Nexxen International's Undervalued Growth Trajectory in the CTV Advertising Boom

The global streaming ad market is on a collision course with the future—and Nexxen International (NEXN) is positioned to capitalize. With Connected TV (CTV) revenue surging 40% year-over-year to $26.4 million in Q1 2025, the company has solidified its role as a leader in the $100 billion+ advanced TV advertising sector. Yet, its valuation remains stubbornly disconnected from its structural growth drivers. Here’s why investors should act now.

CTV Dominance: A $100 Billion Market’s New Kingmaker

Nexxen’s Q1 results underscore its operational mastery of the CTV shift. CTV now accounts for 37% of programmatic revenue, up from 29% a year ago, reflecting its ability to capture a disproportionate share of this high-margin segment. The company’s AI-driven platform, nexAI, and strategic partnerships—such as expanding Tubi into the U.K. and deepening ties with FOX Sports and DirecTV—are fueling this growth.

The CTV market is no longer a niche opportunity; it’s the new battleground for advertisers. Nexxen’s focus on data-driven targeting and programmatic efficiency has allowed it to outpace peers, with CTV revenue growth outpacing total programmatic revenue growth (10% YoY) by a factor of four. This is a company owning the secular shift.

Margin Expansion: Leverage at Scale

While top-line growth is impressive, Nexxen’s true magic lies in its operational leverage. Adjusted EBITDA margins have more than doubled year-over-year, rising to 31% in Q1 2025 from 17% in 2024, as higher-margin CTV revenue scales. This isn’t just a one-quarter blip; it’s a structural improvement.

The tech-driven model—from AI-powered ad optimization to streamlined trading—has reduced costs and amplified returns. With $23.1 million in Q1 Adjusted EBITDA (up 95% YoY), Nexxen is proving that CTV isn’t just a growth lever but a profit machine.

Balance Sheet Strength: A Bulwark Against Uncertainty

Nexxen’s cash-rich balance sheet ($164.7 million in cash, zero long-term debt) and shareholder-friendly policies further amplify its appeal. The recent announcement of a $50 million stock repurchase program signals confidence in its valuation. With an enterprise value of just 5.6x 2025E EBITDA (versus a sector average of 8.75x), the stock is priced for stagnation—despite Nexxen’s roadmap for $380 million in Contribution ex-TAC and $125 million in Adjusted EBITDA this year.

Near-Term Catalysts: The Investor Day Tipping Point

The May 22 investor day is a critical inflection point. Management will detail upgrades to the nexAI platform, which promises to deepen client engagement and further monetize CTV inventory. Additionally, the event will likely outline a long-term vision to capitalize on the shift to streaming—a market expected to hit $180 billion by 2027.

The Undervalued Growth Case: Why NEXN is a Rare Buy

Nexxen is a rare gem in an ad tech sector still digesting macroeconomic headwinds and regulatory scrutiny. Its low valuation multiple, coupled with margin expansion and a fortress balance sheet, creates a compelling risk/reward profile. The disconnect between Nexxen’s fundamentals and its stock price is stark:

• Undervalued at ~6x 2025E EBITDA versus sector averages of 9x+.
• 95% EBITDA growth in Q1, yet shares are down 15% YTD.
• $50M buyback and no debt to dilute returns.

Investors are missing the forest for the trees. Nexxen isn’t just riding a CTV wave—it’s redefining the rules of digital advertising.

Conclusion: Act Before the Market Catches Up

The May 22 investor day could be the catalyst to close this valuation gap. But why wait? Nexxen’s operational leverage, margin resilience, and strategic execution make it a standout play in a transformative industry. With a stock price still stuck in 2023’s rearview mirror, now is the time to buy in before the market realizes what’s on the screen.

Investment thesis: Buy NEXN. The CTV boom isn’t slowing—and neither is Nexxen.