NIQ Global Intelligence plc Ordinary Shares

Good morning and welcome to NIQ's third quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. With that, I'd like to turn the call over to Will Lyons, head of investor relations. Please go ahead.

Thank you. Good morning, everyone, and welcome to NIQ's third quarter 2025 earnings call. Joining me today are CEO Jim Peck, COO Tracy Massey, and CFO Mike Burwell. Following Jim and Mike's prepared remarks, Jim, Tracy, and Mike will take your Q&A. As a reminder, our remarks today will include forward-looking statements. Actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause these results to differ materially are set forth in today's earnings press release. Any forward-looking statements that we make on this call are based on our assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. Also, during this call, we will present both GAAP and certain non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in today's earnings press release, which is available on our IR website, investors.NielsenIQ.com. A replay of this call will also be available on our IR site. And lastly, just a quick housekeeping item. Posted alongside our 10Q and earnings release, you'll find a supplemental file that reflects recasted financials related to our post-IPO legal reorganization. This includes a non-cash mark-to-market adjustment on the Nielsen Media Warrant for all historical periods prior to Q3 2025, where the instrument has converted to equity treatment. And with that, I'll now hand the call to Jim.

Thanks, Will. Good morning, everyone, and thank you for joining us. I'm very pleased to report that our Q3 results beat expectations across the board. 5.8% organic constant currency revenue growth, 21% margins, up 300 basis points, and $224 million of levered free cash flow, achieving most of our second half cash flow guidance in Q3 alone. We've raised our 2025 outlook, and we're heading into 2026 with momentum. Q3 is further proof that we are reaping the financial benefits of our multi-year transformation. In terms of revenue, EMEA and Americas grew 8.8% and 4.1% respectively on an organic constant currency basis. And APAC growth improved. Intelligence revenue grew 6.6% in organic constant currency. Intelligence subscription revenue, our version of ARR, also grew 6.6%. This was our sixth straight quarter of five-plus percent organic constant currency growth and six-plus percent intelligence subscription growth. Activation revenue improved in a quarter, and our pipeline remains robust. On profitability, net loss and adjusted net loss improved, while adjusted EBITDA of $223.7 million accelerated to 25% growth. We expanded adjusted EBITDA margin and we're tracking to significant expansion in 2026. And with our strong Q3 performance, we now expect to be free cash flow break even on a levered basis for the full year 2025. The first step of what we expect will be a multi-year free cash flow inflection. As an important reminder, Levered free cash flow in the first half of the year did not reflect the $100 million of annual interest savings we achieved as part of the IPO. Looking at high-level business performance, aligned to our revenue growth algorithm, Q3 was driven by strong pricing, as well as innovation cross-sell and up-sell. In intelligence, we're seeing continued strong adoption of our omni-channel measurement products, such as e-commerce, consumer panel, and full-view measurement, which contribute nicely to our growth. We're also successfully executing our proven integration playbook at GFK. Tech and Durables revenue has grown year to date and we're aiming to accelerate further in 2026. In activation, our AI first bases, analytics and media products are growing rapidly, supporting 2025 revenue and bolstering momentum heading into 2026. Lastly, Integrations of our gastrograph AI and Mtricks acquisitions are going well and we're penetrating new markets and converting new business. In short, it was a strong quarter. We're growing profitably and improving margin and free cash flow ahead of schedule. For the balance of my prepared remarks, I will address how AI is widening the moat around the NIQ ecosystem and improving our financial profile. We are not simply participating in the AI revolution in consumer data intelligence. We're leading it. Let me start by highlighting three key takeaways. First, AI widens the NIQ data mode. Today and into the future, AI models need the right data in scope, accuracy, and depth. Our data assets are vast and hard to replicate, are enriched, are proprietary, and span decades of consumer spend and behavior, and are updated constantly. Second, we are rapidly embedding AI across our solutions portfolio. We're also evolving the NIQ user experience to enable client speed to insights and further enhance our revenue growth. And third, we believe we're in the first innings of capturing significant AI-driven operating efficiencies and margin expansion. On my first point, today's consumer brands and retailers face a daunting and expensive reality. Consumer behavior is changing rapidly and shopping data is exploding in volume and complexity. Identifying, collecting, and analyzing this data across a rapidly growing number of channels and touchpoints is more challenging and costly than ever. As generative and agentic AI reshape this competitive landscape, CPGs and retailers seek real-time, granular insights so they can act faster and compete smarter. General purpose AI models alone are insufficient to extract meaningful signals from messy unstructured data and not built to support high stake decision making. Try asking a general purpose LLM who sold the most chocolate during October 2025 and the result is incomplete, outdated, and inaccurate. This is because the accurate data simply isn't available in the public domain. But we have this granular data at NIQ To discover, clients can click into sales data by day, week, location, which specific candy bar, at what price point, sold through which retailer, why the consumer bought, what else the consumer bought, everything and more about that transaction. In our ecosystem, we harness advanced technologies and draw on decades of industry leadership to amass the global superset of consumer shopping behavior data, which is continuously updated with first-party data. Our data covers every dimension that matters to clients, including geography, channel, and category. We also believe our data is the most granular available anywhere, down to the specific product skew. This data moat is intentionally designed. Our data scale is vast, global, and proprietary. Our harmonized data assets are extremely difficult and highly impractical to replicate. We ingest retail point of sale data from thousands of retail chains in over 90 markets, and our robust industry reputation for data stewardship facilitates these exchanges. In traditional trade retail, our extensive network of field auditors and digitized collection methods enable us to cover consumer purchases with less technology for retailers in key developing markets, a feat unmatched by others. We also believe we have the most comprehensive digital commerce assets. offering the most detailed view of the digital marketplaces as well as the largest global e-receipt consumer panel. In fact, panels are a key area of focus and differentiation for us. We have collected decades of consumer shopping data from our panels and we're investing to expand our panel footprint. By pairing the what the consumer bought from our leading measurement data with the why from our robust panel data, we are uniquely able to deliver clients the full view of consumer shopping behavior globally. In addition to the massive amounts of data we ingest, it's the rich data that we create that further enhances our mode. We generate a substantial layer of rich reference data and metadata, which includes tens of millions of product attributes, taxonomies, hierarchies, and harmonized product information across the 220 million items in our database. This includes brand, category, size, ingredients, packaging type, and more. A rich layer of descriptive data enables NIQ to organize, analyze, and compare products at a granular level, making it possible for clients to uncover trends, benchmark performance, and make smarter decisions faster. Which brings me to my second point, how our solutions drive clients' speed to insights and unlock new growth. NIQ data and insights power mission-critical client decisions across their enterprise, and our clients are leaning in. By Q3, users on our Discover platform grew 9%, total data points consumed grew 29%, and the average monthly data consumed grew 39% versus last year. Clients increasingly rely on our data and insights. We're leveraging AI to deliver deep value. For example, NextIQ is our proprietary AI engine, which we purpose trained on our 160 petabytes of global consumer and retail data. Unlike generic large language models, NextIQ understands the nuances of consumer shopping. This enables 10 to 12 times faster data processing than general purpose LLMs and with near perfect categorization accuracy. NextIQ isn't just automation. and iq intelligence at scale delivering real-time insights with unmatched precision and speed developed with partners like microsoft snowflake google and intel next iq is also the backbone of our ai powered product suite driving innovation across intelligence and activation products we're building tools to transform how our clients make decisions from predicting winning product concepts in minutes to generating automated KPI narratives. NextIQ's integration into our ecosystem ensures that every insight is grounded in the most granular, harmonized data available, giving NIQ a defensible edge in the market. And from this strong foundation, we're rapidly evolving our AI solutions. For example, version one of our GenAI co-pilot, AskArthur, has accelerated speed to insights by 40% across our omni-channel measurement and consumer panel data. In 2026, we plan to launch Arthur Version 2, an intelligence research hub with predictive signals and analytic storytelling that can chat, anticipate, act, and summarize. Eventually, Arthur will be able to suggest NIQ products, data sets, and analysis based on client needs, enhancing our Discover software into an AI-powered cross-sell and upsell engine. We're also driving AI innovation throughout our activation suite. For example, Revenue Optimizer is our AI-driven analytics solution helping clients optimize pricing and manage trade spend for maximum profit. Precision Areas uses AI data harmonization to segment countries into local markets by demographics and by retail data. This enables clients to find a needle in the haystack in terms of growth opportunities and investment optimization down to the granular neighborhood level. This year, we also launched two AI-first solutions, ACES AI Screener and Product Developer. These solutions seamlessly combine our leading global data assets with our advanced analytics offerings. With BACES AI, clients can now rapidly test, develop, and commercialize products that consumers want to buy. We're driving expansion and seeing strong early client adoption. BACES AI Screener is now live in 11 markets across 129 product categories. Client feedback has been overwhelmingly positive, and we've added 18 large clients since launch. With BACES AI Product Developer, 31 clients, including our largest CPG clients to SMB, tested 500 product concepts in Q3 alone. Unilever reported a 65% reduction in product development time, stronger innovation success rates, and accelerated speed to market, launching products up to six months sooner compared to traditional testing methods. And as showcased in our IPO Roadshow, Brown Forman used Basies AI to identify a winning Jack and Coke formulation adapted for new markets and plan future line extensions. They reported a 350% sales increase, two and a half times sales velocity increase, and repeat consumer purchases that nearly doubled. So AI is embedded broadly across our entire product suite, supporting revenue growth and innovation. We believe we're well positioned to capitalize further in 2026 and beyond. Lastly, on my third point, artificial intelligence is a key driver of operating efficiency and margin improvement at NIQ. It helped us deliver better than expected margin expansion in Q3 and year to date, and it's laying the groundwork for continued expansion in the years to come. For example, we're harnessing agentic AI to automate our entire data operations workflow. from acquisitions to coding to delivery. We're finding that the combination of advanced AI and operational expertise boosts efficiency, elevates data quality, and accelerates our innovation. Clients benefit from our ability to bring products to market faster and to expand into new markets. On the customer support front, our globally launched NIQ service suite now delivers dynamic, personalized, and contextual support powered by GenAI. AI-driven support ticket routing and automated intelligence unlock faster resolutions and more seamless client experiences. Since launch, user engagement with GenAI support tools has increased efficiency by over 40%. And our iGentic customer success ecosystem is setting new standards for end-to-end client satisfaction. Across our corporate support functions, including HR, legal, and finance, we're deploying advanced AI and automation to streamline operations, enhance compliance, and unlock new efficiencies. In finance, AI-powered process automation has enabled us to standardize reporting, reduce transactional workloads, and deliver real-time insights for executive decision making. In HR, intelligent analytics are helping us optimize talent acquisition and workforce planning, while legal teams leverage AI for faster contract review and improved regulatory compliance. In summary, we believe AI is a strength for NIQ on all fronts. It's a differentiator and a profitable growth enabler. We use it to turn global omnichannel consumer complexity into competitive advantage. We turn client questions and needs into client value. As we close out 2025, we are excited about what's ahead in 2026. We'll continue to lead, shaping and building the AI-powered future of consumer intelligence. With that, I'll turn it over to Mike to cover our financials.