Earnings call transcript: Nexxen International Q4 2024 beats EPS forecast, stock surges

Nexxen International Ltd DRC (NASDAQ: NEXN) reported its Q4 2024 earnings, significantly surpassing analysts’ expectations with an earnings per share (EPS) of $0.48, compared to the forecasted $0.16. The company also reported revenue of $112.3 million, exceeding the expected $105.02 million. Following the earnings release, Nexxen’s stock surged by 19.34%, reflecting investor enthusiasm over the strong financial performance. According to InvestingPro analysis, the company appears undervalued based on its Fair Value metrics, with impressive gross profit margins of 82.29%.

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Key Takeaways

• EPS of $0.48 beat the forecast of $0.16.
• Revenue reached $112.3 million, surpassing expectations.
• Stock price increased by 19.34% post-earnings announcement.
• Adjusted EBITDA rose 38% year-over-year.
• Strategic focus on AI and CTV innovations for 2025.

Company Performance

Nexxen International demonstrated robust performance in Q4 2024, marked by record-breaking financial metrics and strategic advancements. The company achieved a contribution ex-TAC of $105.2 million, an all-time quarterly high, driven by a 15% year-over-year growth in programmatic revenue. This growth is attributed to the company’s strategic initiatives, including the launch of generative AI innovations and an increased focus on connected TV (CTV) and video advertising capabilities.

Financial Highlights

• Revenue: $112.3 million, up from the forecast of $105.02 million.
• Earnings per share: $0.48, significantly higher than the $0.16 forecast.
• Adjusted EBITDA: $44.3 million, a 38% increase from Q4 2023.
• Adjusted EBITDA Margin: 42%, up from 35% in the previous year.
• Contribution ex-TAC Retention Rate: 102%, a substantial improvement from 73% in 2023.

Earnings vs. Forecast

Nexxen International reported an EPS of $0.48, significantly surpassing the forecasted $0.16. This represents a positive surprise of 200%. The revenue of $112.3 million also exceeded expectations of $105.02 million, contributing to the strong market reaction. This performance highlights the company’s effective execution of its strategic initiatives and positions it favorably against historical trends.

Market Reaction

Following the earnings announcement, Nexxen’s stock price rose by 19.34%, closing at $8.86. This surge reflects investor confidence in the company’s robust financial performance and strategic outlook. The stock’s performance is notable given its 52-week range, with a low of $4.71 and a high of $11, indicating strong recovery momentum. InvestingPro data shows the stock has a beta of 2.4, suggesting higher volatility than the broader market, while maintaining a strong 71% return over the past year.

Outlook & Guidance

For 2025, Nexxen projects a full-year contribution ex-TAC of $380 million, with programmatic revenue expected to account for approximately 90% of total revenue. The company aims for an adjusted EBITDA of $125 million, focusing on multi-solution adoption, CTV, and data licensing revenue growth. The introduction of AI-driven platform enhancements is anticipated to further bolster its competitive position.

Executive Commentary

CEO Ofer Druker emphasized the company’s transformative efforts, stating, "2024 was focused on transformation, simplification, and innovation." He highlighted the strategic importance of AI, noting, "AI isn’t a buzzword for us. Our end-to-end technology stack connected to a wealth of data enables us to unlock value for our customers." CFO Sajid Niri added, "2025 is now all about execution," underscoring the company’s commitment to delivering on its strategic goals.

Risks and Challenges

• Market Saturation: As the digital advertising market becomes increasingly competitive, maintaining growth could present challenges.
• Macroeconomic Pressures: Global economic instability could impact advertising budgets and spending.
• Technological Integration: Successfully integrating AI innovations into existing platforms will be crucial for sustained growth.
• Regulatory Changes: Changes in data privacy laws could affect Nexxen’s data-driven advertising strategies.

- Dependency on CTV Growth: The company’s growth is closely tied to the expansion of the CTV market, which may face unforeseen obstacles. However, InvestingPro’s Financial Health Score of 2.76 (rated as "GOOD") suggests the company is well-positioned to navigate market challenges, supported by strong cash flow metrics and solid balance sheet management.

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Q&A

During the earnings call, analysts inquired about Nexxen’s data product growth and licensing strategy, exploring potential expansion into the SMB market through AI. The company also confirmed plans to potentially transition to U.S. GAAP accounting, addressing concerns about macroeconomic stability and its impact on future performance.

Full transcript - Nexxen International Ltd DRC (NEXN) Q4 2024:

Operator: Welcome to Nexon’s Fourth Quarter Earnings Call. This call is being recorded and a replay of today’s call will be made available on Nexon’s Investor Relations website. I will now hand the call over to Billy Eckert, Vice President of Investor Relations for introductions and the reading of Safe Harbor statement. Billy, please go ahead.

Billy Eckert, Vice President of Investor Relations, Nexon: Thank you, operator. Good morning, everyone, and welcome to Nexon’s fourth quarter earnings call. During today’s call, we will discuss our financial and operating results for the three and twelve months ended 12/31/2024, as well as our forward looking guidance. With us on today’s call are Ofer Juker, Nexen’s Chief Executive Officer and Sajid Niri, the Company’s Chief Financial Officer. This morning, we issued a press release, which you can access on our IR website at investors.nexon.com.

During today’s conference call, we will make forward looking statements. All statements other than statements of historical fact could be deemed as forward looking. We advise caution and reliance on forward looking statements. These statements include, without limitation, statements and projections regarding our anticipated future financial and operating performance, market opportunity, growth prospects, strategy, financial outlook, partnership and anticipated benefits related to those partnerships, anticipated benefits related to the recent changes in the company’s trading security structure, anticipated benefits related to the company’s intended growth and platform investments, forward looking views on macroeconomic and industry conditions, as well as any other statements concerning the expected development, performance and market share or or competitive performance relating to our products or services. All forward looking statements are based on information available to us as of the date of this call.

These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results to differ materially from those implied by these forward looking statements, including unexpected changes in our business or unexpected changes in macroeconomic or industry conditions. More detailed information about these risk factors and additional risk factors are set forth in our filings with the U. S. Securities and Exchange Commission, including, but not limited to, those risks and uncertainties listed in the section entitled Risk Factors in our most recent annual report on 04/20 F. Nexton does not intend to update or alter its forward looking statements whether as a result of new information, future events or otherwise, except as required by law.

Additionally, the company’s press release and management statements during this conference call will include discussions of certain measures and financial information in IFRS and non IFRS terms. We refer you to the company’s press release for additional details, including definitions of non IFRS items and reconciliations of IFRS to non IFRS results. At this time, it is my pleasure to introduce Ofer Druker, CEO of Nexen. Ofer, please go ahead.

Ofer Druker, Chief Executive Officer, Nexon: Thanks, Billy. You four capped off an incredible year for Nexen as we generated the record quarterly and annual contribution ex TAC for Grammatic revenues and CTV revenue results alongside significantly expanded profitability. Our success in 2024 was a byproduct of getting back to basics after completing the integration of Amobi in 2023. We focused on driving stronger sales execution, installing key talent, simplifying our messaging, boosting our brand recognition and organic product and data innovation. Our achievements on these fronts fueled strong results and alongside our planned AI innovation, position us for continued market share gains in 2025 and beyond.

Following these improvements, we have consistently received validation from the markets that our years long strategy to operate an end to end platform, connect our data platform to our tech stack and enrich its capabilities and focus on CCTV and video placed us well ahead of our peers. Since 2019, we have operated an end to end platform, which we believe give us a clear competitive edge as others in the industry are only now working to try unlocking the benefits of this approach. While one-sided peers are trying to replicate our model, we have an advantage of years of experience serving advertisers, agencies and digital publishers across the ecosystem, supported by our fully functional and robust DSP and SSP technologies. Currently, we believe our DSP and SSP rank among the top in terms of scale and reach within the publicly traded open Internet ad tech space, especially in cities. Our end to end tech platform and operating model benefits customers by enabling enhanced results through access to robust targeting data alongside simplicity and cost efficiencies, while offering a larger TAM and growth opportunity for Nextel compared to one-sided platform.

Customers can flexibly choose to work with us through one or more solutions, enabling us to land and expand with partners and throughout 2024, we were successful in growing relationship with existing customers, including several independent agencies and CTV OEMs like LG. We generated significantly increased spend consolidation and multi solution adoption, driven largely by our efforts to get all of our enterprise DSP customers to adapt NextM SSP as a preferred SSP, which fueled greater end to end revenue and in turn strong growth and expanded profitability in 2024. We entered the year with much stronger platform capabilities following the successful integration of Amobi in 2023. Amobi brought our powerful enterprise GSP capabilities, enhanced our data capabilities and bolstered our CTV and omni channel offering, the combination of which positioned us for deeper penetration with large customers, including independent agencies. As I will expand on later, we are enhancing our platform, data and technology capabilities several steps further throughout 2025 by strategically deepening our AI capabilities and deploying generative AI innovation across our core products, building on our success and momentum from 2024.

We are confident that our planned AI initiatives in 2025 will make our platform’s user interface more intuitive and easier to navigate, better linking customers results to the strength of our tech and data, reducing reliance on user sophistication and expanding our market opportunity. By unleashing and integrating generative AI across our core offering, we will refine our audience targeting precision and deepen the interconnectivity of our platform solution, which we believe will generate even stronger returns for our customers and drive greater spend consolidation. We firmly believe this combined efforts will not only boost our spending within the industry, but also accelerate our long term growth, differentiation and strategic value to industry leaders. The timing couldn’t be more ideal to deepen our AI capabilities, having laid a strong tech and data foundation. By integrating Amobi in 2023 and launching Nexen data platform in 2024, the combination of which has propelled Nexen into a new era of edtech leadership and differentiation.

Nexen Data Platform is integrated with our BSP and SSP and has become central to every key discussion with customers, partners and the industry, while establishing us as the leading data first platform. The platform unifies all our data assets and capabilities, creating a wide range of interconnected and advanced data solutions working in synchrony to drive better results for our partners. Nexon Data Platform features our proprietary audience discovery technology, unified ID graph, curated media capabilities and robust TV focused data tools, highlighted by our exclusive access to Visa global ACR data and our TV intelligence solution, which incorporates seven far reaching TV data sources. We believe this reflects one of the most comprehensive data offering in EdTech and it has tangibly fueled better returns on the advertising spend for our customers, greater confidence in our holistic solution and ultimately increased spend consolidation. Nexon data platform is unique, enabling our customers to onboard first party data enrich it with our powerful data sources and tools to extend audience reach, activate audiences on our DSP and measure eliminating the need for other partners.

With an open and scalable approach to data, our platform is also built to drive regardless of changes in the addressability landscape. We have generated early adoption from notable partners, while our ACL data exclusivity is driving more and more data licensing partnership with major players in the industry like The Trade Desk and Staccada. This highlights that Nexen data platform is not only powering better results for Nexen and its customers, but also increasing our value and recognition across the ecosystem. In 2025, we will continue leading with Nexen data platform in our sales effort and expect to build on the success we achieved in 2024 following the launch. Outside of our data platform release, our strong Q4 and full year ’20 ’20 ’4 results were driven by CTT, one of our core peers, where we expect to continue increasing our competitive advantage and growing our market share.

Our years of focused investment in building an ecosystem designed to deliver better results for both advertisers and CTV publishers have positioned us for continued success. Our platform unified CTV focused DSP, SSP and TV data solution enables seamless experience and better returns for our customers, creating a clear value proposition. CTV advertisers are seeking more direct relationship and integration with publishers to generate better returns on ad spend, while CTV publishers are seeking greater and unique advertising demand as well as solutions designed to maximize the revenue and efficiency. With our capabilities strongly positioned to achieve an enhanced result on both fronts, our end to end CTV focused platform is a perfect fit for both sides of the ecosystem, providing a larger CTV market and growth opportunity for Nexen compared to one-sided peers. Additionally, our simplified messaging and stronger brand recognition has driven customers and new partners to recognize us more and more as a true CTV ad tech leader.

With billions of dollars in linear TV ad budget expected to migrate to digital over time, particularly as live sports shift towards CTV, we believe we are well positioned for long term CTV revenue growth through our robust access to premium CTV and live sports inventory alongside our CTV focused tech and data capabilities. We also anticipate more major CTV and streaming platform will seek partnership with Tecsen going forward as the industry is recognizing the value that our collective solution can bring. Amid strong execution on our strategy, in Q4, we added 112 new actively spending first time advertisers customers, including 18 new enterprise self-service DSP customers and three new independent agencies, leveraging our self-service solution. We also added 73 new supply partners, including some of the industry’s most well known free ad supported streaming services. In addition to our data and tech advancements, our success at tracking and onboarding new talent across our sales, marketing and product teams at both senior and medium management level has positioned us strongly for future growth and accelerated innovation.

We have continued to see an influx of talent eager to join XM, including from peers and renowned industry leaders. In Q1, we also evolved our trading structure by streamlining to a single U. S. Ordinary share listing on NASDAQ, which we believe enhance our long term capital appreciation potential. When we executed our secondary listing on NASDAQ in 2021, we were certain it will be in our best interest to eventually delist from AIM and move solely to The U.

S. Ordinary share listing. But before we could make these changes, we needed to accelerate our growth and await a stronger advertising environment for the move to be well received by investors. With these factors now aligned, we believe over time these changes will increase our U. S.

Investor footprint and recognition, drive greater liquidity, improve our screening on financial data platforms and increase our eligibility for inclusion in select indices. Finally, as mentioned earlier, we are executing on a clear strategic vision to strengthen our platform by deepening our AI capabilities, inclusive of generative AI and machine learning. In 2025, we are launching our first material generative AI driven innovations with new solutions rolling out in H1 and throughout the year. AI has been called to our platform for use. By further scanning these capabilities through generative AI implementations across our vertically integrated platforms, we believe we will be able to deliver stronger performance, better operational efficiency and cost saving for our customers across the key jobs of planning, activation, optimization and monetization.

Generative AI isn’t a buzzword for us. Our end to end technology stack connected to a wealth of data enable us to unlock value for our customers through generative AI in ways one-sided solutions can’t. This year, we are implementing AI driven enhancement across our DSP, creative studio and data platform audience creation and analytics capabilities focused on two key objectives. The first is to simplify platform usability by deploying AI agent that we believe will lower barriers to entry, foster customer spending growth and expand our market opportunity. These agents will provide real time campaign optimization suggestions and integrate directly with our activation tools, driving better returns on ad spend and widening our platform’s utility to a larger base.

The second objective is to optimize the use of our robust datasets, focusing specifically on enhancing our data and audience capabilities, which we believe will significantly improve targeting precision and reach and also lead to higher customer return and increased spending on our platform. While there is no ending fruits for us to achieve short term AI innovation wins, in other instances, our more complex initiative will take time before we reap the full benefits of our investments. That said, we are confident this enhancement will accelerate our long term growth opportunity, make Nexen a fundamentally stronger company and solidify us as a strategic partner and platform of choice for industry leaders in the years to come. 2022 and 2023 were years of acquisition and integration. 2024 was focused on transformation, simplification and innovation.

And in 2025, we believe we are poised to achieve market share gain acceleration. After years of enhancing our platform, business and trading structure and simplifying our messaging, we are better positioned than ever to execute. Our strategy is resonating and customers across the ecosystem are continuing to flock to Nexen for our flexible platform data, CTV, video and omni channel capabilities, and we believe our AI investments will further advance our competitive edge, differentiation and leadership position. I’m excited to continue supporting and driving innovation for our partners. And with that, I’m happy to turn the call to Sagni.

Sajid Niri, Chief Financial Officer, Nexon: Thank you, Ofer. Q4 was very strong for Nexan as we exceeded the rule of 50, generating 16% year over year contribution ex TAC growth and an adjusted EBITDA margin of 42% on a contribution ex TAC basis. In Q4, we generated contribution ex TAC of 105,200,000 which reflected an all time quarterly record. Programmatic revenue was $98,700,000 in Q4, reflecting 15% growth from Q4 twenty twenty three and an all time quarterly record, while contribution tax from our non programmatic business lines increased $1,900,000 year over year in Q4. Growth in Q4 was driven by stronger sales execution following our recent platform, business and brand recognition enhancements, scaling partnerships, improved advertising conditions, particularly within the CTV market, greater multi solution adoption by customers and the U.

S. Election cycle. We observed strength in CTV, video display, data products, self-service products and PNP and increases across most of our industry verticals with the largest increases observed in our government, retail, finance, automotive, health and technology verticals. On the opposite side, we experienced a year over year decrease in mobile video revenue and within our travel and education verticals. The majority of our contribution ex strength in Q4 was driven by CTV as we generated CTV revenue of $37,000,000 reflecting 86% growth from Q4 twenty twenty three and an all time quarterly record as CTV revenue represented 38% of our programmatic revenue, up from 23% in Q4 twenty twenty three.

Our robust CTV revenue growth was attributable to a combination of factors. Those factors include stronger sales execution, better recognition within the CTV market following our rebranding to Nexen, an improved macroeconomic and industry environment, which drove new and existing customers to our premium CTV solutions, benefits related to our partnership with LG and tailwinds from the twenty twenty four U. S. Election cycle. Our CTV revenue growth drove our video revenue to expand significantly as a percentage of programmatic revenue to 75% in Q4 twenty twenty four from 67% in Q4 twenty twenty three as CTV revenue growth substantially outpaced mobile video revenue decline.

We’ve boosted our CTV and video capabilities over the last several years and will continue investing in enhancing them further. As a result, we expect video revenue to remain a primary growth driver for Nexen over time. We continue to see customers increasingly choosing to partner with us and allocating more budget towards our video solution as our data driven video and CTV focused platform oftentimes drive better targeting, audience reach extension and return on advertising spend than other platforms within the industry. Elsewhere, contribution ex TAC from display grew 9% year over year in Q4, while self-service contribution ex TAC increased 21%, driven largely by strong growth within our enterprise DSP solution. Additionally, in Q4, contribution ex TAC from P and Ps grew 20% and contribution ex TAC from data products grew 102% year over year.

The twenty twenty four U. S. Election cycle contributed approximately $6,000,000 in political contribution ex TAC in Q4 twenty twenty four and approximately $10,000,000 for full year 2024, reflecting new quarterly and annual political contribution ex TAC records for Nexon. In Q4, we also generated adjusted EBITDA of $44,300,000 the second highest quarterly adjusted EBITDA in Exane’s history, reflecting a 38% increase from Q4 twenty twenty three. Our significant adjusted EBITDA growth was driven by higher contribution ex TAC, greater customer spend consolidation, lower than expected costs in the quarter and customers increasingly adopting multiple solutions within our ecosystem, particularly as our enterprise DSP customers access more inventory through our SSD.

Our adjusted EBITDA margin in Q4 increased to 42% as a percentage of contribution ex tax from 35% in Q4 twenty twenty three, and we remain confident in our ability to continue expanding our adjusted EBITDA margins over time. In 2024, our contribution ex TAC retention rate increased to 102% from 73% in 2023, amid greater customer spend consolidation and expanded multi solution adoption, underscoring the benefits of the platform, sales team and brand enhancements we’ve made since the completed integration of Amobi and rebrand to Nexen. The increase was further supported by us proactively and strategically discontinuing relationship with smaller customers that were not generating significant revenue or profitability for Nexen to sharpen our focus on better servicing and growing revenue relationships with larger customers. As a result of these combined factors, for full year 2024, our contribution ex TAC per active customer increased to roughly $526,000 reflecting 69% growth from 2023, and we believe we remain well positioned to continue expanding our contribution ex TAC retention rate over time. In Q4, we generated 52,300,000 in net cash from operating activities compared to $43,600,000 in Q4 twenty twenty three.

As of December 31, we had $187,100,000 in cash and cash equivalent, $90,000,000 undrawn on our revolving credit facility and no long term debt. Following the full repayment of our approximately $100,000,000 of pending principal long term debt balance in April 2024. We also reported non IFRS diluted earnings per ordinary share of $0.48 in Q4 twenty twenty four compared to $0.2 in Q4 twenty twenty three or $0.24 in Q4 twenty twenty four compared to $0.1 in Q4 twenty twenty three on a pre reverse split basis. During Q4, we repurchased roughly 4,500,000.0 ordinary shares or 2,250,000.00 shares on a cost reverse split basis, reflecting an investment of GBP 15,600,000.0 or $20,100,000 From 03/01/2022, when we began a series of share repurchase programs through 12/31/2024, we invested roughly $157,300,000 in our repurchase program, buying back approximately 37,900,000.0 ordinary shares or roughly 19,000,000 shares on a post reverse fleet basis, which reflected approximately 24.5% of our shares outstanding. Our current and ongoing $50,000,000 share repurchase program launched on 11/19/2024, and is expected to continue until the early year of 05/19/2025, for completion and is now being executed on NASDAQ following our voluntary delisting from AIM in mid February.

As of 12/31/2024, we had $38,400,000 remaining on our share repurchase program authorization and $17,400,000 remaining as of 02/28/2025. Additionally, our Board of Directors approved the launch of a new $50,000,000 ordinary share repurchase program following completion of the current ongoing program. The new program is expected to begin on the earlier of 05/19/2025, or completion of the currently ongoing program and continue until the earlier of 11/19/2025, or completion. If shares remain at prices the Board believes continue to reflect a discount to fair value following the end of the current and impending program, we will consider initiating an additional one thereafter. With that, I’ll turn to our outlook.

For full year 2025, we anticipate generating contribution ex TAC of approximately $380,000,000 with programmatic revenue expected to reflect approximately 90% of full year 2025 revenue. We also expect to generate approximately $125,000,000 of adjusted EBITDA for full year 2025 and to extend our CTV revenue and data licensing revenue compared to 2024. For full year 2025, we expect our sales and marketing expenses, G and A and depreciation and amortization to reflect roughly the same percentage of contribution ex tax as in full year 2024, and we expect R and D expenses to increase as a percentage of contribution ex tax. In full year 2025, we anticipate stock based compensation expenses will increase compared to 2024, largely due to our increased share price compared to 2023. Our Board’s Compensation Committee, with guidance from its independent consultant, has approved an updated executive compensation philosophy aimed at aligning total harvest pay near the median of the committee approved comparison group comprised of similarly sized U.

S. Listed companies operating broadly similar businesses. Consisting of base salaries, cash bonuses and long term equity incentives, the program closely ties actual executive pay to the achievement of predefined revenue, EBITDA and relative total shareholder return goals, ensuring executive compensation is aligned with the performance of the business, while remaining at or below median dilution levels of our comparison group. As Ofer mentioned, throughout 2025, we will be investing more in advancing our tech, data and AI capabilities, increasingly integrating generative AI across our core products to drive better platform usability and returns on advertising spend for our customers. Our two primary capital allocation focuses in 2025 will remain on share repurchases and investing in our platform as we currently have no plans for major M and A in the near term.

Looking ahead, we remain hyper focused on growing revenue relationships with customers by working to gain larger budget shares and fostering increased multi solution adoption across our end to end ecosystem, building of our success on these fronts in 2024. We will also seek to attract new sizable partners to our platform in 2025 and grow our CTV, omni channel and data licensing revenue opportunities. In 2025, we will continue focusing on expanding relationship with independent agencies. We believe we are particularly well positioned to serve as a strategic partner, have a strong growth opportunity and can establish a dominant position and niche within the industry. These independent agencies are expected to continue gaining market share from major holding companies for the foreseeable future, and we believe our platform is uniquely and strategically positioned to help support and benefit from that growth.

Our tech platform’s ability to serve customers flexibly and holistically alongside our robust data capabilities gives us confidence in our positioning to drive increased customer spending, attract new partners and achieve sustainable long term growth, expanded profitability and market share gains. We also believe Nexfin’s ability to land and expand with customers through multi solution end to end adoption gives us a larger market and long term growth opportunity than one-sided platforms. After a strong and transformational 2024, our momentum has carried over to this point in 2025. We believe we have all the right pieces in place to continue building on our success from 2024 with a stronger platform that we are continuing to strategically enhance through generative AI as well as an improved sales organization, value proposition and brand. 2025 is now all about execution.

We want to thank our shareholders, employees and partners for their support, and we look forward to increasing our U. S. Investor presence following our recent shift to a single U. S. Ordinary share listing on NASDAQ, which we expect will benefit Nexen and its shareholders over the long term.

With that operator, we’ll now take questions.

Operator: Thank you. We will now begin the question and answer session. And your first question comes from the line of Matt Swanson with RBC Capital Markets. Your line is open.

Matt Swanson, Analyst, RBC Capital Markets: Great. Thank you. And congratulations on the quarter, particularly relative to kind of how uneven this earning season has been for a lot of peers. For the customer and publisher additions were strong in the quarter and really aligns with kind of what we’ve been talking about in terms of flipping from defense to offense post the MOB integration. Could you just talk a little bit more about the go to market improvements and how you’re looking to build on some of this momentum into 2025?

Ofer Druker, Chief Executive Officer, Nexon: Thank you, Matt. Thank you also for the question. I think that the change that we’ve done after the integration of Amobi is, of course, material we consider it also in the results. But part of the thing that we are talking about go to market is changing the brand and improving and tightening the messages to the message to the market make a lot of difference because people now understand better what we are basically offering and how we can help them grow their business. And we see a lot of good response from the market around that, that people starting to they see also the behavior of the other partner or other peers in the market that everybody is trying to build an end to end solution while we already got it ready and we are working with that for the last almost six years and it’s helping us to do that.

But we feel also that the brand and the connection of everything under one umbrella is basically, as I mentioned, explained and improving the message and the data. In every discussion that we are doing, data is basically is a very key point because people understand more and more the value in data and how they can integrate it into their business. And it’s helping us of course, because we are one of the only platforms that is horizontal integration and it’s very rich in data and enable the partners from both sides of the screen, like the advertisers and the publishers to launch, to utilize their data, to enrich it and to utilize it on the platform. So I think that all of that together end to end usage of data, a strong reach in CTV is helping us to reach publishers and advertisers that want to work with us and we see the results in the numbers that you mentioned.

Matt Swanson, Analyst, RBC Capital Markets: That’s great. And then, Stiggy, there’s a lot of, I guess, we’d call it noise in the macro right now. Could you just give us kind of an update on what you’re seeing in Q1 so far? And then also kind of how you’re thinking about the environment in your full year guidance?

Sajid Niri, Chief Financial Officer, Nexon: Yes. So thank you, Matt. I think that as we said in our call a couple of minutes ago, we are seeing a normalized environment post the election cycle in The U. S. We entered 2025 on the same sentiment we ended 2024.

As everybody is aware, the macro is a little bit fragile and changing every day. But at this point of time, we are not seeing any change in something that we didn’t anticipate or something that can even affect our 2025 results. So for now, business as usual, we are moving ahead. And as you asked also before, it’s all about execution and now going to offense and we are doing the best effort in order to bring more clients into our ecosystem and go with strategic partnerships.

Matt Swanson, Analyst, RBC Capital Markets: Agreed. Thank you.

Ofer Druker, Chief Executive Officer, Nexon: Thank you.

Operator: Next question comes from the line of Laura Martin with Needham and Company. Your line is open.

Laura Martin, Analyst, Needham and Company: Good morning. Ofer, my first one for you is about data. I think you said it grew by 100%. And I’m wondering if you could talk more granularly about what that product looks like and whether you foresee the data product growing that rapidly in 2025 and 2026?

Sajid Niri, Chief Financial Officer, Nexon: Hey, Lara. Thank you for the question and good morning. I think, yes, if you’re talking like percentage wise, yes, it grew dramatically, but the numbers over there are quite small right now. It’s not that small. When we are talking about data products or like organic data products, we are talking about product as our discovery tool and ID graph that we are catering and enabling clients to benefit specifically and we are paying for that service on a usage basis.

So for this product, we are seeing a very increased usage and engagement for clients and we are managing to license more and more of this solution into our clients. Ofri, you want to add something?

Ofer Druker, Chief Executive Officer, Nexon: Yes. I would just add, LoRa, that usually we prefer not to sell or to offer the data as a standalone product, but to offer it in the mid in like a mix of other services, mostly media. And it’s also that to say, because as I mentioned also on our last call, about 90% of our campaigns are data enriched. So when we are talking about data products, we are talking about when we are basically offering data as a standalone product, which is usually not something that we push to do because we prefer to include it with media because then of course the margins and the activity is bigger for us.

Laura Martin, Analyst, Needham and Company: So is this separate from the Zita CTV ACR data?

Ofer Druker, Chief Executive Officer, Nexon: Mostly it’s about ACR, but in general we are selling and offering data in many of many types of data to our clients, mostly advertisers when they’re building their audiences and targeting or measuring. But when we are talking about this data tools, we are talking mostly about the ACR data. Yes.

Laura Martin, Analyst, Needham and Company: Okay. And then Sajid, a couple for you. One is, now that you’re 100% U. S, what’s your thinking about moving from IFRS to U. S.

GAAP? And then secondly, can you remind us, both the guidance is for 90% programmatic. Can you remind us is the rest is the other 10% managed service or what’s the other 10% that isn’t programmatic?

Sajid Niri, Chief Financial Officer, Nexon: Okay. I’ll answer both questions. So first of all, I will start with the second one. So when we are guiding that 90% or around 90% of our $380,000,000 of guided net revenue for 2025. We are meaning that 90% will go through our full end to end ecosystem.

And the other 10% is what we are calling legacy performance activities, which now are mainly through and related to influencer advertising that we are involved in. So in our eyes, although it’s been transacted and executed through programmatic activities, it’s not like really going through our end to end ecosystem.

Laura Martin, Analyst, Needham and Company: Okay. Thank you. And can you unmute me the

Ofer Druker, Chief Executive Officer, Nexon: first question? What was the first question?

Laura Martin, Analyst, Needham and Company: You

Sajid Niri, Chief Financial Officer, Nexon: asked. Yes, we had a very fruitful discussion in our audit committee and board meeting in the last couple of days around that. And we are now looking for all the gaps between IFRS and U. S. GAAP accounting wise and other related issues.

And I think that we are intending to go to U. S. GAAP and probably better sooner than later. But we are not guiding yet that we will go fully U. S.

GAAP in 2025, but I think that you can think that we will do that.

Ofer Druker, Chief Executive Officer, Nexon: Great.

Laura Martin, Analyst, Needham and Company: Super helpful. Thanks guys. Good numbers. Thanks. Thank you, Andrew.

Operator: Next question comes from the line of Andrew Maroc with Raymond James. Your line is open.

Andrew Maroc, Analyst, Raymond James: Hi, thanks for taking my questions. Maybe one on CTV, if I could. So we’ve obviously seen the direction of travel on the demand side to be to open up to more partners, but interested on the supply side. I mean, typically publishers on CTV have been working with fewer supply partners certainly than desktop display or mobile publishers. But have you seen the direction of travel of that increasing?

Have there been any certain catalyst behind that? And how much has that been helpful to your CTV business? Thanks.

Ofer Druker, Chief Executive Officer, Nexon: Of course. Good morning. Yes, I think that you are right in the point that you mentioned that CTV partners and major partners and publishers are lowering the number of partners that they got in order to sell their media programmatically. Our advantage on that matter is that we have our own demand. So it’s not that we are offering just a connection point to the same demand sources like when you have duplication of SSPs that these guys were using in the past.

We can basically offer a lot of unique demand that is coming from our sales team, which is why that’s the reason that we are able still to grow our publisher base. And I feel that this is a major benefit that the publishers of CTV look at us and I feel that the trend now is not to rely only on one or two sources of SSP, but to expand it to more people that can bring value, meaning additional demand, unique demand that they cannot get through their old relationship. So we see this move in the market and it’s helping us to grow our business, helping us to widen our base of publishers and partners and of course grow our revenues from CTV. Andrew? Andrew, you’re over with us.

Andrew Maroc, Analyst, Raymond James: Sorry, I was on mute. Thank you. Much appreciated.

Ofer Druker, Chief Executive Officer, Nexon: Thank you.

Operator: And your last question comes from the line of Matt Condon with JPM. Your line is open.

Matt Condon, Analyst, JPMorgan: Thank you so much for taking my questions. My first one is just in the new generative AI products. You’re focused on ease of use and performance there. Can you just talk about the opportunity to potentially move down market into the SMB performance territory? Is that a focus or yes, just can you elaborate on that?

Ofer Druker, Chief Executive Officer, Nexon: So you’re asking if we can basically go down the path of the funnel and offer with AI more performance base?

Matt Condon, Analyst, JPMorgan: I was more so just asking just the broadening of the advertiser base that you can address. Can you address now smaller, more SMB type performance advertisers, just given generative AI is now reducing the ease of use of the platform and also increasing the performance?

Ofer Druker, Chief Executive Officer, Nexon: Yes. I think that AI in general will enable us to and enabling us already to simplify the usage of our platforms. And you are right, but in so many ways to operate the full platform that after we integrated Amobee into our platform, it’s a very sophisticated platform, but you need to be a professional in order to use it. And we have a lot of professional partners that are using it. But if you are going to a smaller size advertisers and partners, it will be easier for them to do that with the AI tools that we are building right now.

And our advantage also for these clients is that since we are sitting end to end and we are enabled, we can enable them to run different agents of AI across the advertisers and the publisher side, the DSP and the SSP basically, including the data, which is audience segmentation, creating audiences, targeting them, measuring them and so on. So it will open more venues around it. In this stage that we are now, we are introducing this technology and these capabilities to our major partners. But down the road, I think it’s of course, some of our plan is to enhance the size of the audience that we are able to reach and also to increase what the question that I thought that you are asking, which is also I feel a good question is that basically it will enable also people to get to be able to get better results from the media, because they will be able to utilize the data and the targeting and the platform and the optimization in a much more meaningful manner. So I think it would do both.

And we feel that we are in front of a very big revolution. We are making like a lot of steps now. We are introducing these tools right now to our major partners, but soon we will open it to more.

Matt Condon, Analyst, JPMorgan: Great. That’s very helpful. And then maybe just a follow-up from an earlier question on data licensing revenue. Can you just talk about the key levers for growth in 2025? Is it expanding to new DSPs or is it getting more out of The Trade Desk and StackAdapt?

Just anything that you can highlight there would be very helpful. Thanks guys.

Ofer Druker, Chief Executive Officer, Nexon: Of course. I think that our growth is coming will come and coming from a few trends. One of them is, of course, to win new business. As I mentioned before, our new messaging, our Titan messaging, better go to market strategy is helping us to win more business in the market. And I think that it’s easier also because I think that our offering is basically responding and giving solution to all the trends that are worrying or challenging our advertisers and publishers.

So for them to find to work with us, it’s resolving for them a lot of these issues and they feel that we can give them a very strong solution to their deals, which of course is super important and it enhance the growth. The second thing is also to grow our coin base. So we have big base of partners and publishers already. And what we are now able to do is to basically enhance that engagement with our platform. And so in other ways, we’re basically increasing the revenues that we are generating per client and per partner, which of course is very meaningful because as you know, this type of relationship, the trust to know each other, to trust each other, to have like working habits is super important.

And when you have them, it’s easier to grow the revenues across additional platforms and so on. So these are the two major things that we are doing. And we have a lot of fronts to grow around, meaning we have, as you can see also in our earnings today that we shared that we have our own different formats like display, online video and of course, CTV that is fulfilling and it’s giving like full solution to advertisers today. If in the past, some of these guys were using us only for video or CTV and now they are expanding to display. If they were like display, they are now expanding to other formats and of course it’s very helpful and it’s growing our revenues with them in a very meaningful manner.

Matt Condon, Analyst, JPMorgan: Thank you so much.

Ofer Druker, Chief Executive Officer, Nexon: Okay.

Operator: So And that concludes our question and answer session. I will turn the call back over to Ofer Druker for closing remarks.

Ofer Druker, Chief Executive Officer, Nexon: Thank you. I think that when we look at 2024, so as we wrote in the PR, I think that it for us it was back to basic. We worked very hard years before to make acquisition, to integrate them, to consolidate them, to tighten our message, to rebrand and 2024 was a year that we felt that things came together and you consider by our results and the momentum that we created over the year. And we believe that it’s just setting the stage for the years to come that we call the growth years, which will be this year and next year. And for that, we also onboarded additional talent people from the industry, grew and promoted people from our WeThink company.

And this is a great opportunity also to say thank you very much from full out to all our employees around the globe that worked very hard in 2024 to make these results happen. You can see that it’s a teamwork. It’s not one star that created this change. It’s a lot of people around the world that work together in order to make the change. And thank you for our clients and partners for the trust and patience to get to this point that we can generate for you amazing results and grow the base of our partnership together going forward.

I wish us all that 2025 will be a good year. It started now in the last ten days, there is unrest in the public market, but I hope that it will resolve and it will let us fulfill our potential in this year and going forward. So thank you very much.

Operator: This concludes this conference call. You may now disconnect.

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