Teads Holding Co. — Third Quarter 2026 Earnings Summary

Financial Performance

• Revenue for the three months ended September 30, 2026, was $235.1 million, a 26% decrease year-over-year from $318.8 million; for the nine months ended September 30, 2026, revenue was $785.6 million, a 17% decrease from $948.2 million.
• Gross profit for the quarter was $60.9 million, down 42% year-over-year from $105.7 million, resulting in a gross margin of 25.9% compared to 33.2% in the prior year period.
• Ex-TAC gross profit for the quarter was $93.5 million, a 28% decrease year-over-year from $130.5 million, with an Ex-TAC gross margin of 39.8% versus 40.9% in the prior year.
• Net loss for the quarter was $325.5 million, compared to $19.7 million in the prior year period; the nine-month net loss was $406.7 million versus $88.8 million in the prior year.
• The current quarter's net loss included a $272.4 million non-cash goodwill impairment charge and a $6.4 million non-cash impairment of a publisher commercial agreement asset.
• Adjusted net loss for the quarter was $46.7 million, compared to $13.6 million in the prior year period; for the nine months, adjusted net loss was $123.0 million versus $38.5 million.
• Adjusted EBITDA for the quarter was $(8.1) million, a 142% decrease from $19.2 million in the prior year; for the nine months, it was $(0.4) million versus $56.8 million.
• Net cash used in operating activities was $27.9 million for the quarter, compared to $23.7 million in the prior year; for the nine months, net cash used was $53.6 million versus $0.3 million provided.
• Adjusted free cash flow for the quarter was $(33.1) million, compared to $(24.0) million in the prior year; for the nine months, it was $(71.0) million versus $3.4 million.
• Free cash flow before interest payments was $(1.4) million for the quarter, compared to $3.1 million in the prior year; for the nine months, it was $(7.2) million versus $18.1 million.
• Cash and cash equivalents were $90.3 million as of September 30, 2026.
• Total debt obligations were $657.2 million, including $608.6 million carrying value of 10.000% senior secured notes due 2030, $30.9 million under an accounts receivable financing facility, $15.0 million under a revolving credit facility, and $2.8 million under a short-term overdraft facility.

Guidance and Future Outlook

• The company has suspended all guidance, including full-year 2026 Adjusted EBITDA guidance, and is not providing forward guidance at this time.
• Management noted seeing some improvement in trends in the early part of the fourth quarter.
• The company is taking decisive actions to improve its revenue trajectory, optimize its cost structure, and strengthen its balance sheet.

Business Segments and Product Lines

• Connected TV (CTV) revenue grew 37% year-over-year in the third quarter, representing 12% of total Q3 revenue and approximately 20% of the Enterprise business.
• Year-to-date CTV revenue reached nearly $100 million.
• Omnichannel adoption increased, with branding customers utilizing omnichannel campaigns representing 15% of branding revenue, up from 10% in Q3 2025.
• Teads Ad Manager launched a new evolution leveraging agentic workflows through Model Context Protocols (MCP) to bridge upper-funnel CTV branding with lower-funnel conversions.
• The global Whale TV partnership was expanded to provide Teads Ad Manager buyers native HomeScreen access across 100+ countries.
• Teads was selected as the launch DSP for Telly's persistent, 100% viewable HomeScreen ads, integrated programmatically via Magnite.
• The company renewed Joint Business Partnerships with brands including BMW Group, Lenovo, Shell, and Kia.

Market and Competitive Landscape

• The company is navigating significant headwinds impacting the open internet sector.
• Teads maintains a leading position on the CTV HomeScreen, described as the "front door to the living-room experience."
• The company is focused on driving broader adoption of its Enterprise omnichannel offerings.

Risks and Challenges

• Significant headwinds in the open internet market are impacting revenue and growth.
• The company faces risks related to the integration of Legacy Teads and managing the combined business effectively.
• Risks include the volatility of the market price of common stock and potential delisting from Nasdaq.
• The company must raise additional financing to fund operations or service existing indebtedness and comply with financing covenants.
• Potential impacts from artificial intelligence regulation, geopolitical conflicts, and economic downturns on advertising demand are noted.
• The company faces risks regarding the integrity of its platform against invalid traffic and the success of its recommendation engine.

Management Commentary and Tone

• CEO David Kostman stated the company is using the current moment to focus on driving broader adoption of Enterprise omnichannel offerings.
• Management expressed confidence in the leading position on the CTV HomeScreen while acknowledging the need to address open internet headwinds.
• The tone reflects a focus on cost optimization and balance sheet strengthening in response to financial challenges.

Other Key Points

• The company recorded a $272.4 million non-cash goodwill impairment charge in the third quarter of 2026.
• The company acquired Legacy Teads, a private limited liability company incorporated in Luxembourg, which contributed to the debt structure and integration costs.
• The company has approximately 1,700 employees across 30+ countries and partners with over 10,000 publishers and 20,000 advertisers.
• Net unfavorable foreign currency effects of approximately $1.5 million impacted revenue and Adjusted EBITDA results.
• The company suspended guidance following the significant financial results and impairment charges.