NEW YORK, Aug. 17, 2021 (GLOBE NEWSWIRE) — Outbrain Inc. (Nasdaq: “OB”), a leading recommendation platform for the open web, announced today financial results for the quarter ended June 30, 2021.
“Following our IPO in July 2021, we are excited to report our first quarterly earnings as a public company,” said Yaron Galai, Outbrain’s Co-founder and Co-CEO. “The IPO is an exciting milestone and the start of our journey as a public company. I would like to thank our team and business partners for helping us achieve such a monumental milestone for the Company. I am excited for this next chapter and the opportunity to continue leading the growth of the open web as we remain focused on our mission of delivering products that delight users and generate long term value for our media owner and advertiser partners.”
Second Quarter 2021 Key Financial Metrics:
| Three Months Ended | |||
| (in millions USD) | June 30, 2021 | June 30, 2020 | % Change |
| Revenue | $247.2 | $157.9 | 57% |
| Gross profit | 59.1 | 32.1 | 84% |
| Net income (loss) | 15.2 | (2.6) | NM |
| Non-GAAP Financial Data | |||
| Ex-TAC Gross profit | 66.8 | 39.7 | 68% |
| Adjusted EBITDA | 24.6 | 5.2 | 373% |
Second Quarter 2021 Highlights
- Revenues increased 57% year over year to $247.2 million, compared to $157.9 million. Revenue grew approximately 50%, or $79 million, from net revenue retention on existing media partners1 and approximately 7%, or $12 million, from new media partners.
- Gross profit increased 84% year over year to $59.1 million, compared to $32.1 million.
- Ex-TAC Gross profit increased 68% year over year to $66.8 million, compared to $39.7 million, primarily driven by revenue growth as well as by favorable revenue mix from higher margin media partners and improved performance on media owners with guarantee arrangements.
- Net income increased to $15.2 million, compared to a net loss of $2.6 million year over year.
- Adjusted EBITDA increased over 4x to $24.6 million compared to $5.2 million year-over-year primarily driven by the increase in Ex-TAC Gross profit, partially offset by operating expense growth as we continue to invest in growth.
- Generated $16.5 million of free cash flow; cash and cash equivalents were $111.3 million as of June 30, 2021.
Outbrain completed its IPO in July 2021 raising $160 million in gross proceeds. Also in July 2021, it completed the sale of $200 million aggregate principal amount of senior subordinated secured notes due July 1, 2026 in a private placement, which were subsequently exchanged, upon completion of the IPO, for the Company’s 2.95% Convertible Senior Notes due 2026. Following these transactions, net of estimated expenses, our pro forma balance of cash and cash equivalents as of June 30, 2021 was approximately $450 million.
“We are very pleased with our record top line, strong growth rates and continued operating leverage in the quarter,” stated David Kostman, Co-CEO of Outbrain. “This quarter was another clear demonstration of our leadership in technology and product which continue to drive value for our media partners and advertisers, resulting in a net revenue retention rate of 150%. The premium nature of our media partners and the overall superior quality of our platform continue to be key differentiators and support our strong momentum in the marketplace. We are encouraged by the current trends we see in our business as we continue to strengthen our leadership in the open web.”
Third Quarter and Full Year 2021 Guidance
The following forward-looking statements reflect our expectations:
For the third quarter ending September 30, 2021:
- Ex-TAC Gross profit of $64.5 million to $66.0 million
- Adjusted EBITDA of $15.5 million to $16.5 million
For the full year ending December 31, 2021:
- Ex-TAC Gross profit of $266.0 million to $270.0 million
- Adjusted EBITDA of $80.5 million to $82.5 million
1 We calculate media partner net revenue retention at the end of each quarter by starting with revenue generated on media partners’ properties in the same period in the prior year, “Prior Period Retention Revenue. ”We then calculate the revenue generated on these same media partners’ properties in the current period, “Current Period Retention Revenue.” Current Period Retention Revenue reflects any expansions within the media partner relationships, such as any additional placements or properties on which we extend our recommendations, as well as contraction or attrition. Residual revenue from terminated media partner relationships may also be included in Current Period Retention Revenue. Our media partner net revenue retention in a quarter equals the Current Period Retention Revenue divided by the Prior Period Retention Revenue. These amounts exclude certain revenue adjustments and revenue recognized on a net basis. New media partners are defined as those relationships in which revenue was not generated in the prior period, except for limited instances where residual revenue was generated on a media partner’s properties.
About Outbrain
Outbrain is a leading recommendation platform for the open web. Our technology enables one-third of the world’s online consumers to discover new things through recommendation feeds on their favorite media and connects advertisers to these audiences to grow their business. Outbrain partners with publishers and marketers in more than 55 countries worldwide and is headquartered in New York City, with offices in 18 cities worldwide.
