Executive Summary

Q1 2025 was the first quarter post-Teads close; revenue rose 32% YoY to $286.4M and Ex-TAC gross profit nearly doubled to $103.1M, driven by the acquired higher-margin mix; GAAP net loss widened on acquisition, impairment, and restructuring charges, while adjusted EBITDA was $10.7M and within guidance .
Management achieved Q1 guidance and introduced wide Q2 ranges (Ex‑TAC GP $141–$150M; Adj. EBITDA $26–$34M) while maintaining FY25 Adj. EBITDA of at least $180M; cost synergy capture for 2025 increased to about $40M versus initial expectations .
Strategic positives: 100%+ YoY CTV growth now ~5% of ad spend; Moments vertical video live on 70+ publishers; >50 JBP partnerships and early cross-sell wins; U.S. legacy Teads trends improving .
Key debate: pro forma revenue still declining (~7% YoY in Q1) but improving from Q4; leverage at 10% notes ($637.5M principal) raises focus on EBITDA ramp and cash generation; first semiannual interest due in August .
Potential stock reaction catalysts: accelerated synergy realization (90% of compensation-related actions already taken), cross-sell ramp, CTV scale and exclusive home-screen inventory, and maintained FY profitability targets amid macro “shorter planning cycles” .

What Went Well and What Went Wrong

What Went Well
- Delivered results “above the mid-range of guidance,” achieving Q1 Ex‑TAC GP and adjusted EBITDA targets during integration; Ex‑TAC GP growth (+98% YoY) outpaced revenue on mix benefits from Teads’ higher margin profile .
- Strategic momentum: >100% YoY CTV growth to ~5% of ad spend; Moments vertical video now live on 70+ publishers; >50 JBPs including Ferrero, Haleon, PMI, Beiersdorf; early cross-sell campaigns launched in Q2 .
- Cost synergies tracking ahead: ~90% of compensation-related actions executed; 2025 cost synergy benefit raised to ~$40M, with visibility to ~$60M annualized cost synergies by 2026 and a run-rate by end-2025 .
What Went Wrong
- GAAP net loss widened to $(54.8)M on acquisition-related costs ($16.4M), impairment ($15.6M, vi discontinuance), restructuring ($7.3M), and bridge facility costs ($12.0M) .
- Pro forma revenue still declined ~7% YoY (improved from ~9% decline in Q4), underscoring the need for cross-sell acceleration and organic re-acceleration in the second half .
- Free cash flow was $(6.6)M in Q1, mainly due to $16.2M of transaction and restructuring cash outflows; leverage and 10% coupon add urgency to scaling EBITDA and cash generation .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($M)	$224.2	$234.6	$286.4
Gross Profit ($M)	$48.9	$56.1	$82.7
Gross Margin (%)	21.8%	23.9%	28.9%
Ex‑TAC Gross Profit ($M)	$59.7	$68.3	$103.1
Ex‑TAC Gross Margin (%)	26.6%	29.1%	36.0%
Adjusted EBITDA ($M)	$11.5	$17.0	$10.7
Net Income (Loss) ($M)	$6.7	$(0.2)	$(54.8)
Diluted EPS ($)	$0.01	$0.00	$(0.70)
Free Cash Flow ($M)	$8.7	$37.6	$(6.6)

Notes: The company does not report segments; mix improvements reflect the acquired higher-margin Teads profile and continued mix improvements in legacy Outbrain .

Q1 2025 Actual vs Company Guidance (Q1 guidance was issued on Feb 27, 2025)

Metric	Q1 2025 Guidance	Q1 2025 Actual	Result
Ex‑TAC Gross Profit ($M)	$100 – $105	$103.1	Achieved (within range)
Adjusted EBITDA ($M)	$8 – $12	$10.7	Achieved (within range)

Consensus vs Actuals

Wall Street consensus from S&P Global (EPS, revenue, EBITDA) was unavailable due to a data mapping limitation for OB at the time of retrieval; therefore estimate comparisons are not presented. We will monitor for SPGI mapping resolution and update as available.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Ex‑TAC Gross Profit ($M)	Q2 2025	N/A	$141 – $150	New
Adjusted EBITDA ($M)	Q2 2025	N/A	$26 – $34	New
Adjusted EBITDA ($M)	FY 2025	≥ $180	≥ $180	Maintained
Cost Synergy Savings ($M)	FY 2025	Not disclosed (initial expectation lower)	≈ $40 (benefit in 2025)	Raised vs initial
Total Annual Synergies ($M)	FY 2026 run-rate	$65–$75 (≈$60 cost, $45 compensation)	$65–$75 (reiterated)	Maintained

Earnings Call Themes & Trends

Topic	Q3 2024 (Prior-2)	Q4 2024 (Prior-1)	Q1 2025 (Current)	Trend
AI/Technology & Platform Vision	Focus on improving RPM and model-driven monetization; product beta (Moments)	Continued momentum; DSP spend +45% FY24	“Open internet outcomes platform” vision; 1B+ data points/min fueling AI; “AI Everywhere” across product and processes	Up
Product Performance (Moments)	Beta launch; early traction	Live on 40+ publishers	Live on 70+ publishers; high engagement and viewability	Up
CTV Strategy	Limited disclosure	Not a focus in Q4 release	>100% YoY growth; ~5% of ad spend; exclusive home screen with LG/VIDAA; >300M TV screens access	Up
Macro/Buying Cycles	N/A	N/A	Shorter planning cycles but no meaningful impact yet; wider guidance range for Q2	Mixed
Regional Trends	N/A	Idiosyncratic Teads headwinds (discussed in 2024)	Improving U.S. trends (~30% revenue); pro forma decline narrowing	Improving
Regulatory/Legal	N/A	N/A	DOJ Google ruling seen as broader SSP tailwind; limited direct impact due to end-to-end model	Potential tailwind
R&D/Creative	N/A	N/A	“Image-to-clip” performance tool >$1M of campaigns; creative studio central to outcomes	Up

Management Commentary

Strategic positioning and mission: “Our vision for the new Teads is clear: to create the open Internet advertising platform for elevated outcomes from branding to performance… at significant global scale across 50 markets and 2 billion users.”
Mix and customer base: “Approximately 2/3 of spend on our platform on performance campaigns and approximately 1/3… on branding campaigns,” with ~500 advertisers spending at least $0.5M each and averaging >$2M, representing ~70% of total spend .
CTV and Moments: “CTV revenue grew 100% year-over-year… ~5% of total ad spend,” access to >300M TV screens, exclusive home screen inventory (LG, VIDAA); Moments vertical video delivering near 80% viewability and double engagement vs other branding formats .
Integration and synergies: “We have actioned 90% of compensation-related targets,” cost synergy benefit expected at ~$40M in 2025; total ~$60M cost synergies by 2026 run-rate; “Q2 will be a high watermark for expenses” as savings ramp .
Outlook and growth path: Pro forma revenue down ~7% YoY in Q1 (vs ~9% in Q4) with improving trends; aim to return to pro forma growth in H2 on cross-sell and easing comps .

Notable quotes

“We achieved our Q1 guidance… while achieving significant milestones in the integration.”
“We see a large opportunity for growth with our strategic joint business partner accounts.”
“Ex‑TAC gross profit growth is outpacing revenue growth… driven by a net favorable change in our revenue mix resulting from the acquisition.”
“Shortened planning and buying cycles… we haven’t seen any meaningful impact in our results to‑date.”
“DOJ Google ruling… could potentially provide a great tailwind to SSPs… less impactful on us directly given our end‑to‑end platform.”

Q&A Highlights

Macro and visibility: Planning cycles are shorter (weeks vs months) but no meaningful impact observed; the team balanced guidance for uncertainty yet sees positives in U.S. trends and early cross-sell .
Cross-sell traction: Strong client reception to combined brand + performance “brandformance” pitch; early wins in Q2 and expected acceleration into H2 .
Growth cadence: Management still expects pro forma YoY growth in H2; cost synergy benefits ramp from ~$2M in Q1 to higher levels through Q3–Q4; Q2 expenses are a high watermark .
CTV differentiation: Exclusive OEM home screen placements and deep brand relationships enable premium demand; building toward performance CTV with legacy Outbrain capabilities .
Regulatory environment: DOJ Google outcome seen as supportive for the broader SSP ecosystem; limited direct impact due to end-to-end, direct supply model .

Estimates Context

S&P Global/Capital IQ consensus for Q1 2025 (revenue, EPS, EBITDA) was unavailable due to a data mapping limitation for OB at query time; we could not retrieve estimates to compute beats/misses. We will update when SPGI mapping is resolved.
Against company guidance, Q1 actuals were within guided ranges for Ex‑TAC GP ($103.1M vs $100–$105M) and Adj. EBITDA ($10.7M vs $8–$12M), and management characterized performance as above the mid‑range of guidance .

Key Takeaways for Investors

Integration is advancing with tangible cost capture (≈90% of comp‑related actions) and 2025 cost savings raised to ~$40M; EBITDA leverage should build as savings flow through H2 .
EBITDA trajectory is set to steepen near‑term: Q2 adjusted EBITDA guided to $26–$34M (~3x Q1 level), aided by synergy ramp and seasonal/operational factors; FY25 ≥$180M reiterated .
Growth engines: 100%+ YoY CTV growth (now ~5% spend), exclusive OEM home screen inventory, and Moments vertical video (70+ publishers) expand premium, high‑engagement inventory .
Cross‑sell is the core H2 upside driver; early wins are in place with >50 JBPs and a concentrated base of ~500 large advertisers averaging >$2M annual spend .
Watch the revenue base: pro forma revenue still down ~7% YoY in Q1 but improving; management targets return to pro forma growth in H2 (easier comps and cross‑sell) .
Balance sheet discipline matters: $637.5M principal 10% notes (first interest in August) and net debt focus make free cash flow conversion and synergy capture critical execution KPIs .
Macro risk managed with wider ranges: shortened planning cycles reduce visibility, but the “outcomes” value proposition may benefit scrutiny of ad budgets .

KPIs and Operating Metrics

KPI	Q3 2024	Q4 2024	Q1 2025
Ex‑TAC Gross Profit ($M)	$59.7	$68.3	$103.1
Ex‑TAC Gross Margin (%)	26.6%	29.1%	36.0%
CTV Share of Ad Spend	—	—	~5% (100%+ YoY growth)
Moments Publishers Live	—	40+	70+
Strategic JBPs	—	—	>50 (Ferrero, Haleon, PMI, Beiersdorf)
Large Advertisers (≥$0.5M LTM)	—	—	~500; avg >$2M; ~70% of spend

Additional Context: Capital Structure and Liquidity

Cash, cash equivalents and ST investments: $155.9M at 3/31/25 .
Total debt obligations: $627.0M including 10% senior secured notes due 2030 ($637.5M principal; $610.8M carrying value) and $16.2M overdraft; new $100M super senior revolver established .
Free cash flow of $(6.6)M in Q1 included ~$16.2M of transaction and restructuring cash outflows; excluding these, management noted positive underlying FCF .
February 11: closed $637.5M 10% senior secured notes; proceeds repaid bridge facility used to fund Teads cash consideration .

Source Documents Read

Q1 2025 press release (8‑K Ex. 99.1): full financials, guidance, non‑GAAP reconciliations .
Q1 2025 earnings call transcript: prepared remarks and Q&A on strategy, synergies, macro, CTV, cross‑sell, DOJ ruling .
Other relevant Q1 press releases: Teads acquisition close (Feb 3) ; 10% senior secured notes (Feb 11) .
Prior two quarters’ earnings releases: Q4 2024 and Q3 2024 for trend analysis .

Outbrain Inc. (OB)·Q1 2025 Earnings Summary