Teads Holding Co.

(Dollars in millions, except share and per share amounts or otherwise stated)

1. Organization, Description of Business and Summary of Significant Accounting Policies

Organization and Description of Business

On June 6, 2025, Outbrain Inc. (“Outbrain”), operating under the new Teads brand following Outbrain’s acquisition (the “Acquisition”) of TEADS, a private limited liability company (société à responsabilité limitée) incorporated and existing under the laws of the Grand Duchy of Luxembourg (“Legacy Teads”), completed its corporate name change from Outbrain Inc. to Teads Holding Co. (together with its subsidiaries, “Teads,” the “Company,” “we,” “our,” or “us”). The Company is headquartered in New York, New York, with additional operations throughout North America, Europe, the Middle East, and Asia. The Company’s Common Stock, par value $0.001 per share (“Common Stock”), began trading on The Nasdaq Stock Market LLC under the “TEAD” ticker symbol effective June 10, 2025.

The Company operates a two-sided marketplace that creates a scaled, end-to-end advertising solution by maintaining direct relationships with global advertisers, including Fortune 500 brands and agency holding companies, as well as media owners spanning premium publishers to connected TV (“CTV”), application developers and other existing and emerging content platforms. The Company generates revenue primarily from advertisers purchasing media owner inventory through its platform. The Company’s platform is designed to enable advertisers to reach their audiences across the digital advertising ecosystem and drive desired outcomes from those audiences at each step of the marketing funnel. The Company continues to focus on providing efficient, high-impact supply chains for advertisers and sustainable advertising revenue for media owners as the digital advertising ecosystem evolves.

Basis of Presentation

The accompanying condensed consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and are unaudited. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Accordingly, these condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission on March 16, 2026 (“2025 Form 10-K”).

On February 3, 2025, Outbrain completed the Acquisition for a purchase price of $0.9 billion, comprised of a cash payment of $625 million and 43.75 million shares of Outbrain’s Common Stock. The Acquisition combined the offerings of Outbrain and Legacy Teads into one of the largest Open Internet platforms, allowing the Company to better serve enterprise brands and agencies, as well as direct response and small medium enterprise advertisers across different media environments. In connection with the Acquisition, the Company incurred transaction costs (direct acquisition costs) of $1.1 million and $12.1 million for the three and six months ended June 30, 2025, respectively which were included in general and administrative expenses. See Note 2, Acquisition, to the 2025 Form 10-K for additional information.

As a result of the Acquisition, the accompanying condensed consolidated financial statements include the results of Legacy Teads’ operations from the Acquisition date of February 3, 2025. Consequently, the financial information presented for the six months ended June 30, 2026 is not directly comparable to the financial information presented for the corresponding prior year period, which reflects the operations of Legacy Teads only from the Acquisition date of February 3, 2025. By contrast, each of the three-month periods ended June 30, 2026 and 2025 reflects a full three months of consolidated operations following the Acquisition.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and related disclosures as of the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Estimates and judgments are based on historical information and on various other assumptions that the Company believes are reasonable under the circumstances. Estimates and assumptions made in the accompanying condensed consolidated financial statements include, but are not limited to, the allowance for credit losses, sales allowance, software development costs eligible for capitalization, valuation of deferred tax assets, the useful lives of property and equipment, the useful lives and fair value of intangible assets, valuation of goodwill, the fair value of stock-based awards, benefit obligations, fair value of plan assets, and the recognition and measurement of income tax uncertainties and other contingencies. Actual results could differ materially from these estimates.

Revenue Recognition

The Company sells the placement of advertisements to media agencies and advertisers, which it collectively refers to as its customers. The Company’s customers include brands, performance marketers and other advertisers, which are collectively referred to as its advertisers, each of which contract for use of its services primarily through insertion orders or through self-service tools, allowing advertisers to establish budgets for their advertising campaigns. The Company generates revenue either directly from its customers or indirectly via demand-side platforms (DSPs). Revenue generated directly from its customers can be either on a self-serve basis, where the customer logs into the buying interface and sets up and manages a campaign, or on a managed basis where Company’s teams will log into the buying interface, set up and manage the campaign on behalf of the customers. The Company recognizes revenue pursuant to the five-step framework contained in ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) as further described in Note 1, Organization, Description of Business and Summary of Significant Accounting Policies—Revenue, to the 2025 Form 10-K.

The Company recognizes revenue at a point in time when the advertising is delivered or the outcome occurs, given the real‑time nature of delivery and measurement. The Company recognizes revenue over time when the customer simultaneously receives and consumes the benefits of a specific campaign. Revenue is earned across multiple monetization models using cost-per-click (“CPC”), cost-per-thousand impressions (“CPM”), cost-per-view (“CPV”), and cost-per-incremental action (“CPA”). Prices are typically denominated in unit rates (e.g., CPC, CPM, CPV, CPA) applied to measured delivery or outcomes. The Company estimates variable consideration based on actual delivery volume or measured outcomes, as well as allowances, discounts, rebates (including agency rebates), credits, incentives, or other price concessions. Variable consideration is estimated and included in the transaction price only to the extent it is probable that a significant reversal of cumulative revenue will not occur.

Consideration payable to a customer. The Company’s media partners are generally suppliers of inventory, not customers, in arrangements where the Company’s customer is the advertiser. Accordingly, payments to media partners, including revenue shares, guaranteed minimum payments, and programmatic supply costs, are recorded in cost of revenue. The Company evaluates any arrangement in which a counterparty plays multiple roles to determine whether any portion of the payment represents consideration payable to a customer under ASC 606. When amounts qualify as consideration payable to a customer, such amounts are recorded as a reduction of revenue, unless the Company receives a distinct good or service at fair value, in which case the amounts are recorded in operating expenses instead of reducing revenue.

Practical expedients. The Company’s chief operating decision-maker is not reviewing these different streams separately and therefore the Company has not disaggregated the revenue presentation by revenue stream but has shown the disaggregation by geography. See Note 14 for disaggregation of the Company’s revenue based on geography of where the Company’s marketers are physically located.

When performance obligations are satisfied over time and for which there is no variable consideration, the Company recognizes revenue in the amount to which it has a right to invoice the customer. This reflects the fact that the Company’s right to payment corresponds directly with the value of the Company’s performance completed to date, consistent with the practical expedient in ASC 606.

Principal vs. agent (gross vs. net) presentation. The Company generally acts as the principal because it controls the specified advertising inventory or the right to the advertising service before it is transferred to the advertiser. Accordingly, the Company presents revenue on a gross basis, with amounts payable to media partners recorded as traffic acquisition costs within cost of revenue.

Contract Balances. Contract liabilities primarily comprise advance payments from customers for future services and are recorded as deferred revenue in the Company’s consolidated balance sheets. The Company does not have contract assets because revenue is typically recognized as services are performed and billing generally aligns with delivery.

Cost of Revenue

Traffic Acquisition Costs. Traffic acquisition costs consist of amounts the Company owes to media partners for the purchase of or use of inventory. The Company incurs costs with its media partners, which may be publishers, third-party intermediaries or other parties such as original equipment manufacturers in the period in which certain actions, such as click-throughs, impressions or views, occur. Such costs due to media partners are based on the media partners’ contractual revenue share, programmatic bidding or guaranteed minimums based on certain media partner conditions. In some circumstances, the Company incurs costs based on a guaranteed minimum payment, which may be based on either impressions, page views or a fixed amount if the partner reaches certain performance targets, in exchange for guaranteed placement on specified portions of the media partners’ online properties. Traffic acquisition costs also include amounts payable to media partners whose supply is purchased programmatically.

In some instances, the Company may make upfront payments to media partners in connection with long-term contracts. The Company capitalizes these advance payments under these agreements if specific capitalization criteria have been met. The capitalization criteria includes the existence of future economic benefits to the Company, the existence of legally enforceable recoverability language (e.g., early termination clauses), management’s ability and intent to enforce the recoverability language and the ability to generate future earnings from the agreement in excess of amounts deferred. Capitalized amounts are amortized as traffic acquisition costs over the shorter of the period of contractual recoverability or the corresponding period of economic benefit. Amounts not yet paid are accrued systematically based on the Company’s estimate of user engagement.

Other Cost of Revenue. Other cost of revenue includes costs related to the management of data centers, hosting fees, data connectivity costs, and depreciation and amortization. It also includes the amortization of capitalized software developed or acquired for internal use in support of the Company’s revenue-generating technologies, as well as costs associated with studies and research that directly support these technologies. Additionally, other cost of revenue includes amortization of intangible assets related to developed technology acquired by the Company and used in its revenue-generating efforts.

Certain Risks and Concentrations

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, restricted cash, investments in marketable securities, and accounts receivable. The Company’s cash and cash equivalents, restricted cash and investments in marketable securities are generally invested in high-credit quality financial instruments with both banks and financial institutions to reduce the amount of exposure to any single financial institution.

The Company generally does not require collateral to secure accounts receivable, with the exception of certain customers with higher potential credit risk who are required to prepay for their campaigns. No single marketer accounted for 10% or more of the Company’s total revenue for the three and six months ended June 30, 2026 and 2025, or 10% or more of its gross accounts receivable balance as of June 30, 2026 and December 31, 2025. During the three and six months ended June 30, 2026 and 2025, none of the Company’s media partners accounted for 10% of its total traffic acquisition costs.

Segment Information

The Company hasone operating and reporting segment. The Company’s chief operating decision maker is its Chief Executive Officer who makes resource allocation decisions and assesses performance based on financial information presented on a consolidated basis.

Defined Benefit Plans

The Company maintains defined benefit pension plans in certain international locations which were acquired as part of the Acquisition. Pension benefits are based on employee age, years of service, and compensation. As of June 30, 2026 and December 31, 2025, the net pension liability was $7.3 million and $7.0 million, respectively. Total net periodic benefit cost was $0.2 million and $0.4 million for the three and six months ended June 30, 2026, respectively. For the comparable periods in 2025, the total net periodic benefit cost was $0.2 million and $0.4 million, respectively. Service cost is recorded within operating expenses, while all other cost components are recorded in other income, net. No cash contributions were required during the three and six months ended June 30, 2026 and 2025. See Note 14, Defined Benefit Plans, to the 2025 Form 10-K for additional information.

New Accounting Pronouncements

The Company has evaluated all Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board (“FASB”). Standards not summarized below were assessed and determined to be either inapplicable or are not expected to have a material impact on the Company’s consolidated financial position, results of operations, or cash flows.

Recently Issued Accounting Pronouncements

In September 2025, the FASB issued ASU 2025-06, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software” (“ASU 2025-06”). ASU 2025-06 removes all references to software project development stages, and requires capitalization to begin when management has authorized and committed to funding the project, and it is probable that the project will be completed and the software will be used to perform the function intended. ASU 2025-06 is effective for our annual reporting periods beginning after December 15, 2027, and for interim periods within those annual reporting periods, with early adoption permitted. The Company is in the process of evaluating the impact of ASU 2025-06 on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures” (“ASU 2024-03”). ASU 2024-03 requires disclosures about certain costs and expenses, including but not limited to, purchases of inventory; employee compensation; depreciation; intangible asset amortization; and selling expenses. The ASU is required to be applied prospectively and is effective for annual reporting periods beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. The Company is in the process of evaluating the impact of ASU 2024-03 on its consolidated financial statements and related disclosures.

See Note 1 to the Company’s audited consolidated financial statements for the year ended December 31, 2025 in the 2025 Form 10-K for a complete disclosure of the Company’s significant accounting policies.

2. Restructuring

2025 Restructuring Plans

On February 3, 2025, in connection with the completion of the Acquisition, the Company announced a restructuring plan (the “Plan”), as part of its efforts to streamline operations and reduce duplication of roles. The Plan involved a reduction in workforce of approximately 15%. The actions associated with the employee restructuring under the Plan were initiated in February 2025, were implemented in large part in the second quarter of 2025 and are substantially completed.

On December 3, 2025, the Company commenced a broader strategic restructuring plan (the “Strategic Plan”) intended to reduce operating costs, improve operating margins and advance the Company’s ongoing commitment to profitable growth. The Strategic Plan impacted approximately 10% of the Company’s employees globally. As of June 30, 2026, the Company recognized approximately $8.0 million related to severance and legal costs in connection with the Strategic Plan, and the actions associated with the Strategic Plan have been substantially completed, subject to certain remaining actions governed by local law and consultation requirements.

The Company recorded the following pre-tax charges within restructuring charges in its condensed consolidated statement of operations for the periods presented:

(1)For the three and six months ended June 30, 2026, includes $0.8 million and $2.1 million, respectively, related to sales and marketing and $0.4 million and $0.8 million, respectively, related to general and administrative expenses.

(2)For the three and six months ended June 30, 2025, includes zero and $0.8 million, respectively, related to research and development, $0.9 million and $5.9 million, respectively, related to sales and marketing, and $0.8 million and $2.3 million, respectively, related to general and administrative expenses.

The following table is a reconciliation of the beginning and ending balances for accrued severance and related liabilities recorded within accrued compensation and benefits and accrued and other current liabilities in the Company’s condensed consolidated balance sheets for the six months ended June 30, 2026:

3. Investments in Marketable Securities

All of the Company’s debt securities are classified as available-for-sale. The Company’s cash equivalents and investments as of June 30, 2026 and December 31, 2025 consisted of the following:

Proceeds from the sales of securities were $2.0 million for both the three and six months ended June 30, 2026 and $22.5 million for both the three and six months ended June 30, 2025. Additionally, the Company received proceeds from the maturity of securities of $8.3 million and $18.7 million for the three and six months ended June 30, 2026, respectively, and $3.0 million and $54.7 million for the three and six months ended June 30, 2025, respectively. Gross realized gains were insignificant during all periods presented. Gross realized gains and losses are reclassified from other comprehensive loss into other (expense) income and interest income, net, in the Company’s condensed consolidated statements of operations and are determined using the specific identification method.

As of June 30, 2026, all of the Company’s available-for-sale securities with a fair value of $5.5 million mature within one year.

As of June 30, 2026 and December 31, 2025, the Company’s investments have been in an immaterial gross unrealized loss position for less than 12 months. As such, no allowance for credit losses was recorded for these securities as of June 30, 2026 and December 31, 2025.

4. Goodwill and Intangible Assets

The change in the carrying value of the Company’s goodwill balance during the six months ended June 30, 2026 was as follows:

(1)Goodwill is net of accumulated impairment charges of $352.1 million related to a recognized non‑cash goodwill impairment charge during the fourth quarter of 2025 as a result of a sustained decrease in the Company’s stock price and related decline in market capitalization. The Company did not identify any triggering events or record any goodwill impairment charges during the six months ended June 30, 2026.

The gross carrying amount and accumulated amortization of the Company’s intangible assets are as follows:

During the first quarter of 2025, in connection with the post-Acquisition integration of the Legacy Teads business, the Company made a decision to discontinue its video product offering associated with its prior acquisition of video intelligence AG. Accordingly, the Company fully wrote off the associated intangible assets, as detailed below:

As of June 30, 2026, estimated amortization related to the Company’s identifiable intangible assets in future periods was as follows:

5. Balance Sheet Components

Accounts Receivable and Allowance for Credit Losses

Accounts receivable, net of allowance for credit losses consists of the following:

The allowance for credit losses consists of the following activity:

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consists of the following:

Property, Equipment and Capitalized Software, Net

Property, equipment and capitalized software, net consists of the following:

Accounts Payable

The Company’s accounts payable includes $180.1 million and $217.3 million of traffic acquisition costs as of June 30, 2026 and December 31, 2025, respectively.

Accrued and Other Current Liabilities

Accrued and other current liabilities consists of the following:

6. Fair Value Measurements

The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines the fair value of its financial instruments based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the Company uses the fair value hierarchy described below to distinguish between observable and unobservable inputs:

Level I— Valuations based on quoted prices in active markets for identical assets and liabilities at the measurement date;

Level II — Valuations based on quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be principally corroborated by observable market data for substantially the full term of the related assets or liabilities; and

Level III — Valuations based on unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data.

The following tables set forth the fair value of the Company’s financial assets and liabilities measured on a recurring basis by level within the fair value hierarchy:

(1)Money market securities are valued using Level I of the fair value hierarchy, while the fair values of commercial paper and corporate bonds are considered Level II and are obtained from independent pricing services, which may use various methods, including quoted prices for identical or similar securities in active and inactive markets. See Note 3 for additional detail relating to the Company’s fixed income securities by balance sheet location.

(2)Recorded within other assets.

(3)Recorded within prepaid expenses and other current assets.

(4)Recorded within accrued and other current liabilities.

The Company enters into foreign currency forward contracts to manage exposure to fluctuations in foreign exchange rates. Pursuant to the master netting agreement, the Company may offset the amounts payable in the same currency. However, the Company records the fair values of the assets and liabilities relating to its undesignated foreign currency forward contracts on a gross basis in its consolidated balance sheets and no amounts have been offset. The Company was not required to post cash collateral as of June 30, 2026.

By entering into foreign currency forward contracts, the Company is exposed to a potential credit risk that the counterparty to its contracts will fail to meet its contractual obligations. If a counterparty fails to perform, the Company’s maximum credit risk exposure would be the positive fair value of the foreign currency forward contracts, or any asset balance, which represents the amount the counterparty owes to the Company. In order to mitigate the counterparty risk, the Company performs an evaluation of its counterparty credit worthiness, and its forward contracts have a term of no more than 18 months. During the three and six months ended June 30, 2026, the Company recognized net gains of $0.5 million and $0.1 million, respectively, within other (expense) income and interest income, net in its condensed consolidated statement of operations, related to mark-to-market adjustments on its undesignated foreign currency forward contracts. The Company recorded corresponding net gains of $1.9 million and $1.1 million, respectively, for the three and six months ended June 30, 2025.

The carrying value of borrowings under the Overdraft Facility (as defined below) approximates fair value due to the short-term nature of the borrowings. The fair value of the Senior Secured Notes (as defined below) is estimated using Level II inputs, including external pricing data. The following table summarizes the carrying value and the estimated fair value of the Senior Secured Notes, based on Level II measurements of the fair value hierarchy:

See Note 8 for additional information relating to the Senior Secured Notes.

Non-Financial Assets

Non-financial assets, such as goodwill, definite-lived intangibles assets, operating lease right-of-use assets and property and equipment, are adjusted to fair value (Level III) only when an impairment is recognized. No impairment charges were recorded during the six months ended June 30, 2026. During the six months ended June 30, 2025, the Company recorded $15.5 million in impairment charges related to the discontinuation of a legacy video product offering which consisted of $15.1 million of intangible assets and $0.4 million of unamortized capitalized software development costs. In addition, the Company recorded a $0.1 million impairment charge related to a right-of-use asset during the first quarter of 2025.

7. Leases

The Company’s lease portfolio consists of office facilities, managed data center facilities and vehicles for its U.S. and international locations, with terms expiring through 2034. The Company accounts for these as operating leases and applies the short-term lease measurement and recognition exemption to leases with terms of 12 months or less. For real estate leases, the Company has elected the practical expedient to not separate lease and nonlease components.

The following table summarizes assets and liabilities related to the Company’s operating leases:

The following table presents the components of the Company’s total lease expense:

As of June 30, 2026, the maturities of the Company’s lease liabilities under operating leases were as follows:

The following table summarizes weighted-average lease terms and discount rates for the Company’s operating leases:

8. Debt Obligations

The following table presents the Company’s debt obligations as of June 30, 2026 and December 31, 2025:

10.000% Senior Secured Notes due 2030

In February 2025, the Company issued $637.5 million in aggregate principal amount of 10.000% senior secured notes due February 15, 2030 (the “Senior Secured Notes”). The Senior Secured Notes bear interest at 10.000% per annum, payable semi-annually on February 15 and August 15. In June 2025, the Company repurchased $9.3 million aggregate principal amount of the Senior Secured Notes for $8.0 million in cash, reducing the aggregate principal amount to $628.2 million.

During the three and six months ended June 30, 2026, the Company recognized interest expense related to the Senior Secured Notes of approximately $16.9 million and $33.7 million, respectively, which included a combined amortization of debt discount and deferred financing costs of $1.2 million and $2.3 million, respectively. As of June 30, 2026, the Senior Secured Notes had a carrying value of $607.4 million, net of unamortized discount and deferred financing costs. There have been no material changes to the terms of the Senior Secured Notes or related covenants since December 31, 2025. See Note 9, Debt Obligations—10% Senior Secured Notes due 2030, to the 2025 Form 10-K for additional information.

Credit Facilities

2025 Revolving Facility

The Company maintains a $100.0 million revolving credit facility (the “2025 Revolving Facility”) pursuant to the credit agreement (the “Credit Agreement”) dated February 3, 2025, among the Company, OT Midco Inc., the additional borrowers party thereto from time to time, Goldman Sachs Bank USA, as sole administrative agent and swingline lender, U.S. Bank Trust Company, National Association, as the collateral agent, and the lenders, issuing banks and arrangers party thereto from time to time. The 2025 Revolving Facility may be used for working capital and other general corporate purposes of the Company and its subsidiaries. Loans under the 2025 Revolving Facility bear interest, at the Company’s option, at (x) a secured overnight financing rate, subject to a “zero” floor, plus an interest rate margin of 4.25% per annum or (y) an alternate base rate plus an interest rate margin of 3.25% per annum. In addition, the 2025 Revolving Facility accrues an unused commitment fee at a rate ranging from 0.375% to 0.50%, depending on the Company’s senior secured net leverage ratio, as set forth in the Credit Agreement. As of June 30, 2026, no borrowings were outstanding under the 2025 Revolving Facility and the Company was in compliance with all applicable covenants. The 2025 Revolving Facility includes a springing financial covenant based on a maximum senior secured net leverage ratio. As of June 30, 2026, the available borrowing capacity was limited to $40.0 million (representing 40% of the facility limit) to maintain compliance with this covenant. There have been no material changes to the terms of the Credit Agreement since December 31, 2025. See Note 9, Debt Obligations—Credit Facilities—Credit Agreement, to the 2025 Form 10-K for additional information.

Short-Term Debt

The Company’s French subsidiary, Teads France SAS (“Teads France”), previously maintained an overdraft credit facility with HSBC (the “Overdraft Facility”) which was used to fund the general working capital needs of Teads France. In May 2026, the Company commenced a repayment plan with HSBC to terminate and fully pay down the Overdraft Facility. As of June 30, 2026, approximately $7.1 million (€6.2 million) in borrowings were outstanding under the Overdraft Facility, reflecting payments made during the second quarter of 2026. These outstanding borrowings are recorded within short-term debt in the Company’s condensed consolidated balance sheets. Subsequent to quarter-end, in July 2026, the Company made an additional payment of €1.25 million, reducing the remaining outstanding balance to €5.0 million. The Company expects to pay down the remaining balance of the Overdraft Facility by the end of 2026. See Note 9, Debt Obligations—Short-Term Debt, to the 2025 Form 10-K for additional information.

Interest Expense and Prior Period Activity

The Company recognized total interest expense of $17.4 million and $34.8 million for the three and six months ended June 30, 2026, respectively, primarily related to the Senior Secured Notes. For the comparable periods in 2025, the total interest expense was $17.5 million and $40.6 million, respectively. Interest expense for the three and six months ended June 30, 2025 includes $13.3 million related to the $625 million senior secured bridge term loan credit facility (the “Bridge Facility”), which was used to finance the Acquisition and subsequently repaid in full in February 2025. Additionally, in connection with the entry into the Credit Agreement in February 2025, the Company terminated its 2021 credit facility and recognized the remaining $0.2 million of unamortized deferred financing costs within interest expense.

9. Income Taxes

Due to the ongoing post-Acquisition integration efforts and inability to reliably estimate the annual effective tax rate, for the three and six months ended June 30, 2026 and the three and six months ended June 30, 2025, the Company’s interim provision for or benefit from income taxes is computed using the actual year-to-date results rather than an estimated annual effective tax rate.

The Company’s effective tax rates for the three and six months ended June 30, 2026 were (20.8)% and (8.4)%, respectively. The Company’s effective tax rates for the three and six months ended June 30, 2026 were lower than the U.S. federal statutory tax rate of 21%, primarily due to pre-tax loss, including U.S. and various non-U.S. losses being subject to valuation allowance, during the three and six months ended June 30, 2026.

The Company’s effective tax rates for the three and six months ended June 30, 2025 were 28.7% and 21.5%, respectively. The Company’s effective tax rates for the three and six months ended June 30, 2025, were higher than the U.S. federal statutory tax rate of 21%, primarily due to increased concentration of profitability in lower-tax jurisdictions, partially offset by an increase in uncertain tax positions, coupled with the pre-tax loss during the three months ended June 30, 2025.

10. Commitments and Contingencies

Legal Proceedings and Other Matters

From time to time, the Company is involved in, or may become subject to, legal proceedings, claims and government investigations arising in the ordinary course of business, including disputes related to intellectual property, commercial agreements, privacy matters and employment issues. We describe below certain legal proceedings to which we are a party.

Verve Group Arbitration

As previously disclosed in our 2025 Form 10-K and our Form 10-Q for the quarter ended March 31, 2026, we are involved in a dispute with Verve Group Europe GmbH (“Verve Group”) and its affiliate Smaato, Inc. (“Smaato” and together with Verve Group, “Verve”). The dispute relates to withholdings we applied to Verve’s accounts following the identification of significant volumes of invalid traffic and non-compliant activity originating from Verve’s inventory, and the amounts at issue total approximately $8.1 million in connection with certain disputed invoices. The matter is now proceeding in arbitration before JAMS. We believe Verve’s claims are without merit, as it is our position that our withholdings were based on documented traffic quality issues, and we intend to defend the matters vigorously.

Based on the information currently available to us regarding these matters, we have not recorded an accrual as a loss is not considered probable or reasonably estimable. We will continue to monitor and evaluate the status of these matters each quarter to determine the need for additional disclosure pursuant to ASC 450.

Google Litigation

Subsequent to quarter-end, on August 3, 2026, the Company filed a lawsuit against Google LLC and Alphabet Inc. (together, “Google”) in the United States District Court for the Southern District of New York. The complaint alleges that Google has engaged in anticompetitive conduct in the ad exchange and publisher ad server markets in violation of the federal antitrust laws, including actions that restrict publishers’ ability to use competing services and favor Google’s own advertising exchange, and asserts related claims under New York statutory and common law. The Company is seeking monetary damages, injunctive and declaratory relief, and costs of suit and expenses. The Company intends to pursue its claims vigorously, but cannot predict the outcome of this matter at this early stage.

Other Matters

In addition to the matters described above, we are subject to various other legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business. We do not believe that the final outcome of any of these matters, individually or in the aggregate, will have a material adverse effect on our business, operating results, cash flows or financial condition.

In connection with the Acquisition, the Company identified and recorded a $20.1 million provision related to certain income tax items under ASC 740, “Income Taxes,” and an $8.6 million provision related to certain non-income tax items accounted for under ASC 450, “Contingencies,” within contingent tax liabilities in its condensed consolidated balance sheet as of June 30, 2026. The Company has also recorded an indemnification asset in the full amount of the provision of $28.7 million, as the Company is indemnified against certain tax liabilities under the Share Purchase Agreement, dated August 1, 2024, with Altice Teads S.A. (“Altice Teads”), as amended on February 3, 2025. Altice Teads’ indemnification obligation may be increased if other indemnified risks materialize and will remain in place until all covered matters are resolved.

Any determination or estimate relating to the future resolution of the Company’s legal proceedings is inherently uncertain and involves significant judgment. This is especially true in the early stages of a legal matter when legal issues and facts have not been thoroughly analyzed, in situations where the claimants seek very large or indeterminate damages, where cases present novel legal theories or involve a large number of parties, or where claims or other actions may be possible but have not been brought. As a result of this uncertainty, the Company may not be able to determine whether a favorable or unfavorable outcome is remote, reasonably likely, or probable, or to estimate the amount or range of loss until relatively late in the course of a legal matter. Further, any judgment or estimate relating to claims may change over time in light of developments, and actual outcomes may differ materially from our estimates.

11. Stockholders’ Equity

Equity Acquisition Consideration

On February 3, 2025, as part of the equity portion of the Acquisition consideration, the Company issued 30,320,161 shares of new Common Stock and reissued all 13,429,839 shares of its Treasury Stock at $6.01 per share. A $6.3 million gain on issuance of Treasury Stock, representing the excess of the fair value at the time of issuance of $80.7 million over the original cost of $74.4 million, was recorded to additional paid-in capital. In addition, the Company incurred direct stock issuance costs of approximately $1.6 million, which have been recorded as a reduction to additional paid-in capital.

Share Repurchases

In December 2022, the Company’s Board of Directors (“Board”) authorized a $30 million share repurchase program. The Company did not repurchase any shares of Common Stock during the three and six months ended June 30, 2026, and 2025. As of June 30, 2026,$6.6 million remained available for repurchase under the program. Commission costs associated with share repurchases and any excise taxes accrued as a result of the Inflation Reduction Act of 2022 do not reduce the remaining authorized amount under the repurchase programs.

In addition, the Company may periodically withhold shares to satisfy employee tax withholding obligations arising in connection with the vesting of restricted stock units and exercise of options and warrants in accordance with the terms of the Company’s equity incentive plans and the underlying award agreements.

During the three and six months ended June 30, 2026, the Company withheld 63,309 and 108,470 shares, respectively, with fair values of less than $0.1 million and $0.1 million, respectively, to satisfy employee tax withholding obligations. During the three and six months ended June 30, 2025, the Company withheld 70,108 and 143,108 shares, respectively, with fair values of $0.2 million and $0.6 million, respectively.

Accumulated Other Comprehensive Income (Loss)

The following table details the changes in accumulated other comprehensive income (loss), net of tax:

(1)The tax effects related to realized and unrealized gains on investments in marketable securities was immaterial for the three and six months ended June 30, 2026.

12. Stock-Based Compensation

Equity Incentive Plans

In July 2021, the Board and the Company’s stockholders approved the 2021 Long-Term Incentive Plan (the “2021 Plan”), under which stock options, restricted stock units (“RSUs”) and performance stock units (“PSUs”) may be granted. Awards previously issued under the 2007 Omnibus Securities and Incentive Plan, as amended and restated (the “2007 Plan”), remain subject to that plan.

As of June 30, 2026,2,596,726 and 628,816 shares were available for grant under the 2021 Plan and the 2007 Plan, respectively. The Company generally issues new shares upon settlement of equity awards.

The Company recognizes stock-based compensation based on grant date fair value and accounts for forfeitures as they occur.

The following table summarizes stock-based compensation expense recognized in the Company’s condensed consolidated statements of operations for the periods presented:

As of June 30, 2026, unrecognized compensation expense was approximately $16.6 million for RSUs and $1.3 million for PSUs.

The following table summarizes stock option, RSU and PSU activity for the six months ended June 30, 2026:

Restricted Stock Units

RSUs are granted to eligible employees and non-employee directors with fair value based on the Company’s stock price on the grant date. Compensation expense is recognized on a straight-line basis over the service period. During the six months ended June 30, 2026, the Company granted 5,895,600 RSUs with a weighted average grant date fair value of $0.92 per share.

Performance Stock Units

PSUs are granted to senior executives and other key employees and include both performance-based and market-based awards.

Performance-Based PSUs

The fair value of performance-based PSUs is based on the Company’s stock price on the grant date. These awards vest based on continued service and achievement of specified financial metric-based performance targets over the performance period (typically three years). Compensation expense is recognized ratably over the performance period based on the probability of achieving the performance conditions. The number of shares that may be earned is subject to a maximum of 150% of the target award. During the six months ended June 30, 2026, the Company granted 564,000 performance-based PSUs with a weighted average grant date fair value of $0.96 per share.

Market-Based PSUs

The Company also grants market-based PSUs to senior executives and other key employees with vesting based on total shareholder return (“TSR”) performance and continued service. These awards include: Absolute TSR awards, which vest based on achievement of specified stock price targets, with payout levels ranging from 0% to 100% of target, and Relative TSR awards, which vest based on the Company’s TSR performance relative to a designated peer group, with payout levels ranging from 0% to 150% of target. During the six months ended June 30, 2026, the Company granted 289,000 market-based PSUs with a weighted average grant date fair value of $1.09 per share.

The fair value of market-based PSUs is determined on the grant date using a Monte Carlo simulation. Compensation expense is recognized using an accelerated attribution method over the applicable service period and is not reversed if the market condition is not achieved. The following assumptions were used to estimate the fair value of the Company’s market-based PSUs granted during the six months ended June 30, 2026:

Stock-Based Awards Granted Outside of Equity Incentive Plans

Warrants

As of June 30, 2026,48,529 warrants were outstanding and exercisable with a weighted average exercise price of $7.34. These warrants expire in September 2026.

Employee Stock Purchase Plan

As of June 30, 2026, approximately 4,310,250 shares were reserved under the Company’s 2021 Employee Stock Purchase Plan (the “ESPP”), which is subject to annual automatic evergreen increases. The plan is not yet active and no shares have been issued thereunder.

See Note 13 to the 2025 Form 10-K for additional information relating to the Company’s share-based compensation awards.

13. Net Income (Loss) per Common Share

The following table presents the computation of the Company’s basic and diluted net income (loss) per share:

The Company’s PSUs are only included in diluted net income (loss) per share to the extent the underlying performance conditions have been satisfied at the end of the reporting period, or would be considered satisfied if the end of the reporting period was the end of the related performance period and the result would be dilutive.

The following weighted-average shares have been excluded from the calculation of diluted net income (loss) per share attributable to holders of Common Stock for each period presented because they are anti-dilutive:

14. Segment and Geographic Information

The Company hasone operating and reporting segment as the Company’s Chief Operating Decision Maker (“CODM”) reviews its performance and allocates resources based on its overall business operations with no distinct geographic or product lines that meet the criteria for separate segment reporting. The Company’s CODM is its Chief Executive Officer, David Kostman. The accounting policies applied to the segment are the same as those described in the summary of significant accounting policies.

The Company generates its revenue by operating a two-sided technology platform that drives business results by connecting media owners and advertisers with engaged audiences to drive business outcomes. The Company’s platform enables thousands of digital media owners to provide tailored experiences to their audiences, delivering audience engagement and monetization. For advertisers, the Company’s platform optimizes audience attention and engagement to deliver greater return on investment at each step of the marketing funnel. This segment constitutes 100% of the Company’s consolidated revenue and profit and is the primary focus of the Company’s management’s decision making regarding product development, marketing strategies and capital allocation.

The table below summarizes the results of operations that are provided to the CODM. As the Company hasone reporting segment, net income (loss) is used as the measure of profit or loss to assess segment performance and allocate resources. The Company’s asset information is not regularly provided to the Company’s CODM.

(1)Certain prior period amounts within the segment footnote have been reclassified to conform to the current period presentation. These reclassifications had no impact on previously reported consolidated financial results or total segment profit.

(2)Other segment expenses primarily consist of office and related expenses, other professional fees, non-income taxes, provision for credit losses, and other expenses.

The following table presents total revenue based on where the Company’s advertisers are physically located:

(1)Includes U.S. revenues of $69.0 million and $136.0 million for the three and six months ended June 30, 2026, respectively, and $90.1 million and $169.3 million for the three and six months ended June 30, 2025, respectively.

The Company’s long-lived assets by geographic location, which are comprised of property, equipment and capitalized software, net and operating lease right-of-use assets, net are summarized below: