Financial Data and Key Metrics Changes - Nexxen reported a contribution ex-TAC of $92.6 million in Q3, an 8% increase year-over-year or 14% ex-political, marking a Q3 record [14] - Programmatic revenue reached a Q3 record of $89.6 million, up 10% year-over-year or 15% ex-political [14] - Adjusted EBITDA was $28.6 million in Q3, reflecting a 30% adjusted EBITDA margin as a percentage of contribution ex-TAC [16] - Non-IFRS diluted earnings per share were $0.20 in Q3 compared to $0.27 in Q3 2023 [17] - Cash and cash equivalents stood at $116.7 million with no long-term debt as of September 30 [17] Business Line Data and Key Metrics Changes - Contribution ex-TAC from non-programmatic business lines declined by approximately $1 million year-over-year [15] - CTV revenue decreased by 17% year-over-year in Q3 to $24.5 million, impacted by reduced activity from third-party DSP partners and competitive CPMs [15] - Desktop revenue increased by 67% year-over-year, while mobile revenue rose by 3% [16] - Self-service contribution ex-TAC grew by 11% year-over-year amid greater enterprise DSP adoption, and contribution ex-TAC from data products increased by 154% [16] Market Data and Key Metrics Changes - The company observed year-over-year decreases in CTV and display, as well as reduced spending within government, retail, and education verticals [15] - Competitive pressures in the CTV market have led to lower CPMs, affecting revenue [35] Company Strategy and Development Direction - Nexxen is focusing on enhancing its omnichannel DSP, improving automation, performance, and user experience to attract more enterprise partners [6] - The company is doubling down on its DSP, Discovery, and broader data platform to drive enterprise adoption and reduce reliance on third-party DSPs [12] - A renewed partnership with VIDAA extends exclusive global access to ACR data and secures third-party ad monetization exclusivity, providing a competitive advantage [10] - Nexxen plans to release new DSP innovations and expand infrastructure in 2026, while also pursuing new strategic commercial partnerships [13] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment in lowering guidance due to near-term headwinds, including softness in select channels and changes in a leading DSP customer's spending behavior [12] - Despite challenges, management remains confident in the company's long-term strategy and positioning, emphasizing the importance of exclusive data and advanced technology solutions [22] - The company expects contribution ex-TAC from the VIDAA partnership to increase in 2026, supported by ACR data licensing revenue [21] Other Important Information - Nexxen repurchased approximately 1.8 million shares in Q3, investing about $18.1 million through its share repurchase program [17] - The company invested $20 million in VIDAA in Q3, with an additional $15 million planned for Q3 2026 [18] Q&A Session Summary Question: Steps to address DSP headwinds - Management outlined a clear path to address DSP headwinds, including launching a new product for programmatic TV ads and enhancing self-service solutions [24][27] Question: Current trend in CTV - Management acknowledged softness in CTV due to competition and political factors, but expressed optimism for growth in 2026 with new partnerships and innovations [33][36] Question: Impact of DSP changes on future guidance - Management clarified that the reduced spending from a major DSP is expected to be isolated to Q4 2025 and will not materially impact 2026 performance [20][41] Question: Data licensing partnerships - Management discussed the growth potential of data licensing partnerships with Yahoo and Trade Desk, emphasizing the profitability of these initiatives [49][50] Question: Non-programmatic business impact - Management confirmed that the non-programmatic business operates in silos and does not provide benefits to the programmatic business [47]