Outbrain Reports 32% Revenue Growth to $286.4 Million, Net Loss Increases to $54.8 Million

Outbrain Inc. reported significant financial changes in its latest 10-Q filing for the quarter ending March 31, 2025, following its acquisition of Teads. The company generated revenue of $286.4 million, a 32% increase from $217.0 million in the same period last year. This growth was primarily driven by the addition of $80.3 million in revenue from Teads, although it faced a $10.9 million decline in revenue from its legacy operations. The gross profit for the quarter was $82.7 million, reflecting a gross margin of 28.9%, up from 19.2% in the prior year, largely due to the higher margin profile of the acquired business.

Despite the revenue growth, Outbrain reported a net loss of $54.8 million, compared to a loss of $5.0 million in the previous year. The increase in losses was attributed to higher operating expenses, which surged to $127.1 million from $48.2 million, driven by acquisition-related costs, impairment charges, and restructuring expenses. The company recorded $15.6 million in impairment charges related to the discontinuation of its video product offering and $7.3 million in restructuring costs associated with a workforce reduction of approximately 15% to streamline operations post-acquisition.

Operationally, Outbrain's total assets increased significantly to $1.688 billion as of March 31, 2025, up from $549.2 million at the end of 2024, primarily due to the acquisition of Teads. The company also reported a substantial increase in accounts receivable, which rose to $328.4 million from $149.2 million, indicating a growing customer base and increased advertising activity. The total employee headcount was reduced as part of the restructuring plan, which is expected to yield annual cost savings of approximately $40 million starting in 2026.

Looking ahead, Outbrain's management expressed optimism about the integration of Teads and the potential for enhanced operational efficiencies and revenue synergies. However, they acknowledged the ongoing geopolitical tensions, particularly in Israel, and macroeconomic uncertainties that could impact advertising demand. The company is focused on leveraging its expanded capabilities to drive outcomes for advertisers across various media environments, including connected TV and mobile applications, while continuing to invest in technology and AI to enhance user engagement and advertising effectiveness.