Nexxen International (NASDAQ:NEXN) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.
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Summary
Nexxen International reported record Q3 contribution ex-TAC of $100.3 million, up 8% year-over-year, with programmatic revenue reaching $97.8 million, a 9% increase.
The company achieved significant growth in its CTV and mobile in-app segments, with CTV revenue up 39% year-over-year, driven by new partnerships with major CTV providers like Disney and Sling TV.
Nexxen’s strategic initiatives focus on AI-driven advertising solutions, enhancing platform capabilities, and expanding enterprise adoption, with over 40% growth in contribution ex-TAC from enterprise customers.
The company completed the wind-down of its non-programmatic influencer marketing business, Rhythm Influence, to focus on high-growth areas like CTV and mobile in-app.
Nexxen reaffirmed its full-year 2026 guidance with expected contribution ex-TAC growth of approximately 12% and adjusted EBITDA growth of about 10%, highlighting continued enterprise momentum and platform usage.
Management highlighted the importance of AI in driving future growth, with plans to expand agentic AI solutions to improve campaign performance and operational efficiency.
Nexxen is exploring bolt-on acquisitions to strengthen its mobile in-app capabilities and enhance its competitive positioning, leveraging its strong cash position and lack of long-term debt.
The company expects Q4 to be the best CTV revenue quarter in history, driven by increased platform adoption and the rollout of Nexxen TV Home Screen, with significant growth anticipated in 2027.
Full Transcript
OPERATOR
Welcome to Nexxen International’s third quarter earnings call. At this time, participants are in listen-only mode with a question-and-answer session to follow at the end of the presentation. This call is being recorded, and a replay will be made available on Nexxen International’s investor relations website. I will now hand the call over to Billy Eckert, Vice President of Investor Relations, for introductions and the reading of the safe harbor statement. Billy, please go ahead.
Billy Eckert (Vice President of Investor Relations)
Thank you, operator. Good morning, everyone, and welcome to Nexxen International’s third quarter earnings call. During today’s call, we will discuss our financial and operating results for the three and nine months ended September 30, 2026, as well as our forward-looking guidance. With us on today’s call are Ofer Druker, Nexxen International’s Chief Executive Officer, and Sagi Niri, the Company’s Chief Financial Officer. This morning, we issued a press release which you can access on our IR website at investors.nexxen.com. During today’s call, we will make forward-looking statements. All statements other than statements of historical fact may be deemed forward-looking. We advise caution in relying on them. These statements include, without limitation, statements and projections regarding our anticipated future financial and operating performance, market opportunity, growth prospects, strategy, and financial outlook.
They also include, without limitation, statements regarding our partnerships and anticipated benefits related to those partnerships, as well as expected benefits from our growth initiatives and platform investments. In addition, we may provide forward-looking views on macroeconomic and industry conditions and other statements regarding the expected development, performance, market share, or competitive position of our products and services. All forward-looking statements are based on information available to us as of the date of this call. These statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from those implied by these statements. These include, among other things, unexpected changes in our business or in macroeconomic or industry conditions.
More detailed information about these risk factors and additional risk factors are set forth in our filings with the U.S. Securities and Exchange Commission, including, but not limited to, those listed in the section entitled Risk Factors in our most recent Annual Report on Form 20-F. Nexxen International does not intend to update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.
Additionally, the Company’s press release and management statements during this call will include discussions of certain measures and financial information in IFRS and non-IFRS terms. We refer you to the Company’s press release for additional details, including definitions of non-IFRS items and reconciliations of IFRS to non-IFRS results. At this time, it is my pleasure to introduce Ofer Druker, CEO of Nexxen International. Ofer, please go ahead.
Ofer Druker (Chief Executive Officer)
Thanks, Billy. We continue to execute against our strategy of combining end-to-end technology, unique and robust data, and AI to fuel enterprise adoption, drive growth across CTV and mobile in-app, and deliver better customer outcomes. This execution led to record Q3 contribution ex-TAC and programmatic revenue, alongside a return to year-over-year adjusted EBITDA growth following three top-line guidance increases earlier this year. Our financial results were supported by record Q3 CTV revenue, strong enterprise growth, and continued mobile in-app momentum.
These results reflect both our platform investments and more efficient go-to-market efforts, which together enable us to attract more enterprise customers and major media partners while supporting profitable growth. As we have positioned ourselves to win in market today, we have also advanced our technology and strategy to lead where advertising is going. Advertising will be transacted more and more by AI agents in the future, and Nexxen International is well positioned to help enable and define that future. Since releasing our agentic solutions, client feedback has indicated Nexxen’s AI capabilities are advanced relative to other platforms, both in the breadth of their functionality and how intuitively they are integrated into campaign workflow.
Customers are leveraging these solutions to generate custom reporting, streamline campaign execution, uncover incremental spend opportunities, and improve full-funnel performance with strong initial results. We believe our agentic advantage starts with the foundation underlying Nexxen AI. By combining our end-to-end transaction infrastructure with unique and robust data, we have greater visibility across the advertising journey, enabling better optimizations.
We believe this makes Nexxen AI and our agentic offering more effective, enabling smarter decisions, automated workflows, and better customer outcomes. We have brought these capabilities to market through our in-platform agents and interoperable API solutions, allowing customers to access our solutions within our platform and through their own AI-driven environments. As agentic adoption grows, we believe our combination of Nexxen AI, unique data, and end-to-end technology creates a powerful advantage—one that is already helping us win new business, improve performance for existing customers, and capture larger budgets.
Our continued success in driving enterprise adoption served as a key growth driver in Q3. Contribution ex-TAC from enterprise customers, which access the Nexxen DSP on a self-serve or platform-managed basis, grew over 40% year-over-year during the quarter. We also activated many new advertisers and enterprise customers, with several citing our data capabilities and agentic solutions as key catalysts. Much of this growth is coming from cross- and up-sells as customers lean more into our combined data, media, and technology, fueling greater spend consolidation, end-to-end usage, and profitability.
This momentum is also supporting growth across key areas like CTV and mobile in-app. Throughout 2026, we have enhanced platform performance and usability while strengthening our data core and Nexxen AI capabilities. Earlier this year we launched our new AI-native UI and deeper integration with Nexxen Discovery, creating a simpler, more unified experience for enterprise customers to utilize our combined insights and activation capabilities. We have also made it faster and easier to bring differentiated data into the platform, strengthening the signals that power Nexxen AI.
In Q3, we launched new first-party data onboarding solutions enabling faster activation and enhanced our unified identity graph with additional online and offline signals, nearly doubling our global identity footprint. Our integrations with Shopify and Omnicom’s Acxiom have expanded our platform’s commerce and consumer data signals, supporting better audience insights, reach extension, activation, and measurement. As I will expand on later, we have also grown our suite of agentic solutions, with several agents now live across critical customer workflows.
We generated record Q3 CTV revenue, which grew 39% year over year, and expect an all-time record CTV revenue quarter for Q4 based on the momentum we have seen to this point. Our success was driven in part by our ability to integrate new premium CTV supply. We recently onboarded Disney, Sling TV, and other CTV partners, and our CTV supply coverage is now ranked among the industry’s highest. Last year we were first to market with programmatic smart TV home screen and activation capabilities through Nexxen TV Home Screen.
In Q3 we advanced the offering, launching standardized smart TV home screen inventory specifications across OEMs, removing the major constraints to programmatic scale and monetization. The solution now provides access to premium inventory from VIZIO, TCL, TiVo ADS, and others, with additional major OEMs in testing or active discussions. Demand-side adoption also continues to grow, with partners including The Trade Desk, Google Display & Video 360, StackAdapt, and others onboarded and scaling spend.
We expect Q4 to be the first quarter in which we generate notable revenue from the solution and believe Nexxen TV Home Screen can serve as a meaningful CTV growth catalyst in 2027 and beyond. We also launched programmatic CTV pause ad activation capabilities, enabling access to high-attention inventory for partners like DirecTV Advertising and creating additional pathways to scale CTV monetization. Continued execution against our mobile in-app strategy drove strong year-over-year mobile revenue in Q3, with momentum building into Q4. SDK integrations with partners like Unity have continued to scale, expanding platform-wide monetization and providing additional durability against traffic shifts. Last year, mobile in-app represented a smaller portion of our mobile activity, but today it accounts for the majority. As performance-focused mobile in-app advertisers have expanded across our platform, they are also leveraging our CTV solutions through cross-channel strategies.
We will continue investing in enhancing our performance-based mobile and CTV capabilities to further accelerate this flywheel. Finally, I want to return to agentic AI and the opportunity we see ahead. We currently have in-platform agents spanning key customer workflows like reporting QA, audience intelligence, incremental spend analysis, and campaign and deal troubleshooting. Over the coming quarters we plan to introduce additional agents for audience building, full-scale campaign and deal creation, and other workflows. Today customers must actively select agents for specific tasks, but soon these capabilities will shift to always-on, continuously identifying opportunities and taking action to improve performance.
Importantly, our agents are also accessible through API integrations alongside many other AI-driven tools supporting campaign management workflows. Since launch, eight agency and holding company partners have begun actively testing or utilizing Nexxen within their own AI-driven environments, with encouraging initial results that validate our AI positioning and strategy. By the end of Q1 we expect most of our platform workflow to be executable through our agentic solutions.
AI is also benefiting us internally. We are expanding its use to automate workflows, increase productivity, launch solutions faster, and accomplish more without the need to scale headcount proportionally with revenue. We believe the external and internal application of AI can expand our addressable opportunity and support growth and operating leverage into 2027 and beyond. In closing, our strategy is resonating and our momentum is building. Enterprise adoption is accelerating, CTV and mobile in-app are growing, and Nexxen TV Home Screen is expanding our long-term CTV revenue opportunity. At the same time, our unique data, Nexxen AI solutions, and end-to-end capabilities are enabling us to win more clients and partners across agencies, brands, major holding companies, and premium publishers.
Importantly, as Nexxen has evolved, we think of ourselves not simply as a DSP, data platform, and SSP, but rather as an AI-native full-funnel performance advertising platform, powering better outcomes for both buyers and sellers while enabling them to transact directly in a streamlined, transparent, and unified agentic environment. This is Nexxen AI, the next evolution of our platform and company. While we are generating success today, we believe we are even better positioned for the future.
Advertising will be more organically connected, and we believe Nexxen data, product infrastructure, and early AI will serve as one of the platforms at the center of how it will be transacted. With that, I will turn the call to Sagi.
Sagi Niri (Chief Financial Officer)
Thank you, Ofer. In Q3 we yet again generated record results Continuing the strong momentum we established during the first half of the year following sweet offline guidance increases earlier in 2026, we delivered contribution ex-TAC of $100.3 million, representing a Q3 record and an increase of 8% year over year. Programmatic revenue was $97.8 million, up 9% year over year, also representing a Q3 record. Growth was broad-based, led by continued strength across CTV, mobile, data products, and display, supported by growth within our government, automotive, entertainment, and retail verticals.
These trends more than offset year over year declines within desktop and our non-programmatic business line, as well as softness within our health and travel vertical. During the quarter we completed the strategic wind-down of our non-programmatic influencer marketing business, Rhythm Influence. The wind-down did not have a material impact on contribution ex-TAC or adjusted EBITDA in Q3, nor do we expect it to in Q4, and we are continuing to evaluate strategic options for our remaining non-programmatic business lines to further improve our mix. Q3 represented a third consecutive quarterly CTV revenue record as we generated CTV revenue of $34.1 million, representing a 39% year over year increase driven by continued momentum across our platform’s CTV solutions.
This strength has continued and, based on current visibility, we expect Q4 to reflect the best CTV revenue quarter in company history. Mobile in-app also continued to scale, fueling 9% year over year mobile revenue growth with momentum continuing into Q4. Contribution ex-TAC from data products, PMPs, and display increased 73%, 18%, and 11% year over year, respectively, while desktop revenue declined by 29%. Importantly, the strength of our top line performance translated directly to the bottom line. After several consecutive quarters of year over year decline, adjusted EBITDA returned to growth and margin expanded in Q3. Adjusted EBITDA increased 22% year over year to $34.5 million, representing a 34% margin as a percentage of contribution ex-TAC, compared to a margin of 30% in Q3 2025. This growth and margin expansion reflected continued enterprise momentum, an increased end-to-end platform usage alongside disciplined cost management, a more favorable shekel to US dollar translation, and growing benefits from our AI initiatives.
We remain confident in our ability to expand margins over time as enterprise adoption, end-to-end platform usage, and top and bottom line AI benefits continue to scale. In Q3 we generated $46.1 million of operating cash flow compared to $35.8 million in Q3 2025. As of September 30th we had $152.9 million in cash and cash equivalents, $50 million available under our revolving credit facility, and no long-term debt. Non-IFRS diluted earnings per share was $0.32 in Q3 compared to $0.20 in Q3 2025. We believe our strong balance sheet, absence of long-term debt, and robust cash generation provide financial flexibility to invest across our organic growth potential, acquisition, and capital return priorities.
On capital allocation, in Q3 we completed our additional $15 million investment in TEA, bringing our total investment to $60 million and our equity ownership to approximately 6% of shares outstanding. We also continue deploying capital across our long-term strategic priorities, including AI, data platform capabilities, and go-to-market execution. Importantly, we also extended our $14 million share repurchase program authorization. While we did not repurchase shares in Q3 as we prioritized maintaining flexibility while actively evaluating bolt-on acquisition opportunities, we intend to resume share repurchases in the second half of Q4.
We are also continuing to pursue bolt-on acquisitions that can enhance our platform, strengthen our competitive positioning, and accelerate our growth. Our highest near-term acquisition priority is extending our mobile in-app capability and footprint to accelerate an already growing part of our business. We are also evaluating other opportunities to enhance our performance-based CPV, AI, and data offerings. We expect bolt-on acquisitions to serve as a potentially important component of our growth strategy and are actively seeking to acquire one or more companies over the coming quarters with a focus on opportunities that are accretive to both contribution ex-TAC and adjusted EBITDA.
Turning to our outlook, we are reaffirming our full-year 2026 financial guidance. We continue to expect contribution ex-TAC in the range of $388 to $402 million, representing approximately 12% year over year growth at the midpoint. We also expect programmatic revenue in the range of $380 to $393 million, representing approximately 13% year over year growth at the midpoint. Additionally, adjusted EBITDA is expected in the range of $122 to $132 million, representing approximately 10% year over year growth and a 32% margin as a percentage of contribution ex-TAC at the midpoint.
To this point in Q4 we are tracking toward the highest contribution ex-TAC and programmatic revenue quarter in company history, with October potentially representing our best top line month ever based on preliminary results. This reflects continued enterprise momentum, increased end-to-end platform usage, and strength within CTV, mobile, and data products. While we benefited from the election cycle in Q3 and early Q4, we do not expect political revenue comparison to represent a meaningful growth headwind in 2027.
We also expect Q4 to represent the best CTV revenue quarter in company history as adoption across our platform CTV solution continues to grow and as MAX and TV On-Stream revenue has ramped in line with our expectations. After generating minimal on-prem revenue through Q3 2026, we have seen a notable uptick in adoption and spending in Q4 and, based on this early success and a strong pipeline, continue to believe Nexxen TV On-Stream will represent an increasingly meaningful growth catalyst into 2027 and beyond.
We also anticipate sequential and year over year adjusted EBITDA growth and margin expansion in Q4, as most incremental contribution ex-TAC is expected to flow to adjusted EBITDA, highlighting the operating leverage enabled by our end-to-end model. To support our long-term growth drivers, we will continue investing across AI, data infrastructure, go-to-market execution, and our CTV and mobile in-app capabilities. Overall, we believe we are operating from a position of strength, with acceleration across our key growth engines and increasing operating leverage. As our mix continues to shift towards end-to-end enterprise relationships and high-growth channels such as CTV, Home Screen, and mobile in-app, we believe we are building a more durable business positioned to capture larger revenue opportunities across some of the fastest growing areas of advertising.
We have significant flexibility to continue investing behind these opportunities. We believe we are poised to drive increased growth, profitability, and long-term shareholder value into 2027 and beyond. As always, we thank our shareholders, employees, and partners for their support. Operator will now take questions.
OPERATOR
Thank you. If you would like to ask a question, please press star followed by the number one on your telephone keypad. In the interest of time, we ask that you please limit yourselves to one question and one follow-up question. Thank you. Our first question comes from Matt Swanson from RBC Capital Markets. Please go ahead. Your line is open.
Matt Swanson (Analyst at RBC Capital Markets)
Great, thank you guys. Ofer, I think there’s kind of three numbers that really stood out to me when listening to the prepared remarks. Can you just give us more color on what was the dynamics leading to the strong growth that we saw in CTV of 39%, the 40% growth in the enterprise DSP usage, but also some more context around desktop being down 29% and just kind of what you’re seeing from the environment there?
Ofer Druker (Chief Executive Officer)
Of course. Thank you, Matt. I think that let’s start with the enterprise and then move to the CTV. And your last point was about the decline in desktop. So let’s start with the enterprise. So I think the enterprise is a very hard effort that we are doing in the last more than two years now to basically utilize the acquisition that we did with Amobee in 2022. And basically we have a very strong enterprise solution that we are licensing to clients. I think that we improved a lot the product and we improved a lot the go-to-market strategy and the talent around this activity.
And in the last year or so we see results, and a lot of that happened also in Q3 this year, which is great news for us because of course this is creating stability and long-term growth, and also the fact that it’s connected to your second question that I will touch in a minute about CTV. But the big adoption of enterprise clients of our solution, basically we are encouraging and incentivizing them to buy on our media platform and they are basically growing also the CTV and in-app mobile activity through the mutual partnership that we got with them.
So it’s like a flywheel that is pushing itself when you look at that. We improved the technology, we connected a lot of data and capabilities into our enterprise solution. We improved the go-to-market and talent around that. We see growth in the number of partners and advertisers that are using the platform. Through AI we also see now improvement in the budget that they’re allocating to our media, and altogether some of that is also directed to CTV, in-app mobile, that is growing the numbers.
So I think it’s not one-time effort, it’s like a long-term effort and we look at that as a trend that we believe that can continue going forward into 2027 and beyond. Regarding the CTV growth, it’s a mix of a few things. Also I think that it’s not the first time that we are breaking the record around CTV. I think that again we improved our go-to-market. We have a lot of new partners that are basically coming in, and we will talk also about future ones in a minute. But in general when you look at that, we see that everything is starting to connect. As I mentioned, the enterprise partners are buying more also CTV.
We have more and more people that are advertisers and agencies that are recognizing that what we can offer them together with unique data and measurement is important to them and they are shifting spend to us, also thanks again to AI tools that we built that is helping them to optimize and get the best results that they can on our platform. And when you are looking at CTV also, we also mentioned that we signed a few strong partnerships for the future.
It didn’t affect our number yet, but we signed Disney and Sling and others that are joining now our media platform, and I’m sure that will attract more revenue coming into our platform in the future. Regarding the drop in desktop, we knew that it will come, like last year already we started to prepare for that. That’s the reason that we developed on our CTV effort. That’s the reason that we basically opened up the in-app mobile activity that is growing very steadily and creating strong momentum during this year and also into Q4. And this is basically replacing the declining desktop and even generating growth.
So I don’t think that it’s a surprise, but people are less surfing on sites but still of course launching the TV, watching, consuming content through their CTV sets and through their mobile in-app that is not going down, but the utilization and the usage of these platforms are growing. So I think that from strategic point of view, I think that we choose the right media format and channels to grow our business and it’s offsetting the drop of display and desktop that we saw, that basically we saw it coming like more than a year from now.
I hope that I answered questions.
Sagi Niri (Chief Financial Officer)
Yeah, so I think the margin expansion is related to two different parameters. First of all, the first quarter that we are really reporting on an apples to apples basis. So a lot of partnerships and infrastructure investment around hosting and data that we did in the second half of 2025 are now fully in place. And it’s the first quarter we can really understand how Q3 looks versus previous Q3. Having said that, I think it’s all around seasonality and, of course, the level of revenue that we are generating. So as long as we are generating more revenue, of course the margin on EBITDA is going higher and probably, according to our guidance in Q4, we will be over 40% of adjusted EBITDA margin. I think that going into 2027, when the full year will be apples to apples to 2026, we’ll see more of that kicking in, and we are expecting to be somewhere around the 34% adjusted EBITDA margin in full year 2027.
So I think all the investments we did in the past are now really getting into full utilization and materializing 100%, and it’s affecting, of course, the growth that Ofer just mentioned on CTV and Enterprise and all around that. And now we are kicking in the efficiency and the productivity that is turning into more, of course, cash flow and more adjusted EBITDA.
OPERATOR
Our next question comes from Andrew Merrick, from Raymond James. Please go ahead. Your line is open.
Andrew Merrick (Analyst at Raymond James)
Hi, thanks for taking my questions. Let’s talk about the home screen opportunity. You mentioned that you’ve already got the deals in place with a number of OEMs that you’re integrated with and also in discussions for more. I guess from today, what percentage of what you see as the addressable home screen opportunity are you already integrated with, and how much is potential growth from some of these new coming deals that you’re working on?
Ofer Druker (Chief Executive Officer)
Hi Andrew, good morning. I think that what we did almost a year ago, we basically launched a new product line which is programmatic home screen. People were selling the home screen before we arrived, of course, but I think that what we are adding to that is a programmatic capability to buy this media in a programmatic manner, which is super important according to what is going on in the market, of course. And the second thing that I feel that we invested a lot of time around is to create standardization around it.
So I think that the most important thing to understand is that you have a lot of people that want to buy this media, but you need to manage their expectations about formats, about location, about defining where they are running, and for them to test the outcome and to feel reassured about what they are choosing, which I feel that we crossed a lot of these challenges in the past six months. And I think that we already, as we mentioned, signed some OEMs and are in discussions with others. And it’s a process; we are still making the first steps into that. But as we indicated, it’s starting to show real meaningful results in the end of Q3 and Q4 after a lot of work that we invested. So for addressable market, I think that there is a lot, a lot, a lot of room to grow. There are a lot of operating systems. The big guys are still not in our mix, but I think that of course we believe in the future and believe that some of them will join us.
And I feel that this will be a meaningful growth engine for us because we are a pioneer in this industry. But I think that it’s needed because the advertisers need a better solution to buy this type of media. The OEM needs a better solution to sell this media and to generate the proper results and measurement and reports for them. And I think that we are addressing here a need of the market on both sides. I’m sure that we’ll be able to keep reporting on that in the beginning of next year and to share with you the development and the progress that we are making.
I think that it’s very encouraging. We are looking at it as a catalyst for 2027 and more, and we believe that it will be a meaningful revenue source for us.
Andrew Merrick (Analyst at Raymond James)
Got it. Thank you. And then maybe one on your M&A plans and discussion that you talked about in the prepared remarks. I guess, you know, this is not the first time we’ve heard this from you, but what is kind of catalyzing this return to the M&A market at this time? Is it just like, you know, you really want to accelerate these transitions into these LLM-resistant formats and finding particularly good opportunities to do so, or is it something like the valuations are particularly attractive at this point?
Just anything more you can give on that? Thank you.
Ofer Druker (Chief Executive Officer)
Thank you, Andrew. I think that you touched yourself all the points in your question, but I will address them as an answer also because I think that you touched them in a very smart manner. I think that, first of all, we strongly believe that to grow the revenues of the company, and we performed it in the past, you need to grow organically, of course, but you also need to grow through acquisitions that are adding to you knowledge, technology capabilities, additional customers that can basically join the platform.
And then by synchronization between the elements, you can grow the total revenues of these companies that you are acquiring. The reason that we are looking today at additional M&A is, first of all, we are generating cash. We are a stable company. We have a very strong model that we believe in, and we know what we need to do in order to maintain our position. And to maintain our position, sometimes it’s not good enough — you need even to grow it. So we are looking at companies, as you said, that can increase our stability in media formats that are basically lowering the risk of LLM.
We are looking at companies that can add to us additional customers and clients that will utilize our platform. And we believe that this is the right time because it was almost four years ago that we made our last acquisition. The company made a lot of consolidation efforts. We are working as one platform, one team, and AI is helping us also now to manage our company in a more efficient manner. So an acquisition, we believe, can add to us a lot of value, and we have the means to do that. Just to remind you, we don’t have debt and we have cash. So we believe that this, of course, is a strong indication for us to look for the right acquisition in order to keep growing the company, not just organically, and to address some of the things that can help us to grow even more than we are growing now. Because, for example, we are reporting on growing in what we call non-LLM-affected formats like CTV and in-app mobile.
But we believe that the acquisition probably can give us an additional step, an additional edge in this, and of course it’s always welcome to do that when you can. So we are looking around, and we are checking the market, and we feel that it’s a good time to do that from our standpoint.
OPERATOR
Our next question comes from Jason Crier from Craig-Hallum. Please go ahead. Your line is open.
Jason Crier (Analyst at Craig-Hallum)
Great, thank you. So you mentioned that the CTV home screen has started to trickle in here in Q4. Are you expecting to be live with all or most of the partners that we’ve talked about that are the OEM partners that are running the home screen? And just relative to what you’ve seen in the early days, how does that frame the opportunity for you to drive that inflection growth?
Ofer Druker (Chief Executive Officer)
I think that yes, of course everything that we spoke about we believe is already in the integration. Sometimes the integration takes a little bit longer because it’s, again, something new for a lot of the people. So they need to test it and to find the right way to integrate it into their plans and technology stack. But we are on the right path regarding what is needed. I think that the most important issue here is education of the market, meaning, as I mentioned, it’s a new format and our industry is very vast and big, and you need to basically educate people. Some of the people are not coming all in the first time. Of course, they want to keep the interest of their clients, so they are testing it. They want to make sure that it delivers the results that they feel that it or think that it can deliver. And it’s a process that is step by step growing and increasing the effect of our programmatic activity around the home screen.
And I believe that in the middle of next year it will become a massive trend in the industry, and we have a place to lead it because we have the relationship, we have the technology, we have the knowledge, and we have the experience already how to do that. So I feel very sure about it.
Jason Crier (Analyst at Craig-Hallum)
Thank you. You’d also called out record trends in October. Wanted to see if you could just unpack any specific sources with that. You’ve given a guide for Q4 with like a $14 million range on revenue and a $10 million range on EBITDA. Just curious your thoughts on such a wide range with six weeks left in the year. Thanks.
Sagi Niri (Chief Financial Officer)
Yeah. So, hey, Jason, October was our best month ever. Some of it, of course, relates to some midterm revenues that we’re generating. Having said that, if this revenue wasn’t existing, probably we would have generated with some other advertisers, I think. You know, as I said before, seasonality, of course, kicking in in the last quarter — the last quarter will be our best ever as well. I think the wide range is coming because we wanted to reaffirm and keep the flexibility around that because you can never know what will happen — the macro and the sentiment — and there’s a lot of geopolitical tensions and other tension which can take the market. As you can see, it’s very volatile in the past couple of weeks or months. So we wanted to be sure. We are still guiding for the midpoint, so this is our main guidance, but we kept the range as wide as we can, but not for a specific reason or anything else.
Jason Crier (Analyst at Craig-Hallum)
Got it. Thank you.
OPERATOR
Our next question comes from Laura Martin. Laura Martin from Needham, please go ahead. Your line is open.
Laura Martin (Analyst at Needham)
Hey, just listening to that prior answer, can you actually drill down on how much political you’re expecting in the fourth quarter, but also how much was in the third quarter, because it was a big deal at Magnite and Trade Desk? So I’m interested if you guys had a lot of political information. And then, Ofer, I’d love to drill down on these agentX solutions, which you say are manual today but you are going to automate them. So of the agentX solutions you have to date, what has been the—like, I’m interested in what clients have adopted the most so far.
What’s on the roadmap of what you think could be the most popular agents looking forward over the next 12 months? And what’s the business model? Do they pay separately, do they pay an upcharge, or is it all just included in the platform you’re already—so you don’t really get an incremental revenue tax for that? Thanks.
Ofer Druker (Chief Executive Officer)
No problem. Good morning, Laura. You asked a question that is like equal to a full day, but I will try to provide you answers to all the points. So let’s start with the AI, because I think that it’s—and then I will hand over to Sagi to talk about the election and stuff like that. On the AI stuff, I think that first of all we have an inherent advantage because we are an end-to-end solution. So when you’re looking at that, it’s easier for AI. AI, in order to be efficient, needs to get a lot of signals; it needs to have a lot of points of touch with the process in order to be able to influence it. I think that we are one of the only companies that has a real end-to-end solution. We are repeating that, and you asked me in the past about data, data, data.
So data signals that we are able to deliver today—tools in order to optimize, in order to measure, in order to take decisions. And we see the effect of that. And I must tell you that from discussion that we have with partners that we are offering the platform or presenting them the platform, the responses are very good. In general, I can proudly say that we can already now transact agentically, and we are in discussions with about eight agencies and partners in order to integrate. We have already some live campaigns running, and we believe that this is something that we can be leaders of in the near future because we already got the basis. As I mentioned, we have a lot—and we will talk about the agent in a minute—but I feel that in this field of AI, since our infrastructure is built differently and we put emphasis on the end-to-end solution and on data for so many years, we have an advantage that we are using.
We are already, as I mentioned, able to run agentic campaigns and we believe that the discussions and conversations that we got with clients and tests that we are running and showing great results basically already giving us an edge to start doing that. Regarding the business model, it will not be one business model; there will be a lot. We need to understand that it’s touching a lot of areas of our activity. So we are now basically starting to create business models which are more dedicated to case studies with clients and with partners. Of course, in some cases it will enable us to create new venues of revenue, and in some cases it will give us more efficiency to offer better pricing to people.
But in general, what I feel—and we will share very soon more about it, because I think that you are totally right, Laura—it’s opening a lot of opportunities to differentiated models, business models of payment, and of course it will affect the market. But in our view it will also open a lot of new opportunity for us that were not available in the past and will enable us to generate additional revenue in the future. So I feel that we are in a very good position, and we will let the market know soon what is our next steps.
But in general, as I mentioned, we can already transact agentically. We’re already talking and launching tests, and we believe that it will be massive in 2027. And as you mentioned, for business models I think that there will be a few business models that we will be able to offer to our partners. The agents that you asked me—it’s a long list that we can have, maybe also offline if you want, Laura—but in general, when we are looking at that, we already integrated a lot of agents into the platform that is helping on the enterprise side to launch, to troubleshoot, to create campaigns, to optimize, to Q&A, to troubleshoot problems or mistakes if people integrated them into the coding of their campaigns, to show optimization and upsell, which is driving for us great results.
And also, when you look at it, integrating data into the process in a smart manner, because data today became more—people are looking for fresh data. AI basically enables us to utilize data from our DMP and bring fresh data to the clients when they need it according to their request and to integrate it into the campaign. So I feel that we are very advanced on that. And, as I mentioned also to Matt earlier, this has also helped us to scale up our relationship with our enterprise partners and to win more accounts.
Sagi Niri (Chief Financial Officer)
Laura, regarding the midterm election revenue generation. So first of all, most of it came in Q4—or will come in Q4—because we are not reporting that yet. Some of it came in Q3. Having said that, I think that it’s not material as Magnite and The Trade Desk did. Again, we grew a lot percentage-wise, but we came out from a much lower number. So, you know, that’s good and bad. The good is that it will not give us any material headwind into 2027 guidance and plan.
And the second is that we grew it dramatically higher than we anticipated. We did more than we did on the full election cycle in 2024, which is great. We put a lot of focus on that and we are making sure that we will double what we did in 2024 in 2028. So we are making sure we are having all the components there. Of course, it’s a lot of relationship, but as Ofer mentioned, a lot of capabilities that we tried for the first time were very successful and very engaged by the client.
OPERATOR
Our next question comes from Tyler DiMatteo from BTIG. Please go ahead. Your line is open.
Tyler DiMatteo (Analyst at BTIG)
Thanks for taking the question, guys. Appreciate it. Ofer, I wanted to come back to the mobile business. I believe you said it was up in totality 9% year over year. I just want to drill down into that and double click into the different pieces you’re seeing in that business between in-app, mobile web, et cetera, and then also just your outlook for mobile in general for ’27. Obviously, mobile in-app has been growing industry, depending on what you look at, mid- to high-teens.
But just curious how you’re thinking about the outlook. And then second question for Sagi. You’ve obviously invested a lot this year, which has put a little bit of a lid on EBITDA margins, but you expect that to come back in ’27—I believe you said 34%—but at this point how do you think about investing the incremental dollar? And really what I’m trying to understand is what is the actual return on invested capital and the incremental return on invested capital that you’re seeing and/or expect to see?
Thanks, guys.
Sagi Niri (Chief Financial Officer)
Yes, thank you, Tyler. So as you said, we invested a lot in the second half of 2025 and the first half of 2026. We are now, of course, keeping investing in our infrastructure and maintaining all the different components within our full ecosystem. But, having said that, it will be streamlined, and you won’t see any jumps as you saw in the first half of 2026 versus the first half of 2025. And yes, per your question, as Ofer said, we are utilizing much more AI tools on our platform for our clients and internally for our people.
And of course we are using AI as an enablement tool for different departments within the company. So I think that 34% is the entry point into 2027. We believe that most of the revenue growth that we will see in 2027—most of it—will flow down into the EBITDA line and into the adjusted EBITDA margin.
Ofer Druker (Chief Executive Officer)
Regarding Tyler, the question about the mobile in-app and growing the revenues by 9% in total, the mobile. I think that what—and you asked me about what are the segments that we are looking at in mobile—so mobile, in our eyes, there are two major segments there. One of them is basically in-app mobile and the second one is mobile web. And there is a different behavior, of course, of these two elements. Mobile web is going down a little bit and, basically, when you look at it, the in-app is growing on our systems and the numbers are growing.
I think that there will be a shift between in-app mobile and mobile web, and mobile web will keep going down and in-app will grow. So when it will clean up, probably next year we’ll see the growth more intense on the in-app mobile because it will release the declining mobile web that is basically now not giving us a clearer view of the growth of the in-app mobile.
OPERATOR
Our next question comes from Maria Riepz from Canaccord. Please go ahead. Your line is open.
Maria Riepz (Analyst at Canaccord Genuity)
Great, thanks for taking my questions. I just wanted to ask about your home screen spend, which is scaling nicely through your own DSP but also through The Trade Desk and DV360. Can you maybe talk about the split of home screen between your own DSP and outside DSPs, and how does your take rate compare—sort of take rate on other DSPs compared to your own sort of end-to-end CTV deals?
Ofer Druker (Chief Executive Officer)
Hi. So first of all, we built a programmatic ecosystem around the home screen, and we are working very closely with The Trade Desk—which is a very respectful partner of ours—and DV360, the same; StackAdapt, the same; people that are working with us closely; Basis and Epsilon and other, basically, DSPs that are buying this type of media. I cannot talk about the take rate compared to others because I don’t know it, of course, but we are basically, as I mentioned, now creating—so we are selling the home screen by ourselves to our clients.
We are encouraging our enterprise clients to buy this media—to test it and buy it and utilize it. We have our sales team that are selling strategic sales, meaning managed campaigns which are not hands-on keyboard, offering this media. And we are, of course, as I said, collaborating with all the major DSPs in the market to buy this media from us. And we see great success in that. Regarding take rates and stuff like that, I really don’t have the numbers to share with you, and I think that it will not be fair to start comparing between our clients in this country.
Sagi Niri (Chief Financial Officer)
Yeah, but per your question regarding take rates, you know, there’s no doubt that if a dollar is coming into our DSP and being utilized on our SSP, probably the take rate—the total take rate or the aggregate take rate that we are doing from this process—is higher than only one-sided DSP or SSP.
Maria Riepz (Analyst at Canaccord Genuity)
Got it. That’s very helpful. And then on enterprise—sort of contribution Xstack, which grew, I think you said, over 40%. So that compares to about 8% total, right, in the quarter. Can you maybe help us understand what share of contribution Xstack is enterprise today? And I guess what does that imply for growth for the rest of the business? And then can you talk about your enterprise pipeline as you’re preparing for 2027?
Sagi Niri (Chief Financial Officer)
Okay, I will start with the first half of the question. So yes, CTV grew by almost 40%. Mobile grew as well. I think that, you know, and you are saying that programmatic revenue grew only by 9% because at the end it’s an aggregation of a lot of different activities. So first of all, we are happy because, you know, the main focus of the company and, you know, the big trends within the industry and where we think the future of ad tech is lying is growing on our business, which is CTV and mobile.
So CTV grew and mobile grew as well. The part that didn’t grow, and I think that Ofer spoke about it earlier, is, of course, desktop. And of course, you know, people are going less and less into websites and more and more into different LLMs. So that’s something that we are, you know, preparing to and understanding and knowing that it will go lower in 2027. And this is why we are putting a lot of emphasis on our enterprise solution, on CTV, on AI, and all the other stuff that we just discussed.
Another part of our business that is going down is linear TV. It’s good. These dollars are allocated between linear TV to CTV and this is where part of the growth in CTV is coming as well. Data products and data licenses are growing as well. So I think the most important parts in our business are growing, and it’s, you know, putting the emphasis that we are putting on that in an amazing place. The only ones that are going down are linear TV and desktop, which is quite logical that they are going that direction.
And this is, of course, everything that is taking us to the 9% programmatic growth year over year. As long as enterprise will grow more and CTV will grow more as a percentage of our revenue in an absolute number. Of course, you know, if CTV in the future will grow 40% or enterprise will grow 40%, the level of the aggregate growth will be higher than 9% because their proportion and their weight within our total numbers will be higher. Is that answering the question, Maria?
Maria Riepz (Analyst at Canaccord Genuity)
Yes, I was just wondering just on the enterprise side, I mean, I understand all the channels. I was just wondering kind of on the enterprise side given sort of much higher growth versus average. I was trying to understand sort of the contribution of enterprise to overall contribution ex-tech and sort of what does that imply for the rest of the business outside of enterprise?
Sagi Niri (Chief Financial Officer)
Yes, I think enterprise and strategic are almost the same within our company. The proportion is almost there. I think we understand that going forward enterprise will grow more than strategic. And if I need to guess, you know, it’s very hard to guess with AI all around us because everything is changing a lot. I think that probably in the next three years enterprise will be 70, 80% of our net revenue. It only makes sense, you know, this is what the clients are looking for.
Most of the solution is now enabling them to be an enterprise customer because everything is being streamlined. Most of it is going to be agentic. It’s very easy. You don’t need a complicated or even a simple UI in order to facilitate. You will not need to go into the DSP in a couple of quarters. Probably you can interact with our DSP through an agent-to-agent and through MCP solution. So I think that the industry is going there. I think it’s going much faster than we understand.
So probably enterprise will be most of our revenue in the next couple of years.
OPERATOR
Our last question comes from Barton Crockett from Rosenblatt. Please go ahead. Your line is open.
Barton Crockett (Analyst at Rosenblatt Securities)
Thanks for the question. So I just wanted to get a little bit more color on the range applied in the fourth quarter where I think you back into somewhere between like 8% year over year growth and 22% year over year growth based on your full year guidance ranges and what you just did in the third quarter, which is a massive range. So I was just wondering if you could talk about why that larger range and what the puts and takes are to get you to the higher or the lower end of that stuff.
Sagi Niri (Chief Financial Officer)
Yes, I think. Barton, good morning. I think it was asked already. The simple answer or the quick answer is that because of what’s happening in the macro, the volatility, the geopolitic tensions and other stuff that everyone is reading about every morning and every evening. We kept the wide margin. Having said that, we are aiming to get into the midpoint. This is what we said, you know, from the beginning and this is where we are aiming to be, you know, things that can affect if we will hit the lower, the lower margin or the higher margin.
It’s really the volatility, maybe some kind of holiday spend that we are not, like, assuming or expecting. But other than that we are aiming to the midpoint. So if you need, you know, to your model to take the numbers and the percentage of growth around that, you should look at the midpoint.
OPERATOR
We have no further questions. I would like to turn the call back over to the company’s CEO Ofer Druker for closing remarks.
Ofer Druker (Chief Executive Officer)
Thank you. I will close by saying our platform investment and stronger execution are fueling shared gains, building a more resilient business and accelerating our growth flywheel. Growing enterprise adoption is attracting more premium media partners like Disney to our platform, which in turn is unlocking larger end-to-end revenue opportunities. Together these dynamics are accelerating growth across CTV, mobile in-app and data products. As advertising shifts more and more towards agentic execution, we believe Nexxen International is uniquely positioned to help shape this transformation.
Our end-to-end infrastructure, differentiated data, exclusive media provides a powerful foundation to enable intelligent automated advertising both within our platform and our partners’ AI-driven ecosystem. We plan to accelerate profitable growth and establish Nexxen International as a fundamental technology partner connecting buyers and sellers in the agentic future of advertising. Thank you for all your support and have a great weekend. Thank you.
OPERATOR
This concludes today’s conference call. Thank you for your participation. You may now disconnect.
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