Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 3, 2025

Outbrain Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-40643	20-5391629

(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

111 West 19th Street

New York, NY 10011

(Address of principal executive offices, including zip code)

(Registrant’s telephone number, including area code): (646) 867-0149

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

	☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

	☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

	☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

	☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered

Common stock, par value $0.001 per share	OB	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 7.01. Regulation FD Disclosure.

On February 3, 2025, OT Midco Inc. (“OT Midco”), a Delaware corporation and a wholly owned subsidiary of Outbrain Inc. (“Outbrain”), commenced a private offering (the “Offering”) of $625.0 million in aggregate principal amount of senior secured notes due 2030 (the “Notes”) in a transaction exempt from registration under the Securities Act. The proceeds from the Offering will be used, together with cash on hand, to (i) repay in full and cancel the indebtedness incurred under the senior secured bridge facility (the “Bridge Facility”), including accrued and unpaid interest thereon (the “Bridge Facility Refinancing”), that was used to finance and pay costs related to Outbrain’s acquisition of TEADS (the “Acquisition”), a private limited liability company (société à responsabilité limitée) incorporated and existing under the laws of the Grand Duchy of Luxembourg (“Teads”), and (ii) pay fees and expenses incurred in connection with the Offering and the Bridge Facility Refinancing. The Notes will be secured by first-priority lien over (i) all or substantially all assets of OT Midco Inc., Outbrain and Teads Australia PTY Ltd, a subsidiary of Outbrain in Australia, and (ii) certain assets of some of the other direct and indirect subsidiaries of Outbrain in England and Wales, Canada, Germany, Mexico, Singapore, Switzerland, Luxembourg, Japan, Italy, France and Israel.

In connection with the Offering, Outbrain will provide potential investors with a preliminary offering memorandum, dated February 3, 2025 (the “Preliminary Offering Memorandum”), which contains unaudited pro forma condensed combined financial statements and notes thereto giving effect to the Acquisition and other transactions described therein. This pro forma financial information is included in Exhibit 99.1 attached hereto and is incorporated herein by reference. The Preliminary Offering Memorandum also contains (i) unaudited condensed interim consolidated financial information of Teads as of and for the three and nine months ended September 30, 2024 and 2023 and (ii) information prepared in connection with the Offering not previously disclosed by Outbrain. This information is included in Exhibits 99.2 and 99.3, respectively, attached hereto and is incorporated herein by reference.

The Notes and the related guarantees have not been, and will not be, registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws.

This Current Report does not constitute an offer to sell or a solicitation of an offer to buy the Notes or the related guarantees, nor shall there be any sale of the Notes or the related guarantees in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

The information set forth in this Item 7.01 of this Current Report, including Exhibits 99.1, 99.2 and 99.3, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act except as expressly set forth by specific reference in such filing.

Cautionary Note About Forward-Looking Statements

This Form 8-K contains forward-looking statements within the meaning of the U.S. federal securities laws and the Private Securities Litigation Reform Act of 1995, which statements involve substantial risks and uncertainties. These statements are based on current expectations, estimates, forecasts and projections about the industries in which Outbrain and Teads operate, and beliefs and assumptions of Outbrain’s management. Forward-looking statements may include, without limitation, statements regarding possible or assumed future results of our business, financial condition, results of operations, liquidity, plans and objectives, expected synergies and statements of a general economic or industry-specific nature. You can generally identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “foresee,” “potential” or “continue” or the negative of these terms or other similar expressions that concern our expectations, strategy, plans or intentions, or are not statements of historical fact. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors including, but not limited to: risks that the Acquisition disrupts current plans and operations or diverts management’s attention from its ongoing business; the initiation or outcome of any legal proceedings that may be instituted against Outbrain or Teads, or their respective directors or officers, related to the Acquisition; unexpected costs, charges or expenses resulting from the Acquisition; the ability of Outbrain to successfully integrate Teads’ operations, technologies and employees; the ability to realize anticipated benefits and synergies of the Acquisition, including the expectation of enhancements to Outbrain’s services, greater revenue or growth opportunities, operating efficiencies and cost savings; overall advertising demand and traffic generated by Outbrain and the combined company’s media partners; factors that affect advertising demand and spending, such as the continuation or worsening of unfavorable economic or business conditions or downturns, instability or volatility in financial markets, and other events or factors outside of Outbrain and the combined company’s control, such as U.S. and global recession concerns; geopolitical concerns, including the ongoing war between Ukraine-Russia and conditions in Israel and Middle East; supply chain issues; inflationary pressures; labor market volatility; bank closures or disruptions; the impact of challenging economic conditions; political and policy uncertainties; and other factors that have and may further impact advertisers’ ability to pay; Outbrain and the combined company’s ability to continue to innovate, and adoption by Outbrain and the combined company’s advertisers and media partners of expanding solutions; the success of Outbrain and the combined company’s sales and marketing investments, which may require significant investments and may involve long sales cycles; Outbrain and the combined company’s ability to grow their business and manage growth effectively; the ability to compete effectively against current and future competitors; the loss or decline of one or more large media partners, and Outbrain and the combined company’s ability to expand advertiser and media partner relationships; conditions in Israel, including the ongoing war between Israel and Hamas and other terrorist organizations, may limit Outbrain and the combined company’s ability to market, support and innovate their products due to the impact on employees as well as advertisers and advertising markets; Outbrain and the combined company’s ability to maintain revenues or profitability despite quarterly fluctuations in results, whether due to seasonality, large cyclical events or other causes; the risk that research and development efforts may not meet the demands of a rapidly evolving technology market; any failure of Outbrain or the combined company’s recommendation engine to accurately predict attention or engagement, any deterioration in the quality of Outbrain or the combined company’s recommendations or failure to present interesting content to users or other factors which may cause us to experience a decline in user engagement or loss of media partners; limits on Outbrain and the combined company’s ability to collect, use and disclose data to deliver advertisements; Outbrain and the combined company’s ability to extend their reach into evolving digital media platforms; Outbrain and the combined company’s ability to maintain and scale their technology platform; the ability to meet demands on our infrastructure and resources due to future growth or otherwise; the failure or the failure of third parties to protect Outbrain and the combined company’s sites, networks and systems against security breaches, or otherwise to protect the confidential information of Outbrain and the combined company; outages or disruptions that impact Outbrain or the combined company or their service providers, resulting from cyber incidents, or failures or loss of our infrastructure; significant fluctuations in currency exchange rates; political and regulatory risks in the various markets in which Outbrain and the combined company operate; the challenges of compliance with differing and changing regulatory requirements; the timing and execution of any cost-saving measures and the impact on Outbrain and the combined company’s business or strategy; and the other risk factors and additional information described under the heading “Risk Factors” in Item 1A of Outbrain’s Annual Report on Form 10-K filed with the SEC on March 8, 2024 for the year ended December 31, 2023, Outbrain’s Form 10-Q filed with the SEC on August 8, 2024 for the period ended June 30, 2024, Outbrain’s Form 10-Q filed with the SEC on November 7, 2024 for the period ended September 30, 2024 and in subsequent reports filed with the SEC.

Accordingly, you should not rely upon forward-looking statements as an indication of future performance. Outbrain cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or will occur, and actual results, events or circumstances could differ materially from those projected in the forward-looking statements. The forward-looking statements made in this communication relate only to events as of the date on which the statements are made. Outbrain and the combined company may not actually achieve the plans, intentions or expectations disclosed in the forward-looking statements and you should not place undue reliance on the forward-looking statements. Outbrain undertakes no obligation, and does not assume any obligation, to update any forward-looking statements, whether as a result of new information, future events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events or otherwise, except as required by law.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.		Description
99.1		Unaudited Pro Forma Condensed Combined Financial Information of Outbrain as of September 30, 2024, for the nine months ended September 30, 2024 and September 30, 2023 and for the year ended December 31, 2023.

99.2		Unaudited Condensed Interim Consolidated Financial Statements of Teads as of September 30, 2024 and for the three and nine months ended September 30, 2024 and 2023.

99.3		Additional excerpts from the Preliminary Offering Memorandum, dated February 3, 2025.

104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, Outbrain has duly caused this report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.

	OUTBRAIN INC.
Date: February 3, 2025
	By:	/s/ David Kostman
		Name:	David Kostman
		Title:	Chief Executive Officer

Exhibit 99.1

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

On February 3, 2025, Outbrain acquired Teads pursuant to the Share Purchase Agreement. The following unaudited pro forma condensed combined financial statements and related notes are derived from the historical consolidated financial statements of Outbrain and the historical financial statements of Teads, and give effect to the Acquisition, the Offering and the other related contemplated financing transactions (the “Financing”) on a pro forma basis as described herein.

The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2024 and 2023 and the year ended December 31, 2023 have been prepared as if the Acquisition and the Financing had been completed on January 1, 2023, and the unaudited pro forma condensed combined balance sheet as of September 30, 2024 has been prepared as if the Acquisition and the Financing had been completed on September 30, 2024. The unaudited pro forma LTM consolidated statement of operations information has been derived as follows: (i) unaudited pro forma condensed combined statement of operations for the year ended December 31, 2023, less (ii) unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2023, plus (iii) unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2024.

The unaudited pro forma condensed combined financial statements and the accompanying notes should be read in conjunction with:

•	The unaudited historical condensed consolidated financial statements and related notes of Outbrain in its Quarterly Report on Form 10-Q as of September 30, 2024 and for the periods ended September 30, 2024 and 2023, as filed with the SEC on November 7, 2024 (“Outbrain’s Third Quarter 2024 10-Q”);

•	The audited historical consolidated financial statements and related notes of Outbrain in its Annual Report on Form 10-K as of and for the year ended December 31, 2023, as filed with the SEC on March 8, 2024 (“Outbrain’s 2023 Annual Report”);

•	The unaudited historical condensed interim consolidated financial statements of Teads as of September 30, 2024 and for the nine months ended September 30, 2024 and 2023, which are included in this offering memorandum; and

•	The audited historical consolidated financial statements of Teads as of December 31, 2023 and December 31, 2022 and for each of the three years in the period ended December 31, 2023, which are included in this offering memorandum.

The following unaudited pro forma condensed combined financial information and related notes has been prepared in accordance with Article 11 of Regulation S-X as amended by the Final Rule, Release No. 33-10786, to give effect to the following:

•

Application of the acquisition method of accounting under the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 805 (“ASC 805”), Business Combinations, where certain assets and liabilities of Teads were recorded by Outbrain at their respective fair values as of the date the acquisition was completed;

•	Adjustments to conform the financial statement presentation of Teads to Outbrain, based upon a preliminary assessment by Outbrain;

•	Adjustments to reflect the following financing transactions and other adjustments:

○	Issuance of the Notes offered hereby in an aggregate principal amount of $625 million; and

○	Issuance of 43.75 million newly issued shares of Outbrain Common Stock;

•	Adjustments to reflect transaction costs in connection with the acquisition.

The historical financial statements of Outbrain have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and in its reporting currency of U.S. dollars. The historical financial statements of Teads have been prepared in accordance with IFRS, as issued by IASB, and in its reporting currency of U.S. dollars. Accordingly, the unaudited pro forma condensed combined financial statements reflect certain

adjustments to Teads’ historical consolidated financial statements to align those financial statements with U.S. GAAP, based on Outbrain management’s preliminary analysis. In addition, certain items within Teads’ historical consolidated financial statements have been reclassified to align with Outbrain’s financial statement presentation.

As of the date of this offering memorandum, the Company has not completed the detailed valuation necessary to arrive at the final estimates of the fair value of Teads’ assets acquired and liabilities assumed, and the related allocation of the purchase price, nor has it identified all of the adjustments necessary to conform Teads’ accounting policies to those of Outbrain. Accordingly, the adjustments to the historical book values of assets and liabilities reflect the Company’s best estimates of the fair values, with the excess of the purchase price over the preliminary estimates of fair value recorded as goodwill. Actual results may differ once the Company has completed the detailed valuations necessary to finalize the purchase price allocation. The final calculation of consideration transferred could significantly differ from the amounts presented in the unaudited pro forma condensed combined financial statements due to movements in the value of the Company’s common stock and volatility, among other valuation inputs. Under applicable guidance, the Company is not required to finalize its acquisition accounting until all information is available, but no later than one year after the Acquisition is completed, and any subsequent adjustments made in connection with the finalization of the Company’s acquisition accounting may be material. There can be no assurance that such finalization will not result in material changes.

The pro forma condensed combined financial statements are unaudited, are presented for illustrative and informational purposes only, and are not necessarily indicative of the financial position or results of operations that would have occurred had the Acquisition and the Financing actually been completed as of the dates presented. In addition, the unaudited pro forma condensed combined financial statements do not purport to project the future consolidated financial position or operating results of the combined company. The unaudited pro forma condensed combined financial statements do not reflect any potential cost savings, operating efficiencies or synergies related to the Acquisition. The pro forma adjustments represent Outbrain management’s best estimates and are based upon currently available information and certain assumptions that the Company believes are reasonable. For more information, please see the section titled “Risk Factors — Risks Related to the Combined Company After Closing of the Acquisition — Outbrain incurred significant transaction and integration-related costs in connection with the Acquisition and may not be able to integrate Teads successfully or manage the combined business effectively, and many of the anticipated synergies and other benefits of the Acquisition may not be realized or may not be realized within the expected time frame.”

Unaudited Pro Forma Condensed Combined Balance Sheet

As of September 30, 2024

(in thousands)


	Outbrain Historical	Teads Historical After Reclassifications (see Note 3)	GAAP & Policy Adjustments	Notes	Transaction Accounting and Financing Adjustments	Notes	Pro Forma Combined
ASSETS
Current assets:
Cash and cash equivalents	$57,061	$64,597	$—		$(625,000)	5	$104,833
					608,175	7(a)
Short-term investments in marketable securities	73,467	—	—		—		73,467
Accounts receivable, net of allowances	157,542	210,267	—		(29)	6(a)	367,780
Prepaid expenses and other current assets	38,133	618,021	—		(593,584)	6(b)	62,570
Total current assets	326,203	892,885	—		(610,438)		608,650
Non-current assets:
Long-term investments in marketable securities	—	—	—		—		—
Property, equipment and capitalized software, net	43,934	4,287	21,198	4(a)	(20,957)	6(c)	48,462
Operating lease right-of-use assets, net	15,791	14,831	615	4(c)	(639)	6(d)	30,598
Intangible assets, net	17,834	21,692	(21,198)	4(a)	385,506	6(e)	403,834
Goodwill	63,063	37,013	—		395,047	6(f)	495,123
Deferred tax assets	42,166	11,383	—		29,595	6(j)	83,144
Other assets	21,140	2,596	—		104,825	6(k)	141,838
					14,084	7(a)
					(807)	7(b)
TOTAL ASSETS	$530,131	$984,687	$615		$296,216		$1,811,649

LIABILITIES AND STOCKHOLDERS’ EQUITY:
Current liabilities:
Accounts payable	$123,355	$121,229	$—		$(29)	6(a)	$244,555
Accrued compensation and benefits	18,721	20,833	—		—		39,554
Accrued and other current liabilities	124,053	37,671	(868)	4(c)	(673)	6(d)	193,595
					21,420	6(g)
					11,166	7(a)
					826	7(b)
Deferred revenue	6,598	2,894	—		—		9,492
Total current liabilities	272,727	182,627	(868)		32,710		487,196
Non-current liabilities:
Long-term debt	—	21	—		611,324	7(a)	611,345
Operating lease liabilities, non-current	12,634	12,363	(1,076)	4(c)	(389)	6(d)	23,532
Uncertain tax positions	5,327	—	—		99,825	6(k)	105,152
Deferred tax liabilities	3,459	1,484	650	4(c)	74,884	6(j)	80,477
Other liabilities	8,828	1,886	—		5,000	6(k)	15,714
TOTAL LIABILITIES	$302,975	$198,381	$(1,294)		$823,354		$1,323,416

Commitments and Contingencies

STOCKHOLDERS’ EQUITY:
Common stock	63	17,379	—		(17,379)	6(i)	107
					44	7(b)
Additional paid-in capital	480,440	99,178	—		(99,178)	6(i)	762,701
					283,894	7(b)
					(1,633)	7(b)
Treasury stock, at cost	(74,079)	—	—		—		(74,079)
Accumulated other comprehensive loss	(9,942)	(29,107)	—		29,107	6(i)	(9,942)
Accumulated deficit	(169,326)	698,856	1,909	4(c)	423	6(d)	(190,554)
					(21,420)	6(g)
					(700,765)	6(i)
					(231)	7(a)
TOTAL STOCKHOLDERS’ EQUITY:	227,156	786,306	1,909		(527,138)		488,233
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY:	$530,131	$984,687	$615		$296,216		$1,811,649

See Accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements.

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Nine Months Ended September 30, 2024

(in thousands, except share and per share data)


	Outbrain Historical	Teads Historical After Reclassifications (see Note 3)	GAAP & Policy Adjustments	Notes	Transaction Accounting and Financing Adjustments	Notes	Pro Forma Combined
Revenue	$655,289	$428,482	$—		$(107)	6(a)	$1,083,664
Cost of revenue:
Traffic acquisition costs	487,484	210,314	(48,575)	4(b)	(107)	6(a)	649,116
Other cost of revenue	31,765	31,398	8,539	4(a)	(8,539)	6(c)	75,570
					12,407	6(e)
Total cost of revenue	519,249	241,712	(40,036)		3,761		724,686
Gross profit	136,040	186,770	40,036		(3,868)		358,978
Operating expenses:
Research and development	27,646	28,781	(8,539)	4(a)	(5,629)	6(h)	42,294
			35	4(c)
Sales and marketing	71,762	85,554	48,575	4(b)	22,317	6(e)	219,365
			309	4(c)	(10,402)	6(h)
					1,250	6(k)
General and administrative	51,805	41,987	44	4(c)	(12,058)	6(h)	83,824
			2,046	4(d)
Total operating expenses	151,213	156,322	42,470		(4,522)		345,483
(Loss) income from operations	(15,173)	30,448	(2,434)		654		13,495
Other income (expense), net:
Gain on convertible debt	8,782	—	—		—		8,782
Interest expense	(2,950)	(1,060)	813	4(c)	(49,615)	7(a)	(52,812)
Interest income and other income, net	7,687	12,431	2,046	4(d)	(18,423)	6(b)	3,741
Total other income (expense), net	13,519	11,371	2,859		(68,038)		(40,289)
(Loss) income before income taxes	(1,654)	41,819	425		(67,384)		(26,794)
(Benefit) provision for income taxes	(1,110)	22,113	108	4(c)	(23,485)	6(j)	(11)
					2,363	6(k)
Net (loss) income	$(544)	$19,706	$317		$(46,262)		$(26,783)

Weighted average common shares outstanding (Note 8):
Basic	49,171,414				43,750,000		92,921,414
Diluted	53,701,925				43,750,000		97,451,925
Net loss per common share (Note 8):
Basic	$(0.01)						$(0.29)
Diluted	$(0.10)						$(0.32)

See Accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements.

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Nine Months Ended September 30, 2023

(In thousands, except for share and per share data)


	Outbrain Inc. Historical	Teads Historical after Reclassifications (see Note 3)	GAAP & Policy Adjustments	Note	Transaction Accounting and Financing Adjustments	Note	Pro Forma Combined
Revenue	$687,589	$430,419	$—		$(106)	6(a)	$1,117,902
Cost of revenue:
Traffic acquisition costs	524,024	197,993	(45,792)	4(b)	(106)	6(a)	676,119
Other cost of revenue	31,999	31,241	7,473	4(a)	(7,473)	6(c)	75,647
					12,407	6(e)
Total cost of revenue	556,023	229,234	(38,319)		4,828		751,766
Gross profit	131,566	201,185	38,319		(4,934)		366,136
Operating expenses:
Research and development	28,033	17,314	(6,046)	4(a)	—		39,344
			43	4(c)
Sales and marketing	73,116	79,048	45,792	4(b)	22,317	6(e)	221,902
			379	4(c)	1,250	6(k)
General and administrative	44,766	29,192	(1,427)	4(a)	21,420	6(g)	94,417
			54	4(c)
			412	4(d)
Total operating expenses	145,915	125,554	39,207		44,987		355,663
(Loss) income from operations	(14,349)	75,631	(888)		(49,921)		10,473
Other income (expense), net:
Gain on convertible debt	22,594	—	—		—		22,594
Interest expense	(4,428)	(821)	656	4(c)	(61,989)	7(a)	(66,582)
Interest income and other income (expense), net	5,733	11,259	412	4(d)	(14,172)	6(b)	3,232
Total other income (expense), net	23,899	10,438	1,068		(76,161)		(40,756)
Income (loss) before income taxes	9,550	86,069	180		(126,082)		(30,283)
Provision (benefit) for income taxes	3,365	23,485	46	4(c)	(26,591)	6(j)	2,668
					2,363	6(k)
Net income (loss)	$6,185	$62,584	$134		$(101,854)		$(32,951)

Weighted average shares outstanding (Note 8):
Basic	51,178,127				43,750,000		94,928,127
Diluted	57,696,222				43,750,000		101,446,222
Net income (loss) per common share (Note 8):
Basic	$0.12						$(0.35)
Diluted	$(0.15)						$(0.47)

See Accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements.

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Year Ended December 31, 2023

(in thousands, except share and per share data)


	Outbrain Historical	Teads Historical After Reclassifications (see Note 3)	GAAP & Policy Adjustments	Notes	Transaction Accounting and Financing Adjustments	Notes	Pro Forma Combined
Revenue	$935,818	$649,812	$—		$(171)	6(a)	$1,585,459
Cost of revenue:
Traffic acquisition costs	708,449	286,086	(62,830)	4(b)	(171)	6(a)	931,534
Other cost of revenue	42,571	42,549	10,295	4(a)	(10,295)	6(c)	101,663
					16,543	6(e)
Total cost of revenue	751,020	328,635	(52,535)		6,077		1,033,197
Gross profit	184,798	321,177	52,535		(6,248)		552,262
Operating expenses:
Research and development	36,402	31,181	(10,295)	4(a)	(3,596)	6(h)	53,751
			59	4(c)
Sales and marketing	98,370	108,534	62,830	4(b)	29,756	6(e)	295,032
			520	4(c)	(6,645)	6(h)
					1,667	6(k)
General and administrative	58,665	47,073	74	4(c)	21,420	6(g)	121,946
			2,416	4(d)	(7,702)	6(h)
Total operating expenses	193,437	186,788	55,604		34,900		470,729
(Loss) income from operations	(8,639)	134,389	(3,069)		(41,148)		81,533
Other income (expense), net:
Gain on convertible debt	22,594	—	—		—		22,594
Interest expense	(5,393)	(929)	891	4(c)	(78,527)	7(a)	(83,958)
Interest income and other income (expense), net	7,793	4,549	2,416	4(d)	(14,909)	6(b)	(151)
Total other income (expense), net	24,994	3,620	3,307		(93,436)		(61,515)
Income (loss) before provision for income taxes	16,355	138,009	238		(134,584)		20,018
Provision (benefit) for income taxes	6,113	42,186	60	4(c)	(33,075)	6(j)	18,434
					3,150	6(k)
Net income (loss)	$10,242	$95,823	$178		$(104,659)		$1,584

Weighted average common shares outstanding (Note 8):
Basic	50,900,422				43,750,000		94,650,422
Diluted	56,965,299				43,750,000		100,715,299
Net income (loss) per common share (Note 8):
Basic	$0.20						$0.02
Diluted	$(0.06)						$(0.12)

See Accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements.

Unaudited Pro Forma Condensed Combined Statement of Operations

For the LTM Period Ended September 30, 2024

(in thousands, except share and per share data)


	(1)	(2)	(3)	(4) = (1)+(2)-(3)

	Year Ended December 31, 2023	Nine Months Ended September 30, 2024	Nine Months Ended September 30, 2023	LTM Period Ended September 30, 2024
Revenue	$1,585,459	$1,083,664	$1,117,902	$1,551,221
Cost of revenue:
Traffic acquisition costs	931,534	649,116	676,119	904,531
Other cost of revenue	101,663	75,570	75,647	101,586
Total cost of revenue	1,033,197	724,686	751,766	1,006,117
Gross profit	552,262	358,978	366,136	545,104
Operating expenses:
Research and development	53,751	42,294	39,344	56,701
Sales and marketing	295,032	219,365	221,902	292,495
General and administrative	121,946	83,824	94,417	111,353
Total operating expenses	470,729	345,483	355,663	460,549
Income from operations	81,533	13,495	10,473	84,555
Other income (expense), net:
Gain on convertible debt	22,594	8,782	22,594	8,782
Interest expense	(83,958)	(52,812)	(66,582)	(70,188)
Interest income and other income (expense), net	(151)	3,741	3,232	358
Total other expense, net	(61,515)	(40,289)	(40,756)	(61,048)
Income (loss) before provision for income taxes	20,018	(26,794)	(30,283)	23,507
Provision (benefit) for income taxes	18,434	(11)	2,668	15,755

Net income (loss)	$1,584	$(26,783)	$(32,951)	$7,752

Weighted average common shares outstanding (Note 8):
Basic	94,650,422	92,921,414	94,928,127	93,148,887
Diluted	100,715,299	97,451,925	101,446,222	97,975,207
Net income (loss) per common share (Note 8):
Basic	$0.02	$(0.29)	$(0.35)	$0.08
Diluted	$(0.12)	$(0.32)	$(0.47)	$0.03

See Accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements.

1. Description of the Acquisition and the Financing

On August 1, 2024, Outbrain entered into the Share Purchase Agreement with Teads and Altice Teads to acquire, directly and via certain of its subsidiaries, all of the issued and outstanding equity interests of Teads from Altice Teads (the “Acquisition”). The Acquisition closed on February 3, 2025 (the “Acquisition Closing Date”).

The consideration paid on the Acquisition Closing Date consisted of: (1) a cash payment of $625 million, subject to certain customary adjustments as set forth in the Agreement and (2) 43.75 million newly issued shares of Outbrain Common Stock, par value $0.001 (the “Common Stock Consideration”).

In connection with the Acquisition, on February 3, 2025, Outbrain and the Issuer, as borrowers, entered into a New Credit Agreement, establishing a New Revolving Credit Facility with aggregate commitments of $100.0 million, including a letter of credit sub-limit of $10.0 million and a swingline sub-limit of $20.0 million. The New Credit Agreement also established a Bridge Facility with aggregate commitments of $625.0 million.

On the Acquisition Closing Date, the Bridge Facility was drawn in full to fund the cash portion of the Total Consideration. The proceeds from the Offering will be used, together with cash on hand, to (i) repay in full and cancel the indebtedness incurred under the Bridge Facility, including accrued and unpaid interest thereon and (ii) pay fees and expenses incurred in connection with the Offering and the Bridge Facility Refinancing.

2. Basis of Presentation

The Company and Teads both operate on a calendar year-end basis. The unaudited pro forma condensed combined financial statements have been derived from (i) the unaudited historical condensed consolidated financial statements of Outbrain in its Quarterly Report on Form 10-Q as of September 30, 2024 and for the periods ended September 30, 2024 and 2023, as filed with the SEC on November 7, 2024, (ii) the audited historical consolidated financial statements of Outbrain in its Annual Report on Form 10-K as of and for the year ended December 31, 2023, as filed with the SEC on March 8, 2024, (iii) the unaudited historical interim condensed consolidated financial statements of Teads as of September 30, 2024 and for the nine months ended September 30, 2024 and 2023, which are included in this offering memorandum, and (iv) the audited historical consolidated financial statements of Teads as of December 31, 2023 and December 31, 2022 and for each of the three years in the period ended December 31, 2023, which are included in this offering memorandum. All historical financial statements have been prepared in U.S. dollars.

The unaudited pro forma condensed combined financial statements show the impact of the Acquisition on the financial statements under the acquisition method of accounting, in accordance with ASC 805, Business Combinations, with Outbrain treated as the accounting acquirer of Teads.

The pro forma adjustments are preliminary and based on estimates of the fair value and useful lives of the assets acquired and liabilities assumed and have been prepared to illustrate the estimated effects of the Acquisition and the Financing and certain other adjustments. The final determination of the consideration transferred and acquisition accounting will be based on the fair values of the Teads assets acquired and liabilities assumed on the Acquisition Closing Date and using the fair value concepts defined in ASC 820, Fair Value Measurements. The Company is not required to finalize its acquisition accounting until all information is available, but no later than one year after the Acquisition is completed, and any subsequent adjustments made in connection with the finalization of the Company’s acquisition accounting may be material. There can be no assurance that such finalization will not result in material changes.

The accounting policies of Teads under IFRS as issued by the IASB, which are described in Note 2 to Teads’ historical consolidated financial statements included in this offering memorandum, are not expected to be significantly different from U.S. GAAP, except for those adjustments discussed further in Note 4 below. Although the

adjustments to Teads’ historical financial statements represent the currently known material adjustments to conform to U.S. GAAP, the accompanying unaudited pro forma IFRS to U.S. GAAP adjustments are preliminary and are subject to further adjustments as additional information becomes available and as additional analyses are performed. In addition, the accounting policies of Outbrain may vary materially from those of Teads outside of differences between U.S. GAAP and IFRS. During the preparation of the unaudited pro forma condensed combined financial statements, certain conforming adjustments were made based on the initial analysis of the differences in accounting policies. The Company is in the process of evaluating Teads’ accounting policies, and as a result of that review, additional differences may be identified that, when conformed, could have a material impact on the unaudited pro forma condensed combined financial information.

3. Reclassifications of Teads’ Historical Financial Information

Certain reclassifications have been made to Teads’ historical balance sheet to conform to Outbrain’s balance sheet presentation, as follows:


		As of September 30, 2024
Teads Historical Consolidated Balance Sheet Line Items	Outbrain Historical Consolidated Balance Sheet Line Items	Teads Before Reclassifications	Reclassification Adjustments	Notes	Teads After Reclassifications
		(in thousands)
ASSETS	ASSETS
Cash and cash equivalents	Cash and cash equivalents	$64,597	$—		$64,597
Trade receivables	Accounts receivable, net of allowances	210,267	—		210,267
Financial assets (current)		574,158	(574,158)	(a)	—
Other receivables	Prepaid expenses and other current assets	43,863	574,158	(a)	618,021
Property, plant and equipment	Property, equipment and capitalized software, net	4,287	—		4,287
Right-of-use assets	Operating lease right-of-use assets, net	14,831	—		14,831
Intangible assets	Intangible assets, net	21,692	—		21,692
Goodwill	Goodwill	37,013	—		37,013
Deferred tax assets	Deferred tax assets	11,383	—		11,383
Financial assets (non-current)	Other assets	2,596	—		2,596
Total assets	Total assets	$984,687	$—		$984,687
EQUITY AND LIABILITIES	LIABILITIES AND STOCKHOLDERS’ EQUITY
Trade and other payables	Accounts payable	$121,229	$—		$121,229
	Accrued compensation and benefits	—	20,833	(b)	$20,833
Short-term borrowings		16,855	(16,855)	(c)	—
Lease liabilities		5,450	(5,450)	(c)	—
Current tax liabilities		2,653	(2,653)	(c)	—
Contract liabilities	Deferred revenue	2,871	23	(c)	2,894
Other current liabilities	Accrued and other current liabilities	33,569	4,102	(b),(c)	37,671
Long term borrowings	Long-term debt	21	—		21
Lease liabilities	Operating lease liabilities, non-current	12,363	—		12,363
Non-current provisions		1,882	(1,882)	(d)	—
Deferred tax liabilities		1,484	—		1,484
Other non-current liabilities	Other liabilities	4	1,882	(d)	1,886
	Total liabilities	198,381	—		198,381
Share capital	Common stock	17,379	—		17,379
Share premium	Additional paid-in capital	99,178	—		99,178
Reserves	Accumulated other comprehensive income	(29,107)	—		(29,107)
Retained earnings	Accumulated retained earnings (deficit)	698,856	—		698,856
Total equity	Total stockholders’ equity	$786,306	$—		$786,306
Total equity and liabilities	Total liabilities and stockholders’ equity	$984,687	$—		$984,687

(a)	Reclassifications of financial assets to prepaid expenses and other current assets to conform to Outbrain’s presentation.

(b)	Reclassification to separately break out accrued compensation and benefits from other current liabilities to conform to Outbrain’s presentation.

(c)	Reclassifications to condense the presentation of certain Teads’ historical financial statement line items within current liabilities to be included in accrued and other current liabilities, consistent with Outbrain’s presentation.

(d)	Reclassifications to condense the presentation of certain Teads’ historical balance sheet line items within non-current liabilities to be included in other liabilities.

Certain reclassifications have been made to Teads’ historical statements of operations to conform to Outbrain’s presentation, as follows:


		For the Nine Months Ended September 30, 2024
Teads Historical Consolidated Statement of Operations Line Items	Outbrain Historical Consolidated Statement of Operations Line Items	Teads Before Reclassifications	Reclassification Adjustments	Notes	Teads After Reclassifications
		(in thousands)
Revenue	Revenue	$428,482	$—		$428,482
	Cost of revenue:
Cost of revenue	Traffic acquisition costs	241,712	(31,398)	(a)	210,314
	Other cost of revenue		31,398	(a)	31,398
	Total cost of revenue				241,712
	Gross profit				186,770
	Operating expenses:
Technology and development expenses	Research and development	28,781	—		28,781
Sales and marketing expenses	Sales and marketing	85,554	—		85,554
General and administrative expenses	General and administrative	41,987	—		41,987
	Total operating expenses				156,322
Profit from operations	Income from operations	30,448	—		30,448
	Other income (expense), net:
Finance costs	Interest expense	(1,060)	—		(1,060)
Other financial income and (expenses)	Interest income and other income (expense), net	12,431	—		12,431
	Total other income (expense), net				11,371
Profit before tax	Income before income taxes	41,819	—		41,819
Income tax expense	Provision for income taxes	22,113	—		22,113
Profit for the period	Net income	$19,706	$—		$19,706

(a)	Reclassification to separately break out Teads’ cost of revenue between traffic acquisition costs and other cost of revenue, consistent with Outbrain’s presentation.


		For the Nine Months Ended September 30, 2023
Teads Historical Consolidated Statement of Operations Line Items	Outbrain Historical Consolidated Statement of Operations Line Items	Teads Before Reclassifications	Reclassification Adjustments	Notes	Teads After Reclassifications
		(in thousands)
Revenue	Revenue	$430,419	$—		$430,419
	Cost of revenue:
Cost of revenue	Traffic acquisition costs	229,234	(31,241)	(a)	197,993
	Other cost of revenue		31,241	(a)	31,241
	Total cost of revenue				229,234
	Gross profit				201,185
	Operating expenses:
Technology and development expenses	Research and development	17,314	—		17,314
Sales and marketing expenses	Sales and marketing	79,048	—		79,048
General and administrative expenses	General and administrative	29,192	—		29,192
	Total operating expenses				125,554
Profit from operations	Income from operations	75,631	—		75,631
	Other income (expense), net:
Finance costs	Interest expense	(821)	—		(821)
Other financial income and (expenses)	Interest income and other income (expense), net	11,259	—		11,259
	Total other income (expense), net				10,438
Profit before tax	Income before income taxes	86,069	—		86,069
Income tax expense	Provision for income taxes	23,485	—		23,485
Profit for the period	Net income	$62,584	$—		$62,584

(a)	Reclassification to separately break out Teads’ cost of revenue between traffic acquisition costs and other cost of revenue, consistent with Outbrain’s presentation.


		For the Year Ended December 31, 2023
Teads Historical Consolidated Statement of Operations Line Items	Outbrain Historical Consolidated Statement of Operations Line Items	Teads Before Reclassifications	Reclassification Adjustments	Notes	Teads After Reclassifications
		(in thousands)
Revenue	Revenue	$649,812	$—		$649,812
	Cost of revenue:
Cost of revenue	Traffic acquisition costs	328,635	(42,549)	(a)	286,086
	Other cost of revenue		42,549	(a)	42,549
	Total cost of revenue				328,635
	Gross profit				321,177
	Operating expenses:
Technology and development expenses	Research and development	31,181	—		31,181
Sales and marketing expenses	Sales and marketing	108,534	—		108,534
General and administrative expenses	General and administrative	47,073	—		47,073
	Total operating expenses				186,788
Profit from operations	Income from operations	134,389	—		134,389
	Other income (expense), net:
Finance costs	Interest expense	(929)	—		(929)
Other financial income and (expenses)	Interest income and other income (expense), net	4,549	—		4,549
	Total other income (expense), net				3,620
Profit before tax	Income before income taxes	138,009	—		138,009
Income tax expense	Provision for income taxes	42,186	—		42,186
Profit for the year	Net income	$95,823	$—		$95,823

(a)	Reclassifications to separately break out Teads’ cost of revenue between traffic acquisition costs and other cost of revenue, consistent with Outbrain’s presentation.

4. IFRS to U.S. GAAP and Accounting Policy Adjustments

Teads’ historical consolidated financial statements have been prepared in accordance with IFRS, which differs in certain respects from U.S. GAAP. The unaudited pro forma condensed combined financial statements include the statement of operations of Teads from the audited historical consolidated financial statements for the year ended December 31, 2023, the statement of operations of Teads from the historical unaudited condensed interim consolidated financial statements for the nine months ended September 30, 2024 and 2023, and the balance sheet of Teads from the historical unaudited condensed interim consolidated financial statements as of September 30, 2024, in each case prepared in accordance with IFRS as issued by the IASB.

The historical figures have been adjusted to reflect Teads’ consolidated statements of operations and balance sheet on a U.S. GAAP basis for the preparation of the unaudited pro forma condensed combined financial statements herein.

The following adjustments have been made to Teads’ historical financial statements to present them on a U.S. GAAP basis and conform them to the Company’s accounting policies for the purposes of the unaudited pro forma condensed combined financial statements:

(a)

to reclassify $21.0 million of capitalized software and $0.2 million of leasehold improvements, which are classified within intangible assets on Teads’ balance sheet under IFRS, to property and equipment and capitalized software, net, to conform to Outbrain’s accounting policy of presenting these items within fixed assets, as permitted by U.S. GAAP. The related capital software amortization expenses have been reclassified from operating expenses to other cost of revenue, in accordance with U.S. GAAP;

(b)	to present certain allocated compensation-related costs within sales and marketing operating expenses rather than cost of revenue, in accordance with Outbrain’s accounting policies;

(c)

Under IFRS, lessees account for all leases as finance leases, with the associated lease expenses recorded within interest expense and depreciation expense. Under U.S. GAAP, Teads’ leases, which were analyzed under Accounting Standards Codification Topic 842, “Leases”, would be classified as operating leases with lease expense recognized on a straight-line basis as part of operating expenses. Accordingly, the below adjustments were reflected to derecognize the lease assets and liabilities recorded for Teads’ finance leases in accordance with IFRS and recognize the corresponding operating lease assets and liabilities in accordance with U.S. GAAP in the unaudited pro forma condensed combined balance sheet:


	September 30, 2024
	Teads Finance Leases under IFRS	Teads Operating Leases Under U.S. GAAP	Adjustment
	(in thousands)
Operating lease right-of-use assets, net	$14,831	$15,446	$615
Accrued and other current liabilities	5,450	4,582	(868)
Operating lease liabilities, non-current	12,363	11,287	(1,076)
Net adjustment	$(2,982)	$(423)	$2,559

In the unaudited pro forma condensed combined statement of operations, Teads’ interest expense for lease liabilities classified as finance leases was removed and the allocated operating expenses were adjusted for the differences between the departmental expenses recognized under IFRS to the amounts to be recognized under U.S. GAAP, as summarized below:


	Nine Months Ended September 30, 2024			Nine Months Ended September 30, 2023			Year Ended December 31, 2023
	Teads Finance Leases under IFRS	Teads Operating Leases Under U.S. GAAP	Difference	Teads Finance Leases under IFRS	Teads Operating Leases Under U.S. GAAP	Difference	Teads Finance Leases under IFRS	Teads Operating Leases Under U.S. GAAP	Difference
	(in thousands)
Interest expense - finance leases	813	—	(813)	656	—	(656)	891	—	(891)
Operating expenses - finance lease depreciation	$4,116	$—	$(4,116)	$3,899	$—	$(3,899)	$5,256	$—	$(5,256)
Operating expenses - fixed lease costs	—	4,504	4,504	—	4,375	4,375	—	5,909	5,909
	$4,116	$4,504	$388	$3,899	$4,375	$476	$5,256	$5,909	$653
Research and development			$35			$43			$59
Sales and marketing			$309			$379			$520
General and administrative			$44			$54			$74
			$388			$476			$653

The tax effects of the above adjustments were calculated using a blended U.S. federal and state tax rate and statutory rates of the respective foreign jurisdictions in which Teads operates; and

(d)	to present bank charges within general and administrative expenses, in accordance with U.S. GAAP, rather than within finance costs under IFRS.

We continue to perform a detailed review of Teads’ historical financial statements prepared under IFRS, as issued by IASB. As a result of that review, the Company may identify additional differences between the accounting policies of the two companies that, when conformed, could have a material impact on the combined financial statements.

5. Preliminary Purchase Price Allocation

The aggregate purchase price paid by the Company to acquire Teads was comprised of (i) a cash payment of $625 million and (ii) 43.75 million newly issued shares of Outbrain Common Stock. The aggregate purchase price paid by the Company to acquire Teads was approximately $0.9 billion.

From and after closing, Altice Teads agreed to indemnify Outbrain and its affiliates for certain losses that may be incurred by them. For further information about an indemnity related to tax matters and the effect on these unaudited pro forma condensed combined financial statements, refer to 6(k) below.

The following summarizes the preliminary calculation of consideration transferred. The final calculation of consideration transferred is subject to future adjustments, including changes in the fair value of equity consideration:


			Amount (in thousands)
Cash consideration			$625,000
Common Stock⁽¹⁾			283,938
Preliminary Aggregate Purchase Consideration			$908,938

(1)

Represents a preliminary value of 43.75 million shares of Outbrain Common Stock based on the closing stock price as of January 22, 2025 of $6.49 per share. The actual value of the stock consideration will change based on fluctuations in the value of Outbrain Common Stock on the closing date of the Acquisition.

Under the acquisition method of accounting, the estimated purchase price, calculated as described above, is allocated to the identifiable assets acquired and the identifiable liabilities assumed with any excess being allocated to goodwill.

The allocation of the purchase price is preliminary, and the final determination will be based on the fair values of assets acquired and liabilities assumed, including the fair values of identifiable intangible assets and the fair values of liabilities assumed on the date the Acquisition was consummated. The purchase price allocation is dependent upon certain valuation and other studies that have not yet been completed. Accordingly, the preliminary purchase price allocation is subject to further adjustments as additional information becomes available and as additional analyses and final valuations are conducted at and following the completion of the Acquisition. The final valuations could differ materially from the preliminary valuations presented below and, as such, no assurances can be provided regarding the preliminary purchase price allocation.

The preliminary purchase price allocation was estimated based on Teads’ historical financial statements reflecting IFRS to U.S. GAAP and accounting policy adjustments for pro forma purposes. The following tables summarize the preliminary purchase price allocation to the identifiable assets acquired and liabilities assumed of Teads as well as the identifiable intangible assets recognized as part of the Acquisition (in thousands):


			As of September 30, 2024
			(in thousands)
Purchase consideration			$908,938
Amounts of identifiable assets acquired and liabilities assumed
Book value of Teads’ net assets ⁽¹⁾			$788,215
Less:
Elimination of intercompany transactions with Altice Teads			(593,584)
Elimination of historical goodwill			(37,013)
Elimination of historical capitalized software			(20,957)
Elimination of historical intangible assets			(494)
Add:
Preliminary value of identifiable intangible assets			386,000


			As of September 30, 2024
			(in thousands)
Deferred tax impact of identifiable intangible assets			(45,289)
Preliminary estimate of fair value of identifiable net assets acquired			$476,878
Preliminary estimate of goodwill			$432,060

(1)	The book value of Teads’ net assets reflects preliminary IFRS to U.S. GAAP and accounting policy adjustments. The final goodwill amount that will be recorded in connection with the Acquisition is subject to change due to changes in the book value of Teads’ assets and liabilities at acquisition.

For purposes of determining the consideration transferred, the closing price of Outbrain Common Stock from January 22, 2025 has been utilized. An increase or decrease of 10% in the closing price of the Common Stock would increase or decrease the total consideration by $28.4 million, which would result in a corresponding increase or decrease to goodwill in the unaudited pro forma condensed combined financial statements.

See Note 6 for the preliminary fair value of the identifiable intangible assets.

6. Transaction Accounting Adjustments

The preliminary pro forma adjustments included in the unaudited pro forma condensed combined financial statements are as follows:

(a)	Reflects the elimination of Teads’ historical intercompany balances with Outbrain, which will be eliminated in consolidation of the combined company, as well as the related revenue and traffic acquisition costs.

(b)

Reflects the elimination of Teads’ intercompany balances with Altice Teads, which was required to be settled prior to the consummation of the Acquisition through a series of intercompany movements and distributions. The unaudited pro forma condensed combined balance sheet reflects the eliminations of $19.5 million interest receivable within prepaid expenses and other current assets and intercompany loans receivable of $574.1 million, net of provision for credit losses, within prepaid expenses and other current assets. The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2024, the nine months ended September 30, 2023 and the year ended December 31, 2023 reflect the elimination of net income of $18.4 million, $14.2 million, and $14.9 million, respectively, from interest income and other income (expense), net. These adjustments eliminate the impacts of the interest income, as well as the provision for credit losses on the intercompany loans.

(c)

Reflects an adjustment to eliminate the $21.0 million balance of Teads’ capitalized software included in its consolidated balance sheet as of September 30, 2024, as well to eliminate the related amortization expense of $8.5 million, $7.5 million and $10.3 million for the nine months ended September 30, 2024, the nine months ended September 30, 2023 and the year ended December 31, 2023, respectively, as it is included in the preliminary fair value of the technology intangible asset in (e) below.

(d)

Reflects the re-measurement of Teads’ lease portfolio as of September 30, 2024, updated for discount rates as of such date. The Company also reflected the impact of the practical expedient that it adopted at the Acquisition Closing, whereby it will not recognize right-of-use operating lease assets and liabilities for leases with a remaining lease term of twelve months or less. As a result of this re-measurement, operating lease right of use assets, net declined by $0.6 million, accrued and other current liabilities declined by $0.7 million and operating lease liabilities, non-current declined by $0.4 million. The statements of operations impact of this re-measurement was not material for the nine months ended September 30, 2024, the nine months ended September 30, 2023 or the year ended December 31, 2023.

(e)

Reflects the net increase in intangible assets based on a preliminary estimated fair value, partially offset by an elimination of historical intangible assets. The preliminary estimated fair value is allocated to intangible assets primarily consisting of customer relationships, publisher relationships, technology and a trade name. The estimated fair values and useful lives of identifiable intangible assets are preliminary and have been performed based on publicly available benchmarking information given the limited time available to perform a full valuation study and limitations of information for the valuation study at this time. The amount that will ultimately be allocated to identifiable intangible assets and the related amount of

amortization, may differ materially from this preliminary allocation. Any change in the valuation of intangible assets would cause a corresponding increase or decrease in the balance of goodwill. A hypothetical 10% change in the valuation of intangible assets would result in a change to annual amortization expense of approximately $4.6 million.

These estimated useful lives are preliminary and were determined based on our review of the time period over which economic benefit is estimated to be generated and other factors, including Outbrain management’s view based on historical experience with similar assets and market-based analysis.


				Estimated Amortization
	Teads Historical Amounts After Reclassifications, net	Estimated Fair Value	Increase/ Decrease	Nine Months Ended September 30, 2024	Nine Months Ended September 30, 2023	Year Ended December 31, 2023	Estimated Weighted Average Useful Life (Years)
	(dollars in thousands)
Publishers⁽²⁾	$—	$57,900	$57,900	$4,343	$4,343	$5,790	10
Customers⁽²⁾	326	173,700	173,374	14,475	14,475	19,300	9
Technology⁽¹⁾	—	115,800	115,800	12,407	12,407	16,543	7
Trade name⁽²⁾	—	38,600	38,600	3,619	3,619	4,825	8
Other intangible assets	168	—	(168)	—	—	—
Total estimated intangible assets	$494	$386,000	$385,506	$34,844	$34,844	$46,458
Less: elimination of historical amortization⁽²⁾				120	120	159
Total increase in amortization of intangible assets				$34,724	$34,724	$46,299

(1)	Amortization expense is recorded within cost of revenue.

(2)	Amortization expense is recorded within sales and marketing expenses within operating expenses. This amount excludes the amortization of capitalized software, which is separately eliminated in (c) above.

(f)

Reflects the adjustment to eliminate Teads’ historical goodwill and record the preliminary estimate of goodwill related to the Acquisition, which is calculated as the difference between the fair value of the consideration transferred and the estimated fair values assigned to the identifiable tangible and intangible assets acquired and liabilities assumed. The goodwill amount is subject to change due to various factors, including the fair values of assets and liabilities at acquisition date and foreign exchange currency impacts.


			As of September 30, 2024
			(in thousands)
Preliminary estimate of goodwill			$432,060
Teads’ historical goodwill			(37,013)
Adjustment to goodwill			$395,047

(g)

Total transaction-related costs are estimated at approximately $30.0 million, $8.6 million of which has been reflected within general and administrative expenses in the Company’s historical consolidated statement of operations for the nine months ended September 30, 2024. The remainder of transaction costs of $21.4 million has been reflected as an adjustment to accounts payable in the unaudited pro forma condensed combined balance sheet as of September 30, 2024, as well as an adjustment to general and administrative expenses in the unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2023 and the year ended December 31, 2023.

(h)

Reflects the elimination of stock-based compensation expense for the PSAR Plan, as the related awards were cancelled prior to the Acquisition Closing and the holders will not receive any cash compensation or replacement awards. This plan was adopted in October 2023, therefore, there was no expense recognized during the nine months ended September 30, 2023.


	Nine Months Ended September 30, 2024	Year Ended December 31, 2023
	(in thousands)
Sales and marketing	$10,402	$6,645
Research and development	5,629	3,596
General and administrative	12,058	7,702
Total stock-based compensation expense	$28,089	$17,943

(i)	Reflects the elimination of Teads’ historical equity accounts;


			September 30, 2024
			(in thousands)
Common stock			$17,379
Additional paid-in capital			99,178
Accumulated other comprehensive loss			(29,107)
Accumulated deficit			700,765
Total stockholders’ equity			$788,215

(j)

Represents the tax effect of the above adjustments using a blended U.S. federal and state tax rate and statutory tax rates of the respective foreign jurisdictions in which Teads operates and reflects any anticipated changes to the tax filing statuses of the acquired entities. The statutory tax rates range from 9% to 35%, which are in effect as of the pro forma balance sheet date. The actual effective tax rate could be materially different (either higher or lower) from the rate presented in the unaudited pro forma condensed combined financial information. These assumptions could change depending on post-acquisition activities, the geographical mix of income, changes in tax law, as well as the final determination of the fair value of the identifiable intangible assets and liabilities.

(k)

Represents adjustments to increase uncertain tax positions by $99.8 million and to increase tax contingencies by $5.0 million, with an offsetting increase to other assets of $104.8 million relating to an indemnification provided by the Share Purchase Agreement. The corresponding tax effects have been reflected within the provision for income taxes and sales and marketing expenses in the unaudited pro forma condensed combined statements of operations.

Actual adjustments may differ materially based on the final determination of fair value and are subject to change.

7. Financing Adjustments

The unaudited pro-forma condensed combined financial statements have been adjusted to record the effects of incurring new indebtedness to finance the Acquisition. In connection with the Acquisition on February 3, 2025, Outbrain, as the initial borrower, entered into the New Credit Agreement, establishing the New Revolving Credit Facility with aggregate commitments of $100 million and (ii) the Bridge Facility in an aggregate principal amount of 625 million. We funded the cash consideration of the Acquisition with the Bridge Facility. The proceeds from the Offering will be used, together with cash on hand, to (i) repay in full and cancel the indebtedness incurred under the Bridge Facility, including accrued and unpaid interest thereon and (ii) pay fees and expenses incurred in connection with the Offering and the Bridge Facility Refinancing.

The unaudited pro forma condensed combined balance sheet assumes that $625 million aggregate principal amount of Notes are issued on September 30, 2024 and the unaudited pro forma condensed combined statements of operations assume that the Notes are issued on January 1, 2023.

(a) Debt Financing

The following debt financing adjustments were made in the unaudited pro forma condensed combined balance sheet and statements of operations:


	Balance Sheet			Statement of Operations Adjustments
(in thousands)	Recorded on Balance Sheet at September 30, 2024	Adjustment As of September 30, 2024	Total Amount	Nine Months Ended September 30, 2024	Nine Months Ended September 30, 2023	Year Ended December 31, 2023
Long-term debt⁽¹⁾	$—	$625,000	$625,000	$46,875	$46,875	$62,500
Deferred issuance costs	(526)	(13,150)	(13,676)	$2,051	$2,051	$2,735
Total long-term debt	$(526)⁽²⁾	$611,850⁽³⁾	$611,324⁽⁴⁾


	Balance Sheet			Statement of Operations Adjustments
(in thousands)	Recorded on Balance Sheet at September 30, 2024	Adjustment As of September 30, 2024	Total Amount	Nine Months Ended September 30, 2024	Nine Months Ended September 30, 2023	Year Ended December 31, 2023
Deferred issuance costs - New Revolving Credit Facility	$110	$3,675⁽⁵⁾	$3,785	$568	$568	$757
Deferred issuance costs - prior facility	231	(231)	—	(83)	(83)	(111)
Increase in deferred financing fees	$341	$3,444⁽⁶⁾	$3,785

Bridge Facility fees	$1,208	$11,166⁽⁷⁾	$12,374	$—	$12,374	$12,374
Commitment fee - New Revolving Credit Facility				375	375	500
Commitment fee - prior facility				(171)	(171)	(228)
Total incremental expenses				$49,615	$61,989	$78,527

(1)

On the Acquisition Closing Date, the Bridge Facility was drawn in full to fund the cash portion of the Total Consideration. Because we expect to use the proceeds from the Offering, together with cash on hand, to repay in full and cancel the indebtedness incurred under the Bridge Facility, including accrued and unpaid interest thereon, and to pay fees and expenses incurred in connection therewith, these unaudited pro forma financial statements assume that the Notes are the only long-term indebtedness incurred in connection with the Acquisition. The interest expense on the Notes was calculated using an estimated interest rate of approximately 10.0%. The actual interest rate could be materially different from this estimate based on the final terms of the Offering. A change of 0.125% in the interest rate would increase or decrease interest expense on a pro forma basis by $0.6 million for the nine months ended September 30, 2024, $0.6 million for the nine months ended September 30, 2023 and $0.8 million for the year ended December 31, 2023.

(2)	Recorded as a decrease in other assets.

(3)	Recorded as an increase in cash and cash equivalents.

(4)	Recorded as an increase in long-term debt.

(5)	Recorded as a decrease in cash and cash equivalents.

(6)	Recorded as an increase in other assets.

(7)	Recorded within other assets and accrued and other current liabilities.

(b) Equity Financing

As previously described above, the unaudited pro forma condensed combined financial statements assumed that the Company issued 43.75 million shares of Common Stock, as detailed below:


			September 30, 2024
			(in thousands)
Issuance of common stock, par value of $0.001 per share			$44
Issuance of common stock, additional paid-in capital			283,894
Pro-forma adjustment to stockholders’ equity			$283,938

In connection with the issuance of equity as described above, the Company incurred equity issuance cost as described below:


	Decrease to additional paid-in capital	Recorded on Balance Sheet As of September 30, 2024	Equity Issuance Costs Net of Amounts Recorded
	(in thousands)
Total equity issuance costs	$1,633	$807⁽¹⁾	$826⁽²⁾

(1)	Reflected as a decrease to other assets, where these costs have been recorded as of September 30, 2024.

(2)	Reflected as an increase to accrued and other current liabilities.

8. Earnings (Loss) per Share

The following unaudited pro forma condensed combined basic and diluted earnings (loss) per share calculations are based on unaudited pro forma net income for the combined company and historical basic and diluted weighted average shares of Outbrain, adjusted to give effect to the issuance of consideration in the form of Common Stock.


	Nine Months Ended September 30, 2024	Nine Months Ended September 30, 2023	Twelve Months Ended December 31, 2023	LTM Period Ended September 30, 2024
	(Dollars in thousands)
Numerator:
Pro-forma net (loss) income attributed to common stockholders - basic	$(26,783)	$(32,951)	$1,584	$7,752
Adjustments related to convertible debt⁽¹⁾	(4,834)	(14,588)	(13,930)	(4,388)
Pro-forma net (loss) income attributable to common stockholders - diluted	$(31,617)	$(47,539)	$(12,346)	$3,364

Denominator:
Basic weighted average number of common shares outstanding - reported	49,171,414	51,178,127	50,900,422	49,398,887
Common shares issued as part of the Acquisition	43,750,000	43,750,000	43,750,000	43,750,000
Pro-forma weighted average shares - basic	92,921,414	94,928,127	94,650,422	93,148,887
Convertible debt⁽¹⁾	4,530,511	6,518,095	6,064,877	4,577,753
Restricted stock units	—	—	—	248,567
Pro-forma weighted average shares - diluted	97,451,925	101,446,222	100,715,299	97,975,207
Pro forma net (loss) income per common share:
Basic	$(0.29)	$(0.35)	$0.02	$0.08
Diluted	$(0.32)	$(0.47)	$(0.12)	$0.03

(1)	The Company uses the if-converted method to calculate the dilutive impact of the Convertible Notes, which assumes share settlement as of the beginning of the period if the effect is more dilutive than cash settlement.

The following potentially dilutive weighted-average shares have been excluded from the calculation of diluted net loss per share for each period presented because they are anti-dilutive:


	Nine Months Ended September 30, 2024	Nine Months Ended September 30, 2023	Twelve Months Ended December 31, 2023	LTM Period Ended September 30, 2024
Options to purchase common stock	2,337,331	2,562,276	2,523,643	2,355,347
Warrants	188,235	188,235	188,235	188,235
Restricted stock units	3,854,406	3,158,901	3,275,430	1,629,047
Performance-based stock units	492,353	38,571	51,534	391,215
Total shares excluded from diluted loss per share	6,872,325	5,947,983	6,038,842	4,563,844

Exhibit 99.2

Unaudited Condensed Interim Consolidated Statements of Operations

for the periods ended September 30, 2024 and 2023


(In thousands of USD)	Three months ended September 30, 2024	Three months ended September 30, 2023	Nine months ended September 30, 2024	Nine months ended September 30, 2023	Note no.
Revenue	149,376	148,240	428,482	430,419	10
Cost of revenue	(85,950)	(79,094)	(241,712)	(229,234)	11
Sales and marketing expenses	(24,319)	(24,186)	(85,554)	(79,048)	11
Technology and development expenses	(6,572)	(5,142)	(28,781)	(17,314)	11
General and administrative expenses	(9,002)	(9,474)	(41,987)	(29,192)	11
Profit from operations	23,533	30,345	30,448	75,631
Finance costs	(532)	(133)	(1,060)	(821)	13
Other financial income and (expenses)	20,529	7,840	12,431	11,259	13
Profit before tax	43,530	38,052	41,819	86,069
Income tax expense	(10,597)	(8,835)	(22,113)	(23,485)	14
Profit for the period	32,933	29,217	19,705	62,584

The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.

Unaudited Condensed Interim Consolidated Statements of Comprehensive Income

for the periods ended September 30, 2024 and 2023


(In thousands of USD)	Three months ended September 30, 2024	Three months ended September 30, 2023	Nine months ended September 30, 2024	Nine months ended September 30, 2023
PROFIT / LOSS FOR THE PERIOD	32,933	29,217	19,705	62,584
Items that may not be reclassified to profit or loss
Actuarial gain	—	—	—	—
Items that may be reclassified subsequently to profit or loss
Foreign exchange differences on translation of foreign operations	22,013	(11,626)	5,724	(4,427)
TOTAL COMPREHENSIVE INCOME / (LOSS) FOR THE PERIOD	54,946	17,591	25,430	58,157
Attributable to the equity holders of the company	54,946	17,591	25,430	58,157
Attributable to the non-controlling interests	—	—	—	—

The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.

Unaudited Condensed Interim Consolidated Balance Sheets

as of September 30, 2024 and December 31, 2023


(In thousands of USD)	As of September 30, 2024	As of December 31, 2023	Note no.
ASSETS
Goodwill	37,013	36,597	4
Intangible assets	21,692	21,902
Right-of-use assets	14,831	13,215
Property, plant and equipment	4,287	4,437
Financial assets	2,598	467,631	5
Deferred tax assets	11,383	13,362
Non-current assets	91,803	557,145
Trade receivables	210,267	291,024	2 - 4
Other receivables	43,863	35,790
Financial assets	574,158	35	5
Cash and cash equivalents	64,597	90,441
Current assets	892,885	417,290
TOTAL ASSETS	984,687	974,435


(In thousands of USD)	As of September 30, 2024	As of December 31, 2023	Note no.
EQUITY AND LIABILITIES
Share capital	17,379	17,379	6
Share premium	99,178	99,178	6
Retained earnings	698,856	651,062	6
Reserves	(29,107)	(34,832)	6
Equity attributable to owners of the company	786,305	732,787	6
Total Equity	786,305	732,787
Long term borrowings	21	7
Lease liabilities	12,363	12,074	8
Non-current provisions	1,882	1,909	7
Deferred tax liabilities	1,484	1,223
Other non-current liabilities	4	4
Non-current liabilities	15,754	15,217
Trade and other payables	121,229	156,045	2 - 4
Short-term borrowings	16,855	2,725	8
Lease liabilities	5,450	4,150	8
Current tax liabilities	2,653	15,047
Contract liabilities	2,871	4,593
Other current liabilities	33,570	43,872
Current liabilities	182,627	226,431
TOTAL EQUITY AND LIABILITIES	984,687	974,435

The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.

Unaudited Condensed Interim Consolidated Statements of Changes in Equity

as of September 30, 2024 and 2023


(In thousands of USD)	Share capital	Share premium	Retained earnings	Reserves		Group interest	Non- controlling interests	Total of equity
(In thousands of USD)	Share capital	Share premium	Retained earnings	Employee benefits	Foreign currency translation reserve	Group interest	Non- controlling interests	Total of equity
Balance as at January 01, 2023	17,379	99,178	536,956	(635)	(49,849)	603,028	—	603,028
Profit for the period	—	—	62,584	—	—	62,584	—	62,584
Other comprehensive income	—	—	—	—	(4,427)	(4,427)	—	(4,427)
Comprehensive income for the period	—	—	62,584	—	(4,427)	58,157	—	58,157
Other	—	—	1	—	—	1	—	1
Balance as at September 30, 2023	17,379	99,178	599,542	(635)	(54,276)	661,187	—	661,187


(In thousands of USD)	Share capital	Share premium	Retained earnings	Reserves		Group interest	Non- controlling interests	Total of equity
(In thousands of USD)	Share capital	Share premium	Retained earnings	Employee benefits	Foreign currency translation reserve	Group interest	Non- controlling interests	Total of equity
Balance as at January 01, 2024	17,379	99,178	651,062	(1,182)	(33,650)	732,787	—	732,787
Profit for the period	—	—	19,706	—	—	19,706	—	19,706
Other comprehensive income	—	—	—	—	5,724	5,724	—	5,724
Comprehensive income for the period	—	—	19,706	—	5,724	25,430	—	25,430
Share-Based compensation	—	—	28,089	—	—	28,089	—	28,089
Other	—	—	—	—	—	—	—	—
Balance as at September 30, 2024	17,379	99,178	698,856	(1,182)	(27,925)	786,305	—	786,305

The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.

Unaudited Condensed Interim Consolidated Statements of Cash Flows

for the periods ended September 30, 2024 and 2023


(in thousands of USD)	Nine months ended September 30, 2024	Nine months ended September 30, 2023
Profit for the period	19,706	62,584
Adjustments for:
Amortization of intangible assets	8,685	7,593
Depreciation of right-of-use assets	4,116	3,899
Amortization of tangible assets	1,122	1,244
Impairment losses, net of reversals, on financial assets	1,530	105
Depreciation on Trade receivables	(487)	(1,253)
Provisions booked to liabilities	(3)	—
Foreign exchange loss on advances granted	2,304	(5,366)
Share-Based compensation	28,089	—
Gain sale of property, plant and equipment	28	—
Income tax expense	22,113	23,485
Finance (cost) / income	(17,545)	(7,953)
Tax paid	(39,822)	(41,300)
Changes in working capital:	32,285	41,466
Effect of change in Trade receivables	80,463	76,530
Effect of change in Other receivables	(489)	1,385
Effect of change in Trade and other payables	(34,719)	(30,462)
Effect of change in Contract liabilities	(1,663)	177
Effect of change in Other liabilities	(11,307)	(6,165)
CASH FLOW FROM OPERATING ACTIVITIES	62,121	84,503
Acquisition of assets	(9,194)	(10,235)
Increase in loans and advances granted	(86,440)	(93,176)
CASH FLOW FROM INVESTING ACTIVITIES	(95,635)	(103,411)
Increase in borrowings	13,762	21,973
Decrease in borrowings	(53)	(10,060)
Decrease in lease payments	(4,161)	(3,813)
Net Financial interest	(1,054)	(821)
CASH FLOW FROM FINANCING ACTIVITIES	8,495	7,282
CHANGE IN CASH AND CASH EQUIVALENTS	(25,020)	(11,627)
Cash and cash equivalents on opening	90,441	93,574
Cash and cash equivalents at closing	64,597	81,182
Effect of exchange-rate changes	(825)	(766)

The accompanying notes are an integral part of these Unaudited Condensed Interim Consolidated Financial Statements.

Notes to the Unaudited Condensed Interim Consolidated Financial Statements

as of and for the three and nine-month periods ended September 30, 2024

(Expressed in thousands of US Dollars, except as otherwise noted)

1 About the Teads group

Teads SA (the “Company”) is the parent company of the Teads group (the “Group”). The Company was incorporated under Luxembourg laws in 2006, with its registered office located at 5, rue de la Boucherie, L-1247 Luxembourg, Grand Duchy of Luxembourg.

The Group operates a cloud-based, end-to-end technology platform that enables programmatic advertising for the Open Web. Teads’ platform powers a global, curated ecosystem connecting quality advertisers and agencies with quality publishers. As an end-to-end platform, the Group built deep partnerships with both the demand and supply sides of digital advertising. For advertisers, its platform offers a single access point to buy the inventory of many of the world’s best publishers. Through exclusive partnerships with these premium publishers, the Group enables advertisers to reach 2.0 billion monthly unique users, while improving the efficiency, quality and cost of digital ad transactions. The Group provides the technology required to monetize publishers' most valuable ad inventory programmatically. By connecting both sides through its integrated platform, known as the Teads Global Media Platform, the Group solves the digital, programmatic advertising industry’s most significant problems related to fragmentation inefficiencies, inflated digital advertising costs and quality and scale of inventory.

The Group operates in 33 countries, located in European countries, the United States of America, Canada, South America, Asia, Middle East, and Africa.

2 Accounting policies

2.1 Basis of preparation

The unaudited condensed interim consolidated financial statements of the Group as of September 30, 2024 and for the three and nine-month periods then ended (the “Unaudited Condensed Interim Consolidated Financial Statements”) were approved by the Board of Directors of the Company (the “Board of Directors”) and authorized for issue on November 21, 2024.

The Unaudited Condensed Interim Consolidated Financial Statements are presented in thousands of United States Dollars (USD), except as otherwise stated, and have been prepared in accordance with International Accounting Standard (“IAS”) 34 Interim Financial Reporting. They should be read in conjunction with the annual consolidated financial statements of the Group and the notes thereto as of and for the year ended December 31, 2023, which were prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the IASB (the “annual consolidated financial statements”).

The accounting policies applied for the Unaudited Condensed Interim Consolidated Financial Statements do not differ from those applied in the annual consolidated financial statements, except for the adoption of new standards effective as of January 1, 2024.

These Unaudited Condensed Interim Consolidated Financial Statements have been prepared on a going concern basis.

2.2 Application of new and revised International Financial Reporting Standards (IFRSs)

2.2.1 Standards applicable for the reporting period

The following standards have mandatory application for periods beginning on or after January 1, 2024 as described in note 1.3.2 to the annual consolidated financial statements:

•	Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7), effective on or after January 1, 2024;

•	Amendments in Classification of Liabilities as Current or Non-Current (Amendments to IAS 1), effective on or after January 1, 2024;

•	Non-current Liabilities with Covenants (Amendments to IAS 1), effective on or after January 1, 2024; and

•	Amendments to IFRS 16 Lease Liability in a Sale and Leaseback, effective on or after January 1, 2024.

The application of these amendments had no material impact on the amounts recognised and on the disclosures in the Unaudited Condensed Interim Consolidated Financial Statements.

As of September 30, 2024, the Company has continued to work on the Pillar Two assessment. The preliminary view of the Group is that many of the jurisdictions where it operates should benefit from the transitional Country by Country Reporting Safe Harbor and no material operations have been identified to have current domestic corporate tax rate below 15 percent. Therefore, for these Unaudited Condensed Interim Consolidated Financial Statements, the impact of the global minimum tax is assessed to be limited on both the Company’s effective tax rate and the income tax expense in the nine-month period ended September 30, 2024. The Company is continuously assessing the impact of the Pillar Two corporate income tax legislation.

2.2.2 Standards and interpretations not applicable as of the reporting date

The Group has not early adopted the following standards and interpretations, for which application is not mandatory for the period starting on January 1, 2024 and that may impact the amounts reported:

•	Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture, effective date of the amendments has not yet been determined by the IASB;

•	Amendments to IAS 21: Lack of Exchangeability, effective on or after January 1, 2025;

•	IFRS 18 Presentation and disclosure in Financial Statements, not yet adopted in the European Union;

•	Amendments to IFRS 1, IFRS 7, IFRS 9, IFRS 10 and IAS 7 based on Annual Improvements to IFRS Accounting Standards — Volume 11 issued by the IASB, effective on or after January 1, 2026; and

•	Amendment to the classification and measurement of financial instruments - Amendment to IFRS 9 and IFRS 7, effective on January 1, 2026.

The Board of Directors anticipates that the application of those amendments will not have a material impact on the amounts recognized in the Unaudited Condensed Interim Consolidated Financial Statements.

2.3 Significant accounting judgments and estimates

In the application of the Group’s accounting policies, the Board of Directors is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not clear from other sources. The estimates and associated assumptions are based on historical experience and other factors that are relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

These judgments and estimates relate principally to the deferred taxes, right-of-use assets, lease liabilities and Expected Credit Losses (ECL).

As of September 30, 2024, there were no changes in the key areas of judgements and estimates.

2.4 Seasonality

The Company’s operation is subject to seasonal fluctuations. Therefore, higher revenue and operating results are usually expected in the fourth quarter, due to the seasonal nature of the Company’s segment and the spending patterns of the customers. This information is provided to allow for a better understanding of the results. However, management has concluded that this is not “highly seasonal”.

Given the above, the Company experienced a decrease between December 31, 2023 and September 30, 2024 in the trade receivables and trade payables, as a result of the lower activity in the nine-month period ended September 30, 2024.

3 Significant events

Change in scope

The Group incorporated a new entity (Teads Arabia for Advertising) in March 2024. This entity is fully owned by the Group.

There were no other significant events or transactions that occurred during the nine-month period ended September 30, 2024, which impacted the scope of consolidation compared to that presented in the annual consolidated financial statements.

Disposal of Teads group

Outbrain Inc. and Altice Teads S.A. signed a share purchase agreement (SPA) on August 1, 2024. Outbrain Inc. will acquire the Group in an approximately USD 1 billion transaction, consisting of USD 725,000 upfront cash and USD 25,000 deferred cash, 35 million shares of common stock of Outbrain Inc., and USD 105,000 of convertible preferred equity. The transaction is expected to be completed in the first quarter of 2025 and is subject to certain closing conditions, including the receipt of Outbrain stockholder and regulatory approvals.

The Group is currently assessing the financial impacts of the closing of the acquisition. These impacts should include, among others, the settlement of the advances payments made to Altice Teads S.A., under the cash management agreement described in Note 15.

With respect to the evaluation of the Expected Credit Loss (ECL), please refer to Note 13.

With respect to the valuation and accounting of the PSAR plan, please refer to Note 11.

4 Goodwill

The change in goodwill from December 31, 2023 to September 30, 2024 consists of the following:


(In thousands of USD)	As of December 31, 2023	Exchange adjustments	As of September 30, 2024
Goodwill	36,597	416	37,013

Goodwill is reviewed at the level of the unique CGU annually for impairment and whenever changes in circumstances indicate that its carrying amount may not be recoverable. Goodwill was tested at the CGU level for impairment as of December 31, 2023, based on the recoverable amount estimated through its value in use. No impairment indicator was identified for the nine-month period ended September 30, 2024 and therefore, no updated impairment testing was performed, nor any impairment recorded, for the nine-month period ended September 30, 2024.

5 Financial assets

The main variation in the financial assets is an addition of USD 86,440 on the advance payments made to Altice Teads S.A. (the sole shareholder of the Company) under the cash management agreement. The interest rates decreased by 42 basis points for the SOFR and by 47 basis points for the ESTER Euribor overnight for the nine-month period ended September 30, 2024. Two new interest rates (SONIA and SARON) were added for the nine-month period ended September 30, 2024.

In the perspective of the pre-closing legal restructuring operations (refer to note 3), the advance payments are expected to be settled and thus the Company reclassified the non-current financial assets to current financial assets as of September 30, 2024.

6 Equity attributable to owner of the Company

As of September 30, 2024, the share capital comprised 1,250,327,500 fully paid-up shares, with a par value of €0,01, representing €12,503,275 (USD 17,379). The share premium was €74,263,353 (USD 99,178), which was the result of various capital increases and acquisitions since the creation of the Company.

7 Non-current provisions

Non-current provisions can be broken down as follows:


(In thousands of USD)	As of December 31, 2023	Additions	Reversals	Foreign exchange adjustments	As of September 30, 2024
Provisions for pensions	1,593	—	—	18	1,612
Provisions for litigations	288	—	(3)	(42)	242
Other provisions for charges	28	—	—	(0)	28
TOTAL	1,909	—	(3)	(24)	1,882

8 Financial debt

8.1 Reconciliation of liabilities arising from financing activities

The table below details changes in the Group’s liabilities arising from financing activities, including both cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows will be classified in the Company’s unaudited condensed interim consolidated statements of cash flows from financing activities.


(In thousands of USD)	As of December 31, 2023	Additions	Payments	Reclassification	Reversal	Foreign exchange adjustments	As of September 30, 2024
Other loans and similar debts	7	—	—	(16)	—	31	21
Lease liabilities	12,074	5,564	—	(5,375)	(30)	131	12,363
NON-CURRENT	12,080	5,564	—	(5,391)	(30)	162	12,385
Bank loans (cash liability)	166	—	(35)	—	—	(0)	131
Lease liabilities	4,150	—	(4,161)	5,375	—	85	5,450
Bank loans and overdrafts (debts)	2,559	13,762	—	—	—	398	16,718
Interest accrued on loans	—	6	—	—	—	—	6
CURRENT	6,875	13,767	(4,195)	5,375	—	483	22,305

8.2 Borrowings by maturity


(In thousands of USD)	As of September 30, 2024	Less than one year	Between 1 year and 5 years	More than 5 years
Loans and debts with lending institutions	(9)	—	(9)	—
Lease liabilities	17,813	5,450	12,363	—
Bank loans (cash liability)	16,850	16,850	—	—
Other loans and similar debts	36	—	36	—
TOTAL	34,689	22,299	12,390	—

8.3 Borrowings by type of currency and rate


(In thousands of USD)	As of September 30, 2024	Euro	US dollar	Pound Sterling	Other
Loans and debts with lending institutions	(9)	(9)	—	—	—
Lease liabilities	17,813	3,099	8,824	1,550	4,340
Bank loans (cash liability)	16,850	16,725	124	—	—
Other loans and similar debts	36	36	—	—	—
TOTAL	34,689	19,851	8,948	1,550	4,340


(In thousands of USD)	As of September 30, 2024	Fixed rate	Variable rate
Loans and debts with lending institutions	(9)	—	(9)
Lease liabilities	17,813	17,813	—
Bank loans (cash liability)	16,850	—	16,850
Other loans and similar debts	36	36	—
TOTAL	34,689	17,849	16,841

9 Categories and fair value of financial assets and liabilities

As at September 30, 2024, all assets and liabilities were recorded at amortized cost with their carrying amount being equal to their amortized cost. Similarly, to the position as at December 31, 2023, no assets nor liabilities were recorded as at September 30, 2024 at fair value.

10 Segment information

•	Reportable segments

Segment information reported is built on the basis of internal management data used for performance analysis of businesses and for the allocation of resources (management approach). An operating segment is a component of the Group for which separate financial information is available that is evaluated regularly by the Group’s chief operating decision-maker in deciding how to allocate resources and assessing performance.

The Group’s chief operating decision-maker (CODM) is the CEO, the co-CEO, the CFO and Altice’s management. The CODM reviews consolidated data for revenue and Adjusted EBITDA (earnings before financial income (expense), income taxes, depreciation and amortization, adjusted to eliminate the impact of equity awards compensation expense, restructuring costs, and deal costs) for the purposes of allocating resources and evaluating financial performance.

The Group has concluded that its operations constitute one operating and reportable segment.

•	Geographical information

The Group’s revenue from external customers and information about its segment assets (non-current assets and current assets consider the total amount of financial assets, which is monitored by the CODM) by geographical location is detailed below:


(In thousands of USD)	Revenue from external customers				Non-current and current assets
	Three months ended September 30, 2024	Three months ended September 30, 2023	Nine months ended September 30, 2024	Nine months ended September 30, 2023	As of September 30, 2024	As of December 31, 2023
North America	58,117	58,257	151,817	165,552	49,270	37,792
United States of America	52,083	52,777	136,658	149,870	49,270	37,773
Other countries	6,033	5,480	15,159	15,682	—	19

EMEA (Europe Middle East Africa)	65,731	64,035	206,216	194,036	499,324	407,307
United Kingdom	15,324	15,742	44,994	42,345	43,209	33,124
France	15,018	15,270	54,178	48,866	373,737	328,348
Germany	4,653	4,090	13,053	13,530	922	990
Switzerland	9,196	13,566	25,774	41,152	28,101	17,408
Italy	7,450	7,589	25,326	24,989	31,354	17,450
Spain	3,406	3,618	10,064	11,773	12,417	10,895
Other countries	10,685	4,160	32,827	11,381	9,585	(909)
South America	8,087	9,503	22,484	26,052	5,019	2,023
Asia Pacific	17,440	16,444	47,965	44,779	27,751	20,509
TOTAL	149,376	148,240	428,482	430,419	581,364	467,631

11 Share-based compensation

In October 2023, the Board of directors of Altice Teads S.A., the parent company of the Company, adopted a Phantom Stock Appreciation Right Plan (“PSAR Plan”) for certain managers of the Group. The PSAR Plan gives to its beneficiaries awards, which represent a right to receive a value equal to the excess of the fair market value over the base price of a specific number of Company’s shares, subject to the terms and conditions of the PSAR Plan.

The valuation at the grant date was performed based on a Monte Carlo model. Monte Carlo numerical models determine fair value through estimating the present value of the awards’ payoffs as derived from a large number of risk-neutral expected share prices over the life of the awards. The total value of the PSAR Plan is estimated to amount to USD 84,098.

The main assumptions of the model are described below:

•	Volatility was estimated from the annual equity volatility of a sample of listed companies reasonably comparable to Teads - 50%

•	Risk-free rates were derived from yields observed for German government bonds (constant maturity) as of October 13, 2023, for the maturity corresponding to each exercise date between December 2024 and December 2031.

The number of awards granted to the beneficiaries of the PSAR Plan are 99.3 million at the grant date and as at September 30, 2024.

With respect to the valuation and accounting of the PSAR plan, following the signature of the SPA on August 1, 2024, it is expected that the plan will be terminated at the closing date, and the vested awards will be cash-settled. As a consequence, the plan was reclassified from an equity-settled plan to a cash-settled plan and the Company recognized a share-based payments expense until August 1, 2024. In addition, based on the estimation of the amount of the cash settlement at the closing date, the Company did not record any liability related to the PSAR plan and recorded a reversal of the social charges recorded until August 1, 2024.

For the period ended September 30, 2024, the Company recorded an expense against shareholders' equity for an amount of USD 28,089.


(In thousands of USD)	Three months ended September 30, 2024	Three months ended September 30, 2023	Nine months ended September 30, 2024	Nine months ended September 30, 2023
Cost of revenue	(307)	—	2,626	—
Sales and marketing expenses	(909)	—	7,776	—
Technology and development expenses	(658)	—	5,629	—
General and administrative expenses	(1,409)	—	12,058	—
TOTAL	(3,284)	—	28,089	—

12 Other expenses

For the periods ended September 30, 2024, and September 30, 2023, other operating expenses amounted to USD 2,160 and USD 3,934 respectively. These other operating expenses have been allocated to the operating expenses (Sales and marketing, Technology and development, General and administrative) based on their destination.

Other expenses for the period ended September 30, 2023 are composed of some merger and acquisition costs related to transactions not completed in 2022. The other expenses for the period ended September 30, 2024 are composed of some severances and merger and acquisition costs.

13 Finance costs and Other financial income and (expenses)

The breakdown of financial income is presented in the following table:


(In thousands of USD)	Three months ended September 30, 2024	Three months ended September 30, 2023	Nine months ended September 30, 2024	Nine months ended September 30, 2023
Interest expense on loans	(240)	91	(247)	(165)
Interest expense on lease liabilities	(292)	(224)	(813)	(656)
Finance costs	(532)	(133)	(1,060)	(821)
Foreign exchange gains	(3,019)	43,316	22,253	48,431
Foreign exchange losses	(4,380)	(41,258)	(26,196)	(50,928)
Other financial income	6,108	5,821	17,903	13,861
Expected credit loss (ECL)	21,820	(40)	(1,530)	(105)
Other financial income and (expenses)	20,529	7,840	12,431	11,259
TOTAL Finance costs and Other financial income and (expenses)	19,997	7,707	11,371	10,438

Other financial income is mainly composed by the interest income from the advance payments made to Altice Teads S.A. under the cash management agreement.

Other financial expense is mainly composed of the additional ECL provision recorded in the three and nine-month period as of September 30, 2024, which is mainly resulting from the downgrade of rating from the counterpart. This ECL has been computed by taking into account different scenarios of recovery, weighted in accordance with their probability of occurrence.

With respect to the evaluation of the ECL provision, following the signature of the SPA on August 1, 2024 (please refer to Note 3), the Company has revised the assumptions related to the evaluation of the provision and as a result, the ECL provision was reduced during the third quarter 2024.

14 Taxation


(In thousands of USD)	Nine months ended September 30, 2024	Nine months ended September 30, 2023
Profit for the period	19,706	62,584
Tax expense [(-) charges / (+) income]	(22,113)	(23,485)
Profit before tax	41,819	86,069
	52.88%	27.29%

The Group is required to use an estimated annual effective tax rate to measure the income tax benefit or expense recognized in an interim period. The Group recorded a charge tax expense of USD 22.1 million for the nine-month period ended September 30, 2024, compared to a tax expense of USD 23.5 million for the nine-month period ended September 30, 2023, reflecting an effective tax rate of 27.29%. The increase of the effective tax rate is mainly explained by the impact of the share-based compensation for an amount of USD 28,089. Without the impact of share-based payment, the effective tax rate would be 31.63%.

15 Transactions with related parties

15.1 Cash agreement

On September 23, 2019, Teads France S.A.S, Teads Ltd., Teads Inc., Teads Italia S.r.l. and Teads Espana SLU signed a cash management agreement with Altice Teads S.A., with effect as of April 1, 2018, to establish a cash management system to avoid retaining costly financial fixed assets and to promote the coordinated and optimal use of surplus cash or to cover cash requirements globally among themselves for an unlimited period of time. The Company, Teads Japan K.K., Teads Deutschland Gmbh, Teads Latam LLC, Teads Middle East FZ-LLC, Teads Singapore Pte Ltd, Teads Schweiz GmbH, Teads Mexico SA de CV, Teads Australia Pty Ltd and Teads NL B.V. subsequently adhered to this cash management agreement. For the nine-month periods ended September 30, 2024 and September 30, 2023, the amounts lent to Altice Teads S.A. by the Group were USD 86,440 and USD 93,176, respectively.

15.2 Partnership with a4 Media

Teads Inc. has a partnership with a4 Media, LLC for the U.S., acting as an agent in the U.S. and Teads Espana SLU has an agreement with MEO - Serviços de Comunicaçoes e Multimedia, S.A. covering the Portuguese market. SFR S.A. is a customer of Teads France S.A.S.

16 Commitments given or received

16.1 Commitments given

The Group signed contracts with premium publishers and TV manufacturers with commitment to have access to their inventory in the third quarter of 2024 and onwards. The total committed amount reached USD 98,462 as of September 30, 2024 (compared to USD 122,099 as of December 31, 2023).

16.2 Commitments received

In 2023 and onwards, an overdraft with HSBC was granted to Teads France S.A.S for a total amount of USD 16,743. An amount of USD 16,718 was drawn at September 30, 2024.

17 Post-balance sheet events

There was no event subsequent to the balance sheet date that had an impact on these Unaudited Condensed Interim Consolidated Financial Statements.

Exhibit 99.3

SUMMARY

This summary highlights the information contained elsewhere in this offering memorandum or incorporated by reference herein. Because this is only a summary, it does not contain all of the information that may be important to you. For a more complete understanding of this offering, we encourage you to read this entire offering memorandum and the documents incorporated by reference herein. You should read the following summary together with the more detailed information and consolidated financial statements and the notes to those statements included in this offering memorandum. Unless otherwise indicated, financial information included in or incorporated by reference into this offering memorandum is presented on a historical basis.

Overview

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. 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.

The combined company represents one of the largest open internet advertising platforms, which we believe is
differentiated by its ability to drive outcomes for awareness, consideration, and performance objectives - across
connected TV (‘‘CTV’’), web and mobile apps. We believe that by connecting well-established Teads’ video top
of the funnel solutions with Outbrain’s premium AI driven bottom of the funnel solutions, the combined
company has the ability to drive strong, full-funnel, marketing outcomes for its rich advertiser base across CTV,
native, video, mobile and display products. The two companies bring together a total of approximately 17,500
direct advertisers with a base of approximately 8,100 premium media environments, and approximately
100 billion CTV monthly advertising opportunities creating one of the largest, direct supply paths across the
open internet and CTV. The combined platform covers 50+ markets and reaches approximately two billion
consumers per month and has an attractive “rule of 40” financial profile. The geographic breakdown of the
combined company’s customers is highly diverse with 56% from EMEA, 31% from North America, 10% from
Asia Pacific and 2% from LatAm as of the financial year 2024.

Combination Rationale

We believe the two businesses complement each other in a manner that will enable the combined business to offer a comprehensive technology solution to its customers, creating an attractive selling proposition with an end-to-end, omnichannel advertising platform covering brand building, consideration and performance driving conversions. We expect the combined business will benefit from a significantly increased global scale, delivering increased breadth and depth to create a more attractive partner to advertisers and media owners who are looking to consolidate their spend with fewer partners and improve their return on investment and audience engagement. Each company brings direct end-to-end access to supply and demand, with more than 10,000 combined media properties across publishing and CTV, reaching over two billion monthly unique users, compounding the combined company’s capabilities across the Open Internet.

The Outbrain Board expects that the combined company will be able to realize significant revenue and cost synergies as a result of the Acquisition, as the companies create a strong combined data asset into an end-to-end platform with predictive AI capabilities that will improve business outcomes and drive results at each step of the customer journey. The Outbrain Board believes that in addition to the cost synergies there is significant growth potential for the combined business, including entering new markets, growing positions in current markets through cross selling of the companies’ solutions to each other customers, better matching of demand and supply on the two companies’ media owner partners properties unlocking new solutions and introducing new products for customers. The Outbrain Board identified high levels of cultural and organizational synergy across the two companies and expects that the companies’ familiarity with each other’s business will facilitate a successful integration of the companies.

Company Overview

Outbrain

Outbrain Inc. 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. Our common stock began trading on The Nasdaq Stock Market LLC (“Nasdaq”) on July 23, 2021.

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 AI prediction engine powers a two-sided platform for advertisers and media owners that delivers concrete business outcomes. 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.

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. 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. 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 offering memorandum, when referring to “AI” we are referring to traditional or predictive AI, unless the term “generative AI” is specified.

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. 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. Outbrain’s technology is deployed on the mobile apps and websites of most of our media partners, generating 73% of our revenue in 2023.

We also benefit from diversity across industry verticals across multiple segments, including Fast-Moving Consumer Goods (“FMCG”), Technology, Media and Telecom (“TMT”), Retail, Financial Services, Travel, Healthcare, Auto, Entertainment, M&E and Other, which respectively account for 6%, 18%, 14%, 13%, 3%, 17%, 8%, 8%, 5% and 8% of our revenue for the year ended December 31, 2023 (corresponding to revenue derived from our Programmatic, Performance and Branding & Awareness segments of 16%, 45% and 39%, respectively).

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. 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. 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. 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. 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. We provide advertisers 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. We believe we are an important technology and monetization partner to these media owners, delivering over $5 billion in direct revenue to our partners since our inception. 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. 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. 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.

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.

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. 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.

Teads

Teads was incorporated under Luxembourg laws in 2006, with its registered office located at 5, rue de la Boucherie, L-1247 Luxembourg, Grand Duchy of Luxembourg. Outbrain acquired Teads on February 3, 2025.

Teads operates an end-to-end, omnichannel technology platform that enables digital advertising for a global, curated ecosystem of quality advertisers and their agencies and premium publishers. Teads’ omnichannel platform directly connects leading advertisers and their agencies to premium inventory at scale across online, CTV and app environments. Teads provides solutions that address the entirety of the marketing funnel including both branding and performance marketing budgets and offers a range of buying options. As an end-to-end solution, Teads’ platform consists of buy-side, sell-side, creative, data and AI optimization modules. As a result, Teads has built deep partnerships with both the demand and supply sides of digital advertising. For the year ended December 31, 2023, third party DSPs accounted for 16% of Teads’ revenue, while 84% of revenue was derived from direct demand. In addition, the verticals in which Teads operates are highly diverse across multiple segments including FMCG, TMT, Finance, Beauty and Luxury, Auto, Entertainment and Travel, which respectively account for 16%, 11%, 1%, 10%, 9%, 3%, and 2% of Teads’ revenue for the year ended December 31, 2023.

For advertisers and their agencies, Teads’ omnichannel platform, Teads Ad Manager, offers a direct connection to buy the inventory of many of the world’s premium publishers across a variety of advertising channels. Teads’ AI solutions, which includes advanced audience insights with 1.5 billion unique combinations of input, enable advertisers to effectively and efficiently reach their target audiences powering media planning, data, and creativity across screens. Teads is directly connected to approximately 2,700 publishers across online, CTV and app environments offering advertisers access to exclusive, premium inventory at scale, while improving the efficiency, quality and cost of digital ad transactions. As of December 31, 2023, Teads had over 7,000 customers, defined as an advertiser group in a local market.

For publishers, Teads is a trusted monetization partner, providing the technology required to monetize their most valuable ad inventory programmatically. Teads pioneered an industry-defining video advertising format that is embedded within the article, specifically in between two paragraphs of editorial text. This invention immediately solved one of the biggest problems in digital advertising related to the lack of quality video inventory. Teads’ platform has since expanded offering a suite of engaging and innovative ad formats and placements while ensuring a respectful user experience.

By connecting the advertising and publishing sides through Teads’ integrated platform, Teads addresses some of the industry’s most significant problems related to value chain fragmentation, inefficient digital advertising pricing and quality and scale of inventory.

Revolving Credit Facility and Bridge Facility

In connection with the Acquisition, on February 3, 2025, Outbrain and the Issuer, as borrowers, entered into the New Credit Agreement, establishing the (i) New Revolving Credit Facility with aggregate commitments of $100.0 million, including a letter of credit sub-limit of $10.0 million and a swingline sub-limit of $20.0 million and (ii) Bridge Facility with aggregate commitments of $625.0 million. See “Description of Certain Other Indebtedness—Terms of the New Revolving Credit Facility” and “Description of Certain Other Indebtedness—Terms of the Bridge Facility.”

Restructuring Plan

On February 3, 2025, in connection with the completion of the Acquisition, Outbrain announced a restructuring plan (the “Plan”), as part of its efforts to streamline operations and reduce duplication of roles. The plan involves a reduction in workforce of approximately 15%. Outbrain estimates that it will incur approximately $20 million to $25 million in charges in connection with the Plan, of which approximately $18 million to $24 million is expected to be incurred in 2025. These charges consist primarily of severance payments.

The actions associated with the employee restructuring under the Plan are expected to be initiated the week of February 3, 2025, implemented in large part by the second quarter of 2025 and completed by the first quarter of 2026.

The estimates of the charges and expenditures that Outbrain expects to incur in connection with the Plan, and the timing thereof, are subject to a number of assumptions, and actual amounts may differ materially from estimates.

In addition, Outbrain may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur, including in connection with the implementation of the Plan.

STRENGTHS AND STRATEGIES

OUR STRENGTHS

Outbrain is a pioneer and a category leader in performance advertising, built from over 17 years of expertise in predicting audience engagement and driving conversions. Teads is a leader in brand advertising and omnichannel video solutions. The combined company represents one of the largest Open Internet advertising platforms, with over $1.7 billion of advertising spend for the LTM period ending September 2024.

We believe that the core key strengths of our combined business are:

Scaled Open Internet digital advertising partner, offering advertisers and their agencies a differentiated, comprehensive branding and performance platform.

Differentiated. Outbrain and Teads unite highly-complementary platforms, enabling us to deliver branding and performance solutions to advertisers and their agencies, serving objectives up and down the marketing funnel. We believe that our ability to address all objectives, from building brand awareness and recall (“Branding”), to engaging potential customers, through to driving actions and, ultimately, conversions and sales (“Performance”), differentiates us compared to Open Internet competitors.

Competitive. Addressing a broader set of marketing objectives and budgets in a single platform, at scale, is highly attractive for advertisers and their agencies, as it tends to unlock efficiencies and business performance improvements, as evidenced by the success of the largest Internet advertising platforms. We believe that our combined offering will enable us to better compete with these platforms, as jointly we benefit from a richer, larger data set, more features and lower costs – all contributing to improved return on ad spend and simplified operations for advertisers.

Global presence and extensive, often exclusive, curated advertising inventory. The significant scale of our combined company, operating across more than 50 markets, will allow us to better serve major advertisers, as they seek a global partner. In addition, the combined scale and diversity of our publisher partners better position us to capture increased advertiser budgets.

Scale flywheel. We believe that the increased scale of our publisher inventory and data will help us improve our AI-enabled audience targeting and prediction models, fueling spend growth as advertiser performance improves, thus driving better publisher monetization, and in turn helping us attract more publishers, leading to even more inventory and data.

Highly strategic, long-term relationships with advertisers and their agencies, with a globally diverse customer base ranging from the world’s largest brands to small and midsize businesses (“SMB”) and Direct-to-Consumer advertisers.

Teads and Outbrain have a proven go-to-market strategy, working directly with the leading brands and agencies, and the most sophisticated performance buyers around the world. In 2023, Outbrain and Teads derived 91% and 84% of their revenue, respectively, directly from advertisers, leveraging their respective proprietary digital buying platforms. The combined company serves a large, diverse and complementary set of advertisers globally. A significant proportion of each company’s global advertiser base is incremental to the other, creating a significant cross-sell opportunity.

In addition, Teads’ strategic accounts team focuses exclusively on large, global brands. In some instances, Teads enters into Joint Business Partnerships (“JBPs”) with the world’s largest brands, such as Apple and LVMH. As of September 30, 2024, these JBPs represented, on average $5 million of annual spend. We believe that aggregate annual revenue from JBPs has grown by a CAGR of approximately 25% from 2017-2023. JBPs are non-contractual, mutually agreed, annual spend targets and incentives, highlighting the depth of these relationships. JBPs are a strategic partnership between Teads and advertisers and their agencies, where Teads delivers the full breadth of its platform, from audience targeting solutions to creative optimization and post campaign measurement solutions. At the end of 2023, Teads had or had in process approximately 50 JBPs, with leading global brands across a variety of verticals including Retail and Consumer, Luxury, Fashion & Beauty, Automotive, Finance, Travel and TMT. JBPs represent a significant overall portion of Teads revenue and have been a major growth driver for its business.

Comprehensive omnichannel offering, underpinned by deep capabilities and track-record within the key growth sectors of online video and CTV.

Teads’ digital advertising platform, Teads Ad Manager (“TAM”), is adopted by leading advertisers and agencies and has a reputation for delivering branding outcomes across all channels including mobile, desktop and CTV. Through TAM, buyers run omnichannel campaigns with access to proprietary audience targeting, advanced contextual targeting and creative optimization solutions. Outbrain’s solutions address a different, complementary, media footprint across channels including mobile, desktop, and novel integrations with mobile handset manufactures and network operators. Combined, this represents a scaled and diverse omnichannel platform capable of addressing advertisers’ needs in high-growth, high-value advertising segments.

Teads innovative CTV offering is a significant growth driver and enables omnichannel ad campaigns across premium online video and CTV environments. Teads is integrated with leading CTV apps and smart TV original equipment manufacturers (“OEMs”) offering advertisers access to exclusive and high-value ad inventory. Along with typical video CTV inventory, these integrations, such as with LG and VIDAA, also offer clients the opportunity to advertise on the CTV homescreen with unique, high impact native ad placements. Teads’ revenue from its CTV offering has shown consistent year-on-year quarterly growth in 2024.

We believe that our emphasis on premium and exclusive placements, together with our omnichannel offering, is highly differentiated as it enables advertisers to deliver high quality, high impact campaigns across all screens.

Furthermore, our ability to offer comprehensive omnichannel campaigns aligns with the convergence of all forms of video, from a media planning and buying perspective. Whereas linear television, digital video and display advertising were historically planned and executed as separate budgets, typically in separate teams at the advertiser’s agency, these are increasingly executed together. Our ability to offer all solutions will increasingly position us as a valuable partner for advertisers while enabling us to capture incremental spend. Year to date, Teads omnichannel campaigns are attracting incremental advertiser spend when compared to standalone online video and CTV campaigns. The advertiser spend on single channel campaign of either CTV or Outstream is approximately $13,300 as compared to a single omnichannel campaign with advertiser spend of approximately $55,300.

Differentiated inventory across mobile, desktop and CTV environments, driven by exclusive, long-term and strategic relationships with publishers, media owners and OEMs.

Premium publishers, media owners and OEMs around the world rely on the differentiated ad formats and monetization capabilities of Outbrain and Teads. With approximately 80% of Outbrain’s revenue derived by ads placed on exclusively operated inventory across diverse channels, placements and formats; our access to quality, at-scale, audiences is a key selling proposition to advertisers. By providing media owners with solutions that improve user engagement and retention, inventory monetization and access to diverse advertiser budgets, we are better positioned to expand our publisher footprint and to retain our exclusive, long-term, relationships with many of the world’s most prominent publishers, including Sky News, CNN, New York Post, Axel Springer, Hearst, LG, Hisense, ESPN, Condé Nast, BBC and Le Monde. Today, the companies serve publishers across more than 50+ markets, reaching over 2 billion consumers per month, with Outbrain serving over 8,000 publishers and Teads serving 2,700 publisher partners across CTV, online, and in-app environments.

In 2023, Teads retained 96% of its top 500 publisher relationships. Similarly, in 2024 Outbrain retained 98% of publishers that generated over $10,000 in quarterly revenue. Our respective multi-year contracts, combined with our high retention of top publishers, highlight the strength of our publisher partnerships. Both companies benefit from having approximately 80% of their inventory on an exclusive basis. In addition, highlighting the strength of our respective publisher relationships, contract tenures for both companies’ top publishers are often as long as 7 years. Contracts for Outbrain’s top media owners are typically on a 2-4 year basis, with approximately 80% of Outbrain’s supply derived from multi-year contracts.

Advanced technology platform leveraging proprietary data and sophisticated AI prediction capabilities.

Our proprietary technology platforms benefit from access to a tremendous amount of user engagement signals such as content, context, visit and session data and interaction signals, amongst others. As most advertising spend is directly executed on our platforms, we are able to deliver unique and highly efficient features, capabilities and outcomes, such as the prediction of consumer attention, curated ‘moments of decision-making’ and consumer action and engagement. We provide advertisers with advanced creative optimization capabilities, generating optimal

creative variations based on ad size and device (mobile, desktop and CTV). In addition, with many of our publishers, our platform and algorithms drive decisioning related to the selection of editorial content and content experiences, further highlighting the depth of our relationships and the extent of our data assets.

We believe that the end-to-end nature of our platforms, as well as the nature of the solutions that we provide for publishers and advertisers, positions us to benefit from incremental privacy centric initiatives, when compared to other Open Internet advertising platforms. Specifically, our respective companies and platforms are considered pioneers in building privacy-sustainable contextual targeting solutions, which are not centered on user-graphs and the required third party cookie data.

Our combined research and development (“R&D”) organization numbers in excess of 400 product, engineering, and data science specialists, across four R&D centers in Israel, France, Slovenia and India.

Strong financial performance, highlighted by consistent profitability and strong free-cash-flow, enhanced by meaningful cost and revenue synergies opportunity.

With over $1.5 billion in pro forma LTM revenue as of September 30, 2024, the combined company will be a market leader in the Open Internet digital advertising space. For the LTM period ending September 30, 2024, the combined company generated approximately $257 million of combined company Adjusted EBITDA (including synergies), reflecting 39.7% of its combined company Ex-Tac Gross Profit, with approximately $174 million of combined company free cash flow (including synergies), please see the section titled “Summary combined company Financial Information.” We expect our resilient profitability and free cash flow generation to continue, supported in part by meaningful cost savings in two key areas:

Operating expenses. By streamlining operations, removing overlapping functions, integrating infrastructure, and leveraging cloud-based servers and analytics tools, the combined company is expected to achieve significant cost savings, comprising the majority of expected overall synergies, within two years following the completion of the Acquisition.

Traffic Acquisition. By combining our respective advertiser spend, we expect to be better positioned to monetize previously unused or under-monetized ad inventory that is subject to minimum annual spend commitments. We expect to achieve approximately $10 million in annual TAC savings within two years following the completion of the Acquisition.

We believe that the combined company will be well positioned to capture incremental spend by advertisers, driven by the ability to cross-sell our respective solutions to our combined advertiser base. Specifically, we believe that Outbrain’s performance solutions are attractive to Teads’ approximately 50 JBPs as well as its broader advertiser base. Similarly, we expect Teads’ industry-leading branding and video solutions to be of interest to Outbrain’s large enterprise customers. Finally, both companies have a demonstrated track record of launching and selling products to existing customers, further reinforcing our belief in our respective teams’ ability to deliver on the cross-sell opportunity. In addition to our product-based cross-sell opportunity, we expect to benefit from our larger and deeper joint geographic footprint, offering Teads’ and Outbrain’s products in markets where today only one is present or well established.

Overall, we expect to realize annual synergies of $65-75 million in fiscal year 2026, with further opportunities for expanded synergies in the following years. Of this amount, we estimate that approximately $60 million relates to cost synergies, including approximately $45 million of compensation related expenses and approximately $15 million related to network optimization and other efficiencies, and $5-15 million generated from revenue synergies. We plan to action approximately 70% of the compensation related expense savings during the first month following the Acquisition Closing Date. Based on the analysis done by our respective teams, we believe that this represents a highly achievable target.

Deeply experienced and long-tenured combined management team.

The management of the combined company will consist of a deep pool of proven industry veterans and innovators, with tenures ranging from five years to 18 years. Importantly, the combined company’s core management team will consist of the four key leaders of our respective two companies. Mr. Kostman and Mr. Porat will retain their existing roles of CEO and COO, respectively, with Mr. Arditi and Mr. Quesada assuming the positions of co-presidents.

OUR STRATEGY

Combining end-to-end efficiency with full-funnel capabilities, at scale.

Combined, our platform will deliver Open Internet advertising solutions leveraging leading full-funnel capabilities and differentiated outcomes for advertisers.

Today, advertisers on the Open Internet largely rely on point solutions such as a demand side platforms (“DSP”) or supply side platform (“SSP”), limited to serving specific marketing objectives and serving the needs of either advertisers or publishers. We believe a scaled end-to-end platform with branding and performance solutions, directly connecting demand (advertisers) with supply (publishers and media owners), will improve efficiency and deliver better business outcomes to all. Our combination enables advertisers and their agencies to realize the full potential of the Open Internet through a single platform, reaching and engaging our scaled global audience.

Fundamental to our strategy is our ability to predict moments of attention to build brand awareness, prompt moments of engagement to help advertisers engage potential customers, and create moments of decision-making in order to drive actions, conversions and sales. We will continue to invest in enhancing and expanding a unified, full-funnel solution for advertisers on the Open Internet, similar to solutions offered by the walled garden platforms but with the benefits of reaching users in premium editorial, high-trust, transparent and brand-safe media environments.

Deepen relationships with agencies and advertisers, leveraging our comprehensive product suite.

By combining best-of-both solutions, we will broaden and deepen our relationships with advertisers and their agencies. Our combined business spans a diverse advertiser base with minimal overlap, yet we benefit from highly complementary solutions. Operating today in more than 50 markets, the combined company addresses a broad spectrum of industry verticals and client types, from large enterprise brands to SMBs and direct response advertisers. As of December 31, 2023, Outbrain had over 20,000 customers, while Teads has over 7,000 customers, defined as an advertiser group in a local market, and approximately 2,500 agency relationships. We believe that cross-selling our respective solutions, especially to Teads’ strategic accounts that include JBPs represents an immediate opportunity. Continued innovation at scale, will allow us to better serve our existing clients and attract increased ad spend.

Deepen relationships with publishers and media owners, maintaining and growing our access to premium, exclusive inventory.

Our direct, often exclusive, access to premium inventory across desktop, mobile and CTV environments makes us one of the largest, direct supply paths on the Open Internet. Strengthening our offering for and deepening our partnerships with publishers and media owners will continue to be a cornerstone of our business. We plan to continuously improve our robust monetization opportunities for publishers and media owners by attracting increasingly diverse advertiser budgets, while seeking to capture incremental spend from existing and new advertisers.

In addition, we plan to continue innovating across new and existing ad formats, user engagement tools and inventory monetization capabilities, benefiting our publisher partners and our business. We plan to focus on high-growth media environments, such as CTV and online video, where we seek to replicate our differentiated formats and creative approach, helping us secure valuable, exclusive, inventory across leading media owners and publishers.

Continued innovation to capture sustainable, long-term growth opportunities.

The combination of our two companies establishes one of the largest companies focused on the Open Internet digital advertising market. We plan to leverage our combined resources to invest in innovation that fuels long-term growth opportunities. Given our end-to-end platform, we plan to invest in developing new solutions and capabilities aimed both at advertisers and agencies as well as publishers and media owners.

We expect CTV to be a key area of investment with potential for significant expansion and continued growth, especially given our ability to achieve incremental average campaign spend when activating omnichannel campaigns vs standalone online video or CTV campaigns. To further support this effort, we will continue to invest in expanding our access to exclusive supply, through partnerships with leading media owners, OEMs and publishers.

Maintain financial discipline with a focus on growing free cash flow, lowering our debt leverage and delivering long-term, sustainable growth.

We are committed to maintaining a prudent financial policy that balances free cash flow generation and the long-term financial success of the combined company. We expect the combined company to benefit from attractive pro forma EBITDA margins and significant free cash flow conversion, supported by conservative cost synergy estimates and disciplined capital expenditure.

We intend to prioritize deleveraging in the coming years, while also continuing to invest in the business to ensure we are building new solutions that will drive long term growth.

OUTBRAIN SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED

FINANCIAL INFORMATION


Other Financial Information:	Year Ended December 31,	Nine Months Ended September 30,		LTM Period Ended September 30,
(in thousands of USD)	2023	2024	2023	2024
Pro Forma Adjusted EBITDA⁽¹⁾	$193,367	$87,181	$99,920	$250,628^(a)

(a)	Includes synergies.

(1)

Pro Forma Adjusted EBITDA is defined 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; 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; and, solely with respect to the twelve month period ended September 30, 2024, including the effect of annualized cost savings and synergies with respect to the Acquisition expected to be realized within 24 months of the Acquisition Closing Date. The anticipated benefits and cost savings of the Acquisition may not be realized fully or at all, may take longer to realize than expected or could have other adverse effects that Outbrain and Teads do not currently foresee. Some of the assumptions that Outbrain and Teads have made, such as the achievement of these synergies, may not be realized. Therefore, actual outcomes and results may differ materially from the synergies presented herein.


	Pro Forma Year Ended December 31,	Pro Forma Nine Months Ended September 30,		Pro Forma LTM Period Ended September 30,
(in thousands)	2023	2024	2023	2024
Net income (loss)	$1,584	$(26,783)	$(32,951)	$7,752
Interest expense	83,958	52,812	66,582	70,188
Interest income and other income (expense), net	151	(3,741)	(3,232)	(358)
Gain related to convertible debt	(22,594)	(8,782)	(22,594)	(8,782)
Provision (benefit) for income taxes	18,434	(11)	2,668	15,755
Depreciation and amortization	68,848	50,486	51,845	67,489
Stock-based compensation	12,141	11,487	9,153	14,475
Regulatory matter costs, net of insurance proceeds	742	—	742	—
Merger and acquisition costs, public company implementation costs^(a)	22,908	10,071	22,176	10,803
Severance costs	7,195	1,642	5,531	3,306
Pro forma Adjusted EBITDA (excl. synergies)	$ 193,367	$87,181	$99,920	$180,628
Annual Acquisition-related run-rate cost savings and operational synergies expected to be realized within 24 months of Acquisition Closing^(b)	—	—	—	70,000
Pro Forma Adjusted EBITDA (incl. synergies)	—	—	—	$250,628

(a)	Primarily includes costs related to our acquisition of Teads, acquisition of vi in January 2022, costs related to our initial public offering and public company implementation costs.

(b)	Synergies are estimated to contribute an additional $65-75 million of annual synergies in fiscal year 2026. $70 million of expected synergies in the second year represents the midpoint.

SUMMARY COMBINED COMPANY FINANCIAL INFORMATION

The information below includes certain combined company financial information that is based on historical financial information prepared by Outbrain and Teads. This combined company financial information represents the summation of the standalone financial information prepared by Outbrain and the standalone financial information prepared by Teads, where indicated and solely with respect to the twelve month period ended September 30, 2024, annualized cost savings and synergies with respect to the Acquisition expected to be realized within 24 months of the Acquisition Closing Date. This combined company financial information has not been prepared in accordance with Article 11 of Regulation S-X and does not give effect to the pro forma adjustments required in connection with the preparation of pro forma financial information in accordance with Article 11 of Regulation S-X, and is not indicative of what the combined company’s performance would have been had Outbrain and Teads been a combined company for the periods presented under U.S. GAAP. As a result, the combined company financial information presented below could materially differ from financial information determined in accordance with Article 11 of Regulation S-X. As a result, investors should not place any undue reliance on the combined company financial information.


Non-GAAP Financial Information	Year Ended December 31,			Nine Months Ended September 30,		LTM Period Ended September 30,
(in thousands, except percentages)	2023	2022	2021	2024	2023	2024
Combined company Ex-TAC Gross Profit⁽¹⁾	$653,925	$664,569	$725,765	$434,548	$441,783	$646,690
Combined company Adjusted EBITDA (excl. synergies)⁽²⁾	$198,996	$206,967	$324,771	$90,841	$102,853	$186,984
Combined company Adjusted EBITDA (incl. synergies) as a % of combined company Ex-TAC Gross Profit⁽¹⁾⁽²⁾	30.4%	31.1%	44.7%	20.9%	23.3%	39.7%
Combined company Free Cash Flow (excl. synergies)⁽³⁾	$102,812	$96,642	$162,640	$66,565	$46,803	$122,574

(1)	The following table presents the reconciliation of combined company Ex-TAC Gross Profit to gross profit, the most directly comparable U.S. GAAP measure, for the periods presented:


	Year Ended December 31, 2023			Year Ended December 31, 2022			Year Ended December 31, 2021
	Outbrain	Teads	Total	Outbrain	Teads	Total	Outbrain	Teads	Total
(in thousands)
Revenue	$935,818	$649,812	$1,585,630	$992,082	$657,481	$1,649,563	$1,015,630	$678,165	$1,693,795
Traffic acquisition costs	(708,449)	(223,256)	(931,705)	(757,321)	(227,673)	(984,994)	(743,579)	(224,451)	(968,030)
Other cost of revenue	(42,571)	(105,379)	(147,950)	(42,108)	(96,887)	(138,995)	(31,791)	(78,411)	(110,202)
Gross profit	184,798	321,177	505,975	192,653	332,921	525,574	240,260	375,302	615,562
Other cost of revenue	42,571	105,379	147,950	42,108	96,887	138,995	31,791	78,411	110,202
Combined company Ex-TAC Gross Profit	$227,369	$426,556	$653,925	$234,761	$429,808	$664,569	$272,051	$453,714	$725,765

Total amounts may not recalculate due to rounding.


	Nine Months Ended September 30, 2024			Nine Months Ended September 30, 2023			LTM Period Ended September 30, 2024
	Outbrain	Teads	Total	Outbrain	Teads	Total	Outbrain	Teads	Total
(in thousands)
Revenue	$655,289	$428,482	$1,083,771	$687,589	$430,419	$1,118,008	$903,518	$647,875	$1,551,393
Traffic acquisition costs	(487,484)	(161,739)	(649,223)	(524,024)	(152,201)	(676,225)	(671,909)	(232,794)	(904,703)
Other cost of revenue	(31,765)	(79,973)	(111,738)	(31,999)	(77,033)	(109,032)	(42,337)	(108,319)	(150,656)
Gross profit	136,040	186,770	322,810	131,566	201,185	332,751	189,272	306,762	496,034
Other cost of revenue	31,765	79,973	111,738	31,999	77,033	109,032	42,337	108,319	150,656
Combined company Ex-TAC Gross Profit	$167,805	$266,743	$434,548	$163,565	$278,218	$441,783	$231,609	$415,081	$646,690

Total amounts may not recalculate due to rounding.

(2)	The following tables present the reconciliation of combined company Adjusted EBITDA and combined company Adjusted EBITDA as % of combined company Ex-Tac Gross Profit to net income (loss), the most directly comparable U.S. GAAP measure, for the periods presented:


	Year Ended December 31, 2023			Year Ended December 31, 2022			Year Ended December 31, 2021
(in thousands, except percentages)	Outbrain	Teads	Total	Outbrain	Teads	Total	Outbrain	Teads	Total
Net income (loss)	$10,242	$95,823	$106,065	$(24,581)	$130,987	$106,406	$10,995	$159,856	$170,851
Interest expense/financial costs	5,393	929	6,322	7,625	848	8,473	3,964	911	4,875
Interest income and other income (expense), net	(7,793)	—	(7,793)	(2,600)	—	(2,600)	3,078	—	3,078
Other financial income and (expenses)	—	(4,549)	(4,549)	—	(15,606)	(15,606)	—	(1,299)	(1,299)
(Gain) loss related to convertible debt	(22,594)	—	(22,594)	—	—	—	42,049	—	42,049
Provision (benefit) for income taxes	6,113	42,186	48,299	6,008	49,130	55,138	(25,530)	61,297	35,767
Depreciation and amortization	20,702	12,142	32,844	26,919	6,646	33,565	19,470	6,133	25,603
Stock-based compensation	12,141	17,943	30,084	11,660	—	11,660	26,307	—	26,307
Regulatory matter costs, net of insurance proceeds	742	—	742	(1,875)	—	(1,875)	6,361	—	6,361
Merger and acquisition costs, public company implementation costs^(a)	—	1,614	1,614	2,515	8,044	10,559	2,190	8,026	10,216
Severance costs	3,509	4,453	7,962	603	644	1,247	—	963	963
Combined company Adjusted EBITDA (excl. synergies)	$28,455	$170,541	$198,996	$26,274	$180,693	$206,967	$88,884	$235,887	$324,771
Combined company net income (loss) (excl. synergies) as % of combined company gross profit	5.5%	29.8%	21.0%	(12.8)%	39.3%	20.2%	4.6%	42.6%	27.8%
Combined company Adjusted EBITDA (excl. synergies) as % of combined company Ex-TAC Gross Profit(b)	12.5%	40.0%	30.4%	11.2%	42.0%	31.1%	32.7%	52.0%	44.7%

Total amounts may not recalculate due to rounding.


	Nine Months Ended September 30, 2024			Nine Months Ended September 30, 2023			LTM Period Ended September 30, 2024
(in thousands, except percentages)	Outbrain	Teads	Total	Outbrain	Teads	Total	Outbrain	Teads	Total
Net (loss) income	$(544)	$19,706	$19,162	$6,185	$62,584	$68,769	$3,513	$52,945	$56,458
Interest expense/financial costs	2,950	1,060	4,010	4,428	821	5,249	3,915	1,168	5,083
Interest income and other income (expense), net	(7,687)	—	(7,687)	(5,733)	—	(5,733)	(9,747)	—	(9,747)
Other financial income and (expenses)	—	(12,431)	(12,431)	—	(11,259)	(11,259)	—	(5,721)	(5,721)
Gain related to convertible debt	(8,782)	—	(8,782)	(22,594)	—	(22,594)	(8,782)	—	(8,782)
Provision (benefit) for income taxes	(1,110)	22,113	21,003	3,365	23,485	26,850	1,638	40,814	42,452
Depreciation and amortization	14,494	9,807	24,301	15,757	8,837	24,594	19,439	13,112	32,551
Stock-based compensation	11,487	28,089	39,576	9,153	—	9,153	14,475	46,032	60,507
Regulatory matter costs, net of insurance proceeds	—	—	—	742	—	742	—	—	—
Merger and acquisition costs, public company implementation costs^(a)	8,787	960	9,747	—	756	756	8,787	1,818	10,605
Severance costs	742	1,200	1,942	3,148	3,178	6,326	1,103	2,475	3,578
Combined company Adjusted EBITDA (excl. synergies)	$20,337	$70,504	$90,841	$14,451	$88,402	$102,853	$34,341	$152,643	$186,984
Annual Acquisition-related run-rate cost savings and operational synergies expected to be realized within 24 months of Acquisition Closing	—	—	—	—	—	—	—	—	70,000
Combined company Adjusted EBITDA (incl. synergies)^(b)(c)	—	—	—	—	—	—	—	—	$256,984
Combined company net income (loss) (incl. synergies) as % of combined company gross profit	—	—	—	—	—	—	—	—	21.8%
Combined company Adjusted EBITDA (incl. synergies) as % of combined company Ex-TAC Gross Profit^(b)(c)	—	—	—	—	—	—	—	—	39.7%

Total amounts may not recalculate due to rounding.

(a)	Primarily includes costs related to our acquisition of Teads, our acquisition of vi in January 2022, costs related to our initial public offering and public company implementation costs.

(b)

This combined company financial information includes the realization of certain cost savings and synergies, solely with respect to the twelve month period ended September 30, 2024, with respect to the Acquisition expected to be realized within 24 months of the Acquisition Closing Date. Synergies are estimated to contribute an additional $65-75 million of annual synergies in fiscal year 2026. $70 million of expected synergies in the second year represents the midpoint. The anticipated benefits and cost savings of the Acquisition may not be realized fully or at all, may take longer to realize than expected or could have other adverse effects that Outbrain and Teads do not currently foresee. Some of the assumptions that Outbrain and Teads have made, such as the achievement of these synergies, may not be realized. Therefore, actual outcomes and results may differ materially from the synergies presented herein.

(c)

Combined company LTM Adjusted EBITDA has not been prepared in accordance with Article 11 of Regulation S-X. The primary difference between combined company LTM Adjusted EBITDA and pro forma LTM Adjusted EBITDA relates to certain U.S. GAAP and accounting policy conforming adjustments made under Article 11 of Regulation S-X in order to prepare our pro forma financial statements, which adjustments are described further in “Outbrain Summary Unaudited Pro Forma Condensed Combined Financial Information.”

(3)	The following table presents the reconciliation of combined company Free Cash Flow to net cash provided by operating activities, the most directly comparable U.S. GAAP measure, for the periods presented:


	Year Ended December 31, 2023			Year Ended December 31, 2022			Year Ended December 31, 2021
(in thousands)	Outbrain	Teads	Total	Outbrain	Teads	Total	Outbrain	Teads	Total
Net cash provided by operating activities	$13,746	$122,440	$136,186	$3,813	$133,307	$137,120	$56,762	$135,442	$192,204
Purchases of property and equipment	(10,127)	(923)	(11,050)	(13,375)	(1,229)	(14,604)	(9,743)	(1,897)	(11,640)
Capitalized software development costs	(10,107)	(12,217)	(22,324)	(12,569)	(13,305)	(25,874)	(10,311)	(7,613)	(17,924)
Combined company Free Cash Flow	$(6,488)	$109,300	$102,812	$(22,131)	$118,773	$96,642	$36,708	$125,932	$162,640

Total amounts may not recalculate due to rounding.


	Nine Months Ended September 30, 2024			Nine Months Ended September 30, 2023			LTM Period Ended September 30, 2024
(in thousands)	Outbrain	Teads	Total	Outbrain	Teads	Total	Outbrain	Teads	Total
Net cash provided by (used in) operating activities	$25,898	$62,121	$88,019	$(11,731)	$84,503	$72,772	$51,375	$100,058	$151,433
Purchases of property and equipment	(4,668)	(960)	(5,628)	(7,870)	(681)	(8,551)	(6,925)	(1,202)	(8,127)
Capitalized software development costs	(7,592)	(8,234)	(15,826)	(7,864)	(9,554)	(17,418)	(9,835)	(10,897)	(20,732)
Combined company Free Cash Flow (excl. synergies)	$13,638	$52,927	$66,565	$(27,465)	$74,268	$46,803	$34,615	$87,959	$122,574
Annual Acquisition-related run-rate cost savings and operational synergies expected to be realized within 24 months of Acquisition Closing	—	—	—	—	—	—	—	—	51,450^(a)
Combined company Free Cash Flow (incl. synergies)	—	—	—	—	—	—	—	—	$174,024

Total amounts may not recalculate due to rounding.

(a)	Expected realized synergies in year two, net of illustrative 26.5% tax rate.

TEADS SUMMARY HISTORICAL FINANCIAL INFORMATION

The following tables set forth Teads’ summary historical financial information. The consolidated balance sheet information as of December 31, 2023 and 2022 and the consolidated statement of operations and consolidated statement of cash flows information for the years ended December 31, 2023, 2022 and 2021 have been derived from the Teads Annual Historical Consolidated Financial Statements included in this offering memorandum. The consolidated balance sheet information as of September 30, 2024 and the consolidated statement of operations and the consolidated statement of cash flows information for the nine months ended September 30, 2024 and 2023 have been derived from the Teads Interim Historical Consolidated Financial Statements included in this offering memorandum. The consolidated statement of operations information for the LTM period ended September 30, 2024 was derived as described under the caption “Presentation of Financial and Certain Other Information.” The financial information for the three months ended March 31, 2024 and 2023, the three months ended June 30, 2024 and 2023 and the three months ended September 30, 2024 and 2023 have been derived from Teads’ accounting records and investors should not place undue reliance on this information; financial statements for such three-month periods in a form substantially consistent with Teads Interim Historical Consolidated Financial Statements have not been prepared by Teads and such summary financial information should be viewed as supplemental to Teads’ consolidated financial statements included herein. The Teads Interim Historical Consolidated Financial Statements were prepared on a basis consistent with that used in preparing the Teads Annual Historical Consolidated Financial Statements. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year or any future period. This summary historical financial information is qualified by reference to, and should be read in conjunction with, Teads Historical Consolidated Financial Statements, including the related notes thereto, together with the information under the caption “Teads Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Teads’ consolidated financial statements are prepared in accordance with IFRS, whereas Outbrain’s consolidated financial statements are prepared in accordance with U.S. GAAP. IFRS differs from U.S. GAAP in a number of significant respects.


Consolidated Statements of Operations Information:	Year Ended December 31,			Nine Months Ended September 30,		LTM Period Ended September 30,
(in thousands)	2023	2022	2021	2024	2023	2024
Revenue	$649,812	$657,481	$678,165	$428,482	$430,419	$647,875
Cost of revenue	(328,635)	(324,560)	(302,863)	(241,712)	(229,234)	(341,113)
Sales and marketing expenses	(108,534)	(107,454)	(97,028)	(85,554)	(79,048)	(115,040)
Technology and development expenses	(31,181)	(17,675)	(20,268)	(28,781)	(17,314)	(42,648)
General and administrative expenses	(47,072)	(42,432)	(37,243)	(41,987)	(29,192)	(59,867)
Profit from operations	134,389	165,359	220,764	30,448	75,631	89,206
Finance costs	(929)	(848)	(911)	(1,060)	(821)	(1,168)
Other financial income and (expenses)	4,549	15,606	1,299	12,431	11,259	5,721
Profit before tax	138,009	180,117	221,153	41,819	86,069	93,759
Income tax expense	(42,186)	(49,130)	(61,297)	(22,113)	(23,485)	(40,814)
Profit (loss) for the year/period	$95,823	$130,987	$159,856	$19,706	$62,584	$52,945

Total amounts may not recalculate due to rounding.


Selected Consolidated Balance Sheet Information (as of period end):
(in thousands)	December 31, 2023	December 31, 2022	September 30, 2024
Cash and cash equivalents	$90,441	$93,574	$64,597
Total assets	974,435	840,070	984,687
Long term borrowings	7	12	21
Total liabilities	241,648	237,042	198,381
Total equity	732,787	603,028	786,305


Selected Consolidated Statements of Cash Flows Information:	Year Ended December 31,			Nine Months Ended September 30,
(in thousands)	2023	2022	2021	2024	2023
Cash flow from operating activities	$122,440	$133,307	$135,442	$62,121	$84,503
Cash flow from investing activities	(123,641)	(92,202)	(125,129)	(95,635)	(103,411)
Cash flow from financing activities	(4,099)	(5,917)	(4,846)	8,495	7,282
Effect of exchange rate changes	2,167	(3,429)	(2,042)	(825)	(766)
(Decrease) increase in cash and cash equivalents	$(3,133)	$31,759	$3,425	$(25,844)	$(12,392)

Total amounts may not recalculate due to rounding.


Non-IFRS Financial Information:	Year Ended December 31,			Nine Months Ended September 30,		LTM Period Ended September 30,
(in thousands, except percentages)	2023	2022	2021	2024	2023	2024
Adjusted EBITDA⁽¹⁾⁽²⁾	$170,541	$180,693	$235,887	$70,504	$88,402	$152,643
Ex-TAC Gross Profit⁽¹⁾⁽³⁾	$426,556	$429,808	$453,714	$266,743	$278,218	$415,081
Free Cash Flow⁽¹⁾⁽⁴⁾	$109,300	$118,773	$125,932	$52,927	$74,268	$87,959

(1)

Adjusted EBITDA, Ex-TAC Gross Profit, Adjusted EBITDA as a percentage of Ex-TAC Gross Profit and Free Cash Flow are non-IFRS financial measures Non-IFRS financial measures should be viewed in addition to, and not as an alternative for, Teads’ historical financial results prepared in accordance with IFRS. Non-IFRS financial information does not represent a comprehensive basis of accounting.

(2)

Teads defines Adjusted EBITDA as profit for the year/period before income tax expense, finance costs, other financial income and expenses, depreciation and amortization, other expenses and income (capital gains, non-recurring litigation, restructuring costs) and share-based compensation. This may not be comparable to similarly titled measures used by other companies. Further, this measure should not be considered as an alternative for net income as the effects of income tax expense, finance costs, other financial income and expenses, depreciation and amortization, other expenses and income (capital gains, non-recurring litigation, restructuring costs) and share-based compensation excluded from Adjusted EBITDA do ultimately affect the operating results. Teads believes that Adjusted EBITDA is a useful supplementary measure for evaluating the operating performance of Teads’ business.


	Year Ended December 31,			Nine Months Ended September 30,		LTM Period Ended September 30,
	2023	2022	2021	2024	2023	2024
(in thousands)
Profit (loss) for the year/period	$95,823	$130,987	$159,856	$19,706	$62,584	$52,945
Income tax expense	42,186	49,130	61,297	22,113	23,485	40,814
Finance costs	929	848	911	1,060	821	1,168
Other financial income and (expenses)	(4,549)	(15,606)	(1,299)	(12,431)	(11,259)	(5,721)
Share-based compensation	17,943	—	—	28,089	—	46,032
Other expenses(a)	6,067	8,688	8,989	2,160	3,934	4,293
Depreciation and amortization	12,142	6,646	6,133	9,807	8,837	13,112
Adjusted EBITDA	$170,541	$180,693	$235,887	$70,504	$88,402	$152,643

Total amounts may not recalculate due to rounding.

(a)	Comprised of severance and merger and acquisition costs.

(3)	Ex-TAC Gross Profit is defined as revenue less traffic acquisition costs. The following table presents the reconciliation of Ex-TAC Gross Profit to gross profit for the periods presented:


	Year Ended December 31,			Nine Months Ended September 30,		LTM Period Ended September 30,
	2023	2022	2021	2024	2023	2024
(in thousands)
Revenue	$649,812	$657,481	$678,165	$428,482	$430,419	$647,875
Traffic acquisition costs	(223,256)	(227,673)	(224,451)	(161,739)	(152,201)	(232,794)
Other cost of revenue	(105,379)	(96,887)	(78,411)	(79,973)	(77,033)	(108,319)
Gross profit	321,177	332,921	375,302	186,770	201,185	306,762
Other cost of revenue	105,379	96,887	78,411	79,973	77,033	108,319
Ex-TAC Gross Profit	$426,556	$429,808	$453,714	$266,743	$278,218	$415,081

Total amounts may not recalculate due to rounding.

(4)	Free cash flow is defined as cash flow from operating activities, less costs related to acquisition of assets. The following table presents the reconciliation of free cash flow to net cash provided by operating activities.


	Year Ended December 31,			Nine Months Ended September 30,		LTM Period Ended September 30,
	2023	2022	2021	2024	2023	2024
(in thousands)
Cash flow from operating activities	$122,440	$133,307	$135,442	$62,121	$84,503	$100,058
Purchases of property and equipment	(923)	(1,229)	(1,897)	(960)	(681)	(1,202)
Capitalized software development costs	(12,217)	(13,305)	(7,613)	(8,234)	(9,554)	(10,897)
Free cash flow	$109,300	$118,773	$125,932	$52,927	$74,268	$87,959

Total amounts may not recalculate due to rounding.


	Three Months Ended,
Other Financial Information:	March 31, 2024	March 31, 2023	June 30, 2024	June 30, 2023	September 30, 2024	September 30, 2023
(in thousands)
Revenue	$125,372	$123,880	$153,735	$158,299	$149,376	$148,240
(Loss) profit for the period	$(36,551)	$9,341	$23,323	$24,026	$32,933	$29,217
Adjusted EBITDA	$14,342	$17,681	$32,361	$36,864	$23,800	$33,857

The following table provides a reconciliation of profit (loss) for the period to Adjusted EBITDA, the most directly comparable IFRS measure, for the periods presented:


	Three Months Ended,
	March 31, 2024	March 31, 2023	June 30, 2024	June 30, 2023	September 30, 2024	September 30, 2023
(in thousands)
(Loss) profit for the period	$(36,551)	$9,341	$23,323	$24,026	$32,933	$29,217
Income tax expense	716	6,251	10,800	8,400	10,597	8,835
Finance costs	250	207	277	481	532	133
Other financial income and (expenses)	20,531	(1,443)	(12,432)	(1,977)	(20,529)	(7,840)
Share-based compensation	25,612	—	5,760	—	(3,284)	—
Other expenses	604	656	1,283	2,858	273	420
Depreciation and amortization	3,180	2,721	3,350	3,024	3,277	3,092
Adjusted EBITDA	$14,342	$17,733	$32,361	$36,812	$23,799	$33,857

Total amounts may not recalculate due to rounding.

TEADS MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Comparison of Nine Months Ended September 30, 2024 and 2023

Revenue. Revenue for the nine months ended September 30, 2024 decreased by $1.9 million, or 0.5%, compared to the nine months ended September 30, 2023. This decrease was due primarily to weaker demand on Teads’ platform related to slower spend from North America (a decrease of 8.3%) and LatAm (a decrease of 13.7%), which was only partially offset by positive business trends in EMEA and APAC (which increased by 6.3% and 7.1%, respectively).

Cost of Revenue. Cost of revenue for the nine months ended September 30, 2024 increased by $12.5 million, or 5.4%, compared to the nine months ended September 30, 2023. This increase was due primarily to an increase in traffic acquisition costs for an amount of $9.5 million, as well as an increase in headcount-related costs (of which $2.6 million was attributable to share-based compensation under the PSAR Plan).

Sales and Marketing Expenses. Sales and marketing expenses for the nine months ended September 30, 2024 increased by $6.5 million, or 8.2%, compared to the nine months ended September 30, 2023. This increase was primarily due to an increase in headcount-related costs (of which $7.8 million was attributable to share-based compensation under the PSAR Plan), partially offset by discretionary spend measures on marketing and events ($0.8 million).

Technology and Development Expenses. Technology and development expenses for the nine months ended September 30, 2024 increased by $11.5 million, or 66.2%, compared to the nine months ended September 30, 2023, primarily due to an increase in headcount-related costs (of which $5.6 million was attributable to share-based compensation under the PSAR Plan) and a decrease by $1.6 million in capitalized costs.

General and Administrative Expenses. General and administrative expenses for the nine months ended September 30, 2024 increased by $12.8 million, or 43.8%, compared to the nine months ended September 30, 2023. The increase is mainly due to the impact of share-based compensation under the PSAR Plan, which amounted to $12.1 million, despite lower other expenses (mainly composed of severance and merger and acquisition costs) which amounted to $2.2 million for the period ended September 30, 2024 and $3.9 million for the period ended September 30, 2023.

Finance Costs and Other Financial Income and (Expenses). Other financial income, net for the nine months ended September 30, 2024 increased by $1.2 million compared to the nine months ended September 30, 2023, primarily due to interest income from advance payments made to Altice Teads under the cash management agreement (as defined in the subsection titled “Historical Cash Flows—Investing Activities”).

Income Tax Expenses. Income tax expenses decreased by $1.4 million in the nine months ended September 30, 2024 over the same period in the previous year, mainly resulting from lower profit from operations (before any impact of share-based compensation). Teads had an effective income tax rate of 31.6% (before any impact of share-based compensation) for the nine months ended September 30, 2024, compared to an effective income tax rate of 27.3% in the nine months ended September 30, 2023. This change mainly resulted from an increase in non-deductible expenses (such as share based compensation for $28.1 million, while there was no such expense in the corresponding prior period) and from a different geographical contribution and a higher tax rate for Teads Japan K.K. (Teads’ wholly owned Japanese subsidiary).

Profit for the Year/Period. Teads’ profit for the period decreased by $42.9 million, from $62.6 million for the nine months ended September 30, 2023 to $19.7 million for the nine months ended September 30, 2024 as a result of lower profit from operations, including the impact of share-based compensation ($28.1 million), as previously described.

Liquidity and Capital Resources

Teads continued to finance its operations and capital expenditures primarily through its utilization of cash generated from operations as well as one non-recourse factoring contract and one overdraft facility with HSBC. As of September 30, 2024, Teads had cash and cash equivalents of $64.6 million and $16.7 million of borrowings under the overdraft facility with HSBC.

Operating Activities

For the nine months ended September 30, 2024, cash from operating activities decreased by $22.4 million, to $62.1 million net as compared to $84.5 million net for the nine months ended September 30, 2023. This resulted primarily from the profit for the nine-month period declining $42.9 million, largely offset by non-cash add backs. The decrease in cash from operating activities was also due to a net decrease in working capital of $9.2 million.

Investing Activities

For the periods ended September 30, 2024 and September 30, 2023, the amounts lent to Altice Teads by the Teads subsidiaries under the cash management agreement were $86.4 million and $93.2 million, respectively.

Financing Activities

In the nine months ended September 30, 2024, net cash provided by financing activities was $8.5 million, mainly resulting from borrowings under Teads’ overdraft facility in a cumulative amount of $13.7 million, partly offset by lease payments of $4.2 million. In the nine months ended September 30, 2023, net cash provided by financing activities was $7.3 million, mainly resulting from borrowings under Teads’ overdraft facility for a net cumulative amount of $11.9 million, partly offset by lease payments of $3.8 million.

INDUSTRY

Introduction

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. 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:

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. The key areas where we operate, namely online video and static display as well as CTV are projected to grow from $140 billion of spend in 2023 to $192 billion in 2027, an 8% compound annual growth rate (“CAGR”), with video and CTV being the fastest growing segments, with 10% and 12% CAGR for 2023 – 2027, respectively. This growth and overall spend across our key geographies is driven by several factors, including the following:

•

The continued proliferation of digital content. As digital has become the mainstream delivery method for content, publishers continue to invest in existing as well as new forms of digital content and content distribution (CTV apps and video content, short videos, curated user-generated content (UGC), AI generated summaries and more), driving further user engagement and growing overall monetizable advertising inventory. For example, consumer adoption of Advertising-based Video On Demand (AVOD) content across CTV and Mobile is growing, with an expected 180 million AVOD users in the United States by 2024.

•

Shifting consumer behavior patterns. According to GlobalWebIndex, time spent within social platforms and walled garden platforms decreased from 49% of time spent online in 2017 to 39% in 2023, while time spent on the Open Internet increased from 51% in 2017 to 61% in 2023. We believe that this shift reflects the evolution of the Open Internet, as it evolves to be the primary distribution channel for professionally produced content, driven by long-form video and games, unlocking significant monetization opportunities.

•

A continuous shift towards data-driven outcomes and performance-oriented advertising. As audiences are increasingly engaged across digital media platforms, and as more purchase data is created, collected, integrated and analyzed digitally, advertisers are increasingly able to leverage sophisticated measurement and attribution solutions in order to optimize their advertising spend across the marketing funnel. As a result, advertisers are increasingly shifting spend away from legacy media offerings towards data-based solutions, driven by performance-centric metrics.

The Open Internet advertising technology ecosystem is highly fragmented and inefficient. The digital advertising ecosystem is highly fragmented, as various technology partners provide different, often competing, services to both advertisers and publishers. Demand-Side Platforms (“DSPs”) compete to provide an efficient, at-scale, advertising platform to advertisers and brands. Supply-Side Platforms (“SSPs”) compete to deliver superior yield and monetization solutions to publishers and media owners, which include CTV OEMs as well as traditional web publishers and app owners. In addition, there are multiple software, data as well as quality measurement and assurance providers serving the ecosystem.

As a result, user targeting and messaging is often sub-optimal, driven by the lack of end-to-end integration and the resulting technology and privacy challenges (known commonly as ‘signal loss’), driving lower ROAS for advertisers. In addition, the reliance on multiple technology intermediaries often leads to higher costs which in turn impact ROAS for advertisers or otherwise reduce revenue for publishers.

Large advertisers and their agencies are seeking to consolidate their technology partners. Advertising spend continues to migrate towards large technology platforms, including both social and walled-gardens players as well as Open Internet vendors, as they are able to provide the following benefits:

•

Simplicity - Operations. Agencies often experience high employee churn across digital media buying functions, making it challenging and costly to train, onboard and support multiple, redundant, buying platforms and vendors. In addition, staff will typically migrate towards using a select number of platforms that enable them to perform their tasks most efficiently – because of reach, features, capabilities, ingrained habits, or a mix thereof.

•	Simplicity - Technology. Advertisers and their agencies are unable, or unwilling, to create or maintain multiple technological integrations, especially when there is no clear differentiation between vendors.

•	Efficacy - Data. Larger, end-to-end, platforms benefit from more and better data signals, enabling them to provide better results, especially when integrating advertiser and publisher first-party data.

•	Efficacy - Cost. Larger platforms are often end-to-end in nature, or otherwise capable of forcing Supply-Path Optimization, enabling them to offer better ROAS to advertisers, while benefiting from higher margins, which in-turn further enable them to invest in their solution offerings.

The rapid rise of AI and Generative AI models. AI and especially Generative AI models have become increasingly potent and applicable across a wide range of industries and use cases. We expect Generative AI to be increasingly used towards the creation of highly personalized or otherwise engaging content, at scale, enabling publishers to efficiently create more monetizable content as well as to grow user engagement. In addition, we believe that AI models will increasingly enable advertisers to create custom, highly personalized and engaging ads, driving better user engagement, impact and overall spend efficacy.

Regulatory action and a growing focus on privacy. Over the past few years, regulators in the United States and in Europe have brought a number of lawsuits against some of the largest digital advertising companies, claiming various violations of anti-trust and privacy laws. We believe that as a result, some of these companies may be forced to amend their business practices in a way that may be favorable to Open Internet competitors.

In addition, multiple privacy laws and regulations have been adopted in recent years by various government actors and regulatory agencies in the United States and Europe. These laws grant customers rights over how their online data is viewed, stored, processed, and used, with many tracking functions requiring “opt-in” or proactive affirmative selections by users. For example, Apple has, for a number of years, been actively limiting the use of various user targeting technologies (such as device ID sharing, the use of third-party cookies, and location sharing) with Google also expected to amend or otherwise restrict the availability of such technologies across its platforms.

Document and Entity Information	Feb. 03, 2025
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Feb. 03, 2025
Entity File Number	001-40643
Entity Registrant Name	Outbrain Inc.
Entity Central Index Key	0001454938
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-5391629
Entity Address, Address Line One	111 West 19th Street
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10011
City Area Code	646
Local Phone Number	867-0149
Title of 12(b) Security	Common stock, par value $0.001 per share
Trading Symbol	OB
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false

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