Teads Holding Co. Q3 FY2025 earnings call

• Merger integration is complex, but confident in strategic thesis. Took decisive actions: restructured regions, sales team coverage, and processes. - Conducted business review focusing on portfolio optimization, operational efficiency, and cost optimization. - Connected TV growth strong: ~40% Y/Y in Q3, CTV home screen product gaining traction with over 2,500 campaigns executed. - Cross-screen adoption strong, CTV Performance launched. - AI and algorithmic advancements yielding improvements; retail media innovation advancing.

Revenue in Q3 was approximately $319 million, an increase of 42% year-over-year on an as-reported basis (driven by acquisition impact), but pro forma down 15% Y/Y. Connected TV revenue grew ~40% Y/Y in Q3 and is expected to hit $100 million by year-end. The legacy Outbrain business faced headwinds with lower page views (residual impact from supply cleanup ~$10M Y/Y) and lower page views on partner sites, partially offset by RPM growth. Key regions: U.S., U.K., and France (~50% of revenue) drive headwinds on legacy Teads business; DACH region (second largest) is neutral or growing.

• Q4 Ex-TAC gross profit expected $142M-$152M, adjusted EBITDA $26M-$36M. - Year-to-date adjusted free cash flow positive, expect year to be breakeven. - Plan to achieve at least $35M annualized adjusted EBITDA benefit from transformation and cost efficiencies, starting to see impact in Q4.

• Merger integration challenges, dynamic ecosystem with shifting traffic patterns and competition. - Macro volatility in geographies/verticals, shorter planning cycles. - Legacy Outbrain headwinds: lower page views, supply cleanup impact, DSP business challenges.

Q: Unpack Q3 headwinds, components.

A: Combination of merger distractions, execution challenges, weakness in certain geos/verticals.

Q: Willingness to protect free cash flow?

A: Committed, generating YTD adjusted free cash flow, plan to achieve $35M EBITDA improvement.

Q: 2026 outlook?

A: Positive indicators in CTV, cross-sell, focus on innovation areas, early benefits from sales reorganization.

Q: Traffic diminution?

A: ~10%-15% decline in paid views on premium publishers, offset by RPM growth and publisher engagement efforts.

Q: Q4 Ex-TAC guide?

A: Conservative guidance due to volatility, October performance better than Q3, but headwinds in Outbrain DSP business, positive in CTV and cross-sell.