Teads Holding Co.
For the period ended Sep 30, 2026. Filed Nov 9, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 9, 2026
TEAD$0.19+7.5%Stored close · as of Nov 9, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-07.
0001454938-26-000054
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-09.
0001454938-26-000077
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 189 previous paragraphs and 211 current paragraphs.
119 unchanged; 53 reworded; 38 added; 17 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (38)
Current report
Recent Developments
Current report
A/R Facility
Current report
On September 30, 2026, certain of our subsidiaries entered into a four-year $125.0 million non-recourse accounts receivable financing facility (the “A/R Facility”), scheduled to terminate on September 30, 2030, subject to earlier termination in certain circumstances. As of September 30, 2026, $30.9 million of borrowings were outstanding under the A/R Facility. For additional information, see “—Liquidity and Capital Resources” below and Note 8, Debt Obligations, to the accompanying condensed consolidated financial statements.
Current report
Goodwill Impairment
Current report
During the third quarter of 2026, continued weakness primarily due to changing search and open-web traffic dynamics, including lower publisher traffic and available advertising impressions, led us to reduce projected revenue and profitability and extend the anticipated recovery period. These developments constituted a triggering event, prompting an interim goodwill impairment assessment as of September 30, 2026. As a result, we recorded a non-cash goodwill impairment charge of $272.4 million during the three and nine months ended September 30, 2026, representing a full impairment of our remaining goodwill balance. Following the recording of this charge, the carrying value of our goodwill is zero. This non-cash impairment charge does not affect our cash flows, liquidity, or compliance with debt covenants, nor does it impact our ongoing operations. For additional information, see Note 4, Goodwill and Intangible Assets, to the accompanying condensed consolidated financial statements.
Current report
For the three months ended September 30, 2026, consolidated gross profit was $60.9 million and consolidated Ex-TAC Gross Profit was $93.5 million, compared to $105.7 million and $130.5 million, respectively, for the three months ended September 30, 2025. Our recent results reflect declines in both of our businesses, Enterprise and Direct Response & SME, primarily as a result of lower traffic to our media partners on the Open Internet, which reduces the advertising inventory available for us to monetize, with a more pronounced decline in Direct Response & SME. See “—Generative AI and Publisher Traffic Trends” below.
Current report
Our Enterprise business, focused largely on branding dollars, consists of global brand and agency partnerships utilizing our omnichannel supply inclusive of CTV and is our strategic priority. Enterprise delivered approximately $75 million in Ex-TAC Gross Profit in the three months ended September 30, 2026, compared to approximately $87 million in the three months ended September 30, 2025. The decrease primarily reflected lower traffic to our media partners on the Open Internet, partially offset by growth in CTV in certain geographies, as well as softer brand advertising demand amid the macroeconomic conditions described under “—Macroeconomic Environment” below and competitive pressures.
Current report
Our Direct Response & SME business, focused on performance dollars, includes affiliates, search and performance buyers. Direct Response & SME delivered approximately $20 million in Ex-TAC Gross Profit in the three months ended September 30, 2026, compared to approximately $38 million in the three months ended September 30, 2025. The decrease primarily reflected lower traffic to our media partners on the Open Internet, as well as changes in our supply portfolio and the buying patterns of certain large buyers.
Current report
Revenue for the three months ended September 30, 2026 decreased $83.7 million, or 26.3%, to $235.1 million, from $318.8 million for the three months ended September 30, 2025. Revenue for the nine months ended September 30, 2026 decreased $162.6 million, or 17.1%, to $785.6 million, from $948.2 million for the nine months ended September 30, 2025.
Current report
Revenue for the three months ended September 30, 2026 included net unfavorable foreign currency effects of approximately $1.5 million, and on a constant currency basis, revenue decreased $82.2 million, or 25.8%, compared to the corresponding prior year period. Revenue for the nine months ended September 30, 2026 included net favorable foreign currency effects of approximately $9.5 million, and on a constant currency basis, revenue decreased $172.1 million, or 18.2%, compared to the corresponding prior year period.
Current report
As a percentage of revenue, TAC increased to 63.0% for the three months ended September 30, 2026, from 59.0% for the three months ended September 30, 2025, primarily as a result of the $6.4 million non-cash impairment of a publisher commercial agreement asset. As a percentage of revenue, TAC decreased to 59.5% for the nine months ended September 30, 2026 from 60.2% for the nine months ended September 30, 2025.
Current report
TAC for the three months ended September 30, 2026 included net favorable foreign currency effects of approximately $0.8 million, and on a constant currency basis, TAC decreased $39.4 million, or 20.9%, compared to the corresponding prior year period. TAC for the nine months ended September 30, 2026 included net unfavorable foreign currency effects of approximately $5.1 million and on a constant currency basis, TAC decreased $108.2 million, or 19.0%, compared to the corresponding prior year period.
Current report
Gross profit— decreased $44.8 million, or 42.4%, to $60.9 million for the three months ended September 30, 2026, compared to $105.7 million for the three months ended September 30, 2025. Gross profit decreased $68.5 million, or 22.2%, to $240.1 million for the nine months ended September 30, 2026, compared to $308.7 million for the nine months ended September 30, 2025.
Current report
Gross profit margin— decreased 7.3 percentage points to 25.9% for the three months ended September 30, 2026, compared to 33.2% for the three months ended September 30, 2025 primarily driven by a $6.4 million non-cash impairment of a publisher commercial agreement asset that increased TAC as a percentage of revenue combined with higher technology costs from our expanded platform that increased other cost of revenue. Gross profit margin decreased 2.0 percentage points to 30.6% for the nine months ended September 30, 2026, compared to 32.6% for the nine months ended September 30, 2025 due to higher technology costs, increased amortization expense, and an extra month of consolidated operations, which outpaced a modest reduction in TAC as a percentage of revenue.
Current report
Operating expenses increased $257.0 million, or 229.5%, to $369.0 million for the three months ended September 30, 2026, from $112.0 million for the three months ended September 30, 2025. The increase was primarily driven by the following factors:
Current report
•Goodwill impairment charges — non-cash goodwill impairment charge of $272.4 million recognized during the three months ended September 30, 2026 as a result of continued weakness primarily due to changing search and open-web traffic dynamics, including lower publisher traffic and available advertising impressions, which led us to reduce projected revenue and profitability and extend the anticipated recovery period. These developments constituted a triggering event, prompting an interim goodwill impairment assessment as of September 30, 2026 that indicated the reporting unit’s carrying value exceeded its fair value.
Current report
partially offset by,
Current report
•General and administrative expenses — decreased $8.7 million from $32.0 million for the three months ended September 30, 2025, to $23.3 million for the three months ended September 30, 2026 driven by a $2.4 million decrease in strategic, transaction and integration-related costs, a $2.1 million decrease in bad debt expense, a $1.9 million decrease in non-income tax expense, and a $1.0 million decrease in employee-related incentive compensation costs; and
Current report
Operating expenses for the three months ended September 30, 2026, included net favorable foreign currency effects of approximately $6.8 million, and on a constant currency basis, operating expenses increased $263.8 million, or 235.5%, compared to the corresponding prior year period.
Current report
•Goodwill impairment charges — non-cash goodwill impairment charge of $272.4 million recognized during the nine months ended September 30, 2026 as a result of continued weakness primarily due to changing search and open-web traffic dynamics, including lower publisher traffic and available advertising impressions, which led us to reduce projected revenue and profitability and extend the anticipated recovery period. These developments constituted a triggering event, prompting an interim goodwill impairment assessment as of September 30, 2026 that indicated the reporting unit’s carrying value exceeded its fair value.
Current report
partially offset by,
Current report
Other (expense) income, net improved $0.7 million, or 3.9%, to $(17.4) million for the three months ended September 30, 2026, from $(18.1) million for the three months ended September 30, 2025.
Current report
(Benefit) Provision for Income Taxes
Current report
(1)The three and nine months ended September 30, 2026 included $6.4 million non-cash impairment of a publisher commercial agreement asset.
Current report
We have experienced significant disruption and competitive pressures in our industry driven by an evolution in media consumption and consumer behavior trends, including the proliferation of social media properties, streaming services and other platforms, as well as the adoption of AI. These factors have negatively impacted our business, including our stock price, as described under “—Generative AI and Publisher Traffic Trends” above.
Current report
As of September 30, 2026, the Company had an accumulated deficit of $318.2 million compared to accumulated equity of $95.4 million at December 31, 2025. For the nine months ended September 30, 2026, the Company incurred a net loss of $406.7 million, compared to net loss of $88.8 million for the nine months ended September 30, 2025, and $53.6 million of cash used in operating activities compared to cash provided by operations of $0.3 million for the nine months ended September 30, 2025. The net loss included a non-cash goodwill impairment charge recorded in the third quarter of 2026. Refer to Note 4, Goodwill and Intangible Assets, to the accompanying condensed consolidated financial statements for additional information regarding the goodwill impairment.
Current report
In August 2026, certain credit ratings agencies that provide credit ratings of us and our debt, including Fitch Ratings and S&P Global Ratings, took actions to downgrade such ratings. Changes with respect to our corporate and debt credit ratings, like the downgrades that occurred earlier this year, could limit access to or make it more difficult or costly for us to obtain financing on terms favorable to us or at all.
Current report
Our liquidity depends on operating performance, the timing and collectability of receivables from advertisers, payments to media partners, debt service and other contractual cash requirements. The closing of the A/R Facility in September 2026 provides an additional source of liquidity, but borrowing availability is subject to a borrowing base which fluctuates and a minimum liquidity covenant (see “—Sources of Liquidity”). Refer to Note 8, Debt Obligations, to the accompanying condensed consolidated financial statements for additional information. We continue to actively evaluate our capital structure and intend to engage with our stakeholders to explore transactions to strengthen our balance sheet and reduce our leverage and interest expense, however the success of these plans is not entirely within our control. Additionally, we have executed and continue to identify and implement further cost-savings initiatives and restructurings to proactively manage our liquidity and seek to optimize operations, and have engaged advisors for this purpose. We have identified areas where we will implement cost savings and restructure our business, including workforce scale and efficiency initiatives. Based on our current operating forecast and stated plans that are within our control, we believe that our cash and cash equivalents, expected operating cash flows and available borrowing capacity under our financing arrangements, will be sufficient to meet our obligations as they become due for at least the next 12 months.
Current report
However, due to the continued industry pressures and volatility in the business, our assessment is inherently subjective, judgment-based and subject to various risks and uncertainties. Therefore, there can be no certainty that our plans will be successful. Absent acting on the plans described above, we will require additional liquidity to continue our operations over the next 12 months.
Current report
As of September 30, 2026, we had cash and cash equivalents of $90.3 million and no short-term investments. Additional borrowing availability was $25.0 million under our 2025 Revolving Facility and $29.1 million under our A/R Facility, subject to applicable borrowing-base requirements, covenant limitations and other contractual conditions. Subsequent borrowings under the A/R Facility and the 2025 Revolving Facility, and repayment of the 2025 Revolving Facility, are described below.
Current report
A/R Facility
Current report
On September 30, 2026, certain of our subsidiaries entered into the A/R Facility, which is scheduled to terminate on September 30, 2030, subject to earlier termination, including if more than $35.0 million of the Senior Secured Notes remains outstanding 90 days prior to their maturity and liquidity, as defined in the A/R Facility, at that time is not sufficient to repay those Senior Secured Notes in full. The maximum availability under the A/R Facility is limited by eligible accounts receivable balances, as defined under the terms of the A/R Facility, and we expect our availability under the A/R Facility to fluctuate as those balances change. As of September 30, 2026, the maximum availability and the amount outstanding under the A/R Facility were approximately $60.0 million and $30.9 million, respectively. On October 1, 2026, we borrowed an additional €17.5 million and £3.0 million (approximately $23.7 million) under the A/R Facility. The A/R Facility requires us to maintain consolidated liquidity of at least $50.0 million at all times. A failure to comply with this requirement would permit the lenders to cease funding and to accelerate amounts outstanding under the A/R Facility. See Note 8, Debt Obligations, to the accompanying condensed consolidated financial statements.
Current report
The 2025 Revolving Facility includes a springing financial covenant requiring compliance with a maximum senior secured net leverage ratio when outstanding revolving loans and certain letter of credit obligations exceed 40% of the revolving commitments as of the end of a fiscal quarter. At September 30, 2026, additional borrowing availability was limited to $25.0 million after accounting for the $15.0 million outstanding balance and applicable covenant limitations. As of September 30, 2026, outstanding borrowings were $15.0 million, which we repaid in full on October 6, 2026. On October 22, 2026, we borrowed $40.0 million under the 2025 Revolving Facility. Following this borrowing, outstanding borrowings under the 2025 Revolving Facility equaled 40% of the revolving commitments, the level above which the springing financial covenant would be tested as of the end of a fiscal quarter. The Company was in compliance with all applicable covenants as of September 30, 2026.
Current report
As of September 30, 2026, approximately $628.2 million aggregate principal amount of Senior Secured Notes was outstanding, maturing on February 15, 2030. Annual cash interest requirements on the Senior Secured Notes are approximately $62.8 million, payable semi-annually in February and August. We also have contractual obligations for principal and interest payments under the A/R Facility, and borrowings under the A/R Facility may be required to be repaid prior to its scheduled termination if the borrowing base declines below the amount outstanding or an amortization event occurs. The $15.0 million outstanding under the 2025 Revolving Facility at September 30, 2026 was repaid on October 6, 2026, and on October 22, 2026, we borrowed $40.0 million under the 2025 Revolving Facility. We were in compliance with all applicable covenants as of September 30, 2026.
Current report
Net cash from operating activities decreased $53.9 million, from $0.3 million provided in the nine months ended September 30, 2025 to $53.6 million used in the nine months ended September 30, 2026. The decrease reflected a higher net loss after adjustments for non-cash items and less favorable changes in working capital. Changes in accounts payable, accrued expenses and other current liabilities used $54.8 million more cash than in the prior-year period, due in part to the timing of semiannual interest payments on our Senior Secured Notes. Cash paid for interest includes $62.8 million of semi-annual interest payments on our Senior Secured Notes in the current period compared to $32.1 million in the prior period. This was partially offset by $36.9 million of additional cash provided by changes in accounts receivable.
Current report
Goodwill
Current report
Goodwill represents the excess of the purchase price over the estimated fair value of the net tangible and identifiable intangible assets acquired in business combinations. Goodwill is not amortized but is tested for impairment at least annually in the fourth quarter, or more frequently if events or changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit is below its carrying amount. Under ASC 350, goodwill impairment testing is performed by comparing the fair value of a reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds fair value.
Current report
During the third quarter of 2026, continued weakness primarily due to changing search and open-web traffic dynamics, including lower publisher traffic and available advertising impressions, led us to reduce projected revenue and profitability and extend the anticipated recovery period. These developments constituted a triggering event, prompting an interim impairment assessment as of September 30, 2026. We evaluated our long-lived assets for impairment under ASC 360, “Property, Plant and Equipment,” prior to testing goodwill. A recoverability test performed as of September 30, 2026, determined that estimated undiscounted future cash flows exceeded the asset group’s carrying value. Consequently, the long-lived assets were deemed recoverable, and no impairment was recognized. We then conducted a quantitative goodwill impairment test during the third quarter of 2026 and estimated the fair value of our single reporting unit using a discounted cash flow model under the income approach. For this assessment, the reporting unit's carrying amount was determined on an invested-capital basis, differing from consolidated stockholders’ equity of approximately $(46) million immediately prior to impairment. Because the carrying amount exceeded estimated fair value, we recognized a non‑cash goodwill impairment charge of $272.4 million for the three and nine months ended September 30, 2026, fully impairing our remaining goodwill balance to zero.
Removed paragraphs (17)
Previous report
Post-Acquisition Strategy and Implementation
Previous report
Following the Acquisition, we focused on the integration of our operations amid operational challenges inherent in returning a combined global company to growth. Building on the restructuring of our go-to-market organization in the second half of 2025, we substantially completed the actions under our broader strategic restructuring plan (the “Strategic Plan”) announced in December 2025, which is intended to reduce operating costs, improve operating margins and advance the Company’s commitment to profitable growth. The Strategic Plan, which resulted from a comprehensive review of our business portfolio and operational structure, involved a reduction of our global workforce by approximately 10%. A key component of this strategy is the deliberate rationalization of our business portfolio and a focus on supply quality, including the “clean-up” of underperforming inventory. While these optimizations, alongside broader macroeconomic volatility and increased competition on the demand side, contributed to a year-over-year reduction in spend from certain customers, we believe these shifts are essential for the long-term health and transparency of our premium marketplace.
Previous report
Revenue for the three months ended June 30, 2026 decreased $58.5 million, or 17.0%, to $284.6 million, from $343.1 million for the three months ended June 30, 2025. Revenue for the six months ended June 30, 2026 decreased $78.9 million, or 12.5%, to $550.6 million, from $629.5 million for the six months ended June 30, 2025.
Previous report
Revenue for the three and six months ended June 30, 2026 included net favorable foreign currency effects of approximately $0.8 million and $11.6 million, respectively. On a constant currency basis, revenue decreased $59.3 million, or 17.3%, and $90.5 million, or 14.4%, respectively, compared to the corresponding prior year periods.
Previous report
As a percentage of revenue, traffic acquisition costs decreased to 56.6% for the three months ended June 30, 2026, from 58.0% for the three months ended June 30, 2025 and decreased to 58.0% for the six months ended June 30, 2026 from 60.7% for the six months ended June 30, 2025.
Previous report
Traffic acquisition costs for the three and six months ended June 30, 2026 included net unfavorable foreign currency effects of approximately $0.2 million and $6.1 million, respectively. On a constant currency basis, traffic acquisition costs decreased $37.9 million, or 19.1%, and $69.0 million, or 18.0%, respectively, for the three and six months ended June 30, 2026 compared to the corresponding prior year periods.
Previous report
Gross profit— decreased $24.7 million, or 20.5%, to $95.6 million for the three months ended June 30, 2026, compared to $120.3 million for the three months ended June 30, 2025. Gross profit decreased $23.7 million, or 11.7%, to $179.2 million for the six months ended June 30, 2026 compared to $202.9 million for the six months ended June 30, 2025. These decreases were primarily driven by the lower revenue discussed above, partially offset by lower traffic acquisition costs. The six-month decrease was also partially offset by the inclusion of an additional month of consolidated results in 2026 compared to 2025.
Previous report
As a percentage of revenue, total operating expenses increased to 39.1% for the three months ended June 30, 2026 from 35.7% for the three months ended June 30, 2025, primarily due to lower revenues, partially offset by a $9.4 million decrease in Sales and marketing expenses due to lower employee related expenses.
Previous report
•Sales and marketing expenses — The decreases discussed above were partially offset by $3.3 million increase compared to the six months ended June 30, 2025, primarily driven by additional amortization of acquired intangible assets.
Previous report
Other (expense) income, net decreased $1.7 million, or 9.7%, to $(19.5) million for the three months ended June 30, 2026, from $(17.8) million for the three months ended June 30, 2025. The decrease was primarily attributable to the absence in 2026 of a $1.2 million gain on the repurchase of long-term debt recognized during the second quarter of 2025.
Previous report
Provision (Benefit) for Income Taxes
Previous report
As of June 30, 2026, we believe that our operating cash flows, together with our cash and cash equivalents, investments, and available borrowing capacity, will be sufficient to fund our anticipated operating expenses and capital expenditures for at least the next 12 months. Our assessment of liquidity is subject to various risks and uncertainties, including our operating performance, the timing and collectability of receivables from advertisers and obligations to media partners.
Previous report
As of June 30, 2026, we had cash and cash equivalents of $88.0 million and short-term investments of $3.0 million. In addition, we had up to $40.0 million of available borrowing capacity under our 2025 Revolving Facility (as defined below), subject to customary conditions and covenant limitations.
Previous report
The 2025 Revolving Facility includes a customary springing financial covenant that requires the Company and our restricted subsidiaries to comply with a maximum senior secured net leverage ratio, in the event that utilization under the 2025 Revolving Facility exceeds 40%. As of June 30, 2026, our available borrowing capacity was limited to $40.0 million to maintain compliance with the springing financial covenant.
Previous report
As of June 30, 2026, we had approximately $628.2 million aggregate principal amount of Senior Secured Notes outstanding, which mature on February 15, 2030. The Senior Secured Notes require annual interest payments of approximately $62.8 million, payable semi-annually in February and August. We do not have any significant contractual principal debt maturities in the near term. We were in compliance with all applicable financial covenants as of June 30, 2026.
Previous report
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.
Previous report
Net cash provided by operating activities decreased $49.8 million, from net cash provided of $24.1 million for the six months ended June 30, 2025 to net cash used of $25.7 million for the six months ended June 30, 2026. The decrease primarily reflected lower operating profitability, a $30.1 million increase in cash paid for interest, including the $31.4 million semi-annual interest payment on our Senior Secured Notes made in February 2026, and changes in working capital.
Reworded paragraphs (53)
Previous wording
You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q (this “Report”) and in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission (“SEC”) on March 16, 2026 (“2025 Form 10-K”). In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, beliefs, and expectations, and involve risks and uncertainties that could cause actual results, events, or circumstances to differ materially from those projected in the forward-looking statements. Factors that could cause or contribute to these differences include those set forth in Part I, Item 1A of our 2025 Form 10-K, which is incorporated by reference in this Report, as such factors may be revised or supplemented in subsequent filings with the SEC, as well as those discussed below and elsewhere in this Report, including under the caption “Note About Forward-Looking Statements.”
Current wording
You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q (this “Report”) and in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission (“SEC”) on March 16, 2026 (“2025 Form 10-K”). In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, beliefs, and expectations, and involve risks and uncertainties that could cause actual results, events, or circumstances to differ materially from those projected in the forward-looking statements. Factors that could cause or contribute to these differences include those set forth in Part I, Item 1A of our 2025 Form 10-K, which is incorporated by reference in this Report, and Part II, Item 1A of this Report, as such factors may be revised or supplemented in subsequent filings with the SEC, as well as those discussed below and elsewhere in this Report, including under the caption “Note About Forward-Looking Statements.”
Previous wording
The purpose of this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is to provide information that management believes is necessary to understand our business, financial condition, and results of operations. The MD&A should be read in conjunction with our condensed consolidated financial statements and notes thereto. In addition to the condensed consolidated financial statements prepared in accordance with the generally accepted accounting principles in the United States (“GAAP”), we use certain non-GAAP financial measures throughout this discussion to provide investors with supplemental metrics used by our management for financial and operational decision making. These measures are supplemental and are not an alternative to our financial statements prepared in accordance with GAAP. See “Non-GAAP Reconciliations” in this Report for the definitions and limitations of these measures, and reconciliations to the most directly comparable GAAP financial measures.
Current wording
The purpose of this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is to provide information that management believes is necessary to understand our business, financial condition, and results of operations. The MD&A should be read in conjunction with our condensed consolidated financial statements and notes thereto. In addition to the condensed consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), we use certain non-GAAP financial measures throughout this discussion to provide investors with supplemental metrics used by our management for financial and operational decision making. These measures are supplemental and are not an alternative to our financial statements prepared in accordance with GAAP. See “Non-GAAP Reconciliations” in this Report for the definitions and limitations of these measures, and reconciliations to the most directly comparable GAAP financial measures.
Previous wording
As a result of the 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”), the accompanying condensed consolidated financial statements include the results of Legacy Teads’ operations from the Acquisition date of February 3, 2025. Our current results therefore reflect the fully consolidated operations of the combined company, and each of the three-month periods ended June 30, 2026 and 2025 reflects a full three months of consolidated operations following the Acquisition. However, 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. This overview highlights material developments in our business and should be read in conjunction with the more comprehensive business and industry discussion included in the 2025 Form 10-K.
Current wording
As a result of Outbrain Inc.’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”), which closed on February 3, 2025, the accompanying condensed consolidated financial statements include the results of Legacy Teads’ operations from February 3, 2025. Our current results therefore reflect the fully consolidated operations of the combined company, and each of the three-month periods ended September 30, 2026 and 2025 reflects a full three months of consolidated operations following the Acquisition. However, the financial information presented for the nine months ended September 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. This overview highlights material developments in our business and should be read in conjunction with the more comprehensive business and industry discussion included in the 2025 Form 10-K.
Previous wording
We are a leading omnichannel advertising platform focused on driving outcomes for brand and performance advertisers across the digital ecosystem. Our recent results highlight two different trajectories across our business: Enterprise advertisers, and Direct Response and SME advertisers. Our Enterprise business, focused largely on branding dollars, consists of global brand and agency partnerships utilizing our omnichannel supply inclusive of Connected TV and is our strategic priority. Enterprise delivered $89 million in Ex-TAC Gross Profit in the three months ended June 30, 2026. Our Direct Response and SME advertisers, focused on performance dollars, include affiliates, search and performance buyers. Direct Response and SME delivered $34 million in Ex-TAC Gross Profit in the three months ended June 30, 2026. This component of our business is experiencing headwinds primarily driven by broader industry trends, as described under “—Generative AI and Publisher Traffic Trends” below.
Current wording
We are a leading omnichannel advertising platform focused on driving outcomes for brand and performance advertisers across the digital ecosystem.
Previous wording
We have observed these combined factors contribute to an ongoing decline in page view volume for our publisher partners, thereby reducing the advertising inventory available for monetization on our platform. This decline disproportionately impacts our direct response and SME advertisers, which are most closely tied to open-web performance, and specifically our publisher feed inventory. The decline in page views has resulted in reductions in the buying patterns of direct response and SME advertisers. For our premium publisher partners, we estimate that page views declined by approximately 21% and approximately 16% for the three and six months ended June 30, 2026, respectively, compared to the corresponding prior year periods.
Current wording
We have observed these combined factors contribute to an ongoing decline in page view volume for our publisher partners, thereby reducing the advertising inventory available for monetization on our platform. This decline disproportionately impacts our Direct Response & SME advertisers, which are most closely tied to open-web performance, and specifically our publisher feed inventory. The decline in page views has resulted in reductions in the buying patterns of Direct Response & SME advertisers. For our premium publisher partners, we estimate that page views declined by approximately 18% and approximately 17% for the three and nine months ended September 30, 2026, respectively, compared to the corresponding prior year periods.
Previous wording
While this broader evolution presents challenges to traditional publisher traffic patterns, it also creates opportunities for platform innovation and engagement. Our strategy is intended to address these shifts in several respects. We launched Teads EngageOS, an AI-powered operating system for publishers that unifies editorial content and ad inventory, with the objective of optimizing total publisher revenue across a reader session — designed to protect audience engagement while delivering higher yield. In addition, we are opening additional programmatic buying channels at higher margins, including AI-native supply channels in emerging environments such as large language model interfaces, and launching a vertical video format that enables advertisers to use creative assets developed for other platforms. See “—Expansion Into New Environments, New Experiences and New Ad Formats” below.
Current wording
While this broader evolution presents challenges to traditional publisher traffic patterns, it also creates opportunities for platform innovation and engagement. Our strategy is intended to address these shifts in several respects. We launched Teads EngageOS, an AI-powered operating system for publishers that unifies editorial content and ad inventory, with the objective of optimizing total publisher revenue across a reader session — designed to protect audience engagement while delivering higher yield. In addition, we are opening additional programmatic buying channels at higher margins, including AI-native supply channels in emerging environments such as large language model interfaces, and launched a vertical video format that enables advertisers to use creative assets developed for other platforms. See “—Expansion Into New Environments, New Experiences and New Ad Formats” below.
Previous wording
Advertiser budgets and pricing on our platform fluctuate from period to period for a variety of reasons, including advertiser-specific cycles and preferences, quality of performance and ROAS, supply and demand balance, macroeconomic conditions, and seasonality. In order to grow our revenue and Ex-TAC Gross Profit and maximize value for our advertisers and media partners, our focus as a business is on driving business outcomes and ROAS for advertisers.
Current wording
Advertiser budgets and pricing on our platform fluctuate from period to period for a variety of reasons, including advertiser-specific cycles and preferences, competition, quality of performance and ROAS, supply and demand balance, macroeconomic conditions, and seasonality. In order to grow our revenue and Ex-TAC Gross Profit and maximize value for our advertisers and media partners, our focus as a business is on driving business outcomes and ROAS for advertisers.
Previous wording
For the three and six months ended June 30, 2026, thousands of unique advertisers were active on our owned and operated platforms, in addition to the thousands of advertisers who access the platform through programmatic partnerships.
Current wording
For the three and nine months ended September 30, 2026, thousands of unique advertisers were active on our owned and operated platforms, in addition to the thousands of advertisers who access the platform through programmatic partnerships.
Previous wording
The development and deployment of new ad formats and further penetrating new and growing environments allow us to better serve advertisers who seek to target and engage consumers at scale. We believe this continues to open and grow new types of advertiser demand, while ensuring the relevance of the environments in which we operate.
Current wording
The development and deployment of new ad formats and further penetrating new and growing environments allow us to better serve advertisers who seek to target and engage consumers at scale. We believe this remains an opportunity to open and grow advertiser demand, while ensuring the relevance of the environments in which we operate.
Previous wording
Innovation is a core tenet of our Company and our industry. The dynamic and continuously evolving nature of the digital advertising ecosystem will be significantly impacted by the use of AI in further driving innovative new technologies and solutions. We plan to continue our investments in our people, our technology, and moreover our people’s use of AI in order to retain and enhance our competitive position. For example, improvements to our AI prediction engine, or use of additional data signals, help us deliver more relevant ads, driving higher user engagement, thereby improving ROAS or other desired outcomes for advertisers and increasing monetization for our media partners.
Current wording
Innovation is a core tenet of our Company and our industry. The dynamic and continuously evolving nature of the digital advertising ecosystem will be significantly impacted by the use of AI in further driving innovative new technologies and solutions. We plan to continue our investments in our people’s use of AI in order to retain and enhance our competitive position. For example, improvements to our AI prediction engine, or use of additional data signals, help us deliver more relevant ads, driving higher user engagement, thereby improving ROAS or other desired outcomes for advertisers and increasing monetization for our media partners.
Previous wording
Our business depends on the overall demand for digital advertising, on the continuous success of our current and prospective media partners, and on general market conditions. Digital advertising is a rapidly growing industry, with growth that has outpaced the growth of the broader advertising industry. Content consumption continues to evolve, requiring media owners to adapt in order to successfully attract, engage and monetize their consumers. As audiences are increasingly engaged across digital media platforms, and as more purchase data is created, collected, integrated and analyzed digitally, advertisers are increasingly able to leverage sophisticated measurement and attribution solutions in order to optimize their advertising spend across the marketing funnel. As a result, advertisers are increasingly shifting spend away from legacy media offerings towards data-based solutions, driven by performance-centric metrics. We believe that our strength in delivering engagement and clear outcomes for advertisers, from high-impact branding to lower-funnel performance, built on our proprietary AI prediction engine, aligns well with the ongoing market shift towards increased accountability and expectations of ROAS from digital advertising spend.
Current wording
Our business depends on the overall demand for digital advertising, on the continuous success of our current and prospective media partners, and on general market conditions. Digital advertising has been a growing industry, with growth that has outpaced the growth of the broader advertising industry. Content consumption continues to evolve, requiring media owners to adapt in order to successfully attract, engage and monetize their consumers. As audiences are increasingly engaged across digital media platforms, and as more purchase data is created, collected, integrated and analyzed digitally, advertisers are increasingly able to leverage sophisticated measurement and attribution solutions in order to optimize their advertising spend across the marketing funnel. As a result, advertisers are increasingly shifting spend away from legacy media offerings towards data-based solutions, driven by performance-centric metrics. We believe that our strength in delivering engagement and clear outcomes for advertisers, from high-impact branding to lower-funnel performance, built on our proprietary AI prediction engine, aligns well with the ongoing market shift towards increased accountability and expectations of ROAS from digital advertising spend.
Previous wording
At the same time, the proliferation of generative AI tools, particularly their integration into major search engines and web browsers, is causing a shift in how users discover and consume content online. These tools can provide users with direct answers and AI-generated summaries, which has reduced their need to click through to original publisher websites. This trend of bypassing the traditional user journey to a publisher’s site has contributed, and could continue to contribute to a decline in direct user traffic. A reduction in traffic to our media partners directly decreases the inventory of advertising impressions available for us to monetize, which has affected, and could in the future have a significant effect on, our revenue and results of operations. For additional information regarding the impact of these trends on our business, see “—Recent Trends, Risks and Uncertainties—Generative AI and Publisher Traffic Trends” above, and for the related risks, see “Business—Industry” and “Risk Factors” in our 2025 Form 10-K.
Current wording
At the same time, the proliferation of generative AI tools, particularly their integration into major search engines and web browsers, is causing a shift in how users discover and consume content online. These tools can provide users with direct answers and AI-generated summaries, which has reduced their need to click through to original publisher websites. This trend of bypassing the traditional user journey to a publisher’s site has contributed, and is expected to continue to contribute to a decline in direct user traffic. A reduction in traffic to our media partners directly decreases the inventory of advertising impressions available for us to monetize, which has had, and will likely continue to have, a significant effect on, our revenue and results of operations. For additional information regarding the impact of these trends on our business, see “—Recent Trends, Risks and Uncertainties—Generative AI and Publisher Traffic Trends” above, and for the related risks, see “Business—Industry” and “Risk Factors” in our 2025 Form 10-K.
Previous wording
Our revenue is impacted by the level of advertiser demand for our products and by the volume, quality, and performance of available advertising inventory. Demand fluctuates based on macroeconomic conditions, seasonal advertising patterns, campaign performance, advertiser ROAS expectations, and budget dynamics across advertiser types. Enterprise marketers and agencies deploy budgets to drive a range of brand outcomes, from awareness, consideration and intent to lower-funnel outcomes such as site traffic or app downloads. By contrast, direct response and SME advertisers generally operate against defined performance targets, with spend scaling based on measurable conversion efficiency. To the extent advertisers (of all types) achieve their desired outcomes on our platform, they may increase budgets or expand usage of our solutions over time.
Current wording
Our revenue is impacted by the level of advertiser demand for our products and by the volume, quality, and performance of available advertising inventory. Demand fluctuates based on macroeconomic conditions, seasonal advertising patterns, campaign performance, advertiser ROAS expectations, and budget dynamics across advertiser types. Enterprise marketers and agencies deploy budgets to drive a range of brand outcomes, from awareness, consideration and intent to lower-funnel outcomes such as site traffic or app downloads. By contrast, Direct Response & SME advertisers generally operate against defined performance targets, with spend scaling based on measurable conversion efficiency. To the extent advertisers (of all types) achieve their desired outcomes on our platform, they may increase budgets or expand usage of our solutions over time.
Previous wording
Impairment Charges. Impairment charges consist of non-cash charges recognized when the carrying amount of an asset or asset group is not recoverable or exceeds its estimated fair value, as applicable. These charges may include impairments of goodwill, acquired intangible assets, property and equipment, capitalized software and other long-lived assets. Impairment charges recognized during the six months ended June 30, 2025 relate to intangible assets and capitalized software associated with the discontinuance of the video product offering associated with vi during the first quarter of 2025.
Current wording
Impairment Charges. Impairment charges consist of non-cash charges recognized when the carrying amount of an asset or asset group is not recoverable or exceeds its estimated fair value, as applicable. These charges may include impairments of goodwill, acquired intangible assets, property and equipment, capitalized software and other long-lived assets. Impairment charges recognized during the nine months ended September 30, 2026 relate to goodwill impairment. Impairment charges recognized during the nine months ended September 30, 2025 relate to intangible assets and capitalized software associated with the discontinuance of the video product offering associated with vi during the first quarter of 2025. These non-cash impairment charges did not impact the Company’s cash flows, liquidity, or compliance with debt covenants.
Previous wording
Restructuring Charges. Restructuring charges include non‑recurring severance and related costs incurred in connection with (i) the workforce reduction announced following the Acquisition in February 2025, and (ii) the Strategic Plan initiated in December 2025 to streamline operations and reduce costs. These charges are not reflective of ongoing operating performance and are excluded from certain financial and performance measures.
Current wording
Restructuring Charges. Restructuring charges include severance and related costs incurred in connection with (i) the workforce reduction announced following the Acquisition in February 2025, and (ii) the Strategic Plan initiated in December 2025 to streamline operations and reduce costs. These charges are not reflective of ongoing operating performance and are excluded from certain financial and performance measures.
Previous wording
Interest Expense. Interest expense primarily consists of interest on our 10.000% senior secured notes due 2030 (“Senior Secured Notes”), the Overdraft Facility (as defined below) assumed in the Acquisition, our revolving credit facilities, and amortization of debt discounts and deferred financing cost. Interest expense for 2025 also included interest and fees on our senior secured bridge term loan credit facility drawn and repaid during the first quarter of 2025. Interest expense may increase if we incur any borrowings under our 2025 Revolving Facility (as defined below) or if we enter into new debt facilities or finance lease arrangements.
Current wording
Interest Expense. Interest expense primarily consists of interest on our 10.000% senior secured notes due 2030 (“Senior Secured Notes”), the Overdraft Facility (as defined below) assumed in the Acquisition, our 2025 Revolving Facility (as defined below), our A/R Facility, and amortization of debt discounts and deferred financing cost. Interest expense for 2025 also included interest and fees on our senior secured bridge term loan credit facility drawn and repaid during the first quarter of 2025. Interest expense may increase as a result of borrowings under our 2025 Revolving Facility and A/R Facility or if we enter into new debt facilities or finance lease arrangements.
Previous wording
We have one operating segment, which is also our reportable segment. The following table sets forth our condensed consolidated results for the periods presented. Our 2026 results incorporate a full six months of combined operations, whereas our 2025 results include the Legacy Teads business only from the Acquisition date of February 3, 2025, through June 30, 2025 for the year-to-date period. Because the prior year six-month period includes the results of the acquired business for only a portion of the six-month period, the financial information presented for the six months ended June 30, 2026 is not directly comparable to the corresponding prior year period. Conversely, the financial information presented for the three months ended June 30, 2026 and 2025 is directly comparable, as both quarterly periods reflect a full three months of consolidated operations following the Acquisition.
Current wording
We have one operating segment, which is also our reportable segment. The following table sets forth our condensed consolidated results for the periods presented. Our 2026 results incorporate a full nine months of combined operations, whereas our 2025 results include the Legacy Teads business only from the Acquisition date of February 3, 2025, through September 30, 2025 for the year-to-date period. Because the prior year nine-month period includes the results of the acquired business for only a portion of the nine-month period, the financial information presented for the nine months ended September 30, 2026 is not directly comparable to the corresponding prior year period. Conversely, the financial information presented for the three months ended September 30, 2026 and 2025 is directly comparable, as both quarterly periods reflect a full three months of consolidated operations following the Acquisition.
Previous wording
Three and Six Months Ended June 30, 2026 Compared to Three and Six Months Ended June 30, 2025
Current wording
Three and Nine Months Ended September 30, 2026 Compared to Three and Nine Months Ended September 30, 2025
Previous wording
These decreases were primarily driven by lower revenue from our direct response and SME advertisers, reflecting changing search and open-web traffic dynamics, including lower publisher traffic and available advertising impressions, as well as the impact of actions taken throughout 2025 to exit certain lower quality supply and demand sources. These decreases were partially offset by continued growth in our CTV offerings. The decrease for the six-month period was also partially offset by the inclusion of an additional month of consolidated results in 2026 compared to 2025, as the Acquisition was completed on February 3, 2025.
Current wording
These decreases for the three and nine months ended September 30, 2026 compared to the corresponding prior periods were primarily driven by lower revenue from our Direct Response & SME advertisers, reflecting changing search and open-web traffic dynamics, including lower publisher traffic and available advertising impressions. These decreases were partially offset by continued growth in our CTV offerings. The decrease for the nine-month period was also partially offset by the inclusion of an additional month of consolidated results in 2026 compared to 2025, as the Acquisition was completed on February 3, 2025.
Previous wording
Traffic acquisition costs — decreased $37.7 million, or 19.0%, to $161.2 million for the three months ended June 30, 2026, from $198.9 million for the three months ended June 30, 2025. Traffic acquisition costs decreased $62.9 million, or 16.4%, to $319.3 million for the six months ended June 30, 2026, from $382.2 million for the six months ended June 30, 2025. These decreases were primarily driven by lower revenue and a favorable change in revenue mix toward higher-margin offerings.
Current wording
Traffic acquisition costs (“TAC”) — decreased $40.2 million, or 21.4%, to $148.0 million for the three months ended September 30, 2026, from $188.2 million for the three months ended September 30, 2025. TAC decreased $103.1 million, or 18.1%, to $467.3 million for the nine months ended September 30, 2026, from $570.4 million for the nine months ended September 30, 2025. These decreases were primarily driven by lower revenue and a favorable change in revenue mix toward higher-margin offerings, partially offset by the $6.4 million non-cash impairment of a publisher commercial agreement asset and guaranteed minimum payments.
Previous wording
Other cost of revenue — increased $3.9 million, or 16.3%, to $27.8 million for the three months ended June 30, 2026, compared to $23.9 million in the prior year period. The increase was primarily driven by higher technology costs associated with our expanded platform, including hosting fees, as well as higher contract commitment costs. As a percentage of revenue, other cost of revenue increased to 9.8% for the three months ended June 30, 2026, from 7.0% for the three months ended June 30, 2025.
Current wording
Other cost of revenue — increased $1.4 million, or 5.6%, to $26.2 million for the three months ended September 30, 2026, compared to $24.8 million in the prior year period. The increase was primarily driven by higher technology costs associated with our expanded platform. As a percentage of revenue, other cost of revenue increased to 11.1% for the three months ended September 30, 2026, from 7.8% for the three months ended September 30, 2025.
Previous wording
Other cost of revenue increased $7.6 million, or 17.2%, to $52.0 million for the six months ended June 30, 2026 compared to $44.4 million in the prior period. The increase was primarily driven by the inclusion of an additional month of consolidated operations in 2026 compared to 2025, higher technology costs associated with our expanded platform and higher amortization expense of approximately $1.5 million. As a percentage of revenue, other cost of revenue increased 2.4% to 9.5% for the six months ended June 30, 2026 from 7.1% for the six months ended June 30, 2025.
Current wording
Other cost of revenue increased $9.0 million, or 13.0%, to $78.2 million for the nine months ended September 30, 2026 compared to $69.2 million in the prior period. The increase was primarily driven by the inclusion of an additional month of consolidated operations in 2026 compared to 2025, higher technology costs associated with our expanded platform and higher amortization expense of approximately $1.4 million. As a percentage of revenue, other cost of revenue increased to 10.0% for the nine months ended September 30, 2026, from 7.3% for the nine months ended September 30, 2025.
Previous wording
Our Ex-TAC Gross Profit decreased $20.8 million, or 14.4%, to $123.4 million for the three months ended June 30, 2026, from $144.2 million for the three months ended June 30, 2025. Our Ex-TAC Gross Profit decreased $16.0 million, or 6.5%, to $231.3 million for the six months ended June 30, 2026, from $247.3 million for the six months ended June 30, 2025. The decreases were primarily driven by lower revenue, partially offset by the corresponding decreases in traffic acquisition costs. The six-month decrease was also partially offset by the inclusion of an additional month of consolidated results in 2026 compared to 2025. See “Non-GAAP Reconciliations” for the related definition and reconciliations to gross profit.
Current wording
Our Ex-TAC Gross Profit decreased $37.0 million, or 28.4%, to $93.5 million for the three months ended September 30, 2026, from $130.5 million for the three months ended September 30, 2025. Our Ex-TAC Gross Profit decreased $53.1 million, or 14.1%, to $324.7 million for the nine months ended September 30, 2026, from $377.8 million for the nine months ended September 30, 2025. The decreases were primarily driven by lower revenue, partially offset by the corresponding decreases in TAC. The nine-month decrease was also partially offset by the inclusion of an additional month of consolidated results in 2026 compared to 2025. See “Non-GAAP Reconciliations” for the related definition and reconciliations to gross profit.
Previous wording
Operating expenses decreased $11.3 million, or 9.2%, to $111.2 million for the three months ended June 30, 2026, from $122.5 million for the three months ended June 30, 2025. The decrease was primarily driven by a $9.4 million decrease in Sales and marketing expenses due to lower employee-related expenses as a result of headcount reductions and cost efficiencies achieved through the integration of our global operations. Operating expenses for the three months ended June 30, 2026, included net unfavorable foreign currency effects of approximately $3.0 million. On a constant currency basis, operating expenses decreased $14.3 million, or 11.7%, compared to the corresponding prior year period.
Current wording
•Sales and marketing expenses — decreased $6.2 million from $68.7 million for the three months ended September 30, 2025, to $62.5 million for the three months ended September 30, 2026 driven by lower employee-related expenses as a result of headcount reductions and cost efficiencies achieved through the integration of our global operations.
Previous wording
Operating expenses decreased $32.9 million, or 13.2%, to $216.7 million for the six months ended June 30, 2026 compared to $249.6 million for the six months ended June 30, 2025. The decrease was primarily driven by the following factors:
Current wording
Operating expenses increased $224.1 million, or 62.0%, to $585.7 million for the nine months ended September 30, 2026 compared to $361.6 million for the nine months ended September 30, 2025. The increase was primarily driven by the following factors:
Previous wording
•General and administrative expenses — decreased $9.4 million from $64.4 million during the six months ended June 30, 2025 to $55.0 million during the six months ended June 30, 2026, driven by strategic, transaction and integration-related costs which decreased $19.0 million during the six months ended June 30, 2026 compared to the prior year period. This decrease was partially offset by a $3.4 million increase in bad debt expense and a $2.0 million increase in non-income tax expense, primarily reflecting a sales tax refund recognized in the prior-year period;
Current wording
•General and administrative expenses — decreased $18.1 million from $96.3 million during the nine months ended September 30, 2025 to $78.2 million during the nine months ended September 30, 2026, driven by strategic, transaction and integration-related costs which decreased $21.4 million during the nine months ended September 30, 2026 compared to the prior year period. This decrease was partially offset by a $1.2 million increase in bad debt expense and a $0.9 million increase in non-income tax expense;
Previous wording
•Impairment charges — the absence in 2026 of $15.6 million in impairment charges recorded in the first quarter of 2025 related to the discontinuation of a legacy video product offering;
Current wording
•Intangible asset impairment charges — the absence in 2026 of $15.6 million in impairment charges recorded in the first quarter of 2025 related to the discontinuation of a legacy video product offering;
Previous wording
•Restructuring charges — decreased $6.0 million compared to the six months ended June 30, 2025. The actions associated with the Strategic Plan have been substantially completed, subject to the completion of certain actions governed by local law and consultation requirements. We expect the Strategic Plan to result in annualized cost savings of approximately $35.0 million to $40.0 million;
Current wording
•Restructuring charges — decreased $6.3 million compared to the nine months ended September 30, 2025. The actions associated with the Strategic Plan have been substantially completed, subject to the completion of certain actions governed by local law and consultation requirements;
Previous wording
•Research and development expenses — decreased $5.2 million compared to the six months ended June 30, 2025, primarily due to lower employee-related costs, resulting from higher capitalization of internal labor costs toward qualifying development activities, partially offset by foreign currency exchange impacts and an additional month of base operating costs resulting from a full six months of consolidated operations in 2026 compared to five months in 2025; and
Current wording
•Research and development expenses — decreased $5.5 million compared to the nine months ended September 30, 2025, primarily due to lower employee-related costs, resulting from higher capitalization of internal labor costs toward qualifying development activities, partially offset by foreign currency translation impacts and an additional month of base operating costs resulting from a full nine months of consolidated operations in 2026 compared to eight months in 2025; and
Previous wording
Operating expenses for the six months ended June 30, 2026, included net unfavorable foreign currency effects of approximately $9.5 million. On a constant currency basis, operating expenses decreased $42.4 million, or 17.0%, compared to the corresponding prior year period.
Current wording
Operating expenses for the nine months ended September 30, 2026, included net unfavorable foreign currency effects of approximately $10.6 million, and on a constant currency basis, operating expenses increased $213.5 million, or 59.0%, compared to the corresponding prior year period.
Previous wording
Other (expense) income, net improved $3.9 million, or 9.5%, to $(37.5) million for the six months ended June 30, 2026, from $(41.4) million for the six months ended June 30, 2025. The improvement is primarily attributable to a $5.8 million decrease in interest expense. The decrease in interest expense reflected the absence in 2026 of $13.3 million in fees and interest related to the $625 million senior secured bridge term loan credit facility (the “Bridge Facility”) which was incurred and repaid during February 2025 in connection with financing the Acquisition. This decrease was partially offset by a $7.6 million increase in interest expense related to the Senior Secured Notes. Interest expense for the Senior Secured Notes was $33.7 million for the six months ended June 30, 2026, compared to $26.1 million for the six months ended June 30, 2025, reflecting a full six months of interest expense and amortization of related debt discount and deferred financing costs in 2026, compared to a partial period in 2025. The improvement was also partially offset by the absence in 2026 of the $1.2 million gain on the repurchase of long-term debt recognized during the second quarter of 2025.
Current wording
Other (expense) income, net improved $4.6 million, or 7.8%, to $(54.9) million for the nine months ended September 30, 2026, from $(59.5) million for the nine months ended September 30, 2025. The improvement is primarily attributable to a $5.5 million decrease in interest expense. The decrease in interest expense reflected the absence in 2026 of $13.3 million in fees and interest related to the $625 million senior secured bridge term loan credit facility (the “Bridge Facility”) which was incurred and repaid during February 2025 in connection with financing the Acquisition. This decrease was partially offset by a $7.7 million increase in interest expense related to the Senior Secured Notes. Interest expense for the Senior Secured Notes was $50.6 million for the nine months ended September 30, 2026, compared to $42.9 million for the nine months ended September 30, 2025, reflecting a full nine months of interest expense and amortization of related debt discount and deferred financing costs in 2026, compared to a partial period in 2025. The improvement was also partially offset by the absence in 2026 of the $1.2 million gain on the repurchase of long-term debt recognized during the second quarter of 2025.
Previous wording
Provision for income taxes was $7.3 million and $6.3 million for the three and six months ended June 30, 2026, respectively, compared to a benefit of $5.8 million and a benefit of $19.0 million for the three and six months ended June 30, 2025, respectively. The increases in the provision for income taxes for the three and six months ended June 30, 2026, as compared to their respective prior year periods, were primarily due to U.S. and various non-U.S. losses for the three and six months ended June 30, 2026 being subject to valuation allowances.
Current wording
(Benefit) provision for income taxes was $(0.1) million and $6.2 million for the three and nine months ended September 30, 2026, respectively, compared to $(4.7) million and $(23.6) million for the three and nine months ended September 30, 2025, respectively. The increases in the provision for income taxes for the three and nine months ended September 30, 2026, as compared to their respective prior year periods, were primarily due to impairment of goodwill and U.S. and various non-U.S. losses for the three and nine months ended September 30, 2026 being subject to valuation allowances.
Previous wording
Our effective tax rate decreased to (20.8)% and (8.4)% in the three and six months ended June 30, 2026, respectively, compared to 28.7% and 21.5% in the three and six months ended June 30, 2025, respectively. These decreases in effective tax rates for the three and six months ended June 30, 2026, as compared to their respective prior year periods, were primarily due to pre-tax losses, including U.S. and various non-U.S. losses for the three and six months ended June 30, 2026 being subject to valuation allowances.
Current wording
Our effective tax rate decreased to zero and (1.6)% for the three and nine months ended September 30, 2026, respectively, compared to 19.2% and 21.0% for the three and nine months ended September 30, 2025, respectively. These decreases in effective tax rates for the three and nine months ended September 30, 2026, as compared to their respective prior year periods, were primarily due to impairment of goodwill and pre-tax losses, including U.S. and various non-U.S. losses for the three and nine months ended September 30, 2026 being subject to valuation allowances.
Previous wording
On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted into law in the U.S.. In 2026, Global Intangible Low-Taxed Income and Foreign-Derived Intangible Income have been modified to net controlled-foreign-corporation tested income (“NCTI”) and foreign-derived deduction eligible income (“FDDEI”), respectively. The OBBBA provisions did not have a material impact on the Company’s total tax benefits for the six months ended June 30, 2026.
Current wording
On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted into law in the U.S. In 2026, Global Intangible Low-Taxed Income and Foreign-Derived Intangible Income have been modified to net controlled-foreign-corporation tested income (“NCTI”) and foreign-derived deduction eligible income (“FDDEI”), respectively. The OBBBA provisions did not have a material impact on the Company’s total tax benefit for the nine months ended September 30, 2026.
Previous wording
As a result of the foregoing, we recorded net losses of $42.5 million and $81.3 million, respectively, for the three and six months ended June 30, 2026, as compared to net losses of $14.3 million and $69.2 million, respectively, for the three and six months ended June 30, 2025.
Current wording
As a result of the foregoing, we recorded net losses of $325.5 million and $406.7 million, respectively, for the three and nine months ended September 30, 2026, as compared to net losses of $19.7 million and $88.8 million, respectively, for the three and nine months ended September 30, 2025. Net losses for the three and nine months ended September 30, 2026 include a non-cash goodwill impairment of $272.4 million.
Previous wording
Our Adjusted EBITDA decreased $20.0 million to $7.0 million for the three months ended June 30, 2026 from $27.0 million for the three months ended June 30, 2025, including net unfavorable foreign currency effects of approximately $2.5 million. Our Adjusted EBITDA decreased $30.0 million to $7.7 million for the six months ended June 30, 2026 from $37.7 million for the six months ended June 30, 2025, including net unfavorable foreign currency effects of approximately $4.1 million. These decreases were primarily driven by the lower revenue and Ex-TAC Gross Profit discussed above, partially offset by lower operating expenses. See “Non-GAAP Reconciliations” for the related definitions of Adjusted EBITDA and reconciliations to our net loss.
Current wording
Our Adjusted EBITDA decreased $27.3 million to $(8.1) million for the three months ended September 30, 2026 from $19.2 million for the three months ended September 30, 2025, including net unfavorable foreign currency effects of approximately $1.5 million. Our Adjusted EBITDA decreased $57.2 million to $(0.4) million for the nine months ended September 30, 2026 from $56.8 million for the nine months ended September 30, 2025, including net unfavorable foreign currency effects of approximately $5.8 million. These decreases were primarily driven by the lower revenue and Ex-TAC Gross Profit discussed above, partially offset by lower expenses directly related to our operations. See “Non-GAAP Reconciliations” for the related definitions of Adjusted EBITDA and reconciliations to our net loss.
Previous wording
Ex-TAC Gross Profit is a non-GAAP financial measure. Gross profit is the most comparable U.S. GAAP measure. In calculating Ex-TAC Gross Profit, we add back other cost of revenue to gross profit. Ex-TAC Gross Profit may fluctuate in the future due to various factors, including, but not limited to, seasonality and changes in the number of media partners and advertisers, advertiser demand or user engagements.
Current wording
Ex-TAC Gross Profit is a non-GAAP financial measure. Gross profit is the most comparable U.S. GAAP measure. In calculating Ex-TAC Gross Profit, we add back other cost of revenue, including the non-cash impairment of a publisher commercial agreement asset, to gross profit. Ex-TAC Gross Profit may fluctuate in the future due to various factors, including, but not limited to, seasonality and changes in the number of media partners and advertisers, advertiser demand or user engagements.
Previous wording
We regularly evaluate our cash requirements for operations, commitments, development activities and capital expenditures and manage our liquidity in a manner consistent with our corporate priorities. This discussion should be read in conjunction with our 2025 Form 10-K.
Current wording
We regularly evaluate our cash requirements for operations, commitments, development activities and capital expenditures and manage our liquidity in a manner consistent with our corporate priorities.
Previous wording
Our primary sources of liquidity have been cash receipts from advertisers, cash and cash equivalents, investments in marketable securities, and available borrowing capacity under our 2025 Revolving Facility (as defined below).
Current wording
Our primary sources of liquidity include cash receipts from advertisers, cash and cash equivalents, and available borrowing capacity under our A/R Facility and 2025 Revolving Facility.
Previous wording
As of June 30, 2026, approximately $58.3 million of our cash was held by non-U.S. subsidiaries. The Company’s previously undistributed earnings of foreign subsidiaries are not indefinitely reinvested due to current U.S. funding needs. At June 30, 2026, we have a deferred tax liability of $8.7 million associated with the expected tax consequences of future distributions of foreign earnings, including amounts related to cash and cash equivalents held outside the United States.
Current wording
As of September 30, 2026, approximately $58.9 million of our cash was held by non-U.S. subsidiaries. The Company’s previously undistributed earnings of foreign subsidiaries are not indefinitely reinvested due to current U.S. funding needs. At September 30, 2026, we had a deferred tax liability of $8.6 million associated with the expected tax consequences of future distributions of foreign earnings, including amounts related to cash and cash equivalents held outside the United States.
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Current report — wording carried from elsewhere
•Sales and marketing expenses — decreased $2.9 million compared to the nine months ended September 30, 2025, primarily driven by $7.4 million lower employee-related expenses as a result of headcount reductions and cost efficiencies achieved through the integration of our global operations, partially offset by $3.0 million additional amortization of acquired intangible assets.