Outbrain Announces Third Quarter 2024 Results

Core Insights - Outbrain Inc. reported strong financial results for Q3 2024, achieving guidance on Ex TAC gross profit and exceeding Adjusted EBITDA expectations, with improved margins and profitability, generating positive cash flow for the fifth consecutive quarter [1][4]. Financial Performance - Revenue for Q3 2024 was $224.2 million, a decrease of 3% from $230.0 million in Q3 2023 [2][4]. - Gross profit increased by 5% to $48.9 million compared to $46.4 million in the prior year, with gross margin rising to 21.8% from 20.2% [2][4]. - Ex-TAC gross profit was $59.7 million, up 5% from $56.8 million year-over-year, with Ex-TAC gross margin improving to 26.6% from 24.7% [2][4]. - Net income for the quarter was $6.7 million, compared to $0.5 million in the same period last year, reflecting a significant improvement [2][4]. - Adjusted EBITDA reached $11.5 million, a 12% increase from $10.3 million in Q3 2023 [2][4]. Cash Flow and Investments - The company generated net cash from operating activities of $13.7 million, a 97% increase from $6.9 million in the prior year [2][4]. - Free cash flow was reported at $8.7 million, compared to $1.8 million in Q3 2023, marking a 387% increase [2][4]. - As of September 30, 2024, cash, cash equivalents, and investments in marketable securities totaled $130.5 million [4]. Business Highlights - The total advertiser spend on Outbrain's platform increased by 6% year-over-year in Q3 2024 [3]. - The Outbrain DSP (previously known as Zemanta) saw a growth of approximately 60% year-to-date through September 30, 2024, compared to the prior year [3]. - The beta launch of "Moments" by Outbrain was announced, aimed at enhancing user interaction with traditional media content [3]. - Supply expansion outside of traditional feed products represented approximately 28% of revenue in Q3 2024, up from 26% in Q3 2023 [3]. Future Outlook - The company has increased its outlook for Adjusted EBITDA for FY 2024, expecting Ex-TAC gross profit for Q4 2024 to be between $67.5 million and $72.5 million [1][6]. - Adjusted EBITDA for Q4 2024 is projected to be between $15.0 million and $18.5 million [6].