KALTURA INC

Previous wording

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

Current wording

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

Previous wording

We employ a "land and expand strategy" with the aim of having our customers increase their usage of our offerings and/or purchase additional offerings over time. Our Net Dollar Retention Rate (as defined below) measures our success in retaining and growing recurring revenue from our existing customers over a given period. For the three months ended June 30, 2026 and 2025, our Net Dollar Retention Rate was 96% and 101%, respectively. We grew our Annualized Recurring Revenue (as defined below) by 8% in the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The increase includes the contribution of the PathFactory acquisition, together with growth from new customers.

Current wording

We employ a "land and expand strategy" with the aim of having our customers increase their usage of our offerings and/or purchase additional offerings over time. Our Net Dollar Retention Rate (as defined below) measures our success in retaining and growing recurring revenue from our existing customers over a given period. For the three months ended September 30, 2026 and 2025, our Net Dollar Retention Rate was 97%. Our Annualized Recurring Revenue (as defined below) increased by 9% in three months ended September 30, 2026, compared to three months ended September 30, 2025. The increase includes the contribution of the PathFactory acquisition, together with growth from new customers.

Previous wording

We remain focused on acquiring customers across our key verticals (technology, education, regulated industries, professional and commercial services, and media & telecom). Our approach includes direct enterprise sales for larger customers, as well as channel partnerships and more self-serve or inside sales–led motions to capture small and medium enterprises (“SMEs”). We believe that increasing brand awareness and continued product innovation will help us attract new customers across geographies and industries. We also continue to provide our self-serve offering that can be purchased completely online, which serves as a demand generation engine for our low-touch and enterprise offerings. We believe this will enable us to efficiently acquire smaller customers across all industries over time – expanding beyond enterprises into SMEs, beyond universities into K-12 schools, beyond tier 1 media and telecom companies to tier 2 and 3 media and telecom companies, and beyond providing Media Services to large technology companies to also addressing smaller technology firms and startups.

Current wording

We remain focused on acquiring customers across our key verticals (technology, education, regulated industries, professional and commercial services, and media & telecom). Our approach includes direct enterprise sales for larger customers, as well as channel partnerships and more self-serve or inside sales–led motions to capture SMEs. We believe that increasing brand awareness and continued product innovation will help us attract new customers across geographies and industries. We also continue to provide our self-serve offering that can be purchased completely online, which serves as a demand generation engine for our low-touch and enterprise offerings. We believe this will enable us to efficiently acquire smaller customers across all industries over time – expanding beyond enterprises into SMEs, beyond universities into K-12 schools, beyond tier 1 media and telecom companies to tier 2 and 3 media and telecom companies, and beyond providing Media Services to large technology companies to also addressing smaller technology firms and startups.

Previous wording

Many of our customers run multiple Kaltura products for various use cases, ranging from employee training and collaboration to external marketing and virtual events. By cross-selling and upselling additional solutions — such as our newly introduced Gen AI-powered capabilities and expanded application suites — we aim to drive higher usage and expand overall revenue. Our strong integration, ongoing support, and a commitment to evolving security and compliance requirements also helps us support sustained customer adoption and usage growth. We are focused on increasing sales within our existing customer base through increased usage of our platform and the cross-selling of additional products and solutions. For the three months ended June 30, 2026, our Net Dollar Retention Rate was 96%. In order for us to increase revenue within our customer base, we will need to maintain engineering-level customer support and continue to introduce new products and features as well as innovative new use cases that are tailored to our customers' needs.

Current wording

Many of our customers run multiple Kaltura products for various use cases, ranging from employee training and collaboration to external marketing and virtual events. By cross-selling and upselling additional solutions — such as our newly introduced Gen AI-powered capabilities and expanded application suites — we aim to drive higher usage and expand overall revenue. Our strong integration, ongoing support, and a commitment to evolving security and compliance requirements also helps us support sustained customer adoption and usage growth. We are focused on increasing sales within our existing customer base through increased usage of our platform and the cross-selling of additional products and solutions. For the three months ended September 30, 2026, our Net Dollar Retention Rate was 97%. In order for us to increase revenue within our customer base, we will need to maintain engineering-level customer support and continue to introduce new products and features as well as innovative new use cases that are tailored to our customers' needs.

Previous wording

Remaining Performance Obligations represents the amount of contracted future revenue that has not yet been delivered, including both subscription and professional services revenues. Remaining Performance Obligations consists of both deferred revenue and contracted non-cancelable amounts that will be invoiced and recognized in future periods. As of June 30, 2026, our Remaining Performance Obligations was $164.3 million, which consists of both billed consideration in the amount of $59.8 million and unbilled consideration in the amount of $104.5 million that we expect to invoice and recognize in future periods.

Current wording

Remaining Performance Obligations represents the amount of contracted future revenue that has not yet been delivered, including both subscription and professional services revenues. Remaining Performance Obligations consists of both deferred revenue and contracted non-cancelable amounts that will be invoiced and recognized in future periods. As of September 30, 2026, our Remaining Performance Obligations was $161.6 million, which consists of both billed consideration in the amount of $66.5 million and unbilled consideration in the amount of $95.1 million that we expect to invoice and recognize in future periods.

Previous wording

We expect to recognize 71% of our Remaining Performance Obligations as revenue over the next 12 months and the remainder over the next four years, in each case, in accordance with our revenue recognition policy.

Current wording

We expect to recognize 70% of our Remaining Performance Obligations as revenue over the next 12 months and the remainder over the next four years, in each case, in accordance with our revenue recognition policy.

Previous wording

(a)The three months ended June 30, 2026 and 2025, and the six months ended June 30, 2026 and 2025 include $532, $602, $1,075 and $1,210, respectively, of interest expenses and $663, $737, $1,203 and $1,632, respectively, of interest income.

Current wording

(a)The three months ended September 30, 2026 and 2025, and the nine months ended September 30, 2026 and 2025, include $514, $527, $1,589 and $1,737 respectively, of interest expenses and $349,$751,$1,551 and$2,383, respectively of interest income.

Previous wording

(b)Strategic initiatives for the three and six months ended June 30, 2026 and 2025 relate to professional fees, consulting services, and transaction-related costs incurred in connection with the acquisition of PathFactory and other costs associated with strategic initiatives.

Current wording

(b)Strategic initiatives for the three and nine months ended September 30, 2026 and 2025 relate to professional fees, consulting services, and transaction-related costs incurred in connection with the acquisition of PathFactory and other costs associated with strategic initiatives. The three and nine months ended September 30, 2025 include vendor credit and discounted pricing for expenses recognized during the three months ended June 30, 2025.

Previous wording

(c)The three and six months ended June 30, 2026 includes employee termination benefits incurred in connection with the 2026 Reorganization Plans.

Current wording

(c)The three and nine months ended September 30, 2026 and 2025 include one-time employee termination benefits incurred in connection with the Company's reorganization plans.

Previous wording

(d)Acquisition-related compensation costs for the three months ended June 30, 2026 relate to statutory termination costs and other severance payments associated with integrating the PathFactory acquisition.

Current wording

(d)Acquisition-related compensation costs for the nine months ended September 30, 2026 relate to statutory termination costs and other severance payments associated with integrating the PathFactory acquisition.

Previous wording

Our revenues are mainly comprised of revenue from SaaS and PaaS subscriptions. SaaS and PaaS subscriptions provide access to our Video Experience Cloud which powers all types of video experiences: live, real-time, and on-demand video. We provide access to our platform either as a cloud-based service, which represents most of our SaaS and PaaS subscriptions, or, less commonly, as a term license to software installed on the customer's premises. Revenue from SaaS and PaaS subscriptions is recognized ratably over the time of the subscription, beginning from the date on which the customer is granted access to our Video Experience Cloud. Revenue from the sale of a term license is recognized at a point in time in which the license is delivered to the customer. Revenue from post-contract services ("PCS") included in On-Prem deals is recognized ratably over the period of the PCS.

Current wording

Our revenues are mainly comprised of revenue from SaaS and PaaS subscriptions. SaaS and PaaS subscriptions provide access to our Video Experience Cloud which powers all types of video experiences: live, real-time, and on-demand video. We provide access to our platform either as a cloud-based service, which represent most of our SaaS and PaaS subscriptions, or, less commonly, as a term license to software installed on the customer's premises. Revenue from SaaS and PaaS subscriptions is recognized ratably over the time of the subscription, beginning from the date on which the customer is granted access to our Video Experience Cloud. Revenue from the sale of a term license is recognized at a point in time in which the license is delivered to the customer. Revenue from post-contract services ("PCS") included in On-Prem deals is recognized ratably over the period of the PCS.

Previous wording

Cost of revenue decreased in absolute dollars in the three and six months ended June 30, 2026 from the three and six months ended June 30, 2025. For the three months ended June 30, 2026 and 2025, and for the six months ended June 30, 2026 and 2025, our cost of revenue was $12,357, $13,243, $24,874 and $27,491, respectively.

Current wording

For the three months ended September 30, 2026 and 2025, and for the nine months ended September 30, 2026 and 2025, our cost of revenue was $13,331, $13,139, $38,206 and $40,629, respectively.

Previous wording

Gross margins have improved year-over-year since 2020, and while this measure has and will continue to vacillate between quarters, we expect it to continue the growth trend in the coming years. Gross margins have been, and will continue to be, affected by a variety of factors, including the average sales price of our products and services, volume growth, the mix of revenue between software licenses, maintenance and support, professional services, onboarding of new media and telecom customers, hosting of major virtual events, and changes in cloud infrastructure and personnel costs. In particular, the gross margins in the M&T segment are lower than in the EE&T segment because of resources required for implementing solutions for TV experiences, which generally exceed those of other offerings. This results in a longer period for M&T from initial booking to go-live and a higher proportion of professional services revenue as a percentage of overall revenue. Additionally, a higher proportion of M&T revenue comes from customers who choose to license our offerings through private cloud and on-premise deployments, which also impacts our M&T gross margin. Going forward, over the long term, we expect to see a gradual improvement in gross margins for both EE&T and M&T, driven by enhanced efficiencies in both production and professional services costs.

Current wording

Gross margins have improved year-over-year since 2020, and while this measure has and will continue to vacillate between quarters, we expect it to continue the growth trend in the coming years. Gross margins have been, and will continue to be, affected by a variety of factors, including the average sales price of our products and services, volume growth, the mix of revenue between software licenses, maintenance and support, professional services, onboarding of new media and telecom customers, hosting of major virtual events, and changes in cloud infrastructure and personnel costs. In particular, the gross margins in the M&T segment are lower than in the EE&T segment because of resources required for implementing solutions for TV experiences, which generally exceed those of other offerings. This results in a longer period for M&T from initial booking to go-live and a higher proportion of professional services revenue as a percentage of overall revenue. Additionally, a higher proportion of M&T revenue comes from customers who choose to license our offerings through private cloud and on-premise deployments, which also impacts our M&T gross margin. Going forward, over the long term, we expect to see an improvement in gross margins for both EE&T and M&T, driven by enhanced efficiencies in both production and professional services costs.

Previous wording

For the three months ended June 30, 2026 and 2025, our gross margins were 74% (78% for subscriptions and (99)% for professional services) and 70% (77% for subscriptions and (73)% for professional services), respectively. For the six months ended June 30, 2026 and 2025, our gross margins were 73% (78% for subscriptions and (96)% for professional services) and 70% (77% for subscriptions and (77)% for professional services), respectively.

Current wording

For the three months ended September 30, 2026 and 2025, our gross margins were 72% (77% for subscriptions and (100)% for professional services) and 70% (77% for subscriptions and (74)% for professional services), respectively. For the nine months ended September 30, 2026 and 2025, our gross margins were 72% (78% for subscriptions and (97)% for professional services) and 70% (77% for subscriptions and (77)% for professional services), respectively.

Previous wording

For our EE&T segment, gross margins for the three months ended June 30, 2026 and 2025, were 79% (84% for subscription and (348)% for professional services), and 78% (84% for subscription and (226)% for professional services), respectively. For the six months ended June 30, 2026 and 2025, our gross margins for our EE&T segment were 78% (83% for subscriptions and (322)% for professional services) and 78% (84% for subscriptions and (192)% for professional services), respectively.

Current wording

For our EE&T segment, gross margins for the three months ended September 30, 2026 and 2025, were 77% (82% for subscription and (350)% for professional services), and 76% (82% for subscription and (317)% for professional services), respectively. For the nine months ended September 30, 2026 and 2025, our gross margins were 78% (83% for subscriptions and (331)% for professional services) and 77% (83% for subscriptions and (225)% for professional services), respectively.

Previous wording

For our M&T segment, gross margins for the three months ended June 30, 2026 and 2025 were 53% (57% for subscriptions and 9% for professional services) and 48% (55% for subscriptions and (1)% for professional services), respectively. For the six months ended June 30, 2026 and 2025, our gross margins for our M&T segment were 53% (58% for subscription and 9% for professional services) and 48% (56% for subscription and (14)% for professional services), respectively.

Current wording

For our M&T segment, gross margins for the three months ended September 30, 2026 and 2025 were 53% (56% for subscriptions and 16% for professional services) and 54% (58% for subscriptions and 20% for professional services), respectively. For the nine months ended September 30, 2026 and 2025, our gross margins were 53% (57% for subscription and 11% for professional services) and 50% (57% for subscription and (2)% for professional services), respectively.

Previous wording

Our research and development expenses consist primarily of costs incurred for personnel-related expenses for our technical staff, including salaries and other direct personnel-related costs. Additional expenses include consulting and professional fees for third-party development resources and software subscriptions. We expect our research and development expenses to gradually decrease as a percentage of revenue. Subsequent costs incurred for the development of future upgrades and enhancements, which are expected to result in additional functionality, may qualify for capitalization under internal-use software and therefore may cause research and development expenses to fluctuate.

Current wording

Our research and development expenses consist primarily of costs incurred for personnel-related expenses for our technical staff, including salaries and other direct personnel-related costs. Additional expenses include consulting and professional fees for third-party development resources and software subscriptions. Going forward, over the long term, we expect our research and development expenses to decrease as a percentage of revenue. Subsequent costs incurred for the development of future upgrades and enhancements, which are expected to result in additional functionality, may qualify for capitalization under internal-use software and therefore may cause research and development expenses to fluctuate.

Previous wording

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

Current wording

Additional expenses include marketing program costs and amortization of acquired customer relationships intangible assets. Going forward, over the long term, we expect our sales and marketing expenses to increase as a percentage of revenue.

Previous wording

Our general and administrative expenses consist primarily of personnel-related costs for our executive, finance, human resources, information technology, and legal functions, including salaries and other direct personnel-related costs. Additional expenses include costs for other operational and administrative functions, professional fees for external legal, accounting, and consulting services, directors’ and officers’ insurance, and strategic initiatives. We expect our general and administrative expenses to gradually decrease as a percentage of revenue.

Current wording

Our general and administrative expenses consist primarily of personnel-related costs for our executive, finance, human resources, information technology, and legal functions, including salaries and other direct personnel-related costs. Going forward, over the long term, we expect our general and administrative expenses to decrease as a percentage of revenue.

Previous wording

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

Current wording

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

Previous wording

•Enterprise, Education & Technology (78% and 75% of revenue for the three months ended June 30, 2026 and 2025, respectively, and 78% and 74% for the six months ended June 30, 2026 and 2025, respectively): Our EE&T segment represents revenues from all of our products, industry solutions for education customers, and Media Services (except for M&T customers), as well as associated professional services for those offerings.

Current wording

•Enterprise, Education & Technology (78% and 74% of revenue for the three months ended September 30, 2026 and 2025, respectively, and 78% and 74% for the nine months ended September 30, 2026 and 2025): Our EE&T segment represents revenues from all of our products, industry solutions for education customers, and Media Services (except for M&T customers), as well as associated professional services for those offerings.

Previous wording

•Media & Telecom (22% and 25% of revenue for the three months ended June 30, 2026 and 2025, respectively, and 22% and 26% for the six months ended June 30, 2026 and 2025, respectively): Our M&T segment primarily represents revenues from our TV Solution and Media Services sold to media and telecom customers.

Current wording

•Media & Telecom (22% and 26% of revenue for the three months ended September 30, 2026 and 2025, respectively, and 22% and 26% for the nine months ended September 30, 2026 and 2025): Our M&T segment primarily represents revenues from our TV Solution and Media Services sold to media and telecom customers.

Previous wording

EE&T revenue increased by $3.6 million, or 11%, to $36.8 million for the three months ended June 30, 2026, from $33.2 million for the three months ended June 30, 2025. The increase was primarily driven by a $5.2 million increase in revenue from new customers, partially offset by a $1.6 million decrease in revenue from existing customers. These figures include contributions from the PathFactory acquisition.

Current wording

EE&T revenue increased by $4.6 million, or 14% to $36.9 million for the three months ended September 30, 2026, from $32.4 million for the three months ended September 30, 2025. The increase is mainly attributable to a $5.4 million increase in revenue generated from new customers, partially offset by $0.8 million decrease in revenue from existing customers. These figures include contributions from the PathFactory acquisition.

Previous wording

EE&T subscription revenue increased by $3.9 million, or 12%, to $36.4 million for the three months ended June 30, 2026, from $32.6 million for the three months ended June 30, 2025.

Current wording

EE&T gross profit increased by $3.9 million, or 16%, to $28.5 million for the three months ended September 30, 2026, from $24.5 million for the three months ended September 30, 2025. The increase was primarily driven by higher revenue and a lower proportion of personnel-related costs included in cost of revenues.

Previous wording

EE&T professional services gross loss decreased by $0.1 million, or 3%, to a gross loss of $2.7 million for the six months ended June 30, 2026, from a gross loss of $2.8 million for the six months ended June 30, 2025.

Current wording

EE&T professional services gross loss decreased by $0.2 million, or 11%, to a gross loss of $1.5 million for the three months ended September 30, 2026, from a gross loss of $1.7 million for the three months ended September 30, 2025.

Previous wording

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

Current wording

M&T revenue decreased by $1.2 million, or 10%, to $10.3 million for the three months ended September 30, 2026, from $11.5 million for the three months ended September 30, 2025. The decrease is mainly attributable to a $1.3 million decrease in revenue from existing customers, partially offset by $0.2 million increase in revenue from new customers.

Previous wording

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

Current wording

M&T professional services revenue decreased by $0.4 million, or 32% to $0.9 million for the three months ended September 30, 2026, from $1.4 million for the three months ended September 30, 2025.

Previous wording

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

Current wording

M&T gross profit decreased by $0.7 million, or 12%, to $5.4 million for the three months ended September 30, 2026, from $6.2 million for the three months ended September 30, 2025. The decrease was primarily driven by lower revenue, partially offset by a lower proportion of personnel-related costs included in cost of revenues.

Previous wording

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

Current wording

M&T professional services gross profit decreased by $0.1 million, or 47%, to $0.1 million for the three months ended September 30, 2026, from $0.3 million for the three months ended September 30, 2025.

Previous wording

Research and development expenses increased by $1.1 million, or 10%, to $12.7 million for the three months ended June 30, 2026, from $11.6 million for the three months ended June 30, 2025. The increase was primarily due to a $0.6 million increase in compensation expenses mainly due to the impact of the depreciation of the U.S. dollar against the New Israeli Shekel compared to the prior-year period and a $0.2 million increase in subcontractor and consultants costs, mainly due to additional resources following the acquisition of PathFactory. In addition, research and development expenses were impacted by a $0.3 million increase in IT related expenses, also attributable to software applications supporting the operations of the acquired PathFactory business.

Current wording

Research and development expenses increased by $1.0 million, or 9%, to $12.5 million for the three months ended September 30, 2026, from $11.5 million for the three months ended September 30, 2025. The increase was primarily attributable to a $0.8 million increase in compensation expenses, mainly driven by the depreciation of the U.S. dollar against the New Israeli Shekel compared to the prior-year period and a higher proportion of personnel-related costs attributable to research and development, partially offset by the capitalization of compensation costs related to the development of internal-use software. The increase also reflected a $0.3 million increase in IT-related costs, primarily attributable to higher utilization of third-party generative artificial intelligence services and tools.

Previous wording

Sales and marketing expenses increased by $1.3 million, or 11%, to $12.8 million for the three months ended June 30, 2026, from $11.5 million for the three months ended June 30, 2025. The increase was primarily driven by a $0.5 million increase in compensation expenses, mainly due to organizational realignment initiatives, including the reclassification of certain personnel into the sales organization, partially offset by a decrease in commission expenses. In addition, other expenses increased by $0.7 million, primarily due to higher IT-related expenses associated with software applications supporting the operations of the acquired PathFactory business, as well as higher amortization expense related to the identified intangible assets recognized as part of the PathFactory purchase price allocation.

Current wording

Sales and marketing expenses increased by $1.0 million, or 9%, to $12.0 million for the three months ended September 30, 2026, from $11.0 million for the three months ended September 30, 2025. The increase was primarily due to a $0.2 million increase in compensation expenses, mainly due to changes in the allocation of certain employee-related costs to Sales and Marketing. In addition, IT-related costs increased by $0.2 million, primarily due to higher expenses associated with software applications supporting the operations of the acquired PathFactory business, and other expenses increased by $0.3 million mainly due to amortization of identified intangible assets recognized as part of the PathFactory purchase price allocation.

Previous wording

Financial expense, net decreased by $2.3 million, or 49%, to $2.3 million expense for the three months ended June 30, 2026, from $4.6 million expense for the three months ended June 30, 2025. The decrease was primarily due to $2.1 million related to exchange rate differences.

Current wording

Financial Income, net increased by $0.6 million, to $0.7 million for the three months ended September 30, 2026, from $0.1 million for the three months ended September 30, 2025. The increase was primarily due to $0.9 million related to exchange rate differences.

Previous wording

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

Current wording

Provision for income taxes increased by $0.4 million, or 29%, to $1.6 million for the three months ended September 30, 2026, from $1.2 million for the three months ended September 30, 2025, primarily due to increased tax liability related to income generated by our subsidiaries organized under the laws of Israel and the United Kingdom.

Previous wording

Total EE&T revenue increased by $3.3 million, or 5%, to $71.0 million for the six months ended June 30, 2026, from $67.7 million for the six months ended June 30, 2025. The increase was primarily driven by a $5.5 million increase in revenue from new customers, partially offset by $2.2 million decrease in revenue from existing customers. These figures include contributions from the PathFactory acquisition.

Current wording

Total EE&T revenue increased by $7.9 million, or 8%, to $107.9 million for the nine months ended September 30, 2026, from $100.0 million for the nine months ended September 30, 2025. The increase was primarily driven by a $10.8 million increase in revenue from new customers, partially offset by $2.9 million decrease in revenue from existing customers. These figures include contributions from the PathFactory acquisition.

Previous wording

EE&T gross profit increased by $3.3 million, or 6%, to $55.7 million for the six months ended June 30, 2026, from $52.4 million for the six months ended June 30, 2025. This increase was mainly due to a $3.3 million increase in revenue and reduction in compensation costs, from improved operational efficiency, driven by workforce reductions.

Current wording

EE&T gross profit increased by $7.2 million, or 9%, to $84.2 million for the nine months ended September 30, 2026, from $77.0 million for the nine months ended September 30, 2025. This increase was mainly due to a $7.9 million increase in revenue and reduction in compensation costs, from improved operational efficiency, driven by workforce reductions.

Previous wording

EE&T professional services gross loss decreased by $0.2 million, or 13%, to $1.3 million for the three months ended June 30, 2026, from $1.5 million for the three months ended June 30, 2025.

Current wording

EE&T professional services gross loss decreased by $0.3 million, or 6%, to a gross loss of $4.2 million for the nine months ended September 30, 2026, from a gross loss of $4.5 million for the nine months ended September 30, 2025.

Previous wording

M&T revenue decreased by $3.2 million, or 14%, to $20.6 million for the six months ended June 30, 2026, from $23.8 million for the six months ended June 30, 2025. The decrease is mainly attributable to a decrease in revenue from existing customers.

Current wording

M&T revenue decreased by $4.4 million, or 12%, to $30.9 million for the nine months ended September 30, 2026, from $35.3 million for the nine months ended September 30, 2025. This decrease is mainly attributable to a $4.6 million decrease in revenue from existing customers, partially offset by $0.2 million increase in revenue from new customers.

Previous wording

M&T professional services gross profit increased by $0.5 million, or 143%, to $0.2 million profit for the six months ended June 30, 2026, from a $0.4 million gross loss for the six months ended June 30, 2025.

Current wording

M&T professional services gross profit increased by $0.4 million, or 410%, to $0.3 million profit for the nine months ended September 30, 2026, from $0.1 million gross loss for the nine months ended September 30, 2025.

Previous wording

Research and development expenses decreased by $0.2 million, or 1%, to $23.4 million for the six months ended June 30, 2026, from $23.7 million for the six months ended June 30, 2025. The decrease was primarily due to a $0.3 million decrease in compensation expenses, largely driven by capitalization of compensation costs related to the development of internal use software, partially offset by impact of the depreciation of the U.S. dollar against the New Israeli Shekel.

Current wording

Research and development expenses increased by $0.8 million, or 2%, to $35.9 million for the nine months ended September 30, 2026, from $35.1 million for the nine months ended September 30, 2025. The increase was primarily due to a $0.5 million increase in compensation expenses, mainly driven by the depreciation of the U.S. dollar against the New Israeli Shekel compared to the prior-year period and a higher proportion of personnel-related costs attributable to research and development, partially offset by the capitalization of compensation costs related to the development of internal-use software. The increase also reflected a $0.5 million increase in IT-related costs, primarily attributable to higher utilization of third-party generative artificial intelligence services and tools.

Previous wording

Sales and marketing expenses increased by $1.2 million, or 5%, to $24.7 million for the six months ended June 30, 2026, from $23.4 million for the six months ended June 30, 2025. The increase was primarily due to a $0.6 million increase in compensation expenses, mainly due to organizational realignment initiatives, including the reclassification of certain personnel into the sales organization, partially offset by a decrease in commission expenses. In addition, other expenses increased by $0.8 million, primarily due to higher IT-related expenses associated with software applications supporting the operations of the acquired PathFactory business, as well as higher amortization expense related to the identified intangible assets recognized as part of the PathFactory purchase price allocation.

Current wording

Sales and marketing expenses increased by $2.2 million, or 6%, to $36.7 million for the nine months ended September 30, 2026, from $34.5 million for the nine months ended September 30, 2025. The increase was primarily due to a $0.8 million increase in compensation expenses mainly due to organizational realignment initiatives, including the reclassification of certain personnel into the sales organization, partially offset by a decrease in commission expenses. In addition, other expenses increased by $0.8 million, primarily due to higher IT-related expenses associated with software applications supporting the operations of the acquired PathFactory business, as well as higher amortization expense related to the identified intangible assets recognized as part of the PathFactory purchase price allocation.