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Nexxen International Ltd. (NEXN)
NASDAQ:NEXN
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Nexxen International
(NASDAQ:NEXN)
Rating:75Outperform
Price Target:―
Positive Factors
Earnings
Nexxen reported solid Q1 results, with contribution ex-TAC and adj. EBITDA both coming in ahead of expectations.
Growth Strategy
Nexxen continues to make select investments to drive future growth, including expanding its salesforce across both the US and Europe and developing new AI solutions for advertisers.
Valuation
Despite the recent strong stock performance, with shares up ~50% since mid-March, NEXN is still trading at undemanding valuations of ~1.5x FY25 revenue and ~4.5x adj. EBITDA, and execution against these targets should drive further multiple expansion.
Negative Factors
Advertising Market
Some softness in the ad market as a few advertisers delayed campaigns to the second half of the year.
Integration Challenges
Integration challenges and macro headwinds led to a difficult 2023 for Nexxen.
Nexxen International (NEXN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$655.43M
Dividend YieldN/A
Average Volume (3M)571.92K
Price to Earnings (P/E)15.5
Beta (1Y)1.07
Revenue Growth10.36%
EPS GrowthN/A
CountryUS
Employees895
SectorCommunication Services
Sector Strength84
IndustryTraditional Media
Share Statistics
EPS (TTM)0.16
Shares Outstanding63,819,817
10 Day Avg. Volume1,049,374
30 Day Avg. Volume571,916
Financial Highlights & Ratios
PEG Ratio-0.89
Price to Book (P/B)1.57
Price to Sales (P/S)0.00
P/FCF Ratio12.30
Enterprise Value/Market Cap1.33
Enterprise Value/Revenue0.63
Enterprise Value/Gross Profit3.20
Enterprise Value/Ebitda2.37
Forecast
1Y Price Target
$12.00Price Target Upside36.67% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
Nexxen International Business Overview & Revenue Model
Company DescriptionTremor International Ltd offers advertising technologies with operations in more than 60 countries. It offers data-focused marketing solutions that drive brand insight in mobile, leveraging video, native, and display to reach the users for every app, service, and brand. The group's business divisions include Tremor Video, Unruly, RhythmOne, and Taptica. Geographically, it derives a majority of revenue from America and also has a presence in Asia, Europe, Israel, China, and other countries.
How the Company Makes MoneyNexxen International generates revenue through a multifaceted business model. The primary revenue streams include subscription fees from its cloud-based software platforms and licensing fees for its enterprise applications. Additionally, the company earns significant income from consulting services, where it provides digital transformation and cybersecurity expertise to its clients. Strategic partnerships with technology firms and ongoing client contracts also contribute to its financial success. Nexxen's focus on continuous innovation and customer-centric solutions helps maintain a steady flow of revenue and positions it competitively in the technology market.
Nexxen International Earnings Call Summary
Earnings Call Date:May 14, 2025
(Q1-2025)
| % Change Since: -28.73%|
Next Earnings Date:Aug 14, 2025
Earnings Call Sentiment Positive
Nexxen's earnings call highlighted strong growth in CTV revenue and programmatic revenue, significant advancements in AI capabilities with nexAI, and an aggressive share repurchase strategy, signaling a positive outlook despite some challenges in non-programmatic business lines and economic uncertainties. The sentiment is cautiously optimistic, with a focus on execution and resilience in the face of potential economic challenges.Q1-2025 Updates
Positive Updates
Record Contribution ex-TAC and Programmatic Revenue
Nexxen achieved a Q1 record contribution ex-TAC of $75 million, representing an 8% year-over-year growth. Programmatic revenue also reached a Q1 record of $71.8 million, a 10% increase compared to Q1 2024.
Strong CTV Revenue Growth
CTV revenue hit a record $26.4 million in Q1, reflecting 40% year-over-year growth, and accounted for 37% of programmatic revenue, up from 29% in Q1 2024.
Launch of nexAI
The launch of nexAI, a suite of generative AI and machine learning powered tools, promises enhanced advertising capabilities, including faster insights and smarter planning, which have already led to meaningful productivity gains for clients.
Share Repurchase Program
Nexxen completed a $50 million share repurchase program and launched a new $50 million program, reflecting confidence in the company's valuation and future prospects.
Improved Adjusted EBITDA Margin
Adjusted EBITDA reached $23.1 million, a 95% increase from Q1 2024, with an adjusted EBITDA margin of 31% as a percentage of contribution ex-TAC, up from 17% in Q1 2024.
Negative Updates
Decline in Non-Programmatic Business
There was an approximately $900,000 year-over-year decrease in contribution ex-TAC from non-programmatic business lines, and a 22% decrease in contribution ex-TAC from display.
Reduced Net Cash from Operating Activities
Net cash from operating activities decreased to $19.3 million compared to $37.7 million in Q1 2024.
Economic Uncertainty and Softness in Q2
The advertising market experienced some softness entering Q2 due to economic uncertainty and evolving U.S. policies, impacting market sentiment and advertising demand.
Company Guidance
During Nexxen's first-quarter earnings call for fiscal year 2025, the company reaffirmed its full-year guidance, projecting a contribution ex-TAC of approximately $380 million, with programmatic revenue expected to comprise around 90% of total revenue. The anticipated adjusted EBITDA for the year stands at about $125 million. In the first quarter, Nexxen achieved a record contribution ex-TAC of $75 million, marking an 8% year-over-year growth, and programmatic revenue reached $71.8 million, reflecting a 10% increase compared to Q1 2024. CTV revenue grew by 40% year-over-year to reach $26.4 million, representing 37% of programmatic revenue. Adjusted EBITDA for the quarter was $23.1 million, a significant 95% increase from the previous year, resulting in an adjusted EBITDA margin of 31%. The company experienced growth across several verticals, including education, finance, health, and automotive, while noting a $900,000 year-over-year decrease in contribution ex-TAC from non-programmatic business lines. Nexxen also reported non-IFRS diluted earnings per share of $0.16, compared to $0.02 in Q1 2024, and repurchased approximately 3.7 million ordinary shares during the quarter. Despite some market softness in Q2, Nexxen remains confident in its full-year guidance, supported by trends such as spend consolidation, industry recognition, and CTV revenue growth.Nexxen International Financial Statement Overview
Summary
Nexxen International faces financial challenges with declining revenues and a negative net profit margin, but maintains a strong balance sheet with low leverage. Operational inefficiencies impact profitability, and cash flow management needs improvement for sustaining operations.Income Statement
Nexxen International's income statement reveals a mixed performance with declining revenue over the past few years. The gross profit margin remains healthy at 81.3% in 2023. However, the company is currently facing profitability challenges, evidenced by a negative net profit margin of -6.5% due to a net loss. The EBIT margin has also turned negative at -5.1%, indicating operational inefficiencies. The significant drop in revenue from 2021 to 2022 highlights growth concerns.65
Positive
Balance Sheet
The balance sheet of Nexxen International shows a strong equity base with a debt-to-equity ratio of 0.25, indicating low leverage and financial stability. The equity ratio stands at 60.1%, showcasing a robust capital structure. However, there is a slight decline in stockholders' equity over the years. Despite this, the company's return on equity (ROE) has decreased to -3.95% in 2023, reflecting recent profitability issues.78
Positive
Cash Flow
Nexxen's cash flow statement demonstrates resilience with a positive operating cash flow to net income ratio of -2.83, despite the net loss. The free cash flow has decreased from previous years, showing a contraction in liquidity. The free cash flow to net income ratio is a positive highlight, but the overall cash flow trends indicate a need for better cash management strategies.72
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 365.48M | 331.99M | 335.25M | 341.94M | 211.92M |
| Gross Profit | 304.46M | 269.72M | 274.50M | 270.29M | 152.11M |
| EBITDA | 106.15M | 69.50M | 89.74M | 115.20M | 39.61M |
| Net Income | 35.44M | -21.49M | 22.74M | 73.22M | 2.14M |
Balance Sheet | |||||
| Total Assets | 840.51M | 904.80M | 956.16M | 802.74M | 535.01M |
| Cash, Cash Equivalents and Short-Term Investments | 187.07M | 234.31M | 217.50M | 367.72M | 97.46M |
| Total Debt | 37.20M | 136.13M | 127.88M | 14.99M | 21.21M |
| Total Liabilities | 309.66M | 361.25M | 404.55M | 230.36M | 205.99M |
| Stockholders Equity | 530.85M | 543.55M | 551.62M | 572.38M | 329.01M |
Cash Flow | |||||
| Free Cash Flow | 127.31M | 41.12M | 67.83M | 161.74M | 29.71M |
| Operating Cash Flow | 150.84M | 60.74M | 83.01M | 170.09M | 35.16M |
| Investing Cash Flow | -21.21M | -16.96M | -232.99M | -16.49M | 4.92M |
| Financing Cash Flow | -174.74M | -26.55M | 3.06M | 116.86M | -22.37M |
Nexxen International Technical Analysis
Negative
8.78
Price Trends
10.68
Negative
9.56
Positive
9.29
Positive
Market Momentum
-0.11
Negative
45.65
Neutral
56.47
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NEXN, the sentiment is Negative. The current price of 8.78 is below the 20-day moving average (MA) of 10.22, below the 50-day MA of 10.68, and below the 200-day MA of 9.29, indicating a neutral trend. The MACD of -0.11 indicates Negative momentum. The RSI at 45.65 is Neutral, neither overbought nor oversold. The STOCH value of 56.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NEXN.
Nexxen International Risk Analysis
Nexxen International disclosed 1 risk factors in its most recent earnings report. Nexxen International reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Nexxen International Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $655.43M | 15.52 | 8.57% | ― | 10.36% | ― | |
62 Neutral | $1.02B | 318.01 | 1.62% | 1.13% | 4.87% | ― | |
61 Neutral | $40.69B | -0.79 | -11.97% | 3.78% | 2.11% | -69.16% | |
60 Neutral | $737.76M | 13.23 | 9.10% | 7.00% | -2.69% | 61.73% | |
54 Neutral | $451.72M | ― | -4.73% | 1.27% | 42.01% | -100.56% | |
48 Neutral | $615.93M | ― | 4.92% | ― | -17.54% | 66.05% | |
45 Neutral | $502.68M | ― | -42.89% | ― | -13.81% | -433.86% |
* Communication Services Sector Average
Performance Comparison
NEXN
Nexxen International
10.17
4.24
71.50%
CCO
Clear Channel Outdoor
1.18
-0.38
-24.36%
DLX
Deluxe
16.49
-3.73
-18.45%
NCMI
National Cinemedia
4.71
0.21
4.67%
EEX
Emerald Expositions Events
5.12
-0.12
-2.29%
ADV
Advantage Solutions
1.55
-1.77
-53.31%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.