NIQ Global Intelligence plc 2026 Q2 Earnings Call

Hello, everyone, and welcome to NIQ's second quarter 2026 earnings call. Joining me today are CEO, Jim Peck, and CFO, Mike Burwell. Following Jim's and Mike's prepared remarks, we'll open the line for Q&A with Jim, Mike, and our Chief AI and Product Officer, Troy Treangen. As a reminder, today's remarks will include forward-looking statements regarding our expectations and outlook. Actual results may differ materially from those expressed or implied in these statements. For information about factors that could cause actual results to differ materially, please refer to today's earnings press release and our SEC filings. We undertake no obligation to update any forward-looking statements made on this call except as required by law. During this call, we will also discuss both GAAP and non-GAAP financial measures.

Reconciliations of non-GAAP measures to the most directly comparable GAAP measures are included in our earnings press release, which is available on our investor relations website. A replay of this call will also be available there. Finally, unless otherwise noted, revenue growth rates mentioned on this call are compared with prior year period. With that, I'll turn the call over to Jim.

Thank you, Will. Good afternoon, everyone. Before we begin, I just want to apologize. I have a cold, and so I'm sure my voice is a little bit raspy, and we'll just do the best we can. Q2 marked our fifth consecutive quarter exceeding the top end of our guidance across all key metrics. We accelerated organic constant currency revenue growth to 5.8%, grew adjusted EBITDA nearly 22%, and expanded adjusted EBITDA margin 270 basis points to 23.3%. Adjusted earnings per share came in at $0.27, well above the top end of our range. Levered free cash flow inflected positive at $74.1 million, and we reduced leverage to 3.1 times. That's progression from top to bottom line. We are raising full-year 2026 guidance across the board, reflecting our upside performance and positive outlook. It's been a year since our IPO and several things stand out.

Strong demand for our solutions, our structural advantages, and our strengthening financial profile, including durable growth and retention with 10 consecutive quarters of 5%+ growth in organic constant currency and strong Q2 retention at 105% NDR and 99% GDR. This is a strong core with emerging AI growth opportunities. We are also seeing expanded margins approaching our mid-20s target with a longer-term path into the 30s. Increased profitability, tracking to more than $1 billion of adjusted EBITDA and more than $1 of adjusted EPS this year. Inflecting cash flow in our raised outlook for $245 million-$255 million. Continued deleveraging on track to achieve our sub 3x target. We are delivering results today while reinvesting in competitive differentiation in our future. AI native innovation, consumer panel expansion, technology platform enhancements, and disciplined tuck-in M&A.

As I have described on our recent calls, NIQ sits on one of the world's most defensible data assets in our view. Decades of permission, harmonized data, and vertical specific context layer across consumer, retail, and market intelligence. We believe that combination is impractical, if not impossible, to replicate. Last quarter, I outlined how NIQ intelligence drives client decision-making and how AI adoption is creating additional growth opportunities. Today, it is about progress we are making on our innovation roadmap. Optiq Bridge and ConnectAI deliver NIQ intelligence, the ground truth layer that enterprise AI runs on, into clients' decision flows. Whether through our tools and LLMs or their own, we are moving up the AI value chain from informing decisions to executing them. The balance of my remarks today will cover three areas. First, how a broadly healthy client demand environment is driving our core growth.

Second, our progress laying the foundation for additional AI-powered growth. Third, our progress expanding profitability by embedding AI across our organization. On point one, clients are buying more NIQ. Looking at our regions, America's OCC growth led the way, growing 8.3%. EMEA OCC growth accelerated to 4.9%. In both, we saw new wins and strong upselling of our intelligence solutions. In the U.S., a leading coffee manufacturer consolidated onto NIQ from two incumbent providers at once. They told us why. Our AI capabilities and product roadmap, as well as the seamless unified Full View experience across every data set. In EMEA, leading Swiss and U.K. grocers paired measurement with consumer panel to get the Full View. A major U.K. grocer came back to us from a competitor on that same value proposition, choosing our new product granularity and e-commerce expertise. APAC returned to 1.9% OCC growth.

Here we saw strong activation, cross-sell, and early improvement in China, Japan, and Korea from the retailer relationships and partnerships we outlined last quarter. In Vietnam, we won back a global CPG manufacturer from a competitor mid-pilot by designing a tailored measurement plus field solution in weeks, not quarters. That is the pattern across the region. We start with granular measurement data, then expand into analytics to power go-forward decisions. We also beat two major global incumbents to win the largest going global contract in that market to date, helping a major automaker expand overseas. We also recently acquired YiMian, an e-commerce data and insights business in China and Southeast Asia. It strengthens our digital commerce capabilities, accelerates the Full View, and extends NIQ into adjacent opportunities like agentic commerce in these markets. We also opened new categories and buyer types that were not NIQ's a couple of years ago.

A global ad tech platform licensed our purchase data to power privacy-safe campaign planning at scale, selecting NIQ over a direct competitor and traditional panel providers. Unlimitail, a leading European retail media platform, chose NIQ to measure business outcomes across its multi-retailer, multi-country network, our first client of its kind. Ad tech and retail media are newer adjacent demand pools prove our data travels well beyond CPG. Growth was not only strong by region but by product. Q2 intelligence growth re-accelerated to 5.7% on new wins and strong upselling motion, particularly in e-commerce and consumer panel. Annualized intelligence subscription revenue, our version of ARR, grew 5.8% in Q2 and eclipsed the $3 billion mark. Activation OCC growth accelerated for a second straight quarter to 6.1%, signaling our commercial and go-to-market efforts are working. A few proof points. In North America, a global convenience retailer expanded its renewal into SKU level analytics, price and promotion, and category management across more than a dozen countries, adding over $5 million of incremental value.

In the Middle East, a regional manufacturer layered shopper and consumption analytics onto its core measurement subscription, and we took that work back from a competitor across three markets. A global personal care leader extended its worldwide agreement, adding analytics and servicing on top of core measurement. Within activation, demand remained strong for our analytics and innovation-based solutions. Year to date, these solutions were nearly 60% of activation revenue and grew low double digits. Looking deeper, our AI native solutions, BASES AI and NIQ Activate, drove meaningful share of that growth. This growth isn't a one-off.

It's driven by newer AI native offerings that feed directly from our proprietary core data, and that data is growing fast. We added 4.3 trillion consumer transaction data records per week in Q2, 23% faster than last year. This spans 260 million product items with 10.5 billion product attributes in our 160 petabyte data engine, all rooted in NIQ's vertical specific expertise. That granularity benefits our entire portfolio. In fact, more than 90% of our revenues derive from this proprietary data, and our capabilities are increasingly at the fore as client AI adoption accelerates. Let me share some proof points from our first wave. Data point consumption on our platform grew 25% year-over-year. Roughly 51% of our top 100 clients now use at least one of our AI native solutions, and the number of clients using them has grown 64% year to date.

This is also translating into financial results. Revenue from AI native solutions grew by 34% in Q2, and more than 80% of AI native revenue comes from recurring clients, a good sign of stickiness and long-term value. Clients are at the center of everything we do, and we're focused on doing more. In June, our annual flagship client event, C360, drew more than 600 CPG tech and durables and retailer decision-makers from across the globe. Their message was clear: help them cut through the fragmented data and disconnected systems and decide faster in a fast-changing consumer landscape and help them capitalize on their AI strategies. Which brings me to my second point, our progress laying the foundation for additional AI-powered, profitable growth. Last quarter, I described our three-pillar strategy to fuel the future of trusted AI.

In Q2 and year to date, we accelerated innovation to deliver AI native value for clients and our business. In our first pillar, building NIQ AI applications for smarter outcomes, at C360, we announced Optiq Suite, our insight assistants, and NIQ Cadence, our GenAI native marketing effectiveness platform. Aligned to our second pillar, NIQ IP that fuels AI, we announced the launch of Optiq Bridge and Connect AI Suite, which embed decision-grade NIQ intelligence directly into market leading applications, AI-powered workflows, and the enterprise. We have also progressed MCP access and integrations with all of the leading AI platforms so clients can reach secure governed NIQ intelligence directly through these platforms. These launches let us meet clients exactly where they are, whether they are an AI buyer of NIQ solutions directly or through an LLM or an ad builder embedding NIQ within their own AI environment.

Importantly, every solution has permission service layers built in. Clients can embed NIQ intelligence into their AI use cases while keeping the NIQ decoder ring, the IP, methodologies, and models that power our differentiated analytics. Last week, we announced the first charter clients for Connect AI. These include Purina, a global personal hygiene company, a leading beauty company, and two global beverage companies. Each is working with a dedicated NIQ engineering and data science team to build AI-ready intelligence infrastructure and decision workflows inside their own environment. Early client demand has been strong. Our pipeline has grown quickly to 49 live opportunities, including our charter clients and active discussions with many of our top clients. It is also broad-based across FMCG and tech and durables, as well as with clients large and small. We plan to add more charter clients, including retailers, in the next phase.