Q1 2025 Performance Overview The company's Q1 2025 performance saw significant revenue and gross profit growth post-Teads acquisition, despite an increased net loss due to one-time costs Key Financial Metrics Q1 2025 saw revenue grow 32% to $286.4 million and Ex-TAC gross profit rise 98% to $103.1 million, with Adjusted EBITDA up 665% to $10.7 million, though net loss increased to $54.8 million due to acquisition costs Q1 2025 Key Financial Metrics (in millions USD) | | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $286.4 | $217.0 | 32% | | Gross profit | $82.7 | $41.6 | 99% | | Net loss | $(54.8) | $(5.0) | NM | | Ex-TAC gross profit | $103.1 | $52.2 | 98% | | Adjusted EBITDA | $10.7 | $1.4 | 665% | | Free cash flow | $(6.6) | $4.6 | (242)% | - CEO David Kostman highlighted a strong start post-Teads combination, noting that the company delivered financial results above the mid-range of its guidance while achieving major integration and synergy milestones3 Business Highlights Q1 business highlights include the successful Teads acquisition, increased synergy expectations of $40 million for 2025, over 100% CTV revenue growth, and new strategic brand partnerships - Completed the acquisition of Teads for approximately $900 million, consisting of $625 million in cash and 43.75 million shares of Outbrain common stock5 - Expects to realize $65 million to $75 million of synergies in 2026, with an increased benefit of approximately $40 million from cost synergies expected in 20255 - CTV (Connected TV) revenue grew by more than 100% year-over-year in Q1 2025, now accounting for about 5% of total ad spend7 - Secured new strategic Joint Business Partnerships (JBPs) with major brands including Ferrero, Haleon, Philip Morris International, and Beiersdorf7 Financial Highlights & Liquidity Q1 financials were significantly impacted by the Teads acquisition, leading to a $54.8 million net loss due to one-time charges, while liquidity stands at $155.9 million cash with $627.0 million total debt - Net loss of $54.8 million was driven by several one-time, pre-tax charges: $16.4 million in acquisition-related costs, $15.6 million in impairment charges (related to discontinuing the vi product), $7.3 million in restructuring charges, and $12.0 million in bridge facility costs7 - As of March 31, 2025, the company held $155.9 million in cash, cash equivalents, and marketable securities10 - Total debt obligations stood at $627.0 million, primarily from $610.8 million in senior secured notes due 2030 issued to finance the acquisition10 - Entered a new credit agreement for a $100.0 million super senior secured revolving credit facility, expiring in 2030, for working capital and general corporate purposes10 Financial Outlook The company provides its financial guidance for the second quarter and full year 2025, projecting key non-GAAP metrics Second Quarter and Full Year 2025 Guidance The company projects Q2 2025 Ex-TAC gross profit between $141 million and $150 million, Adjusted EBITDA between $26 million and $34 million, and reiterates full-year Adjusted EBITDA of at least $180 million Q2 2025 Guidance (Non-GAAP) | Metric | Guidance Range (in millions) | | :--- | :--- | | Ex-TAC gross profit | $141 - $150 | | Adjusted EBITDA | $26 - $34 | - For the full year ending December 31, 2025, the company continues to expect Adjusted EBITDA of at least $180 million8 Consolidated Financial Statements (Unaudited) This section provides the unaudited consolidated financial statements, detailing the company's operational results, financial position, and cash movements Condensed Consolidated Statements of Operations Q1 2025 revenue grew to $286.4 million, but increased operating expenses and interest led to a net loss of $54.8 million, or ($0.70) per share, compared to a $5.0 million loss in Q1 2024 Q1 2025 Statement of Operations Summary (in thousands USD) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenue | $286,357 | $216,964 | | Gross Profit | $82,650 | $41,595 | | Loss from operations | $(44,436) | $(6,597) | | Net loss | $(54,843) | $(5,041) | | Diluted Net loss per share | $(0.70) | $(0.10) | Condensed Consolidated Balance Sheets The March 31, 2025 balance sheet reflects a significant expansion post-Teads acquisition, with total assets surging to $1.69 billion and total liabilities increasing to $1.21 billion due to new debt Balance Sheet Summary (in thousands USD) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $534,082 | $343,131 | | Goodwill | $587,494 | $63,063 | | Intangible assets, net | $391,022 | $16,928 | | TOTAL ASSETS | $1,688,040 | $549,213 | | Total Current Liabilities | $472,545 | $289,471 | | Long-term debt | $610,816 | $— | | TOTAL LIABILITIES | $1,213,375 | $317,870 | | TOTAL STOCKHOLDERS' EQUITY | $474,665 | $231,343 | Condensed Consolidated Statements of Cash Flows Q1 2025 cash flows show $1.0 million used in operations, a $598.3 million outflow for the Teads acquisition, and $596.1 million provided by financing, ending with $138.5 million in cash Q1 2025 Cash Flow Summary (in thousands USD) | | Three Months Ended March 31, 2025 | | :--- | :--- | | Net cash (used in) provided by operating activities | $(966) | | Net cash used in investing activities | $(546,320) | | Net cash provided by financing activities | $596,094 | | Net increase in cash | $48,751 | Non-GAAP Financial Measures & Reconciliations This section defines and reconciles the company's non-GAAP financial measures, including Ex-TAC Gross Profit, Adjusted EBITDA, and Free Cash Flow, to GAAP results Explanation of Non-GAAP Measures The company uses non-GAAP measures like Ex-TAC Gross Profit, Adjusted EBITDA, and Free Cash Flow to assess core operating performance by excluding specific non-recurring or non-cash expenses - Ex-TAC gross profit is a key profitability measure calculated by adding other cost of revenue back to GAAP gross profit, used to evaluate operating performance and trends1415 - Adjusted EBITDA is defined as net income (loss) adjusted for interest, taxes, depreciation & amortization, stock-based compensation, and other non-core expenses such as acquisition-related costs and restructuring charges16 - Free cash flow is defined as cash flow from operating activities minus capital expenditures and capitalized software development costs, used to evaluate the ability to generate cash19 Reconciliations of Non-GAAP to GAAP Measures Detailed Q1 2025 reconciliations show GAAP Gross Profit of $82.7 million to Ex-TAC Gross Profit of $103.1 million, Net Loss of $54.8 million to Adjusted EBITDA of $10.7 million, and Free Cash Flow of negative $6.6 million Reconciliation of Gross Profit to Ex-TAC Gross Profit (Q1 2025, in thousands) | | Amount | | :--- | :--- | | Gross profit (GAAP) | $82,650 | | Add: Other cost of revenue | $20,472 | | Ex-TAC gross profit (Non-GAAP) | $103,122 | Reconciliation of Net Loss to Adjusted EBITDA (Q1 2025, in thousands) | | Amount | | :--- | :--- | | Net loss (GAAP) | $(54,843) | | Adjustments (Interest, Taxes, D&A, etc.) | $12,873 | | Stock-based compensation | $2,941 | | Acquisition-related costs | $16,418 | | Restructuring charges | $7,279 | | Impairment charges | $15,614 | | Other adjustments | $23,227 | | Adjusted EBITDA (Non-GAAP) | $10,689 | Reconciliation to Free Cash Flow (Q1 2025, in thousands) | | Amount | | :--- | :--- | | Net cash used in operating activities (GAAP) | $(966) | | Purchases of property and equipment | $(2,921) | | Capitalized software development costs | $(2,699) | | Free cash flow (Non-GAAP) | $(6,586) |
Outbrain (OB) - 2025 Q1 - Quarterly Results