Outbrain Inc. (OB) Bundle
A Brief History of Outbrain Inc.
Company Overview
Outbrain Inc. is a digital marketing company that specializes in content recommendation and native advertising. Founded in 2006, the company has developed a robust platform that connects advertisers with audiences through personalized content recommendations.
Recent Financial Performance
As of September 30, 2024, Outbrain reported a revenue of $224.2 million for the three months ended September 30, 2024, a decrease from $230.0 million in the same period of 2023. For the nine months ended September 30, 2024, revenue was $655.3 million, down from $687.6 million in the prior year.
| Financial Metrics | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Revenue | $224.2 million | $230.0 million | $655.3 million | $687.6 million |
| Gross Profit | $48.9 million | $46.4 million | $136.0 million | $131.6 million |
| Net Income | $6.7 million | $0.5 million | Net Loss: $(0.5) million | $6.2 million |
| Adjusted EBITDA | $11.5 million | $10.3 million | $20.3 million | $14.5 million |
Cost Structure
Traffic acquisition costs decreased by $8.7 million, or 5.0%, to $164.5 million for Q3 2024, compared to $173.2 million in Q3 2023. The cost of revenue for the nine months ended September 30, 2024, totaled $519.2 million, down from $556.0 million in the prior year.
Operating Expenses
Operating expenses increased by $8.0 million, or 18.4%, to $51.8 million for Q3 2024 from $43.8 million in Q3 2023. The rise in expenses was largely due to acquisition-related costs of $5.6 million and increased personnel-related costs of $3.0 million.
| Operating Expense Components | Q3 2024 | Q3 2023 |
|---|---|---|
| Research and Development | $9.1 million | $8.7 million |
| Sales and Marketing | $23.2 million | $21.5 million |
| General and Administrative | $19.6 million | $13.6 million |
Recent Developments
On September 19, 2024, Outbrain repurchased $118.0 million of its Convertible Notes at a discount, recording a pre-tax gain of approximately $8.8 million. Furthermore, the company entered into a definitive share purchase agreement to acquire Teads S.A. on August 1, 2024.
Stockholder Equity
As of September 30, 2024, Outbrain's total stockholders' equity was reported at $227.2 million, with a total of 63,029,098 shares outstanding. The accumulated deficit stood at $(74.1) million, reflecting ongoing investments into growth and acquisitions.
| Stockholders' Equity Metrics | Amount |
|---|---|
| Total Stockholders' Equity | $227.2 million |
| Shares Outstanding | 63,029,098 |
| Accumulated Deficit | $(74.1) million |
Market Position and Future Outlook
Outbrain continues to innovate within the digital advertising space, aiming to enhance its platform capabilities and expand its market presence. Despite recent revenue declines, the company is focused on optimizing its cost structure and improving profitability.
A Who Owns Outbrain Inc. (OB)
Ownership Structure as of 2024
As of September 30, 2024, Outbrain Inc. has a diverse ownership structure primarily consisting of institutional investors and individual shareholders. Following the acquisition agreement with Altice Teads S.A., the ownership stakes have been notably impacted.
| Owner | Type | Shares Owned | Percentage Ownership |
|---|---|---|---|
| Altice Teads S.A. | Institutional Investor | Approximately 35 million shares | 41% (48% assuming conversion of Series A Preferred Stock) |
| Other Institutional Investors | Institutional Investors | Approximately 30 million shares | 30% (Estimated) |
| Individual Shareholders | Retail Investors | Approximately 15 million shares | 15% (Estimated) |
| Treasury Stock | Company | 13,374,906 shares | 14% (of issued shares) |
Recent Transactions Impacting Ownership
On August 1, 2024, Outbrain entered into a definitive share purchase agreement with Altice Teads S.A., resulting in a significant change to the ownership structure. The agreement entails the acquisition of Teads by Outbrain, which will involve cash payments and the issuance of new shares. The total consideration includes:
- Cash payment of $725 million
- 35 million newly issued shares of common stock
- 10.5 million newly issued shares of Series A Convertible Preferred Stock
Following this transaction, Altice Teads S.A. is expected to become a significant shareholder, holding approximately 41% of the common stock, or 48% if the Series A Preferred Stock is converted.
Market Performance and Shareholder Impact
As of September 30, 2024, Outbrain's common stock was trading at around $4.75 per share. The company has a total of 63,029,098 shares issued and 49,654,192 shares outstanding. The recent acquisition and shifts in ownership are anticipated to influence market perception and stock performance moving forward.
Financial Overview
Outbrain's financial performance in 2024 reflects a revenue of $655.3 million for the nine months ended September 30, 2024, down from $687.6 million in the same period of 2023. The net income for the three months ended September 30, 2024, was $6.7 million.
Conclusion on Ownership Dynamics
The ownership structure of Outbrain Inc. is characterized by a significant institutional presence, particularly following the acquisition agreement with Altice Teads S.A. This transaction is likely to reshape the company's future direction and investor relations strategy as it integrates Teads into its operational framework.
Outbrain Inc. (OB) Mission Statement
Overview of Mission Statement
The mission of Outbrain Inc. is to empower publishers and advertisers to engage their audiences effectively through personalized content recommendations. The company aims to provide innovative advertising solutions that enable brands to connect with consumers while ensuring a seamless user experience across the Open Internet.
Company Values
- Integrity: Upholding transparency and trust in all relationships.
- Innovation: Continuously developing cutting-edge technology to enhance user engagement.
- Collaboration: Fostering strong partnerships with media companies and advertisers.
- Customer Focus: Prioritizing the needs and preferences of both publishers and advertisers.
Recent Developments Related to Mission
In 2024, Outbrain entered into a definitive share purchase agreement to acquire Teads S.A. for a total consideration of approximately $725 million in cash and stock. This acquisition aims to enhance Outbrain's capabilities in delivering innovative advertising solutions to its partners.
Financial Performance Metrics
Outbrain's financial performance reflects its commitment to its mission, showcasing growth and operational efficiency:
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Revenue | $224.2 million | $230.0 million | $655.3 million | $687.6 million |
| Gross Profit | $48.9 million | $46.4 million | $136.0 million | $131.6 million |
| Net Income (Loss) | $6.7 million | $0.5 million | $(0.5) million | $6.2 million |
| Adjusted EBITDA | $11.5 million | $10.3 million | $20.3 million | $14.5 million |
| Ex-TAC Gross Profit | $59.7 million | $56.8 million | $167.8 million | $163.6 million |
Market Position and Strategy
Outbrain positions itself as a leading platform for content discovery, focusing on enhancing user engagement for its media partners and providing measurable results for advertisers. The company serves over a billion unique consumers monthly, delivering approximately 12 billion personalized content experiences daily.
Future Outlook
Looking forward, Outbrain aims to leverage its technological advancements and strategic acquisitions to strengthen its market presence and fulfill its mission of connecting brands with their target audiences effectively. The integration of Teads S.A. is expected to broaden its advertising offerings and enhance revenue streams.
How Outbrain Inc. (OB) Works
Business Model
Outbrain Inc. operates as a digital advertising platform primarily focused on content discovery and recommendation. The company connects advertisers with publishers to generate traffic and engagement through personalized content recommendations. The platform leverages data analytics to optimize ad placements and enhance user engagement across various media channels.
Financial Performance
As of September 30, 2024, Outbrain reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Revenue | $224.2 million | $230.0 million | $655.3 million | $687.6 million |
| Gross Profit | $48.9 million | $46.4 million | $136.0 million | $131.6 million |
| Gross Margin | 21.8% | 20.2% | 20.8% | 19.1% |
| Net Income (Loss) | $6.7 million | $0.5 million | ($0.5 million) | $6.2 million |
| Adjusted EBITDA | $11.5 million | $10.3 million | $20.3 million | $14.5 million |
Traffic Acquisition Costs
Traffic acquisition costs are a significant component of Outbrain’s expenses. For Q3 2024, these costs amounted to:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Traffic Acquisition Costs | $164.5 million | $173.2 million |
| Traffic Acquisition Cost as % of Revenue | 73.4% | 75.3% |
Recent Developments
On August 1, 2024, Outbrain entered into a definitive share purchase agreement to acquire Teads S.A. for a total consideration of:
- Cash payment: $725.0 million
- 35.0 million newly issued shares of common stock
- 10.5 million newly issued shares of Series A Convertible Preferred Stock
- Deferred cash payment: $25.0 million
Stockholder Equity
As of September 30, 2024, Outbrain's stockholders' equity was reported as follows:
| Item | Value (in thousands) |
|---|---|
| Total Stockholders' Equity | $227,156 |
| Accumulated Deficit | ($169,326) |
| Treasury Stock (at cost) | 13,374,906 shares |
Cash Flow Overview
For the nine months ended September 30, 2024, Outbrain's cash flow activities were as follows:
| Cash Flow Activity | Amount (in thousands) |
|---|---|
| Net Cash Provided by Operating Activities | $25,898 |
| Net Cash Provided by Investing Activities | $75,569 |
| Net Cash Used in Financing Activities | ($116,894) |
Market Position
Outbrain has established itself as a leader in the content recommendation space, delivering personalized ads to over a billion unique consumers monthly. The company partners with numerous media outlets to enhance engagement and drive business outcomes for advertisers.
Key Financial Ratios
Important financial ratios as of September 30, 2024:
| Ratio | Value |
|---|---|
| Current Ratio | 1.95 |
| Debt to Equity Ratio | 0.48 |
| Return on Equity (ROE) | 2.94% |
Conclusion of Financial Metrics
Outbrain continues to adapt to a dynamic digital advertising landscape while maintaining a focus on profitability and strategic growth through acquisitions and partnerships.
How Outbrain Inc. (OB) Makes Money
Revenue Generation Model
Outbrain Inc. generates revenue primarily through its advertising platform, which connects advertisers with media partners. As of September 30, 2024, Outbrain reported revenue of $224.2 million for the three months ended, a decrease from $230.0 million in the same period in 2023. For the nine months ended September 30, 2024, revenue was $655.3 million, down from $687.6 million the previous year.
Traffic Acquisition Costs
Traffic acquisition costs (TAC) represent a significant expense for Outbrain as they pay media partners for the revenue generated through their platforms. For the three months ended September 30, 2024, TAC amounted to $164.5 million, compared to $173.2 million in the same quarter of 2023. This decline in TAC reflects a 5.0% decrease year-over-year.
Gross Profit and Margins
Outbrain's gross profit for the three months ended September 30, 2024 was $48.9 million, yielding a gross margin of 21.8%. This compares to a gross profit of $46.4 million and a margin of 20.2% in the same quarter of 2023. For the nine months ended September 30, 2024, gross profit increased to $136.0 million with a margin of 20.8%, up from $131.6 million and 19.1% in the prior year.
Ex-TAC Gross Profit
Ex-TAC Gross Profit, which excludes traffic acquisition costs, was $59.7 million for the three months ended September 30, 2024, compared to $56.8 million in 2023. For the nine-month period, Ex-TAC Gross Profit was $167.8 million, up from $163.6 million year-over-year.
Operating Expenses
Operating expenses for Outbrain totaled $51.8 million for the three months ended September 30, 2024, an increase from $43.8 million in the prior year. Major components included:
- Research and Development: $9.1 million
- Sales and Marketing: $23.2 million
- General and Administrative: $19.6 million
Operating expenses as a percentage of revenue increased to 23.1% from 19.0% year-over-year.
Net Income and Adjusted EBITDA
Outbrain reported a net income of $6.7 million for the three months ended September 30, 2024, compared to $0.5 million in the same quarter of 2023. However, for the nine months ended, the company recorded a net loss of $0.5 million, down from a net income of $6.2 million.
Adjusted EBITDA for the three months ended September 30, 2024 was $11.5 million, up from $10.3 million in 2023. For the nine-month period, Adjusted EBITDA increased to $20.3 million from $14.5 million.
Geographic Revenue Breakdown
The revenue generated from different geographic regions for the three months ended September 30, 2024, was as follows:
| Region | Revenue (2024) | Revenue (2023) |
|---|---|---|
| USA | $63.98 million | $70.02 million |
| EMEA | $134.47 million | $136.08 million |
| Other | $25.73 million | $23.91 million |
| Total Revenue | $224.18 million | $230.02 million |
Overall, the company's revenue from the USA decreased, while revenue from "Other" regions saw an increase.
Recent Developments
On August 1, 2024, Outbrain announced its acquisition of Teads S.A. for a total consideration of $725 million in cash, along with stock options. This strategic move aims to enhance Outbrain's advertising capabilities and expand its market reach.
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Resources:
- Outbrain Inc. (OB) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Outbrain Inc. (OB)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Outbrain Inc. (OB)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.