Teads Holding Co.

Good day and welcome to TID's second quarter 2026 earnings conference call. At this time, all participants are in listen-only mode. A brief 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 TID's investor relations. Please go ahead.

Good morning and thank you for joining us on today's conference call to discuss TID's second quarter results. Joining me on the call today, we have David Kostman and Jason Kiviat, the CEO and CFO of Teads. During this conference call, managers will make forward-looking statements based on current expectations and assumptions, including statements regarding our business outlook and prospects. The statements are subject to risks and uncertainties that may cause actual results to differ materially from our forward-looking statements. These risk factors are discussed in detail in our annual report on Form 10-K for the year ended December 31, 2025. As updated in our subsequent reports filed with the Securities and Exchange Commission, forward-looking statements speak only as of the call's original date, and we do not undertake any duty to update any such statements. Today's presentation also includes references to the non-GAAP financial measures. You should refer to the information contained in the company's second quarter results announcement for definitional information and reconciliations of non-GAAP measurements to the comparable GAAP financial measures. Our earnings release can be found on our IR website, investors.tease.com, under News and Events. With that, Let me turn the call over to David.

Thank you, May, and good morning, everyone. For the second quarter, excellent gross profit reached $123 million. Adjusted EBITDA was $7 million, and our cash generation remained positive with $3 million in free cash flow. Our results this quarter highlight two distinctly different trajectories across our business. To provide clear visibility into the two sides of our business, our enterprise brand and agencies business, and our direct response and small-medium enterprises business, which is closely aligned with our legacy outbound business, we are explicitly breaking out the extra gross profit of each, and we'll discuss where our strategic momentum lies, where we are directing capital, and what we see as the drivers of our long-term growth. Our enterprise business, powered by connected TV growth and omnichannel outcome solutions for global brand and agencies, is our primary growth engine. Following investments in our product architecture and go-to-market teams, we believe this business is positioned to capture market share, increase growth, and expand margins. Enterprise delivered $89 million in extra gross profit in Q2 in line with our plan. Advertiser spend stabilized from our prior headwinds in 2025 to be flat year-over-year in Q2, and we expect mid-single-digit extra growth in H2. As Connected TV continues to expand as a proportion of our mix, we expect growth to accelerate into 2027, unlocking natural operating leverage. Key drivers of this strategic momentum include the further strengthening of CTV, which saw top-line revenue growth of 67% year-over-year in Q2 to approximately $40 million. CTV accounted for 13% of our Q2 revenue, compared to 7% in Q2 2025. Growth is driven by our global homescreen leadership position, reaching over 500 million homescreens globally and the rollout of TEAD's CEB Ensembler, our unified full funnel branding and performance suite. We're excited about the momentum in home screen and believe this is a significant differentiator. We also expanded our supply and reach. We renewed our exclusive home screen partnership with LG across Europe and APAC with expansion into new markets, partnered with TiVo's ads across 5.3 million households in North America and the UK and integrated with VIDA Japan unlocking 2.3 million devices as of July 1st. Another drive is omnichannel adoption. Home screen growth is actively reinforcing our broader omnichannel packages. Branding customers utilizing omnichannel campaigns represented 16% of Q2 branding revenue up from 9% in Q2 2025 and approaching our 18% full-year target. On the traditional publisher side, we remain focused on higher margin, mid-article placements within our premium publisher base, which we monetize with video and high-impact display for our brand advertisers and which form part of our omni-channel offerings. On the strategic brand and agency partnerships, we secured and renewed major global joint business partnerships with premier enterprise brands, including Stellantis, Louis Vuitton, Warner Brothers, and Dyson. Concurrently, active dialogues and early stage implementations around AI and data collaborations with major agency holding companies position us well heading to Q4 in 2027. So despite potential EBITDA trade-offs, we are making the deliberate choice to continue investing in the enterprise business to capture market share and maximize long-term enterprise value. Moving to our direct response and SME business. In contrast, this business, which covers affiliates, search, performance buyers, and small-medium enterprises directed to consumer brands on our Amplify platform, delivered $34 million in extra gross profit, representing a 30% year-over-year decline. This business is currently navigating significant strategic and operational headwinds and is in transition. On the macro front, we continue to monitor the changing dynamics in search and open net traffic that are impacting the native advertising industry. The broader adoption of AI summaries is shifting traditional organic referral patterns industry-wide, resulting in drops in publisher impressions. Additionally, we are seeing closed ecosystems like the World Gardens leverage their own AI and automation to strengthen their positions, alongside ongoing platform policy updates, making it more challenging for publishers to monetize through native. As we discussed for the last few quarters, we also implemented a deliberate quality reset such that a portion of our revenue decline was self-directed. We exited certain low margin direct response accounts and pruned lower quality open web supply to enforce brand safety and elevate supply standards for strategic brand partners. Most of these actions, as we reported in the past, were taken throughout 2025s. To address these shifts, we're executing a plan focused on client outcomes, new supply, and operational efficiency. In Q2, we launched Teads Engage operating system, an AI-powered publisher operating system designed to unify content and add inventory to monetize complete reader sessions rather than relying on volatile search-driven page views. This is a strategic product launch that aims to change the dynamics of the business, resulting in higher margins for us and better engagement and yield for our partners. Some of our premium publishers, including Penske Media, The Arena Group, Scripps, New York Post, and others, are in different stages of testing, and we have seen significant lifts in yield. In addition, we are entering new supply channels. We're opening higher-margin programmatic environments including active dialogues with leading AI players to leverage our global scale and data across emerging LLM channels. We are making targeted enhancements within our Amplify platform to optimize advertiser targeting and campaign efficiency and launching new formats like vertical video with the aim of helping our direct response clients achieve stronger ROAS outcomes. And lastly, We are reorganizing our internal structure, centralizing teams, and embedding AI tools to streamline processes, thereby reducing the cost base of this business. To sum up, we're actively addressing near-term headwinds in our direct response and SME, resolving the temporary cost pressures from Q2, and capturing meaningful efficiencies across our operations to plant AI. Most importantly, our core strategy remains on track. CTV is accelerating, our enterprise business is executing holding to plan, and we plan to continue investing in our highest margin platform to drive long-term growth and expand operating leverage across teams. I will now turn the call over to Jason for a detailed review of our financials.