Outbrain's Q4 2024: Dissecting Contradictions on Integration Timelines, Teads Performance, and Strategic Focus

These are the key contradictions discussed in Outbrain's latest 2024Q4 earnings call, specifically including: Technical Integration Timeline, Teads Performance Expectations, and Strategic Growth Focus:



Merger and Acquisition:
- Teads and Outbrain completed their merger, with Teads becoming the new name, marking a significant increase in combined ad spend to about $1.7 billion and adjusted EBITDA to about $230 million.
- The merger unites complementary solutions for branding and performance, creating an omnichannel outcomes platform.

Revenue Synergies and Cost Reductions:
- Teads and Outbrain expect to grow ex TAC revenue by a factor of 2.5x and EBITDA by a factor of 6x by 2026 through integration and synergy realization.
- Significant synergies are anticipated in compensation, noncompensation operating expenses, and traffic acquisition costs, with estimated savings of $45 million and $15 million by 2026, respectively.

CTV and Performance Marketing Integration:
- Teads' CTV business achieved 3x revenue growth between 2024 and 2023, with proprietary solutions and partnerships contributing to this growth.
- The integration of Outbrain's performance marketing capabilities is expected to expand opportunities in the SME segment and enhance CTV performance measurement and optimization.

France and U.S. Market Performance:
- Teads' Q4 revenues declined due to political instability in France, impacting 25% of year-over-year revenue, and management distractions in the U.S., causing a 20% year-over-year decline.
- The company attributes these issues to temporary factors and expects a return to growth in these regions.