NIQ Global Intelligence Plc Q2 FY2026 earnings call

Core Business Performance

• Fifth consecutive quarter exceeding the top end of guidance across all key metrics. 10 consecutive quarters of 5%+ OCC organic growth. Adjusted EPS hit 27 cents, well above guidance ranges.
• Levered free cash flow inflected positive to $74.1 million, with net leverage reduced to 3.1x, on track to hit the sub-3x leverage target by end-2026.
• Broad-based healthy client demand across regions: Americas led growth with new client wins and competitive displacements; EMEA saw grocers and CPG clients consolidate onto NIQ's full-view platform; APAC returned to growth with improved momentum in China, Japan and Korea, and new category expansion into non-CPG verticals including automotive, ad tech, and retail media.
• Completed nearly all actions under the 2026 restructuring program, on track to hit 70-80 million in annual run-rate savings with less than a one-year payback.

AI Innovation Progress

• Launched the full three-pillar AI product strategy: (1) NIQ-built AI applications including Optic Suite and NIQ Cadence, a GenAI-native marketing effectiveness platform; (2) embedded NIQ intelligence via Optic Bridge and Connect AI into third-party AI platforms and client internal workflows; (3) infrastructure for AI-powered agentic commerce measurement.
• Early adoption metrics: 51% of NIQ's top 100 clients now use at least one AI-native solution; total client count for AI solutions grew 64% year-to-date; AI-native revenue grew 34% year-over-year, with 80% of AI revenue coming from existing recurring clients.
• Announced first charter clients for Connect AI, including major global CPG brands, with a pipeline of 49 active opportunities. Planning to add retail charter clients in the next phase of rollout.
• Completed the acquisition of Yimions, a China/Southeast Asia e-commerce data and insights business, to strengthen digital commerce capabilities in the region. Added Irina Stoyan, former Palantir executive, as Chief AI Commercial Officer to lead AI commercial scaling.

Operating Efficiency

• AI-enabled productivity gains across data operations, engineering, commercial, and support functions contributed roughly half of the 270 basis points of year-over-year margin expansion in Q2.
• Over 90% of revenue is derived from NIQ's proprietary defensible data asset, which grew 23% year-over-year to 4.3 trillion new consumer transaction records added per week. Platform data consumption grew 25% year-over-year, indicating rising client relevance.

Geographic Segments

1. Americas: Organic constant currency (OCC) revenue growth of 8.3%, driven by intelligence product wins and activation cross-selling. Adjusted EBITDA grew 10.5% to $143 million, with an adjusted EBITDA margin of 31.4%.
2. EMEA: OCC revenue growth of 4.9%. Adjusted EBITDA grew to 26.1% year-over-year to $179 million, with adjusted EBITDA margin expanding 550 basis points to 35.3%.
3. APAC: OCC revenue growth returned to positive 1.9%, a sequential improvement from Q1 2026, driven by improving commercial momentum and cross-selling of analytics solutions. Adjusted EBITDA increased 9.2% to $32 million, with margin expanding 120 basis points to 19.8%.

Product Segments

1. Intelligence: OCC revenue growth re-accelerated to 5.7%, marking the 10th consecutive quarter of 5%+ growth. Annualized intelligence subscription revenue (ARR equivalent) grew 5.8% year-over-year and exceeded $3 billion. Net dollar retention (NDR) was 105% and gross dollar retention (GDR) was 99%, highlighting strong client stickiness.
2. Activation: OCC growth accelerated for the second straight quarter to 6.1%. Analytics and innovation-based solutions represent nearly 60% of year-to-date Activation revenue and grew low double digits year-over-year. AI-native products Basies AI and Retail Activate drove a meaningful share of this segment's growth.

Overall consolidated Q2 2026 reported revenue was $1.1 billion, growing 8% year-over-year, with 5.8% OCC growth. Consolidated adjusted EBITDA grew 21.9% to $262 million, with margin expanding 270 basis points to 23.3%.

• Management raised full year 2026 guidance across all metrics, reflecting Q2 outperformance, favorable foreign exchange impacts, and the Yimions acquisition:
  • Full year 2026 reported revenue growth: 7.1% to 7.4% (up from prior guidance)
  • Full year 2026 OCC organic revenue growth: 5.2% to 5.6%
  • Full year 2026 adjusted EBITDA growth: 15% to 17%, with adjusted EBITDA margin of 23.5% to 23.9%
  • Full year 2026 adjusted EPS: $1.08 to $1.12, a more than 13% increase at the midpoint from prior guidance
  • Full year 2026 levered free cash flow: $245 million to $255 million, an $8 million increase at the midpoint from prior guidance
  • Reaffirmed expectation to reach net leverage below 3.0x by the end of 2026
• Q3 2026 guidance:
  • Reported revenue growth: ~4.9% to 5.3%
  • OCC organic growth: 5.2% to 5.5%
  • Adjusted EBITDA growth: 15% to 17%, with margin of 23% to 23.5%
  • Adjusted EPS growth: 22% to 24%
• AI initiatives are not expected to contribute material revenue to 2026 results, as 2026 is a foundation-building year; commercial scaling of AI products is expected to begin in 2027 and beyond.
• Implied Q4 2026 OCC growth is expected to align with Q3 expectations, with ~370 basis points of year-over-year EBITDA margin expansion and adjusted EPS nearly double Q3 levels, consistent with typical Q4 seasonality.

No explicit new material risks were discussed on the call. Management noted that actual results may differ materially from forward-looking statements due to unforeseen factors, referencing risk disclosures included in the earnings press release and SEC filings. The only external factor referenced was ongoing conflict in the Middle East, though management noted that performance outside the Americas remained solid despite the conflict.

Q: Management called out 30%+ growth for consumer panel (CPS) and e-commerce products within the mid-single digit growing intelligence segment. Does this mean traditional core measurement products are growing notably below the segment average?

A: Core RMS traditional measurement is growing at the overall segment mid-single digit rate, while the faster growing CPS and e-commerce products are smaller portions of total segment revenue. All AI-related revenue is counted within the intelligence segment for reporting purposes, and full-year guidance does not assume material AI revenue so any upside will be incremental to guidance. Full-view measurement, NIQ's holistic omnichannel offering, now has more than 200 clients, continues to gain adoption, and serves as the foundation for AI capabilities, opening up new client use cases and additional budget pools.

Q: Can you explain what Connect AI is, how it is positioned, and how it will be monetized?

A: Connect AI serves clients that want to embed NIQ's proprietary intelligence directly into their own internal AI workflows and systems. Charter clients get dedicated NIQ engineering and data science support to integrate NIQ data into their environments, with built-in permission and IP protection layers that preserve NIQ's unique analytical methodologies. There are already 49 active opportunities in the Connect AI pipeline from clients across multiple regions and verticals, with additional retail clients set to join the charter program soon. NIQ is experimenting with multiple pricing models, including consumption-based pricing, and is focused on validating value and building a repeatable scalable commercial model in 2026.

Q: How do you expect rising AI adoption and data consumption growth to translate to revenue over the medium term? How is client demand for new AI use cases evolving?

A: Higher data consumption reflects growing client relevance, as clients use NIQ's granular data alongside their own internal data to improve efficiency, accelerate innovation, and drive top-line growth. New AI use cases like Connect AI target entirely new budget pools controlled by client chief data and technology officers, rather than traditional market research teams, representing untapped demand. This demand is broad-based across geographies: it is most advanced in the US, but there is also strong pipeline activity in Western Europe and Asia.

Q: What drove EMEA's very strong margin expansion in Q2, and is the structurally higher margin versus Americas expected to persist?

A: Half of overall consolidated 270 basis points of margin expansion came from restructuring cost savings and half came from operating leverage on the largely fixed cost base (80% of total costs are fixed). EMEA's 550 basis points of margin expansion reflects ongoing disciplined cost management, the benefit of scale as the segment's large size makes cost efficiency improvements more impactful, and a small amount of favorable timing of variable costs for activation projects.