The chart below shows how OB performed 10 days before and after its earnings report, based on data from the past quarters. Typically, OB sees a +10.70% change in stock price 10 days leading up to the earnings, and a -1.54% change 10 days following the report. On the earnings day itself, the stock moves by -1.98%. This data can give you a slight idea of what to expect for the next quarter's release.
Positive
Teads Acquisition Completion: Acquisition of Teads closed, combining expertise in branding and performance with video and branding solutions.
Free Cash Flow Growth: Record free cash flow generated in Q4, continuing a positive trajectory.
Advertiser Spend Growth: Direct response advertisers embraced Outbrain DSP, leading to a 45% growth in advertiser spend in 2024.
Supply Revenue Increase: Revenue from supply beyond traditional feed increased to 30% in Q4 2024, up from 26% in Q4 2023.
Moments Vertical Video Launch: Launch of Moments vertical video experience with over 40 media owners, showing strong initial user engagement.
Strategic Partnership Expansion: Renewed agreements with key publishing partners and secured new business partnerships, demonstrating strong value proposition.
AI Adoption in Creative Automation: Over 70% of customer base utilized AI-based Creative Automation suite, enhancing targeted creatives.
Global User Base Expansion: Exceptional global reach with over 2 billion unique users and strong partnerships with premium brands.
Strong Profit and Cash Flow: Achieved Q4 guidance for gross profit and adjusted EBITDA, with significant free cash flow generation.
EBITDA Growth and Margin Improvement: Adjusted EBITDA grew 21% year-over-year to $17 million, reflecting margin improvement.
Strong Free Cash Flow: Free cash flow of approximately $38 million in Q4 and $51 million for the year, ending with $166 million in cash and no debt.
Post-Merger Synergy Impact: Estimated annual impact of $65 million to $75 million from synergies post-merger, with half already secured.
Q1 Financial Guidance: Guidance for Q1 Ex TAC gross profit of $100 million to $105 million and adjusted EBITDA of $8 million to $12 million.
Negative
Q4 Revenue Decline: Revenue in Q4 was approximately $235 million, reflecting a decrease of 5% year-over-year.
Net Revenue Retention Decline: Net revenue retention of our publishers was 86%, which reflects downward pressure of ad impressions, particularly from one key supply partner.
Operating Expenses Increase: Operating expenses increased year-over-year, predominantly driven by one-time costs of $5.5 million related to our transaction with Teads.
Impact of Partner Transition: While Ex TAC gross profit continued year-over-year growth in Q4, one of our key partners transitioned to new bidding technology, impacting overall growth in Q4 by a high single-digit percentage.
Gross Profit Decline Outlook: We expect Ex TAC gross profit to decline year-over-year in Q1, indicating ongoing challenges in revenue generation post-merger.
Outbrain Inc. (NASDAQ:OB) Q4 2024 Earnings Call Transcript
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