustments, net 4,298 — — Other 331 279 373 7,031 3,096 3,704 Financial expenses (income), net $ 4,047 $ ( 434 ) $ ( 1,200 ) NOTE 18: ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following table summarizes the changes in accumulated other comprehensive loss by component, net of tax, during the years ended December 31, 2025, December 31, 2024 and December 31, 2023: Net Unrealized Income on Available-for-Sale Securities Instruments Net Unrealized Income on Derivatives Designated as Hedging Instruments Total Balance as of December 31, 2024 $ 23 $ 936 $ 959 Other comprehensive income before reclassifications 38 5,559 5,597 Net realized losses (gains) reclassified from accumulated other comprehensive income (loss) 2 ( 3,799 ) ( 3,797 ) Other comprehensive income 40 1,760 1,800 Balance as of December 31, 2025 $ 63 $ 2,696 $ 2,759 148 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) Net Unrealized Income on Available-for-Sale Securities Instruments Net Unrealized Income on Derivatives Designated as Hedging Instruments Total Balance as of December 31, 2023 $ 49 $ 998 $ 1,047 Other comprehensive income (loss) before reclassifications ( 26 ) 770 744 Net realized income reclassified from accumulated other comprehensive income — ( 832 ) ( 832 ) Other comprehensive loss ( 26 ) ( 62 ) ( 88 ) Balance as of December 31, 2024 $ 23 $ 936 $ 959 Net Unrealized Income (Losses) on Available-for-Sale Securities Instruments Net Unrealized Income (Losses) on Derivatives Designated as Hedging Instruments Total Balance as of December 31, 2022 $ ( 181 ) $ ( 120 ) $ ( 301 ) Other comprehensive income (loss) before reclassifications 230 ( 1,155 ) ( 925 ) Net realized losses reclassified from accumulated other comprehensive income — 2,273 2,273 Other comprehensive income 230 1,118 1,348 Balance as of December 31, 2023 $ 49 $ 998 $ 1,047 149 Table of Contents KALTURA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS U.S. dollars in thousands (except share and per share data) NOTE 19: RESTRUCTURING ACTIVITIES Restructuring Plan On August 4, 2025, the Board of Directors of the Company approved a cost-reduction and re-organization plan that included, among other things, downsizing approximately 10 % of the Company's workforce (the "2025 Reorganization Plan"). The 2025 Reorganization Plan was focused on realigning the Company's operations to further increase efficiency and productivity During the year ended December 31, 2025, in connection with the Plan, the Company recorded expenses of $ 903 , all for one-time employee termination benefits. Restructuring Accruals The following table is a reconciliation of the beginning and ending restructuring liability for the year ended December 31, 2025, related to the 2025 Reorganization Plan: Enterprise, Education and Technology Media and Telecom Total Balance as of December 31, 2024 $ — $ — $ — Accrual and accrual adjustments 529 374 903 Cash payments ( 499 ) ( 374 ) ( 873 ) Balance as of December 31, 2025 $ 30 $ — $ 30 The restructuring liability for severance and termination benefits is reflected in "Employees and payroll accruals" in the consolidated balance sheet as of December 31, 2025. NOTE 20: SUBSEQUENT EVENTS PathFactory Acquisition On March 15, 2026, the Company entered into a definitive agreement to acquire PathFactory Holdings ULC, a company organized under the laws of the province of British Columbia (“PathFactory”), for cash consideration of approximately $ 22,000 . The transaction is expected to close in the second quarter of 2026, subject to the satisfaction or waiver of customary closing conditions. 150 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.