Q1 2025 Nexxen International Ltd Earnings Call
Okay.
Speaker Change: Welcome to Nexus first quarter earnings call. At this time participants are in a listen only mode with a question and answer session to follow at the end of presentation.
Operator: Welcome to Nexxen's First Quarter Earnings Call. At this time, participants are in a listen-only mode with a question-and-answer session to follow at the end of presentation. This call is being recorded and a replay of today's call will be made available of Nexxen's Investor Relations website.
Speaker Change: This call is being recorded and a replay of today's call will be made available on <unk> Investor Relations website.
Billy Eckert: I will now hand the call over to Billy Eckert, Vice President of Investor Relations, for introductions and the reading of the Safe Harbor Statement.
Speaker Change: I will now hand, the call over to very accurate Vice president of Investor Relations for introductions and the reading of the Safe Harbor statement Bailey. Please go ahead.
Billy Eckert: Billy, please go ahead. Thank you, Operator.
Speaker Change: Thank you operator, good morning, everyone and welcome to the <unk> first quarter earnings call.
Billy Eckert: Good morning, everyone, and welcome to Nexxen's First Quarter Earnings Call. During today's call, we will discuss our financial and operating results for the three-month ended March 31st, 2025, as well as our forward-looking guide. With us on today's call are Ofer Druker, Nexxen's Chief Executive Officer, and Sagi Niri, the company's Chief Financial Officer.
Speaker Change: During today's call, we will discuss our financial and operating results for the three months ended March 31, 2025, as well as our forward looking guidance.
Speaker Change: With us on today's call are ultra drinker, <unk>, Chief Executive Officer, and <unk>, the Companys Chief Financial Officer.
Billy Eckert: This morning, we issued a press release which you can access on our IR website at investors.nexsen.com. During today's conference call, we will make forward-looking statements. All statements other than statements of historical fact could be deemed as forward-looking. We advise caution and reliance on forward-looking states. These statements include, without limitation, statements and projections regarding our anticipated future financial and operating performance, market opportunity, growth prospects, strategy, financial outlook, partnerships and anticipated benefits related to those partnerships, anticipated benefits related to the recent changes in the company's trading security structure, anticipated benefits related to the company's intended growth and platform investments, forward-looking views on macroeconomic and industry conditions, as well as any other statements concerning the expected development, performance, and market share, or competitive performance relating to our products or services.
Speaker Change: This morning, we issued a press release, which you can access on our IR website at investors <unk> Dot com.
Speaker Change: During today's conference call, we will make forward looking statements all statements other than statements of historical fact could be deemed as forward looking we advise caution and reliance on forward looking statements.
Speaker Change: These statements include without limitation statements and projections regarding our anticipated future financial and operating performance market opportunity growth prospect strategy financial outlook partnerships and anticipated benefits related to those partnerships anticipated benefits related to the recent changes in the Companys trading securities structure anticipated benefits related to the company.
Speaker Change: Heavy growth and platform investments forward looking views are macroeconomic and industry conditions as well as any other statements concerning the expected development performance in market share or competitive performance relating to our products or services.
Speaker Change: All forward looking statements are based on information available to us after the date of this call.
Billy Eckert: All forward-looking statements are based on information available to us as of the date of this These statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from those implied by these forward-looking statements, including unexpected changes in our business, or unexpected changes in macroeconomic or industry.
Speaker Change: These statements involve known and unknown risks uncertainties and other factors that may cause our actual results to differ materially from those implied by these forward looking statements, including unexpected changes in our business or unexpected changes in macroeconomic or industry conditions.
Speaker Change: More detailed information about these risk factors and additional risk factors are set forth in our filings with the U S Securities and exchange Commission, including but not limited to those risks and uncertainties listed in the section entitled Risk factors in our most recent annual report on form 20-F.
Billy Eckert: More detailed information about these risk factors and additional risk factors are set forth in our filings with the U.S. Securities and Exchange Commission, including, but not limited to, those risks and uncertainties listed in the section entitled Risk Factors in our most recent annual report on Form 28.
Billy Eckert: Nexxen does not intend to update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. Additionally, the company's press release and management statements during this conference call will include discussions of certain measures and financial information in IFRS and non-IFRS We refer you to the company's press release for additional details, including definitions of non-IFRS items and reconciliations of IFRS to non-IFRS.
Speaker Change: <unk> does not intend to update or alter its forward looking statements, whether as a result of new information future events or otherwise except as required by law.
Additionally, the company's press release and management statements. During this conference call will include discussions of certain measures and financial information in FRS and non Ifr's terms we.
Speaker Change: We refer you to the company's press release for additional details, including definitions of non <unk> items and reconciliations of Ifr F. <unk> results at this time. It is my pleasure to introduce <unk> CEO of the exited over please go ahead.
Ofer Druker: At this time, it is my pleasure to introduce Ofer Druker, CEO of Nexxen. Ofer, please go ahead. Thanks, Billy. Our momentum from 2024 carried into Q1, as we achieved record results despite market uncertainty, driven by continuous strength in CTV, a powerful and durable growth engine for Nexxen, supported by broader industry trends. Beyond CTV, three key drivers continue to enhance our performance and accelerate our growth opportunity. First, our unified end-to-end platform is earning increasing recognition for delivering simplicity, control, efficiency, better outcomes, and cost-effectiveness. offering a clear edge over one-sided solutions, especially when combined with our differentiated data and AI capabilities.
Speaker Change: Thanks Danny.
Speaker Change: Our momentum from 2020 full carried into Q1 as we achieved record results. Despite market uncertainty driven by continued strength in CTV is powerful and durable growth engine for Nixon supported by broader industry trends.
Speaker Change: CTV three key drivers continue to enhance our performance and accelerate our growth opportunities.
Speaker Change: All unified end to end platform is there any increase in competition for delivering sufficiently control efficiency better outcomes and cost advantages.
Speaker Change: Offering a cliff edge over one sided solution, especially when combined with our depreciated that AI capability.
Ofer Druker: Second, we remain a leader in data-driven analysis. Our proprietary data sets power every stage of the campaign lifecycle, enabling partners to maximize performance in both stable and volatile markets. And third, our interconnected platform and robust data infrastructure provide an ideal base for AI innovation. allowing us to release impactful new tools that drive immense results for our partners, deepening our competitive advantage.
Speaker Change: Second we remain a leader in data driven.
Our proprietary power every stage of the campaign lifecycle, enabling policy is to maximize performance in both stable and volatile market conditions.
Speaker Change: Our interconnected platform and robust data infrastructure provide an ideal baseball AI innovation.
Speaker Change: Allowing us to release impactful new tools that drive enhanced results for our partners.
Speaker Change: Our competitive advantages.
Speaker Change: The recent launch of Mexico marks a transformational step forward for the next.
Ofer Druker: The recent launch of Nexx AI marks a transformational step forward for Nexxen. Nexx AI, our comprehensive suite of generative AI and machine learning-powered assistance and features, is vertically integrated across our platform, enhancing every stage of the advertising journey. It leverages Nexxen's technology platform to deliver faster insights, smarter planning, automated activation, and real-time optimization. The first Nexx AI released an AI system in Nexxen DSP, surface insight instantly, and face time. Dozens of clients have already gained access, reporting meaningful productivity gains, while others are excited about Nexx AI potential to automate data and insight gathering, and streamline reporting and optimization.
Our comprehensive suite of generating the AI and machine learning powered assistant and features.
Speaker Change: Quickly integrated the growth of our platform.
Speaker Change: As in every stage of <unk> Jim.
Speaker Change: Leverage <unk> technology platform to deliver faster inside multiyear planning automated activation and real time optimization.
Speaker Change: The fourth nationally.
Speaker Change: And AI assistant in excellent DSP.
Speaker Change: In fact instantly.
Tom: Thanks, Tom dozens of clients have already gained access reporting meaningful productivity gains while others are excited about <unk> potential to automate data and insight gathering and streamline reporting and optimization.
Ofer Druker: Later this year, we expect to introduce expanded Nexx AI capabilities, focused on enhancing optimization and bringing advanced functionality to our data platform in Overall, Nexx AI is expected to enhance our clients' and partners' ability to get the most value out of our platform, optimize product effectiveness, and leverage the vast data we provide to enrich insights and expand reach. We believe this, in combination, will help increase customer stickiness and attract new partners.
Tom: Later this year, we expect to introduce extended next AI capabilities focused on enhancing optimization and bringing advanced functionality.
Tom: The platform SSP.
Tom: Although loan next AI is expected to enhance our clients and partners the ability to get the most value out of our platform optimized product effectiveness and leverage the fact that that we provide.
Tom: Insights and extended reach.
Tom: We believe this.
Tom: In combination with <unk> to increase customer stickiness and attract new partners.
Ofer Druker: Next, I'll announce the benefits of our end-to-end platform. Nexxen Unity enables customers to onboard data, gain insights, extend audience reach, plan media strategies, activate campaigns, continuously optimize and measure results, all within a single connected platform. This model delivers strong value in our market conditions but becomes even more essential in periods of uncertainty when advertisers and publishers are under pressure to do more with less and focus on efficiency and results. Our end-to-end approach is driving greater spend consolidation with more advertisers and agencies choosing to access inventory through our SSP, fueling both growth and margin expenditure. A great example is Toyota, which expands its video and CTV investment end-to-end with Nexxen.
Tom: Next to enhance the benefits of our end to end platform Nexsan unity enables customers to onboard that getting insights extend audience reach Glen media strategy.
Tom: Based campaigns continuously optimize and measure results.
Tom: We gave a single connected platform.
Tom: This model will deliver strong value in our market condition, but become even more essential in periods of uncertainty.
Tom: Advertisers and publishers are under pressure to do more with less and focus on efficiency and results.
Tom: And so and of course is driving greater expense consolidation with more advertisers and agencies choosing to exit inventory through our SSP.
Tom: Really both growth and margin expansion.
Tom: A great example is Toyota, which expands its video and CTV investments and to end with next Gen and as a result, we are seeing stronger conversions logo vehicles and consumer engagement.
Ofer Druker: And as a result, it's seeing stronger conversions, lower media costs, and higher consumer income. Through our end-to-end platform, air integration and proprietary data across every touchpoint, we are well-positioned to deliver value and growth. CTV remained our primary growth driver in Q1, a testament to the strength of our interconnected CTV data and technology offerings. and Growing Industry Innovation. As consumers continue shifting to ad-supported streaming and advertisers move billions of dollars in budget from linear TV, Nexxen is well-positioned to capitalize on significant long-term growth opportunities. Our leadership position is reinforced by our ability to deliver measurable performance across CTV expertise.
Tom: Through an end to end platform a sequential comparison.
Tom: Across every touch point, we are well positioned to deliver value and growth.
Tom: Did they really remains our primary growth driver in Q1 is testament to the strength of our interconnected CTV that technology offering.
Tom: And growing industry a combination.
Tom: As consumers continue shifting to AD supported streaming and advertisers move billions of dollars in budgets from linear television nexsan is well positioned to capitalize on the significant long term growth opportunity.
Tom: Our leadership position is reinforced by our ability to deliver measurable performance across CTV advertising.
Ofer Druker: Further, it's supported by growing relationships with leading CTV advertisers and streaming platforms, including 2B who recently expanded its partnership with Nexxen beyond the U.S. into the U.K. to increase programmatic advertising revenue opportunities. These will validate our strategy and strengthen our position to capture outside shares in one of digital advertising process growing areas. Our differentiated data platform, which offers a variety of in-demand market solutions, also continues to drive new and expanded partnerships while increasing our value across the industry. Data is central to everything we do, and we have spent years building our capabilities and footprints, giving us a competitive edge as others race to acquire and assemble similar offerings.
Tom: <unk> is supported by growing initiatives with leading CTV advertisers and streaming platforms, including <unk>.
Tom: Recently expanded its partnership with <unk> beyond the U S into the U K to increased programmatic advertising revenue.
Tom: This will validate our strategy and strengthen our position to capture outsized share in one of digital advertising fastest growing areas.
Tom: Our differentiated desktop platform, which offers a variety of end demand market solution also continues to drive new and expanded partnerships, while increasing our value across the industry.
Tom: That that is central to everything we do and we have spent years building our capabilities and footprint, giving us a competitive edge as obvious right to acquire and Stephane stimulant offering.
Ofer Druker: Recently, as the industry has focused on unifying and scaling data, ethics, AI, targeting, and identity solutions, we have seen major players like Publicis and GroupM acquire platforms like Locomi and InfoSum to keep Nexxen is ahead of the open internet at the curve, already integrating, connecting, and delivering these capabilities at scale, resulting in incredibly sophisticated market-leading solutions that position us to win markets.
We are simply as the industry is focused on unifying and scaling that aspect.
Tom: AI targeting an identity solution, we are still major players like <unk> acquired platforms like locally in april's down to keep pace.
Tom: Next thing is as of the opening I think already integrating connecting and delivering these capabilities at scale, resulting an incredibly sophisticated market, leading solutions that position us to win market share.
Ofer Druker: Our performance and brand momentum also continue to attract top-tier talent from peers and industry leaders. After strengthening our executive team, we are focused on reinforcing mid-level management to support growth and innovation. In the U.S., we continue to expand our sales force. And in Europe, we are strategically hiring sales leaders to accelerate our international growth opportunity, particularly within CTV, capitalizing on our relationship with LIDA and IT.
Tom: Our performance and brand momentum also continued to attract top tier talent.
Tom: Industry leaders.
Tom: First strengthening our executive team, we are focused on reinforcing mid level management to support growth and innovation.
Tom: In the U S. We continue to expand our sales force and in Europe. We are strategically are insensitive to accelerate our international growth opportunity, particularly within CPB capitalizing on our initiative with visa and license.
Tom: In Q1, we added 131, new activity spending first time customers.
Ofer Druker: Q1, where does 1 out of 1 view actively spending first-time adversarial customers? including 15 new enterprise self-service customers and onboarded 63 new supply partners. Our streamlined U.S. listing, combined with our consistent execution and clearer messaging, is also improving our recognition in the capital markets. Since evolving our trading structure, we have seen higher trading volumes, growing investor interest, and an impressive increase in sell side coverage. We are committed to building on this momentum through active investor and analyst engagement, conference participation, and our upcoming investor day, and continue to believe our updated structure has strengthened our positioning for long-term capital appreciation.
Tom: Customers, including 15, New enterprise service customers and Onboarding 63, new supply partners.
Tom: Our streamline reflecting combined with our consistent execution and key messages.
Tom: Also improving our recognition in the capital markets since the evolving our trading structure, we have seen August trading volumes growing investor interest and.
Tom: Impressive increase in sell side coverage, we are committed to building on this momentum through active investor and analyst engagement conference participation in our upcoming Investor day and continue to believe.
Tom: This structure has strengthened our positioning for long term capital appreciation.
Tom: Our strategy is global making our technology platform and driving powerful results for partners. Our execution remains strong and we are confident our leadership position will continue to grow through ongoing innovation and platform investments.
Ofer Druker: Our strategy is resonating. Our technology platform is driving powerful results for our partners. Our execution remains strong, and we are confident our leadership position will continue to grow through ongoing AI innovation and platform innovation. Even amid economic uncertainty and evolving advertising trends, Nexxen continues to deliver, empowering customers to achieve stronger outcomes while reducing costs and reducing inequality. through the combined power of data and technology. Having spent years laying the groundwork, we are now executing from a position of strength. With a comprehensive platform, differentiated datasets, embedded AI, a talented team, growing strategic partnership, and a strong reputation within the industry, we have built a durable advantage that position us to deliver long-term value.
Tom: Economic uncertainty and evolving advertising trends Nexsan continued to deliver in <unk>.
Tom: Powering customers to achieve stronger outcomes, while reducing cost of the default requirements through the combined power of Delphi technologies.
Tom: Having spent years laying the groundwork we are now executing further acquisition Australia.
Tom: With a comprehensive platform depreciated balco stake Embeds.
Tom: Our talented team growing strategic partnership and a strong reputation within the industry. We have built a durable advantage that position us to deliver long term value.
Ofer Druker: We are excited to continue supporting our clients and helping shape the future of digital advertising through innovation and partnership.
Tom: We are excited to continue the faulting.
Siggi: And helping shape the future of digital advertising through innovation and partnership with that I'm happy to turn the call over to Siggi.
Sagi Niri: With that, I'm happy to turn the call over to Sagi. Thank you, Ofer. In Q1, we generated a contribution exact of $75 million, a Q1 record representing 8% year-over-year growth. Programmatic revenue also reached a Q1 record of $71.8 million, reflecting a 10% increase compared to Q1 2024. Our growth was driven by strong sales execution, continued CTV momentum, increased end-to-end revenue, and higher spend consolidation from key partners. Our strategic focus on larger customers, expanded self-service footprint and ability to support partners across their full workflow also contributed to both our contribution x-tack and adjusted EBITDA strength. In Q1, we observed continued growth in CTV, video, self service products and PMPs, and increases across our education, finance, health and automotive In contrast, we experienced an approximately $900,000 year-over-year decrease in contribution extracts from our non-programmatic business lines, a decrease in contribution extracts from display, and reduced spending within our government veterans.
Siggi: Thank you all fir in Q1, we generated contribution ex Tac of $75 million.
Siggi: Q1 record, representing 8% year over year growth.
Siggi: Programmatic revenue also reached a Q1 record of $71 $8 million.
Siggi: <unk>, a 10% increase compared to Q1 2024.
Siggi: Our growth was driven by strong sales execution continued CTV momentum increased end to end revenue and higher spend consolidation from key partners.
Siggi: Our strategic focus on larger customers expanded self service footprint and ability to support partners across their full workflow also contributed to both our contribution ex Tac and adjusted EBITDA strength.
Siggi: Q1, we observed continued growth in CTV video self service products, and Pnp and increases across our education finance and automotive verticals. In contrast, we experienced an approximately $900000 year over year.
Siggi: The decrease in contribution ex Tac from our non programmatic business lines or decreasing contribution ex Tac from display and reduced spending within our government vertical.
Siggi: CTV continues to lead our growth story, we generated record Q1, CTV revenue was $26 4 million, which reflected 40% year over year growth.
Sagi Niri: CTV continues to lead our growth story. We generated record Q1 CTV revenue of $26.4 million, which reflected 40% year-over-year growth. As a result, CTV accounted for 37% of programmatic revenue, up from 29% in Q1 2021. This momentum also helped expand video revenue to 75% of programmatic revenue in Q1 2025, and 66% in Q1 2024. And we remain confident that both video and CTV will represent core long term growth drivers. Elsewhere in Q1, self-service contribution x-tax grew 32% and P&P revenue rose 12% year over year, while contribution x-tax from display decreased 22%, largely due to declines in our non-core non-programmatic business.
Siggi: As a result.
Siggi: We accounted for 37% of programmatic revenue up from 29% in Q1 2024.
Siggi: This momentum also help expand video revenue to 75% of programmatic revenue in Q1 2025 and.
Siggi: 66% in Q1, 2024, and we remain confident that both video and CTV will represent core long term growth drivers for next time.
Siggi: Elsewhere in Q1 self service contribution ex Tac grew 32% and Pnp revenue rose, 12% year over year, while contribution ex Tac from display decreased 22% largely due to declines in our non core non programmatic business lines.
Siggi: We exceeded wall Street's adjusted EBITDA expectations in Q1, generating adjusted EBITDA of $23 $1 million and 95% increase from Q1 2020 for.
Sagi Niri: We exceeded Wall Street's adjusted EBITDA expectations in Q1, generating adjusted EBITDA of $23.1 million, a 95% increase from Q1 2021. This growth was driven by higher contribution exact increased spend consolidation and customers adopting an increasing number of solutions within our ecosystem, particularly as enterprise BSP customer access more inventory through our As a result, our adjusted EBITDA margin in Q1 increased to 31% with a percentage of contribution x-tax of 17% in Q1 2024, and we remain confident in our ability to continue expanding our margins over time. In Q1, we generated $19.3 million in net cash from operating activities compared to $37.7 million in Q1 2024.
Siggi: This growth was driven by higher contribution ex Tac increased spend consolidation in customers adopting an increasing number of solution within our ecosystem.
Siggi: Equally as enterprise DSP customer access more inventory through our SSP.
Siggi: As a result, our adjusted EBITDA margin in Q1 increased to 31% as a percentage of contribution ex tax from 17% in Q1, 2024, and we remain confident in our ability to continue expanding our margins over time.
Siggi: In Q1, we generated $19 $3 million in net cash from operating activities compared to $37 7 million in Q1 2024.
Sagi Niri: As of March 31st, we had $164.7 million in cash and cash exvivalence, $90 million undrawn on our revolving credit facility and no long term debt. We also recorded non-IFRS diluted earnings per share of $0.16 in Q1 2025 compared to $0.02 in Q1 2024 on a post-reverse split basis. We repurchased roughly 3.7 million ordinary shares on a post-reverse split basis in Q1, representing an investment of approximately $32.9 million. Since initiating a series of buyback programs on March 1st, 2020, through March 31st, 2025. We repurchased roughly 29.2% of our outstanding shares, investing approximately $190.2 million. In April, we completed our previous $50 million share repurchase program authorization and launched a new $50 million program.
Siggi: As of March 31st we had $164 $7 million in cash and cash equivalents $19 million undrawn on our revolving credit facility and no long term debt.
We also reported non <unk> diluted earnings per share of <unk> in Q1, 2025 compared to <unk> in Q1 2024 on a post reverse split basis.
Siggi: We repurchased roughly $3 7 million ordinary shares on a post reverse split basis in Q1, representing an investment of approximately $32 9 million since initiating a series of buyback programs on March five 2020.
Siggi: Through March 31, 2025, we repurchased roughly 29, 2% of our outstanding shares investing approximately $194 million.
Siggi: In a green, we completed our previous $50 million share repurchase program authorization and launched a new $50 million program.
Sagi Niri: The ongoing program is expected to continue until the earlier of November 19, 2025, or completion. And as of April 30, we had roughly $39 million remaining in our With no long-term debt or near-term M&A plans, we intend to continue allocating capital to share repurchases, particularly while our valuation remains below U.S. ATT&CK peers and our stock trade at level the board believes undervalued.
Siggi: The ongoing program is expected to continue until the earlier of November 19, 2025 oil completion and as of April 30, we had roughly $39 million remaining in our authorization.
We have no long term debt or near term M&A plans, we intend to continue allocating capital to share repurchases, particularly when our valuation remains below U S AD tech peers, and our stock trades at level. The board believes undervalues the business.
Siggi: With that I'll turn to our outlook.
Sagi Niri: With that, I'll turn to our We are reaffirming our prior guidance for full year 2025. We continue to anticipate contribution EXTAC of approximately $380 million, with programmatic revenue expected to represent roughly 90% of our fully 2025 revenue. We also anticipate adjusted EBITDA for approximately $125 million and continue to expect growth in both CTV and data licensing revenue in full year 2025, compared to full year 2021. While the advertising market has experienced some softness in Q2 driven by economic uncertainty and evolving US policies, we remain confident in our full year 2025 guidance, assuming no material deterioration in economic or advertising This confidence is supported by several key trends, including ongoing spend consolidation from existing customers, growing industry recognition, sustained CTV revenue strengths, growth in new partnerships, increasing end-to-end adoption, and encouraging ad spend patterns observed so far in...
Siggi: We are reaffirming our prior guidance for full year 2025.
Siggi: We continue to anticipate contribution ex Tac of approximately $380 million with programmatic revenue is expected to represent roughly 90% of our full year 2025 revenue.
Siggi: We also anticipate adjusted EBITDA of approximately $125 million and continue to expect growth in both CTV and that's our licensing revenue in full year 2025 compared to full year 2024.
Siggi: While the advertising market has experienced some softness in Q2, driven by economic uncertainty and evolving use policies. We remain confident in our full year 2025 guidance, assuming no material deterioration in economic or advertising conditions.
Siggi: This confidence is supported by several key trends, including ongoing spend consolidation from existing customers growing industry recognition sustained CTV revenue strength growth and new partnership increasing and co and adoption and encouraging AD spend patterns observed so far in Q2.
Siggi: That said, we remain appropriately cautious.
Sagi Niri: That said, we remain appropriately Fervor macroeconomic shocks, tariff changes or policy shifts could impact market sentiment, consumer behavior and advertising demand. Still, Nexxen is well positioned to support customers in any environment. In more challenging markets, advertisers tend to consolidate budgets with platforms that deliver efficiency, smarter outcomes and stronger ROI, areas where Nexxen has a clear competitive advantage. Our expanded self-service footprint has also lessened our reliance on managed service revenue, which is typically more vulnerable to economic Additionally, our focus on larger customers is improved contribution effects, durability. So while the demand environment remained uncertain, Nexxen is more resilient to volatility than in the past and continues to execute.
However, macroeconomic shocks tariff changes or policy shifts could impact market sentiment consumer behavior in advertising demand.
Siggi: Next one is well positioned to support customers in any environment.
Siggi: In more challenging markets advertisers tend to consolidate budgets with platform that deliver efficiency smarter outcomes and stronger ROI areas, where nexsan is a clear competitive advantage.
Siggi: Our expanded self service footprint is also lessens our reliance on managed service revenue, which is typically more vulnerable to economic shifts.
Siggi: Additionally, our focus on larger customers has improved contribution ex Tac durability.
Siggi: So while the demand environment to remain uncertain pain, nexsan is more resilient to volatility and in the past and continue to execute effectively.
Sagi Niri: Our model also provides meaningful operating leverage. At Customer Spend Consolidates and End-to-End Revenue Increases, we are well positioned to capitalize on larger opportunities and deliver strong profitability, even in turbulent conditions. Our strategic focus on innovation, discipline, self-execution, and operational efficiency has laid a strong foundation for sustainable, profitable growth. Additionally, our AI investments in 2025 are expected to sharpen our competitive edge, drive cost efficiencies, and contribute to margin expansion over the The recent verdict in the ongoing Google ATT&CK antitrust case also has potential to benefit Nexxen and others across the opening. While timelines and potential outcomes remain uncertain, a reduced Google presence and a more level playing field could unlock meaningful opportunities for independent, transparent, and data-driven platforms like ours, as buyers and publishers seek trusted alternatives that deliver greater control, efficiency, and ROI.
Siggi: Our model also provides meaningful operating leverage.
Siggi: As customers spend consolidates and end to end revenue increases, we are well positioned to capitalize on larger opportunities and deliver strong profitability even in turbulent conditions.
Siggi: Our strategic focus on innovation disciplined sales execution and operational efficiency has laid a strong foundation for sustainable profitable growth.
Siggi: Additionally, our AI investments in 2025 are expected to sharpen our competitive edge and drive cost efficiencies and contribute to margin expansion over time.
Siggi: The recent verdict in the ongoing Google ethic antitrust case also has potential to benefit and excellent offers across the open internet.
Siggi: While timelines and potential outcomes remain uncertain reduced Google presents in a more level playing field could unlock meaningful opportunities for independence transparency and data driven platforms like ours, as Brian and publishers seek trusted us entities that deliver greater control efficiency and ROI.
Siggi: Depending on the remedy is this could benefit both the demand and supply sides of our business and further strengthen our long term competitive positioning.
Sagi Niri: Depending on the remedies, this could benefit both the demand and supply sides of our business and further strengthen our long term competitive Following our transformation in 2022 and 2023 and strong execution in 2024, we've carried momentum into 2025. With our rebrand complete, major platform upgrades delivered, and a focused, high-performing sales team in place, Nexxen is now widely recognized as a leading strategic ad tech partner, deepening relationships with existing customers and attracting high-value partners. As we stated, 2025 is all about execution. And so far, we're delivering.
Siggi: Following our transformation in 2022, and 2023 and strong execution in 2024, we carried momentum into 2025.
Siggi: We have our rebrand complete major platform upgrade believers in a focused I performing sales team in place Nexsan is now widely recognized as the leading strategic ASIC partner deepening relationships with existing customers and attracting high value partnerships.
Siggi: As we've stated 2025 is all about execution and so far we are delivering.
Sagi Niri: With stronger fundamentals, rising industry recognition, and a more scalable platform and operating model, we're excited to host our first U.S. Investor Day next. During the event, we'll present a comprehensive overview of our long-term vision, growth outlook, product suite, innovation roadmap, and go-to-market strategy. will also be joined by customer and industry experts to reinforce Nexxen's relevance, leadership, and momentum across the X.
Siggi: We have stronger fundamentals rising industry recognition and a more scalable platform and operating model. We're excited to host our first U S Investor Day next week.
Siggi: During the event, we will present, a comprehensive overview of our long term vision growth outlook product suite innovation roadmap and go to market strategy.
Siggi: We will also be joined by customer and industry experts to reinforce <unk> relevant leadership and momentum across the ecosystem.
Siggi: We believe this will clearly demonstrate nexsan strengths differentiation and long term growth potential and further solidify why we represent a compelling investment opportunity.
Sagi Niri: We believe this will clearly demonstrate Nexxen's strengths, differentiation, and long-term growth potential, and further solidify why we represent a compelling investment As always, thank you to our shareholders, employees and partners for your continued support and operator will now take Thank you.
Siggi: As always thank you to all our shareholders employees and partners for your continued support and operator, we'll now take questions.
Siggi: Thank you.
Siggi: We will now begin the question and answer session.
Operator: We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset to ensure that your phone is not on mute when asking your question. Again, press star one to join.
Siggi: You have dialed in and we would like to ask a question. Please press star one on your telephone keypad to raise your hand and join the queue.
Siggi: If you would like to withdraw your question simply press Star one again.
Siggi: You have called upon to ask you a question in a listening via speakers wanting our device. Please pick up your handset to ensure that your phone is not on mute and asking your questions again.
Siggi: <unk> wanted to join the queue.
Speaker Change: And our first question comes from the line of Jason <unk> with Craig Hallum. Your line is open.
Jason Crayer: And our first question comes from the line of Jason Crayer with Craig Hallum. The line is open. Great, thank you guys. Very nice quarter.
Jason: Great. Thank you guys very nice quarter I'm wondering if you can just put a finer point on the macro comments that you made what youre seeing so far in Q2.
Jason Crayer: I'm wondering if you can just put a finer point on the macro comments that you made, you know, what you're seeing so far in Q2, and if any specific commentary on verticals where you're seeing any strength or weakness. Thank you.
Jason: Any specific commentary on verticals, where youre seeing any strengths or weakness.
Jason: Thank you so do you want to take it.
Sagi Niri: Sagi, you want to take it? Yeah, sure, I can take it. Hey, Jason, how are you? Um, first of all, I think that, you know, the geopolitic environment is changing all the time so I think what was relevant like two weeks ago maybe it's not relevant yesterday or today. I think that we saw some kind of softness entering into April when the Tariffs War was I'm not sure at the peak, but somewhere around that. I think that we are well diversified and we have we are activating in in terms of different verticals. And if we are seeing you know, something going down, it's being compensated by another vertical is going up.
Jason: Yes, sure I can take it.
Speaker Change: J, Paul how are you.
Jason: First of all I think that you know.
Jason: The geopolitics.
Jason: Uh huh.
Jason: Environment is in changing all the time, so I think what was relevant like two weeks ago, maybe not rather than yesterday or today.
Jason: I think that we saw some kind of softness entering into April.
Jason: Packaged tour was.
Jason: I'm not sure at the peak, but somewhere around that.
Jason: I think that we are well diversified and we have we are activating in tons of different verticals and if we are seeing something going down is being compensated by a number of vertical is going up.
Sagi Niri: We are not really over indexed with any vertical And I think that some of the softness that we saw, hopefully will go away very soon because of the, you know, the certainty that now is coming into the market. And I think that most of it was a little bit push of campaigns from April to the end of the quarter and maybe some of it into H2, but nothing really material that is changing, you know, our early guidance and our confidence in our ability to get to eat our numbers. Wonderful, thank you.
We are not really over indexed with any vertical.
Jason: And I think that some of the softness that we saw all fully will go away very strong because of the.
Jason: Certainty that now is coming into the market.
Jason: And I think that most of it was a little b pools of campaigns from April through the end of the quarter and maybe some of it into.
Jason: A store, but nothing really material that is changing in our yearly guidance and our confidence in our ability.
Jason: <unk> two to get to eat on numbers.
Jason: Wonderful. Thank you and then just as a follow up so you are reiterating the guidance for a really nice EBITDA beat in Q1 is that more a product of conservatism around the macro or should we think about that as kind of related to the incremental investments you're making on AI.
Sagi Niri: And then just as a follow up, so you're reiterating the guide after a really nice even a beat in Q1. Is that more a product of conservatism around the macro? Or should we think about that as kind of related to the incremental investments you're making on AI? Um, great question. I think, you know, it came from several, uh, components that, uh, contribute to this, uh, adjusted edit a bit. Some of it, you know, came from our eating our top line by around 2 million, which, you know, 90 something percent of that is going directly into the bottom line.
Jason: Great question I think it came from sabre.
Jason: Components.
Jason: Contributing to this.
Jason: Adjusted EBITDA beat.
Jason: Some of it came from our <unk> 18.
Jason: Top line by around $2 million, which 90 something percent of that is going directly into the bottom line.
Sagi Niri: Some of it came from reversal adoption allowance, but we are seeing almost every Q1. Some of it came from, of course, better utilization and margin expansion. And some of it came from slower than expected onboarding of talent. With some of it, you know, it's not like we have a challenge over there, but because of the uncertainty that already started somewhere around February, we streamlined our ad count onboarding for 2025. So I think all of that is like, helps us to beat our Adjusted Edita number by a nice number. And I think that we are being cautious around the yearly Adjusted Edita.
Jason: Some of it came for all reverse that allowance, but we are seeing almost every Q1.
Jason: Some of it came from of course, better utilization and margin expansion and some of it came from slower than expected onboarding of talent with some of it you know it's not like we have the challenge over there, but because of the uncertainty that already started somewhere around February we streamlined our.
Ed: Sure Ed.
Ed: Onboarding for 2025, so I think all of that is like help us to beat our adjusted EBITDA number by a nice number and I think that.
Ed: We are being cautious around the newly adjusted EBITDA.
Jason: Jason is that answering your question.
Sagi Niri: Jason, is that answering your question?
Ed: Okay.
Ed: Okay.
Speaker Change: Our next question comes from the line of Andrew <unk> with Raymond James Your line is open.
Andrew Marok: Our next question comes from the line of Andrew Marok with Raymond James. Hi, thanks for taking my questions.
Andrew: Hi, Thanks for taking my questions, maybe one if I could on this concept of these increased familiarity of next and we're kind of in the marketplace and some of the feedback that you're getting there for those.
Ofer Druker: Maybe one if I could on this concept of the increased familiarity of Nexxen kind of in the marketplace, and some of the feedback that you're getting there for those customers who are maybe a little bit more unfamiliar with Nexxen, what are some of like, the things that they're finding surprising? And how are your Salesforce hiring efforts kind of dovetailing into that? And then I have a follow up. Thank you, Andrew.
Speaker Change: Customers, who maybe a little bit more on the familiar with next and what are some of the things that they are finding surprising and how are your sales force hiring efforts, that's kind of dovetailing into that and then I have a follow up thanks.
Andrew: Thank you I would take it.
Ofer Druker: I will take it, Sagi. I think that we kept our strategy strong from almost 2019, which put the emphasis on end-to-end solution data and emphasize on CTV. I think that two things happened. First, with our rebranding and repackaging, I think that we also improve our messaging so people understand better what we are doing. And I think that the fact that we utilize everything under one brand is also helping us a lot in that. The second thing, I think, which is very crucial, is the rise of the importance of data. So even in the past, we needed to convince sometimes people that data is important.
Andrew: I think that we kept our strategy is strong from almost 2019, which put emphasize on end to end solution.
Andrew: And emphasized on CTV.
Andrew: Two things have been first with our rebranding and repackaging I think that we also improve our messaging so people understand better what we are doing and I think that effect that we utilize everything under one brand is also helping us a lot in there. The second thing I think is which is very crucial is there.
Andrew: Rise of the importance of data so even in the past we needed to convince sometimes people that data is imported now people are looking at that is it.
Ofer Druker: Now people are looking at that as a very important element in our offering. And we are getting a lot of great feedback about our capabilities around data, how we can basically utilize it across the journey of the campaign, from planning to activation and measurement. And I think that this is resonating very well. And we believe that this is something that we'll keep strengthening in the market in order to get more adaptants and more open doors to new clients in the market. helpful. Thank you.
Andrew: A very important element in our offering and we are getting a lot of great feedback about our abilities around data.
Andrew: Basically utilize it across.
Andrew: Costa journey of the campaign from planning to activation and measurement and I think that this is resonating very well and we believe that this is something that we.
Andrew: Keep strengthening in the market in order to get more adaptive and more open doors to new clients in the market.
Andrew: Helpful. Thank you and maybe one on the Google.
Andrew Marok: And maybe one on the Google outcome, if I could. So obviously, we've seen the Department of Justice's proposed remedies. Nothing is certain yet. But assuming things do kind of break the way that you're hoping, is there any incremental investment that you might have to do to take advantage of that opportunity? Or is it all just kind of part of your your core mission of expanding your share within the market?
Andrew: Tom if I could.
Andrew: So obviously, we've seen the department of Justice was proposed remedies.
Andrew: Nothing is certain yet, but assuming things do kind of break the ways that youre, hoping is there any incremental investment that you might have to do to take advantage of that opportunity or is it all just kind of part of your core mission of expanding our share within the market. Thank you.
Sagi Niri: Thank you. Of course, I think it's very unclear to understand when and what will happen really with Google going forward. But I'm sure that it's already doing some good stuff in the near future because the mindset is already a little bit different around Google and the ability to... And people are looking to expand their work with other partners. We don't need to extra invest in that. It's something that is in our core business and we are able to basically accept and grow our business based on our current headcount and technology. So of course, we will welcome any movement like that.
Andrew: I think it's very unclear to understand when and what will happen really with Gabelli.
Andrew: Going forward, but for sure that is already doing some some good stuff in the near future because their mindset is already there it'll be different around Google and the ability.
Andrew: And people are looking to expand.
Andrew: Work with other partners, we don't need two extra invest and that is something that is in our core business and we are able to basically accept and grow our business based on our recurrent.
Andrew: Headcount and technology.
Andrew: Of course, we will welcome any movements like that and we are doing everyday efforts to recruit and grow our base of publishers and of course, the advertisers and I think that this change of course can help us in the future.
Sagi Niri: And we are doing everyday efforts to recruit and grow our base of publishers and, of course, advertisers. And I think that this change, of course, can help us in the future.
Maria Rips: Thank you.
Andrew: Thank you.
Andrew: Yes.
Speaker Change: Our next question comes from the line of Maria <unk> with Canaccord Genuity. Your line is open.
Sagi Niri: Our next question comes from the line of Maria Rips with Canaccord Genuity. Great. Thanks for taking my questions and congrats on the strong quarter. So as we think about your full year guidance... Can you give us a little more color on what is embedded in your projection and the NGV segment growth perspective, which is sort of platform-specific improvements that you talked about in your prepared report. I think, you know, as I said before, although we had a strong quarter and we beat our net revenue and adjusted EBITDA lines, I think that we are still cautious because, you know, the uncertainty may be moved a little bit away, but it's still here.
Great. Thanks for taking my questions and congrats on this quarter. So as we sort of as we think about your full year guidance, just sort of expected growth acceleration can you maybe give us a little bit more color on what's what's embedded in your projections from the television segment growth perspective push yourself platform specific improvements that you talked about in your prepared remarks.
<unk>.
Speaker Change: Yes sure.
Speaker Change: And Maria I think.
Speaker Change: As I said before we had a strong quarter and we beat our.
Speaker Change: Net revenue and adjusted EBITDA aligned I think that we are still cautious because of the uncertainty.
Speaker Change: Maybe moved a little bit the way, but it's still here and you know and uncertainty is there people are holding.
Sagi Niri: And, you know, when uncertainty is there, people are holding on to their budget. Having said that, I think that on the CTV and our growth engines into 2025, we took into consideration that we will reach somewhere around the 40% of CTV revenues out of programmatic revenue. Other than that, you know, and it relates to the question of Andrew before, we didn't look into consideration, you know, the Google verdict, because I think that You know, I saw a lot of articles around that and a lot of people talking around that. I think that the only thing that everyone is, you know, can agree on is that it will, of course, give some positive effect to the open Internet.
Speaker Change: Yeah.
Onto their budget.
Speaker Change: Having said that I think thats on the CTV and our growth engines in 2025, we took into consideration that we will reach.
Somewhere around the 40% of CTV revenues out of programmatic revenue.
Speaker Change: Other than that and it relates to the question on AV and moving forward, we did and took into consideration the Google.
Okay, because I think that.
No I saw a lot of articles around that and a lot of people talking around that I think that the only thing that everyone is.
Speaker Change: Can agree on is that it will of course deep some positives.
Speaker Change: Affect to the open Internet I'm not sure anyone understand to what extent and how Martin is offers that.
Sagi Niri: I'm not sure anyone understands, you know, to what extent and how much. And as Ofer said, We can bear a lot of increase in our fill rate and wind rate on the current cost structure. So if we will see wind over there, we don't need any extra cost in order to utilize this extra spend on our platform. I hope that this is answering your question. that's very helpful.
Speaker Change: We can.
Speaker Change: We can bear a lot of.
Speaker Change: A lot of.
Speaker Change: The increase in our fill rate and win rate on the current cost structure. So if we will see wins over there we don't need any extra costs in order to utilize this extra spend on our platform.
Speaker Change: This is answering your question.
Speaker Change: Got it.
Speaker Change: Very helpful. And then you mentioned enhanced large ports GB offerings to various partnerships. So that was great to see can you maybe talk about your strategy in live sports more broadly.
Sagi Niri: And then you mentioned enhanced live sports TV offerings through various partnerships. So that was great to see. Can you maybe talk about your strategy in live sports more broadly? And are there any other sort of major partnerships or inventory type that you would like to add to the platform? And maybe sort of what kind of advertiser demand are you seeing more broadly for sports versus non-sports?
Speaker Change: Are there any other sort of major partnerships. So inventory tied that you would like to add to the platform and maybe sort of what kind of advertiser demand have you seen more broadly for sports wishes Northpoint inventory.
I would take it.
Sagi Niri: I will take it, Sagi. I think that live sport is something that's becoming very, very popular, among, of course, users, but also advertisers that want to reach these users in the best place when they are watching sport. And with our CTV activity and our wide partnership, we are able to fulfill a lot of sport events that basically are interesting for the U.S. audience, and we are getting also a lot of traction from advertisers and other DSPs that are connected to us that want to monetize this basically interesting opportunity. I think that we don't have like a specific right now, a target that I can mention in this call that is super important to us to add.
Speaker Change: Think that lifeboat is something that's becoming more.
Speaker Change: Very very popular in mind of course users, but also it doesn't that wants to reach users in the best place when.
Speaker Change: Watching sport.
Speaker Change: And with our CTV activity.
Speaker Change: Arthur shape, we are able to fulfill a local filling sports events, which basically are interesting for the U S audience and we are getting good traction from it.
Speaker Change: Advertisers and other Isps that are connected to us this want to monetize.
Speaker Change: <unk> is basically an interesting opportunity.
Speaker Change: I think that we don't have like a specific right now targeted I can mentioned in this call that is super important to us to add I think that there is ongoing process.
Sagi Niri: I think that there is ongoing process that we are working with on in order to add more and more content and more and more advertisers and other DSPs that are interested to utilize this opportunity. And I think the trend is very well, it's very good as you can see. And we are going to expand it also through our relationship with VIDA, which is the operating of ICENSE, and not just in the US, but also internationally in the future, because of our relationship with them. And of course, OEM and especially ICENSE, that is promoting a lot of and sponsoring a lot of sports events is very helpful for us.
Speaker Change: Working with <unk> in order to add more and more content and moving more advertisers and other abuse piece of interest due to utilize this opportunity.
Speaker Change: The trend is very well is very good as you can see.
Speaker Change: And we are going to extend it also through our relationship with the with visa, which is the operating as of <unk> <unk>.
Speaker Change: Just in the U S. But also internationally in the future because of our relationship with them and of course, an OEM and especially <unk> <unk>.
Speaker Change: Promoting a lot of and sponsoring a lot of sports events is very.
Speaker Change: Helpful for us.
Speaker Change: Got it. Thank you so much for the color.
Sagi Niri: Thank you so much for the call.
Speaker Change: Thank you.
Speaker Change: Okay.
Speaker Change: Our next question comes from the line of Barton Crockett with Rosenblatt. Your line is open.
Barton Crockett: Our next question comes from the line of Barton Crockett with Rosenblatt. Hi, thanks for taking the question. I guess two kind of things if I could. One, just stepping back a little bit and thinking about your view of the growth potential of your business. You know, you mentioned that you are buying back your stock because your multiple is below some of the other ad tech comparables. And you've also suggested that you believe you're going to be a share gainer. But if we look at your like contribution X tech growth rate in the quarter at up about 8%, I think.
Barton Crockett: Hi, Thanks for taking the question.
Speaker Change: I guess two.
Speaker Change: Two kind of things if I could.
Speaker Change: One just stepping back a little bit and thinking about your view.
Speaker Change: The growth potential of your business.
Speaker Change: You mentioned that you are buying back your stock because your multiple is below some of the other AD tech comparable.
Speaker Change: And <unk>.
Speaker Change: You've also suggested that you believe you're kind of be a share gainer.
Speaker Change: But if we look at your <unk> contribution ex Tac growth rate in the quarter at about 8% I think.
Sagi Niri: You're growing slower than the Trade Desk in the 20s and Magnite, lower double digit. So I'm just wondering, do you see implicit in your share repurchase and in your share gain commentary? Do you think your revenue growth accelerates over some time frame? And if so, if you could talk about what gets us there.
Speaker Change: You are growing slower than the trade desk in the Twenty's and Mcknight lower double digit so.
Speaker Change: So I'm just wondering do you see implicit in your share repurchase and your share gain commentary do you think your revenue growth accelerates over some timeframe.
Speaker Change: And if so if you could talk about what gets us there.
Sagi Niri: Hey, I will take it. So thank you, Barton, for your call and for your question. I think that I will divide it into two points. First of all, I think that the traders traditionally over the last few years were presenting very high growth, which is, of course, a matter of them leading this market for a long time and being established a solution for many of the major players in this industry, which allow them to grow at this rate, which is, of course, very impressive. The second thing, I think that we conducted the major integration, the acquisition, and then the integration of Amobi and all our full stack and rebranding.
Speaker Change: I would take it.
Speaker Change: So think about them for your call and for your question I think that the.
Speaker Change: I will divide it into two points first of all I think that the trade desk traditionally over the last few years we are.
Speaker Change: Presenting very high growth, which is of course, a matter of them, leading this market for a long time and being established solution for many of the major players in this industry, which allowed them to grow at these rates, which is of course.
Speaker Change: Very briefly the.
Speaker Change: The second thing I think that we conducted a major integration.
Speaker Change: The acquisition and then the integration of them will be in all our full stack and rebranding we finish it basically at the beginning of 2024. We've sold 2024, we've got we delivered much better results than the last deals before them that 2022 and 2003.
Sagi Niri: We finished it basically in the beginning of 2024. We saw 2024 that we delivered much better results than the last years before them, like 2022 and 2023. And we feel that it's taking time to ramp up. It's not that it's a switch that you click on and suddenly everybody's jumping on you and wants to work with you. I think that there is a lot of work to be done, a lot of meetings, messaging, conferences, meetings in order to get it done. But I think that we are on the right path and we see the growth.
Speaker Change: And we feel that it's taking time to ramp up its not that the.
Speaker Change: It's a switch that you click on and suddenly everybody is jumping on you and wants to work with you I think that there is a lot of work to be done local food.
Speaker Change: Meetings messaging conferences meetings in order to get it done, but I think that we have on the right path and we see the growth and I think that our offering is very interesting in answering most of the trends.
Sagi Niri: And I think that our offering is very interesting and answering most of the trends and the things that are happening in the market, basically, that is challenging and also big opportunities for clients on both sides of the publishers and the advertiser side. We feel very strong about what we are doing. We think that it's a matter of time. We are improving our execution that was fairly good already in 2024. But we are expanding it and growing it and improving our execution. And I feel that in the next year or two, we see a growth coming in because of the infrastructure, because of the platform, the technology, the improved messaging and rebranding.
Speaker Change: Things that are happening in the market basically that is challenging and also big opportunities for clients on both sides of the purposes ended advertiser's site. So we.
We feel very strong about what we are doing.
We think that it's a matter of time, we are improving our execution.
Speaker Change: Fairly good already in 2024, but we are.
Speaker Change: Expanding it and growing it and improving.
Speaker Change: Our execution and I feel that in the next year or two we see growth coming in because of the infrastructure because of the platform. The technology, the improved messaging and branding and as we mentioned several on the beyond that also.
Sagi Niri: And as we mentioned in several PRs, that also talent acquisition that we are doing, and integration and promotion from the company. And all of that together will lead to additional growth in the near and mid-term.
Speaker Change: Ain't acquisition that we are doing and integration and promotion from the company and all of that together will lead to additional growth in the near and mid term.
Sagi Niri: Okay. Thank you for that. And then one other, if I could, you know, I think one of your clients that you guys talk about is Tubi, which had some benefit in the first quarter from the Super Bowl being on Fox and record viewership on Tubi. Was that in any way a material kind of contributor that might not be recurring as we look ahead? There is always different reasons for people to watch and to consume content. I don't think that we envision that there will be like a major massive change around that. I think that people are switching their favorites of what they are watching and so on according of course to availability and seasons, but we don't feel usually this change over the last few years unless it's like something very major on a global level that can affect it, but also then people find other things to watch.
Speaker Change: Okay.
Speaker Change: And then one other if I could.
Speaker Change: I think one of your.
Speaker Change: Clients that you guys talk about is <unk>.
Speaker Change: Which had.
Speaker Change: Some benefit in the first quarter from the Super Bowl being on Fox and record viewership on <unk>.
Speaker Change: Was that in any way.
Speaker Change: Material kind of contributor that might not be recurring as we look ahead.
Speaker Change: Hey.
Speaker Change: There is always different reasons for people to rewards and to consume content I don't think that the.
Speaker Change: We envision that there will be like a major domestic change around there I think that people are switching there.
Speaker Change: <unk> favorably.
Speaker Change: We are watching and so on according of course to availability and seasons, but we don't see them usually this the change over the last few years.
Speaker Change: Unless it's like something.
Speaker Change: Very major win with global level that can get effective coastal than.
Speaker Change: People find other things to towards basically if you look at the trends that were just published in the past.
Sagi Niri: Basically, if you look at the trends that were just published in the past two weeks, you see that there is a stable The scenario that people are watching between five to six hours a day consuming content and mostly from TV and mobile.
Speaker Change: But we can see that there.
Speaker Change: Stable.
Speaker Change: Scenario that people are watching between five to six hours a day.
Speaker Change: <unk> content and most meaningful TV mobile of course.
Speaker Change: Okay Alright.
Sagi Niri: Okay, all right, we'll leave it there. Okay.
Speaker Change: We're not expecting any material change.
Speaker Change: Okay, Alright, thank you very much.
Sagi Niri: All right. Thank you very much.
Speaker Change: <unk>.
Matt Condon: And our last question comes from the line of Matt Condon with Citibank. Your line is open.
Matt Condon: And our last question comes from the line of Matt Condon with Citizens. Thank you so much for taking my questions. My first one is just, you highlighted new partnerships as a key contributor to your, to maintaining the full year of contribution next tech guidance. I was just wondering which one of those partnerships or if you could highlight any of the partnerships that are really driving that growth. Is it the beta partnership with the Trade Desk? Is it LG? Is it Sagwell? Any color that Sagi, did you, can you take it? I don't remember that we mentioned like one part.
Matt Condon: Thank you so much for taking my questions. My first one is just you highlighted new partnerships as a key contributor to maintaining the full year contribution ex Tac guidance I was just wondering what should one of those partnerships.
Matt Condon: Highlight any of the partnerships that are really driving that growth is it the data partnership with the trade desk is at algae Bagwell any color there would be helpful.
Matt Condon: So again did you say.
Because I don't remember that we mentioned.
Matt Condon: Oh yeah.
Sagi Niri: Yeah, no, I'll take it. I think that You know, as I said before, I'm not sure who asked the question, we are well diversified over our verticals, our partners, both on the supply side and on the demand side. And we are not really reliant on anyone. So, and we are not really over indexed to anyone. So, I don't think that, you know, if something will happen, we can put a finger and say, hey, this line of business or this partner, or this corporation is going to suffer. I think we are well positioned and hopefully that it will not come.
Matt Condon: Yeah, No I'll take it of course.
Matt Condon: Hey, Matt I think that you know.
I said before I'm not sure. The question we are.
Matt Condon: Well diversified over our versus.
Matt Condon: Our partners.
Matt Condon: Both on the supply side and on the demand side and we are not really reliant on any one so and we are not really over index to anyone.
Matt Condon: Don't think that.
Matt Condon: If something will happen, we can put our finger and say hey, This line of business with this partner for this corporation is going to suffer.
Matt Condon: I think we are well positioned and ultimately.
Sagi Niri: But if it will come, I'm sure that we have enough, you know, scale and diversification in order to compensate it from a different line of business or partner or whatever we're talking about.
Matt Condon: It will not come back it will come and ensure that we have enough.
Matt Condon: Scale and diversification.
Matt Condon: And safety from a different line of business or partner or whatever we're talking about I hope that I answered your question.
Sagi Niri: I hope that I answered your question. That's helpful.
Matt Condon: That's helpful. And then I also just wanted to ask about the end to end platform and just what percentage of your DSP buys are also going through your assets.
Sagi Niri: And then I also just wanted to ask about the end-to-end platform and just what percentage of your DSP buys are also going through your SSP? And just what ending are we in there? And how much higher do you guys... Thank you so much. Yeah, sure. So I think, you know, we didn't change a lot in the last couple of quarters. It's somewhere around the 50s percent. So 50% of every dollar that is coming through our DSP is being utilized or facilitated on our exchange. At the end of the day, we think it can go higher, and of course, it will contribute to our margin expansion.
Matt Condon: What inning are we in there and how much higher do you guys think that can go. Thank you so much.
Matt Condon: Yes sure.
Matt Condon: It Didnt change a lot in the last couple of.
Walter: Walter it's somewhere around the 50%.
Matt Condon: 50% of every dollar of that is coming through our DSP is being.
Walter: Utilized or facilitate.
Walter: On our exchange.
Walter: At the end of the day, we think it can go higher and of course, it will contribute to our.
Walter: Margin expansion.
Sagi Niri: Having said that, it's not something that we are really controlling. Everything, you know, all the decisions are being made by the bidder and by algorithm, and it's not like we can affect anything. And by the way, you know, advertisers can come in agencies and ask to facilitate 20% of their budget on XSFP or on ZSFP or on, I don't know, A-Exchange. So we are not really controlling that. Having said that, and as Ofer mentioned, because we are all the time and it's ongoing, we are bringing more and onboarding more and more publishers and more and more inventory and more and more data.
Walter: Having said that it's not something that we're really controlling everything and all of the.
Walter: Decisions are being made by the <unk> by algorithm and it's not like we can affect anything and by the way advertisers can calm and agencies and to facilitate the 20% of their badges on ex SSP or on that SSP or Ron I don't know a exchange. So we are not really controlling that and.
Walter: He said that and as <unk> mentioned, because we are all the time and it's ongoing.
Walter: In the morning on bundling more and more publishers and more and more inventory and more and more data.
Sagi Niri: We are presuming that at the end of the day, we can facilitate more or the bidder and algorithm will get the right decision, the right ROI for both sides in order to facilitate through our platform. So it will go up. I can't tell you exactly, you know, what is like my point of view of the cut, but I think it can move from 50 to 60 in the next three years. That's very helpful. Thank you so much. Thank you.
Walter: First you will mean that at the end of the day, we can facilitate more or the theater an algorithm, we will get the right decision the right Rois.
Walter: Both sides in order to facilitate through our platform. So it will go up I campaigned and exactly you know what it's like <unk>.
Speaker Change: My point of view of the cap, but I think it can move from 50% to 60 in the next three years.
Walter: That's very helpful. Thank you so much.
Walter: Thank you sure.
Speaker Change: And we will take a question from Nat Schindler with Scotiabank. Your line is open.
Nat Schrinder: And we'll take a question from Nat Schrinder with Scotiabank. Yes. Hi, guys.
Walter: Okay.
Nat Schindler: Yes, hi, guys.
Sagi Niri: Great quarter. And particularly on the EBITDA side, you're usually quite a bit lower in Q1 on EBITDA because of the lower revenue just seasonally that happens in Q1. Trying to understand what are you expecting in expenses? I just go out through the year. You're going to be not seeing your traditional Ramp-A-Neeb-A-Dot even as you ramp rep. to get to your guidance. Is there some specific expense you want to call out? A&F. No, there isn't any special expense. I think I touched it on previous questions. So I said that the, you know, the extra EBITDA that we delivered in Q1 came from eating our top line.
Walter: Great quarter, and particularly on the EBITDA side.
Walter: Actually quite a bit lower in Q1 on EBITDA because of the lower revenue.
Walter: Just seasonally that happens in Q1 trying to understand what are you expecting in expenses.
Walter: I just go out through the year.
Walter: Youre going to be not seeing your traditional ramp in EBITDA, even as you ramp revenue.
Walter: To get to your guidance is there some specific expense you want to call out.
Walter: Anna.
Walter: <unk>.
Speaker Change: No there isn't any special expense I think I touched it on previous questions. So I would say that the.
Walter: The extra EBITDA that we delivered in Q1 came from <unk>.
Speaker Change: I think our.
Sagi Niri: And everything, of course, that we are eating over there are going directly into the bottom line. Some reversal on the actual allowance provision. Some better utilization and margin expansion on different line of businesses. And a little bit slower than expected on boarding of ad count. Again, it was an educated decision that we took, not any challenge, because we are seeing a lot of talents now trying to come to Nexxen. So I think all of these components are the reason for eating the editor line. You know, we are still guiding the 125. We are still cautious.
Speaker Change: Hotline and encouraging of course that we are eating over there are going directly into the bottom line summaries there style on that total allowance provision.
Speaker Change: Some better utilization and margin expansion on the front line of businesses and a little bit slower than expected.
Speaker Change: Onboarding of Ed Count again, it was an educated decision that we took not any challenge because we are seeing a lot of silence now trying to calm.
Speaker Change: To next and so I think.
Speaker Change: All of these components are the reason for Eaton Vance is aligned.
Speaker Change: You know we are still guiding the 125 without being cautious we are still.
Sagi Niri: We are still, you know, it's early in the year and we want to see where Q2, Q3 is taking us. Maybe and hopefully, you know, it will go higher as the year will progress.
Speaker Change: It's early in the year and we want to see where Q2 Q3 is taking gas may.
Speaker Change: Maybe an all fully you know it will go higher as well.
Speaker Change: With progress.
Speaker Change: Okay.
Sagi Niri: Okay, and where do you think What is a long-term stable level? Obviously, you've had a lot of swings over the years with adding in and dealing with the acquisition. Uh, you've been very high in the past in other places. Where do you want to You're talking about Justin Debbie D'Amazion? Yeah, so just to leave at the margin, ex-tax versus contribution tax. I think we want it to be, you know, 100%, but it's not feasible. You know, it's something that we are thinking about a lot. I think that, you know, Gen-AI and all the initiatives around that will contribute to that.
Speaker Change: Where do you think.
Speaker Change: What is the long term stable level, obviously, you have had lots of swings over the years with.
Speaker Change: Adding in and dealing with the acquisitions.
Speaker Change: You've been very high in the past in other places where do you want it to be.
Speaker Change: You are talking about net.
Speaker Change: Adjusted EBITDA margin.
Speaker Change: So adjusted EBITDA margin ex Tac versus contribution.
Speaker Change: I think we wanted to be 100%, but it is not feasible I think that.
Speaker Change: Yes.
Speaker Change: But seriously.
Speaker Change: It's something that we are thinking about it a lot, but I think that you know Jan AI and all the initiatives around that will contribute to that.
Sagi Niri: We are investing a lot in 2025 as part of a plan, and of course, we will see the benefits and the outcome of that in 2026 and onward. You know, if I need to, like, do a educated guess or not guess according to our plan, I think that we can reach the 40s by three to five years.
Speaker Change: We are investing a lot in 2025 as part of our plan and of course, we will see the benefits and the outcome of that in 2026 and onward.
Speaker Change: If I may to like do.
Speaker Change: Agile cases gas or not gas. According to our plan I think that we can reach the forecast by three to five years.
Speaker Change: Okay.
Sagi Niri: Okay, thank you. And that concludes the question and answer session.
Speaker Change: Thank you.
Speaker Change: Youre welcome.
Ruger: And that concludes the question and answer session I would like to turn the call back over to offers Ruger for closing remarks.
Ofer Druker: I would like to turn the call back over to Ofer Druker for closing remarks. Thank you. We are very excited with our performance and the way we rebranded, packaged, and executed our strategy through our robust technology stack and our talented and committed teams around the globe. I think that the last quarter also showed the resilience and the hard work with all the uncertainty around, we achieved really good results. Watching our peers in the industry, we strongly believe we are on the right path and we will keep on going. exercising our strategy in the next couple of years and we are really feeling that we choose the right strategy and we are exercising it in a way that basically enable us to grow the business and keep leading the market around CTV data and end-to-end that we started this journey basically in 2019.
Speaker Change: You.
Ruger: We are very excited with our performance and we and the way we rebranded.
Ruger: Decades, and executed our strategy through our robust technology stack and our talented and committed teams around the globe I think that the last quarter also show the resilience and valve work, we pulled our sales at the around we achieved really good results watching our peers in the industry we strongly.
Ruger: We believe we are the right path.
Ruger: And we will keep.
Exercising our strategy in the next couple of years and we are really we are really feeling that we chose the right strategy and we're exercising it in a way that basically enable us to grow the business.
Ruger: And leading the market around CTV.
Ruger: And then to end that we started this journey basically in 2019.
Ofer Druker: So thank you everyone for your support and for your time this morning and thank you very much. Ladies and gentlemen. This concludes today's conference call. Thank you all for joining, and you may now disconnect. Please wait, the conference will begin shortly.
Ruger: So thank you everyone for your support for this deal for your time this morning, and thank you very much.
Speaker Change: And gentlemen.
Speaker Change: This concludes today's conference call. Thank you all for joining and you may now disconnect.
Speaker Change: Okay.
Speaker Change: Please wait the conference will begin shortly.
Speaker Change: [music].