по - целовать - сь
по-: makes the word perfective.
-целовать-: base word "to kiss" (modified to "целовали" to signify past tense for the plural subject "они").
-сь: The subject that is being learned in this lesson, signifies that this is happening to itself (or, to be more technical, is in the reflexive).
Which then makes the word "поцеловались".
Both this and the previous sentence seem a bit clumsy when translated into English. My Russian isn't brilliant, hence why I'm here, but I often feel there's a subtlety of expression in the language that English (or at least my English!) lacks.