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What changed in Teads Holding Co.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Teads Holding Co.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+693 added−578 removedSource: 10-K (2025-03-07) vs 10-K (2024-03-08)

Top changes in Teads Holding Co.'s 2024 10-K

693 paragraphs added · 578 removed · 321 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe have been a Trustworthy Accountability Group (TAG) Brand Safety Certified member since 2018. We also implement certain Media Rating Council Invalid Traffic Detection and Filtration Standards in our internal fraud detection technological ecosystem. 19 Table o f Contents
Biggest changeWe also implement certain Media Rating Council Invalid Traffic Detection and Filtration Standards in our internal fraud detection technological ecosystem. 14 Table of Contents • Teads and Outbrain have been Trustworthy Accountability Group (“TAG”) Brand Safety Certified members since 2017 and 2018, respectively, with Teads’ global operations also maintaining the “Brand Safety Certified” and “Certified Against Fraud” seals.
For example, the Digital Services Act (DSA) in the European Union, which became enforceable in February 2024, is aimed at protecting users and the digital space from harmful and illegal content. Although we have not been named a “Very Large Online Platform” under the DSA, we are required to meet certain content transparency requirements which require technical and compliance changes.
For example, the Digital Services Act (“DSA”) in the European Union, which became enforceable in February 2024, is aimed at protecting users and the digital space from harmful and illegal content. Although we have not been named a “Very Large Online Platform” under the DSA, we are required to meet certain content transparency requirements which require technical and compliance changes.
We are members in good standing of the Network Advertising Initiative (NAI), an association dedicated to responsible data collection and its use for digital advertising. We adhere to the NAI Code of Conduct, along with the IAB Self-Regulatory Principles for Online Behavioral Advertising, and the IAB Europe OBA Framework.
We are members in good standing of the Network Advertising Initiative (“NAI”), an association dedicated to responsible data collection and its use for digital advertising. We adhere to the NAI Code of Conduct, along with the IAB Self-Regulatory Principles for Online Behavioral Advertising, and the IAB Europe OBA Framework.
The commercial terms of these arrangements, such as revenue percentages, tiering of such percentages, guaranteed minimum rates of payment or programmatic are all factors, among others such as geography and size of the media partners, that contribute to our revenue mix.
The commercial terms of these arrangements, such as revenue share percentages, tiering of such percentages, guaranteed minimum rates of payment or programmatic are all factors, among others such as geography and size of the media partners, that contribute to our revenue mix.
We have been subject to significant legislative and regulatory developments in the past, and proposed or new legislation and regulations could significantly affect our business in the future. For example, we implemented a number of changes and controls as a result of requirements under the General Data Protection Regulation ((EU) 2016/679) (GDPR), and may implement additional changes in the future.
We have been subject to significant legislative and regulatory developments in the past, and proposed or new legislation and regulations could significantly affect our business in the future. For example, we implemented a number of changes and controls as a result of requirements under the General Data Protection Regulation (EU) 2016/679 (“GDPR”), and may implement additional changes in the future.
Data Privacy Framework (“DPF”), a voluntary certification program for the transfers of personal data from the EU to the U.S., became effective. The DPF replaced the prior transfer framework that was invalidated in July 2020 by the Court of Justice of the European Union.
Data Privacy Framework (“DPF”), a voluntary certification program for the transfers of personal data from the E.U. to the U.S., became effective. The DPF replaced the prior transfer framework that was invalidated in July 2020 by the Court of Justice of the European Union.
These laws and regulations involve matters including privacy, use of artificial intelligence, data use, data protection and personal information, content, intellectual property, advertising, marketing, distribution, data security, data retention and deletion, data localization and storage, data disclosure, competition, protection of minors, consumer protection, accessibility, taxation, environmental reporting and economic or other trade controls including sanctions, and securities law compliance.
These laws and regulations involve matters including privacy, use of AI, data use, data protection and personal information, content, intellectual property, advertising, marketing, distribution, data security, data retention and deletion, data localization and storage, data disclosure, competition, protection of minors, consumer protection, accessibility, taxation, environmental reporting and economic or other trade controls including sanctions, and securities law compliance.
The EU AI Act imposes multiple new requirements on the utilization of generative artificial intelligence technologies which may adversely impact our business practices and affect our ability to adopt new technologies.
The EU AI Act imposes multiple new requirements on the utilization of generative AI technologies which may adversely impact our business practices and affect our ability to adopt new technologies.
If we are unable to collect data and/or transfer data between and among countries and regions in which we operate, it could affect our ability to provide our services or our ability to target ads, which could adversely affect our financial results. For example, in July 2023 the E.U.-U.S.
If we are unable to collect data and/or transfer data between and among countries and 13 Table of Contents regions in which we operate, it could affect our ability to provide our services or our ability to target ads, which could adversely affect our financial results. For example, in July 2023 the E.U.-U.S.
This portfolio includes 18 granted U.S. utility patents, 35 granted U.S. design patents, 15 European registered community designs and 14 UK registered designs.
This portfolio includes 17 granted U.S. utility patents, 35 granted U.S. design patents, 15 European registered community designs and 14 UK registered designs.
Our dedicated teams work with potential customers through the entire sale cycle, from initial contact to contract execution and implementation. Throughout the process, our teams provide guidance as to how our platform can optimize the value of a media owner’s audience or how an advertiser can reach relevant consumers.
Our dedicated teams work with potential customers through the entire sale cycle, from initial contact to contract execution and implementation. Throughout the process, our teams provide guidance as to how our platforms can optimize the value of a media owner’s audience or how an advertiser can reach relevant consumers and reach their desired outcomes.
We believe our platform would be difficult, time consuming, and costly to replicate. We protect our competitive technology position through innovation and by continually developing new intellectual property. Outbrain has built an extensive intellectual property portfolio to date.
We believe our platforms would be difficult, time consuming, and costly to replicate. We protect our competitive technology position through innovation and by continually developing new intellectual property. 12 Table of Contents Outbrain has built an extensive intellectual property portfolio to date.
We also have arrangements with media partners on a programmatic basis such that the contract defines the mechanics to participate in the media partner’s real-time auction for access to the media partner’s inventory, with neither party committing to provide or bid on inventory.
We also have arrangements with media partners to bid on inventory, many of which are on programmatic basis such that the contract defines the mechanics to participate in the media partner’s auction for access to the media partner’s inventory, with neither party committing to provide or bid on inventory.
All traffic to and between our data centers is encrypted, along with all sensitive configurations, while our users and customers have their passwords hashed. Secure advertising is a building block of user trust.
All traffic to and between our data centers is encrypted, along with all sensitive configurations, while our users and customers have their passwords hashed.
The key factors that enable us to compete effectively for advertising dollars include: (i) deep understanding of consumer interest and intent across editorial environments, as a result of our unique media owner offering, (ii) utilization of our core AI prediction technology to leverage this data to deliver better branding, consideration and performance outcomes, (iii) access to massive audience scale on premium media owner properties across the globe; and (iv) supply-path optimization by design, offering advertisers efficient, direct access to media owner inventory at scale.
In addition, key factors that enable us to compete effectively for advertising dollars include: tenure of advertiser relationship; deep understanding of consumer interest and intent across editorial environments; utilization of our core AI prediction technology to leverage this data to deliver better branding, consideration and performance outcomes; access to massive audience scale on premium, often exclusive media owner inventory across the globe; and full-funnel offering providing advertisers efficient and direct access to media owner inventory at scale.
The advertising industry at large is focused on creating methods to deliver tailored experiences to consumers without infringing on user privacy or creating data leakage. As a result, platforms which focus on delivering relevant experiences to consumers based on context and interest, rather than user-based factors, will ostensibly be best positioned to meet advertiser needs in a post-cookie environment.
As a result, platforms which focus on delivering relevant experiences to consumers based on context and interest, rather than user-based factors, will ostensibly be best positioned to meet advertiser needs in a post-cookie environment.
Additionally, following contract execution and implementation, our account management teams guide our media partners on how additional platform deployment and optimizations can deliver incremental monetization. We engage advertisers and their agencies in order to educate them on how to increase reach and ROAS using our solutions.
Additionally, following contract execution and implementation, our account management teams guide our media partners on how additional platform deployment and optimizations can deliver incremental monetization.
On July 27, 2021, we closed our IPO and issued 8,000,000 shares of our common stock at an initial offering price of $20.00 per share, receiving aggregate net proceeds of $145.1 million, after deducting underwriting discounts, commissions and other offering costs. Our mission is to connect businesses with engaged audiences.
On July 27, 2021, Outbrain closed its IPO and issued 8,000,000 shares of Common Stock at an initial offering price of $20.00 per share, receiving aggregate net proceeds of $145.1 million, after deducting underwriting discounts, commissions and other offering costs. Both Outbrain and Teads operate a two-sided marketplace, which together, create a scaled end-to-end advertising solution.
Changes to our products or business practices as a result of these or similar developments have in the past adversely affected, and may in the future adversely affect, our business and adds complexity to our and our partner’s compliance programs. 18 Table o f Contents We are also subject to evolving laws and regulations that dictate whether, how, and under what circumstances we can transfer, process and/or receive certain data that is critical to our operations, including the collection of data and the data shared between countries or regions in which we operate.
We are also subject to evolving laws and regulations that dictate whether, how, and under what circumstances we can transfer, process and/or receive certain data that is critical to our operations, including the collection of data and the data shared between countries or regions in which we operate.
As a result, digital advertising not only subsidizes media consumption for billions of consumers globally, but also finances the creation of journalism, news, and innovative mediums of entertainment across thousands of independent properties — creating a more diverse consumer ecosystem beyond walled gardens. 6 Table o f Contents We believe that the following industry trends are relevant to our business: Proliferation of digital media and digital advertising across mobile environments, with changing consumer expectations.
As a result, digital advertising enables media consumption for billions of consumers globally, as it finances the creation of journalism, news, and innovative mediums of entertainment across thousands of independent properties — creating the diverse content ecosystem that underpins our public discourse and culture. We believe that the following trends are relevant to the advertising industry and our business.
Many of our competitors provide only one element of the full demand offering we have now created. We believe we are in a differentiated position due to our ability to service advertiser objectives from branding to performance and provide media owners with full-page monetization as a result.
We believe we are in a differentiated position as we provide quality at scale through an end-to-end platform that has the ability to service advertiser objectives from branding to performance and provide media owners with full-page monetization as a result.
Providing a clean, non-fraudulent premium network for media owners, advertisers and consumers is a top priority at Outbrain. Our dedicated anti-fraud team monitors our platform to identify and investigate unusual web traffic patterns. We detect, block and prevent fraudulent web traffic by using both internal and external third-party TAG Anti-Fraud certified solutions.
Combined with internally developed capabilities and our content review process we are tackling both malicious ads and the bad actors behind them. • Providing a clean, non-fraudulent premium network for media owners, advertisers and consumers is a top priority at Outbrain. Our dedicated anti-fraud team monitors our platform to identify and investigate unusual web traffic patterns.
Our Industry Advertising is the primary business model for digital media on the Open Internet, including traditional media environments, as well as gaming and retail media environments.
Industry Advertising is a critical source of revenue for digital media properties on the Open Internet, including traditional media environments, gaming, streaming and CTV and retail media.
In order to provide secure ads, we integrated an advanced industry leading third-party technology to scan live ads looking for potential security violations either in the ads themselves or on the pages to which they directly link. Combined with internally developed capabilities and our content review process we are tackling both malicious ads and the bad actors behind them.
Secure advertising is a building block of user trust. • In order to provide secure ads, at Outbrain we integrated an advanced industry leading third-party technology to scan live ads looking for potential security violations either in the ads themselves or on the pages to which they directly link.
Securities and Exchange Commission (the “SEC”) in connection with our initial public offering (“IPO”) of our common stock, and our common stock began trading on The Nasdaq Stock Market LLC (“Nasdaq”) on July 23, 2021.
On July 22, 2021, Outbrain’s registration statement on Form S-1 (File No. 333-257525), filed on June 29, 2021, as amended, was declared effective by the U.S. Securities and Exchange Commission (the “SEC”) in connection with its initial public offering (“IPO”) of common stock, and the Common Stock began trading on The Nasdaq Stock Market LLC (“Nasdaq”) on July 23, 2021.
The DSA includes significant penalties for non-compliance. In addition, the rising global adoption of artificial intelligence technologies has resulted in the European Union reaching a provisional political agreement on the Artificial Intelligence Act, 2023 (“EU AI Act”).
Together, they aim to safeguard users, promote transparency, and foster innovation and competition in the digital economy. The rising global adoption of AI technologies has resulted in the European Union reaching a provisional political agreement on the Artificial Intelligence Act, 2023 (“EU AI Act”).
As we continue growing our team, and become more diverse culturally and geographically, we want to make sure we retain a shared mission among the people that become part of our Company. In particular, there are certain characteristics that we seek out in our employees: • Intelligent and productive.
We strive to foster deep employee engagement built upon personal development and achievement that is supported by continuous feedback, learning, and team building. As we continue growing our team, and become more diverse culturally and geographically, we want to make sure we retain a shared mission among the people that become part of our Company.
Human Capital Resources Much of our success can be directly attributed to our global team of technology, business, and data science experts who work out of our 15 locations worldwide. Outbrain is comprised of a diverse, intelligent and driven group of individuals who are passionate and excited to be leading continued innovation in Open Internet technology and advertising.
Human Capital Resources We believe that the Company is comprised of an intelligent and driven group of individuals from varying backgrounds who are passionate and excited to be leading continued innovation in Open Internet technology and advertising. Our culture and team are critical assets in building and expanding our business.
We employ in-market sales teams across our markets, helping us attract premium digital media owners and advertisers to our platforms, as well as global support hubs to manage small and medium clients.
We are deeply integrated into the agency ecosystem, employing a two-pronged approach that targets both brands and their media planning and buying agencies. We employ in-market sales teams across our markets, helping us attract advertisers and agencies, as well as premium digital media owners to our platforms.
Our Data Flywheel Sales and Marketing We focus our sales and marketing efforts on supporting, advising, and training our media partners and advertisers.
We believe that continued investment in our platform, including its technologies and functionalities, is critical to our success and long-term growth. Sales and Marketing We focus our sales and marketing efforts on supporting, advising, and training our advertisers, agencies and media partners.
In addition, we have developed and currently utilize online acquisition channels to attract new advertisers, who we are able to onboard and serve in an automated manner, using self-serve tools and technologies. 16 Table o f Contents Our sales teams educate prospective media owners, partners, and advertisers on the use, technical capabilities, and benefits of our platform.
In addition to local teams, we utilize global support hubs to manage certain client types and sizes. 11 Table of Contents Our sales teams educate prospective media owners, partners, and advertisers on the use, technical capabilities, and benefits of our platforms.
Item 1. Business Outbrain Inc. (together with our subsidiaries, “Outbrain,” the “Company,” “we,” “our” or “us”) was incorporated in August 2006 in Delaware. The Company is headquartered in New York, New York with various wholly-owned subsidiaries, including in Israel, Europe and Asia.
The Company will operate under the name Teads. General The Company, combining the capabilities of Outbrain and Teads, is a leading omnichannel advertising platform focused on driving outcomes across the Open Internet. The Company is headquartered in New York, New York with various wholly-owned subsidiaries, including in Europe, Israel and Asia. Outbrain was incorporated in August 2006 in Delaware.
Based on where data is available, 49% were male, 47% were female and 4% undisclosed. Approximately 40% of our workforce is located in Israel, 13% is located in the United States, 13% is located in Slovenia, and the remaining 34% is located across our other global offices.
We have approximately 1800 employees, which excludes notified employees whose positions were impacted by the acquisition-related restructuring. Approximately 18% of our workforce is located in Israel, 16% is located in France, 6% is located in Slovenia, 13% is located in the United States, and the remaining 47% is located across our other global off ices.
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On July 22, 2021, our registration statement on Form S-1 (File No. 333-257525), filed on June 29, 2021, as amended, was declared effective by the U.S.
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Item 1. Business Acquisition of Teads On February 3, 2025, Outbrain Inc. (“Outbrain”) completed the previously announced acquisition (“Acquisition”) of TEADS, a private limited liability company (société anonyme) incorporated and existing under the laws of the Grand Duchy of Luxembourg (“Teads”).
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Outbrain is a leading technology platform that drives business results by connecting media owners and advertisers with engaged audiences to drive business outcomes, reaching over a billion unique consumers around the world. Outbrain’s artificial intelligence (“AI”) prediction engine powers a two-sided platform for advertisers and media owners that delivers concrete business outcomes.
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The consideration paid at the closing of the Acquisition was approximately $900 million, comprised of a cash payment of $625 million, subject to certain customary adjustments, and 43.75 million shares of Outbrain’s common stock, $0.001 par value per share (“Common Stock”).
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Our platform enables thousands of digital media owners to provide tailored experiences to their audiences, delivering audience engagement and monetization. For tens of thousands of advertisers, from enterprise brands to performance marketers, our platform optimizes audience attention and engagement to deliver greater return on investment at each step of the marketing funnel.
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In this Annual Report on Form 10-K (this “Report”), the financial statements of Outbrain do not include the financial position or results of operations of Teads, since the Acquisition occurred subsequent to year-end.
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Over the past decade, consumers have become increasingly accustomed to seeing highly curated content that aligns with their unique interests. Social media and search have simplified discovery by leveraging billions of data points to offer personalized experiences.
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Throughout this Report (except in Part II, Item 7, the consolidated financial statements and the accompanying footnotes thereto, and where otherwise stated or indicated by context), references to the “Company,” “we,” “our,” or “us” are to the combined company (together with its subsidiaries) following the Acquisition, references to “Outbrain” are to Outbrain independently, and references to “Teads” are to Teads independently.
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In a similar fashion, our prediction engine ingests billions of data points each minute to provide digital media owners with a platform to deliver curated editorial and advertiser experiences to their audiences. We have been leveraging AI to enhance our ingestion of data and the performance of our prediction engine since our inception.
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We have direct relationships with both (i) global advertisers including Fortune 500 brands, agency holding companies, and small-to-medium sized businesses, and (ii) media owners spanning premium publishers to connected TV (“CTV”) platforms. We generate revenue from advertisers purchasing media owner inventory through our platforms.
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This type of AI, known as traditional or predictive AI, uses machine learning to filter and better understand data to forecast consumer preferences. By contrast, generative AI turns machine learning inputs into actual content. Throughout this Report, when referring to “AI” we are referring to traditional or predictive AI, unless the term “generative AI” is specified.
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Our platform is designed to enable advertisers to not only reach their audiences across the entire Open Internet — from web, to CTV, to app environments — but to drive outcomes from those audiences at each step of the marketing funnel. These outcomes include completed views, post-click engagement, brand uplift, sign-ups, sales, and more.
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According to Statista, consumption of content continues to shift online, with over 5 billion consumers accessing the Internet, primarily through mobile devices, where the ability to scroll through a feed has come to be expected by consumers on every page. This means the method in which audiences discover and engage with editorial content must evolve.
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Our solution directly addresses the largest challenges in the advertising industry today — including inefficient supply chains and fragmentation, quality and scale of inventory, and the ability to correlate advertising investment to concrete business outcomes.
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Our media partners are media owners that use Outbrain’s technology to help their audiences navigate what to read, watch, consider, and buy next. Our platform is built for user engagement and, as a mobile-first company, is designed to be highly effective on mobile devices.
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For advertisers and their agencies, we offer a single access point to scaled audiences across premium, curated media environments, with technology solutions that drive outcomes from branding to performance. For media owners, we provide both sustainable, year-round advertising revenue and technology solutions to more deeply engage and retain audiences.
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Outbrain’s technology is deployed on the mobile apps and websites of most of our media partners, generating 73% of our revenue in 2023. Outbrain operates a two-sided marketplace, which means we usually have exclusive control over all aspects of the consumer experience, allowing us to quickly test and deploy new formats for our advertisers and media owners.
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By combining our respective sets of exclusive media inventory from publishers to CTV, we believe we provide a more connected consumer experience across the Open Internet. Our Offerings As noted above, we operate a two-sided marketplace, forming an end-to-end advertising platform with direct media owner and advertiser relationships.
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Since inception, we have been guided by the same core principles pertaining to our three constituents: consumers, media partners, and advertisers. • Consumers. Our platform is centered on predicting consumer attention and engagement.
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For advertisers, our platform is one of the most scaled solutions to reach audiences across the vast and fragmented channels of the Open Internet — including exclusive environments accessible only to us. Advertiser Solutions : There are multiple buying methods for advertisers to access this solution — including our CPC performance platform, and our CPM-based managed- and self-service platforms.
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We believe that by focusing our algorithm on optimizing toward these consumer-centric factors, we are able to cultivate user behavior patterns that compound over time, delivering greater effectiveness and efficiency for our advertisers, superior long-term monetization for our media partners, as well as increased value for Outbrain. • Media Partners.
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This gives us greater ability to work with a wider set of brands, agencies, and performance marketers, by providing strong value through whichever platform they choose to 5 Table of Contents buy.
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We are committed to supporting the long-term success of our media partners. We strive to develop multi-year contracts with media partners, with the objective of delivering long-term revenue and deeper audience engagement. Our media partners include both traditional publishers and companies in new and rapidly evolving categories, such as mobile device manufacturers. • Advertisers.
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Regardless of the channel through which an advertiser decides to work with us, we believe our unique value proposition remains to be that we drive advertising outcomes from branding to consideration to performance objectives. We also provide extensive, bespoke creative studio solutions — offering data-driven creative that’s tailored to the many environments and channels we offer access to.
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We offer unique advertising solutions across the marketing funnel and provide a single access point to not only reach, but drive real business outcomes from consumers across the Open Internet.
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These offerings are underpinned by omnichannel data and measurement solutions, powered by the proprietary audience and contextual data accessible to us through our exclusive media owner relationships.
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We provide advertisers 5 Table o f Contents from enterprise brands to performance marketers with solutions to optimize consumer attention and engagement, to deliver accountable business results and greater return on investment. We partner with thousands of the world’s most trusted digital media owners.
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Teads operates a two-pronged approach that targets both brands and their media planning and buying agencies. • Teads manages relationships with its large, strategic advertisers through its strategic accounts team, which secures new strategic advertiser partners, as well as grows spend from existing ones.
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We believe we are an important technology and monetization partner to these media owners, delivering approximately $5.2 billion in direct revenue to our partners since our inception.
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The strategic accounts team offers a range of in-house consultative services for Teads’ largest advertisers, including an account strategist to advise on how to utilize the Teads product portfolio, creative consultancy to help maximize campaign effectiveness by supporting the creation of elevated video and display assets, data consultancy to improve an advertiser’s targeting strategy, and research and insights services to measure campaign effectiveness.
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Some key partners with which we have long-standing relationships across our various regions include Asahi Shimbun, CNN, Der Spiegel, Le Monde, MSN, New York Post, Sky News and Sky Sports, and The Washington Post.
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Teads believes that the value it adds to its most strategic customers through Teads’ consultative approach has a positive impact on average spend per customer and on customer retention.
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The average tenure of our top 20 media partners (based on our 2023 revenue), which also includes our more recent partnerships, such as Axel Springer and Fox News, is approximately seven years. Through our direct, usually exclusive code-on-page integrations with media owners, we have become one of the largest online advertising platforms on the Open Internet.
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As part of Teads’ go-to-market strategy, it focuses on large, enterprise brands and in some cases establishes strategic joint business partnerships (“JBPs”) that include non-contractual commitments of spend and utilize the full breadth of Teads platform across data, creative and measurement. • In addition to Teads’ direct relationships with advertisers, Teads is also deeply integrated into the agency ecosystem.
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In 2023, we provided personalized ads to over a billion monthly unique consumers, delivering on average over 12 billion experiences promoting content, services, and products per day, with tens of thousands of advertisers directly using our platform.
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Teads has long-standing relationships with agency holding companies, as well as a range of smaller agencies. Teads employs a combination of global and local account management in order to manage its relationship with the agencies. Finally, Teads has master service agreements in place with agency holding companies for Teads’ proprietary buying interface, Teads Ad Manager.
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We are one of the few technology companies who provide a single point of access to consumers as they engage with thousands of media properties across the Open Internet. As a result, we provide a platform that delivers a consistent experience to these consumers, giving advertisers confidence in how they reach their audiences at valuable moments of engagement and consideration.
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These agency partnerships provide Teads efficient centralized management of smaller advertisers who mostly leverage these agencies to manage their advertising spend. Media Owner Solutions : We partner with over 10,000 media owners, from premium publishers to OEMs including CTV and Smartphone manufacturers.
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Our AI prediction engine is fundamental to how we optimize experiences and outcomes for consumers, media owners, and advertisers. We process billions of data signals per minute, powering more than one billion predictions and over 100,000 experiences per second.
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Many of these strategic, long-standing partnerships span many years, with Outbrain’s top 20 media partners having an average tenure of 7 years. We believe that we are a unique partner to media owners due to the diversity and scale of advertising revenue we provide, from budgets spanning video, display, native, and performance advertising.
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The growth of our platform, access to audiences, and analysis of marketer results provides us with greater data, which enables us to continually improve the efficacy of our AI prediction engine. Our ability to collect and synthesize large data sets using AI is a key differentiator, and enables us to deliver advertiser outcomes, consumer experiences, and media owner value.
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In addition, we provide technology solutions that enable media owners to more deeply engage their audiences, increasing the total revenue opportunity media owners can realize. Media partner agreements include sharing the revenue generated on media partner sites and applications, including variable revenue percentages based on page view volume or revenue.
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As mentioned above, the consumption of content continues to shift to mobile devices. In mobile environments, consumers habitually scroll through apps, mobile browsers and news feeds, such as those found on social media, providing continuous opportunities to deliver personalized advertising experiences.
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In addition, the Company may commit to a guaranteed minimum rate of payment to the media partner during the year in order to access such inventory, which may include various media partner commitments, such as defined placements across the media partner sites.
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As a result, we believe that personalized and engaging digital content experiences, supported by non-intrusive ads, have become the expectation of media owners, rather than a consumer luxury. Advertising spend follows time spent and engagement, and as such mobile ad spend is expected to increase at a faster pace than digital ad spend in total.
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The Open Internet digital advertising market is large and our key focus areas within it are growing. We operate in a large global and growing digital advertising market.
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There is a significant opportunity for technology platforms to develop similar browsing experiences for consumers across the increasing amount of available content on the Open Internet.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

136 edited+143 added−46 removed214 unchanged
Biggest changeRisk Factor Summary The following is a summary of some of the principal risks we face: • Our revenue and results of operations are highly dependent on overall advertising demand and spending and traffic generated by our media partners; • The impact on advertising demand and spend of factors such as the continuation or worsening of unfavorable economic or business conditions or downturns and instability in the financial markets; • A failure to grow or to manage growth effectively may cause the quality of our platform and solutions to suffer; • Our sales and marketing efforts may require significant investments and, in certain cases, involve long sales cycles; • Our research and development efforts may not meet the demands of a rapidly evolving technology market; • The digital advertising industry is intensely competitive and we must effectively compete against current and future competitors; • Loss of media partners could have a significant impact on our revenue and results of operations; • Growth in our business may place demands on our infrastructure and resources; • The failure of our recommendation engine to accurately predict user engagement; • If the quality of our recommendations deteriorates, or if we fail to present interesting content to our users, we may experience a decline in user engagement, which could result in the loss of media partners; • Limitations on our ability to collect, use, and disclose data to deliver advertisements; • Our failure or the failure of third parties to protect our sites, networks and systems against security breaches, or otherwise to protect the confidential information of us or our partners; • Outages or disruptions that impact us or our service providers, resulting from cyber incidents, or failures or loss of our infrastructure; and • Political and regulatory risks in the various markets in which we operate and the challenges of compliance with differing and changing regulatory requirements.
Biggest changeRisk Factor Summary The following is a summary of some of the principal risks we face: • Our ability to successfully integrate Teads or manage the Company effectively; • Our ability to realize synergies and other benefits of the Acquisition, including, among other things, operating efficiencies, revenue synergies and cost savings; • Our due diligence investigation of Teads may be inadequate or risks related to Teads’ business may materialize; • Unexpected costs, charges or expenses resulting from the Acquisition; • The outcome of any securities litigation, stockholder derivative or other litigation related to the Acquisition; • The Company may need to raise additional financing in the future to fund its operations, which may not be available to it on favorable terms or at all; • The market price of the Common Stock is expected to be volatile, and the market price of the Common Stock may drop, following the Acquisition; • The Company’s internal control over financial reporting may not meet the standards required by Section 404 of the Sarbanes-Oxley Act; • The Company’s ability to attract and retain customers, management and other key personnel; • Our revenue and results of operations are highly dependent on overall advertising demand and spending and traffic generated by our media partners; • The impact on advertising demand and spend of factors such as the continuation or worsening of unfavorable economic or business conditions or downturns and instability in the financial markets; • A failure to grow or to manage growth effectively may cause the quality of our platform and solutions to suffer; • Our sales and marketing efforts may require significant investments and, in certain cases, involve long sales cycles; • Our research and development efforts may not meet the demands of a rapidly evolving technology market; • The digital advertising industry is intensely competitive and we must effectively compete against current and future competitors; • Loss of media partners could have a significant impact on our revenue and results of operations; • Growth in our business may place demands on our infrastructure and resources; • The failure of our recommendation engine to accurately predict user engagement; • If the quality of our recommendations deteriorates, or if we fail to present interesting content to our users, we may experience a decline in user engagement, which could result in the loss of media partners; • Limitations on our ability to collect, use, and disclose data to deliver advertisements; 16 Table of Contents • The potential impact of AI on our industry and our need to invest in AI-based solutions; • Our failure or the failure of third parties to protect our sites, networks and systems against security breaches, or otherwise to protect the confidential information of us or our partners; • Outages or disruptions that impact us or our service providers, resulting from cyber incidents, or failures or loss of our infrastructure; and • Political and regulatory risks in the various markets in which we operate and the challenges of compliance with differing and changing regulatory requirements.
In addition, if the market for technology stocks, the stock of digital advertising companies or the stock market, in general, experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, results of operations, or financial condition.
In addition, if the market for technology stocks, the stock of digital advertising companies or the stock market, in general, experiences a loss of investor confidence, the trading price of the Common Stock could decline for reasons unrelated to our business, results of operations, or financial condition.
There can be no assurance that any share repurchases will enhance stockholder value because the market price of our common stock may decline below the levels at which we repurchased shares of common stock. Although our share repurchase program is intended to enhance long-term stockholder value, short-term stock price fluctuations could reduce the program’s effectiveness.
There can be no assurance that any share repurchases will enhance stockholder value because the market price of the Common Stock may decline below the levels at which we repurchased shares of Common Stock. Although our share repurchase program is intended to enhance long-term stockholder value, short-term stock price fluctuations could reduce the program’s effectiveness.
If securities or industry analysts do not publish research or publish unfavorable research about our business, our stock price and trading volume could decline. The trading market for our common stock depends, to some extent, on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts.
If securities or industry analysts do not publish research or publish unfavorable research about our business, our stock price and trading volume could decline. The trading market for the Common Stock depends, to some extent, on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts.
The market price of our common stock could decline and may make it more difficult for you to sell your stock at a time and price that you deem appropriate, as a result of substantial sales of our common stock, particularly sales by our directors, executive officers and significant stockholders, a large number of shares of our common stock becoming available for sale or the perception in the market that holders of a large number of shares intend to sell their shares.
The market price of the Common Stock could decline and may make it more difficult for you to sell your stock at a time and price that you deem appropriate, as a result of substantial sales of Common Stock, particularly sales by our directors, executive officers and significant stockholders, a large number of shares of Common Stock becoming available for sale or the perception in the market that holders of a large number of shares intend to sell their shares.
These provisions include: • authorizing “blank check” preferred stock, which could be issued by the board without stockholder approval and may contain voting, liquidation, dividend and other rights superior to our common stock, which would increase the number of outstanding shares and could thwart a takeover attempt; • a classified board of directors whose members can only be dismissed for cause; • the prohibition on actions by written consent of our stockholders; • the limitation on who may call a special meeting of stockholders; • the establishment of advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon at stockholder meetings; and • the requirement of at least 75% of the outstanding capital stock to amend any of the foregoing second through fifth provisions.
These provisions include: • authorizing “blank check” preferred stock, which could be issued by the board without stockholder approval and may contain voting, liquidation, dividend and other rights superior to the Common Stock, which would increase the number of outstanding shares and could thwart a takeover attempt; • a classified board of directors whose members can only be dismissed for cause; • the prohibition on actions by written consent of our stockholders; • the limitation on who may call a special meeting of stockholders; • the establishment of advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon at stockholder meetings; and • the requirement of at least 75% of the outstanding capital stock to amend any of the foregoing second through fifth provisions.
We are an emerging growth company, and for as long as we continue to be an emerging growth company, we intend to take advantage of exemptions from various reporting requirements such as, but not limited to, not being required to obtain auditor attestation of our reporting on internal control over financial reporting, having reduced disclosure obligations about our executive compensation in our periodic reports and proxy statements, and not being required to hold advisory stockholder votes on executive compensation and stockholder approval of any golden parachute payments not previously approved.
We are currently an emerging growth company, and for as long as we continue to be an emerging growth company, we intend to take advantage of exemptions from various reporting requirements such as, but not limited to, not being required to obtain auditor attestation of our reporting on internal control over financial reporting, having reduced disclosure obligations about our executive compensation in our periodic reports and proxy statements, and not being required to hold advisory stockholder votes on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Though GDPR intended to harmonize the privacy laws across the EEA, member state interpretations of the law continue to vary making compliance increasingly complex. For example, France and Germany, have adopted a strict approach to the dropping of any cookies without consent, even if cookies are used strictly for technical delivery and not for personalization.
Though GDPR is intended to harmonize privacy laws across the EEA, member state interpretations of the law continue to vary making compliance increasingly complex. For example, France and Germany have adopted a strict approach to the dropping of any cookies without consent, even if cookies are used strictly for technical delivery and not for personalization.
The trading price of our common stock might also decline in reaction to events that affect other companies in the digital advertising industry even if these events do not directly affect us. In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company.
The trading price of the Common Stock might also decline in reaction to events that affect other companies in the digital advertising industry even if these events do not directly affect us. In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company.
Congress and state legislatures, along with federal regulatory authorities have recently increased their attention on matters concerning the collection and use of consumer data. For example, California enacted the California Consumer Privacy Act, along with related regulations (together, the “CCPA”), which was subsequently updated by the California Privacy Rights Act (“CPRA”).
Congress and state legislatures, along with federal regulatory authorities have increased their attention on matters concerning the collection and use of consumer data. For example, California enacted the California Consumer Privacy Act, along with related regulations (together, the “CCPA”), which was subsequently updated by the California Privacy Rights Act (“CPRA”).
However, the ruling requires that European organizations seeking to rely on the EU SCCs to export data out of the EEA ensure the data is protected to a standard that is “essentially equivalent” to that in the EEA including, where necessary, by taking “supplementary measures” to protect the data.
However, the ruling requires that European organizations seeking to rely on the SCCs to export data out of the EEA ensure the data is protected to a standard that is “essentially equivalent” to that in the EEA including, where necessary, by taking “supplementary measures” to protect the data.
We have elected to use the extended transition period under the JOBS Act. Accordingly, our consolidated financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards.
We have elected to use the extended transition period under the JOBS Act. Accordingly, our audited consolidated financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards.
Our platform is designed with degradation features that enable us to turn off our organic experiences and ads without producing white space on the media partner’s properties for the vast majority of our media partners.
Outbrain’s platform is designed with degradation features that enable us to turn off our organic experiences and ads without producing white space on the media partner’s properties for the vast majority of our media partners.
The following are some of the political and regulatory risks and challenges we face across jurisdictions: • greater difficulty in enforcing contracts; • higher costs of doing business internationally, including costs incurred in establishing and maintaining office space and equipment for our international operations; • risks associated with trade restrictions and foreign legal requirements, including any certification and localization of our platform that may be required in foreign countries; • organizing or similar activity by workers, local unions, work councils, or other labor organizations; • our ability to respond to competitive developments and other market and technological dynamics, such as the emergence of generative AI; • greater risk of unexpected changes in regulatory practices, tariffs, and tax laws and treaties; • compliance with anti-bribery laws, including, without limitation, compliance with the U.S.
The following are some of the political and regulatory risks and challenges we face across jurisdictions: • greater difficulty in enforcing contracts; • higher costs of doing business internationally, including costs incurred in establishing and maintaining office space and equipment for our international operations; • risks associated with trade restrictions and foreign legal requirements, including any certification and localization of our platform that may be required in foreign countries; 34 Table of Contents • organizing or similar activity by workers, local unions, work councils, or other labor organizations; • our ability to respond to competitive developments and other market and technological dynamics, such as the emergence of generative AI; • greater risk of unexpected changes in regulatory practices, tariffs, and tax laws and treaties; • compliance with anti-bribery laws, including, without limitation, compliance with the U.S.
The existence of a share repurchase program could also cause our stock price to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity for our stock.
The existence of a share repurchase program could also cause our stock price to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity for the Common Stock.
Factors that can cause our results of operations to fluctuate include: • changes in demand and competition for ad inventory sold on our platform; • changes in our access to valuable ad inventory of media partners; • the addition or loss of media partners on our platform, an d/or loss of ad inventory from a media partner; • costs associated with adding or attempting to retain media partners; • the continuation or worsening of unfavorable economic or business conditions or downturns or instability in financial markets; • seasonality of our business; • changes in consumer usage of devices and channels to access media and digital content; • changes in the structure of the buying and selling of digital ad inventory; 26 Table o f Contents • changes in the pricing policies of media partners and competitors; • changes in third-party service costs; • changes and uncertainty in our legislative, regulatory, and industry environment, particularly in the areas of data protection and consumer privacy; • introduction of new technologies or solutions; • unilateral actions taken by demand side platforms, agencies, advertisers, media partners, and supply side platforms; • changes in our capital expenditures as we acquire hardware, technologies, and other assets for our business; and • changes to the cost of retaining and adding highly specialized personnel.
Factors that can cause our results of operations to fluctuate include: • changes in demand and competition for ad inventory sold on our platform; • changes in our access to valuable ad inventory of media partners; • the addition or loss of media partners on our platform, an d/or loss of ad inventory from a media partner; • costs associated with adding or attempting to retain media partners; • the continuation or worsening of unfavorable economic or business conditions or downturns or instability in financial markets; • seasonality of our business; • changes in consumer usage of devices and channels to access media and digital content; • changes in the structure of the buying and selling of digital ad inventory; • changes in the pricing policies of media partners and competitors; • changes in third-party service costs; 27 Table of Contents • changes and uncertainty in our legislative, regulatory, and industry environment, particularly in the areas of data protection and consumer privacy; • introduction of new technologies or solutions; • unilateral actions taken by demand side platforms, agencies, advertisers, media partners, and supply side platforms; • changes in our capital expenditures as we acquire hardware, technologies, and other assets for our business; and • changes to the cost of retaining and adding highly specialized personnel.
Disruptions to our platform and our servers could interrupt our ability to provide our solutions and materially affect our reputation, relationships with media partners and advertisers, business and results of operations.
Any disruptions to our platform and our servers could interrupt our ability to provide our solutions and materially affect our reputation, relationships with media partners and advertisers, business and results of operations.
If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile.
If some investors find the Common Stock less attractive as a result, there may be a less active trading market for the Common Stock, and our stock price may be more volatile.
Sales of substantial amounts of our common stock in the public markets, or the perception that they may occur, could cause the market price of our common stock to decline.
Sales of substantial amounts of Common Stock in the public markets, or the perception that they may occur, could cause the market price of the Common Stock to decline.
We have never declared or paid cash dividends on our common stock and do not expect to pay any dividends in the foreseeable future.
We have never declared or paid cash dividends on the Common Stock and do not expect to pay any dividends in the foreseeable future.
Although we are certified under the DPF, this mechanism is already facing legal scrutiny and challenges, similar to the Privacy Shield, and its invalidation may impact our ability to transfer EEA/UK data to the United States. The second mechanism, the UK and EEA Standard Contractual Clauses (“SCCs”), were upheld as a valid legal mechanism for transnational data transfer.
Although we are certified under the DPF, this mechanism is already facing legal scrutiny and challenges, similar to the Privacy Shield, and its invalidation may impact our ability to transfer EEA/UK data to the United States. The second mechanism, the UK and EEA Standard Contractual Clauses (“SCCs”), was upheld as a valid legal mechanism for transnational data transfer.
Further, such activity may result in the company operating in businesses beyond its current core business with risk factors beyond those which are identified here. From time to time, we may evaluate potential mergers and acquisitions or investment opportunities. We have made a number of acquisitions in the past.
Further, such activity may result in the company operating in businesses beyond its current core business with risk factors beyond those which are identified here. From time to time, we may evaluate potential mergers and acquisitions or investment opportunities. We have made a number of acquisitions in the past, including the Acquisition.
As a result of such actions, we may become subject to significant liability, including claims for damages, financial penalties, and costs of compliance. Claims may be expensive to defend, divert management’s attention from our business operations, and affect the cost and availability of insurance, even if we ultimately prevail.
As a result of such actions, we have become and may continue to become subject to significant liability, including claims for damages, financial penalties, and costs of compliance. Claims may be expensive to defend, divert management’s attention from our business operations, and affect the cost and availability of insurance, even if we ultimately prevail.
As a result, loss of confidence in such mechanisms and slow adoption rates create may undermine the viability of the TCF such that there is no industry standard for requesting and obtaining consent, all of which could negatively affect our business, results of operations, and financial condition.
As a result, loss of confidence in such mechanisms and slow adoption rates of changes may undermine the viability of the TCF such that there is no industry standard for requesting and obtaining consent, all of which could negatively affect our business, results of operations, and financial condition.
While we attempt to negotiate long payment periods with our media partners and shorter periods from our advertisers and seek to enforce the payment terms currently in place with our clients, we are not always successful. As a result, we must manage timing issues between our accounts payable and our accounts receivables.
While we attempt to negotiate long payment periods with our media partners and shorter periods from our advertisers and seek to enforce the payment terms currently in place with our clients, we are not always successful. As a result, we must manage timing issues between our accounts payable and our accounts receivable.
In Europe, the General Data Protection Regulation (EU) 2016/679 (“GDPR”) took effect on May 25, 2018 and applies to products and services that we provide in Europe, as well as the processing of personal data of European Economic Area (“EEA”) residents, wherever that processing occurs.
In Europe, the General Data Protection Regulation (EU) 2016/679 (“GDPR”) took effect on May 25, 2018 and applies to products and services that we provide in Europe, as well as the processing of personal data of individuals in the European Economic Area (“EEA”), wherever that processing occurs.
Pursuant to GDPR, the UK GDPR and related ePrivacy laws, media partners and any downstream partners are required to obtain unambiguous consent from EEA data subjects to process their personal data, which the industry has addressed through the release and widespread adoption of the IAB TCF.
Pursuant to GDPR, the UK GDPR and related ePrivacy laws, media partners, advertisers and any partners are required to obtain unambiguous consent from EEA data subjects to process their personal data, which the industry has addressed through the release and widespread adoption of the IAB TCF.
Failure to comply with GDPR, or its implementation in the United Kingdom through the Data Protection Act 2018 (“UK GDPR”), may result in significant penalties for non-compliance, in the United Kingdom, the greater of £17.5 million or 4% of the total worldwide turnover in the preceding financial year or, in the case of the GDPR, whichever is greater €20 million or 4% of an enterprise’s global annual revenue.
Failure to comply with GDPR, or its implementation in the United Kingdom through the UK GDPR and the Data Protection Act 2018 (together, the “UK GDPR”), may result in significant penalties for non-compliance, in the United Kingdom, the greater of £17.5 million or 4% of the total worldwide turnover in the preceding financial year or, in the case of the GDPR, whichever is greater, €20 million or 4% of an enterprise’s global annual revenue.
Digital services or other similar taxes could, among other things, increase our tax expense, create significant administrative burdens for us, discourage potential customers from subscribing to our platform due to the incremental cost of any such sales or other related taxes, or otherwise have a negative effect on our financial condition and results of operations.
Digital services or other similar taxes could, among other things, 41 Table of Contents increase our tax expense, create significant administrative burdens for us, discourage potential customers from subscribing to our platform due to the incremental cost of any such sales or other related taxes, or otherwise have a negative effect on our financial condition and results of operations.
Acquisitions and investments carry with them a number of risks, including the following: • diversion of management time and focus from operating our business; • implementation or remediation of controls, procedures and policies of the acquired company; 31 Table o f Contents • integration of financial systems; • coordination of product, engineering and selling and marketing functions; • retention of employees from the acquired company; • unforeseen liabilities; • litigation or other claims arising in connection with the acquired company; and • in the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic, currency, political and regulatory risks associated with specific countries.
Acquisitions and investments carry with them a number of risks, including the following: • diversion of management time and focus from operating our business; • implementation or remediation of controls, procedures and policies of the acquired company; • integration of financial systems; • coordination of product, engineering and selling and marketing functions; • retention of employees from the acquired company; • unforeseen liabilities; • litigation or other claims arising in connection with the acquired company; and • in the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic, currency, political and regulatory risks associated with specific countries.
Factors that could cause fluctuations in the trading price of our common stock include the following: • significant volatility in the market price and trading volume of technology companies in general and of companies in the digital advertising industry in particular; • announcements of new solutions or technologies, commercial relationships, acquisitions, or other events by us or our competitors; • price and volume fluctuations in the overall stock market from time to time; • changes in how advertisers perceive the benefits of our platform and future offerings; • the public’s reaction to our press releases, other public announcements, and filings with the SEC; • the trading of or conversion of our Convertible Notes; • fluctuations in the trading volume of our shares or the size of our public float; • sales of large blocks of our common stock; • actual or anticipated changes or fluctuations in our results of operations; • changes in actual or future expectations of investors or securities analysts; • litigation involving us, our industry, or both; • governmental or regulatory actions or audits; 39 Table o f Contents • regulatory developments applicable to our business, including those related to privacy in the United States or globally; • general economic conditions and trends; • major catastrophic events in our domestic and foreign markets; and • departures of key employees.
Factors that could cause fluctuations in the trading price of the Common Stock include the following: • significant volatility in the market price and trading volume of technology companies in general and of companies in the digital advertising industry in particular; • announcements of new solutions or technologies, commercial relationships, acquisitions, or other events by us or our competitors; • price and volume fluctuations in the overall stock market from time to time; • changes in how advertisers perceive the benefits of our platform and future offerings; • the public’s reaction to our press releases, public announcements, and filings with the SEC; • fluctuations in the trading volume of our shares or the size of our public float; • sales of large blocks of Common Stock; • actual or anticipated changes or fluctuations in our results of operations; • changes in actual or future expectations of investors or securities analysts; • litigation involving us, our industry, or both; • governmental or regulatory actions or audits; • regulatory developments applicable to our business, including those related to privacy in the United States or globally; • general economic conditions and trends; • major catastrophic events in our domestic and foreign markets; and • departures of key employees.
Sanctions under the DSA include fines of up to 6% of global turnover in the event of non-compliance and can lead to a ban on operating in the EU in cases of repeated serious breaches. A similar piece of legislation, the Online Safety Bill, is currently being discussed in the UK.
Sanctions under the DSA include fines of up to 6% of global turnover in the event of non-compliance and can lead to a ban on operating in the E.U. in cases of repeated serious breaches. A similar piece of legislation, the Online Safety Bill, is currently being discussed in the UK.
Much of this scrutiny has focused on the use of cookies and other technologies to collect information about Internet users’ online browsing activity on web browsers, mobile devices, and other devices, to associate such data with user or device identifiers or de-identified identities across devices and channels.
Much of this scrutiny has focused on the use of cookies and other technologies to collect information about Internet users’ online browsing activity on web browsers, mobile devices, and other devices, to associate such data with user or device identifiers or individual identities across devices and channels.
As we expand and change, in particular across multiple geographies, following acquisitions, in more remote environments or in global talent centers, it may be difficult to preserve our corporate culture, which could reduce our ability to innovate, create, and operate effectively.
As we expand and change, in particular across multiple geographies, following acquisitions, including the Acquisition, in more remote environments or in global talent centers, it may be difficult to preserve our corporate culture, which could reduce our ability to innovate, create, and operate effectively.
The GDPR includes operational requirements for companies that receive or process personal data of residents of the EEA that are different from those that were in place in the EEA prior to the GDPR.
The GDPR includes operational requirements for companies that receive or process personal data of individuals in the EEA that are different from those that were in place in the EEA prior to the GDPR.
If one or more of these analysts who cover us ceases coverage of our company or fails to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.
If one or more of these analysts who cover us ceases coverage of our 43 Table of Contents company or fails to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.
We evaluate periodically the various currencies to which we are exposed and take hedging measures to reduce the potential adverse impact from the appreciation or the depreciation of our non-U.S.-dollar-denominated operations, as appropriate.
We evaluate periodically the various currencies to which we are exposed and 28 Table of Contents take hedging measures to reduce the potential adverse impact from the appreciation or the depreciation of our non-U.S.-dollar-denominated operations, as appropriate.
If any of this occurs, it may have a material adverse effect on our reputation, business operations, financial position, competitive position and prospects. We may be unable to obtain, maintain and protect our intellectual property rights and proprietary information or prevent third parties from making unauthorized use of our intellectual property. Our intellectual property rights are important to our business.
If any of this occurs, it may have a material adverse effect on our reputation, business operations, financial position, competitive position and prospects. We may be unable to obtain, maintain and protect our intellectual property rights and proprietary information, or prevent third parties from making unauthorized use of our intellectual property or claiming unauthorized use of their intellectual property.
There can be no assurance that we or our third-party providers will be successful in preventing security breaches, including as a result of cyber attacks, or successfully mitigating their effects. 30 Table o f Contents Further, our servers and data centers are vulnerable to damage or interruption from fires, natural disasters, terrorist attacks, power loss, telecommunications failures or similar catastrophic events.
There can be no assurance that we or our third-party providers will be successful in preventing security breaches, including as a result of cyber attacks, or successfully mitigating their effects. Further, our servers and data centers are vulnerable to damage or interruption from fires, natural disasters, terrorist attacks, power loss, telecommunications failures or similar catastrophic events.
In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. 42 Table o f Contents Item 1B. Unresolved Staff Comments None.
In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. 45 Table of Contents Item 1B. Unresolved Staff Comments None.
We believe our corporate culture has been a critical component of our success as we believe it fosters innovation, creativity, and teamwork across our business, helping to drive our success. We cannot ensure we can effectively maintain our corporate culture as we continue to grow and maintain the hybrid work model we established as a result of COVID-19.
We believe our corporate culture has been a critical component of our success as we believe it fosters innovation, creativity, and teamwork across our business, helping to drive our success. We cannot ensure we can effectively maintain our corporate culture as we continue to grow and maintain the hybrid work model.
As described in more detail below in this Item 1A under “ User growth and engagement depends upon effective interoperation with devices, platforms and standards set by third parties that we do not control, ” prominent technology companies also have discontinued, or announced intentions to discontinue, the use of certain cookies, and to develop alternative methods and mechanisms for tracking users .
As described in more detail below under the risk factor titled “ User growth and engagement depends upon effective interoperation with devices, platforms and standards set by third parties that we do not control, ” prominent technology companies also have discontinued, or announced intentions to discontinue, the use of certain cookies, and to develop alternative methods and mechanisms for tracking users .
The most commonly used Internet browsers allow users to modify their browser settings to block first-party cookies (placed directly by the media partner or website owner that the user intends to interact with) or third-party cookies, and some browsers block third-party cookies by default.
The most commonly used Internet browsers allow users 29 Table of Contents to modify their browser settings to block first-party cookies (placed directly by the media partner or website owner that the user intends to interact with) or third-party cookies, and some browsers block third-party cookies by default.
Further, in the European Union, current national laws that implement the ePrivacy Directive (2002/58/EC) will be replaced by the ePrivacy Regulation, which will significantly increase fines for non-compliance and impose burdensome requirements around placing cookies.
In addition to GDPR, in the European Union, current national laws that implement the ePrivacy Directive (2002/58/EC) will be replaced by the ePrivacy Regulation, which will significantly increase fines for non-compliance and impose burdensome requirements around placing cookies.
The rapid evolution of AI, including government regulation of AI, may impede our ability to do business and will require significant resources to ensure compliance. Failures or loss of our infrastructure, including hardware and software, with respect to us and other service providers on which we rely, could adversely affect our business.
The rapid evolution of AI, including government regulation of AI, may impede our ability to do business and will require significant resources to compete effectively and to ensure compliance with evolving regulatory requirements. Failures or loss of our infrastructure, including hardware and software, with respect to us and other service providers on which we rely, could adversely affect our business.
Media owners face challenges growing and maintaining their audiences a result of the proliferation of new and innovative content distribution methods such as social media platforms. The overall decline in media owner audiences limits available advertising inventory creating financial pressure on media owners who rely on advertising to operate their business.
Media owners face challenges growing and maintaining their audiences as a result of the proliferation of new and innovative content distribution methods such as social media platforms and AI summarization. The overall decline in media owner audiences may limit available advertising inventory creating financial pressure on media owners who rely on advertising to operate their business.
There can be no assurance that any limitation of liability provisions in our contracts would be enforceable or adequate or would otherwise protect us from any such liabilities or damages with respect to any particular claim arising from a cyber incident.
There can be no assurance that any limitation of liability provisions in our contracts would be enforceable or adequate or would otherwise protect us from any such liabilities or damages with respect to any particular claim arising from such disruptions.
Any such strategies, such as forward contracts, options and foreign exchange swaps related to transaction exposures that we may implement to mitigate this risk may not fully eliminate our exposure to foreign exchange fluctuations. 27 Table o f Contents Our business depends on our ability to collect, use and disclose data to deliver advertisements.
Any such strategies, such as forward contracts, options and foreign exchange swaps related to transaction exposures that we may implement to mitigate this risk may not fully eliminate our exposure to foreign exchange fluctuations. Our business depends on our ability to collect, use and disclose data to deliver advertisements.
As a result of any of the above, we have been involved in litigation or governmental investigations, whether on our own, or involving or concerning our media partners or advertisers, including class action claims, or as third-parties required to comply with requests for information or subpoenas.
As a result of the above, we have been involved in, and could be involved in further, litigation or governmental investigations, whether on our own, or involving or concerning our media partners or advertisers, including class action claims, or as third-parties required to comply with requests for information or subpoenas.
Our sales and marketing teams educate prospective media partners and advertisers about the use, technical capabilities, and benefits of our platform. Our sales cycle (with both media partners as well as with certain advertisers and agencies) can take 21 Table o f Contents significant time from initial contact to contract execution and implementation.
Our sales and marketing teams educate prospective media partners and advertisers about the use, technical capabilities, and benefits of our platform. Our sales cycle (with both media partners as well as with certain advertisers and agencies) can take significant time from initial contact to contract execution and implementation.
Additionally, we are subject to laws and regul ations related to data privacy, data protection, information security, and consumer protection across different markets where we conduct our business, which could potentially impact our ability to collect, use, and disclose data as described in this Item 1A under “ We are subject to laws and regulations related to online privacy, data protection, and information security, and consumer protection across different markets where we conduct our business, including in the United States and Europe.
Additionally, we are subject to laws and regul ations related to data privacy, data protection, information security, and consumer protection across different markets where we conduct our business, which could potentially impact our ability to collect, use, and disclose data as described in under the risk factor titled “ We are subject to laws and regulations related to online privacy, data protection, and information security, and consumer protection across different markets where we conduct our business, including in the United States and Europe.
Moreover, additional or different disclosures may lead to a reduction in user engagement, which could have an adverse effect on our business, results of operations, and financial condition. 37 Table o f Contents Environmental, social and governance (“ESG”) risks could adversely affect the Company's reputation, business and performance and the trading price of its common stock.
Moreover, additional or different disclosures may lead to a reduction in user engagement, which could have an adverse effect on our business, results of operations, and financial condition. Environmental, social and governance (“ESG”) risks could adversely affect the Company’s reputation, business and performance and the trading price of the Common Stock.
We rely on a combination of confidentiality clauses, trade secrets, copyrights, patents and trademarks to protect our intellectual property and know-how. However, the steps we take to protect our intellectual property may be inadequate.
Our intellectual property rights are important to our business. We rely on a combination of confidentiality clauses, trade secrets, copyrights, patents and trademarks to protect our intellectual property and know-how. However, the steps we take to protect our intellectual property may be inadequate.
Although we have not been classified as a “very large online platform” under the DSA, we may still be required to comply with the provisions of the DSA or support our partners’ compliance with the provisions of the DSA.
Although we have not been classified as a “very large online platform” under the DSA, we are still required to comply with the provisions of the DSA and/or support our partners’ compliance with the provisions of the DSA.
Our directors, executive officers and employees hold options and restricted stock units under our equity incentive plans, and the shares issuable upon the exercise of such options or vesting of such restricted stock units have been registered for public resale under the Securities Act.
Our directors, executive officers and employees hold options and restricted stock units under our equity incentive plans, and the shares issuable upon the exercise of such options or vesting of such restricted stock units have been registered for public resale under the Securities Act of 1933, as amended (the “Securities Act”).
If our media partners or advertisers were to breach their contractual or other requirements in this regard, or a court or governmental agency 35 Table o f Contents were to determine that we, our media partners and/or our advertisers failed to comply with any applicable law, then we may be subject to potentially adverse publicity, damages and related possible investigation, litigation or other regulatory activity.
If our media partners or advertisers were to breach their contractual or other requirements in this regard, or a court or governmental agency were to determine that we, our media partners and/or our advertisers failed to comply with any applicable law, then we may be subject to potentially adverse publicity, damages and related possible investigations, litigation or other regulatory activity.
Risks Related to Outbrain and Outbrain’s Industry Our revenue and results of operations are highly dependent on overall advertising demand and spending in the markets in which we operate.
Risks Related to Outbrain, Teads and the Company Our revenue and results of operations are highly dependent on overall advertising demand and spending in the markets in which we operate.
We are members of self-regulatory bodies that impose additional requirements related to the collection, use, and disclosure of consumer data, such as the right to opt out of the sharing or the sale of their personal information for interest-based advertising purposes.
Global Privacy Platform and Multi-State Privacy Agreement. We are members of self-regulatory bodies that impose additional requirements related to the collection, use, and disclosure of consumer data, such as the right to opt out of the sharing or the sale of their personal information for interest-based advertising purposes.
The DSA imposes stricter obligations on curbing harmful or unlawful content, such as implementing tools to automatically monitor, detect and take down illegal online content; implementing a mechanism for users to easily flag content and to cooperate with “trusted flaggers” (such as NGOs); reinforcing traceability of our customers; implementing a mechanism for the public and businesses to challenge content moderation decisions and seek redress; providing access to vetted researchers to the key data and provision of access to NGOs to public data; increased transparency on the algorithms used for recommending content to users; implementing risk-based controls to prevent the misuse of our tools and independent audits of our risk management systems; implementing mechanisms to adapt swiftly and efficiently in reaction to crises affecting public security or public health; preventing the use of targeted advertising with respect to children targeting and sensitive personal data.
The DSA, among other things: imposes stricter obligations on curbing harmful or unlawful content, such as implementing tools to automatically monitor, detect and take down illegal online content; implements a mechanism for users to easily flag content and to cooperate with “trusted flaggers” (such as NGOs); reinforces traceability of our customers; implements a mechanism for the public and businesses to challenge content moderation decisions and seek redress; provides access to vetted researchers to the key data and provision of access to NGOs to public data; increases transparency on the algorithms used for recommending content to users; implements risk-based controls to prevent the misuse of our tools and independent audits of our risk management systems; implements mechanisms to adapt swiftly and efficiently in reaction to crises affecting public security or public health; and prevents the use of targeted advertising with respect to child targeting and sensitive personal data.
In Europe, the Digital Services Act (EU) 2022/2065 (“DSA”) will be enforceable from February 2024 and applies to digital services that connect consumers to goods, services, or content in the EEA.
In Europe, the Digital Services Act (EU) 2022/2065 (“DSA”) became enforceable in February 2024 and applies to digital services that connect consumers to goods, services, or content in the EEA.
As we expand the application of our solutions, we increasingly depend on media agencies who assist advertisers in planning and purchasing advertising for brand marketing objectives, such as preference shift and brand awareness. Media agencies may require platforms like ours to be added to preferred partners programs, connect to designated intermediaries or make various commitments.
We depend on media agencies who assist advertisers in planning and purchasing advertising for brand marketing objectives, such as preference shift and brand awareness. Media agencies may require platforms like ours to be added to preferred partners programs, connect to designated intermediaries or make various commitments.
Although we developed technical solutions to comply with such cookie limitations, evolving interpretations of required limitations may result in unintended consequences with respect to our operations, such as fraud identification or user experience.
Although we have developed technical solutions to comply with such cookie limitations, evolving interpretations of required limitations may result in unintended consequences with respect to our operations, such as inhibiting fraud prevention efforts or user experience.
Real or perceived errors, disruptions or outages in our platform, including due to the possible cyberattacks discussed above or our failure to maintain adequate security and supporting infrastructure, could adversely affect our operating results and growth prospects.
Our business depends on our ability to maintain and scale our technology platform. Real or perceived errors, disruptions or outages in our platform, including due to the possible cyberattacks discussed above or our failure to maintain adequate security and supporting infrastructure, could adversely affect our operating results and growth prospects.
As regulators start to enforce a strict approach regarding the use of cookies, we expect further system changes, limitations on the effectiveness of our advertising activities, and compliance requirements, which may adversely affect our margins, increase costs, and subject us to additional liabilities.
As more regulators (such as the German and French regulators) enforce a stricter approach regarding the use of cookies, we expect further system changes, limitations on the effectiveness of our advertising activities, and compliance requirements, which may adversely affect our margins, increase costs, and subject us to additional liabilities.
In the event that use of the DFP, the SCCs or relying on the UK adequacy decision are invalidated as solutions for data transfers to the U.S., or there are additional changes to the data protection regime in the EEA/UK resulting in any inability to transfer personal data from the EEA/UK to the U.S. in compliance with data protection laws, European media partners and advertisers may be more inclined to work with businesses that do not rely on such compliance mechanisms to ensure legal and regulatory compliance, such as EEA/UK-based companies or other competitors that do not need to transfer personal data to the U.S. in order to avoid the above-identified risks and legal issues.
In the event that use of the DPF, the SCCs or reliance on the UK adequacy decision are invalidated as solutions for data transfers to the U.S., or there are additional changes to the data protection regime in the EEA/UK resulting in any inability to transfer personal data from the EEA/UK to the U.S. in compliance with data protection laws, European media partners and advertisers may be more inclined to work with businesses that do not rely on such compliance mechanisms, such as EEA/UK-based companies or other competitors that do not need to transfer personal data to the U.S..
While the text of the ePrivacy Regulation is still under development, the CJEU Fashion ID, Planet 49, Wirtschaftsakademie cases are driving increased attention to cookies and tracking technologies and impacting compliance requirements across the ecosystem.
While the text of the ePrivacy Regulation is still under development, the CJEU Fashion ID, Planet 49, Wirtschaftsakademie cases are driving increased attention to cookies and tracking technologies and impacting compliance requirements across the ecosystem, particularly when applied in conjunction with GDPR.
We operate in an industry with extensive intellectual property litigation. There is a risk that our business, platform, and services may infringe or be alleged to infringe the trademarks, copyrights, patents, and other intellectual property rights of third parties, including patents held by our competitors or by non-practicing entities.
There is a risk that our business, platform, and services may infringe or be alleged to infringe the trademarks, copyrights, patents, and other intellectual property rights of third parties, including patents held by our competitors or by non-practicing entities.
We rely on owned and leased servers and other third-party hardware and infrastructure to support our operations. To support our business needs, we operate our own proprietary cloud infrastructure using third party data centers co-located in three geographically separate locations managed by three different vendors in the United States.
We rely on owned and leased servers and other third-party hardware and infrastructure to support our operations. To support our business needs, we operate our own proprietary cloud infrastructure using third party data centers co-located in separate locations managed by different vendors in the United States. In addition, we also serve recommendations from a public cloud.
In addition, the UK Information Commissioner’s Office (“ICO”), the Irish Data Protection Commission and the French Commission Nationale de l’Informatique et de Libertés (“CNIL”) continue to investigate the ad tech industry and the use of cookies.
The UK Information Commissioner’s Office (“ICO”), the Irish Data Protection Commission and the French Commission Nationale de l’Informatique et de Libertés (“CNIL”) have investigated and continue to investigate the ad tech industry, including our partners and the use of cookies.
The occurrence of unforeseen events, like the COVID-19 pandemic, conflicts and wars, and other macroeconomic factors that affect advertising demand may have a disproportionate impact on our revenues and profitability in certain periods and could adversely affect our business, results of operations, and financial condition.
The occurrence of unforeseen events, like public health crises, conflicts and wars, and other macroeconomic factors 21 Table of Contents that affect advertising demand may have a disproportionate impact on our revenues and profitability in certain periods and could adversely affect our business, results of operations, and financial condition.
Any security breach or cyber incident, which impacts us or one of our third-party service providers, or any failure on our part or on the part of such third parties to protect our sites, networks and systems or to protect our confidential information or the confidential information of others could damage our reputation and brand and substantially harm our business and operating results. 29 Table o f Contents Our business depends on our ability to maintain and scale our technology platform.
Any security breach or cyber incident, which impacts us or one of our third-party service providers, or any failure on our part or on the part of such third parties to protect our sites, networks and systems or to protect our confidential information or the confidential information of others could damage our reputation and brand and substantially harm our business and operating results.
If we experience a decline in consumers or their engagement, for example, because consumers begin to ignore our platform or direct their attention to other elements on the online properties of our media partners, our media partners and advertisers may in turn not view our solutions as attractive, which could harm our business, results of operations, and financial condition.
If we experience a decline in consumers or their engagement, for example, because consumers begin to ignore our platform or direct their attention to other elements on the online properties of our media partners, our media partners and advertisers may in turn not view our solutions as attractive, which could harm our business, results of operations, and financial condition. 25 Table of Contents The content of advertisements could damage our reputation and brand, or harm our ability to expand our base of consumers, advertisers and media partners, and negatively impact our business, results of operations, and financial condition.
Companies are facing increasing scrutiny from investors, customers, regulators and other stakeholders related to their ESG practices and disclosure. The nature, scope and complexity of matters that we must assess and report are expanding due to growing mandatory and voluntary reporting relating to the environment, climate change, diversity and inclusion, workplace conduct and human capital management.
Companies are facing increasing scrutiny from investors, customers, regulators and other stakeholders related to their ESG practices and disclosure. The nature, scope and complexity of matters that we must assess and report are constantly changing due to evolving governmental and investor expectations regarding reporting relating to climate change, diversity and inclusion, workplace conduct and human capital management.
In addition, we also serve recommendations from a public cloud based in Europe. We do not have control over the operations of these facilities or technology of our cloud and service providers, including any third-party vendors that collect, process and store personal data on our behalf.
We do not have control over the operations of these facilities or technology of our cloud and service providers, including any third-party vendors that collect, process and store personal data on our behalf.
Foreign Corrupt Practices Act and the UK Bribery Act; • compliance with data protection and privacy law regimes of various countries, especially as our business relates to consumer online privacy and interested-based advertising; • heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements; • the uncertainty of protection for intellectual property rights in some countries; • general economic and political conditions in these foreign markets, including political and economic instability in some countries; • the potential for heightened regulation relating to content curation or discovery as a result of concerns relating to the spread of disinformation through technology platforms; and • double taxation of our international earnings and potentially adverse tax consequences due to changes in the tax laws of the United States or the foreign jurisdictions in which we operate. 32 Table o f Contents We are subject to laws and regulations related to online privacy, data protection, information security, content and consumer protection across different markets where we conduct our business, including in the United States and Europe.
Foreign Corrupt Practices Act, to the extent in effect, and the UK Bribery Act; • compliance with data protection and privacy law regimes of various countries, especially as our business relates to consumer online privacy and interested-based advertising; • heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements; • the uncertainty of protection for intellectual property rights in some countries; • general economic and political conditions in these foreign markets, including political and economic instability in some countries; • the potential for heightened regulation relating to content curation or discovery as a result of concerns relating to the spread of disinformation through technology platforms; • double taxation of our international earnings and potentially adverse tax consequences due to changes in the tax laws of the United States or the foreign jurisdictions in which we operate; and • With respect to the United States, changes in federal policy, including trade and tariff policies and tax policy, occur over time through policy and personnel changes following elections.
The trading price of our common stock has fluctuated and may continue to do so. These fluctuations could cause you to incur substantial losses, including all of your investment in our common stock.
Technology stocks historically have experienced high levels of volatility. The trading price of the Common Stock has fluctuated and may continue to do so. These fluctuations could cause you to incur substantial losses, including all of your investment in the Common Stock.
In addition to hiring new employees, we must continue to focus on retaining our best employees. Competition for highly skilled personnel in our industry is challenging across all our locations, particularly in New York City, where our headquarters are located, and in Israel and Slovenia, where we conduct the majority of our research and development activities.
Competition for highly skilled personnel in our industry is challenging across all our locations, particularly in New York City, where our headquarters are located, and in Israel, France and Slovenia, where we conduct the majority of our research and development activities.
If we are held to have breached the terms of an open source software license, we could be required to seek licenses from third parties to continue operating using our solution on terms that are not economically feasible, to re-engineer our solution or the supporting computational infrastructure to discontinue use of code, or to make generally available, in source code form, portions of our proprietary code.
If we are held to have breached the terms of an open source software license, we could be required to seek licenses from third parties to continue operating using our solution on terms that are not economically feasible, to re-engineer our solution or the supporting computational infrastructure to discontinue use of code, or to make generally available, in source code form, portions of our proprietary code. 40 Table of Contents We are required to comply with international advertising regulations in connection with the distribution of advertising, including potential regulation or oversight of native advertising disclosure standards.
Doing business outside of the U.S. also increases our risk exposure to anti-corruption laws and regulations such as the Foreign Corrupt Practices Act, any violation of which could expose us to significant financial penalties or consent orders that may curtail our business. We may engage in strategic transactions, which may not yield a positive financial outcome.
Doing business outside of the U.S. also increases our risk exposure to anti-corruption laws and regulations, such as 33 Table of Contents the Foreign Corrupt Practices Act to the extent in effect, any violation of which could expose us to significant financial penalties or consent orders that may curtail our business.
Even if our sales and marketing efforts are successful, there can be no assurance that the properties of our media partners will be able to generate sufficient user interest, traffic or engagement.
If we are unsuccessful in our sales and marketing efforts, our results of operations and prospects will be adversely affected. 22 Table of Contents Even if our sales and marketing efforts are successful, there can be no assurance that the properties of our media partners will be able to generate sufficient user interest, traffic or engagement.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe use COBIT, or Control Objectives for Information Technologies, as a framework for risk management and manage various controls as required by ISO 27001, 27017 and 27032 standards. We maintain the following certifications: ISO 27001, ISO 27017 and ISO 27032, Cloud Security Alliance Star level 1 and PCI-DSS SAQ A-EP. Our on-premises data centers are SOC 2 certified.
Biggest changeOutbrain uses COBIT, or Control Objectives for Information Technologies, as a framework for risk management and manages various controls as required by ISO 27001, 27017 and 27032 standards. Outbrain maintains the following certifications: ISO 27001, ISO 27017 and ISO 27032, Cloud Security Alliance Star level 1 and PCI-DSS SAQ A-EP. Outbrain’s on-premises data centers are SOC 2 certified.
Our cybersecurity risk management program includes: • Ongoing risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; • cybersecurity awareness training of our employees, incident response personnel, and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; • a third-party risk management process for service providers, suppliers, and vendors.
Our cybersecurity risk management program includes: • Ongoing risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; • cybersecurity awareness training of our employees, incident response personnel, and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for service providers, suppliers, and vendors.
Our Risk Committee, which includes our CEO and other members of management, meets quarterly as part of the Company’s enterprise risk management program, with cybersecurity being the most significant area of review and reporting. Our security team, including our Governance Risk and Compliance lead (GRC), CISO & CIO, is responsible for assessing and managing our risks from cybersecurity threats.
Our Risk Committee, which includes our CEO and other members of management, meets quarterly as part of the Company’s enterprise risk management program, with cybersecurity being the most significant area of review and reporting. Our security team, including our Governance Risk and Compliance lead (GRC) and CISO, is responsible for assessing and managing our risks from cybersecurity threats.
The full Board also receives briefings from management on our cyber risk management program, including education sessions regarding cybersecurity topics from our Chief Information Officer (CIO) and Chief Information Security Officer (CISO), internal security staff or external experts.
The full Board also receives briefings from management on our cyber risk management program, including education sessions regarding cybersecurity topics from our Chief Information Security Officer (CISO), internal security staff or external experts.
In addition, management updates the Committee, as necessary, regarding any material cybersecurity incidents, as well as certain other incidents that have lesser impact potential. The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity.
In addition, management updates the Committee, as necessary, regarding any material cybersecurity incidents, as well as certain other incidents that have lesser impact potential. 46 Table of Contents The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity.
Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee oversight of cybersecurity and other information technology risks. The Audit Committee oversees management’s implementation of our cybersecurity risk management program. 43 Table o f Contents The Audit Committee receives quarterly reports from management regarding our cybersecurity risks.
Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee oversight of cybersecurity and other information technology risks. The Audit Committee oversees management’s implementation of our cybersecurity risk management program. The Audit Committee receives quarterly reports from management regarding our cybersecurity risks.
Removed
Our CIO has 15 years experience as a technology leader with extensive cybersecurity experience. He is also CRISC (Certified in Risk and Information Systems Control) certified.
Added
Teads utilizes NIST as a framework for risk management and manage various controls as required by SOC2 Type 2. Teads maintains the SOC2 Type 2 certification and its cloud infrastructure providers are ISO 27 certified.
Added
Information Systems Acquired from Teads As disclosed above in Item 1 under “Acquisition of Teads,” on February 3, 2025, we completed our acquisition of Teads. Teads’ legacy information systems are currently maintained separately from Outbrain’s preexisting information system infrastructure.
Added
After we are able to fully evaluate Teads’ legacy information systems, protocols and practices, we plan to operationally integrate either the legacy Teads system or the legacy Outbrain system, and these integrated systems will then be subject to Outbrain’s cybersecurity risk management structure and strategy.
Added
While we integrate these systems, our GRC and CISO are engaging in cybersecurity risk management activities, and any cybersecurity incidents detected on the legacy Teads information systems are assessed, managed and reported in accordance with the governance processes detailed above.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeSince 2007, we have maintained a presence in Netanya, Israel, which is overseen by one of our founders, where we occupy space consisting of approximately 47,000 square feet under a lease that expires in 2026. In January 2023, we also entered into a new lease in Ljubljana, Slovenia, which is approximately 16,000 square feet and expires in 2032.
Biggest changeSince 2007, we have maintained a presence in Netanya, Israel, which is overseen by one of our founders, where we occupy space consisting of approximately 60,000 square feet under a lease that expires in 2030. We also have a leased office in Ljubljana, Slovenia, which is approximately 16,000 square feet and expires in 2032.
We believe that our current facilities are adequate to meet our needs f or the immediate future, and that, should it be needed, suitable additional space will be available to accommodate any expansion of our operations.
We believe that our current facilities are adequate to meet our needs for the immediate future, and that, should it be needed, suitable additional space will be available to accommodate any expansion of our operations.
We also have sales and operations offices in a number of locations around the world, including Cologne, Germany; Gurugram, India; Madrid, Spain; Milan, Italy; Munich, Germany; Paris, France; São Paolo, Brazil; Singapore; Sydney, Australia; Timişoara, Romania; and Tokyo, Japan.
We also have sales and operations offices in a number of locations around the world, including Cologne, Germany; Gurugram, India; Madrid, Spain; Milan, Italy; Munich, Germany; Paris, France; Singapore; Sydney, Australia; Timişoara, Romania; and Tokyo, Japan.
Added
The corporate headquarters of the Teads business is currently located in Paris, France in an office space consisting of approximately 16,000 square feet pursuant to a lease agreement terminating in 2026.
Added
Teads also has an office in Montpellier, France which is approximately 15,000 square feet pursuant to a lease agreement expiring in 2027, which is primarily used for technology and development.
Added
Teads maintains offices around the world, including in the U.S., Australia, Austria, Brazil, Canada, China, England, Germany, Italy, India, Japan, Korea, Mexico, Morocco, the Netherlands, Poland, Romania, Singapore, Spain, Switzerland, Taiwan, and the United Arab Emirates, all of which are leased, and are primarily used for general administration and sales and marketing.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeMine Safety Disclosures Not applicable. 44 Table o f Contents PART II
Biggest changeMine Safety Disclosures Not applicable. 47 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe below table sets forth the repurchases of our common stock for the three months ended December 31, 2023: Period (a) Total number of shares (or units) purchased (1) (b) Average price paid per share (or unit) (2) (c) Total number of shares purchased as part of publicly announced plans or programs (d) Approximate dollar value of shares that may yet be purchased under the plans or programs (in thousands) (2) October 2023 458,348 $4.71 440,000 $15,421 November 2023 338,377 $3.86 336,600 $14,128 December 2023 423,786 $4.14 408,689 $12,436 TOTAL 1,220,511 $4.28 1,185,289 _________________ (1) Total number of shares purchased includes shares repurchased under our $30 million share repurchase program, as well as shares withheld to satisfy employee tax withholding obligations arising in connection with the vesting and settlement of restricted stock units under our 2007 Omnibus Securities and Incentive Plan and our 2021 Long-Term Incentive Plan.
Biggest changeThe below table sets forth the repurchases of the Common Stock for the three months ended December 31, 2024: Period (a) Total number of shares (or units) purchased (1) (b) Average price paid per share (or unit) (c) Total number of shares purchased as part of publicly announced plans or programs (d) Approximate dollar value of shares that may yet be purchased under the plans or programs (in thousands) October 2024 15,846 $4.61 — $6,615 November 2024 1,268 $5.04 — $6,615 December 2024 21,140 $6.19 — $6,615 TOTAL 38,254 $5.50 — _________________ (1) Total number of shares purchased is comprised of shares withheld to satisfy employee tax withholding obligations arising in connection with the vesting and settlement of restricted stock units under our 2007 Omnibus Securities and Incentive Plan and our 2021 Long-Term Incentive Plan. 48 Table of Contents Stock Performance Graph The following graph compares the cumulative total stockholder return on an initial investment of $100 in the Common Stock between July 23, 2021 (our initial trading day) and December 31, 2024, with the comparative cumulative total return of an investment of such amount in (i) the NASDAQ Composite Index (IXIC), (ii) the NASDAQ Internet Index, and (iii) the Russell 2000 Index (RUT) over the same period.
Purchases of Equity Securities by the Issuer On December 14, 2022, our Board approved a share repurchase program authorizing us to repurchase up to $30 million of our common stock, with no requirement to purchase any minimum number of shares.
Purchases of Equity Securities by the Issuer On December 14, 2022, our Board approved a share repurchase program authorizing us to repurchase up to $30 million of the Common Stock, with no requirement to purchase any minimum number of shares.
The graph assumes the closing market price on July 23, 2021 of $20.00 per share as the initial value of our common stock. The returns shown below are based on historical results and are not necessarily indicative of, nor intended to forecast, potential future stock price performance.
The graph assumes the closing market price on July 23, 2021 of $20.00 per share as the initial value of the Common Stock. The returns shown below are based on historical results and are not necessarily indicative of, nor intended to forecast, potential future stock price performance.
We have not paid any cash dividends. Therefore, the total return calculation for us is solely based on the change in the price of our common stock, whereas the data for the comparative indices assumes reinvestment of dividends.
We have not paid any cash dividends. Therefore, the total return calculation for us is solely based on the change in the price of the Common Stock, whereas the data for the comparative indices assumes reinvestment of dividends.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock began trading on The NASDAQ Stock Market LLC (“Nasdaq”) on July 23, 2021 under the symbol “OB.” Prior to July 23, 2021, there was no established public trading market for our common stock.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Common Stock began trading on Nasdaq on July 23, 2021 under the symbol “OB.” Prior to July 23, 2021, there was no established public trading market for the Common Stock.
The graph is not deemed “filed” with the SEC and shall not be deemed incorporated by reference into any of our prior or future filings made with the SEC. Item 6. [Reserved] 46 Table o f Contents
The graph is not deemed “filed” with the SEC and shall not be deemed incorporated by reference into any of our prior or future filings made with the SEC. Item 6. [Reserved] 49 Table of Contents
In addition, we may from time to time withhold shares in connection with tax obligations related to vesting of restricted stock units in accordance with the terms of our equity incentive plans and the underlying award agreements.
The repurchase program may be commenced, suspended, or terminated at any time at our discretion without prior notice. In addition, we may from time to time withhold shares in connection with tax obligations related to vesting of restricted stock units in accordance with the terms of our equity incentive plans and the underlying award agreements.
Dividend Policy We have never declared or paid cash dividends on our common stock. We currently intend to invest our available funds and any future earnings in the operation of our business, as well as share repurchases, and do not anticipate paying any dividends on our common stock in the foreseeable future.
We currently intend to invest our available funds and any future earnings in the operation of our business and to satisfy our debt obligations, and do not anticipate paying any dividends on the Common Stock in the foreseeable future.
Holders of Record As of February 29, 2024, there were a pproximately 142 holders of record of our common stock. The actual number of the Company’s stockholders is greater than this number of record holders, which does not include stockholders who are the beneficial owners of shares that are held of record by brokers and other nominee holders.
The actual number of the Company’s stockholders is greater than this number of record holders, which does not include stockholders who are the beneficial owners of shares that are held of record by brokers and other nominee holders. Dividend Policy We have never declared or paid cash dividends on the Common Stock.
The manner, timing, and actual number of shares repurchased under the program will depend on a variety of factors, including price, general business and market conditions, and other investment opportunities.
The manner, timing, and actual number of shares repurchased under the program will depend on a variety of factors, including price, general business and market conditions, and other investment opportunities. Shares may be repurchased through privately negotiated transactions or open market purchases, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act.
Removed
Shares may be repurchased through privately negotiated transactions or open market purchases, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The repurchase program may be commenced, suspended, or terminated at any time at our discretion without prior notice.
Added
Following the completion of the acquisition of Teads and as part of our integration plan, it is expected that the combined company will operate under the name Teads. Holders of Record As of February 28, 2025, there were approximately 99 holders of record of the Common Stock.
Removed
(2) The average price paid per share under the share repurchase program includes commissions, but excludes the 1% excise tax accrued on our share repurchases as a result of the Inflation Reduction Act of 2022.
Added
Recent Sales of Unregistered Securities The shares of the Common Stock issued to Altice Teads on February 3, 2025 as consideration in connection with the Acquisition were issued in transactions exempt from registration under the Securities Act, in reliance on Section 4(a)(2) of the Securities Act.
Removed
Commission costs associated with share repurchases and excise taxes do not reduce the remaining authorized amount under our repurchase programs. 45 Table o f Contents Stock Performance Graph The following graph compares the cumulative total stockholder return on an initial investment of $100 in our common stock between July 23, 2021 (our initial trading day) and December 31, 2023, with the comparative cumulative total return of an investment of such amount in (i) the NASDAQ Composite Index (IXIC), (ii) the NASDAQ Internet Index, and (iii) the Russell 2000 Index (RUT) over the same period.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

122 edited+114 added−52 removed49 unchanged
Biggest changeCash Flows The following table summarizes the major components of our net cash flows for the periods presented: Year Ended December 31, 2023 2022 (In thousands) Net cash provided by operating activities $ 13,746 $ 3,813 Net cash provided by (used in) investing activities 69,640 (317,898) Net cash used in financing activities (117,068) (31,699) Effect of exchange rate changes (1,004) (4,043) Net decrease in cash, cash equivalents and restricted cash $ (34,686) $ (349,827) Operating Activities Net cash from operating activities increased $9.9 million, to net cash provided by operating activities of $13.7 million in 2023, as compared to net cash provided by operating activities of $3.8 million in 2022, which was primarily driven by a $9.2 million increase in our net income after non-cash adjustments and a $0.7 million net favorable change in operating assets and liabilities, primarily attributable to lower prepayments made to media partners under long-term contracts, partially offset by a net unfavorable change due to the timing of working capital.
Biggest changeCash Flows The following table summarizes the major components of our net cash flows for the periods presented: Year Ended December 31, 2024 2022 (In thousands) Net cash provided by operating activities $ 68,561 $ 13,746 Net cash provided by investin g activities 67,153 69,640 Net cash used in financing activities (117,702) (117,068) Effect of exchange rate changes 634 (1,004) Net increase (decrease) in cash, cash equivalents and restricted cash $ 18,646 $ (34,686) Operating Activities Net cash provided operating activities increased $54.9 million, to $68.6 million in 2024, as compared to $13.7 million in 2023.
Interest expense may increase if we incur any borrowings under our revolving credit facility or if we enter into new debt facilities or capital leasing arrangements. Interest Income and Other Income (Expense), net.
Interest expense may increase if we incur any borrowings under our revolving credit facility or if we enter into new debt facilities or capital leasing arrangements. Interest Income and Other Income, net.
As a result, this information should be considered as supplemental in nature and is not meant as a substitute for revenue, gross profit, net income (loss) or net cash provided by (used in) operating activities presented in accordance with U.S. GAAP. Ex-TAC Gross Profit Ex-TAC Gross Profit is a non-GAAP financial measure. Gross profit is the most comparable U.S.
As a result, this information should be considered as supplemental in nature and is not meant as a substitute for revenue, gross profit, net income (loss) or net cash provided by operating activities presented in accordance with U.S. GAAP. Ex-TAC Gross Profit Ex-TAC Gross Profit is a non-GAAP financial measure. Gross profit is the most comparable U.S. GAAP measure.
GAAP. The preparation of these audited consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances.
The preparation of these audited consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances.
As a result, as of December 31, 2023, the Company’s U.S. federal net operating losses have been fully utilized, with the exception of those subject to the annual limitation provided for in Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), which resulted in higher cash taxes and lower effective tax rate due to a deduction related to foreign-derived intangible income.
As a result, as of December 31, 2024, the Company’s U.S. federal net operating losses have been fully utilized, with the exception of those subject to the annual limitation provided for in Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), which resulted in higher cash taxes and lower effective tax rate due to a deduction related to foreign-derived intangible income.
Interest income and other income (expense), net primarily consists of interest earned on our cash, cash equivalents and investments in marketable securities, discount amortization on our investments in marketable securities, and foreign currency exchange gains and losses.
Interest income and other income, net primarily consists of interest earned on our cash, cash equivalents and investments in marketable securities, discount amortization on our investments in marketable securities, and foreign currency exchange gains and losses.
While our collections during the three months ended March 31, 2023 were negatively impacted by the closure of Silicon Valley Bank (“SVB”), we have historically experienced higher cash collections during our first quarter due to seasonally strong fourth quarter sales, and, as a result, our working capital needs typically decrease during the first quarter.
While Outbrain’s collections during the three months ended March 31, 2023 were negatively impacted by the closure of Silicon Valley Bank, we have historically experienced higher cash collections during our first quarter due to seasonally strong fourth quarter sales, and, as a result, our working capital needs typically decrease during the first quarter.
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.
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.
Additionally, the Facility includes events of default and customary affirmative and negative covenants applicable to us and our subsidiaries, including, without limitation, restrictions on liens, indebtedness, investments, fundamental changes, dispositions, restricted payments, and prepayment of the Convertible Notes and of junior indebtedness.
Additionally, the Facility included events of default and customary affirmative and negative covenants applicable to us and our subsidiaries, including, without limitation, restrictions on liens, indebtedness, investments, fundamental changes, dispositions, restricted payments, and prepayment of the Convertible Notes and of junior indebtedness.
We calculate media partner net revenue retention at the end of each quarter by starting with revenue generated on media partners’ properties during the same period in the prior year, “Prior Period Retention Revenue.” We then calculate the revenue generated on these same media partners’ properties in the current period, “Current Period Retention Revenue.” Current Period Retention Revenue reflects any expansions within the media partner relationships, such as any additional placements or properties on which we extend our recommendations, as well as contraction or attrition.
At Outbrain, media partner net revenue retention is calculated at the end of each quarter by starting with revenue generated on media partners’ properties during the same period in the prior year, “Prior Period Retention Revenue.” We then calculate the revenue generated on these same media partners’ properties in the current period, “Current Period Retention Revenue.” Current Period Retention Revenue reflects any expansions within the media partner relationships, such as any additional placements or properties on which we extend our recommendations, as well as contraction or attrition.
The Facility contains representations and warranties, including, without limitation, with respect to collateral; accounts receivable; financials; litigation, indictment and compliance with laws; disclosure and no material adverse effect, each of which is a condition to funding.
The Facility contained representations and warranties, including, without limitation, with respect to collateral; accounts receivable; financials; litigation, indictment and compliance with laws; disclosure and no material adverse effect, each of which is a condition to funding.
As a result of our analysis, during 2023 and 2022, after weighing all of the evidence, we determined that the positive evidence, particularly the evidence that was objectively verifiable, continued to outweigh the negative evidence.
As a result of our analysis, during 2024 and 2023, after weighing all of the evidence, we determined that the positive evidence, particularly the evidence that was objectively verifiable, continued to outweigh the negative evidence.
User Engagement with Relevant Media and Advertising Content Driving attention and engagement is the key pillar of our platform that drives value for consumers, media partners, and advertisers. Our AI prediction algorithm manages this dynamic, matching consumers with editorial and advertiser experiences that will deliver attention and engagement across the Open Internet.
User Engagement with Relevant Media and Advertising Content Driving attention and engagement is the key pillar of the Combined Company’s platform that drives value for consumers, media partners, and advertisers. The Combined Company’s AI prediction algorithm manages this dynamic, matching consumers with editorial and advertiser experiences that will deliver attention and engagement across the Open Internet.
In evaluating our ability to recover our deferred tax assets within the jurisdictions in which they arise, we consider all available positive and negative evidence, including our history of pre-tax income, projected future taxable income, the scheduled reversals of deferred tax liabilities, taxable income available to carryback to prior years and our tax planning strategies.
In evaluating our ability to recover our deferred tax assets within the jurisdictions in which they arise, we consider all available positive and negative evidence, including our history of pre-tax income, projected future taxable income, the scheduled reversals of deferred tax liabilities, taxable income available to carryback to prior years and our tax planning strate gies.
We recognize tax benefits from uncertain tax positions only if we believe that it is more likely than not that the tax position will be sustained on examination by the taxing authoritie s based on the technical merits of the position.
We recognize tax benefits from uncertain tax positions only if we believe that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position.
Our professional service fees consist primarily of accounting, audit, tax, legal, information technology and other consulting costs, including our implementation of and compliance with Sarbanes-Oxley Act requirements. Other Income (Expense), Net Other income (expense), net is comprised of gain (loss) on convertible debt, interest expense and interest income and other income (expense). Gain on convertible debt.
Our 57 Table of Contents professional service fees consist primarily of accounting, audit, tax, legal, information technology and other consulting costs, including our implementation of and compliance with Sarbanes-Oxley Act requirements. Other Income, Net Other income, net is comprised of gain on convertible debt, interest expense, and interest income and other income, net. Gain on convertible debt.
Our technology has developed into a robust AI machine learning system and is largely homegrown by our Research and Development team. One of the strongest long-term levers in our business is the continuous improvement of our algorithms and the data sets our algorithms learn from.
The Combined Company’s technology has developed into a robust AI machine learning system and is largely homegrown by its Research and Development team. One of the strongest long-term levers in the Combined Company’s business is the continuous improvement of its algorithms and the data sets its algorithms learn from.
As a result, our audited consolidated financial statements may not be comparable to companies that have adopted new or revised accounting pronouncements as of public company effective dates. 64 Table o f Contents
As a result, our audited consolidated financial statements may not be comparable to companies that have adopted new or revised accounting pronouncements as of public company effective dates. 70 Table of Contents
Accordingly, we believe that these measures provide information to investors and the market in understanding and evaluating our operating results in the same manner as our management and the Board. 57 Table o f Contents These non-GAAP financial measures are defined and reconciled to the corresponding U.S. GAAP measures below.
Accordingly, we believe that these measures provide information to investors and the market in understanding and evaluating our operating results in the same manner as our management and the Board. 61 Table of Contents These non-GAAP financial measures are defined and reconciled to the corresponding U.S. GAAP measures below.
In considering the need for a valuation allowance, we consider our historical and future projected taxable income, as well as other objectively verifiable evidence, including our realization of tax attributes, assessment of tax credits and utilization of net operating loss carryforwards. 54 Table o f Contents Results of Operations We have one operating segment, which is also our reportable segment.
In considering the need for a valuation allowance, we consider our historical and future projected taxable income, as well as other objectively verifiable evidence, including our realization of tax attributes, assessment of tax credits and utilization of net operating loss carryforwards. 58 Table of Contents Results of Operations Outbrain has one operating segment, which is also our reportable segment.
Adjusted EBITDA (1) was 12.5% and 11.2% of Ex-TAC Gross Profit (1) in 2023 and 2022, respectively. ______________________ (1) Ex-TAC Gross Profit, Adjusted EBITDA and constant currency measures are non-GAAP financial measures. See “Non-GAAP Reconciliations” in this Report for definitions and limitations of these measures, and reconciliations to the comparable U.S. GAAP financial measures.
Adjusted EBITDA (1) was 15.8% and 12.5% of Ex-TAC Gross Profit (1) in 2024 and 2023, respectively. ______________________ (1) Ex-TAC Gross Profit, Adjusted EBITDA and constant currency measures are non-GAAP financial measures. See “Non-GAAP Reconciliations” in this Report for definitions and limitations of these measures, and reconciliations to the comparable U.S. GAAP financial measures.
These conditions make it difficult for us, our media partners, advertisers, and agencies to accurately forecast and plan future business activities and could cause a further reduction or delay in overall advertising demand and spending or impact our advertisers’ ability to pay, which would negatively impact our business, financial condition, and results of operations.
These conditions make it difficult for the Combined Company, its media partners, advertisers, and agencies to accurately forecast and plan future business activities and could cause a further reduction or delay in overall advertising demand and spending or impact the Combined Company’s advertisers’ ability to pay, which would negatively impact the Combined Company’s business, financial condition, and results of operations.
However, there are multiple factors that could impact our future liquidity, including our business performance, our ability to collect payments from our advertisers, having to pay our media partners even if our advertisers default on their payments, or other factors described under Item 1A “Risk Factors” included in this Report. 59 Table o f Contents Sources of Liquidity Our primary sources of liquidity are cash receipts from our advertisers, our cash and cash equivalents, investments in marketable securities, and the available capacity under our revolving credit facility discussed below.
However, there are multiple factors that could impact the Combined Company’s future liquidity, including its business performance, ability to collect payments from advertisers, having to pay media partners even if advertisers default on their payments, or other factors described under Item 1A “Risk Factors” included in this Report. 63 Table of Contents Sources of Liquidity The Combined Company’s primary sources of liquidity are cash receipts from its advertisers, cash and cash equivalents, investments in marketable securities, and the available capacity under its revolving credit facilities discussed below.
The Facility contains a financial covenant that requires, in the event that credit extensions under the Facility equal or exceed 85% of the lesser of the available commitments under the Facility or upon the occurrence of an event of defaults, our Company to maintain a minimum consolidated monthly fixed charge coverage ratio of 1.00.
The Facility contained a financial covenant that required, in the event that credit extensions under the Facility equal or exceed 85% of the lesser of the available commitments under the Facility or upon the occurrence of an event of default, our Company to maintain a minimum consolidated monthly fixed charge coverage ratio of 1.00.
Our revenue generally fluctuates from quarter to quarter as a result of a variety of factors, including seasonality, as many advertisers allocate the largest portion of their budgets to the fourth quarter of the calendar year to coincide with increased holiday purchasing, as well as the timing of advertising budget cycles.
The Combined Company’s revenue has generally fluctuated from quarter to quarter as a result of a variety of factors, including seasonality, as many advertisers allocate the largest portion of their budgets to the fourth quarter of the calendar year to coincide with increased holiday purchasing, as well as the timing of advertising budget cycles.
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, not on optimizing for price.
In order to grow the Combined Company’s revenue and Ex-TAC Gross Profit and maximize value for its advertisers and media partners, its focus as a business is on driving business outcomes and ROAS for advertisers, not on optimizing for price.
Operating Expenses Our operating expenses consist of research and development, sales and marketing and general and administrative expenses. The largest component of our operating expenses is personnel costs. Personnel costs consist of wages, benefits, bonuses, stock-based compensation and, with respect to sales and marketing expenses, sales commissions. 53 Table o f Contents Research and Development.
Operating Expenses Our operating expenses consist of research and development, sales and marketing and general and administrative expenses. The largest component of our operating expenses is personnel costs. Personnel costs consist of wages, benefits, bonuses, stock-based compensation and, with respect to sales and marketing expenses, sales commissions. Research and Development.
Accordingly, these conditions have adversely impacted our business and could, if they continue or worsen, adversely impact us in the future, including if our advertisers were to reduce or further reduce their advertising spending as a result of any of these factors.
Accordingly, these conditions have adversely impacted the Combined Company’s business and could, if they continue or worsen, adversely impact the Combined Company in the future, including if its advertisers were to reduce or further reduce their advertising spending as a result of any of these factors.
Our Smartlogic product dynamically adjusts both the arrangement and the formats of content delivered to a user, depending on the user’s preferences and our media partner’s key performance indicators (“KPIs”), designed to provide a tailored and engaging feed experience. We continue to invest in media partner and advertiser focused tools, technology, and products as well as privacy-centric solutions.
Outbrain’s Smartlogic product dynamically adjusts both the arrangement and the formats of content delivered to a user, depending on the user’s preferences and a media partner’s key performance indicators, designed to provide a tailored and engaging feed experience. The Combined Company continues to invest in media partner and advertiser focused tools, technology, and products as well as privacy-centric solutions.
The current macroeconomic environment, with variables such as inflation, increased interest rates, bank disruptions, recessionary concerns, bankruptcies, currency exchange rate fluctuations, global supply chain disruptions, and labor market volatility, has negatively impacted our advertisers.
The current macroeconomic environment, with variables such as inflation, increased interest rates, tariffs and trade wars, bank disruptions, recessionary concerns, bankruptcies, currency exchange rate fluctuations, global supply chain disruptions, and labor market volatility, has negatively impacted the Combined Company’s advertisers.
Industry Dynamics 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 broad advertising industry.
Industry Dynamics The Combined Company’s business depends on the overall demand for digital advertising, on the continuous success of its 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.
Treasury Share Repurchases On December 14, 2022, our Board approved a new stock repurchase program, authorizing us to repurchase up to $30 million of our common stock, par value $0.001 per share, with no requirement to purchase any minimum number of shares.
Treasury Share Repurchases On December 14, 2022, our Board approved a new stock repurchase program, authorizing us to repurchase up to $30 million of of the Common Stock , with no requirement to purchase any minimum number of shares.
However, upon evaluating our forecasted state taxable income, we increased our valuation allowance against state net operating loss carryforwards by $0.5 million and $2.8 million in 2023 and 2022, respectively.
However, upon evaluating our forecasted state taxable income, we increased our valuation allowance against state net operating loss carryforwards by $0.3 million and $0.5 million in 2024 and 2023, respectively.
We recognize revenue in the period in which the click or impression occurs. The amount of revenue that we generate depends on the level of demand from advertisers to promote their content to users across our media partners’ properties. We generate higher revenue at times of high demand, which is also impacted by seasonal factors.
The amount of revenue that we generate depends on the level of demand from advertisers to promote their content to users across our media partners’ properties. We generate higher revenue at times of high demand, which is also impacted by seasonal factors.
GAAP. 58 Table o f Contents The following table presents the reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable U.S.
GAAP. 62 Table of Contents The following table presents the reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable U.S.
Our relationships with media partners are typically long-term, exclusive, and strategic in nature. Our top 20 media partners, based on our 2023 revenue, have been using our platform for an average of seven years, despite their typical contract length being two to four years.
The Combined Company’s relationships with media partners are typically long-term, exclusive, and strategic in nature. Outbrain’s top 20 media partners, based on its 2024 revenue, have been using its platform for an average of seven years, despite their typical contract length being two to four years.
However, traffic acquisition costs have, at times, grown at a faster or slower rate than revenue, primarily due to the mix of the revenue generated or contracted terms with media partners.
The quarterly rate of increase in traffic acquisition costs is generally commensurate with the quarterly rate of increase in revenue. However, traffic acquisition costs have, at times, grown at a faster or slower rate than revenue, primarily due to the mix of the revenue generated or contracted terms with media partners.
The repurchase program may be commenced, suspended, or terminated at any time at our discretion without prior notice. As of December 31, 2023, the remaining repurchase availability under our $30 million share repurchase program was $12.4 million, reflecting repurchases of 3,729,462 shares for $17.8 million in 2023.
The repurchase program may be commenced, suspended, or terminated at any time at our discretion without prior notice. As of December 31, 2024 , the remaining repurchase availability under our $30 million share repurchase program was $6.6 million, reflecting repurchases of 1,410,001 shares for $5.8 million in 2024 and 3,729,462 shares for $17.8 million in 2023 .
These measures are supplemental and are not an alternative to our financial statements prepared in accordance with U.S. GAAP. See “Non-GAAP Reconciliations” in this Report for the definitions and limitations of these measures, and reconciliations to the most comparable U.S. GAAP financial measures. Business Overview Outbrain Inc.
These measures are supplemental and are not an alternative to our financial statements prepared in accordance with U.S. GAAP. See “Non-GAAP Reconciliations” in this Report for the definitions and limitations of these measures, and reconciliations to the most comparable U.S. GAAP financial measures. Acquisition of Teads On February 3, 2025, Outbrain Inc.
Partial Repurchase of Convertible Senior Notes On April 14, 2023, we repurchased $118.0 million aggregate principal amount of our 2.95% convertible notes due 2026 (“Convertible Notes”) out of the initially issued principal balance of $236.0 million via a privately negotiated repurchase agreement with Baupost Group Securities, L.L.C., the sole holder of the Convertible Notes, for approximately $96.2 million in cash, including accrued interest, representing a discount of approximately 19% to the principal amount of the repurchased Convertible Notes.
Repurchase of Outstanding Convertible Notes On September 19, 2024, we repurchased the remaining $118.0 million aggregate principal amount of our 2.95% Convertible Senior Notes due 2026 (the “Convertible Notes”) out of the initially issued principal balance of $236.0 million via a privately negotiated repurchase agreement with Baupost Group Securities, L.L.C., the sole holder of the Convertible Notes, for approximately $109.7 million in cash, including accrued interest, representing a discount of approximately 7.5% to the principal amount of the repurchased notes.
Our borrowing availability under the Facility is calculated by reference to a borrowing base which is determined by specified percentages of eligible accounts receivable, based on the defined borrowing formula.
Our borrowing availability under the Facility is calculated by reference to a borrowing base which is determined by specified percentages of eligible accounts receivable, based on the defined borrowing formula. The Facility was scheduled to terminate on November 2, 2026.
Gross profit for 2023 included net favorable foreign currency effects of approximately $1.0 million, and decreased $8.9 million, or 4.6%, on a constant currency basis, compared to the prior year period. Ex-TAC Gross Profit Our Ex-TAC Gross Profit decreased $7.4 million, or 3.1%, to $227.4 million in 2023, from $234.8 million in 2022.
Gross profit for 2024 included net unfavorable foreign currency effects of approximately $1.3 million, and increased $8.6 million, or 4.6%, on a constant currency basis, compared to the prior year period. Ex-TAC Gross Profit Our Ex-TAC Gross Profit increased $8.7 million, or 3.9%, to $236.1 million in 2024, from $227.4 million in 2023.
GAAP measure, for the periods presented: Year Ended December 31, 2023 2022 (In thousands) Revenue $ 935,818 $ 992,082 Traffic acquisition costs (708,449) (757,321) Other cost of revenue (42,571) (42,108) Gross profit 184,798 192,653 Other cost of revenue 42,571 42,108 Ex-TAC Gross Profit $ 227,369 $ 234,761 Adjusted EBITDA We define Adjusted EBITDA as net income (loss) before gain related to convertible debt; interest expense; interest income and other (expense) income, net; provision for income taxes; depreciation and amortization; stock-based compensation, and other income or expenses that we do not consider indicative of our core operating performance, including, but not limited to merger and acquisition costs, certain public company implementation related costs, regulatory matter costs, and severance costs related to our cost saving initiatives.
GAAP measure, for the periods presented: Year Ended December 31, 2024 2023 (In thousands) Revenue $ 889,875 $ 935,818 Traffic acquisition costs (653,731) (708,449) Other cost of revenue (44,042) (42,571) Gross profit 192,102 184,798 Other cost of revenue 44,042 42,571 Ex-TAC Gross Profit $ 236,144 $ 227,369 Adjusted EBITDA We define Adjusted EBITDA as net income (loss) before gain related to convertible debt; interest expense; interest income and other income, net; provision for income taxes; depreciation and amortization; stock-based compensation, and other income or expenses that we do not consider indicative of our core operating performance, including, but not limited to merger and acquisition costs, regulatory matter costs, and severance costs related to our cost saving initiatives.
Our current investment program is focused on achieving maximum returns within our investment policy parameters, while preserving capital and maintaining sufficient liquidity.
The Combined Company’s current investment program is focused on achieving maximum returns within its investment policy parameters, while preserving capital and maintaining sufficient liquidity.
Additionally, we are confident that our strength in delivering engagement and clear outcomes for advertisers, 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. 52 Table o f Contents Seasonality The global advertising industry experiences seasonal trends that affect most participants in the digital advertising ecosystem.
Additionally, the Combined Company is confident that its strength in delivering engagement and clear outcomes for advertisers, built on its proprietary AI prediction engine, aligns well with the ongoing market shift towards increased accountability and expectations of ROAS from digital advertising spend. Seasonality The global advertising industry experiences seasonal trends that affect most participants in the digital advertising ecosystem.
(5) We are unable to reliably estimate the timing of future payments related to uncertain tax positions; therefore, we have excluded $8.4 million from the preceding table related to uncertain tax positions, including accrued interest and penalties as of December 31, 2023.
(3) We are unable to reliably estimate the timing of future payments related to uncertain tax positions; therefore, we have excluded $6.0 million from the preceding table related to uncertain tax positions, including accrued interest and penalties as of December 31, 2024.
See “Non-GAAP Reconciliations” for the related definitions of Adjusted EBITDA and reconciliations to our net income. Non-GAAP Reconciliations Because we are a global company, the comparability of our operating results is affected by foreign exchange fluctuations.
Our Adjusted EBITDA for 2024 included net unfavorable foreign currency effects of approximately $1.2 million. See “Non-GAAP Reconciliations” for the related definitions of Adjusted EBITDA and reconciliations to our net income (loss). Non-GAAP Reconciliations Because we are a global company, the comparability of our operating results is affected by foreign exchange fluctuations.
The development and deployment of new ad formats allow us to better serve consumers, media partners and, ultimately, 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 relevance as the environments in which we operate diversify. 51 Table o f Contents Investment in Our Technology and Infrastructure Innovation is a core tenet of our Company and our industry.
The development and deployment of new ad formats allow the Combined Company to better serve consumers, media partners and, ultimately, advertisers who seek to target and engage consumers at scale; the Combined Company believes this continues to open and grow new types of advertiser demand, while ensuring relevance as the environments in which it operates diversify. 55 Table of Contents Investment in the Combined Company’s Technology Innovation is a core tenet of the Combined Company and its industry.
Net revenue retention is an important indicator of media partner satisfaction, the value of our platform, as well as our ability to grow revenue from existing relationships.
At Outbrain, net revenue retention has been an important indicator of media partner satisfaction, the value of its platform, as well as its ability to grow revenue from existing relationships.
We strongly believe in the transformative power of AI in shaping the future of sustainable media, and have been utilizing AI technology for years to empower both media owners and advertisers in their businesses.
The Combined Company strongly believes in the transformative power of AI in shaping the future of sustainable media, and Outbrain has been utilizing AI technology for years to empower both media owners and advertisers in their businesses.
Off-Balance Sheet Arrangements We do not currently engage in off-balance sheet financing arrangements. In addition, we do not have any interest in entities referred to as variable interest entities, which includes special purpose entities and other structured finance entities. JOBS Act Transition Period We are an emerging growth company as defined in the JOBS Act.
In addition, we do not have any interest in entities referred to as variable interest entities, which includes special purpose entities and other structured finance entities. 69 Table of Contents JOBS Act Transition Period We are an emerging growth company as defined in the JOBS Act.
Income Taxes We are subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgment is required in determining our provision for income taxes and income tax assets and liabilities, including evaluating uncertainties in the application of accounting principles and complex tax laws.
Significant judgment is required in determining our provision for income taxes and income tax assets and liabilities, including evaluating uncertainties in the application of accounting principles and complex tax laws.
See “Non-GAAP Reconciliations” for information regarding the constant currency measures provided in this discussion and below to supplement our reported results. 55 Table o f Contents Cost of Revenue and Gross Profit Traffic acquisition costs decreased $48.9 million, or 6.5%, to $708.4 million in 2023, compared to $757.3 million in the prior year period.
See “Non-GAAP Reconciliations” for information regarding the constant currency measures provided in this discussion and below to supplement our reported results. 59 Table of Contents Cost of Revenue and Gross Profit Traffic acquisition costs decreased $54.7 million, or 7.7%, to $653.7 million in 2024, compared to $708.4 million in the prior year period.
See “Non-GAAP Reconciliations” in this Report for the definitions and limitations of these measures, and reconciliations to the most comparable U.S. GAAP financial measures. Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Revenue Revenue decreased by $56.3 million, or 5.7%, to $935.8 million in 2023 from $992.1 million in 2022.
See “Non-GAAP Reconciliations” in this Report for the definitions and limitations of these measures, and reconciliations to the most comparable U.S. GAAP financial measures. Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Revenue Revenue decreased $45.9 million, or 4.9%, to $889.9 million in 2024 from $935.8 million in 2023.
Revenue for 2023 included net favorable foreign currency effects of approximately $5.0 million, and decreased $61.3 million, or 6.2% on a constant currency basis. • Our gross profit was $184.8 million and our gross margin was 19.7% in 2023, compared to gross profit of $192.7 million and gross margin of 19.4% in 2022. • Our Ex-TAC Gross Profit(1) was $227.4 million in 2023, compared to $234.8 million in 2022. • Our net income was $10.2 million, or 5.5% of gross profit in 2023, compared to net loss of $24.6 million, or (12.8)% of gross profit in 2022.
Revenue for 2024 included net unfavorable foreign currency effects of approximately $2.4 million, and decreased $43.5 million, or 4.7%, on a constant currency basis, compared to the prior year period. • Our gross profit was $192.1 million and our gross margin was 21.6% in 2024, compared to gross profit of $184.8 million and gross margin of 19.7% in 2023. • Our Ex-TAC Gross Profit (1) was $236.1 million in 2024, compared to $227.4 million in 2023. • Our net loss was $0.7 million, or (0.4)% of gross profit in 2024, compared to net income of $10.2 million, or 5.5% of gross profit in 2023.
Given our focus on context and engagement, the depth and length of our media partner relationships, and our scale, we believe that we are well positioned in the long-term to address and potentially benefit from many of these industry dynamics.
Given the Combined Company’s focus on context and engagement, the depth and length of its media partner relationships, and its scale, the Combined Company believes that it is well positioned in the long-term to address and potentially benefit from many of these industry dynamics.
In 2023, we repurchased $118.0 million of our outstanding Convertible Notes at a discount of approximately 19% of the principal amount and recorded a pre-tax gain of $22.6 million. Interest Expense. Interest expense consists of interest expense on the Convertible Notes, our revolving credit facility and capital leases.
In September 2024, we repurchased the remaining $118.0 million of our Convertible Notes at a discount of approximately 7.5% of the principal amount and recorded a pre-tax gain of $8.8 million. Interest Expense. Interest expense consists of interest expense on the Convertible Notes, our 2021 revolving credit facility and capital leases.
Factors Affecting Our Business Retention and Growth of Relationships with Media Partners We rely on relationships with our media partners for a significant portion of our advertising inventory and our corresponding ability to drive advertising revenue.
Factors Affecting the Combined Company’s Business Retention and Growth of Relationships with Media Partners The Combined Company relies on its relationships with its media partners for a significant portion of its advertising inventory and its corresponding ability to drive advertising revenue.
This decrease was partially offset by growth of approximately 8%, or $80.1 million, from new media partners.
This decrease was partially offset by growth of approximately 6.0%, or $60 million, from new media partners.
Free Cash Flow Free cash flow is defined as cash flow provided by operating activities, less capital expenditures and capitalized software development costs. Free cash flow is a supplementary measure used by our management and the Board to evaluate our ability to generate cash and we believe it allows for a more complete analysis of our available cash flows.
Free cash flow is a supplementary measure used by our management and the Board to evaluate our ability to generate cash and we believe it allows for a more complete analysis of our available cash flows.
Net income for 2023 included a pre-tax gain of approximately $22.6 million recorded in 2023 in connection with the repurchase of half of our 2.95% convertible notes due in 2026. • Our Adjusted EBITDA (1) was $28.5 million in 2023, compared to $26.3 million in 2022.
Net income for 2023 included a pre-tax gain of $22.6 million in connection with our repurchases of the first half of our Convertible Notes. • Our Adjusted EBITDA (1) was $37.3 million in 2024, compared to $28.5 million in 2023.
To further strengthen these relationships, we continuously invest in our technology and product functionality to drive user engagement and monetization by (i) improving our algorithms, referred to as our AI prediction engine; (ii) effectively managing supply and demand; (iii) expanding the adoption of our enhanced products by media partners; and (iv) expanding our demand capabilities to new formats and business lines such as Onyx.
To further strengthen these relationships, the Combined Company continuously invests in its technology and product functionality to drive user engagement and monetization by (i) improving its algorithms, referred to as its AI prediction engine; (ii) attracting and procuring relevant demand; (iii) expanding the adoption of its enhanced products by media partners; and (iv) expanding its demand capabilities to new formats.
Fundamentally, we plan to continue to make our platform available for media partners on all types of devices and platforms and evolve our business to apply our technology to the most popular methods of media consumption, which now include unique video, high-impact display, and other new media experiences.
Fundamentally, the Combined Company plans to continue to make its platform available for media partners on all types of devices and platforms and evolve its business to apply its technology to the most popular methods of media consumption, which now include unique video, high-impact display, and other new media experiences, such as Moments, Outbrain’s vertical video offering launched in 2024.
Our direct integrations across our media partners’ properties provide us with a large volume of proprietary first-party data, including context, user interest and behavioral signals. The more data points we have, the better our CTR predictions and yield potential can be.
The Combined Company’s direct integrations across its media partners’ properties provide it with a large volume of proprietary first-party data, including context, user interest and behavioral signals. The more data points the Combined Company has, the better its advertisers’ ROAS, and yield potential can be.
Traffic acquisition costs included net unfavorable foreign currency effects of approximately $3.9 million, and decreased $52.8 million, or 7.0%, on a constant currency basis, compared to the prior year period. The decrease in traffic acquisition costs was primarily due to lower revenue and improved performance from certain deals, partially offset by a net unfavorable change in revenue mix.
Traffic acquisition costs included net favorable foreign currency effects of approximately $1.1 million, and decreased $53.6 million, or 7.6%, on a constant currency basis, compared to the prior year period. The decrease in traffic acquisition costs was primarily related to the decrease in our revenue, a net favorable change in our revenue mix and improved performance from certain deals.
As we grow attention and engagement, we are able to collect more data and continually improve our prediction engine — which drives better results for our advertiser and media owner partners. This growth “flywheel” can be measured by growth of the consumer data points we drive, such as click-through-rate (“CTR”). CTR improvements increase the number of clicks on our platform.
As the Combined Company grows attention and engagement, it is able to collect more data and continually improve its prediction engine, which drives better results for its advertiser and media owner partners. This growth “flywheel” can be measured by growth of the consumer data points the Combined Company drives, such as click-through-rate (“CTR”).
During 2023 and 2022, we withheld 163,265 shares and 245,465 shares, respectively, with a fair value of $0.8 million and $2.5 million, respectively, to satisfy the minimum employee tax withholding obligations. 61 Table o f Contents Capital Expenditures Our cash flow used in investing activities primarily consists of capital expenditures and capitalized software development costs.
During 2024 and 2023, we withheld 162,157 shares and 163,265 shares, respectively, with a fair value of $0.8 million in each year, to satisfy the minimum employee tax withholding obligations. 66 Table of Contents Capital Expenditures Outbrain’s cash flow used in investing activities has primarily consisted of capital expenditures and capitalized software development costs.
(2) On November 2, 2021, the Company entered into the Second Amended and Restated Loan and Security Agreement with SVB, which provides, subject to borrowing availability and certain other conditions, for revolving loans in an aggregate principal amount of up to $75.0 million (the “Facility”), with a $15.0 million sub-facility for letters of credit.
(2) Our Second Amended and Restated Loan and Security Agreement, as amended by the First Amendment thereto, with Silicon Valley Bank, a division of First Citizens Bank & Trust Company, provides, subject to borrowing availability and certain other conditions, for revolving loans in an aggregate principal amount of up to $75.0 million (the “Facility”), with a $15.0 million sub-facility for letters of credit.
We continue to monitor our operations, and the operations of those in our ecosystem (including media partners, advertisers, and agencies).
The Combined Company continues to monitor its operations, and the operations of those in its ecosystem (including media partners, advertisers, and agencies).
The following tables set forth our results of operations for the periods presented: Year Ended December 31, 2023 2022 (In thousands) Consolidated Statements of Operations: Revenue $ 935,818 $ 992,082 Cost of revenue: Traffic acquisition costs 708,449 757,321 Other cost of revenue 42,571 42,108 Total cost of revenue 751,020 799,429 Gross profit 184,798 192,653 Operating expenses: Research and development 36,402 40,320 Sales and marketing 98,370 108,816 General and administrative 58,665 57,065 Total operating expenses 193,437 206,201 Loss from operations (8,639) (13,548) Other income (expense), net: Gain on convertible debt 22,594 — Interest expense (5,393) (7,625) Interest income and other income (expense), net 7,793 2,600 Total other income (expense), net 24,994 (5,025) Income (loss) before provision (benefit) for income taxes 16,355 (18,573) Provision for income taxes 6,113 6,008 Net income (loss) $ 10,242 $ (24,581) Other Financial Data: Research and development as % of revenue 3.9 % 4.1 % Sales and marketing as % of revenue 10.5 % 11.0 % General and administrative as % of revenue 6.3 % 5.8 % Ex-TAC Gross Profit (1) $ 227,369 $ 234,761 Adjusted EBITDA (1) $ 28,455 $ 26,274 ______________________ (1) Ex-TAC Gross Profit and Adjusted EBITDA are non-GAAP financial measures.
The following tables set forth our results of operations for the periods presented: Year Ended December 31, 2024 2023 (In thousands) Consolidated Statements of Operations: Revenue $ 889,875 $ 935,818 Cost of revenue: Traffic acquisition costs 653,731 708,449 Other cost of revenue 44,042 42,571 Total cost of revenue 697,773 751,020 Gross profit 192,102 184,798 Operating expenses: Research and development 37,080 36,402 Sales and marketing 97,498 98,370 General and administrative 70,162 58,665 Total operating expenses 204,740 193,437 Loss from operations (12,638) (8,639) Other income (expense), net: Gain on convertible debt 8,782 22,594 Interest expense (3,649) (5,393) Interest income and other income, net 9,209 7,793 Total other income, net 14,342 24,994 Income before provision for income taxes 1,704 16,355 Provision for income taxes 2,415 6,113 Net (loss) income $ (711) $ 10,242 Other Financial Data: Research and development as % of revenue 4.2 % 3.9 % Sales and marketing as % of revenue 11.0 % 10.5 % General and administrative as % of revenue 7.9 % 6.3 % Ex-TAC Gross Profit (1) $ 236,144 $ 227,369 Adjusted EBITDA (1) $ 37,300 $ 28,455 ______________________ (1) Ex-TAC Gross Profit and Adjusted EBITDA are non-GAAP financial measures.
See “Non-GAAP Reconciliations” for the related definition and a reconciliation to net cash provided by operating activities. Investing Activities Cash from investing activities increased $387.5 million, to net cash provided by investing activities of $69.6 million in 2023, from net cash used in investing activities of $317.9 million in 2022.
See “Non-GAAP Reconciliations” for the related definition and a reconciliation to net cash provided by operating activities. 67 Table of Contents Investing Activities Cash from investing activities decreased $2.4 million, to net cash provided by investing activities of $67.2 million in 2024, from net cash provided by investing activities of $69.6 million in 2023.
Year Ended December 31, 2023 2022 (In thousands) Net cash provided by operating activities $ 13,746 $ 3,813 Purchases of property and equipment (10,127) (13,375) Capitalized software development costs (10,107) (12,569) Free cash flow $ (6,488) $ (22,131) LIQUIDITY AND CAPITAL RESOURCES We regularly evaluate the cash requirements for our operations, commitments, development activities and capital expenditures and manage our liquidity risk in a manner consistent with our corporate priorities.
Year Ended December 31, 2024 2023 (In thousands) Net cash provided by operating activities $ 68,561 $ 13,746 Purchases of property and equipment (7,380) (10,127) Capitalized software development costs (9,913) (10,107) Free cash flow $ 51,268 $ (6,488) LIQUIDITY AND CAPITAL RESOURCES The Combined Company regularly evaluates the cash requirements for its operations, commitments, acquisitions, development activities and capital expenditures and manages its liquidity risk in a manner consistent with its corporate priorities.
We leverage AI in a manner designed to enable media owners to increase their revenues and connect with audiences on their own platforms within the Open Internet. We use machine learning to predict consumer interest and propensity to convert. We make around 1 billion such predictions every second.
The Combined Company leverages AI in a manner designed to enable media owners to increase their revenues and connect with audiences on their own platforms within the Open Internet. The Combined Company uses machine learning to predict consumer interest and propensity to convert ads to sales.
We believe that we have a significant opportunity to further grow consumer engagement, and thus our business, as today CTR for ads on our platform is less than 1% of ads served.
CTR improvements increase the number of clicks on its platform. The Combined Company believes that it has a significant opportunity to further grow consumer engagement, and thus its business, as today CTR for ads on its platform is less than 1% of ads served.
As of December 31, 2023, in addition to cash flow from our operations, our available liquidity was follows: December 31, 2023 (In thousands) Cash and cash equivalents (1) $ 70,889 Short-term investments 94,313 Long-term investments 65,767 Revolving Credit Facility (2) 75,000 Total $ 305,969 __________________________ (1) As of December 31, 2023, approximately $32.1 million of our cash and cash equivalents was held outside of the United States by our non-U.S. subsidiaries.
As of December 31, 2024, in addition to cash flow from our operations, Outbrain’s available liquidity was as follows: December 31, 2024 (In thousands) Cash and cash equivalents (1) $ 89,094 Short-term investments 77,035 Revolving Credit Facility (2) 58,125 Total $ 224,254 __________________________ (1) As of December 31, 2024, approximately $31.9 million of our cash and cash equivalents was held outside of the United States by our non-U.S. subsidiaries.
We strive to compound consumer attention and engagement, continually enhancing value for both advertisers and media owners. 50 Table o f Contents Growth in attention and engagement is driven by several factors, including enhancements to our AI prediction technology, growth in the breadth and depth of our data assets, the size and quality of our content and advertising index, user engagement, new media partners, and expansion on existing media partners.
Growth in attention and engagement is driven by several factors, including enhancements to the Combined Company’s AI prediction technology, growth in the breadth and depth of its data assets, the size and quality of its content and advertising index, user engagement, new media partners, expansion on existing media partners and expansion to new media environments and formats.
We generally expect these seasonal trends to continue, though historical seasonality may not be predictive of future results given the potential for changes in advertising buying patterns and macroeconomic conditions. These trends will affect our operating results and we expect our revenue to continue to fluctuate based on seasonal factors that affect the advertising industry as a whole.
The Combined Company generally expects these seasonal trends to continue, though historical seasonality may not be predictive of future results given the potential for changes in advertising buying patterns and macroeconomic conditions.
Commission costs associated with share repurchases and excise taxes accrued as a result of the Inflation Reduction Act of 2022 do not reduce the remaining authorized amount under the repurchase programs. During 2022, we repurchased 6,389,129 shares with a fair value of $30.2 million, including commissions, under our prior $30 million share repurchase program authorized in February 2022.
Commission costs associated with share repurchases and excise taxes accrued as a result of the Inflation Reduction Act of 2022 do not reduce the remaining authorized amount under the repurchase programs.
Our free cash flow for 2023 improved to a use of cash of $6.5 million, as compared to a use of cash of $22.1 million in 2022, primarily reflecting higher net cash provided by operating activities and lower capital expenditures in 2023. Free cash flow is a supplemental non-GAAP financial measure.
Our free cash flow increased $57.8 million, to $51.3 million in 2024, as compared to a use of cash of $6.5 million in 2022, primarily reflecting higher operating cash flow, as discussed above, as well as lower capital expenditures in 2024. Free cash flow is a supplemental non-GAAP financial measure.
As a percentage of revenue, other cost of revenue increased 30 basis points to 4.5% in 2023 from 4.2% in 2022. Gross profit decreased $7.9 million, or 4.1%, to $184.8 million in 2023, compared to $192.7 million in 2022, which was attributable to the decrease in revenue exceeding the decrease in the cost of revenue, as previously described.
As a percentage of revenue, other cost of revenue increased 40 basis points to 4.9% in 2024 from 4.5% in 2023. Gross profit increased $7.3 million, or 4.0%, to $192.1 million in 2024, compared to $184.8 million in 2023. This increase was largely attributable to lower traffic acquisition costs, partially offset by lower revenue, as previously described.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThere have been no amounts outstanding under the Facility since we amended and restated our loan agreement in November 2021. Long-term debt recorded on our audited consolidated balance sheets as of December 31, 2023 and December 31, 2022 was $118.0 million and $236.0 million, respectively, and bears a fixed rate of interest.
Biggest changeThere was no debt outstanding as of December 31, 2024 and the $118.0 million of long-term debt outstanding as of December 31, 2023 bore a fixed rate of interest.
Since our debt investments are classified as available-for-sale, the unrealized gains and losses related to fluctuations in market volatility and interest rates are reflected within accumulated other comprehensive income (loss) within stockholders’ equity in our audited consolidated balance sheets. Inflation Risk Our business is subject to risk associated with inflation.
Since our debt investments are classified as available-for-sale, the unrealized gains and losses related to fluctuations in market volatility and interest rates are reflected within accumulated other comprehensive (loss) income within stockholders’ equity in Outbrain’s consolidated balance sheets. Inflation Risk Our business is subject to risk associated with inflation.
See Item 1A, “Risk Factors” under “ We are subject to payment-related risks that may adversely affect our business, working capital, financial condition and results of operations.” We do not factor our accounts receivables, nor do we maintain credit insurance to manage the risk of credit loss.
See Item 71 Table of Contents 1A, “Risk Factors” under “ We are subject to payment-related risks that may adversely affect our business, working capital, financial condition and results of operations.” We do not factor our accounts receivables, nor do we maintain credit insurance to manage the risk of credit loss.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We have operations both in the United States and internationally, and we are exposed to market risks in the ordinary course of our business. These risks include foreign exchange, interest rate, inflation and credit risks.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We have operations both in the United States and internationally, and we are exposed to market risks in the ordinary course of our business. These risks include foreign exchange, interest rate, inflation and credit risks. We continue to assess market risk relative to Teads.
Interest Rate Risk Our exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of the interest rates in the United States. Our exposure to market risk for changes in interest rates relates primarily to our cash and cash equivalents, investments and any future borrowings under the Facility.
Interest Rate Risk Our exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of the interest rates in the United States. Our exposure to market risk for changes in interest rates relates primarily to our cash and cash equivalents, investments and any future borrowings under our revolving credit facilities.
We plan to actively monitor our exposure to the fair value of our investment portfolio in accordance with our policies and procedures, which include monitoring market conditions, to minimize investment risk. A 100 basis point change in interest rates as of December 31, 2023 would change the fair value of investment portfolio by approximately $1.3 million.
We plan to actively monitor our exposure to the fair value of our investment portfolio in accordance with our policies and procedures, which include monitoring market conditions, to minimize investment risk. A 100 basis point change in interest rates as of December 31, 2024 would change the fair value of investment portfolio by approximately $0.2 million.
We are also exposed to a risk that the counterparty to our foreign currency forward exchange contracts will fail to meet its contractual obligations. In order to mitigate this risk, we perform an evaluation of our counterparty credit risk and our forward contracts have a term of no more than 12 months. 65 Table o f Contents
We are also exposed to a risk that the counterparty to our foreign currency forward exchange contracts will fail to meet its contractual obligations. In order to mitigate this risk, we perform an evaluation of our counterparty credit risk and our forward contracts have a term of no more than 18 months. 72 Table of Contents
Dollar against the currencies of the countries in which we operate impact our operating results, as further described in Item 7, “Results of Operations.” The effect of a hypothetical 10% increase or decrease in our weighted-average exchange rates on our revenue, cost of revenue and operating expenses denominated in foreign currencies would result in a $7.2 million unfavorable or favorable change to our operating loss for the year ended December 31, 2023.
Dollar against the currencies of the countries in which we operate impact our operating results, as further described with respect to Outbrain in Item 7, “Results of Operations.” The effect of a hypothetical 10% increase or decrease in our weighted-average exchange rates on Outbrain’s revenue, cost of revenue and operating expenses denominated in foreign currencies would result in a $10.5 million unfavorable or favorable change to our operating loss for the year ended December 31, 2024.
Foreign Currency Risk Our consolidated results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange ra tes. The majority of our revenue and cost of revenue are denominated in U.S. Dollars, with the remainder in other currencies. Our operating expenses are generally denominated in the currencies in which our operations are located.
Foreign Currency Risk Our consolidated results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange ra tes . The majority of the Company’s revenue and operating expenses are denominated in U.S. Dollars and Euros.
As of December 31, 2023, our exposure to market risk for changes in interest rates relates primarily to our cash and cash equivalents of $70.9 million and our investments in marketable securities of $160.1 million under our investments program initiated during the third quarter of 2022, which consist of U.S.
As of December 31, 2024, our exposure to market risk for changes in interest rates relates primarily to our cash and cash equivalents of $89.1 million and our investments in marketable securities of $77.0 million under our investments program, which consist of U.S.
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A majority of our operating expenses are denominated in U.S. Dollars, with the remainder denominated primarily in New Israeli Shekels and to a lesser extent British pound sterling and Euros.
Added
In addition, we have significant operating expenses denominated in New Israeli Shekels, given one of Outbrain’s R&D centers is located in Israel.
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Subsequent to December 31, 2024, we completed a private offering of $637.5 million in aggregate principal amount of 10.0% senior secured notes due 2030, which bear a fix rate of interest (see Note 16 to the accompanying audited consolidated financial statements for additional information).

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