Outbrain 2025 Q1 Earnings Misses Targets as Net Loss Widens 987.9%

Outbrain (OB) reported its fiscal 2025 Q1 earnings on May 12th, 2025. Outbrain's performance fell short of analyst expectations, with revenue reaching $286.36 million compared to the consensus estimate of $279.75 million, marking a slight beat. However, earnings per share (EPS) were a significant miss at -$0.70 versus the expected -$0.11, indicating deeper losses. The company's guidance for Q2 2025 remains in line with previous forecasts, expecting Ex-TAC gross profit between $141 million and $150 million and Adjusted EBITDA between $26 million and $34 million. Despite challenges, Outbrain reiterated its confidence in achieving synergies from the Teads acquisition and maintaining financial performance throughout 2025.

Revenue

The total revenue of Outbrain increased by 32.0% to $286.36 million in 2025 Q1, up from $216.96 million in 2024 Q1.

Earnings/Net Income

Outbrain's losses deepened to $0.70 per share in 2025 Q1 from a loss of $0.10 per share in 2024 Q1, reflecting a concerning increase.

Post-Earnings Price Action Review

The stock price of Outbrain experienced a decline following the earnings report, falling by 12.50% during the latest trading day. Over the past week, the stock dropped by 7.41%, and month-to-date, it has decreased by 7.68%. Historical analysis suggests a pattern where buying OB shares after revenue misses and holding for 30 days could yield specific outcomes. While the immediate impact on share price has been negative, investors might consider longer-term performance trends when reacting to earnings reports. The recent acquisition of Teads and integration progress may offer potential strategic benefits, despite short-term market reactions. Investors are advised to monitor the company's strategic initiatives and market conditions to assess future stock movements.

CEO Commentary

David Kostman, CEO of Teads, expressed optimism about the company's performance following the acquisition of Teads, highlighting a strong start in Q1 2025 with revenue surpassing expectations at $286.4 million, a 32% year-over-year increase. He noted that the integration is on track, with significant milestones achieved and strong feedback from advertisers regarding their brandformance platform strategy. However, he acknowledged challenges, including a net loss of $54.8 million primarily due to acquisition-related costs and restructuring. Kostman emphasized the potential for cross-selling opportunities and the growing demand in the CTV segment, which saw over 100% revenue growth year-over-year.

Guidance

For Q2 2025, Outbrain expects Ex-TAC gross profit between $141 million and $150 million and Adjusted EBITDA between $26 million and $34 million. For the full year 2025, the company continues to guide for at least $180 million in Adjusted EBITDA, reflecting confidence in achieving synergies from the Teads acquisition and maintaining financial performance amidst a challenging macroeconomic environment.

Additional News

In recent weeks, Outbrain has been focused on integrating Teads, following the completion of its acquisition in February 2025 for approximately $900 million. The combined company, now operating under the Teads brand, aims to leverage synergies and expand its omnichannel outcomes platform. Outbrain has initiated strategic Joint Business Partnerships with major brands such as Ferrero, Haleon, Philip Morris International, and Beiersdorf. Additionally, the company has launched initial cross-selling of legacy Outbrain performance solutions to legacy Teads enterprise brand customers, with several campaigns successfully sold. The company is also celebrating the milestone of its CTV HomeScreen powering 1,500 campaigns, reflecting its commitment to innovation and growth.