Outbrain (US:OB)2025-02-28 13:25Financial Data and Key Metrics Changes - For Q4 2024, the company reported revenue of approximately $235 million, reflecting a decrease of 5% year-over-year [29] - Ex TAC gross profit was $68.3 million, an increase of 7% year-over-year, continuing a trend of acceleration and outpacing revenue growth for the seventh consecutive quarter [31] - Adjusted EBITDA grew 21% year-over-year to $17 million, indicating consecutive margin improvement [33] Business Line Data and Key Metrics Changes - The Outbrain DSP saw a growth of 45% in advertiser spend in 2024, driven by superior performance across various formats [11] - Revenue generated from supply beyond the traditional feed represented approximately 30% of revenue in Q4 2024, up from 26% in Q4 2023 [12] - The company successfully renewed agreements with key publishing partners and secured new business partnerships, demonstrating the value proposition offered to premium publishers [15] Market Data and Key Metrics Changes - Total ad spend was materially flat year-over-year during Q4 but increased year-over-year on a full-year basis [29] - Net revenue retention of publishers was 86%, reflecting downward pressure on ad impressions from a key supply partner [30] - The company has over 2 billion unique users and proprietary data signals through exclusive content partnerships with premium media properties [21] Company Strategy and Development Direction - The merger with Teads aims to combine branding and performance capabilities, enhancing the company's position in the open Internet advertising space [7] - The company plans to leverage AI to create a seamless consumer journey across various platforms, enhancing the effectiveness of advertising campaigns [17] - The focus on expanding beyond traditional feeds and enhancing performance capabilities is expected to drive future growth [49] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the integration of Teads and the potential for significant synergies, estimating an annual impact of $65 million to $75 million on adjusted EBITDA [36] - The company anticipates a return to overall pro forma growth by the second half of the year, with positive trends observed in the legacy Teads business [75] - Management highlighted the importance of CTV as a growing segment within performance marketing, with expectations for increased advertiser interest [84] Other Important Information - The company completed the acquisition of Teads on February 3, 2024, and will operate under the Teads brand moving forward [6][100] - The company ended Q4 with $166 million in cash and no debt, indicating a strong liquidity position [34] - The company does not intend to repurchase shares in the near term due to the recent acquisition [35] Q&A Session Summary Question: Transition of publishers and advertisers onto the combined platform - Management is focused on unifying teams and cross-selling, with a clear roadmap for integration and performance capabilities delivery [46] Question: Demand for native advertising - Management noted ongoing growth in performance solutions and a shift towards performance-driven advertising [50] Question: Drivers of growth in Outbrain DSP - The growth is attributed to enhanced bidding technology and the ability to broaden the share of wallet from performance advertisers [55] Question: Progress of revenue outside traditional feeds - Management expects continued investment in this area, viewing it as a growth driver [63] Question: Performance of legacy Teads business - Management reported a recovery in performance and positive trends in January and February following the merger [72] Question: Synergies from the merger - Management estimates $60 million in cost synergies and $5 to $15 million in revenue synergies, with a focus on optimizing traffic acquisition costs [90][96] Question: Future of the Teads brand and ticker symbol - The company will operate under the Teads name and plans to change the ticker symbol over time [100] Question: Funding for news advertising - Management sees early positive trends in advertising spending on news, although it remains a small part of the overall inventory mix [103]