Nexxen International Ltd. Q2 FY2025 earnings call

• Renewed and expanded strategic partnership with VIDAA, securing exclusive inventory access and BDAS ACR data, and investing $35 million in VIDAA to accelerate North America CTV expansion.
• Made strides in AI strategy with nexAI, adopted by over 100 users, with plans to roll out enhanced SSP functionality and broader platform integration later in 2025 and 2026.
• Attracted top-tier commercial leaders from major industry players, moved to a single U.S. ordinary share listing, added to the Russell 3000 Index, and had a strong turnout at the first U.S. Investor Day in May.
• Added 108 new actively spending first-time advertiser customers and 86 new supply partners in Q2.
• Monitoring the Google AdTech antitrust case, seeing potential for share gains in the open Internet space.

In Q2 2025, Nexxen generated contribution ex-TAC of $87.8 million, a Q2 record and 6% year-over-year growth. Programmatic revenue reached $85 million, a Q2 record with an 8% YoY increase. CTV revenue was $28.4 million, a Q2 record with 1% YoY growth. Self-service contribution ex-TAC grew 4% YoY, while contribution ex-TAC from data products increased 76%. Conversely, contribution ex-TAC from PMPs and display declined 6% and 4% YoY respectively. Adjusted EBITDA was $29.9 million in Q2 2025, a 12% increase from Q2 2024, with an adjusted EBITDA margin of 34% of contribution ex-TAC.

Nexxen is reaffirming its prior full-year 2025 guidance. It continues to anticipate contribution ex-TAC of approximately $380 million, adjusted EBITDA of approximately $125 million, and programmatic revenue to represent roughly 90% of full-year 2025 revenue. The company expects year-over-year growth in both CTV and data licensing revenue in 2025, with confidence based on Q3 trends and a diversified revenue base.

• Unexpected changes in business, macroeconomic or industry conditions.
• Uncertainties related to tariffs, evolving trade policies, and geopolitical tension.

Q: Matthew Swanson asks about the full stack differentiation of nexAI.

A: Ofer Druker states that nexAI has over 100 users, with plans to roll out SSP capabilities and connect assistants to enable full cycle utilization across DSP, DMP, and SSP.

Q: Laura Martin inquires about slow CTV revenue growth.

A: Ofer Druker mentions market trends affecting CPMs and that the investment in VIDAA is a long-term play, with growth expected in the second half of 2025 and beyond.

Q: Andrew Marok asks about M&A openness.

A: Ofer Druker says Nexxen is ready to consider M&A opportunities to add client base or coverage not currently held.

Q: Jason Kreyer asks about Google's impact on open Internet.

A: Ofer Druker discusses CTV and mobile in-app as less influenced areas, with focus on growing these segments.

Q: Barton Crockett asks about SSP impacts.

A: Ofer Druker states Nexxen is less affected by DSP changes due to its end-to-end solution and diversified business.

Q: Matt Condon asks about VIDAA opportunity and data licensing.

A: Ofer Druker discusses massive inventory opportunities with VIDAA and the potential of data licensing for revenue and client partnerships