Needham has adjusted its price target for Nexxen (NEXN, Financial), increasing it from $12 to $14 while maintaining a Buy rating on the stock. This decision reflects Nexxen's impressive performance in the first quarter, notably highlighted by significant growth in connected TV (CTV) revenue and a broader adoption of its end-to-end solutions. The company's strong operating leverage has also contributed to this positive outlook, according to an analyst report shared with investors.
NEXN Key Business Developments
Release Date: March 05, 2025
- Contribution ex-TAC: $105.2 million in Q4, an all-time quarterly record, with 16% year-over-year growth.
- Programmatic Revenue: $98.7 million in Q4, reflecting 15% growth from Q4 2023.
- CTV Revenue: $37 million in Q4, representing 86% growth from Q4 2023.
- Adjusted EBITDA: $44.3 million in Q4, a 38% increase from Q4 2023, with a margin of 42%.
- Net Cash from Operating Activities: $52.3 million in Q4, compared to $43.6 million in Q4 2023.
- Cash and Cash Equivalents: $187.1 million as of December 31, 2024.
- Non-IFRS Diluted Earnings per Share: $0.48 in Q4 2024, compared to $0.20 in Q4 2023.
- Share Repurchase: Approximately 4.5 million ordinary shares repurchased in Q4, reflecting an investment of $20.1 million.
- 2025 Outlook: Expected contribution ex-TAC of approximately $380 million and adjusted EBITDA of approximately $125 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Nexxen International Ltd (NEXN, Financial) achieved record quarterly and annual Contribution ex-TAC for programmatic revenues and CTV revenue results in 2024.
- The successful integration of Amobee in 2023 enhanced Nexxen's enterprise DSP capabilities, data capabilities, and CTV and omnichannel offerings.
- Nexxen's end-to-end platform and robust DSP and SSP technologies provide a competitive edge in the CTV market.
- The company plans to deepen its AI capabilities in 2025, which is expected to enhance platform usability and improve targeting precision.
- Nexxen's CTV revenue grew by 86% year-over-year in Q4 2024, driven by strong sales execution and improved macroeconomic conditions.
Negative Points
- Nexxen experienced a year-over-year decrease in mobile video revenue and within its travel and education verticals.
- The macroeconomic environment remains fragile, which could impact future performance.
- Despite strong growth, the data product segment is still relatively small in terms of revenue contribution.
- The company anticipates an increase in stock-based compensation expenses in 2025 due to a higher share price.
- Nexxen's transition from IFRS to US GAAP accounting is still under consideration, which may involve complexities and adjustments.
