All right. Good afternoon, everyone. Thank you all for joining us. I'm Maria Ripps, Internet Analyst here at Canaccord Genuity, and it's my pleasure to introduce Ken Suh, Nexxen's Chief Strategy Officer, and Billy Eckert, Vice President of Investor Relations. Gentlemen, thank you so much for joining us today.
Thanks for having us, Maria.
Maybe to start, given that the company just got listed in the U.S. and some investors may not be sort of fully familiar with the story, let's start off with a high-level overview of Nexxen.
Yeah, absolutely. We are in the programmatic advertising technology space, and we're unique and differentiated because where many players in the industry choose to operate for one side of the ecosystem, meaning they'll operate a demand-side platform or a DSP that caters to advertisers and agencies, or a supply-side platform or SSP that caters to publishers, we unite those two technologies and are able to serve both advertisers and publishers through a holistic and unified platform. End-to-end is certainly a differentiator for us. It enables efficiency, cost advantages, and some data advantages for our customers. The second piece that makes us unique is, in addition to operating those two pieces of technology, we have a data platform that's vast and robust that sits between those two that helps improve performance for both sides of the ecosystem.
The combination of both our end-to-end technology footprint and the unification of data within that footprint makes us unique and differentiated within the industry. People have probably known us through varying different names and acquisitions over the years, but we're relatively new in the industry in our modern form. We've come together through a series of acquisitions over the last seven or eight years, most recently culminating with Amobee, which was our biggest one back in 2022. In 2022 and 2023, we really made the unification of our platform much better through the integration process. We improved our sales and marketing efforts. We rebranded the company in 2024. All of that resulted in us sort of hitting an inflection point last year where our results and execution have gotten better.
Finally, in 2025, the last leg of our transformational process, we updated our trading structure where we were listed as our primary security in the U.K. We had a two-for-one ADR on the Nasdaq. Now we're single listed on Nasdaq as an ordinary share structure, which has helped improve our visibility with Wall Street, garner added analyst coverage, and help with investor interest.
That was a great overview. Billy, you reported Q2 results this morning, so it was a busy morning for you. Can you hit on some of the highlights from the quarter?
Yeah, absolutely. Maria, you're absolutely right. It was a busy night and a busy morning this morning, but it was a good morning. We came out this morning and we were able to meet our contribution ex-tack or net revenue target. We grew our programmatic revenue, which is the core of our business, by 8% year- over- year. We exceeded our adjusted EBITDA guidance, generating $29.9 million in adjusted EBITDA or 12% year-over-year growth. What was really interesting for us is, you know, the bulk and bread and butter of our business is video, CTV, and data. Really what stood out in this quarter is that the majority of our results and our ability to sort of meet our contribution ex-tack guidance was carried by strength in data products, which grew 76% year- over- year.
Data and technology licensing is a fast-growing trajectory for us that we anticipate getting bigger and bigger in 2026 and beyond, and was really the standout for us this quarter. In addition to hitting our numbers on the operational front, we also released some innovative products that we talked about, NexAI, which is our suite of integrated AI solutions that help with performance optimization, monetization, really across our entire platform. We renewed a strategic partnership with VIDAA in Q3 that I'm sure we'll touch on later, while also buying back a significant amount of stock. We bought back around $39 million in stock during the second quarter. If you look at us over the last three years, we bought around 34% of our shares outstanding back. Additionally, we reaffirmed our full-year 2025 guidance. Overall, it was a pretty strong quarter for us.
Yeah, it sounds like it was a good quarter all around. One question we've been getting this morning is your growth within CTV. Maybe talk about sort of what kind of trends you saw in Q2 within CTV and sort of how should we think about CTV growth for the balance of the year?
Yeah, so CTV for us this quarter grew 1%. It was a Q2 record for us, but it was a little bit slower than it's been over the last several quarters for a couple of different reasons. One, to an extent, we saw a little bit of CPM pressure, so that mitigated some of the growth that we would have seen otherwise. Secondly, a select number of our customers that are on the larger side were starting to feel the impacts of tariffs starting in Q2. That resulted in where our spending and volume trends were pretty strong holistically. Ultimately, our net revenue growth in CTV was only around 1%. Looking into the back half, though, our long-term trajectory in CTV, we remain very confident, optimistic in.
We have strong CTV-focused technology and data capabilities and some unique TV data assets that give us a really long runway for growth within CTV. While CTV was not the superstar this quarter, like oftentimes it is for us, we were still able to hit our numbers, largely due to the diversity and resilience of our end-to-end offering, where if one pocket of our business is maybe not seeing as much strength, usually another element of our business will help offset that.
Perfect. Ken, maybe we can dive a little bit deeper into your end-to-end approach to programmatic advertising and maybe talk about some of the advantages of this approach, both for advertisers and publishers.
Yeah, I remember talking to a customer about what are the advantages of having both the buy side and the sell side. If you can actually make them speak better together, you're actually able to gain much more value of what's happening within the pipes on both sides. There's a lot of inefficiency generally when you're connecting third-party systems together. When you're actually able to unify everything on a single identity graph that we have within the Nexxen data platform, it allows for seamless transactions and much higher scale, which is key in our industry. We're seeing that play out in our business today. The Nexxen data platform that kind of sits in the middle is powering the unique differentiation of what's happening within the pipes on the buy side and the sell side. That's been something that's been really interesting to see.
We're seeing that play out with specific customers as well. We have, say, a CTV publisher who's maybe now looking to move a lot of their deal IDs onto our platform and running deals through our DSP. This is allowing for much more seamless, fast, and more efficient opportunities. They get more money from the buyer. The buyer's actually saving money on infrastructure costs, and we're actually able to make much more of a win-win situation for everyone.
That's helpful. Maybe for the broader audience, can you share some color in terms of your current channel mix and who are your core customer types, both on the DSP side and the SSP side?
Yep. On the DSP side, we work with all the major holding companies through their programmatic channels. You can imagine CPG, retail, auto tech, telco being strong verticals for us. We also work with a large group of indie agencies who tend to work with direct-to-consumer brands as well, so a pretty broad mix of buyers there. On the supply side, we've mentioned CTV. We work with all the major OEMs out there – Samsung, TCL, LG, etc., all the FAST apps, all the major platforms on the CTV side, as well as across the web. A number of our customers are on the display and online video side and in-app as well. Very comprehensive in our customer mix on the supply side.
Let's talk about your data platform next. It feels like it offers a unique value proposition. As Billy pointed out, it was a strong contributor to growth this quarter. Talk to us about some of the specific capabilities that underpin this functionality.
Yeah, one of the unique capabilities is we've created our own Nexxen identity graph. What this is is a graph of graphs. What that means is it's able to identify people identified within other graphs that are out there. We support things like RampID and UID and ID5 and all these different platforms. We're able to unify those people with different identities into our own identity graph. This allows us to be much more efficient and allow buyers to identify audiences that before they didn't think were relevant to their campaign. Now, through our identity graph, this is something that we've seen a lot of strength in. Previous companies that we've announced who are utilizing this solution, such as United Airlines, Stagwell, and we just received an award for Best Cookie List Identity Graph Solution by Digiday, I think yesterday.
This platform is really powering a lot of strong scale decisioning happening on both the buy side. On the sell side, publishers are realizing that they have a very unique asset in their first-party data. This is a really key differentiating factor for them because they're seeing traffic continue to compress due to some of the trends we're seeing from Google and the rise of ChatGPT and AI. They're saying, "Hey, how do I differentiate my traffic?" It's actually my data because it's my audience. They can bring that audience into the Nexxen data platform and then find that audience and other similar audiences through our platform too. It's really there to serve both sides of our business on the buy side and sell side.
Maybe expanding on that a little bit, on your SSP side, on your sell side, what makes that part of your business unique? One question that we've been getting a lot is with all the regulatory uncertainty with Google and the ongoing antitrust case, could Nexxen benefit from some of the developments as a result?
Yeah, to your first part of your question, what makes that SSP unique? That's the first question that we'll get from our publishers. What's different about you? We really are asked, do you have any unique demand? A lot of publishers are under enormous revenue pressure right now. We can absolutely point to the Nexxen DSP being a full-fledged DSP that we had acquired. This provides that unique opportunity for them to make unique demand. What they're really starting to transition from a demand partner is now we're being a tech partner. We have a self-service platform that they can use to bring their own deals to and scale those deals as well. To your second question, I think it's really early days on what's going to happen with Google.
We mentioned on the earnings call earlier today, we do think those of us who are the independents will see some benefit as that starts to play out over the next few months.
As you think about your clients on the SSP side, how many SSP platforms do they typically work with?
Yeah, it depends on the type of publisher. I think on the CTV side, they're generally working with a few at this point, three to five different SSPs that they're trying to find the right balance of who they want to work with, and some of those key points that we talked about. On the web, they're much more diversified. They're trying to get as much demand in because the supply is essentially infinite at this point on the display side and website. Different technologies have been developed to add as many bidders as you want through these server-side integrations with prebids. We're seeing a little bit of a shift. I would say CTV is more selective. Web is a little bit more open.
Got it. It seems like ChatGPT and other sort of similar platforms are taking users away from traditional search. What does this mean for Nexxen?
Yeah, I think for us, because we're so focused on video, CTV, in-app, those platforms aren't as affected, I would say, as let's say traditional web platforms that are dependent on SEO and paid search results. In that sense, we're keeping an eye on that. It's also potentially going to accelerate that spend move from traditional web to CTV and in-app because that's where the attention is. Consumers are spending more time on their connected devices and streaming more video than ever, rather than searching. I think this may just help accelerate what we're seeing. That's a positive growth trend for a company like Nexxen.
Got it. Let's talk about AI for a minute. You've been steadily rolling out new products. Talk to us about, there were a couple of products, I think NexAI DSP Assistant and NexAI Discovery, that were pretty significant for the platform. Talk to us about these products and what else is in the pipeline for the second half of the year.
Yeah, this is super exciting. I got to say, when I was at CES this year, it was the first time I felt reinvigorated because Evan was talking about AI and it was not the same show anymore. It was like, hey, what can we do here that's different and exciting? Everyone was thinking about how to use AI to provide better products and services. For us, on the DSP side, it's allowing our customers to optimize things in real time, ask our agent, "Hey, I want to change the mix. I want to optimize to this KPI more." It's making that change and it's automating that change. Before, you had to figure it out on your own, hands-on keys, or you had to call an account manager. This is making things so much more real and fast. You're seeing the results quickly and you can pivot where you want.
On the DSP side, it's providing a lot more control and optimization. On the Discovery platform, which for those who don't know, this is really our insights platform, it's providing much deeper insights through AI. You can ask our Discovery platform now a number of different questions around your customers' different profiles as well. We're seeing it live and the customer feedback has been very positive on these two products. Of course, the next step for AI is to make that available on the SSP side. For publishers, you know, what bid prices, bid floors should I be setting this at based on what's happening in the market? How do I optimize my media mix based on the buying channels that I'm seeing? Getting very granular about what they can do to optimize is potentially areas that we're looking to release.
We're thinking about opportunities in late 2025 and definitely into 2026.
Got it. That makes sense. To what extent are you leveraging AI internally to drive sort of operating efficiencies?
Yeah, we have also a large managed service business as well. This is serviced by our account managers, and they are finding enormous amounts of value with the AI products that we're building, not just for our customers, but for our internal customers as well, really, as we service. We're seeing a lot of opportunities to get back to our customers a lot quicker, more accurate data, automating a lot of opportunities to get there. I think we're seeing the benefits both internally and externally.
Got it. That makes sense. Shifting gears here a little bit, you recently, just a couple of days ago, announced that you renewed your partnership with VIDAA and extended it through 2029. Maybe talk about why that's important for the company and what are some implications of this extension and expansion.
Yeah, absolutely, Maria. It's something we're really excited about. For those in the room that aren't as familiar with VIDAA, VIDAA is the fastest growing major CTV operating system in the world. They're a subsidiary of Hisense, which produces, obviously, Hisense televisions and TVs for other brands like Toshiba. When you think about the walled garden CTV OEM ecosystem where they make the television, they have their own operating system, they have their own FAST inventory, they monetize their own data, this was a really unique opportunity for us to be able to inject ourselves into that walled garden ecosystem to be an ad monetization and data monetization partner for them. What's exciting about the extension with them is we entered an original partnership with them in 2022 and invested $25 million in them at that time.
For the last three years, we have been focused on building the foundation to get to the point we're at today. VIDAA has scaled their television footprint massively internationally. They've started working in North America as well. We, at the same time, built the pipes and the capabilities to ingest their ACR data into the Nexxen data platform and integrate that within our data offerings. All of that took time, but now with the renewal and the extension of the agreement, we extended our exclusive global ACR data rights with them through the end of 2029 and gained exclusive video and display ad monetization rights on VIDAA Media in North America through the end of 2029.
With a partnership for the last three years focused on really building the foundation, getting all of the pieces in place, now we're shifting to full-scale monetization and actually generating some value off of all the hard work we've done over the last three years. What I mean by that is I talked about VIDAA building up their international footprint over the last few years. They're very strong in Europe. They're very strong in Australia. We see a lot of opportunities to monetize both on the data side and the CTV and display ad inventory side there. We also invested $35 million additional dollars into VIDAA during this renewal and the extension, which is ultimately going to be used by VIDAA to build deeper retail partnerships in North America to get more VIDAA-powered CTVs into the market in North America.
As we simultaneously work on increasing our monetization internationally, which is a strong opportunity for us, there's scarcity of TV data over there. There's a lot of monetizable ad inventory over there. The real prize over the long term is North America. As everybody knows, North America is the largest advertising market, particularly in the U.S. As we're able to get more VIDAA TVs in market, it's going to create a surplus of unique ad inventory that's interesting for our customers and interesting for the industry, and greater data scale that really helps our long-term value proposition and growth trajectory into data licensing where, as VIDAA and Hisense hit more scale, that data becomes much more valuable for things like targeting and measurement. Ken, maybe you have something more to add on that, but that's sort of my high-level thought on it.
Yeah, if you think about it from a buyer perspective, they often ask, do you have any inventory that's exclusive? Do you have any inventory that's owned and operated? That's a double check now for us. We're part owner of VIDAA. We actually operate this inventory. This is a very difficult inventory to claim as owned and operated and exclusive in this market. They're growing very quickly, as Billy was mentioning, on distribution. The U.S. is just really getting started. The biggest market is about to explode with them, and us having the exclusive rights around this is really exciting for us.
That's a great overview. Given all the strategic progress you've made over the past several quarters, maybe talk to us about your recent Salesforce investments and then how do you position Nexxen when you sort of go to market and talk to clients? How do you position your platform relative to some of your competitors?
Yeah, we've seen a lot of amazing growth on the hiring front within the company. We've hired a couple of really strong leaders in different functions on the commercial side, also on the data side, on the marketing side as well. We're actually starting to attract top-notch talent from a lot of the top companies that are out there today. We're making investments internationally as well, growing the teams outside the U.S. Really looking forward to continuing to grow investments in the people that we have. Part of the reasons why they're coming is because of our offering, our complete offering, I would say, really from end to end. That data piece that I was talking about being a big differentiator as the pipes continue to compete, what's actually going to differentiate what's in those pipes?
If you have exclusive data, if you have something that really works and drives outcomes for advertisers and marketers, that attracts people to say, ooh, that's a real product, that's a real data set. I actually want to help this mission. It's been really exciting to see people who want to join us and then are joining us today.
Do you feel like your sales team is sort of optimized at this point, or do you want to expand it further?
I think we're always looking to grow. You know, it's something that we believe in. There are markets that I think we can grow more in as well. Obviously, here in the U.S., and as we mentioned, that VIDAA opportunity is just starting. I think there's opportunities to grow commercial muscle around that too. We've got still ways to go as far as growing, but we're really happy about the opportunities.
Got it. Let's talk about your capital allocation sort of framework next. You've been buying back shares pretty aggressively. It was nice to see. Just maybe talk about your plans in terms of share buybacks going forward and maybe also share your thoughts on M&A, just given sort of the company's history with M&A.
Yeah, absolutely. Given our optimism in the long-term growth of the business and our current stock valuation, we've really taken advantage in terms of buybacks and using that for our primary capital allocation conduit over the last few years. Most recently in this quarter, we bought back around $39 million worth of stock in Q2. As I mentioned earlier, over the last three years, from March 2022 to the end of Q2 this year, we bought back around 34% of our shares outstanding. Looking ahead, our board is continuing to evaluate implementing an additional share repurchase program once we get through the current and ongoing one. One thing that we've started to do, and it's a benefit of our fundamental positioning in our end-to-end model, right now we're debt-free. We have no long-term debt.
We generate high profitability and significant cash flow, which allows us to be flexible with capital allocations. In addition to considering implementing a new share repurchase program, we're also investing internally in enhancing our platform and generative AI capabilities to make the performance of our platform stronger and more appealing to new and existing customers. That's one element of it. We're also investing strategically in sales, particularly in commercial leadership in the media side. The other thing that we're considering for the first time in a while as well is looking at exploring strategic potential acquisition opportunities. When we talk about this, I don't think it'll be as large as anything like we did with Amobee where we paid $239 million for those guys back in 2022.
We're really looking at a few key areas that could be interesting to help sort of boost our growth prospects over the next few years. I would say one is looking for opportunities to enhance our data footprint and monetizable data. Two, anything around accelerating AI and helping that get embedded more deeply into our product suite. Three is looking for opportunities to accelerate revenue in our core business lines, both in the U.S. and internationally. Four, maybe looking at opportunities to enter new high-growth areas in the market that we're not as big in today.
Great. I think we have a minute or so left here, maybe to wrap up our discussion for both of you. What are you most excited about your business as you think about next year or two?
Yeah, for me, it's continued investment in our technology, specifically NexAI. Again, we're just touching the surface with the DSP and demand side. We haven't really released anything yet on the supply side. I think the DMP as well is going to benefit from it. That's a big one for me.
For me, outside of NexAI, I would say the next one is VIDAA. The exclusivity of the TV data, which is so critical for TV advertisers, is a huge deal for us. It comes at such a high margin that it could be something that becomes a more material piece of our business over time. That's really interesting for us. Gaining that exclusive ad monetization rights on both CTV and native display in North America, as those guys grow their footprint, gives us an even stronger CTV and monetization opportunity than we even had before that. I would say over the next few years, that's certainly something to watch from us.
Perfect. With that, we're out of time. Ken, Billy, thank you so much for joining us today.
Thanks.
Thanks.