Nexxen International Ltd.

Welcome to Nexon's first quarter earnings call. At this time, participants are in a listen-only mode with a question and answer session to follow at the end of presentation. This call is being recorded and a replay of today's call will be made available of Nexon's investor relations website. I will now hand the call over to Billy Eckert, Vice President of Investor Relations for introductions and the reading of the Safe Harbor Statement.

Billy, please go ahead. Thank you, operator. Good morning, everyone, and welcome to

Nexon's first quarter earnings call. During today's call, we will discuss our financial and operating results for the three months ended March 31, 2025, as well as our forward-looking guidance. With us on today's call are Oprah Duker, Nexon's Chief Executive Officer, and Sigeen Eri, the company's Chief Financial Officer. This morning, we issued a press release which you can access on our IR website at .nexon.com. During today's conference call, we will make forward-looking statements. All statements other than statements of historical fact could be deemed as forward-looking. We advise caution and reliance on forward-looking statements. These statements include, without limitation, statements and projections regarding our anticipated future financial and operating performance, market opportunity, growth prospects, strategy, financial outlook, partnerships, and anticipated benefits related to those partnerships, anticipated benefits related to the recent changes in the company's trading security structure, anticipated benefits related to the company's intended growth and platform investments, forward-looking views on macroeconomic and industry conditions, as well as any other statements concerning the expected development, performance, and market share, or competitive performance relating to our products or services. All forward-looking statements are based on information available to us as of the date of this call. These statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from those implied by these forward-looking statements including unexpected changes in our business or unexpected changes in macroeconomic or industry conditions. More detailed information about these risk factors and additional risk factors are set forth in our filings with the U.S. Securities and Exchange Commission, including, but not limited to, those risks and uncertainties listed in the section entitled, Risk Factors, in our most recent annual report on Form 20F. NECSA does not intend to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Additionally, the company's press release and management statements during this conference call will include discussions of certain measures and financial information in IFRS and non-IFRS terms. We refer you to the company's press release for additional details, including definitions of non-IFRS items and reconciliations of IFRS to non-IFRS results. At this time, it is my pleasure to introduce Ofer Drukker, CEO of Nexon. Ofer, please go ahead.

Thanks, Billy. Our momentum from 2024 carried into Q1, as we achieved record results despite market uncertainty, driven by continuous strength in CTV, a powerful and durable growth engine for Nexon, supported by broader industry trends. Beyond CTV, three key drivers continue to enhance our performance and accelerate our growth opportunity. First, our unified -to-end platform is aiming increased recognition for delivering simplicity, control, efficiency, better outcomes and cost advantages, offering a clear edge of a one-sided solution, especially when combined with our differentiated data and AI capabilities. Second, we remain a leader in data-driven aspects. Our proprietary data sets power every stage of the campaign lifecycle, enabling partners to maximize performance in both stable and volatile market conditions. And third, our interconnected platform and robust data infrastructure provide an ideal base for AI innovation, allowing us to release impactful new tools that drive enhanced results for our partners, deepening our competitive advantages. The recent launch of NexAI marks a transformational step forward for Nexon. NexAI, our comprehensive suite of generative AI and machine learning powered systems and features is vertically integrated across our platform in enhancing every stage of the advertising journey. It leveraged Nexon's technology platform to deliver faster insights, smarter planning, automated activation and real-time optimization. The first NexAI released an AI assistant in Nexon DSP, surface insight instantly and saves time. Dozens of clients have already gained access, reporting meaningful productivity gains, while others are excited about NexAI potential to automate data and insight gathering and streamline reporting and optimization. Later this year, we expect to introduce expanded NexAI capabilities, focus on enhancing optimization and bringing advanced functionality to our data platform in SSP. Overall, NexAI is expected to enhance our clients and partners' ability to get the most value out of our platform, optimize product effectiveness and leverage the vast data we provide to enrich insights and expand reach. We believe this in combination will help increase customer stickiness and attract new partners. NexAI enhance the benefit of our -to-end platform. NexAI uniquely enables customers to onboard data, gain insights, extend audience reach, plan media strategies, activate campaigns, continuously optimize and measure results all within a single connected platform. This model delivers strong value in our market condition, but become even more essential in periods of uncertainty when advertisers and publishers are under pressure to do more with less and focus on efficiency and results. Our -to-end approach is driving greater spend consolidation with more advertisers and agencies choosing to access inventory through our SSP, fueling both growth and margin expansion. A great example is Toyota, which expands its video and CTV investment -to-end with NexTen and as a result, it's seeing stronger conversions, lower media costs and higher consumer engagement. Through our -to-end platform, air integration and proprietary data across every touch point, we are well positioned to deliver value and growth. CTV remained our primary growth driver in Q1, a testament to the strength of our Intel connected CTV data and technology offering and growing industry recognition. As consumers continue shifting to add supported streaming and advertisers move billions of dollars in budget from linear TV, NexTen is well positioned to capitalize on the significant long-term growth opportunities. Our leadership position is reinforced by our ability to deliver measurable performance across CTV advertising. Further, it's supported by growing relationship with leading CTV advertisers and streaming platform, including 2B, who recently expanded this partnership with NexTen beyond the US into the UK to increase programmatic advertising revenue. This will validate our strategy and strengthen our position to capture outside shares in one of digital advertising process growing area. Our differentiated data platform, which offers a variety of in-demand market solutions, also continue to drive new and expanded partnership while increasing our value across the industry. Data is central to everything we do and we have spent years building our capabilities and footprint, giving us a competitive edge as others race to acquire and assemble similar offerings. Recently, as the industry has focused on unifying and scaling data, APEC, AI, targeting an identity solution, we have seen major players like public season group N acquire platforms like Lotomy and InfoSum to keep pace. NexTen is ahead of the open internet APEC curve, already integrating, connecting, and delivering these capabilities at scale, resulting in incredibly sophisticated market-leading solutions that position us to win market share. Our performance and brand momentum also continue to attract top-tier talent from peers and industry leaders. After strengthening our executive team, we are focused on reinforcing mid-level management to support growth and innovation. In the US, we continue to expand our sales force and in Europe, we are strategically hiring sales leaders to accelerate our international growth opportunity, particularly within CTV, capitalizing on our relationship with VISA and ISIM. In Q1, we added 101 new actively-spending first-time advertising customers, including 15 new enterprise sales service customers and onboarded 63 new supply partners. Our streamlined US listing, combined with our consistent execution and clearer messaging, is also improving our recognition in the capital market. Since evolving our trading structure, we have seen higher trading volumes, growing investor interest, and an impressive increase in sales-side coverage. We are committed to building on this momentum through active investor and analyst engagement, conference participation, and our upcoming Investor Day, and continue to believe our updated structure has strengthened our positioning for long-term capital appreciation. Our strategy is resonating. Our technology platform is driving powerful results for our partners, our execution remains strong, and we are confident our leadership position will continue to grow through ongoing AI innovation and platform investment. Even amid economic uncertainty and evolving advertising trends, Nexon continues to deliver, empowering customers to achieve stronger outcomes while reducing costs and resource requirements through the combined power of data and technology. Having spent years laying the groundwork, we are now executing from a position of strength. With a comprehensive platform, differentiated data sets, embedded AI, a talented team growing strategic partnerships and a strong reputation within the industry, we have built a durable advantage that position us to deliver long-term value. We are excited to continue supporting our clients and helping shape the future of digital advertising through innovation and partnership. With that, I'm happy to turn the call over to Sagih.

Thank you, Ofer. In Q1, we generated contribution extract of $75 million, a Q1 record representing 8% -over-year growth. Programmatic revenue also reached a Q1 record of $71.8 million, reflecting a 10% increase compared to Q1 2024. Our growth was driven by strong sales execution, continued CTV momentum, increased -to-end revenue, and higher spend consolidation from key partners. Our strategic focus on larger customers expanded self-service footprint and ability to support partners across their full workflow also contributed to both our contribution extract and adjusted EBITDA strengths. In Q1, we observed continued growth in CTV, video, self-service products, and PMPs, and increases across our education, finance, health, and automotive verticals. In contrast, we experienced an approximately $900,000 -over-year decrease in contribution extract from our non-programmatic business lines, a decrease in contribution extract from display, and reduced spending within our government vertical. CTV continued to lead our growth story. We generated record Q1 CTV revenue of $26.4 million, which reflected 40% -over-year growth. As a result, CTV accounted for 37% of programmatic revenue, up from 29% in Q1 2024. This momentum also helped expand video revenue to 75% of programmatic revenue in Q1 2025, from 66% in Q1 2024, and we remain confident that both video and CTV will represent core long-term growth drivers for next time. Elsewhere in Q1, self-service contribution extract grew 32%, and PMP revenue rose 12%, while contribution extract from display decreased 22%, largely due to declines in our non-core, non-programmatic business lines. We exceeded Wall Street's adjusted EBITDA expectations in Q1, generating adjusted EBITDA of $23.1 million, and 95% increase from Q1 2024. This growth was driven by higher contribution extract, increased spend consolidation and customers adopting an increasing number of solutions within our ecosystem, particularly as enterprise BST customers accessed more inventory through our SSP. As a result, our adjusted EBITDA margin in Q1 increased to 31% as a percentage of contribution extracts from 17% in Q1 2024, and we remain confident in our ability to continue expanding our margins over time. In Q1, we generated $19.3 million in net cash from operating activities, compared to $37.7 million in Q1 2024. As of March 31st, we had $164.7 million in cash and cash equivalent, $90 million undrawn on our revolving credit facility, and no long-term debt. We also reported non-IFRS diluted earnings per share of $0.16 in Q1 2025, compared to $0.02 in Q1 2024 on a post-reverse split basis. We repurchased roughly 3.7 million ordinary shares on a post-reverse split basis in Q1, representing an investment of approximately $32.9 million. Since initiating a series of buyback programs on March 1st, 2022, through March 31st, 2025, we repurchased roughly .2% of our outstanding shares, investing approximately $190.2 million. In April, we completed our previous $50 million share repurchase program authorization and launched a new $50 million program. The ongoing program is expected to continue until the earlier of November 19th, 2025, or completion. And as of April 30th, we had roughly $39 million remaining in our authorization. With no long-term debt or near-term M&A plans, we intend to continue allocating capital to share repurchases, particularly while our valuation remains below US ATT&CK peers, and our strong trade that level the board believes undervalue the business.

With

that, I turn to our outlook. We are reaffirming our prior guidance for full year 2025. We continue to anticipate contribution X-TAC of approximately $380 million, with programmatic revenue expected to represent roughly 90% of our full year 2025 revenue. We also anticipate adjusted debit of approximately $125 million, and continue to expect growth in both CTV and data licensing revenue in full year 2025, compared to full year 2024. While the advertising market has experienced some softness in Q2, driven by economic uncertainty and evolving US policies, we remain confident in our full year 2025 guidance, assuming no material deterioration in economic or advertising conditions. This confidence is supported by several key trends, including ongoing spend consolidation from existing customers, growing industry recognition, sustained CTV revenue strength, growth in new partnership, increasing -to-end adoption, and encouraging ad spend patterns observed so far in Q2. That said, we remain appropriately cautious. However, macroeconomic shocks, tariff changes, or policy shifts could impact market sentiment, consumer behavior, and advertising demand. Still, Nexon is well positioned to support customers in any environment. In more challenging markets, advertisers tend to consolidate budgets with platforms that deliver efficiency, smarter outcomes, and stronger ROI, areas where Nexon has a clear competitive advantage. Our expanded self-service footprint has also lessened our reliance on managed service revenue, which is typically more vulnerable to economic shifts. Additionally, our focus on larger customers has improved contribution extract durability. So, while the demand environment remains uncertain, Nexon is more resilient to volatility than in the past and continues to execute effectively. Our model also provides meaningful operating leverage. As customer spend consolidates and -to-end revenue increases, we are well positioned to capitalize on larger opportunities and deliver strong profitability, even in turbulent conditions. Our strategic focus on innovation, discipline, and sales execution and operational efficiency has laid a strong foundation for sustainable, profitable growth. Additionally, our AI investments in 2025 are expected to sharpen our competitive edge, drive cost efficiencies, and contribute to margin expansion over time. The recent verdict in the ongoing Google Attic antitrust case also has potential to benefit Nexon and others across the open internet. While timelines and potential outcomes remain uncertain, a reduced Google presence and a more level playing field could unlock meaningful opportunities for independent, transparent, and data-driven platforms like ours, as buyer and publisher seek trusted alternatives that deliver greater control, efficiency, and ROI. Depending on the remedies, this could benefit both the demand and supply side of our business and further strengthen our long-term competitive positioning. Following our transformation in 2022 and 2023 and strong execution in 2024, we've carried momentum into 2025. With our rebrand complete, major platform upgrades delivered, and a focused, eye-performing sales team in place, Nexon is now widely recognized as a leading strategic ad tech partner, deepening relationship with existing customers and attracting high-value partnerships. As we've stated, 2025 is all about execution, and so far, we're delivering. With stronger fundamentals, rising industry recognition, and a more scalable platform and operating model, we're excited to host our first US investor day next week. During the event, we'll present a comprehensive overview of our long-term vision, growth outlook, product suite, innovation roadmap, and -to-market strategy. We'll also be joined by customer and industry experts to reinforce Nexon's relevance, leadership, and momentum across the ecosystem. We believe this will clearly demonstrate Nexon's strengths, depreciation, and long-term growth potential, and further solidify why we represent a compelling investment opportunity. As always, thank you to our shareholders, employees, and partners for your continued support

and

operator

will now take questions. Thank you.

We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset to ensure that your phone is not on mute when asking your question. Again, press star one to join

the queue. And our first question comes from the line

of Jason Crair with Craig Callum. The line is open.

Great, thank you guys. Very nice quarter. I'm wondering if you can just put a finer point on the macro comments that you made, what you're seeing so far in Q2, and if any specific commentary on verticals where you're seeing any strengths or weakness, thanks.

Thank you. Taki, you want to take it? Yeah,

sure, I can take it. Hey Jason, how are you? First of all, I think that the geopolitics environment is changing all the time. So I think what was relevant like two weeks ago, maybe it's not relevant yesterday or today. I think that we saw some kind of softness entering into April when the tariffs war was, I'm not sure at the peak, but somewhere around that. I think that we are well diversified and we are activating in terms of different verticals and if we are seeing something going down, it's being compensated by another vertical going up. We are not really over indexed with any vertical. And I think that some of the softness that we saw, hopefully will go away very soon because of the certainty that now is coming into the market. And I think that most of it was a little bit push of campaigns from April to the end of the quarter and maybe some of it into H2, but nothing really material that is changing our early guidance and our confidence in our ability to

get

to ether numbers.

Wonderful, thank you. And then just as a follow up, so you're reiterating the guide after a really nice EBITDA beat in Q1. Is that more a product of conservatism around the macro or should we think about that as kind of related to the incremental investments you're making on AI?

Great question. I think it

came from several components that contributed to this adjusted EBITDA beat. Some of it came from our top line by around two million, which 90 something percent of that is going directly into the bottom line. Some of it came from reversal adaptor allowance that we have in the market. That we are seeing almost every Q1. Some of it came from of course, better utilization and margin expansion. And some of it came from slower than expected on boarding of talent. With some of it, it's not like we have a challenge over there, but because of the uncertainty that already started somewhere around February, we streamlined our ad count on boarding for 2025. So I think all of that is like, helps us to beat our adjusted EBITDA number by a nice number. And I think that we are being cautious around the newly

adjusted EBITDA. Jason, is that answering your question?

Our next question comes from the line of Andrew Marrock with Raymond James. Your line is open.

Hi, thanks for taking my questions. Maybe one, if I could on this concept of the increased familiarity of Nexon kind of in the marketplace and some of the feedback that you're getting there. For those customers who are maybe a little bit more unfamiliar with Nexon, what are some of like the things that they're finding surprising and how are your Salesforce hiring efforts kind of dovetailing into that? And then I have a follow up, thanks.

Thank you, Andrew. I will take it again. I think that we kept our strategy strong from almost 2019, which put the emphasis on end to end solution, that and emphasize on CTV. I think that two things happened first, with our rebranding and repackaging. I think that we also improve our messaging so people understand better what we are doing. And I think that the fact that we utilize everything under one brand is also helping us a lot in that. The second thing I think is, which is very crucial, is the rise of the importance of data. So even the past, we needed to convince sometimes people that data is important. Now people are looking at that as a very important element in our offering. And we are getting a lot of great feedback about our abilities around data, how we can basically utilize it across the journey of the campaign from planning to activation and measurement. And I think that this is resonating very well. And we believe that this is something that we keep strengthening in the market in order to get more adaptants and more open doors to new clients in the market.

Helpful, thank you. And maybe one on the Google outcome, if I could. So obviously we've seen the Department of Justice's closed remedies. Nothing is certain yet, but assuming things do kind of break the way that you're hoping, is there any incremental investment that you might have to do to take advantage of that opportunity? Or is it all just kind of part of your core mission of expanding your share within the market? Thank you.

Of course. I think it's very unclear to understand when and what will happen really with Google going forward. But I'm sure that it's already doing some good stuff in the near future because the mindset is already a little bit different around Google and the ability to... And people are looking to expand their work with other partners. We don't need to extra invest in that. It's something that is in our core business. And we are able to basically accept and grow our business based on our current account and technology. So of course we will welcome any movement like that. And we are doing everyday efforts to recruit and grow our base of publishers and of course advertisers. And I think that this change of course can

help us in the future. Thank you.

Our next question comes from the line of Maria Rips with Kinecourt Genuity. Your line is open.

Great. Thanks for taking my questions and congrats on the strong quarter. So as we think about your full year guidance and expected growth acceleration, can you maybe give us a little bit more color on what's embedded in your projections from the CTV segment growth perspective versus platform-specific improvements that you talked about in your prepared remarks?

Okay. Yeah, sure.

Maria. I think, as I said before, although we had a strong quarter and we beat our net revenue and adjusted the EBITDA lines, I think that we are still cautious because the uncertainty maybe moved a little bit away, but it's still here. And when uncertainty is there, people are holding onto their budget. Having said that, I think that on the CTV and our growth engines into 2025, we took into consideration that we will reach somewhere around the 40% of CTV revenues out of programmatic revenue. Other than that, and it relates to the question of Andrew before, we didn't look into consideration the Google verdict because I think that I saw a lot of articles around that and a lot of people talking around that. I think that the only thing that everyone can agree on is that it will, of course, give some positive effect to the open Internet. I'm not sure anyone understands to what extent and how much. And as Arthur said, we can bear a lot of increase in our fill rate and win rate on the current cost structure. So if we will see wins over there, we don't need any extra cost in order to utilize this extra spend on our platform. I hope that this is answering your question.

Got it. That's very helpful. And then you mentioned enhanced live sports TV offerings to various partnerships, so that was great to see. Can you maybe talk about your strategy in live sports more broadly? Are there any other sort of major partnerships or inventory type that you would like to add to the platform? And maybe sort of what kind of advertising demands are you seeing more broadly for sports versus non-sports inventory?

I will take it, Sagui. I think that live sports is something that is becoming very, very popular among, of course, users, but also advertisers that want to reach these users in the best place when they are watching sports. And with our CTV activity and our wide partnership, we are able to fulfill a lot of sports events that basically are interesting for the US audience. And we are getting also a lot of traction from advertisers and other DSPs that are connected to us that want to monetize this basically interesting opportunity. I think that we don't have like a specific right now target that I can mention in this call that is super important to us to add. I think that there is ongoing process that we are working with on in order to add more and more content, and more and more advertisers, and other DSPs that are interested to utilize this opportunity. And I think the trend is very well, it's very good as you can see. And we are going to expand it also through our relationship with Vida, which is the operating of iSense, not just in the US, but also internationally in the future because of our relationship with them. And of course, OEM and especially iSense, that is promoting a lot of and sponsoring a lot of sports events

is

very helpful for us.

Got it. Thank you so much for the call. Thank you.

Our next question comes from the line of Barton Crockett with Rosenblatt. Rolaisal.

Hi, thanks for taking the question. I guess two kind of things if I could. One, just stepping back a little bit and thinking about your view of the growth potential of your business. You mentioned that you are buying back your stock because your multiple is below some of the other ad tech comparables. And you've also suggested that you believe you are going to be a share gainer. But if we look at your contribution X-TAC growth rate in the quarter at up about 8% I think, you are growing slower than the trade desk in the 20s and Magnite lower double digit. So I'm just wondering, do you see implicit in your share repurchase and in your share gain commentary, do you think your revenue growth accelerates over some timeframe? And if so, if you could talk about what gets us there.

I will take it Sagi. So thank you Barton for your call and for your question. I think that I will divide it into two points. First of all, I think that the trade desk traditionally over the last few years were presenting very high growth which is of course a matter of them leading this market for a long time and being established solution for many of the major players in this industry which allow them to grow in this rate which is of course very impressive. The second thing I think that we conducted the major integration, the acquisition and then the integration of a Mobi and all our full stack and rebranding. We finished it basically in the beginning of 2024. We saw 2024 that we delivered much better results than the last days before them like 2022 and 2023. And we feel that it's taking time to ramp up. It's not that it's a switch that you click on and suddenly everybody is jumping on you and wants to work with you. I think that there is a lot of work to be done, a lot of meetings, messaging, conferences, meetings in order to get it done. But I think that we are on the right path and we see the growth. And I think that our offering is very interesting in answering most of the trends and the things that are happening in the market basically that is challenging and also big opportunities for clients on both sides of the publishers and the advertisers side. So we feel very strong about what we are doing. We think that it's a matter of time. We are improving our execution that was fairly good already in 2024, but we are expanding it and growing it and improving our execution. And I feel that in the next year or two we will see growth coming in because of the infrastructure, because of the platform, the technology, the improved messaging and rebranding. And as we mentioned in several PRs, there is also talent acquisition that we are doing and integration and promotion from the company. And all of that together will lead to additional growth in the near and mid-term.

Okay, thank you for that. And then one other if I could. I think one of your clients that you guys talk about is Tubi which had some benefit in the first quarter from the Super Bowl being on Fox and record viewership on Tubi. Was that in any way a material kind of contributor that might not be recurring as we look ahead?

There is always

different reasons for people to watch and to consume content. I don't think that we envision that there will be like a major message change around that. I think that people are switching their favorites of what they are watching and so on according of course to availability and seasons. But we don't feel usually this change over the last few years unless it's like something very major on a global level that can affect it. But also then people find other things to watch. Basically if you look at the trends that we have just published in the past two weeks you see that there is a stable scenario that people are watching between five to six hours a day consuming content and mostly from TV and mobile of course.

So I don't think they are not expecting any material change. Okay, thank you very much. Of course.

And our last question comes from the line of Matt Condon with CTzens. Your line is open.

Thank you so much for taking my questions. My first one is just you highlighted new partnerships as a key contributor to maintaining the full year contribution to tech guidance. I was just wondering which one of those partnerships or highlight any of the partnerships that are really driving that growth. Is it the data partnership with the trade desk? Is it LG? Is it Bagwell? Any color there would be helpful.

Saghi,

can you take it? I don't remember that we mentioned one part.

Yeah, no, I'll take it of course. Hey Matt, I think that as I said before, I'm not sure who asked the question. We are well-diversified over our verticals, our partners, both on the supply side and on the demand side. And we are not really reliant on anyone. And we are not really over indexed to anyone. So I don't think that if something will happen we can put a finger and say, hey, this line of business or this partner or this cooperation is going to suffer. I think we are well positioned and hopefully that it will not come. But if it will come, I'm sure that we have enough scale and diversification to compensate it from a different line of business or partner or whatever we are talking about. I hope that I answered your question.

That's helpful. And I also just wanted to ask about the -to-end platform. What percentage of your DSP buys are also going through your SSP? And just what ending are we in there? And how much higher do you guys think that could go? Thank you so much.

Yeah, sure. So

I think we didn't change a lot in the last couple of quarters. I think we are at somewhere around the 50%. So 50% of every dollar that is coming through our DSP is being utilized or facilitated on our exchange. At the end of the day we think it can go higher. And of course it will contribute to our margin expansion. Having said that, it's not something that we are really controlling. I think everything, all the decisions are being made by the bidder and by algorithm. It's not like we can affect anything. And by the way, advertisers can come in agencies and ask to facilitate 20% of their budget on XSSP or on ZSSP or on AXchange. So we are not really controlling that. Having said that, and as Ofer mentioned, because we are all the time and it's ongoing, we are bringing more and onboarding more and more publishers, and more and more inventory, and more and more data. We are presuming that at the end of the day we can facilitate more or the bidder and algorithm will get the right decision, the right ROI for both sides in order to facilitate through our platform. So it will go up. I can't tell you exactly what is like my point of view of the cap, but I think it can move from 50 to 60 in the next three years.

That's very helpful. Thank you so much. Thank you. And we will take a question from

Nat Schreinder with Scoushabank. Your line is open.

Yes, hi guys. Great quarter. And particularly on the EBITDA side, you are usually quite a bit lower than Q1 on EBITDA because of the lower revenue just seasonally that happens in Q1. Trying to understand what are you expecting in expenses? I just go out through the year. You are going to be not seeing your traditional ramp in EBITDA even as you ramp revenue to get to your guidance. Is there some specific expense you want to call out?

No,

there isn't any special expense. I think I touched it on previous questions. So I said that the extra EBITDA that we delivered in Q1 came from eating our top line. And everything of course that we are eating over there are going directly into the bottom line. Some reversal on the actual allowance provision. Some better utilization and margin expansion on different line of businesses. And a little bit slower than expected on boarding of EdCount. Again, it was an educated decision that we took, not any challenge because we are seeing a lot of talent now trying to come to next end. So I think all of these components are the reason for eating the EBITDA line. We are still guiding the 125. We are still cautious. It's early in the year and we want to see where Q2, Q3 is taking us. Maybe and hopefully it will go higher as the year progresses.

Okay. And where do you think, what is a long-term stable level? Obviously you've had lots of swings over the years with adding in and dealing with the acquisitions. You've been very high in the past in other places. Where do you want it to be?

You're talking about adjusted EBITDA margin?

Yes, so adjusted EBITDA margin, exact, versus contribution.

I think we want it to be 100% but it's not feasible. I think that seriously, it's something that we are thinking about a lot. I think that Gen.AI and all the initiatives around that will contribute to that. We are investing a lot in 2025 as part of a plan. And of course we will see the benefits and the outcome of that in 2026 and onward. If I need to do an educated guess or not guess according to our plan, I think that we can reach the 40s by 3 to 5

years. Okay. Thank you. You are welcome. And

that concludes the question and answer session. I would like to turn the call back over to Offer Juker for closing remarks.

Thank you. We are very excited with our performance and the way we rebranded, packaged, and executed our strategy through our robust technology tech and our talented and committed teams around the globe. I think that the last quarter also showed the resilience and the hard work with all the uncertainty around. We achieved really good results. Watching our peers and the industry, we strongly believe we are on the right path. And we will keep exercising our strategy in the next couple of years. And we are really feeling that we choose the right strategy and we are exercising it in a way that basically enables us to grow the business and keep leading the market around CTV data and -to-end that we started this journey basically in 2019. So thank you everyone for your support and for your time this morning. And thank you very much.

Ladies and gentlemen, this concludes today's conference call. Thank you all for joining and you may now disconnect.

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