Nexxen International Q3 Earnings Call Highlights

Key Points

• Third-quarter Contribution ex-TAC and programmatic revenue hit records, rising 8% to $100.3 million and 9% to $97.8 million, respectively. CTV revenue surged 39% and enterprise customer Contribution ex-TAC grew more than 40%, offsetting a 29% decline in desktop revenue.
• Profitability and cash generation improved: adjusted EBITDA rose 22% to $34.5 million, the margin expanded to 34%, and operating cash flow increased to $46.1 million. Nexxen ended September with $152.9 million in cash and no long-term debt.
• Nexxen reaffirmed its 2026 guidance, including Contribution ex-TAC of $388 million to $402 million and adjusted EBITDA of $122 million to $132 million. It is prioritizing potential bolt-on acquisitions in mobile in-app advertising and plans to resume share repurchases in the second half of the fourth quarter.

Nexxen International NASDAQ: NEXN reported record third-quarter Contribution ex-TAC and programmatic revenue, as connected TV and enterprise customer growth helped offset declines in desktop and non-programmatic business.

The advertising technology company also returned to year-over-year adjusted EBITDA growth and reaffirmed its full-year 2026 guidance. Chief Financial Officer Sagi Niri said the company was tracking toward its highest quarterly Contribution ex-TAC and programmatic revenue in the fourth quarter, while retaining a wide guidance range because of economic and geopolitical uncertainty.

CTV and Enterprise Growth Offset Desktop Decline

Third-quarter Contribution ex-TAC rose 8% from a year earlier to $100.3 million, while programmatic revenue increased 9% to $97.8 million. Both were records for a third quarter, Niri said.

Connected TV, or CTV, revenue climbed 39% to $34.1 million. Mobile revenue rose 9%, supported by growth in mobile in-app advertising. Contribution ex-TAC from data products, private marketplaces and display increased 73%, 18% and 11%, respectively. Desktop revenue fell 29%.

Chief Executive Officer Ofer Druker said the company had anticipated weakness in desktop and increased its focus on CTV and mobile in-app advertising. He said mobile web activity was also declining, while in-app activity was growing and had become the majority of Nexxen’s mobile business.

Contribution ex-TAC from enterprise customers rose more than 40% year over year. Druker attributed the growth to product improvements, changes to the company’s sales strategy and customers directing more spending through Nexxen’s media platform. Enterprise customers access the company’s demand-side platform on a self-serve or platform-managed basis.

Nexxen completed the wind-down of its non-programmatic influencer marketing business, RhythmInfluence, during the quarter. Niri said the move had no material impact on third-quarter Contribution ex-TAC or adjusted EBITDA and was not expected to have one in the fourth quarter. The company is evaluating options for its remaining non-programmatic businesses.

Profitability Improves as Home Screen Spending Ramps

Adjusted EBITDA increased 22% to $34.5 million, following several quarters of year-over-year declines. The adjusted EBITDA margin, measured against Contribution ex-TAC, rose to 34% from 30% a year earlier. Niri cited enterprise growth, increased use of Nexxen’s end-to-end platform, cost discipline, a more favorable shekel-to-dollar translation and benefits from artificial intelligence initiatives.

Operating cash flow rose to $46.1 million from $35.8 million a year earlier. Non-IFRS diluted earnings per share increased to $0.32 from $0.20. Nexxen ended September with $152.9 million in cash and equivalents, $50 million available under its revolving credit facility and no long-term debt.

Management expects the fourth quarter to be its best CTV revenue quarter, helped by rising adoption of Nexxen TV Home Screen, which allows advertisers to buy smart TV home screen inventory programmatically. Niri said the product generated minimal revenue through the third quarter but had seen a notable increase in adoption and spending in the fourth.

Druker said Nexxen had standardized home screen inventory specifications across manufacturers and was working with demand-side partners including The Trade Desk, Google’s Display & Video 360 and StackAdapt. He said some large operating systems were not yet in the company’s mix and that wider adoption would require educating advertisers and allowing them to test the format.

Guidance Reaffirmed, With Acquisitions in Focus

Nexxen maintained its 2026 outlook for Contribution ex-TAC of $388 million to $402 million, programmatic revenue of $380 million to $393 million and adjusted EBITDA of $122 million to $132 million. At the respective midpoints, those forecasts imply growth of approximately 12%, 13% and 10% from 2025.

Niri said the company was aiming for the midpoint of its guidance and had kept the range wide to preserve flexibility amid market volatility. He said election-related advertising benefited the business in the third quarter and early fourth quarter, but was not expected to create a meaningful growth headwind in 2027.

The CFO said he expected a full-year adjusted EBITDA margin of around 34% in 2027, measured against Contribution ex-TAC, as prior investments become more fully utilized. That compares with an expected margin of 32% at the midpoint of the company’s 2026 guidance.

Nexxen is seeking one or more bolt-on acquisitions over the coming quarters, with mobile in-app capabilities its highest near-term priority, Niri said. The company made no share repurchases in the third quarter while evaluating acquisition opportunities, but intends to resume purchases under its extended $40 million authorization in the second half of the fourth quarter.

Druker said Nexxen currently has 10 AI agents covering workflows such as reporting, audience intelligence and campaign troubleshooting. The company expects most platform workflows to be executable through its agentic solution by the end of the first quarter and is developing business models for the technology.

About Nexxen International (NASDAQ:NEXN)

Nexxen International Ltd. is an advertising technology company that connects advertisers and media owners through software for planning, buying, selling and measuring digital advertising. Its platform supports campaigns across connected television, online video and mobile channels. The company offers demand-side tools for advertisers, supply-side tools for publishers and media owners, and data solutions intended to help target and evaluate campaigns. Nexxen serves customers in multiple markets, including North America, Europe and Asia-Pacific.

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