Nexxen International Ltd. Q3 FY2025 earnings call

• Nexxen delivered strong Q3 programmatic revenue growth, driven by omnichannel strength, enterprise DSP adoption, and data demands. • SSD benefited from proprietary data assets like Nexxen Discovery, with a renewed data partnership adding a long-term growth engine. • Enhanced the DSP with improved buying algorithms, automated budget optimization, and Next AI assistant, achieving high customer satisfaction scores. • Nexxen Discovery, a proprietary insights and audience segmentation tool, became a competitive advantage by unifying cross-channel data sources. • Lowered guidance due to near-term headwinds but remains confident in its strategy to navigate dynamics, with investments in Vida, M&A opportunities, and repurchase programs.

In Q3, Nexxen International Ltd. delivered contribution ex-TAC of $92.6 million, a Q3 record with an 8% year-over-year increase or 14% ex-political. Programmatic revenue reached a Q3 record of $89.6 million, up 10% year-over-year or 15% ex-political. The non-programmatic business line saw a year-over-year decline of roughly $1 million in contribution ex-TAC. CTV revenue in Q3 was $24.5 million, down 17% year-over-year or 13% ex-political. Desktop revenue increased 67% year-over-year, mobile revenue rose 3%, and video revenue represented 70% of programmatic revenue. Contribution ex-TAC from PMP declined 4% year-over-year, and display decreased 2%. Self-service contribution ex-TAC grew 11% year-over-year, and contribution ex-TAC from data products increased 164%.

• Lowered full-year 2025 guidance: Contribution ex-TAC expected in the range of $350 million to $360 million, adjusted EBITDA in the range of $113 million to $117 million, with programmatic revenue representing roughly 95% of total revenue. • Full-year 2025 contribution ex-TAC growth midpoint at ~3% (6% ex-political), programmatic revenue growth midpoint at ~6% (9% ex-political). • Q4 headwinds from certain DSP partners and macro softness, but confident in 2026 and beyond due to platform's technology and partnerships.

• Near-term headwinds including softness in select channels and a DSP's shift in SPO strategy. • Competitive CTV CPMs and reduced spending in certain verticals. • Risks related to macroeconomic and industry conditions that may cause actual results to differ from forward-looking statements.

Q: When thinking about the DSP headwind, steps to rectify?

A: Sagi Niri talked about CTV media launches, enhancing self-serve, data discovery tool improvements, and investing in in-app mobile media.

Q: Trend line in CTV?

A: Ofer Druker discussed softness in Q4 due to category softness, competitive CPMs, and lack of political spend, but optimism for 2026 with Vida partnership and TVS opportunities.

Q: On mobile and app focus?

A: Ofer Druker explained partnership approach with SDK companies to monetize in-app media instead of M&A for supply scaling.