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Outbrain, Now Teads, Shows Strong Q1 2025 Revenue Growth

Outbrain, now operating as Teads, announced its financial results for the first quarter of 2025, reporting revenues of $286.4 million—a substantial 32% increase compared to last year. Despite this growth, the company faced a net loss of $54.8 million, primarily due to costs associated with the acquisition and restructuring efforts.

Financial Highlights

The integration of Teads is proceeding well, and the company projects synergies in the range of $65 million to $75 million by 2026. Noteworthy achievements include:

• Revenue boosted by 32% year-over-year, driven by the Teads acquisition.
• Gross profit nearly doubled to $82.7 million, enhancing the gross margin to 28.9%.
• Adjusted EBITDA surged to $10.7 million, a remarkable 665% increase year-over-year.
• The company aims to achieve $40 million in cost synergies by the end of 2025.

Challenges Ahead

While Outbrain celebrates its growth, several challenges loom:

• The net loss escalated to $54.8 million from $5.0 million the previous year, raising concerns about financial health.
• Negative free cash flow of $(6.6) million compared to a positive $4.6 million last year indicates liquidity issues.
• Total debt obligations have reached $627.0 million, which includes significant high-interest notes that may impact future cash flow stability.

Outlook for Q2 2025

Looking ahead, Outbrain anticipates Ex-TAC gross profit between $141 million and $150 million for the second quarter. The adjusted EBITDA is projected to fall between $26 million and $34 million.

Recent Partnerships and Strategic Moves

Outbrain has recently forged joint business partnerships with notable brands including Ferrero, Haleon, and Philip Morris International, strengthening its market position.

Frequently Asked Questions

What were Outbrain’s financial results for Q1 2025?

Outbrain reported a revenue of $286.4 million, a 32% increase compared to Q1 2024, with a net loss of $54.8 million.

How did the Teads acquisition affect Outbrain’s financials?

The acquisition of Teads significantly enhanced revenue and gross profit, which increased by 99% to $82.7 million.

What is Outbrain’s outlook for Q2 2025?

Outbrain expects Ex-TAC gross profit to fall between $141 million and $150 million, with adjusted EBITDA between $26 million and $34 million for Q2 2025.

What strategic partnerships did Outbrain establish recently?

Outbrain has entered into new partnerships with Ferrero, Haleon, and Philip Morris International to bolster its business reach.

What non-GAAP financial measures does Outbrain use?

Outbrain employs non-GAAP metrics like Ex-TAC gross profit and Adjusted EBITDA for an improved view of its operational performance.

In summary, while Teads’ integration brings growth potential, Outbrain must navigate significant financial challenges in the upcoming quarters.

Insider Trading Activity

In the past six months, insiders have engaged in trading of $OB stock four times, with one purchase and three sales:

• Yaron Galai has sold 100,000 shares for an estimated $672,119.
• David Kostman (CEO) purchased 20,000 shares for approximately $79,600.

Hedge Fund Activity

During the latest quarter, 61 institutional investors increased their holdings in $OB stock, while 47 reduced their positions. Notable recent moves include:

• VALUE BASE LTD. added 670,338 shares (+17.5%) valued at an estimated $2,500,360.
• ARROWSTREET CAPITAL added 276,852 shares (+189.2%) for roughly $1,987,797.
• S SQUARED TECHNOLOGY decreased holdings by 255,076 shares (-38.9%), worth about $1,831,445.
• PARTNERS CAPITAL INVESTMENT GROUP reduced shares by 204,407 (-100%), equivalent to around $1,467,642.

Analyst Ratings

In recent months, analysts have issued ratings for $OB, with two firms assigning buy ratings and none giving sell ratings. Recent notable ratings include:

• JMP Securities issued an “Outperform” rating on February 4, 2025.
• Needham issued a “Buy” rating on December 18, 2024.

Full Release

NEW YORK, May 9, 2025 (GLOBE NEWSWIRE) — Outbrain Inc. (Nasdaq: OB), now operating under the Teads brand, has released its financial results for the quarter ending March 31, 2025.

“`

Company’s Financial Performance Shows Significant Changes in 2024

2024		% Change
Revenue	$	286.4	$	217.0	32%
Gross Profit		82.7		41.6	99%
Net Loss		(54.8)		(5.0)	NM
Net Cash (Used In) Provided by Operating Activities		(1.0)		8.6	(111%)
Non-GAAP Financial Data
Ex-TAC Gross Profit		103.1		52.2	98%

# Teads Reports Strong Q1 2025 Results Following Acquisition

## Financial Overview

| Metric | Q1 2025 | Change |
|——————————|———————-|———————|
| **Adjusted EBITDA** | 10.7 million | 1.4 million |
| **Adjusted Net Loss** | (15.3 million) | (4.9 million) |
| **Free Cash Flow** | (6.6 million) | 4.6 million |

### Key Notes
– Adjusted EBITDA showed growth to **10.7 million**, while the adjusted net loss totaled **(15.3 million)**.
– Free cash flow was reported at **(6.6 million)**, indicating a shift from previous figures.

**Historical Context:** This quarter marks the incorporation of operations from legacy Teads, effective from February 3 to March 31, 2025.

### Business Highlights

– The acquisition of Teads was completed with a total consideration of approximately **$900 million**, consisting of **$625 million in cash** and **43.75 million shares** of Outbrain common stock.
– The combined entity will operate under the Teads name.
– The company anticipates realizing approximately **$65 million to $75 million** in synergies by 2026, predominantly from cost reductions.

### Strategic Developments

– Initial cross-selling of Outbrain’s performance solutions to Teads brand customers commenced in Q2, with several campaigns initiated.
– New Joint Business Partnerships (JBPs) were secured with major brands including Ferrero and Philip Morris International.
– Approximately **500 advertisers**, averaging over **$2 million** in annual spend, comprise about **70%** of overall customer expenditure.

### Growth Metrics

– The Connected TV (CTV) segment saw over **100% year-over-year growth** in Q1 2025, now accounting for about **5%** of total ad expenditures.
– The Moments vertical video offering, launched in Q3 2024, has gained traction with over **70 publishers** on-board, including notable names like Fox News.

### Financial Highlights

– Revenue reached **$286.4 million**, marking a **32% increase** from **$217.0 million** in the prior year. This growth is attributed primarily to the Teads acquisition, offset by unfavorable foreign currency effects of approximately **$2.6 million**.
– Gross profit climbed to **$82.7 million**, representing an impressive **99% increase** compared to **$41.6 million** in the previous year. The gross margin improved to **28.9%** from **19.2%**, thanks to the higher profit margins of the Teads business.

In summary, Teads is experiencing a significant upward trajectory, fueled by strategic acquisitions and enhanced operational capabilities as it integrates legacy technologies and customer bases. The company’s outlook reflects optimism as it continues to capitalize on newly developed synergies and market opportunities.# Company Reports Significant Financial Changes Following Acquisition

## Financial Overview

The company reported a net revenue of $47.2 million for the recent period, a decline from $52.2 million during the same period last year. This decrease primarily stems from the recent acquisition. Notably, the Ex-TAC gross margin saw an improvement, rising to 36.0%, compared to 24.0% in the previous year. This increase reflects the acquisition’s higher margin profile.

### Net Loss and Adjusted Figures

The net loss for the current period was recorded at $54.8 million, a stark contrast to the $5.0 million loss reported last year. This loss was influenced by several factors: pre-tax acquisition-related costs amounting to $16.4 million, impairment charges of $15.6 million primarily linked to the discontinuation of the vi product offering, restructuring charges of $7.3 million associated with an operational streamlining plan post-acquisition, and $12.0 million in bridge facility costs.

The adjusted net loss stood at $15.3 million, which is higher than the adjusted net loss of $4.9 million from the previous year. Meanwhile, adjusted EBITDA grew to $10.7 million, up from $1.4 million in the prior year period.

### Cash Flow and Debt

Cash used in operating activities totaled $1.0 million, a drop from $8.6 million provided in the previous year. Free cash flow was at $(6.6) million compared to $4.6 million last year, significantly affected by cash outflows tied to transaction costs and restructuring charges totaling $16.2 million.

As of March 31, 2025, cash, cash equivalents, and marketable securities reached $155.9 million, which includes $136.3 million in cash and cash equivalents and $19.6 million in short-term investments. Total debt obligations were significant at $627.0 million, mainly comprising the $610.8 million carrying value of the 10% senior secured notes due in 2030, along with $16.2 million owing on a short-term overdraft facility acquired.

A new credit agreement was established with Goldman Sachs Bank, U.S. Bank Trust Company, and other lenders, offering a $100.0 million super senior secured revolving credit facility, set to expire on February 3, 2030, for working capital and corporate needs. This replaces a previous revolving credit facility with Silicon Valley Bank, which has since been terminated.

## Second Quarter Guidance

Looking ahead, management has provided forward-looking statements for the second quarter and full year of 2025. For the second quarter ending June 30, 2025, anticipated figures include:

– Ex-TAC gross profit ranging from $141 million to $150 million
– Adjusted EBITDA projected between $26 million and $34 million

For the full year ending December 31, 2025, the company expects adjusted EBITDA of at least $180 million. These projections are classified as forward-looking non-GAAP financial measures, lacking a direct reconciliation to corresponding GAAP measures due to the potential variability of future financial impacts.

## Conference Call Details

Outbrain will conduct an investor conference call on Friday, May 9, at 8:30 a.m. ET. Attendees can join by phone at 1-877-497-9071, or for international listeners, 1-201-689-8727. A replay will be accessible two hours post-call by dialing 1-877-660-6853, and the passcode for both the live call and replay is 13753068. The replay will remain available until May 23, 2025. Additionally, investors can tune into a live webcast through the Investor Relations section of the company’s website.

## Understanding Non-GAAP Financial Measures

The company employs several non-GAAP financial measures to assess business performance, including Ex-TAC gross profit, Ex-TAC gross margin, adjusted EBITDA, and free cash flow. It’s important to note that these measures are not substitutes for GAAP financial metrics and may differ from those used by other companies in the industry.

Due to foreign exchange fluctuations, operating results can vary, prompting the calculation of constant currency measures to provide a comparable basis with prior year amounts. This supplementary information aids in evaluating operating performance, although it should not replace GAAP amounts.

In summary, the company’s financial report showcases significant changes stemming from its recent acquisition, with both heightened challenges and anticipated future growth.

Understanding Key Financial Metrics: Ex-TAC Gross Profit and Adjusted EBITDA Explained

We add back other costs of revenue to gross profit. Ex-TAC gross profit may fluctuate in the future due to various factors, including seasonality and changes in the number of media partners and advertisers, shifts in advertiser demand, and variations in user engagement.

Ex-TAC gross profit, Ex-TAC gross margin (calculated as Ex-TAC gross profit as a percentage of revenue), and Adjusted EBITDA as a percentage of Ex-TAC gross profit are important profitability measures that our management and board of directors utilize. These metrics help us assess operating performance and trends, formulate short- and long-term operational plans, and make strategic capital allocation decisions. We believe these measures help investors understand our operating results, reflecting the insights of our management and board of directors.

However, there are limitations to using Ex-TAC gross profit. Traffic acquisition cost is a significant part of our total cost of revenue, and Ex-TAC gross profit will always be higher than the gross profit for any given period. Additionally, other companies in our industry may define Ex-TAC gross profit differently, complicating comparisons. Thus, this information should be viewed as supplemental and not a replacement for revenue or gross profit as defined by GAAP.

Adjusted EBITDA

We define Adjusted EBITDA as net income (loss) before various items, including gains on convertible debt, interest incomes, income taxes, depreciation, and amortization, as well as stock-based compensation. This measure also accounts for other income or expenses deemed not indicative of core operating performance, such as acquisition-related costs and restructuring charges. Adjusted EBITDA serves as a key profitability metric for our management and board, allowing for effective comparisons of performance across periods.

We believe Adjusted EBITDA offers valuable insights for investors and others seeking to understand our operating results as our management and board do. However, since our calculation may differ from similar non-GAAP information from other companies, it should be viewed as a supplementary measure and not as a substitute for GAAP calculations.

Adjusted Net Income (Loss) and Adjusted Diluted EPS

Adjusted net income (loss) is a non-GAAP measure defined as net income (loss) excluding items considered irrelevant to core operating performance. This includes gains on convertible debt, merger and acquisition costs, regulatory matter costs, and severance costs related to cost-saving initiatives. Adjusted net income (loss) is also presented on a per diluted share basis. We view adjusted net income (loss) and adjusted diluted EPS as key for enabling performance comparisons over time. However, like other non-GAAP metrics, these should not be treated in isolation from net income (loss) or diluted EPS as reported under GAAP.

Free Cash Flow

Free cash flow measures the cash generated from operating activities, minus capital expenditures and capitalized software development costs. This metric helps our management and board assess our cash generation capabilities. While free cash flow offers a comprehensive view of our available cash flows, it should also be treated as supplemental and not a substitute for GAAP financial performance measures.

Forward-Looking Statements

This press release includes forward-looking statements as defined by federal securities laws, encompassing various risks and uncertainties. These statements may discuss anticipated future performance, financial condition, and results. You can identify forward-looking statements by words like “may,” “will,” “should,” and “expects,” among others. Our expectations and projections form the basis for these statements regarding potential impacts on our business and financial results.

The viability of these forward-looking statements is influenced by numerous factors, including the integration of our recently acquired company, TEADS, and our ability to realize the anticipated efficiencies and revenues from this acquisition. Additional uncertainties include the potential for unexpected costs, challenges in financing future operations, and general market conditions affecting advertising demand. The ongoing economic climate, including events such as global geopolitical tensions, may also play a significant role in projecting our operational outcomes.

# Teads and Outbrain Merge: A Strategic Move Amid Global Challenges

The ongoing situation in Israel and the broader Middle East has resulted in increased supply chain disruptions, inflationary pressures, and labor market volatility, which collectively pose significant risks for companies, including advertisers. These challenges, combined with uncertainty in U.S. political and economic policies, could affect advertisers’ capacity to invest in media solutions. Furthermore, innovative solutions and the adoption of these by advertisers and media partners remain critical for maintaining competitiveness.

Another factor affecting the industry is the impact of artificial intelligence (AI). Companies must enhance their investments in AI-driven solutions, which can provide cutting-edge tools for advertising. Success also hinges on strategic investments in sales and marketing, especially given the lengthy sales cycles often involved. Managing growth effectively while navigating fierce competition remains a priority for companies across the sector.

The current conflict in Israel between Hamas and other organizations reinforces the urgency of these considerations, as companies aim to uphold their revenue streams amid fluctuating market conditions. Also, they must address ongoing quarterly fluctuations, influenced by seasonality and cyclical events that could disrupt profitability.

Development in technology plays a crucial role, particularly regarding recommendation engines that must accurately predict user engagement. If these systems fail or diminish in effectiveness, it could lead to a notable decline in partner relationships and user engagement. Additionally, companies face challenges relating to data privacy, which affect their advertisement strategies.

Finally, businesses must address the inherent risks posed by security breaches and potential outages, as these can have immediate consequences on both operations and stakeholder trust. Moreover, currency exchange rates and varying regulatory frameworks across countries add another layer of complexity to the business environment.

The content presented here reflects the challenges faced by the industry and does not guarantee future performance. There is a distinct possibility that actual results may substantially differ from those projected in any forward-looking statements.

About The Combined Company

Outbrain Inc. (Nasdaq: OB) and Teads successfully merged on February 3, 2025, now operating under the Teads brand. The newly formed Teads is positioned as an omnichannel outcomes platform for the open internet, optimizing marketing results across premium media channels. By leveraging predictive AI technology, Teads aims to maximize the value from each media dollar spent, ensuring effective connections between quality media, engaging brand content, and accurate measurement.

This new entity counts more than 10,000 publishers and 20,000 advertisers among its partners, establishing it as one of the most extensive advertising platforms available. Headquartered in New York City, Teads employs nearly 1,800 people across 36 countries, underscoring its commitment to global operations.

Media Contact:

[email protected]

Investor Relations Contact:

[email protected]
(332) 205-8999

# Financial Performance Analysis: Key Revenue Insights Revealed

OUTBRAIN INC. Condensed Consolidated Statements of Operations (In thousands, except for share and per share data)
		Three Months Ended March 31,
			2025				2024
		(Unaudited)
Revenue

$	286,357			$	216,964
Cost of revenue:
Traffic acquisition costs			183,235				164,810
Other cost of revenue			20,472				10,559
Total cost of revenue			203,707				175,369
Gross profit			82,650				41,595
Operating expenses:
Research and development			13,979				9,193
Sales and marketing			53,737				23,617

# Financial Report Reveals Key Operating and Impairment Charges

General and Administrative			36,477				15,215
Impairment Charges			15,614				—
Restructuring Charges			7,279				167
Total Operating Expenses			127,086				48,192
Loss from Operations			(44,436	)			(6,597	)
Other (Expense) Income:
Interest Expense			(23,124	)			(937	)
Other (Expense) Income and Interest Income, Net			(484	)

# Financial Overview Reveals Significant Losses and Share Figures

## Breakdown of Financial Performance

In the latest report, the financial data showcases a substantial net loss amid other expenses. The overall financial landscape is outlined as follows:

### Income Insights

– **Total Other (Expense) Income, Net**: $(23,608)
– **Loss Before Income Taxes**: $(68,044)

### Tax Benefits and Net Loss

Tax-related figures indicate the following:

– **Benefit from Income Taxes**: $(13,201)

This culminates in a **Net Loss** of:

– **Overall Net Loss**: $(54,843)
– **Net Loss (Comparative)**: $(5,041)

## Shareholder Metrics

The report further details the weighted average shares outstanding, critical for evaluating earnings per share:

### Basic Shares Outstanding

– **Total**: 77,954,579
– **Comparative Total**: 49,265,012

### Diluted Shares Outstanding

– **Total**: 77,954,579

These figures reiterate the significant challenges faced by the company, prompting a closer look at financial strategies moving forward. The mounting losses reflect an area of concern for stakeholders, necessitating strategic adjustments in operations to foster recovery.# Outbrain Inc. Reports Financial Performance for Q1 2025

OUTBRAIN INC. Condensed Consolidated Balance Sheets (In thousands, except for number of shares and par value)
	March 31, 2025				December 31, 2024
	(Unaudited)
ASSETS:
Current assets:
Cash and cash equivalents	$	136,312			$	89,094
Short-term investments in marketable securities		19,567				77,035
Accounts receivable, net of allowances		328,386
Net loss per common share:
Basic		$	(0.70	)		$	(0.10	)
Diluted		$	(0.70	)		$	(0.10	)

# Financial Overview: Current and Non-Current Asset Details

## Current Assets

Total current assets	149,167	49,817	27,835
Prepaid expenses and other current assets	—	534,082	343,131

## Non-Current Assets

### Breakdown of Non-Current Assets

Property, equipment and capitalized software, net	47,879	45,250
Operating lease right-of-use assets, net	26,874	15,047
Intangible assets, net	391,022	16,928
Goodwill	587,494	63,063
Deferred tax assets	49,957	40,825
Indemnification asset	—	—

This financial overview outlines both current and non-current assets, detailing their respective values. The structured data helps understand the composition of assets and offers clarity on the company’s financial position.# Financial Overview: Assets and Liabilities Breakdown

26,556				—
Other assets		24,176				24,969
TOTAL ASSETS	$	1,688,040			$	549,213
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Current liabilities:
Accounts payable	$	274,060			$	206,920
Accrued compensation and benefits		50,760				19,430
Deferred revenue		13,066				6,932
Short-term debt		16,202				—
Accrued and other current liabilities

# Breakdown of Total Liabilities Reveals Financial Position

### Current Liabilities Overview

– **Current Liabilities:**
– Total: 472,545
– Short-term Debts: 118,457
– Other Current Liabilities: 56,189

### Non-Current Liabilities Analysis

– **Long-term Debt:**
– Total: 610,816
– Operating Lease Liabilities (non-current): 20,356
– Deferred Tax Liabilities: 62,099
– Contingent Tax Liabilities: 36,632
– Other Liabilities: 10,927

### Summary of Liabilities

– **Total Liabilities:**
– Overall total: 1,213,375# Stockholder Equity Analysis for March 2025: Key Insights

## Overview of Stockholder Equity

As of March 31, 2025, the stockholder equity figures reflect important developments in the company’s financial standing. Notably, the equity composition indicates shifts in various share categories and overall financial health.

### Common Stock

The company has authorized one billion shares of common stock, with **94,349,511 shares issued** and **94,293,190 shares outstanding** as of March 31, 2025. This is an increase from the **63,503,274 shares issued** and **50,090,114 shares outstanding** reported as of December 31, 2024. The significant rise in outstanding shares suggests active market engagement.

**Value of Common Stock**: $94

### Preferred Stock

In terms of preferred stock, the company maintains an authorization of **100,000,000 shares**, yet **none were issued or outstanding** as of both March 31, 2025, and December 31, 2024.

**Value of Preferred Stock**: —

### Additional Paid-in Capital

The additional paid-in capital shows a robust figure of **$674,442** as of March 31, 2025, compared to **$484,541** at the end of 2024. This indicates successful capital raising efforts or valuations that have been favorable to the company.

### Treasury Stock

The treasury stock reflects a strategic hold, currently at **56,321 shares** as of March 31, 2025, down from **13,413,160 shares** as of December 31, 2024. This reduction suggests either stock buybacks or retirements, which could be a move aimed at enhancing shareholder value.

**Cost of Treasury Stock**:
– March 31, 2025: $(242)
– December 31, 2024: $(74,289)

### Comprehensive Income (Loss)

The accumulated other comprehensive income stands at **$24,707** as of March 31, 2025, up from a loss of **$(9,480)** at year-end 2024. This positive swing is a significant indicator of improved financial performance over the period.

### Accumulated Deficit

The accumulated deficit reflects the company’s ongoing struggles with profitability, amounting to **$(224,336)** as of March 31, 2025. In comparison, the deficit was **$(169,493)** as of December 31, 2024, highlighting an increase in financial liabilities.

## Total Stockholders’ Equity

Overall, the total stockholders’ equity figures remain pivotal in assessing the financial posture of the company. The increases in both shares issued and additional capital illustrate an evolving landscape for stakeholders. Monitoring these metrics continues to be crucial for informed investment decisions.

—

The above insights encapsulate a snapshot of total stockholder equity as of March 2025, facilitating a clear understanding of the company’s financial trajectory.“`html

Outbrain Inc. Reports Financial Results for Q1 2025

OUTBRAIN INC. Condensed Consolidated Statements of Cash Flows (In thousands)
		Three Months Ended March 31,
			2025				2024
		(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(54,843	)		$	(5,041	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization of property and equipment			1,935				1,639

“`

Breakdown of Amortization and Non-Cash Expenses

Amortization of capitalized software development costs			2,472				2,409
Amortization of intangible assets			8,466				852
Amortization of discount on marketable securities			(425	)			(642	)
Stock-based compensation			2,941				2,927
Non-cash operating lease expense			2,307				1,195
Provision for credit losses			298				1,693
Amortization of debt issuance costs			12,843				—

Financial Changes Show Mixed Results in Deferred Taxes and Assets

Deferred income taxes			(17,786)				(174)
Impairment of assets			15,614				—
Unrealized foreign currency transaction (gains) losses			1,688				312
Other			30				26
Changes in operating assets and liabilities:
Accounts receivable			37,605				30,398
Prepaid expenses and other current assets			5,901				7,262
Accounts payable and other current liabilities			(22,374)				(31,875)

# Detailed Financial Overview Reveals Key Metrics for Future Growth

Operating lease liabilities			(2,614	)			(1,205	)
Deferred revenue			(830	)			(1,471	)
Other non-current assets and liabilities			5,806				300
Net cash (used in) provided by operating activities			(966	)			8,605
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of a business, net of cash acquired			(598,319	)			(181	)
Purchases of property and equipment			(2,921	)			(1,335

# Financial Overview: Key Insights on Cash Flows and Securities

## Capitalized Software Development Costs
– **Current Period:** (2,699)
– **Previous Period:** (2,627)

## Marketable Securities Transactions
### Purchases
– **Current Period:** (16,602)
– **Previous Period:** (31,578)

### Proceeds from Sales and Maturities
– **Current Period:** 74,221
– **Previous Period:** 31,492

## Investing Activities Summary
### Net Cash Used
– **Total for Current Period:** (546,320)
– **Total for Previous Period:** (4,229)

## Cash Flows from Financing Activities
### Proceeds
– **Bridge Facility:** 625,000

### Repayments
– **Under the Bridge Facility:** (625,000)

This financial data highlights significant activity regarding cash flows, particularly in investments and financing activities. The changes in capitalized software development costs reflect ongoing development efforts, while variations in marketable securities provide insights into the company’s investment strategy.

Financing Activities Reported with Notable Cash Movements

Proceeds from senior secured notes			625,305				—
Payment of deferred financing costs			(28,155	)			—
Payment of stock issuance costs			(775	)			—
Treasury stock repurchases and share withholdings on vested awards			(355	)			(4,015	)
Principal payments on finance lease obligations			—				(255	)
Proceeds from bank overdrafts, net			74				—
Net cash provided by (used in) financing activities			596,094

“`html

Outbrain’s Financial Performance Highlights Key Changes and Trends

			(4,270	)
Effect of exchange rate changes			(57	)			363
Net increase in cash, cash equivalents and restricted cash		$	48,751			$	469
Cash, cash equivalents and restricted cash — Beginning			89,725				71,079
Cash, cash equivalents and restricted cash — Ending		$	138,476			$	71,548

“`

Company Financial Report Reveals Key Revenue and Profit Metrics

OUTBRAIN INC. Non-GAAP Reconciliations (In thousands) (Unaudited)
The following table presents the reconciliation of Gross Profit to Ex-TAC gross profit and Ex-TAC gross margin, for the periods presented:
	Three Months Ended March 31,
		2025				2024

Revenue	$	286,357			$	216,964
Traffic acquisition costs		(183,235)	)			(164,810)	)
Other cost of revenue		(20,472)	)			(10,559)	)
Gross profit		82,650				41,595
Other cost of revenue		20,472				10,559
Ex-TAC gross profit	$	103,122			$	52,154
Gross margin (gross profit as % of revenue)		28.9	%

# Financial Overview: Key Metrics for March 2025

## Summary of Financial Performance

The financial metrics for the three months ending March 31, 2025, provide critical insights into the company’s performance. Key figures include a net loss of $54,843 and an Ex-TAC gross margin of 19.2%.

### Key Financial Ratios

– **Ex-TAC Gross Profit Margin**:
– **2025**: 19.2%
– **2024**: 24.0%

– **Gross Margin (Ex-TAC)**:
– **2025**: 36.0%

This shift in gross margin may indicate fluctuations in operational efficiency or shifts in revenue-generating strategies.

## Reconciliation of Net Loss to Adjusted EBITDA

The following table outlines the reconciliation of net loss to Adjusted EBITDA for the specified periods:

| Metric | 2025 | 2024 |
|—————————————–|—————-|—————-|
| Net Loss | $(54,843) | $(5,041) |
| **Interest Expense** | $23,124 | $937 |
| Other Expense (Income) and Interest Income, Net | $484 | $(1,405) |
| Benefit from Income Taxes | $(13,201) | $(1,088) |
| Depreciation and Amortization | $12,873 | — |

## Analysis of Key Figures

The net loss increased significantly from the previous year, reflecting potential challenges in cost management or revenue generation, as illustrated by the steep interest expense rise in 2025. The impact of taxes and depreciation further complicates the overall financial landscape, suggesting that analysts should closely monitor future performance metrics.

In conclusion, understanding these financial dynamics will be crucial for stakeholders aiming to navigate the complexities of the company’s evolving business model.# Outbrain Inc. Reports Key Financial Metrics for Recent Period

		4,900
Stock-based compensation		2,941				2,927
Acquisition-related costs		16,418				—
Restructuring charges		7,279				167
Impairment charges		15,614				—
Adjusted EBITDA	$	10,689			$	1,397
Net loss as % of gross profit	(66.4		)%		(12.1		)%
Adjusted EBITDA as % of Ex-TAC Gross Profit		10.4	%			2.7	%

# Company Reports Financial Reconciliation for March 2024 Quarter

The reconciliation of net loss and diluted earnings per share (EPS) to adjusted net loss and adjusted diluted EPS is detailed in the following table for the respective periods.

### Financial Overview

The table below shows the breakdown for the three months ending March 31 for 2024 and 2023.

OUTBRAIN INC. Non-GAAP Reconciliations (In thousands) (Unaudited)

The following table presents the reconciliation of net loss and diluted EPS to adjusted net loss and adjusted diluted EPS, respectively, for the periods presented:
	Three Months Ended March 31,
		2024				2023
Net loss	$	(54,843	)		$	(5,041	)
Adjustments:
Acquisition-related costs		16,418				—
Restructuring charges		7,279				167
Impairment charges		15,614				—
Bridge facility costs		11,996				—
Total adjustments, before tax

# Financial Results Reflect Significant Adjustments Amid Losses

51,307				167
Income tax effect		(11,759	)			(41	)
Total adjustments, after tax		39,548				126
Adjusted net loss	$	(15,295	)		$	(4,915	)
Basic and diluted weighted-average shares		77,954,579				49,265,012
Diluted net loss per share – reported	$	(0.70	)		$	(0.10	)
Adjustments, after tax		0.50

# Financial Performance Report: Q1 2025 Highlights

## Adjusted Diluted Loss Per Share

The adjusted diluted loss per share for the quarter is as follows:
– **2025**: $(0.20)
– **2024**: $(0.10)

## Reconciliation of Operating Activities to Free Cash Flow

The following table outlines the reconciliation from net cash provided by (used in) operating activities to free cash flow for the reported periods:

### Three Months Ended March 31

| Description | 2025 | | 2024 | |
|—————————————————–|———–|———–|———–|———–|
| | | | | |
| **Net cash (used in) provided by operating activities** | $(966) | | $8,605 | |
| **Purchases of property and equipment** | $(2,921) | | $(1,335) | |
| **Capitalized software development costs** | $(2,699) | | $(2,627) | |
| **Free cash flow** | $(6,586) | | $4,643 | |

### Closing Notes

These figures reflect the company’s ongoing operating dynamics and investment strategies. The performance metrics suggest a focus on capital expenditures that may impact liquidity positions in both quarters.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.