NIQ Global Intelligence Q2 2025 Earnings Call Transcript

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August 14, 2025

Key Takeaways

  • Positive Sentiment: NIQ delivered Q2 revenue of $1.04B, up 5.7% on an organic constant-currency basis, with adjusted EBITDA growing 16% to $215M and margins expanding nearly two percentage points to 20.6%.
  • Positive Sentiment: The company’s four-pillar revenue growth algorithm—105% net dollar retention, 2.5% pricing uplift, rapid upsell of new AI-powered solutions, and expansion into adjacent verticals—drove outperformance in Q2.
  • Positive Sentiment: NIQ bolstered its platform through strategic tuck-ins, acquiring GastroGraph AI for sensory insights and Emteryx to enter the Brazilian supply chain vertical, enhancing its AI-driven data capabilities.
  • Positive Sentiment: Following its July IPO and debt refinancing, NIQ has reduced interest expense by over $100M annually, holds $250M in cash and $1B in total liquidity, and targets a net leverage ratio below 3.5x by year-end.
  • Positive Sentiment: NIQ raised full-year 2025 guidance, now expecting 4.2–4.4% reported revenue growth (5.0–5.2% organic cc), 13–14% adjusted EBITDA growth (~20% margin), and $245–275M of free cash flow, underscoring strong visibility into profitable growth.
AI Generated. May Contain Errors.
Earnings Conference Call
NIQ Global Intelligence Q2 2025
00:00 / 00:00

There are 12 speakers on the call.

Operator

Hello and thank you for standing by. My name is Tiffany and I will be your conference operator today. At this time, I would like to welcome everyone to the NIQ Second Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

Operator

Would now like to turn the call over to Will Lyons, Head of Investor Relations. Will, please go ahead.

Speaker 1

Thank you. Good morning, everyone, and welcome to NIQ's second quarter twenty twenty five earnings call. Joining me today are CEO, Jim Pack COO, Tracy Massey and CFO, Mike Burwell. I would like to take this opportunity to remind you that our remarks today will include forward looking statements. Actual results may differ materially from those contemplated by these forward looking statements.

Speaker 1

Factors that could cause these results to differ materially are set forth in today's earnings press release. Any forward looking statements that we make on this call are based on our assumptions today, and we undertake no obligation to update these statements as a result of new information or future events. During this call, we will present both GAAP and certain non GAAP financial measures. A reconciliation of non GAAP to GAAP measures is included in today's earnings press release. The earnings press release and an accompanying investor presentation are available on our website at investors.nielseniq.com.

Speaker 1

A replay of this call will also be available on our Investor Relations website. Following management's prepared remarks, we will open the call to Q and A. Also, we intend to file our 10 Q later today after market close. And with that, I'll now hand the call to Jim.

Speaker 2

Thank you, Will, and welcome, everyone. We appreciate you joining us for our first call as a public company following our July IPO. We're looking forward to a productive ongoing dialogue with all of you. We had a great second quarter and 2025, delivering another quarter of profitable growth and margin expansion. We continue to provide our data and insights to our clients around the globe, enabling them to compete and win.

Speaker 2

Our 2Q results exceeded the top end of our July preannouncement range shared in the IPO prospectus. We generated more than $1,000,000,000 in revenue, up 5.7% on an organic constant currency basis. Revenue from our largest two segments, Americas and EMEA, grew 5.48.1%, respectively. Within our solutions, our core intelligence revenue grew 7.5%. Intelligence subscription revenue, our version of ARR, grew 6.9%.

Speaker 2

We have been growing and increasing profitability. Our Q2 net loss was $14,100,000 while adjusted EBITDA grew 16% to $215,000,000 for nearly a 21% margin, expanding nearly two percentage points year over year. So because this is our first earning call, I'll briefly outline our mission and strategy for creating long term shareholder value. NIQ powers NextGen Global Consumer Intelligence covering $7,200,000,000,000 in consumer spending across more than 90 countries. We ingest 3,500,000,000,000 data records weekly, leveraging AI and human intelligence to deliver differentiated granular insights.

Speaker 2

We also are the only provider that can combine consumer measurement and panel data for a holistic view of shopping behavior globally. Our AI tech powered platform is a growth enabler. It powers our data scale, breadth and depth as well as our capital efficient innovation, automated coding and at lower data costs. This has driven mid single digit growth, high incremental margins and increased client satisfaction. We believe there's significant upside ahead and we are positioned to capture a leading share of a $57,000,000,000 TAM with significant white space.

Speaker 2

As I cover our Q2 highlights, I would like to reiterate our revenue growth algorithm, which has four components: strong revenue retention value based pricing cross selling and up selling our new capabilities and solutions, and finally penetrating fast growing adjacent verticals and markets. Starting with our strong revenue retention, including 105% net dollar retention rate, which demonstrates our durable client partnerships, the mission criticality of our solutions and the value we create. Next is pricing, which was the biggest driver of Q2 growth. Tech upgrades and cost of living escalators are baked into subscription contracts. Like renewals, we earn these increases every year by being a great partner and innovating to serve our clients' needs.

Speaker 2

The next component is upselling and cross selling our innovative new capabilities and solutions. In Q2, we saw rapid adoption of our consumer panel product in Europe and Latin America. In U. S. And Europe, client demand remains very strong for our e commerce measurement products.

Speaker 2

In fact, we've reached 50% e commerce product upsell penetration across our 100 largest CPG clients. In Q2, we also launched and expanded our innovation focused activation product, Basis AI Screener. Live now in 10 countries and 89 categories, we cross sold this solution to several large intelligence clients. We acquired and integrated GastroGraph AI, a leading sensory insights platform that provides food and beverage manufacturers with predictive analytical capabilities related to ingredients. This acquisition further strengthens our Basie's AI screener product roadmap.

Speaker 2

The last component is penetrating adjacent verticals and high growth markets. Adjacent verticals include financial services, government and media. Last week, we also announced our entrance into the supply chain vertical by acquiring Emteryx, a leading Brazil based SaaS company with a network of more than 2,000 manufacturers, wholesalers and distributors covering consumer transactions across approximately 1,200,000 points of sale throughout Brazil. Emtrix is prime for growth. Already active in more than 25 markets, bolting Emtrix into the NiQ platform can drive deeper penetration into LATAM, APAC and EMEA.

Speaker 2

In summary, client demand remains strong despite ongoing uncertainty in its global trade policy. We believe this demonstrates a key point. NIQ solutions are mission critical in all economic environments. This is reflected in the financial guidance we're issuing today. And just a few comments before I pass to Tracy to cover our client first approach and revenue growth strategy.

Speaker 2

It was a great Q2 and we believe we are only just starting to reap the benefits of our transformation. We'll continue to press our competitive advantages, powering innovation, serving clients, penetrating our TAM and delivering on our promises, driving towards consistent revenue growth, margin expansion and free cash flow generation. I want to thank our NIQ associates worldwide for their commitment, and I also want to thank our investors for their partnership along this exciting journey. Tracy?

Speaker 3

Thanks, Jim, and thank you to everyone for joining us on today's call. Our growth strategy is rooted in our innovative culture that is accountable, committed to integrity, and driven to win. We put clients at the heart of everything we do, and our business model aligns our success with their success. NIQ data, software, and expertise are deeply embedded within our clients' enterprises from the c suite to sales and marketing to r and d and supply chain management. We drive mission critical strategic and operating decisions for billion dollar budgets, including pricing strategies, trade spend, advertising, innovation, supply chain, and m and a.

Speaker 3

We win due to several factors. We're the only global source of truth and the only one that married what consumers bought with why they bought it. We have unmatched data scale, insights, and capabilities. We're embedded within client operations, and we're mission critical to their daily decision making. We're trusted by the world's top consumer brands many over decades, and our AI powered tech stack enables rapid innovation and upsell.

Speaker 3

A few highlights on our future success aligned to the growth algorithm that Jim outlined. First, on renewals. We continue to have strong renewals with our clients. One of these was securing a multiyear 8 figure renewal with one of our largest CPG clients, and I'll note that this client opted against running an open RFP process based on our strong relationship and differentiated value. And across all regions, we renewed and grew with existing retailers and added new retailers to our ecosystem.

Speaker 3

Second, we continue to upsell and cross sell new capabilities and solutions. Our tech transformation is enabling us to rapidly innovate and grow share of wallet. 90% of our largest clients have adopted at least one of our new capabilities. For example, our digital shelf e commerce product enables clients to quickly understand pricing effectiveness, respond to competitive promotions, track category share, and monitor online search share among many other benefits. Digital shelf is now available in 70 markets globally.

Speaker 3

We're also seeing rapid US market adoption of our all in one full view measurement products. These products bring together all of NIQ's data assets in one single platform, including online and offline point of sale data, sales and share data from different retailers, and our omni shopper consumer panel data. FullView has unleashed new product capabilities that drive differentiated insights for our clients, such as one of our top CPG clients who uses Four View Measurement to track and optimize their in store and digital commerce performance. This solution was fully launched in The US last year, and we will continue to innovate. For example, we're in the early days of bringing Four View Measurement products to European markets.

Speaker 3

Our innovative approach to consumer panel is also driving strong adoption, upsell, and cross sell. In Q2, we expanded our US omni shopper panel, now the largest of its kind in The US at 250,000 households. More broadly, our consumer panel product is driving ample takeaways across Western Europe, North America, and Latin America, and panel revenue is growing by double digits. Another q two innovation was the launch of our new omnichannel measurement sales and share read of a leading US club retailer. It's resonating, and we're driving up sell with clients of all types from brands to retailers to financial services professionals like those on this call.

Speaker 3

Born out of a North American sales and product collaboration, this showcases how we create new value from our rich granular data. In addition to upselling our new capabilities, we also see significant cross selling with existing intelligence clients with complementary activation solutions. These already have strong attachment rates with approximately 76% of activation revenue coming from existing intelligence clients during the quarter. However, only 40% of existing intelligence clients are currently buying activation, giving us strong cross selling potential ahead. Turning to adjacent and high growth markets.

Speaker 3

In addition to entering supply chain through Entrex, we leverage Agencik AI across our rich data assets to enter the packaging vertical. Another example of how we can mine our data to create our own growth opportunities. Yet another example of this is our approach to penetrating SMB. Our data enables us to identify the category upstarts and our tailored solutions, specialized sales force, and customer success teams help SMB clients turn into category leaders. We've been growing SMB revenue at double digit rates this year, and we believe we're well positioned to capture extensive growth whitespace ahead.

Speaker 3

Our core algorithm underpins our expectation for mid single digit revenue growth. We also have multiple additional growth levers, including large new client wins, including client win backs, organic growth investments to penetrate new opportunities and strategic bolt on M and A such as our GastroGraph and Emtrix acquisitions, which we normalize out of organic revenue growth, but are sources of profitable growth moving forward. We are pleased with strong demand and increased client satisfaction, including an NPS score that reached 45 in Q2, up seven points versus December 2024 and more than triple twenty nineteen. We are focused on serving our clients and in turn driving this metric higher. In summary, we're executing well and believe we have all the ingredients to lead, win and grow for the long term.

Speaker 3

I'll now pass to Mike to cover our Q2 financials and outlook.

Speaker 4

Thanks, Tracy, and good morning, everyone. It's great to engage with our investors and our analysts for the first time as a public company. And I'm looking forward to working with all of you as we scale the company and build shareholder value. Our strong revenue visibility and ongoing cost discipline position us for ongoing profitable growth and strong cash flow. Key highlights of our financial profile.

Speaker 4

Our revenue is approximately 80% recurring with multiyear subscription based contracts and built in price escalators. This gives us great top line visibility. On the cost side, roughly 80% of our costs are fixed and ratable throughout a given year. Fixed costs include most of our data acquisition costs, which provide the jumping off point for our global AI powered data intelligence engine. Our fixed cost base enables high revenue flow through to EBITDA, as you see in our Q2 results and outlook, all of this driving significant free cash flow inflection as we deliver profitable growth against lower one time costs, CapEx and interest expense.

Speaker 4

Turning to our Q2 results. Q2 organic constant currency revenue grew 5.7% to $1,040,000,000 above the top end of our July preannouncement range. We saw particular strength across Americas and EMEA and intelligence driven by strong renewals, value based pricing, cross sell and upsell and growth in new verticals. All of this contributed Americas growth of 5.4% and EMEA growth of 8.1%. From a product perspective, total intelligence and annualized intelligence subscription revenue showed notable strength, growing 7.56.9%, respectively.

Speaker 4

Activation decreased slightly in Q2 as clients worked through project timing considerations. I'll note that we've seen solid project demand in recent months. On expenses, total operating expenses were $1,000,000,000 We reduced expenses by $12,000,000 or 1.2% by driving operating efficiencies from our NIQ transformation as well as GFK synergies as we wind down onetime integration expenses. And our net loss was $14,100,000 while adjusted EBITDA grew 16% and margins expanded 180 basis points to 20.6%. We have a proven integration playbook to increase shareholder value.

Speaker 4

We ramped up adjusted EBITDA margins from 13% in 2020 to 18.5% in 2024, and we expect the results of the JFK integration will be a key driver of margin expansion this year and next. Turning to free cash flow. We expect 2025 to be a significant positive inflection year, particularly in the second half given our post IPO capital structure. It's important to focus on free cash flow over the second half of the year given the change in our capital structure and our debt pay down. We expect to significantly grow free cash flow in the second half as we grow revenue, expand adjusted EBITDA margins and drive capital efficiency.

Speaker 4

Also, our July IPO has helped us significantly delever the balance sheet, and we are targeting a 3.5 times net leverage ratio by the 2025 and below three times by the end of fiscal year twenty twenty six. Through our IPO and our two successful debt refinancing, we have reduced interest expense by over $100,000,000 per year, significantly lowering our overall cost of capital. I'll also note we have built an automatic interest spread step downs in our credit agreements that can deliver another $10,000,000 of annual interest savings as our leverage ratio decreases. Taking all of this into account, we expect to generate $245 to $275,000,000 of leverage free cash flow in the 2025, which is up approximately $230,000,000 versus the same period in 2024. This is an exciting first step of free cash flow inflection in the coming years.

Speaker 4

Turning to our balance sheet. I'll outline our post IPO and debt repayment view and cash position. Following our IPO and subsequent debt pay down as well as our recent debt refinancing, we have more than $250,000,000 of cash on the balance sheet and total available liquidity of more than $1,000,000,000 including our upsized $750,000,000 revolving credit facility. As mentioned earlier, this week we closed an amend and extend transaction of our USD and euro denominated term loan fees, lowering our cost of debt and extending our maturities by two point five years to October 2030. I'm pleased to see our strengthened credit profile recognized by the agencies, with rating upgrades from both Moody's to B1 and Fitch to BB- and a positive outlook from S and P.

Speaker 4

On capital allocation, as free cash flow ramps, repaying debt is our top priority. Also, as you have seen from our GastroGraph and Amtrex announcements, we will continue to pursue strategic tuck ins that are accretive and complement our growth strategy. Our post capitalization liquidity position gives us the flexibility while also achieving our net leverage goal. To conclude, I'll provide our thoughts on the 2025 financial outlook. I'll note that based on our strong Q2 performance and favorable business dynamics, we're setting guidance ahead of our estimates we shared with the research analysts leading up to the IPO.

Speaker 4

For the 2025, we expect revenue growth as reported of approximately 4.2% to 4.4%. Organic constant currency revenue growth of approximately percent to 5.2%, and adjusted EBITDA growth of approximately 13% to 14%, or nearly 20% margin, which implies around 165 basis points of expansion on a year over year basis. For the full year of 2025, we expect revenue growth as reported of approximately 4.1% to 4.3% organic constant currency revenue growth of approximately 5.2 to 5.4% adjusted EBITDA growth of approximately 18% to 19% or approximately 21% margin, which implies approximately two seventy basis points of year over year margin expansion. It was a great quarter and we're excited for what's ahead. So operator, we're ready to open up the call for Q and A.

Operator

Your first question comes from the line of Manav Patnaik with Barclays. Please go ahead.

Speaker 5

Thank you. Good morning. I was just wondering if the momentum that you talked about and why you raised the second half of the guide, how that reconciles with some of the noise we're seeing in the market, the uncertainty, the new round of tariffs news, I guess, that you had called out had impacted some of your business in the first half. Just was hoping how you factor that in.

Speaker 2

Yes. Sure, Manav. Hi. Good to talk to you again. Yes.

Speaker 2

I think as we've talked about before, the information and the analytics that we provide to our clients impact so many parts of their business that whether there's a recession or not a recession or whether there's tariffs, which are kind of a new thing, and I think our you you we've seen that our business has performed through that. They need our insights in literally every kind of environment. So we're not experiencing any of that kind of choppiness, and we're just seeing a good steady performance that that you'd expect from us.

Speaker 5

Got it. Okay. And then just to follow-up, the second half guide, can you just help us in terms of the activation and intelligence, that should look like? Like, is there any tough comps or project based revenue stuff to consider?

Speaker 4

You Manav, it's Mike. When you look at those second half comps, we have lower comps. We had tougher comps in the first half and lower comps in the second half. So you're going to see improvement in activation that's included and reflected in those numbers over the second half. So again, overall, we took those comps up, as you see, and reflected in those numbers versus what we had previously established as guidance, and that includes both the intelligence and activation businesses.

Speaker 5

Your

Operator

next question comes from the line of Jeff Silber with BMO Capital Markets. Please go ahead.

Speaker 6

Thanks so much. Wanted to first focus on activations. If I remember correctly, you had talked earlier about some of the softness around the tariffs. And I know you kind of answered that question. But do you think you're out of the woods yet?

Speaker 6

Do you really think that we've kind of gone through that and folks are kind of back to sort of normalized buying?

Speaker 2

Sure. Sure, Jeff. Great to to hear from you. So, Tracy, that that's a great question for you to answer.

Speaker 3

Yeah. Sure. Hi, Jeff. We we really didn't see an adverse impact to tariffs. If anything, we saw additional demand for pricing studies in particular and consumer sentiment work.

Speaker 3

So, you know, as Jim said at the start, we we really are mission critical to our clients and and relevant of what's going on in the market, whether it be the economic climate, market growth of different categories, changing consumer sentiment, we don't see softness in end market impacts. We we sometimes see some temporary slowdown from internal issues in our clients, like reorganization or leadership changes, but we're really not seeing any impact. And in q two last year, we had a very strong activation business. And as Mike said, so we had a very high comp as we faced Q2 this year. The second half of this year has lower comps.

Speaker 3

And I'll also note that we have underlying very, very strong underlying demand for our activation business. It remains very robust. We have seen a strong increase across our order book in recent months, because clients need nIQ to help them innovate, compete, and win.

Speaker 6

Yeah. That's really helpful. And then just looking at the quarter, I know you hadn't provided any specific color by segment, but I think the EMEA revenues, especially that accelerating growth was a bit better than most people had thought. Can we talk a little bit about that? You alluded to a little bit in your comments, but if we can get a little bit more color, that'll be great.

Speaker 3

Yeah. Sure. The EMEA business is is highly levered towards, the tech and durables business. So the old GSK business that we that we bought, that is, very big in that region, and we saw strong, rebound for that business in particular. And we also saw very strong growth on consumer panel.

Speaker 3

So we're very excited by our EMEA performance in q two. It reflects our underlying growth algorithm. So across all parts of the algorithm, they did well. But in particular, I would point to the consumer panel innovation. And like I say, GFK, the old GFK rebound, we don't report on that.

Speaker 3

It's very integrated, but a strong rebound in the tech and durables business.

Speaker 6

Okay. Really helpful. Thanks so much.

Operator

Next question comes from the line of Jason Haas with Wells Fargo. Please go ahead.

Speaker 7

Good morning. This is Jingyi on for Jason Haas. Can you elaborate on the client project timing dynamics? What caused that, and whether the softness is expected to persist into 3Q? Thank you.

Speaker 2

Yeah. Could could you repeat that question? It broke up just a little bit.

Speaker 4

Yeah. Sorry. Can you elaborate on

Speaker 7

the client project timing dynamics and if that was caused by macro uncertainty or other factors and whether the softness is expected to persist into three q?

Speaker 2

Okay. You said client project? Is that is that right? Yeah. So, Tracy, you you alluded to that just a minute ago.

Speaker 2

Why don't why don't you kinda just dive into that a little bit more?

Speaker 3

Yeah. So I I'm assuming you're you're meaning activation. So the the softness we saw versus last year, so not not softness, but a lower growth rate than we would expect the the full year to be was because last year's Q2 was a very strong comp. We had very, very strong activation business last year. This year's business is strong, just wasn't quite as strong.

Speaker 3

As we head into Q3 and Q4, we had much lower, we have much lower comps. So we're very, very confident of that business. The order book is very, very strong. We've seen a strong increase, so we don't expect softness in that area.

Speaker 4

Can you hear me better now? Sorry.

Speaker 5

Yes. Yes.

Speaker 7

Okay. And then for my follow-up question, so it looks like you have an easier comp in three q, but your guidance implies a deceleration in organic growth. So can you walk me through the moving pieces there?

Speaker 3

So I I would say, you know, we we have a portfolio of solutions across both activation and intelligence. Our growth guidance reflects this as well as our confidence of all of the underlying elements of our growth algorithm. So while our activation order book is robust, there's been confidence in q three and q four guidance, and it's a mixture of both. We don't give specific guidance, splitting the two up. I was just specifically answering your question about activation.

Speaker 3

We feel very, very good about the order book. But overall, our guidance is as as we showed during q three and q four.

Speaker 4

And and maybe I I would add one other comment to Tracy's what Tracy stated. When you look at our q three guidance, from, you know, what we had had previously, you know, we had taken it up from 4.7% to 5.2% overall. And look, we're highly confident in our ability to deliver, and that's why we increased those rates in terms of what our overall guidance will be. And so I guess I just want to make sure to emphasize that in addition to Tracy's comments.

Operator

Your next question comes from the line of Andrew Nicholas with William Blair. Please go ahead.

Speaker 8

Hi, good morning. Thanks for taking my questions. I wanted to double back to Tracy's response on the EMEA strength. It sounds like that's a really big driver specifically from the rebound in GSK. How much is that a function of maybe the market environment or Protect and Durables strength versus execution of, you know, the the NIQ transformation playbook?

Speaker 2

Sure. I I'm gonna say the answer is both. But I think I'll again, I'll turn it over to Tracy to to give more color as she she kinda started the answer and let her let her take your question, Andrew.

Speaker 3

Yeah. It it's both. So if you if you remember from, the roadshow, the tech and durables business is a bit of a drag on our business last year, which was the first full year of integrating that business, and we were very confident that we would turn that around given the fact that we're using the same playbook as we did for the NIQ transformation. That's been very successful in the first half of this year, and we have gone from a slight decline last year to low digit growth, and we expect it to get even stronger in the second half of the year. So just very confident on that turnaround of that tech and durables business.

Speaker 3

It isn't market related. It's our performance, and how we're running that business. Now we've integrated it in, and like I said, we're executing the same playbook. From the the other side, it's panels. Again, we talked about that.

Speaker 3

If you remember, we had to, divest our panels business that that we we got when we acquired GSK. And therefore, last year, we weren't able to compete, against the people we divested it to until q four. So we really only started to see the benefit of the the good consumer panel investments we've made, last year q four and the first half of this year. And that's particularly strong in Western Europe as our innovation to combine consumer panel with RMS data on one on one system is really resonating, with our clients, and we're seeing significant win backs in that area. It's a very, very strong innovation, and it's resonating really well.

Speaker 3

So we remain confident of that. So I would say two things, the turnaround of tech and durables and the upsell, cross sell of our solutions.

Speaker 8

That's super helpful. Thank you. And then maybe for my follow-up, just if you could talk a little bit more on pricing as a contributor in the quarter and maybe a reminder on how that is incorporated within your contract structures as it sits today? Thanks again.

Speaker 3

Yeah. So, if you think about our growth algorithm, what q two, our growth algorithm, we drove two and a half percent from pricing, one and a half percent from upsell and cross sell of our innovative new solutions, and 1.7% from our new markets. That's the algorithm we showed you when we did the roadshow, that's how it played out in Q2. So strong growth in pricing. I think our guidance is always 2.5% to 3%, and we hit the 2.5%.

Operator

Your next question comes from the line of Andy Grobler with BNP. Please go ahead.

Speaker 9

Hi, good morning. Thank you for taking my questions. Just firstly on the margin expansion. You talked a little around the benefits from GFK synergies and the NIQ transformation. Can you just split out kind of the component parts of that plus anything you got from just operational leverage?

Speaker 9

Thank you.

Speaker 4

Sure. Thank you for the question. When you look at it, roughly 60% of that was driven by our GFK integration. 30% of it has come from our continued drive of our mid single digit revenue growth and 80% fixed cost base. And again, roughly around 10% is being driven through the continued flow through of our NIQ transformation, and it continues to flow through our business overall.

Speaker 4

So really, those are the main components.

Speaker 9

Okay. And then just one follow-up, if I may, on just on the guidance and FX, because it was a tailwind in Q2. The guidance for the full year looks to be about 20 basis points, well, Q3 and for the full year. Given ongoing U. S.

Speaker 9

Dollar weakness, why isn't the tailwind from currency bigger than that?

Speaker 4

Yes. Currency, when you look at the first quarter, back FX was a headwind. When you look at Q2, it was a tailwind. And when when we look at it year to date, it was a headwind. Now if you dissect that a bit more, Americas our Americas business has been more of a headwind, particularly as it relates to our consistent headwind associated with our peso and Canadian dollar, where our business for EMA has been more of a tailwind in terms of thinking about it.

Speaker 4

So look, we used Q2 spot rates to forecast our guidance. And so we really didn't see a bigger tailwind through the rest of the year. And so that's where we really kept it flat in terms of thinking about it. So we're thinking we get back to really more like consistent constant currency rates. And so that's what we've used in our guidance overall.

Speaker 9

And just on that, the Q2 spot rates, was that period end or average during the period?

Speaker 1

Did not reduce the average.

Speaker 9

Thanks very much. No problem.

Operator

Your next question comes from the line of Jeff Meuler with Baird. Please go ahead.

Speaker 10

Yes, thank you. On the consumer panel investments and growth, can you just go into detail on how your consumer panels are differentiated on a standalone basis? And then talk through the incremental value and integrated with the core sales measurement data? And then on the market opportunity, is there much of a white space opportunity or is it more about competitive takeaways?

Speaker 3

Yeah. Hi. This is Tracy again. In terms of consumer panel, so I would say we just launched in The U. S.

Speaker 3

This quarter, the largest panel, household panel in the country, the 250,000 households that's just launched, so we expect some strong performance from that going forward. In in Europe, we increased our panel sizes in all of the countries, and I would say that's one of the things that's, helping us. But the biggest thing that's helping us is the ability to put consumer panel alongside RMS on one system. What happens when you're a manufacturer client or you're a marketer is often the the two pieces of information. So the RMS and the consumer panel are slightly different because of where they come from.

Speaker 3

They have to spend a lot of time reconciling that, and it's quite a lot of work, it's quite difficult. By having two on one in one system, we do that for them. So they don't have all of that extra work. The answers are much quicker. They can get to decisions much quicker.

Speaker 3

So it's significantly beneficial, and that is where we are seeing the growth. People are because consume our clients are seeing the integration, which nobody else can do because everybody else has power or RMS. They're not able to put the two together. That's the really big differentiator that's causing our wins.

Speaker 10

Got it. And then for Baseus AI, how does the the pricing compare to the heritage solution, which is, I think, more services intensive? Or is there a a margin opportunity if you can talk through that?

Speaker 3

We we don't give guidance about the pricing across our different solutions. Mike, I don't know if you want to comment,

Speaker 11

but No.

Speaker 3

I don't we don't we don't give that sort of breakdown.

Speaker 2

Yeah. Look. I think you're I think you're asking us about the the AI based product. Of course Yes. You're Yeah.

Speaker 2

So we're able to think about that. We're gonna increase the number of transactions with that particular product because we can cycle through using AI feedback to our clients very quickly, and they love that. And we give them the feedback in the same format they would expect from the more intense study. But, ultimately, when they're making these very big decisions about innovation and new products, which is what Basie is all about, they still ultimately want that very deep dive into kind of the the the emotional reaction and other reactions clients have to to the name of their product, you know, and in some cases, the taste of their product. And that has a lot more science in it than just AI.

Speaker 2

So what we're seeing is they're I won't I guess, I won't give you the name of any particular client, but they're they got on the edge of their chairs when they saw they could experiment and pay us appropriately upfront, with a bunch of iterations. And then they ultimately when they boil it down to a few, then we can go and apply our more, let's call it, scientific approach that dives deeper into consumer reaction in order to make them feel more confident in the big investments they're going to make.

Speaker 5

Got it. Thank you.

Operator

Your final question comes from the line of Wahid Amin with Bank of America. Please go ahead.

Speaker 11

Hey, good morning. Could you expand on the growth in new verticals? What are you seeing across the buckets of either government, financial services or media, anything in particular you're seeing plans gravitate more towards, whether that be a certain product or whether that be across intelligence or activation?

Speaker 3

The biggest vertical of the biggest growth is SMB, so small and medium businesses. We saw that grow 22% in the quarter. It's a very big growth vector for us working on those smaller clients. Like like we said in the talking points, we're able to identify who they are because we've got all the data of everybody who sells everything to a consumer. So we can identify those clients.

Speaker 3

If they don't buy data from us, we're able to go to them with insights and then pick up that business. So that's probably the biggest growth vertical, but but we see strong, strong growth across all the verticals, whether that be financial. Packaging was a new one that we've just got into. So new verticals overall grew 14%. That would be Financial Services, Packaging, those sorts of areas.

Speaker 3

But across the board, we see strong double digit growth in all of those areas and expect that to continue.

Speaker 11

Okay. And for my follow-up, just the two recent M and As that you've done in the past few months, can you walk us through the philosophy, why those assets and specifically why now?

Speaker 2

Yeah. Sure. So we have built an engine both in terms of our systems, you know, with our Discover product and and the underlying kind of data architecture and with our sales engine that we can easily absorb new capabilities into our world, let's call it, that we know our clients like and then easily upsell and cross sell them, you know, without, you know, creating some kind of significant cost of action. And so I think you're gonna see us continue to look for bolt on acquisitions like this that are really immediately accretive that, essentially, our clients bring to us as we're out in the market and they're using these same services and saying, boy, this would really be good if it was integrated with Discover and with NICU. And in these in this particular case, both of these acquisitions hit a real meaningful spot for our clients.

Speaker 2

And and so they're they're really instantly accretive and and very low risk.

Speaker 4

And, Wahid, I would I would just ask that we let's state that we are continuing to focus on our debt pay down. Right? So these acquisitions fall within a small size or reasonable size in our mind that makes sure that we can still be focused on making sure we're generating debt paydown and making sure we're increasing our cash flow as we're at that inflection point in the business. So just to add to Jim's comments. Thank you.

Operator

That concludes our question and answer session. I will now turn the call back over to James Peck for closing remarks.

Speaker 2

Yeah. So just just very briefly, I'm super excited about this management team and all the people at nIQ who who have a capability that are uniquely primed to put us in a position to serve our clients. And we remain very confident and super excited about our strategy and our plans going forward, and we look forward to our next update.

Operator

Ladies and gentlemen, this concludes today's call. We thank you all for joining. You may now disconnect.

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