Q & A Highlights

Q: Can you update us on the evaluation of potential transactions and how you are balancing investments in the enterprise business against profitability and liquidity? A: David Kostman (CEO) stated that the company continues to evaluate opportunities to strengthen its balance sheet and will report any specific updates. Regarding investments, he emphasized focusing on growth drivers like CTV, omnichannel, and AI integrations with agencies. The enterprise business is a higher-margin segment with tremendous return opportunities, so Teads plans to continue investing there. In contrast, the legacy Outbrain-related business is being run for profitability and improved operating leverage.

Q: How much of the 30% decline in the direct response and SME business is traffic-related due to AI summaries and Google's shift, and does this hurt the ability to sell omnichannel products? A: David Kostman (CEO) explained that page view declines vary by publisher, generally in the 15% to 25% range, impacting the business. However, he clarified that the focus and growth are now on the higher-margin brand and enterprise segment. The decline does not impact omnichannel sales, as most omnichannel inventory is in in-read placements (after the first or second paragraph), which are not affected by these trends. The launch of Engage OS is also changing how end-of-article inventory is treated.

Q: Can you update us on the traction you are getting with large ad agencies and where you see success in placing products? A: David Kostman (CEO) noted that over 90% of enterprise billings come through major agencies. Investments in the Teads Ad Manager platform are driving increased traction around AI-level integrations for activation and planning. While traction varies by holding company, the platform's unique ability to deliver branding and performance, CTV, online video, measurement, and attributionincluding exclusive home screen inventorypositions Teads well. This confidence supports expectations for growth in the second half of the year and potential acceleration into 2027.

Q: What were the primary drivers behind adjusted EBITDA coming in below the expected range in Q2, and what steps are being taken? A: Jason Kiviat (CFO) attributed the shortfall to a confluence of factors: timing and cutoff of expenses (approximately half the variance) in discretionary areas like T&E and marketing, temporary transitionary costs from migrating cloud platforms, FX fluctuations (particularly the Israeli shekel), elevated bad debts from prior quality initiatives, and continued investments in the enterprise business. He expects costs to step down in Q3 and noted the company is scrutinizing cost structures in lower-profit areas to fund enterprise growth.

Q: What is the outlook for the enterprise business, and what evidence supports the return to growth? A: Jason Kiviat (CFO) highlighted that May and June both showed positive year-over-year growth in advertiser spend from enterprise customers, aligning with the budget plan to return this business to growth. The momentum is expected to continue into Q3, with a forecast for H2 year-over-year growth in ex-TAC from this segment. This is driven by CTV acceleration, omnichannel adoption, and higher margins from the enterprise customer mix.

Q: What are the key drivers of CTV growth, and how significant is this segment to the overall strategy? A: David Kostman (CEO) reported CTV top-line revenue growth of 67% year-over-year in Q2, reaching approximately $40 million, and now representing 13% of total revenue (up from 7% in Q2 2025). Growth is driven by a global home screen leadership position (over 500 million home screens), the rollout of the CED ensemble (full-funnel branding and performance suite), and expanded supply partnerships, including renewed LG partnerships and new integrations with T-Bold ads and Vida Japan.

Q: How is the omnichannel adoption progressing, and what is the target? A: David Kostman (CEO) stated that branding customers utilizing omnichannel campaigns represented 16% of Q2 branding revenue, up from 9% in Q2 2025, and approaching the 18% full-year target. Home screen growth is actively reinforcing broader omnichannel packages, and the company remains focused on higher-margin mid-article placements within its premium publisher base.

Q: What is the strategy for the direct response and SME business amid the secular headwinds? A: David Kostman (CEO) outlined a plan focused on client outcomes, new supply, and operational efficiency. Key initiatives include the launch of Teads Engage Operating System (an AI-powered publisher OS to monetize complete reader sessions), entering new higher-margin programmatic environments (including dialogues with AI players), enhancing the Amplify platform with new formats like vertical video, and reorganizing internal structures with AI tools to reduce costs. The company is actively addressing near-term headwinds while resolving temporary cost pressures.

Q: What is the company's cash position and liquidity profile? A: Jason Kiviat (CFO) reported ending Q2 with $91 million in cash equivalents and investments in marketable securities, plus access to a $40 million revolving credit facility. The company generated $3 million of free cash flow in the quarter and continues to evaluate its cost and capital structure for opportunities to improve its financial profile and strengthen the balance sheet.

Q: Why is the company suspending guidance, and what does this mean for the full-year outlook? A: Jason Kiviat (CFO) explained that given the volatility in the direct response and SME business and as the company executes on strategic initiatives, Teads is suspending guidance, including the previously provided full-year 2026 EBITDA guidance. This decision reflects the uncertainty in the DR/SME segment while the enterprise business shows positive momentum.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .