Teads Holding Co. Q4 FY2025 earnings call

• Transition over past year: Merged two cultures, technologies, and businesses, walked away from low-quality revenue. Second half of year simplified org chart, right-sized cost, brought in fresh leadership.
• Q4 highlights: Hit high end of XTAC guidance, beat adjusted EBITDA target, generated positive free cash flow. CTV accelerating with over $100M annual revenue and 55% Q4 growth. Performance cross-selling to enterprise up 300% QoQ. Renewed joint business partnerships. Restructuring to save $35 - $40M annually. Added top-tier talent and flattened leadership structure.
• 2026 enterprise strategy pillars: Continue leading with CTV offerings, focus on home screen leadership and omnichannel branding to performance. Deepen strategic relationships with agencies. Scale performance business for enterprise advertisers. AI is engine behind growth areas, progressing on integration of AI and data infrastructure, using LLM models for predictive delivery

In Q4, revenue was approximately $352 million, up 50% y-o-y as-reported (17% decline pro forma). XTAC gross profit was $152 million, up 122% as-reported (19% decline pro forma). CTV is accelerating with over $100M annual revenue and 55% growth in Q4. Performance cross-selling to enterprise customers saw a 300% jump in Q4. December restructuring expected to save $35 - $40M annually. For 2026, enterprise strategy focuses on CTV offerings, deepening agency relationships, and scaling performance business. Q1 2026 ex-tech gross profit expected $102M - $106M, adjusted EBITDA break-even to $3M. Full year 2026 adjusted EBITDA expected ~$100M

• Q1 2026: Ex-tech gross profit expected $102M - $106M, adjusted EBITDA break-even to $3M.
• Full year 2026: Adjusted EBITDA expected ~$100M. Expect opportunities to generate positive free cash flow this year. Year-over-year comparison impact for 2026 is a headwind of ~$20M of XTAC, mostly in H1, phasing down by Q4

• Operational challenges led to timetable longer than initially anticipated, resulting in goodwill impairment.
• Uncertainty of overall environment may impact timeline and progress to return to top-line growth.
• FX headwinds from weakening of dollar versus mainly euro and shekel

Q: On the Salesforce, are we staffed up now on the Salesforce from the integration, and do you expect smooth sailing going forward on those kinds of hires? And secondly, expand on exclusive deals with Samsung and LG.

A: On Salesforce, confident in leadership team and team in place, anticipate smooth sailing. On exclusive deals with LG and Samsung, have exclusive relationships in certain geographies, advantage lies in direct integration between Teads Ad Manager and home screen, creative adaptation, and premium brand relationships.

Q: Provide additional color to the business and trends in OneQ, and on organizational changes.

A: Seeing improvement in Q1, on as-reported basis guiding midpoint for X-Tech flat y-o-y, pro forma down but not as much as Q4. CTV accelerating, performance sales momentum, UK and US showing improvement. Comfortable with team as year started with clear execution plan and defined goals.

Q: Assumptions behind full year EBITDA guide, linearity of growth and margin.

A: Guidance of ~$100M EBITDA, year-over-year comp headwind of ~$20M of XTAC from quality cleanup, impacts Q1 - Q2 then phases down. Expect improvement each quarter, Q4 being where positive growth hit. Expenses reduced in Q1 due to restructuring, rest of year has some step-ups.

Q: Specific ad verticals strength or weakness.

A: No material verticals, some weakness in CPG and automotive, some strength in health and finance.

Q: Google TV opportunity and proactive cleanup of inventory.

A: Google TV added to CTV home screen opportunity, huge growth opportunity for CTV home screen. Proactive cleanup of inventory largely behind us, impact continues into first half of 2026, but network and marketplace is healthier for premium brands