Outbrain reports a 40% increase in revenue in the third quarter of 2021

Outbrain reports a 40% increase in revenue in the third quarter of 2021 and raises revenue forecasts for the full year. Outbrain's total revenue was $ 250 million, above analysts' forecasts. However the TAC expenses, some of the revenue the company shares with content sites, amount to about $ 180 million.
Outbrain revenue after deducting the money the company shares with content sites (Ex-TAC ​​Gross Profit) rose to $ 68 million compared to $ 48 million in the same quarter last year - an increase of 44%.
Adjusted EBITDA increased by 56% to $ 19.9 million in the third quarter of 2021, compared to $ 12.8 million in the corresponding quarter, due to an increase in revenue. Adjusted EBITDA reflects profit before interest, tax, depreciation, amortization and share-based payments and non-recurring expenses.
The company reported a net loss of about $ 54 million compared to a net profit of about $ 2.5 million in the same quarter in 2020, following expenses of about $ 58 million due to the company's IPO on Wall Street and share-based compensation for employees. The net loss per share was $ 1.13, while economists' forecasts were for earnings of 9 cents per share. Free cash flow increased to approximately $ 31 million, compared to approximately $ 3 million in the corresponding quarter. The company's cash balance as of the end of the third quarter is approximately $ 482 million.
Outbrain was issued in July at a value of about $ 1.1 billion and raised about $ 160 million in the offering. The company later raised $ 200 million through a convertible loan.
The company expects revenue (Ex-TAC ​​gross profit) of $ 76.5-74.5 million in the fourth quarter of 2021. Adjusted EBITDA in the fourth quarter will be $ 23.5-22.5 million according to the company forecast. For the whole of 2021, Outbrain expects revenue (Ex-TAC ​​gross profit) of $ 272-270 million, compared to a previous revenue forecast of $ 270-266 million. Adjusted EBITDA in 2021 will reach $ 88.5-87.5 million, compared to a previous forecast of $ 82.5-80 million.
Outbrain operates in the field of native advertising. That is, advertising that is incorporated into the content naturally, as part of the user experiences. The company has developed an algorithm that analyzes the preferences of different readers, and offers them articles - text or video - that may interest them. This is how it creates traffic (traffic), and extends the time spent by surfers on content sites (due diligence: Outbrain advertising products are integrated into the web pages of Haaretz and TheMarker sites).
David Costman, Co-CEO of Outbrain, said: "The significant growth reflects the continued leadership of our platform and technology in the industry, and healthy market conditions." Yaron Galai, Co-CEO of Outbrain said: "As reflected in our record results. At the same time, we continue to expand long-term investments in data science, innovation and quality."