Nexxen Highlights AI, CTV Growth Strategy and Path to 40% EBITDA Margins

Key Points

• Nexxen is emphasizing an integrated ad-tech platform spanning demand-side, supply-side, data and AI tools, with proprietary data viewed as a more durable advantage than AI alone. The company cited a 62% reduction in Toyota’s cost per vehicle sold as an example of advertiser outcomes.
• Connected TV is a major growth engine: CTV revenue rose 33% year over year in the second quarter and represented about 40% of revenue generation. Nexxen is expanding into programmatic TV home screens and expects its VIDAA investment and OEM relationships to broaden its reach.
• Management is targeting significant margin expansion, forecasting an approximately 34% EBITDA margin in 2027 and eventual margins in the “40-ish” percent range. Mobile revenue also grew 23% year over year, while the company is considering acquiring an SDK network for roughly $50 million.

Nexxen International NASDAQ: NEXN executives highlighted the company’s integrated advertising technology platform, connected TV growth strategy and artificial-intelligence investments during a fireside chat hosted by Rosenblatt internet media analyst Barton Crockett.

Chief Product Officer Karim Rayes described Nexxen as a unified programmatic platform operating demand-side, supply-side and data businesses, supported by proprietary data, exclusive media assets and AI tools. The company’s platform covers audience discovery, planning, activation, optimization and monetization, he said.

Rayes said Nexxen’s integrated approach is designed to consolidate functions and fees that may otherwise be spread across the ad-tech ecosystem. While the company charges fees on both the demand and supply sides when transacting with third-party platforms, it can unify fees and offer savings when customers use its end-to-end platform, according to Rayes.

“Ultimately, it’s really about return on ad spend and the outcomes you’re driving for the advertisers,” Rayes said. He cited Toyota as an example, saying the automaker achieved a 62% reduction in cost per vehicle sold through Nexxen’s advertising solutions.

Integrated Platform and Data Strategy

Rayes said operating both a demand-side platform, or DSP, and a supply-side platform, or SSP, allows Nexxen to manage data and signals across an advertising transaction. The company said this can help it understand media being purchased, advertiser objectives and resulting outcomes while seeking to reduce operating costs for publishers and advertisers.

Addressing questions about neutrality in auctions, Rayes said Nexxen maintains separate supply-side and demand-side teams with distinct targets. He said the company runs neutral auctions and that advertisers can audit what they pay across supply-side platforms. Automated algorithms determine where spending is directed based on expected return on investment, he said.

AI alone will not be the long-term differentiator in advertising technology, Rayes said. Instead, he said value will be determined by the data used to train AI systems and the technology underneath those tools. Nexxen’s data assets include its Nexxen Discovery platform, proprietary television data and transaction-level data, he said.

The company’s nexAI offering includes AI agents for audience research, reporting, troubleshooting, quality assurance and, soon, planning, Rayes said. Nexxen is using the tools internally and intends to make agents interoperable with customers’ own AI ecosystems. Rayes also said the company uses AI in operations and engineering, adding that more than 90% of its code is written using AI tools.

CTV, Home Screen and VIDAA

Chief Financial Officer Sagi Niri said connected TV revenue increased 33% year over year in the second quarter, supported by spending across Nexxen’s CTV technology, proprietary TV data and premium media. He said enterprise customers increased their spending and new publishers joined the platform.

Niri said CTV represented roughly 40% of Nexxen’s revenue generation, while mobile was also at approximately 40%. He said CTV could become the company’s largest distribution channel and could become the leading channel across ad technology more broadly as consumers continue to consume content through connected television.

Nexxen has introduced a programmatic solution for native television home screens that connects television original-equipment manufacturers, or OEMs, to the programmatic advertising ecosystem. Rayes said the product standardizes different OEM ad formats so advertisers can run campaigns across multiple manufacturers rather than work separately with each OEM and its ad server.

The company launched the home-screen offering more than a quarter ago and expects revenue in the fourth quarter, with a larger contribution anticipated in 2027 as buy-side integrations scale. Rayes said home-screen placements may support performance-oriented CTV advertising because viewers are highly engaged when choosing what to watch.

Niri said Nexxen’s investment in V, formerly known as VIDAA, is both financial and strategic. He said Nexxen expects its aggregate investment to reach $60 million by the end of the third quarter, representing about 6% of V’s equity. Nexxen has exclusivity with VIDAA for automated content recognition, or ACR, globally and for VIDAA’s North American inventory, he said.

VIDAA has about 50 million screens worldwide, Niri said, with a particularly strong presence outside North America. Nexxen expects its expanding home-screen ecosystem to reach roughly 10 million to 20 million screens through announced and unannounced OEM relationships, he added.

Mobile Expansion and Margin Outlook

Niri said mobile revenue rose 23% year over year in the second quarter, driven by Nexxen’s in-app strategy and partnerships with SDK networks. He said the company views mobile in-app advertising as relatively resilient to AI-driven changes in web and desktop traffic.

Nexxen does not currently own its own software development kit, or SDK, and Niri said acquiring an SDK network is an area of focus for potential mergers and acquisitions. He said such a transaction could be around $50 million and financed through cash and equity.

On profitability, Niri said Nexxen has invested in AI, data infrastructure, go-to-market efforts and platform capabilities during what he called a transformational year. He said the company expects operating leverage as revenue scales across its existing platform and enterprise customers.

Niri said Nexxen’s initial plan calls for approximately a 34% EBITDA margin in 2027, followed by annual improvement of at least 1 to 2 percentage points over subsequent years, with a long-term goal of reaching an EBITDA margin in the “40-ish” percent range.

About Nexxen International (NASDAQ:NEXN)

Tremor International Ltd provides end-to-end software platform that enables advertisers to reach relevant audiences and publishers. The company's demand side platform (DSP) offers full-service and self-managed marketplace access to advertisers and agencies to execute their digital marketing campaigns in real time across various ad formats. Its sell supply side platform (SSP) provides access to data and a comprehensive product suite to drive inventory management and revenue optimization. The company also offers data management platform solution, which integrates DSP and SSP solutions enabling advertisers and publishers to use data from various sources in order to optimize results of their advertising campaigns.

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