Nexxen International Ltd. Ordinary Shares 2026 Q2 Earnings Call

Good morning, everyone, and welcome to Nexxen's second quarter earnings call. During today's call, we will discuss our financial and operating results for the three and six months ended June 30th, 2026, as well as our forward-looking guidance. With us on today's call are Ofer Druker, Nexxen'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 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. Ofer, please go ahead. Thanks, Billy.

Q2 was another strong quarter as we delivered record results well ahead of consensus estimates, highlighted by our best CTV revenue quarter in company history. Our outperformance enabled us to raise our full-year contribution ex-TAC and programmatic revenue guidance for the third time this year and reflects continued execution against our long-term strategy. The investment we have made across the major elements of our platform, alongside our enhanced AI capabilities and tighter, sharper go-to-market approach, are improving execution. These investments are translating into stronger adoption, accelerating spend ramp, and growing platform usage by clients and partners. We have continued to onboard a growing number of enterprise customers, and as they scale spend and adopt more solutions, we believe they will support our growth in the second half and over the coming years.

We are also strengthening our CTV leadership through our growing strategic commercial initiatives and innovations like Nexxen TV Home Screen. At the same time, we have continued to expand in AI-resilient channels such as mobile in-app, reinforcing several long-term growth drivers. As AI reshapes programmatic advertising, we believe differentiation will be driven not simply by AI capabilities, but by the strength of the integrated platform on which those capabilities are built and the core platform elements that power them, including proprietary data, exclusive media assets, and open interoperable technology. Those are areas where Nexxen has built a durable competitive advantage through both our differentiated products and integrated end-to-end platform strategy, enabling us to innovate across the programmatic value chain. While many view AI as mainly efficiency tool, we are using AI primarily to drive growth by delivering stronger outcomes and expanding the benefits customers can realize from our platform.

We strongly believe that nexAI can represent a meaningful long-term strategic growth engine for Nexxen, not just a productivity enhancer. Over the last several quarters, we have made significant strides in our enterprise go-to-market execution while enhancing our DSPs' full-funnel performance, usability, and integration with nexAI. The investments we have made are helping us attract enterprise customers with large, more recurring budgets and fueling deeper platform-wide engagement. In Q2, we announced our new DSP UI and enhanced nexAI DSP assistance, both of which are seeing growing usage across our enterprise customer base while improving performance and efficiency. Customers are also benefiting from our DSP's tighter integration with Nexxen Discovery, our proprietary audience insights and segmentation solution. This deeper integration is helping customers identify and activate new audiences using differentiated insights to expand, reach, and drive stronger outcomes.

We also significantly enhance our first-party data onboarding capabilities, enabling advertisers to move audiences from uploads to activation within 24 hours. Alongside our enhanced unified identity graph, these innovations simplify activation, strengthen intelligence, improve effectiveness, and accelerate campaign execution. Built upon our DSP's direct integration with Nexxen Discovery, our proprietary data assets, and our SSP premium media supply, these enhancements are strengthening an already differentiated enterprise value proposition. They are delivering even stronger results and driving customer adoption across more of our end-to-end solutions. For example, after initially onboarding as a DSP customer, Toyota expanded to leverage our data capabilities, Nexxen Discovery, and our media supply, generating approximately 2.7 times the return on ad spend and a 62% reduction in cost per vehicle sold. Supported by growing adoption and innovation, enterprise spend increased by over 25% year-over-year in Q2, and our pipeline remains strong.

Additionally, the number of advertisers activated through enterprise customers increased from less than 400 in Q2 2025 to over 750 in Q2 2026, with each leveraging more than one solution across our platform. Our CTV momentum continued in Q2 as we deliver CTV revenue growth of 33% year-over-year, with year-over-year momentum carrying into Q3. Growth was broad-based as customers continued to increase spend across our integrated CTV technology solutions, exclusive TV data assets, and premium media. As enterprise customers continue scaling spend and new publishers on board, we believe we are well positioned to extend our CTV revenue footprint over the long term. Momentum behind Nexxen TV Home Screen, our industry-first programmatic smart TV home screen ad activation solution, also continues to build.

We expect Nexxen TV Home Screen to begin contributing more meaningfully to revenues in Q4, with contribution ramping throughout 2027, supported by a strong pipeline across demand and OEM partners. Looking ahead, we are also continuing to expand our performance-based CTV capabilities, which we believe can further support our long-term CTV revenue growth opportunity. Beyond CTV, we are also continuing to benefit from execution against our mobile in-app strategy, which helped drive significant year-over-year mobile revenue growth in Q2, with year-over-year momentum continuing into Q3. Our SDK integration with Unity and others have strengthened our position in this AI-resilient channel, expanding monetization opportunities across our platform. We continue to believe mobile in-app will remain a durable long-term growth driver. Beyond improving our platform today, we are also positioning Nexxen for the next evolution of programmatic advertising, where AI agents increasingly help advertisers and agencies plan and execute campaigns.

We believe nexAI represents a core differentiator built on the advantages of our end-to-end platform, proprietary data, premium media assets, and audience intelligence. Today, nexAI is already helping drive stronger customer outcomes, accelerating adoption, and beginning to contribute to revenue growth, and we believe its value will continue to expand over time. Our initial focus with nexAI has been on expanding its in-platform agentic capabilities across the campaign lifecycle. We already have agents assisting customers with reporting, audience research, QA, and troubleshooting, and we plan to introduce additional agents supporting media planning, audience creation, optimization, and advanced creative automation soon. As these capabilities continue to mature, we believe they will further support growing enterprise and publishers' engagements. During Q2, we also announced nexAI interoperability, which will enable our AI agents to connect with external AI agents through open standards such as MCP and agent-to-agent interoperability.

This will allow advertisers and agencies to access Nexxen's data, audience intelligence, and activation capabilities directly from the AI tools and environments they already use. We believe interoperability will become more and more important as enterprises build out their own AI ecosystems. Our strategy is to ensure that whether campaigns are run on Nexxen or through our customers' own AI assistants, we remain a trusted source of data intelligence and campaign execution across those workflows, as well as an integral part of our partners' AI infrastructure. Additionally, we are continuing to expand our dedicated AI teams to increase our focus on accelerating product innovation. Today, AI supports approximately 95% of our software development efforts, enabling our teams to deliver new capabilities faster while enhancing efficiency and supporting long-term operating leverage. We expect these benefits to continue scaling into late 2026 and beyond.

In closing, we are continuing to execute against our strategy while investing in the priorities we believe matter most: accelerating enterprise adoption, growing our CTV leadership, deepening our mobile in-app footprint, enhancing our data capabilities, and advancing our AI leadership through expanded nexAI products and solutions. Together, we believe these investments are strengthening our competitive position while creating several durable long-term growth drivers. in H2, we expect to continue executing strongly and to also generate incremental revenues around the U.S. midterm elections, which are expected to represent a strong political advertising cycle. To support our next phase of growth, we have also made important enhancements to our leadership team. Chance Johnson, our former Chief Commercial Officer, has been promoted to President of Nexxen.

Chance will focus on strengthening Nexxen's relationship with strategic clients and partners by better demonstrating how the company's connected, robust, and differentiated full platform capabilities can uniquely position them for success in the market. Kara Puccinelli, formerly our Chief Customer Officer, has assumed the role of Chief Commercial Officer and will continue managing the company's enterprise offering. Finally, Ken Suh, formerly Nexxen's Chief Strategy Officer, has assumed the role of Chief Business Officer, continuing to position the company to capitalize on growth opportunities across its exchange business, particularly within mobile, in-app, and CTV. Chance, Kara, and Ken's leadership role strengthen our commercial organization, unify execution, and position us to accelerate growth across our core drivers, including enterprise, CTV, and mobile. I have the utmost confidence in each of them.