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01/10 16:59
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call highlights a mixed outlook. On the positive side, there is a reaffirmation of strong revenue projections, growth in CTV and data licensing, and strategic partnerships like VIDAA, which are promising. However, concerns arise from DSP headwinds, competitive pressures, and unclear responses from management on specific metrics. The Q&A reveals efforts to mitigate these challenges, but uncertainties remain. The lack of specific guidance on certain aspects and the focus on future growth rather than immediate results suggest a neutral sentiment, with potential for slight positive or negative movement.
Contribution ex-TAC $92.6 million, a Q3 record, reflecting an 8% increase year-over-year or 14% ex political. Growth was driven by data product, self-service, desktop and mobile alongside increases across our health, business and finance verticals.
Programmatic Revenue $89.6 million, up 10% year-over-year or 15% ex political. Growth was driven by data product, self-service, desktop and mobile alongside increases across our health, business and finance verticals.
CTV Revenue $24.5 million, declined 17% year-over-year in Q3 or 13% ex political. Results were impacted by decreased activity from select third-party DSP partners within our OMP and PMP channels, tariff-related spending reductions from certain customers and more competitive CTV CPMs.
Desktop Revenue Increased 67% year-over-year. Growth attributed to targeting tools helping advertisers find audiences across devices.
Mobile Revenue Rose 3% year-over-year. Growth attributed to targeting tools helping advertisers find audiences across devices.
Self-Service Contribution ex-TAC Grew 11% year-over-year amid greater enterprise DSP adoption.
Data Products Contribution ex-TAC Increased 154% year-over-year.
Adjusted EBITDA $28.1 million in Q3, reflecting a 30% adjusted EBITDA margin as a percentage of contribution ex-TAC. Confidence in margin expansion over time through contribution ex-TAC growth, cost discipline, and anticipated benefits from AI initiatives.
Net Cash from Operating Activities $35.8 million in Q3 compared to $39.9 million in Q3 2024.
Cash and Cash Equivalents $116.7 million as of September 30, with no long-term debt and $50 million undrawn on revolving credit facility.
Non-IFRS Diluted Earnings Per Share $0.20 in Q3 compared to $0.27 in Q3 2024 on a post-reverse split basis.
Nexxen Discovery: Proprietary data assets like Nexxen Discovery have been central to agency and brand conversations, enabling advertisers to uncover, build, and activate high-performing audiences at scale. It has become a competitive advantage with enhanced usability and adoption.
Programmatic Smart TV Home Screen Activation: Launched the industry's first solution for programmatic Smart TV home screen activation, providing direct access to native Smart TV inventory via Nexxen SSP. This innovation is exclusive to Nexxen and differentiates it from competitors.
VIDAA Partnership: Renewed and expanded partnership with VIDAA through 2029, securing exclusive global access to ACR data and third-party ad monetization exclusivity in North America. This positions Nexxen as a key player in targeting and measurement data.
Yahoo! DSP Integration: ACR audience segments are now available for targeting in the Yahoo! DSP, paving the way for licensing growth in 2026 and beyond.
DSP Enhancements: Improved buying algorithms and automated budget optimization in the DSP, lowering media costs and increasing return on ad spend. NexAI DSP assistant has enhanced real-time insights and usability, with efficiency gains of up to 97%.
Omnichannel DSP Investments: Continued investments in omnichannel DSP, enhancing automation, performance, and user experience to attract more enterprise partners.
Strategic Shift to Self-Service DSP: Focusing on revenue from omnichannel self-service DSP and data products, reducing reliance on third parties and creating end-to-end revenue opportunities.
AI and Data Integration: Deepening AI integration and expanding data capabilities to enhance usability and performance, positioning Nexxen for long-term growth.
Lowered Financial Guidance: The company has reduced its full-year 2025 guidance due to several factors, including lower-than-expected activity from certain third-party DSP partners, competitive CTV CPMs, and reduced spending from some customers. This reflects near-term financial headwinds.
Softness in Select Channels: There is reduced activity in certain channels, particularly within the Nexxen SSP, due to changes in spending behavior from a major DSP customer and macroeconomic factors like tariffs.
Decline in CTV Revenue: CTV revenue declined 17% year-over-year in Q3, driven by decreased activity from third-party DSP partners, tariff-related spending reductions, and more competitive CPMs.
Non-Programmatic Business Weakness: The non-programmatic business line experienced a year-over-year decline of $1 million in contribution ex-TAC, and the company is actively evaluating options for this segment.
Reliance on Third-Party DSPs: The company faces challenges due to its reliance on third-party DSPs, which have tightened SPO strategies and reduced spending in certain channels.
Macroeconomic and Tariff-Related Pressures: Macroeconomic softness and tariff-related spending reductions have impacted customer spending, particularly in CTV and other channels.
Competitive Pressures in CTV CPMs: More competitive CTV CPMs have created pricing pressures, impacting revenue and profitability in this segment.
Reduced Spending in Key Verticals: There has been reduced spending in government, retail, and education verticals, which has negatively impacted revenue.
Revenue Guidance: Nexxen has lowered its full-year 2025 guidance, now expecting contribution ex-TAC in the range of $350 million to $360 million, adjusted EBITDA in the range of $113 million to $117 million, and programmatic revenue to represent roughly 95% of total revenue. This reflects a contribution ex-TAC growth of approximately 3% at the midpoint or 6% ex-political, and programmatic revenue growth of approximately 6% at the midpoint or 9% ex-political.
2026 Growth Expectations: Nexxen anticipates significant CTV revenue growth opportunities in 2026 and beyond, supported by the renewal and expansion of its strategic partnership with VIDAA. Contribution ex-TAC from the VIDAA partnership is expected to increase in 2026, driven by ACR data licensing revenue, exclusive third-party ad monetization opportunities, and the launch of the programmatic Smart TV home screen activation solution.
Strategic Investments and Innovations: In 2026, Nexxen plans to release new DSP innovations, expand infrastructure and capacity, and deepen AI integration to enhance usability and performance. The company is also enhancing its CTV capabilities through innovative product launches, such as the programmatic Smart TV home screen activation solution, and entering new scaled mobile in-app partnerships.
AI and Data Integration: Nexxen expects the adoption of nexAI to grow, driving operational efficiency, adjusted EBITDA growth, and margin expansion over time. Continued investments in AI, data, and technology are planned to reinforce platform advantages and differentiation.
Market Positioning and Partnerships: Nexxen is aggressively pursuing new sizable strategic commercial partnerships leveraging its VIDAA exclusivities and first-to-market programmatic Smart TV home screen activation solution. These efforts aim to secure large spend commitments, greater enterprise adoption, and scale licensing opportunities.
Share Repurchase Program: We repurchased roughly 1.8 million shares in Q3, investing approximately $18.1 million through our now completed $50 million program and recently launched $20 million program. From March 2022 through the end of Q3 2025, we repurchased roughly 36.6% of outstanding shares, investing approximately $247.4 million. As of October 31, approximately $13.9 million remained under our authorization, and we intend to evaluate implementing a new repurchase program following completion of our current program.
The earnings call highlights a mixed outlook. On the positive side, there is a reaffirmation of strong revenue projections, growth in CTV and data licensing, and strategic partnerships like VIDAA, which are promising. However, concerns arise from DSP headwinds, competitive pressures, and unclear responses from management on specific metrics. The Q&A reveals efforts to mitigate these challenges, but uncertainties remain. The lack of specific guidance on certain aspects and the focus on future growth rather than immediate results suggest a neutral sentiment, with potential for slight positive or negative movement.
The earnings call summary and Q&A highlight several positive aspects: strong year-over-year EPS growth, a substantial share repurchase program, and confidence in meeting financial guidance. The Q&A reveals optimism about the NexAI product and CTV growth, despite current challenges. The company's strategic focus on partnerships and data licensing also points to future growth potential. While there are some uncertainties, such as the impact of Google's antitrust case and VIDAA's ramp-up, the overall sentiment is positive, suggesting a likely stock price increase in the near term.
The earnings call highlights strong financial performance, particularly in CTV revenue and adjusted EBITDA growth. The share repurchase program and improved profitability are positive indicators. Despite some caution due to macroeconomic uncertainties, the guidance remains optimistic, especially with the anticipated growth in CTV. The Q&A reveals some management caution but also confidence in diversified growth and strategic partnerships. Overall, the positive financial metrics and strategic initiatives suggest a likely positive stock price movement.
Nexen's earnings call highlights strong financial performance, with significant growth in key metrics such as contribution ex-TAC, programmatic revenue, and CTV revenue. The company also raised its adjusted EBITDA guidance, indicating confidence in future growth. Share repurchase programs and strategic partnerships further bolster positive sentiment. The Q&A session revealed no significant risks or uncertainties, and management's focus on execution and strategic partnerships is reassuring. Overall, the positive financial results and strategic initiatives suggest a positive stock price movement in the short term.
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