Outbrain Inc.

Good day. Welcome to Outbrain Incorporated's first quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. Question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would like to turn the call over to Outbrain's investor relations. Please go ahead.

Good morning, and thank you for joining us on today's conference call to discuss Outbrain's now operating estate first quarter 2025 results. Joining me on the call today, we have David Kaufman, the CEO and CFO of SEED. During this conference call, management will make forward-looking statements based on current expectations and assumptions, including statements regarding our business outlook and process. These statements are subject to risks and concerns that may cause actual results to differ materially from our forward-looking statements. These risk factors are discussed in detail in our form 10-K filed for the year end for 31st as updated in our subsequent reports filed by the Securities and Exchange Commission. Forward-looking statements speak only as the call's original date and do not undertake any duty to update any such statements. Today's presentation also includes references to non-GAAP financial measures. You should refer to the information contained in the company's first quarter earnings report for definitional information and reconciliation of non-GAAP measures with the comparable GAAP financial measures. Our earnings release can be found on our IR website, investors.outbrains.com, under news and events. With that, let me turn the call over to David.

Thank you, Tiffany. Good morning, and thank you for joining us today. I'm pleased to share that we had a strong start to the year. As a reminder, Outbrain and Teads merged on February 3rd to form the new Teads. I'm glad to report that we achieved our Q1 guidance, both in terms of extra gross profit and adjusted EBITDA, while achieving significant milestones in the integration. Our vision for the new tease is clear, to create the open internet advertising platform for elevated outcomes, from branding to performance. Our end-to-end platform empowers brands to connect the consumer journey from discovery to purchase, driving real business outcomes. The open Internet provides a different level of access to incremental, scaled user moments, but we've lacked a solution that can connect the fragmented channels of the open Internet in order to drive real business outcomes across all stages of the marketing funnel. That's where the new TEADS comes in. We believe there are several key factors that will enable TEADS to become the platform of choice to drive outcomes from branding to performance on the open internet. First, we have direct exclusive media relationships that allow us to curate inventory at massive scale globally. This means that we have significant flexibility around the use of such supply, mimicking the control the walled gardens have of owned and operated inventory. The fact that we are an end-to-end platform provides advertisers with the optimized, transparent supply path that's essential for delivering outcomes. And we do this at a significant global scale across 50 markets and 2 billion users. Second, these unique media relationships also yield a wealth of proprietary data around how consumers engage and take action. We access over 1 billion data points each minute. which fuel our AI-powered algorithm. That algorithm tailors our inventory environment to drive the optimum outcome from every user, again, in a very similar way to the algorithm of WorldGarden. Third, our creative studio is the key layer that enables our brand and agency partners to seamlessly connect with audiences across previously fragmented channels. We understand what most likely to drive outcomes from a creative perspective for each of our partners' businesses, making us a deeply entrenched strategic partner. We believe that these capabilities will allow us to deliver dependable outcomes at SCAPE on the open internet, similar to the walled garden, in a way that's not possible with the currently fragmented DSP or SSP point solutions on the market. Moving to execution. We see solid execution across the business and see momentum behind this strategy. Our platform features a healthy, diverse balance of advertiser segments, verticals, and geography. I want to mention that in terms of the marketing campaign objectives, we are well-balanced with approximately two-thirds of spend on our platform on performance campaigns and approximately one-third of the spend on our platform on branding campaigns. And the feedback from the hundreds of client meetings we've had since closing has been consistent. Offering an outcome-based solution for objectives from branding to performance and a combined brand form and solutions across all screens is highly compelling. One segment of clients I'm excited by is our strategic joint business partner account. We closed Q1 with more than 50 JBPs, including new commitments with Ferrero, Haleon, Philip Morris International, and Bayer Store. We believe the structure of these strategic partnerships gives us a large opportunity for growth, servicing new product lines, geographies, and marketing objectives in each brand's portfolio. Legacy Teads has mostly serviced branding campaigns with a JVP partner, but practically all of them have significant performance objectives and budgets that would be available to us. We have already seen several successes with legacy feed branding customers expanding with us now to performance. In addition to the JBPs, over the past few years, the combined company has consistently maintained approximately 500 advertisers spending at least half a million dollars on our platforms on a rolling 12-month basis. On average, these customers have each spent in excess of $2 million annually which represents roughly 70% of total customer spend on our platform. Additionally, we have another approximately 1,000 advertisers spending between $100,000 and $500,000 annually, representing a great base to grow our share of wallet with these large customers. Moving to the supply side, where continued ownership of unique, exclusive media environments remains critical. We're seeing wins, not just from new business, but from long-time customers who trust us to innovate and scale with them. Renewals have included Webidya in France, Sunkei in Japan, and TMZ and Conde Nast in the US. We're also innovating the experiences we can provide to consumers across these traditional web environments. Moments, our vertical video solution, provides the immersive experience of social media's scrollable format to traditional publishing environments, and consumers are showing high engagement with users now consuming eight videos on average. Over 70 publishers have adopted Moments, with examples delivering close to 80% viewability with nearly double the engagement rate of other branding formats. Moments will be one of the cornerstones of an expanded, vertical experiences suite at the new Teads, where brands can scale social experiences beyond the walled garden. As we strive to drive outcomes for advertisers across all screens on the open internet, expanding our access to unique CTV environment remains a key focus. In Q1, CTV revenue grew over 100% year over year. Now we're presenting approximately 5% of our total ad spend. We also now have access to more than 300 million TV screens for manufacturers globally, with about half of these coming to our exclusive partnerships with LG and Vida, in addition to our access to more than 7,000 CTV properties globally. And we believe the value of our unique CTV home screen inventory is clear. Since its launch in 2023, more than 1,500 CTV home screen campaigns have been run by premium brands globally, including Cartier, Nestle, and Airfront. On the operational side, our focus remains on integration, efficiency, and execution. Immediately post-closing, we implemented the majority of headcount-related synergies. At this point, we have actioned 90% of our annualized compensation-related targets. We're also making significant progress on other operating expense synergy opportunities, such as office consolidation, licenses, professional services, and others. And we remain on track to reach our total target of $60 million in annualized cost savings in 2026 and to achieve this run rate by the end of 2025. In addition, we are focused on our AI everywhere effort, identifying opportunities and implementing AI across our engineering, algo product solutions, and internal processes teams with great potential to serve our partners faster and better. Just as one example, in our direct response performance business, we have already seen more than $1 million of campaigns using our image-to-clip technology that enables short video creation for performance marketers based on an image. To sum it up, we are well underway in our strategic and financial transformation. I'm very excited that we are successfully executing with discipline on the merger synergies and continue to be committed to our profitability targets while also getting great traction for our market position and vision. we are deepening our relationships with advertisers and media owners alike and seeing real validation for our strategy that we believe will lead to increasingly winning a larger share of wallets. Thank you again for joining us. Now I will turn it over to Jason for a more detailed financial update.