NIQ Global Intelligence plc Ordinary Shares

Good morning and welcome to NIQ's fourth quarter and full year 2025 earnings 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 fourth quarter and full year 2025 earnings call. Joining me today, our CEO, Jim Pack, CFO Mike Burwell, and Chief Product Officer Troy Triangan. Following Jim and Mike's prepared remarks, Jim, Mike, and Troy 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 unless otherwise noted, growth rates mentioned on this call are versus the comparable prior year period. And with that, I'll now hand the call over to Jim.

Thank you, Will. Good morning, everyone, and thank you for joining us. 2025 was a defining year for NIQ. We entered the public markets, executed consistently against our profitable growth strategy, and exceeded all key financial targets set at our IPO. 5.7% organic constant currency revenue growth, expanding adjusted EBITDA margins, 320 basis points to nearly 22%, generating $350 million of free cash flow in the back half and achieving free cash flow positive ahead of schedule, and we deleveraged to 3.25 times EBITDA. These results demonstrate our strengthening business model and disciplined execution. For the balance of my remarks, I will address how NIQ is positioned to win in an AI world. I'll reinforce how AI strengthens NIQ in three ways. First, how our governed data mode and domain expertise make AI work for clients. AI models require precise governed data to power high-stakes decisions across the enterprise, from pricing and assortment to innovation, trade allocation, and advertising. This is exactly where NIQ operates. Second, how we're using AI to drive revenue growth and product innovation more deeply embedding at the application layer to serve clients. And third, how AI delivers structural operating efficiency across our business. First, the scale, breadth, and depth of our data moat advantages us. We now cover $7.4 trillion in consumer spending worldwide. We aggregate consumer shopping data across offline and online sources, point of sale data from thousands of retailers and millions of stores across developed and emerging markets. proprietary traditional trade data through our NIQ field network, digital commerce assets, and the largest global e-receipt panel. Our Connect engine ingests, codifies, categorizes, and enriches approximately 4 trillion data records per week, up from 3.1 trillion just a year ago. We generate substantial proprietary metadata across more than 240 million items and tens of millions of product attributes. This context layer is critical to client decision making. It is continually refreshed, standardized, and enriched to provide a current, comparable view of consumer behavior. Beyond that, the proprietary and permission data we ingest and the intelligence we create are governed by longstanding agreements with retailers and manufacturers. These are not merely contractual arrangements. They reflect decades of trusted relationships and rigorous data stewardship. This governance framework defines how our most AI-forward clients embed NIQ's decision-grade intelligence directly into their pricing, innovation, and operating management systems. It also reinforces NIQ as central to responsible, enterprise-ready AI deployment. We ensure client data and NIQ intelligence remain protected, permissioned, and used only with explicit authorization. And as leading AI companies have acknowledged this week, Domain-embedded, governed systems are essential for AI to work effectively. Strict governance principles also underpin our strategic partnerships with the likes of Microsoft, Google, and Snowflake, integrating NIQ intelligence into enterprise AI environments. As AI moves from insight generation to operational deployment, NIQ's trusted, governed data and domain expertise provide clients a decisive advantage, securely turning intelligence into mission-critical action. This has been NIQ's strength for decades. We see measurable adoption across our largest clients. Client data consumption grew more than 30% year-over-year, a leading indicator of deeper workflow embedment. More than 60% of our top 50 clients adopted at least one AI-native NIQ product, increasing platform penetration across our largest accounts. Adopters of NIQ AI products are growing their investment in NIQ 30% faster than non-adopters, demonstrating clear monetization leverage from AI integration. Put simply, increased AI adoption strengthens NIQ's role inside enterprise decision systems. Second, AI is driving meaningful revenue today and accelerating innovation across our platform. Total intelligence revenue grew 7.1% in organic constant currency in 2025, led by continued strength in EMEA and Americas. Retention and expansion remain strong with net dollar retention of 105%, growth retention of 98%, and annualized subscription revenue growth of 6.6%, our seventh consecutive quarter above 6%. Several of our new capabilities are now growing at double-digit rates, reflecting strong client adoption. E-commerce is a clear example of this momentum. Revenue growth accelerated to 32% in 2025, and cross-sell penetration increased to 29% of intelligence clients, up from 19% last year. AI enabled us to expand our full-view measurement capabilities, including broader Amazon coverage and a new read into a large U.S. club retailer. We ended the year with more than 190 full view measurement clients and expect continued growth in 2026. In consumer panel, we delivered strong renewals and accelerated competitive share gains in Western Europe and Latin America. In the US, we expanded our OmniShopper panel to an industry leading 250,000 panelists with a clear path to scale further using AI. The panel revenue grew low double digits in 2025, and we are increasing investment in 2026 to expand coverage and capture additional market share. When paired with our measurement data, our panel assets power our differentiated full view value proposition. This was central to eight-figure renewals with several multinational consumer product companies. Full view anchors their pricing, promotion, assortment, and category growth strategies across highly competitive markets. Also, our AI-powered analytics and forward-looking capabilities position us not just as a measurement provider, but as a transformation partner as clients move toward predictive and automated decision-making. We also saw strong performance in adjacent and high-growth markets. In new verticals, AI enabled expansion in packaging and rapid scaling of our media offerings. Along with government and financial services, these verticals delivered mid-teens growth in 2025. Finally, SMB grew at high teen rates, supported by strong retention across geographies. We continue to scale AI-driven go-to-market capabilities, including expanding an AI agent pilot to 66 markets, improving targeting and future growth potential. In activation, we're seeing a continued strong client adoption of our new GenAI native offerings. Basie's AI Screener expanded to 209 categories, and we more than doubled the client base to 36 in Q4. Client engagement increased as well, with more than 1,000 innovations tested last year. Basie's product developer adoption increased as well in Q4, and we cross-sold 35 of our largest clients in 2025. This early success underscores the central role our AI platform plays in helping clients innovate and grow. While these AI solutions grow from a small base, our activation revenue is flat in 2025. This reflects varied project timing as some clients navigate an uneven landscape. However, retention is high and pipeline demand remains solid, reflecting growth potential, not displacement. In 2025, 78% of activation revenue came from clients that buy intelligence, and 40% of our intelligence clients buy activation. implying large cross-sell upside. In 2026, we've taken decisive action to capture this opportunity, strengthening activation leadership, sharpening go-to-market focus, and embedding AI tools to improve pipeline management and conversion. Our data moat positions us at the forefront of AI innovation. For example, in 2026, we were evolving Discover into an AI-powered intelligence hub that recommends NIQ products, data, and analysis tailored to specific client needs. In January, we beta launched our Agendic AI Analyst feature in Discover, enabling natural language interaction across our datasets for more than 40 client personas, including pricing, distribution, account performance, and shopper analysis. As engagement and cross-selling accelerate, we are evaluating new pricing models in 2026 These include usage-based approaches and an AI innovation index that better align pricing with the value we create. So our proprietary permission data is becoming more essential. Our applications are becoming smarter. Our workflow is more automated. As AI embeds into enterprise decision systems where clients have billions of dollars at stake, NIQ becomes even more mission critical. A third benefit to NIQ is also taking shape, measurable cost efficiency. As previewed in November, we've accelerated the use of advanced technologies, including AI, to drive operational excellence. For example, AI-assisted automation in data operations reduces manual effort and improves quality. In Germany, agentic AI now codes tens of thousands of products in hours instead of days, cutting data costs by nearly 70%, and accelerated our product insights launch to four new European markets. AI tools and engineering delivery is roughly a 10% productivity uplift and 25% faster time to market and pilot programs, allowing us to scale output across more than 2,200 engineers without adding headcount and directly supporting margin expansion. In sales, AI enables sellers with 40% faster access to sales materials, reduced time to proposals, better pipeline management, and less administrative workload. This is increasing time spent selling and we see ample opportunity to further optimize our sales motions in 2026. In customer support, we upgraded AI search across 3000 plus documents and expanded AI assisted ticket resolution, cutting manual workload by 17% and improving response times and quality while driving 81% self serve via NIQ service suite. And we are also continuing to deploy AI tools across finance, legal, and HR to automate repeatable work. AI is driving structural cost efficiency, underpinning our confidence in continued margin and free cash flow expansion in 2026 and beyond. Which brings me to our new 2026 Cost Optimization Program announced today. These actions signal a prominent next phase for NIQ, reflecting our commitment to leveraging AI, automation, advanced digital tools, and data-driven processes to streamline operations, enhance agility, and reinforce competitive advantages. While this program increases one-time investments in 2026, the result is a structurally stronger margin profile and a greater free cash flow over time. As free cash flow ramps in 2026, our capital allocation philosophy remains consistent, prioritizing deleveraging while investing for durable growth. We will also continue to pursue targeted accretive tuck-in acquisitions that advance our strategic growth priorities, complement our product roadmap, and expand our geographic footprint. And we'll maintain our disciplined growth-oriented CapEx at 6.5% to 7% of revenue focused on panel expansion, platform enhancements, and AI capabilities. Looking ahead, our 2026 strategic priorities are clear. Execute our revenue growth algorithm, advance areas of strength, invest prudently, and drive the next phase of AI benefits. Mike will discuss our 2026 outlook in more detail, but highlights include five-plus percent organic revenue growth, meaningful adjusted EBITDA margin expansion to more than 23.5 percent, 235 to 250 million of levered free cash flow, and continued deleverage towards sub-three times by the end of 2026. Intelligence growth remains durable. Activation returns to growth. AI becomes increasingly embedded, both in our revenue engine and our cost structure. In closing, 2025 was an inflection point. We strengthened our growth, expanded margins, generated positive free cash flow, and strengthened our balance sheet and advanced our AI leadership. Before I turn the call over to Mike, I want to acknowledge Tracy Massey's decision to step down as COO for personal reasons. Over the past several years, Tracy strengthened our client-focused commercial organization and will continue to act as a trusted advisor to me and the rest of the management team. I want to thank Tracy for her contributions. I'm taking this opportunity to step further into the business, and I remain fully committed to driving its continued success. We're streamlining our operating motion as we enter 2026 with a strong, unified leadership team and clear momentum. I want to thank NIQ Associates Worldwide for their expertise and dedication in 2025. I look forward to what we're going to achieve together in 2026. With that, I'll turn it over to Mike.