Nexxen Intl (NEXN) Q3 2026 Earnings Call Transcript

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DATE

Thu, Nov. 12, 2026

CALL PARTICIPANTS

• Chief Executive Officer - Ofer Druker
• Chief Financial Officer - Sagi Niri
• Vice President of Investor Relations - William Eckert

TAKEAWAYS

• Contribution ex-TAC -- $100.3 million, representing an 8% increase and a third quarter record.
• Programmatic Revenue -- $97.8 million, reflecting 9% growth and reaching a third quarter high.
• CTV Revenue -- $34.1 million, growing 39% year over year and accounting for 35% of programmatic revenue.
• Adjusted EBITDA -- $34.5 million, up 22% compared to $28.2 million in the prior year.
• Adjusted EBITDA Margin -- 34%, expanding from 30% in the third quarter of 2025 due to disciplined cost management and AI-driven efficiencies.
• Non-IFRS Diluted EPS -- $0.32, compared to $0.20 in the same period last year.
• Enterprise Contribution ex-TAC -- over 40% growth year over year, driven by self-serve and platform-managed DSP usage.
• Full Year Contribution ex-TAC Guidance -- $388 million to $402 million, representing approximately 12% growth at the midpoint.
• Full Year Programmatic Revenue Guidance -- $380 million to $393 million, representing approximately 13% growth at the midpoint.
• Full Year Adjusted EBITDA Guidance -- $122 million to $132 million, targeting a 32% margin at the midpoint.
• Cash and Equivalents -- $152.9 million as of Sept. 30, 2026, with no long-term debt.
• Desktop Revenue -- declined 29%, as management noted a shift in consumer behavior away from websites.
• Operating Cash Flow -- $46.1 million, compared to $35.8 million in the third quarter of 2025.
• V Investment -- completed an additional $15 million investment, bringing the total to $60 million for a 6% equity stake.
• Data Products Contribution ex-TAC -- increased 73% year over year, supported by new onboarding solutions.
• Display Revenue -- grew 11% year over year, while PMP revenue increased 18%.
• Video Revenue Mix -- represented 66% of programmatic revenue, compared to 70% in the prior year.
• Programmatic Revenue Mix -- increased to 95% of total revenue, up from 94% in the third quarter of 2025.

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RISKS

• Sagi Niri stated that "geopolitical tensions" and market "volatility" contributed to the decision to maintain a wide guidance range for the fourth quarter.

SUMMARY

Nexxen International Ltd. (NASDAQ:NEXN) reported record third quarter contribution ex-TAC and programmatic revenue, driven by reported enterprise adoption and CTV segment results. Management reaffirmed full-year 2026 financial guidance, citing October performance and stated visibility for the fourth quarter. The company reported that its focus on AI-native tools and end-to-end data integration has affected customer outcomes and operational leverage, resulting in a return to adjusted EBITDA growth.

• Ofer Druker stated, "Advertising will be transacted more and more by AI agents in the future, and Nexxen is well positioned to help enable and define their future."
• Management reported that eight agency and holding company partners are actively testing Nexxen's AI capabilities within their own AI-driven environments.
• The company expects most platform workflows to be executable through agentic solutions by the end of the first quarter of 2027.
• Sagi Niri noted that October was the company's "best top line month ever" and expects the fourth quarter to be the highest contribution ex-TAC quarter in company history.
• Nexxen advanced its Smart TV home screen offering by launching standardized inventory specifications across manufacturers including TCL and TiVo Ads.
• Management indicated that the company is transitioning from a traditional demand-side and supply-side platform model to an AI-native, full-funnel performance advertising platform.

INDUSTRY GLOSSARY

• Contribution ex-TAC: A non-IFRS measure defined as gross profit plus depreciation and amortization minus nonprogrammatic media costs.
• CTV: Connected TV, referring to video content delivered through an internet-connected television or device.
• DSP: Demand Side Platform, a system that allows digital ad buyers to manage multiple ad exchange and data exchange accounts through one interface.
• SSP: Supply Side Platform, a technology platform that enables digital publishers to manage their advertising space inventory.
• Agentic AI: Artificial intelligence systems designed to autonomously perform tasks and workflows within an advertising platform.
• Programmatic: The automated, data-driven buying and selling of digital advertising in real time.
• TAC: Traffic Acquisition Costs, the expenses associated with acquiring ad impressions from publishers.
• PMP: Private Marketplace, a customized, invitation-only real-time bidding marketplace where publishers make their premium ad inventory available to a select group of advertisers.

Full Conference Call Transcript

Operator: Welcome to Nexxen's third quarter earnings call.[Operator Instructions] This call is being recorded, and a replay will be made available on Nexxen'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 the safe harbor statement. Billy, please go ahead.

William Eckert: Thank you, operator. Good morning, everyone, and welcome to Nexxen's third quarter earnings call. During today's call, we will discuss our financial and operating results for the 3 and 9 months ended September 30, 2026, as well as our forward-looking guidance. With us on today's call are Ofer Druker, Nexxen's Chief Executive Officer; and Sagi Niri, the company's Chief Financial Officer. This morning, we issued a press release, which you can access on our IR website at investors.nexxen.com. During today's call, we will make forward-looking statements. All statements other than statements of historical fact may be deemed forward-looking. We advise caution in reliance on them.

These statements include, without limitation, statements and projections regarding our anticipated future financial and operating performance, market opportunity, growth prospects, strategy and financial outlook. They also include, without limitation, statements regarding our partnerships and anticipated benefits related to those partnerships as well as expected benefits from our growth initiatives and platform investments. In addition, we may provide forward-looking views on macroeconomic and industry conditions and other statements regarding the expected development, performance, market share or competitive position of our products and 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 statements. These include, among other things, unexpected changes in our business or 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 listed in the section entitled Risk Factors in our most recent annual report on Form 20-F. Nexxen 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 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 Nexxen. Ofer, please go ahead.

Ofer Druker: Thanks, Billy. We continue to execute against our strategy of combining end-to-end technology, unique and robust data and AI to fuel enterprise adoption, drive growth across CTV and mobile in-app and deliver better customer outcomes. This execution led to record Q3 contribution ex-TAC and programmatic revenue alongside a return to year-over-year adjusted EBITDA growth following 3 top line guidance increases earlier this year. Our financial results were supported by record Q3 CTV revenue, strong enterprise growth and continued mobile in-app momentum. These results reflect both our platform investments and more efficient go-to-market efforts, which together have enabled us to attract more enterprise customers and major media partners, while supporting profitable growth.

As we have positioned ourselves to win in market today, we have also advanced our technology and strategy to lead where advertising is going. Advertising will be transacted more and more by AI agents in the future, and Nexxen is well positioned to help enable and define their future. Since releasing our agentic solutions, client feedback has indicated Nexxen's AI capabilities are advanced relative to other platforms both in the breadth of their functionality and how intuitively they are integrated into campaign workflow. Customers are leveraging these solutions to generate custom reporting, design campaign execution, uncover incremental spend opportunities and improve full-funnel performance with strong initial results. We believe our agentic advantage starts with the foundation underlying nexAI.

By combining our end-to-end transaction infrastructure with unique and robust data, we have greater visibility across the advertising journey, enabling better optimization. We believe this makes nexAI and our agentic offering more effective, enabling smarter decisions, automated workflows and better customer outcomes. We have brought these capabilities to market through our in-platform agents and interoperable MCP solutions, allowing customers to access our solutions within our platform and through their own AI-driven environments. As agentic adoption grows, we believe our combination of nexAI, unique data and end-to-end technology, creates a powerful advantage, one that is already helping us win new business, improve performance for existing customers and capture larger budgets.

Our continued success in driving enterprise adoption has served as a key growth driver. In Q3, contribution ex-TAC from enterprise customers which access the Nexxen DSP on a self-serve or platform-managed basis, grew over 40% year-over-year. During the quarter, we also activated many new advertisers and enterprise customers, with several citing our data capabilities and agentic solutions as key catalysts. Much of this growth is coming from cross and upsells as customers lean more into our combined data, media and technology, fueling greater spend consolidation, end-to-end usage and profitability. This momentum is also supporting growth across key areas like CTV and mobile in-app. Throughout 2026, we have enhanced platform performance and usability while strengthening our data core and nexAI possibilities.

Earlier this year, we launched our new AI, native UI and deeper integration with Nexxen Discovery, creating a simpler, more unified experience for enterprise customers to utilize our combined insights and activation capabilities. We have also made it faster and easier to bring differentiated data into the platform, strengthening the signals that power nexAI. In Q3, we launched new first-party data onboarding solutions, enabling faster activation and enhanced our Unified Identity Graph with additional online and offline signals, nearly doubling our global identity footprint. Our integration with Shopify and Omnicom's Acxiom has expanded our platform's commerce and consumer data signals, supporting better audience insights, reach extension, activation and measurement.

As I will expand on later, we have also grown our suite of agentic solutions with several agents now live across critical customer workflows. We generated record Q3 CTV revenue, which grew 39% year-over-year and expect an all-time record CTV revenue quarter for Q4 based on the momentum we have seen to this point. Our success was driven in part by our ability to integrate new premium CTV supply. We recently onboarded Disney, Sling TV and other CTV partners, and our CTV supply coverage is now ranked among the industry highest. Last year, we were first to market with programmatic Smart TV home screen ad activation capabilities through Nexxen TV Home Screen.

In Q3, we advanced the offering, launching standardized Smart TV home screen inventory specifications across OEMs, removing a major constraint to programmatic scale and monetization. The solution now provides access to premium inventory from V, TCL, TiVo ads and others, with additional major OEMs in testing or active discussions. Demand side adoption also continues to grow with partners, including The Trade Desk, Google's Display and Video 360, StackAdapt and others onboarded and scaling spend. We expect Q4 to be the first quarter in which we generate notable revenue from the solution and believe Nexxen TV Home Screen can serve as a meaningful CTV growth catalyst in 2027 and beyond.

We also launched programmatic CTV pause ad activation capabilities, enabling access to high-attention inventory for partners like DIRECTV advertising and creating additional pathways to scale CTV monetization. Continued execution against our mobile in-app strategy drove strong year-over-year mobile revenue growth in Q3 with momentum building into Q4. SDK integrations with partners like Unity have continued to scale, expanding platform-wide monetization and providing additional durability against LLM-driven traffic shift. Last year, mobile in-app represented a smaller portion of our mobile activity, but today, it accounts for the majority. As performance-focused mobile in-app advertisers have expanded across our platform, they are also leveraging our CTV solutions through cross-channel strategies.

We will continue investing in enhancing our performance-based mobile and CTV capabilities to further accelerate this flywheel. Finally, I want to return to agentic AI and the opportunity we see ahead. We currently have in-platform agents spanning key customer workflows like reporting, QA, audience intelligence, incremental spend analysis and campaign and deal troubleshooting. Over the coming quarters, we plan to introduce additional agents for audience building, full-scale campaign and deal creation and other workflows. Today, customers must actively select agents for specific tasks. But soon, these capabilities will shift to always on continuously identifying opportunities and taking action to improve performance. Importantly, our agents are also accessible through MCP integrations alongside many other AI-driven tools supporting campaign management workflows.

Since launch, 8 agency and holding company partners have begun actively testing or utilizing Nexxen within their own AI-driven environment with encouraging initial results that validate our AI positioning and strategy. By the end of Q1, we expect most of our platform workflow to be executable through our agentic solution. AI is also benefiting us internally. We are expanding its use to automate workflows, increase productivity, launch solutions faster and accomplish more without the need to scale headcount proportionally with revenue. We believe the external and internal application of AI can expand our addressable opportunity and support growth and operating leverage into 2027 and beyond. In closing, our strategy is resonating and our momentum is building.

Enterprise adoption is accelerating, CTV and mobile in-app are growing and Nexxen TV Home Screen is expanding our long-term CTV revenue opportunity. At the same time, our unique data, nexAI solutions and end-to-end capabilities are enabling us to win more clients and partners across agencies, brands, major holding companies and premium publishers. Importantly, as Nexxen has evolved, we think of ourselves not simply as a DSP, data platform and SSP, but rather as an AI-native, full-funnel performance advertising platform powering better outcomes for both buyers and sellers, while enabling them to transact directly in a streamlined, transparent and unified agentic environment. This is nexAI, the next evolution of our platform and company.

While we are generating success today, we believe we are even better positioned for the future. Advertising will be more agentically connected, and we believe Nexxen has the data, product infrastructure and early AI lead to serve as one of the platforms at the center of how it will be transacted. With that, I will turn the call to Sagi.

Sagi Niri: Thank you, Ofer. In Q3, we yet again generated record results, continuing the strong momentum we established during the first half of the year, following 3 top line guidance increases earlier in 2026. We delivered contribution ex- TAC of $100.3 million, representing a Q3 record and an increase of 8% year-over-year. Programmatic revenue was $97.8 million, up 9% year-over-year, also representing a Q3 record. Growth was broad-based, led by continued strength across CTV, mobile, data products and display, supported by growth within our government, automotive, entertainment and retail verticals. These trends more than offset year-over-year declines within desktop and our non-programmatic business line as well as softness within our health and travel vertical.

During the quarter, we completed the strategic wind-down of our non-programmatic influencer marketing business, RhythmInfluence. The wind-down did not have a material impact on contribution ex-TAC or adjusted EBITDA in Q3, nor do we expect it to in Q4. And we are continuing to evaluate strategic options for our remaining nonprogrammatic business line to further improve our mix. Q3 represented a third consecutive quarterly CTV revenue record as we generated CTV revenue of $34.1 million, representing a 39% year-over-year increase, driven by continued momentum across our platform CTV solutions. This strength has continued and based on current visibility, we expect Q4 to reflect the best CTV revenue quarter in company history.

Mobile in-app also continued to scale, fueling 9% year-over-year mobile revenue growth, with momentum continuing into Q4. Contribution ex-TAC from data products, PMPs and display increased 73%, 18% and 11% year-over-year, respectively, while desktop revenue declined by 29%. Importantly, the strength of our top line performance translated directly to the bottom line. After several consecutive quarters of year-over-year decline, adjusted EBITDA returned to growth and margin expanded in Q3. Adjusted EBITDA increased 22% year-over-year to $34.5 million, representing a 34% margin as a percentage of contribution ex-TAC compared to a margin of 30% in Q3 2025.

This growth and margin expansion reflected continued enterprise momentum and increased end-to-end platform usage alongside disciplined cost management, a more favorable shekel to U.S. dollar translation and growing benefits from our AI initiatives. We remain confident in our ability to expand margins over time as enterprise adoption, end-to-end platform usage and top and bottom line AI benefits continue to scale. In Q3, we generated $46.1 million of operating cash flow compared to $35.8 million in Q3 2025. As of September 30, we had $152.9 million in cash and cash equivalents, $50 million available under our revolving credit facility and no long-term debt. Non-IFRS diluted earnings per share was $0.32 in Q3 compared to $0.20 in Q3 2025.

We believe our strong balance sheet, absence of long-term debt and robust cash generation provides financial flexibility to invest across our organic growth, potential acquisition and capital return priorities. On capital allocation, in Q3, we completed our additional $15 million investment in V, bringing our total investment to $60 million and our equity ownership to approximately 6% of shares outstanding. We also continued deploying capital across our long-term strategic priorities, including AI, data platform capabilities and go-to-market execution. Importantly, we also extended our $40 million share repurchase program authorization. While we did not repurchase shares in Q3 as we prioritize maintaining flexibility while actively evaluating bolt-on acquisition opportunities, we intend to resume share repurchases in the second half of Q4.

We are also continuing to pursue bolt-on acquisitions that can enhance our platform, strengthen our competitive positioning and accelerate our growth. Our highest near-term acquisition priority is expanding our mobile in-app capabilities and footprint to accelerate an already growing part of our business. We are also evaluating other opportunities to enhance our performance-based CTV, AI and data offerings. We expect bolt-on acquisition to serve as a potentially important component of our growth strategy and are actively seeking to acquire one or more companies over the coming quarters, with a focus on opportunities that are accretive to both contribution ex-TAC and adjusted EBITDA. Turning to our outlook. We are reaffirming our full year 2026 financial guidance.

We continue to expect contribution ex-TAC in the range of $388 million to $402 million, representing approximately 12% year-over-year growth at the midpoint. We also expect programmatic revenue in the range of $380 million to $393 million, representing approximately 13% year-over-year growth at the midpoint. Additionally, adjusted EBITDA is expected in the range of $122 million to $132 million, representing approximately 10% year-over-year growth and a 32% margin as a percentage of contribution ex-TAC at the midpoint. To this point in Q4, we are tracking towards the highest contribution ex-TAC and programmatic revenue quarter in company history, with October potentially representing our best top line month ever based on preliminary results.

This reflects continued enterprise momentum, increased endpoint platform usage and strength within CTV, mobile and data products. While we benefited from the election cycle in Q3 and early Q4, we do not expect political revenue comparison to represent a meaningful growth headwind in 2027. We also expect Q4 to represent the best CTV revenue quarter in company history as adoption across our platform CTV solution continues to grow and as Nexxen TV Home Screen revenue has ramped in line with our expectations. After generating minimal onscreen revenue through Q3 2026, we have seen a notable uptick in adoption and spending in Q4.

And based on this early success and a strong pipeline, continue to believe Nexxen TV Home Screen will represent an increasingly meaningful growth catalyst into 2027 and beyond. We also anticipate sequential and year-over-year adjusted EBITDA growth and margin expansion in Q4 as most incremental contribution ex-TAC is expected to flow to adjusted EBITDA, highlighting the operating leverage enabled by our end-to-end model. To support our long-term growth drivers, we will continue investing across AI, data infrastructure, go-to-market execution and our CTV and mobile in-app capabilities. Overall, we believe we are operating from a position of strength with acceleration across our key growth engines and increasing operating leverage.

As our mix continues to shift towards end-to-end enterprise relationships and high-growth channels such as CTV, home screen and mobile in-app, we believe we are building a more durable business position to capture larger revenue opportunities across some of the fastest-growing areas of advertising. With significant flexibility to continue investing behind these opportunities, we believe we are poised to drive increased growth, profitability and long-term shareholder value into 2027 and beyond. As always, we thank our shareholders, employees and partners for their support. Operator, we'll now take questions.

Operator: [Operator Instructions] Our first question comes from Matt Swanson from RBC Capital Markets.

Matthew Swanson: Ofer, I think there's kind of 3 numbers that really stood out to me when listening to the prepared remarks. Can you just give us more color on what was the dynamics leading to the strong growth that we saw in CTV of 39%, the 40% growth in the enterprise DSP usage, but also the -- some more context around desktop being down 29% and just kind of what you're seeing from the environment there?

Ofer Druker: Of course, thank you, Matt. I think that what -- let's start with the enterprise and then move to the CTV. And your last point was about?

Matthew Swanson: The decline in that.

Ofer Druker: Okay. So let's start with the enterprise. So I think the enterprise is a very hard effort that we are doing in the last more than 2 years now to basically utilize the acquisition that we did with Amobee in 2022. And basically, we have a very strong enterprise solution that we are licensing to clients. I think that we improved a lot the product and we improved a lot the go-to-market strategy and the talent around this activity. And in the last year or so, we see results and a lot of that happened also in Q3 this year, which is great news for us because, of course, this is creating stability and long-term growth.

And also the fact that -- it's connected to your second question that I will touch in a minute about CTV, but the big adoption of enterprise clients of our solution, basically, we are encouraging and incentivizing them to buy on our media platform. And they are basically growing also the CTV and in-app mobile activity through the mutual partnership that we got with them. So it's like a flywheel that is pushing itself. When you look at that, we improved the technology. We improved -- we connected a lot of data and capabilities into our enterprise solution. We improved the go-to-market and talent around it.

We see growth in the number of partners and advertisers that are using the platform. Through AI, we also see now improvement in the budget that they are allocating to our media. And altogether, some of that is also directed to CTV, in-app mobile that is growing the numbers. So I think it's not onetime effort. It's like a long-term effort, and we look at that as a trend that we believe that can continue going forward into 2027 and beyond. Regarding the CTV growth, it's a mix of a few things also. I think that it's not the first time that we are breaking the record around CTV. I think that, again, we improved our go-to-market.

We have a lot of new partners that are basically coming in, and we will talk also about future ones in a minute. But in general, when you look at that, we see that everything is starting to connect. As I mentioned, the enterprise partners are buying more also CTV. We have more and more people that are advertisers and agencies that are recognizing that what we can offer them together with unique data and measurement is important to them, and they are shifting spend to us. Also thanks again to AI tools that we built that is helping them to optimize and get the best results that they can on our platform.

And when you are looking at CTV also, we also mentioned that we signed a few strong partnerships for the future. It didn't affected our number yet, but we signed Disney and Sling and others that are joining now our media platform, and I'm sure that will attract more revenue coming into our platform in the future. Regarding the drop in desktop, we knew that it will come. Like last year already, we got -- we started to prepare for that. That's the reason that we double up on our CTV effort. That's the reason that we basically open up the in-app mobile activity that is growing very steadily and creating strong momentum during this year and also into Q4.

And this is basically replacing the declining desktop and even generating growth. So I don't think that it's surprised, but people are less surfing on sites and they are -- but still, of course, launching their TV, watching -- consuming content through their CTV sets and through their mobile in-app, that is not going down, but the utilization and the usage of these platforms are growing.

So I think that -- from a strategic point of view, I think that we choose the right media format and channels to grow our business, and it's offsetting the drop of display and desktop that we saw -- that basically we saw it coming like more than a year from now -- ago, sorry. I hope that answers your questions, Matt.

Matthew Swanson: Yes. No, that was very thorough. And then, Sagi, you mentioned the amount of incremental revenue that flows through to adjusted EBITDA. You saw adjusted EBITDA grow twice as fast as revenue. Could you just give us a little more color? You talked a little bit about the leverage that you guys are getting from internal AI usage. I know there's also a benefit from investments you've made previous years, but just some of the dynamics around the margin expansion?

Sagi Niri: Yes. So I think the margin expansion is related to 2 different parameters. First of all, it's the first quarter that we are really reporting on an apples-to-apples basis. So a lot of partnerships and infrastructure investments around hosting and data that we did in the second half of 2025 are now fully in place. And in the first quarter, we can really understand how Q3 looks versus previous Q3. Having said that, I think it's all around seasonality and of course, the level of revenue that we are generating.

So as long as we are generating more revenue, of course, the margin on EBITDA is going higher and probably according to our guidance in Q4, we will be over 40% of adjusted EBITDA margin. I think that going into 2027, when the full year will be like full apples-to-apple to 2026, we'll see more of that kicking in, and we are expecting to be somewhere around the 34% adjusted EBITDA margin in full year 2027. So I think all the investments we did in the past like, are now really getting into full utilization and materializing for 100%. And it's affecting, of course, the growth that Ofer just mentioned on CTV and enterprise and all around that.

And now we are kicking in the efficiency and the productivity that is turning into more, of course, cash flow and more adjusted EBITDA.

Operator: Our next question comes from Andrew Marok from Raymond James.

Andrew Marok: Let's talk about the home screen opportunity. You mentioned that you've already got the deals in place with a number of OEMs that you're integrated with and also in discussions for more. I guess from today, what percentage of what you see as the addressable home screen opportunity are you already integrated with? And how much is potential growth from some of these new coming deals that you're working on?

Ofer Druker: Andrew, I think that what we did like almost a year ago, we basically launched a new product line, which is programmatic home screen. People were selling the home screen before we arrived, of course, but I think that what we are adding to that is a programmatic capability to buy this media in a programmatic manner, which is super important in -- according to what is going on in the market, of course. And the second thing that I feel that we invested a lot of time around is to create standardization around it.

So I think that the most important thing to understand is that you have a lot of people that want to buy this media, but you need to manage their expectation about formats, about location, about defining where they are running for them to test the outcome and to feel reassured about what they are choosing, which I feel that we crossed a lot of these challenges in the past 6 months. And I think that we already, as we mentioned, signed some OEMs and in discussions with others. And it's a process, we are still making the first steps into that.

But as we indicated also showing -- starting to show real meaningful results in the end of Q3 and Q4 after a lot of work that we invested. So from addressable market, I think that there is a lot, a lot, a lot of room to grow. There is a lot of operating system. The big guys are still not in our mix, but I think that, of course, we are -- we believe in the future that -- hope and believe that some of them will join us. And I feel that this will be a meaningful growth engine for us because we are a pioneer in this industry.

But I think that it's needed because the advertisers need a better solution to buy this type of media. The OEM needs a better solution to sell this media and to generate the proper results and measurement and reports for them. And I think that we are addressing the need of the market of both sides that I'm sure that we'll be able to keep reporting on that in the beginning of next year and to share with you the development and the progress that we are making.

I think that it's very encouraging. -- it's like we are looking at it as a catalyst for 2027 and more, and we believe that it will be a meaningful revenue source for us.

Andrew Marok: Got it. And then maybe one on your M&A plans and discussion that you talked about in the prepared remarks. I guess, this is not the first time we've heard this from you, but what is kind of catalyzing this return to the M&A market at this time? Is it just like you really want to accelerate these transitions into these LLM-resistant formats and finding particularly good opportunities to do so? Or is it something like the valuations are particularly attractive at this point? Just anything more you can give on that?

Ofer Druker: Thank you, Andrew. I think that you touched yourself all the points by -- in your question, but I will address them as an answer also because I think that you touched them in a very smart manner. I think that, first of all, we strongly believe that to grow the revenues of the company, and we performed it in the past, you need to grow organically, of course, but you also need to grow through acquisitions that are adding to you knowledge, technology capabilities, additional customers that can basically join the platform and then by cross -- by synchronization between the elements, you can grow the revenues -- the total revenues of these companies that you are acquired.

The reason that we are looking today at additional M&A is our -- first of all, we are generating cash. We are a stable company. We have a very strong model that we believe in it. And we know what we need to do in order to maintain our position and to maintain our position, sometimes you -- it's not good enough, you need even to grow it. So we are looking at companies, as you said, that can increase our stability in media formats, that are basically lowering the risk of LLM. We are looking at companies that can add to us additional customers and clients that will utilize our platform.

And we believe that this is the right time because it was like almost 4 years ago that we made our last acquisition. The company made a lot of consolidation efforts. We are working as one platform, one team. And AI is helping us also now to manage our company in a more efficient manner. So an acquisition, we believe, can add to us a lot of value, and we have the means to do that. Just to remind you, we don't have that and we own cash.

So we believe that this, of course, is a strong indication for us to make -- to look for the right acquisition in order to keep growing the company not just organically and to address some of the things that can help us to grow even more than we are growing now. Because, for example, we are reporting on growing in what we call non-LLM affected formats like CTV and in-app mobile, but we believe that an acquisition probably can give us additional step -- additional edge in this. And of course, it's always welcome to do that when you can.

So we are looking around and we are checking the market, and we feel that it's a good timing to do that from our standpoint.

Operator: Our next question comes from Jason Kreyer from Craig-Hallum.

Jason Kreyer: So you mentioned that the CTV home screen has started to trickle in here in Q4. Are you expecting to be live with all or most of the partners that we've talked about that are -- the OEM partners that are running the home screen? And just relative to what you've seen in the early days, how does that frame the opportunity for you to drive that inflection in growth?

Ofer Druker: I think that, yes, of course, everything that we spoke about, we believe that is already in the integration. Sometimes the integration takes a little bit longer because it's -- again, it's something new for a lot of the people. So they need to test it and to find the right way to integrate it into their plans and technology stack, but we are on the right path. Regarding what is needed, I think that the most important issue here is education of the market, meaning -- as I mentioned, it's a new format. And our industry is very vast and big, and you need to basically educate the people.

Some of the people are not coming all in, first time. They are -- of course, they want to keep their interest of their clients. So they are testing it. They want to make sure that it delivers the results that they feel that it -- or think that it can deliver. And it's a process that is step-by-step growing and increasing the effect of our programmatic activity around the home screen.

And I believe that in the middle of next year, it will become a massive trend in the industry, and we have a place to lead it because we have the relationship, we have the technology, we have the knowledge and we have the experience already how to do that. So I feel very sure about it.

Jason Kreyer: You had also called out record trends in October. I wanted to see if you could just unpack any specific sources? With that, you've given a guide for Q4 with like a $14 million range on revenue and a $10 million range on EBITDA. Just curious your thoughts on such a wide range with 6 weeks left in the year?

Sagi Niri: Yes. So Jason, October was our best month ever. Some of it, of course, relates to some midterm revenues that we're generating. Having said that, if this revenue wasn't existing, probably we would have generated with some other advertisers. I think, as I said before, seasonality, of course, kicking in, in the last quarter. The last quarter will be our best ever as well. I think the wide range is coming because we wanted to reaffirm and like keep the flexibility around that because you can never know what will happen.

The macro and the sentiment and there's a lot of geopolitical tensions and other tension, we can take the market -- As you can see, it's very volatile in the couple of weeks or months. So we wanted to be sure we are still guiding for the midpoint. So this is like our main guidance, but we kept the range as wide as we can, but not for a specific reason or anything else.

Operator: Our next question comes from Laura Martin from Needham & Company.

Laura Martin: Just listening to that prior answer, can you actually drill down on how much political you're expecting in the fourth quarter, but also how much was in the third quarter because it was a big deal at Magnite and Trade Desk? So I'm interested if you guys had a lot of political? And then also, I'd love to drill down on these agentic solutions, which you say are manual today, but you are going to automate them. So of the agentic solutions you have to date, what has been the -- like I'm interested in what clients have adopted the most so far?

What's on the road map of what you think could be the most popular agents looking forward over the next 12 months? And what's the business model? Do you get -- do they pay separately? Do they pay an upcharge? Or is it all just included in the platform you're already -- so you don't really get an incremental revenue taxed for it?

Ofer Druker: No problem, Laura, you asked a question that is like equal to a full day, but I will ask -- I will try to provide you answers to all the points. So let's start with the AI because I think that it's -- and then I will hand over to Sagi to talk about the election and stuff like that. On the AI stuff, I think that, first of all, we have an inherent advantage because we are an end-to-end solution. So when you're looking at that, it's easier for AI. AI in order to be efficient, it needs to get a lot of signals.

It needs to have a lot of points of touch with the process in order to be able to influence it. I think that we are one of the only companies that has a real end-to-end solution. We are repeating that. And you asked me in the past about data, data, data. So data is signals that we are able to deliver, today our AI tools in order to optimize, in order to measure, in order to take decisions. And it's -- we see the effect of that. And I must tell you that from discussion that we have with partners that we are offering the platform or presenting them the platform, the response are very good.

In general, I can proudly say that we can already now transact agentically. We are in discussions with about 8 agencies and partners in order to integrate. We have already some live campaigns running, and we believe that this is something that we can be leaders of in the near future because we already got the basis, as I mentioned. We have a -- and we will talk about the agent in a minute. But I feel that in this field of AI, since our infrastructure is built differently and we put emphasis on the end-to-end solution and on data for so many years, we are -- we have like an advantage that we are using.

We are already, as I mentioned, able to run agentic campaign. And we believe that the discussions and conversations that we got with clients and tests that we are running and showing great results, basically already giving us an edge to start doing that. Regarding the business model, it will not be one business model. There will be a lot. We need to understand that it's like touching a lot of areas of our activity. So we are now basically starting to create business models which are more dedicated to case studies with clients and with partners. Of course, in some cases, it will enable us to create new venues of revenue.

And in some cases, it will give us more efficiency to offer better pricing to people. But in general, what I feel -- and we will share very soon more about that because I think that you are totally right, Laura. It's opening a lot of opportunities to differentiated models, business models of payment. And of course, it will affect the market. But in our view, it will also open a lot of new opportunity for us that were not available in the past, sorry, and will enable us to generate additional revenue in the future. So I feel that we are in a very good position, and we will let the market know soon what is our next steps.

But in general, as I mentioned, we can already transact agentically. We're already talking and launching tests, and we believe that it will be massive in 2027. And as you mentioned, for business models, I think that there will be a few business models that we will be able to offer to our partners. Regarding agents that you ask me, it's a long list, and we can add that maybe also offline, if you want, Laura.

But in general, when we are looking at that, we already integrated like a lot of agents into the platform that is helping on the enterprise side to launch, to troubleshoot, to create campaigns, to optimize, to Q&A, to troubleshoot problems or mistakes if people integrated them into the coding of their campaigns, to show optimization and upsell, which is driving for us great results and also integrating -- also when you look at it, integrating data into the process in a smart manner because data today became more like people are looking for fresh data.

AI basically enable us to utilize data from our PMP and bring like fresh data to the clients when they need it according to their request and to integrate it into the campaign. So I feel that we are very advanced on that. And that's -- as I mentioned also to Matt earlier, this has also helped us to scale up our relationship with our enterprise partners and to win more accounts.

Sagi Niri: Laura, regarding the midterm election revenue generation, so first of all, most of it came in Q4, less -- or will come in Q4 because we are not reporting that yet. Some of it came in Q3, of course. Having said that, I think that it's not material as Magnite and The Trade Desk deal. Again, we grew a lot percentage-wise, but we came out for a much lower number. So that's good and bad. The good is that it will not give us any material headwind into 2027 guidance and plan. And the second is that we grew it dramatically higher than we anticipated.

We did more than we did on the full election cycle on 2024, which is great. We put a lot of focus on that. And we are making sure that we will double what we did in 2024 and 2028. So we are making sure we are having all the components there. Of course, it's a lot of relationship. But as Ofer mentioned, a lot of capabilities that we tried for the first time was very successful and very engaged by the clients.

Operator: Our next question comes from Tyler DiMatteo from BTIG.

Tyler DiMatteo: Ofer, I wanted to come back to the mobile business. I believe you said it was up in totality 9% year-over-year. I just want to drill down to that and double-click into the different pieces you're seeing in that business between in-app mobile up, web, et cetera? And then also just your outlook for mobile in general for '27? Obviously, mobile in-app has been growing in industry depending on what you look at mid to high teens. But just curious kind of how you're thinking about the outlook?

And then second question for Sagi, you've obviously invested a lot this year, which has put a little bit of a rig on EBITDA margin, but you expect that to come back in '27, I believe you said 34%. But at this point, Sagi, how do you think about investing the incremental dollar? And really, what I'm trying to understand is like what is the actual return on invested capital and the incremental return on invested capital that you're seeing and/or expected to see?

Sagi Niri: Yes. Thank you, Tyler. So as you said, we invested a lot in the second half of 2025 and the first half of 2026. We are now -- as for now, we -- of course, we are keeping investing in our infrastructure and maintaining all the different components within our full ecosystem. But having said that, it will be streamlined and you won't see any jump as you saw in the first half of 2026 versus the first half of 2025. And yes, per your question, as Ofer said, we are utilizing much more AI tools on our platform for our clients and internally for our people.

And of course, we are using AI as an enablement tool for different departments within the company. So I think that 34% is like the entry point into 2027. We believe that most of the revenue growth that we will see in 2027, most of it will flow down into the EBITDA line and into the adjusted EBITDA margin.

Ofer Druker: Regarding Tyler, the question about the mobile in-app and growing the revenues by 9% in total, the mobile, I think that what -- and you asked me about what is the segments that we are looking at mobile. So mobile in our eyes, there are 2 major segments, one of them is basically in-app mobile and the second one was mobile web. And there is a different behavior, of course, of these 2 elements. Mobile web is going down a little bit. And basically, when you look at it, the in-app is growing on our systems and the numbers are growing.

I think that there will be like a shift between in-app, mobile and mobile web and mobile web will keep going down and in-app will grow. So when it will clean up probably next year, we'll see the growth more intense on the in-app mobile because it will release the declining mobile web that is basically now not giving us like a clear number, a clear view on the growth of the in-app mobile.

Operator: Our next question comes from Maria Ripps from Canaccord.

Maria Ripps: I just wanted to ask about your home spend -- sorry, home screen spend, which is scaling nicely through your own DSP, but also through The Trade Desk and DV360. Can you maybe talk about sort of the split of home screen between sort of your own DSP and outside DSPs? And how does your take rate compare sort of -- take rate on other DSPs compare to your own sort of end-to-end CTV deals?

Ofer Druker: So, first of all, we see -- we build a programmatic ecosystem around the home screen, and we are working very closely with The Trade Desk, which we are a very respectful partner of us and DV360 the same, Takada, the same, people that are working with us closely basis and other, Epsilon and other, basically DSPs that are buying this type of media. I cannot talk about the take rate from -- compared to others because I don't know it, of course. But we are basically, as I mentioned now, created the -- so we are selling the home screen by ourselves to our clients.

We are encouraging our enterprise clients to buy this media, to test it and buy it and utilize it. We are -- our sales teams that are selling strategic sales, meaning managed campaigns which are not hands-on key, offering this media. And we are, of course, as I said, elaborating and collaborating with all the major DSPs in the market to buy this media from us, and we see great success in that. Regarding take rates and stuff like that, I really don't have the numbers to share with you. I think that it will not be fair to start comparing between our clients in this call.

Sagi Niri: Yes. But per your question regarding take rates, there's no doubt that if a dollar is coming into our DSP and being utilizing on our SSP, probably the take rate -- the total take rate or the aggregate take rate that we are doing from this process is higher than only one-sided DSP or SSP, your question.

Maria Ripps: Got it. That's very helpful. And then on enterprise sort of contribution ex-TAC, which grew, I think you said over 40%. So that compares to about 8% total, right, in the quarter. Can you maybe help us understand sort of what share of contribution ex-TAC is enterprise today? And I guess, what does that imply for growth for the rest of the business? And then can you talk about sort of your enterprise pipeline as you're preparing for 2027?

Sagi Niri: Okay. I will start with the first half of the question. So yes, CTV grew by almost 40%, mobile grew as well. I think that -- and you are saying that programmatic revenue grew only by 9% because at the end, it's an aggregation of a lot of different activities. So first of all, we are happy because of the main focus of the company and the big trends within the industry and where we think the future of ad tech is lying is growing on our business, which is CTV and mobile. So CTV grew and mobile grew as well. The part that didn't grow, and I think that Ofer spoke about it earlier is, of course, desktop.

And of course, people are finding them less and less into websites and more and more into different LLMs. So that's something that we are preparing to and understanding and knowing that it will go lower in 2027. And this is why we are putting a lot of emphasis on our enterprise solution, on the CTV, on AI and all the other stuff that we just discussed. Another part of our business that is going down is linear TV. it's good. These dollars are allocated between linear TV to CTV, and this is where part of the growth in CTV is coming as well. Data products and data licenses is growing as well.

So I think every -- the most important part in our business are growing, and it's putting the emphasis that -- we are putting that in an amazing place. The only ones that are going down is linear TV and desktop, which is quite logical that they are going that direction. And this is, of course -- everything is taking us to the 9% programmatic growth year-over-year.

As long as enterprise will grow more and CTV will grow more as a percentage of our revenue and in absolute numbers, of course, if CTV in the future will grow 40% or enterprise will grow 40%, the level of the aggregate growth will be higher than 9% because their proportion and their weight within our total numbers will be higher. Is that answering your question, Maria?

Maria Ripps: Yes. I was just wondering just on the enterprise side, I mean, I understand all the channels. I was just wondering kind of on the enterprise side, given the sort of much higher growth versus average, I was trying to understand sort of the contribution of enterprise to overall ex-TAC -- contribution ex-TAC and sort of what does that imply for the rest of the business outside of enterprise?

Sagi Niri: Yes. So I think enterprise and strategic are almost the same in our -- within our company. The proportion is almost there. I think we understand that going forward, enterprise will grow more than strategic. And if I need to guess, it's very hard to guess with AI all around us because everything is changing a lot. I think that probably in the next 3 years, enterprise will be 70%, 80% of our net revenue. It only makes sense. This is what the clients are looking for. Most of the solution is now enabling them to be an enterprise customer because everything is being streamlined. Most of it is going to be agentic. It's very easy.

You don't need a complicated or even a simple UI in order to facilitate, you will not need to go into the DSP. In a couple of quarters, probably, you can interact with our DSP through an agent-to-agent and through MCP solution. So I think that the industry is going there. I think it's going much faster than we understand. So probably enterprise will be most of our revenue in the next couple of years.

Operator: Our last question comes from Barton Crockett from Rosenblatt.

Barton Crockett: So I just wanted to get a little bit more color on the range implied in the fourth quarter, where I think you back into somewhere between like 8% year-over-year growth and 22% year-over-year growth based on your full year guidance ranges and what you just did in the third quarter, which is a massive range. So I was just wondering if you could talk about why that larger range and what the puts and takes are to get you to the higher or the lower end of that stuff?

Sagi Niri: Yes. So I think it was asked already. The simple answer or the quick answer is that because of what's happening in the macro, the volatility, the geopolitical tensions and other stuff that everyone is reading about every morning and every evening, we kept the right margin. Having said that, we are aiming to get into the midpoint. This is what we said from the beginning, and this is where we are aiming to be. Things that can affect if we will hit the lower margin or the higher margin, it's really the volatility, maybe some kind of holiday spend that we are not like assuming or expecting. But other than that, we are aiming to the midpoint.

So if you need into your model to take the numbers and the percentage of growth around that, you should look at the midpoint.

Operator: We have no further questions. I would like to turn the call back over to the company's CEO, Ofer Druker, for closing remarks. Thank you.

Ofer Druker: I will close by saying our platform investment and stronger -- strong execution are fueling share gains, building a more resilient business and accelerating our growth flywheel. Growing enterprise adoption is attracting more premium media partners like Disney to our platform, which is -- in turn, is unlocking larger end-to-end revenue opportunities. Together, these dynamics are accelerating growth across CTV, mobile in-app and data products. As advertising is -- shifts more and more and more towards agentic execution, we believe Nexxen is uniquely positioned to help shape this transformation. Our end-to-end infrastructure, differentiated data, exclusive media provides a powerful foundation to enable intelligent automated advertising, both within our platform and our partners' AI-driven ecosystem.

We plan to accelerate profitable growth and establish Nexxen as a fundamental technology partner, connecting buyers and sellers in the agentic future of advertising. Thank you for all your support, and have a great weekend. Thank you.

Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect.

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