NEW YORK – Outbrain Inc. (NASDAQ:OB), a leader in online recommendation platforms trading near its 52-week high of $5.50, has announced its intention to acquire Teads, a global media platform, marking a significant expansion in its operations. Outbrain entered into a Share Purchase Agreement on August 1, 2024, to acquire all issued and outstanding equity interests of Teads from Altice Teads S.A.
The acquisition is subject to customary closing conditions, including regulatory approvals. While the financial terms of the deal were not disclosed in the filing, Outbrain has made it clear that the acquisition is a strategic move to enhance its product offerings and drive growth.
Outbrain's CEO, David Kostman, signed the filing on Friday, signaling the company's commitment to the acquisition. The filing also contains forward-looking statements about the expected benefits of the transaction, cautioning that these are subject to risks and uncertainties.
In other recent news, Outbrain's third-quarter results for 2024 aligned with expectations, with the company's adjusted EBITDA notably better than anticipated. The company's profitability trends were more promising than expected, which has been attributed to successful efforts in optimizing the company's cost structure. However, the forecast for fourth-quarter ex-TAC (traffic acquisition costs) was weaker than initially expected.
Citi has adjusted its outlook on Outbrain, reducing the price target to $5.30 from the previous $5.50 but maintaining a Neutral rating on the stock. The firm's adjustment follows Outbrain's third-quarter results.
In terms of future expectations, Outbrain anticipates Q3 ex-TAC gross profit to range between $58 million to $62 million and adjusted EBITDA to fall between $8 million to $10.5 million. The company also maintains its full-year 2024 guidance and increases adjusted EBITDA guidance to $31.5 million to $36 million.
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