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Outbrain Announces Second Quarter 2022 Results

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Outbrain Inc. (Nasdaq: OB) reported second-quarter 2022 results showing a 2% revenue increase to $250.9 million despite macroeconomic challenges. However, gross profit fell 18% to $48.7 million, with a significant net loss of $10.3 million.

The company's focus is on cost-saving measures, projecting an additional $12 million in savings for the second half of 2022. Cash and cash equivalents stood at $391.4 million as of June 30, 2022. Outbrain remains optimistic about future growth, citing increased market share and ongoing investments in technology.

Positive
  • Revenue grew 2% year-over-year to $250.9 million.
  • New media partners contributed approximately $25.8 million to revenue growth.
  • Projected cost savings of $12 million for the second half of 2022.
Negative
  • Gross profit decreased by 18% to $48.7 million.
  • Net loss of $10.3 million compared to a net income of $15.2 million in the prior year.
  • Free cash flow was negative, at $8.9 million.

NEW YORK, Aug. 11, 2022 (GLOBE NEWSWIRE) -- Outbrain Inc. (Nasdaq: OB), a leading recommendation platform for the open web, announced today financial results for the quarter ended June 30, 2022.

“We are pleased to report that despite worsening macroeconomic headwinds, we delivered on the guidance we provided for the second quarter of 2022,” said David Kostman, Outbrain's Co-CEO. “We continued to gain significant market share globally with wins of top premium publishers throughout 2022. We expect that this increased market share, together with our investments in technology and product, will position us well for strong growth when the advertising market recovers. Nevertheless, in view of market softness and economic uncertainty, we continued to adjust our cost structure with focus on profitability.”

“Product innovation, quality, and our deep partnerships remain the cornerstones of our business and are key differentiators, especially when the macro environment remains challenging,” added Yaron Galai, Outbrain’s Co-Founder and Co-CEO. “We recognize the near-term environment will remain volatile, however, during these times, we will continue to focus on the long term and make the right strategic investments in our future product and supply partnerships.”

Second Quarter 2022 Key Financial Metrics:

  Three Months Ended June 30, Six Months Ended June 30,
(in millions USD)  2022  2021 %
Change
  2022  2021 %
Change
Revenue $250.9 $247.2 2% $505.1 $475.2 6%
Gross profit  48.7  59.1 (18)%  102.7  112.5 (9)%
Net (loss) income  (10.3) 15.2 (168)%  (12.2) 25.9 (147)%
Net cash provided by (used in) operating activities  1.5  19.5 (92)%  (1.1) 24.9 (105)%
Non-GAAP Financial Data *        
Ex-TAC gross profit  59.3  66.8 (11)%  122.8  127.2 (3)%
Adjusted EBITDA  5.9  24.6 (76)%  17.5  45.2 (61)%
Adjusted net (loss) income  (10.9) 16.5 (166)%  (11.0) 27.0 (141)%
Free cash flow  (8.9) 16.5 (154)%  (17.8) 19.1 (193)%

* See non-GAAP reconciliations below

Second Quarter 2022 Highlights:

  • Revenue increased to $250.9 million, compared to $247.2 million. Revenue increased 6% on a constant currency basis, excluding net unfavorable foreign currency effects of approximately $11.5 million. The reported increase was driven by approximately $25.8 million, or 10% of growth from new media partners1, offset by a decrease of approximately $22.2 million due to net revenue retention of 91% on existing media partners. We have experienced lower yields mainly due to weaker demand on our platform, primarily as a result of the current macroeconomic conditions and the impact on advertising spend.
  • Gross profit decreased 18% year over year to $48.7 million, compared to $59.1 million. Gross profit decreased 14% on a constant currency basis, excluding net unfavorable foreign currency effects of approximately $1.9 million.
  • Ex-TAC gross profit decreased 11% year over year to $59.3 million, compared to $66.8 million. Ex-TAC gross profit decreased 8% on a constant currency basis, excluding net unfavorable foreign currency effects of approximately $1.9 million.
  • Net loss of $10.3 million compared to net income of $15.2 million in the prior year.
  • Adjusted EBITDA of $5.9 million compared to $24.6 million in the prior year, reflecting lower Ex-TAC gross profit and increased operating expenses. Adjusted EBITDA included net favorable foreign currency effects of approximately $0.7 million.
  • We increased our cost saving initiatives to address the current macroeconomic environment, focusing on efficiencies and cost reduction opportunities. We expect that these actions will result in cost savings of an additional $12 million in the second half of 2022 as compared with our prior guidance.
  • Cash from operating activities was $1.5 million in the period; free cash flow was a use of cash of $8.9 million, reflecting our planned increase in capital expenditures. Cash and cash equivalents were $391.4 million as of June 30, 2022.

As of July 31, 2022, we repurchased 2,339,374 shares for a total of $12.6 million, including commissions, under our $30 million stock repurchase program, with remaining availability under the program of $17.5 million.

2022 Full Year and Third Quarter Guidance

The following forward-looking statements reflect our expectations for 2022.

For the full year ended December 31, 2022, we expect:

  • Ex-TAC gross profit of at least $228 million
  • Adjusted EBITDA of at least $18 million

For the third quarter ending September 30, 2022, we expect:

  • Ex-TAC gross profit of $48 million to $52 million
  • Adjusted EBITDA of breakeven to $(4) million

The above measures are forward-looking non-GAAP financial measures for which a reconciliation to the most directly comparable GAAP financial measure is not available without unreasonable efforts. See “Non-GAAP Financial Measures” below. In addition, our guidance is subject to risks and uncertainties, as outlined below in this release.

________________________________

1 We calculate media partner net revenue retention at the end of each quarter by starting with revenue generated on media partners’ properties in the same period in the prior year, “Prior Period Retention Revenue.” We then calculate the revenue generated on these same media partners’ properties in the current period, “Current Period Retention Revenue.” Current Period Retention Revenue reflects any expansions within the media partner relationships, such as any additional placements or properties on which we extend our recommendations, as well as contraction or attrition. Our media partner net revenue retention in a quarter equals the Current Period Retention Revenue divided by the Prior Period Retention Revenue. These amounts exclude certain revenue adjustments and revenue recognized on a net basis. New media partners are defined as those relationships in which revenue was not generated in the prior year period, except for limited instances where residual revenue was generated on a media partner’s properties. In such instances, the residual revenue would be excluded from net revenue retention above.

Conference Call and Webcast Information

Outbrain will host an investor conference call this morning, Thursday, August 11th at 8:30 am ET. Interested parties are invited to listen to the conference call which can be accessed live by phone by dialing 1-877-407-9208 or for international callers, 1-201-493-6784. A replay will be available two hours after the call and can be accessed by dialing 1-844-512-2921, or for international callers, 1-412-317-6671. The passcode for the live call and the replay is 13731328. The replay will be available until August 25, 2022. Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the Investors Relations section of the Company’s website at https://investors.outbrain.com. The online replay will be available for a limited time shortly following the call.

Non-GAAP Financial Measures

In addition to GAAP performance measures, we use the following supplemental non-GAAP financial measures to evaluate our business, measure our performance, identify trends and allocate our resources: Ex-TAC gross profit, Adjusted EBITDA, free cash flow, adjusted net (loss) income and adjusted diluted EPS. These non-GAAP financial measures are defined and reconciled to the corresponding GAAP measures. These non-GAAP financial measures are subject to significant limitations, including those we identify below. In addition, other companies in our industry may define these measures differently, which may reduce their usefulness as comparative measures. As a result, this information, should be considered as supplemental in nature and is not meant as a substitute for revenue, gross profit, net (loss) income, diluted EPS or cash flows from operating activities presented in accordance with U.S. GAAP.

Because we are a global company, the comparability of our operating results is affected by foreign exchange fluctuations. We calculate constant currency measures and foreign currency impacts by translating the current year’s reported amounts into comparable amounts using prior year’s exchange rates. All constant currency financial information being presented is non-GAAP and should be used as a supplement to our reported operating results. We believe that this information is helpful to our management and investors to assess our operating performance on a comparable basis. However, these measures are not intended to replace amounts presented in accordance with GAAP and may be different from similar measures calculated by other companies.

The Company is also providing third quarter and full year 2022 guidance on a non-GAAP basis. These forward-looking non-GAAP financial measures are calculated based on internal forecasts that omit certain amounts that would be included in GAAP financial measures. The Company has not provided quantitative reconciliations of these forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures because it is unable, without unreasonable effort, to predict with reasonable certainty the occurrence or amount of all excluded items that may arise during the forward-looking period, which can be dependent on future events that may not be reliably predicted. Such excluded items could be material to the reported results individually or in the aggregate.

Ex-TAC Gross Profit

Ex-TAC gross profit is a non-GAAP financial measure. Gross profit is the most comparable GAAP measure. In calculating Ex-TAC gross profit, we add back other cost of revenue to gross profit. Ex-TAC gross profit may fluctuate in the future due to various factors, including, but not limited to, seasonality and changes in the number of media partners and advertisers, advertiser demand or user engagements.

We present Ex-TAC gross profit, as well as Adjusted EBITDA as a percentage of Ex-TAC gross profit, because they are key profitability measures used by our management and board of directors to understand and evaluate our operating performance and trends, develop short-and long-term operational plans and make strategic decisions regarding the allocation of capital. Accordingly, we believe that these measures provide information to investors and the market in understanding and evaluating our operating results in the same manner as our management and board of directors. There are limitations on the use of Ex-TAC gross profit in that traffic acquisition cost is a significant component of our total cost of revenue but not the only component and, by definition, Ex-TAC gross profit presented for any period will be higher than gross profit for that period. A potential limitation of this non-GAAP financial measure is that other companies, including companies in our industry, which have a similar business, may define ex-TAC gross profit differently, which may make comparisons difficult. As a result, this information, should be considered as supplemental in nature and is not meant as a substitute for revenue or gross profit presented in accordance with U.S. GAAP.

Adjusted EBITDA

We define Adjusted EBITDA as net (loss) income before charges related to exchange of senior notes upon IPO; interest expense; interest income and other income (expense), net; provision for income taxes; depreciation and amortization; stock-based compensation, and other income or expenses that we do not consider indicative of our core operating performance, including but not limited to, merger and acquisition costs, certain IPO and public company implementation related costs, and regulatory matter costs. We present Adjusted EBITDA as a supplemental performance measure because it is a key profitability measure used by our management and board of directors to understand and evaluate our operating performance and trends, develop short-and long-term operational plans and make strategic decisions regarding the allocation of capital, and we believe it facilitates operating performance comparisons from period to period.

We believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors. However, our calculation of Adjusted EBITDA is not necessarily comparable to non-GAAP information of other companies. Adjusted EBITDA should be considered as a supplemental measure and should not be considered in isolation or as a substitute for any measures of our financial performance that are calculated and reported in accordance with GAAP.

Adjusted Net (Loss) Income and Adjusted Diluted EPS

Adjusted net (loss) income is a non-GAAP financial measure, which is defined as net (loss) income excluding items that we do not consider indicative of our core operating performance, including but not limited to, charges related to the exchange of senior notes upon IPO, the cumulative incremental stock-based compensation expense impact for awards with an IPO performance condition, merger and acquisition costs, certain IPO related costs, deferred tax asset valuation allowance release, and regulatory matter costs. Adjusted net (loss) income, as defined above, is also presented on a per diluted share basis. We present adjusted net (loss) income and adjusted diluted EPS as supplemental performance measures because we believe they facilitate performance comparisons from period to period. However, adjusted net (loss) income or adjusted diluted EPS should not be considered in isolation or as a substitute for net (loss) income or diluted earnings per share reported in accordance with GAAP.

Free Cash Flow

Free cash flow is defined as cash flow from operating activities less capital expenditures and capitalized software development costs. Free cash flow is a supplementary measure used by our management and board of directors to evaluate our ability to generate cash and we believe it allows for a more complete analysis of our available cash flows. Free cash flow should be considered as a supplemental measure and should not be considered in isolation or as a substitute for any measures of our financial performance that are calculated and reported in accordance with GAAP.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to possible or assumed future results of our business, financial condition, results of operations, liquidity, plans and objectives. You can generally identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “guidance,” “outlook,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions that concern our expectations, strategy, plans or intentions. We have based these forward-looking statements largely on our current expectations and projections regarding future events and trends that we believe may affect our business, financial condition and results of operations. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors, including but not limited to: overall advertising demand and traffic generated by our media partners; factors that affect advertising demand and spending, such as unfavorable economic or business conditions or downturns, instability or volatility in financial markets, and other events or factors outside of our control, such as U.S. and global recession concerns, geopolitical concerns, including the conflict between Russia and Ukraine, supply chain issues, inflationary pressures, labor market volatility, and the pace of recovery or any resurgences of the COVID-19 pandemic; any failure of our recommendation engine to accurately predict user engagement, any deterioration in the quality of our recommendations or failure to present interesting content to users or other factors which may cause us to experience a decline in user engagement or loss of media partners; limits on our ability to collect, use and disclose data to deliver advertisements; the effects of the ongoing and evolving COVID-19 pandemic, including the resulting global economic uncertainty, and measures taken in response to the pandemic; our ability to continue to innovate, and adoption by our advertisers and media partners of our expanding solutions; our ability to meet demands on our infrastructure and resources due to future growth or otherwise; our ability to extend our reach into evolving digital media platforms; our ability to maintain and scale our technology platform; our ability to grow our business and manage growth effectively; the success of our sales and marketing investments, which may require significant investments and may involve long sales cycles; the risk that our research and development efforts may not meet the demands of a rapidly evolving technology market; the loss of one or more of our large media partners, and our ability to expand our advertiser and media partner relationships; our ability to compete effectively against current and future competitors; failures or loss of the hardware, software and infrastructure on which we rely, or security breaches; our ability to maintain our profitability despite quarterly fluctuations in our results, whether due to seasonality, large cyclical events, or other causes; political and regulatory risks in the various markets in which we operate; the challenges of compliance with differing and changing regulatory requirements; and the risks described in the section entitled “Risk Factors” and elsewhere in our Annual Report on Form 10-K filed for the year ended December 31, 2021, as updated in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, and in subsequent reports we file with the SEC. Accordingly, you should not rely upon forward-looking statements as predictions of future events. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those projected in the forward-looking statements. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

About Outbrain

Outbrain (Nasdaq: OB) is a leading recommendation platform for the open web. Our technology enables 10 billion daily recommendations to consumers across more than 7,000 online properties and connects advertisers to these audiences to grow their business. Founded in 2006, Outbrain is headquartered in New York with offices in 17 cities worldwide.

Media Contact

press@outbrain.com

Investor Relations Contact

IR@outbrain.com

(332) 205-8999

 
OUTBRAIN INC.
Condensed Consolidated Statements of Operations
(In thousands)
 
  Three Months Ended June 30, Six Months Ended June 30,
   2022   2021   2022   2021 
  (Unaudited)
Revenue $250,883  $247,153  $505,099  $475,177 
Cost of revenue:        
Traffic acquisition costs  191,554   180,324   382,250   347,937 
Other cost of revenue  10,610   7,767   20,199   14,709 
Total cost of revenue  202,164   188,091   402,449   362,646 
Gross profit  48,719   59,062   102,650   112,531 
Operating expenses:        
Research and development  10,519   8,474   20,947   16,902 
Sales and marketing  28,122   21,186   55,517   41,054 
General and administrative  12,957   12,247   28,991   22,640 
Total operating expenses  51,598   41,907   105,455   80,596 
(Loss) income from operations  (2,879)  17,155   (2,805)  31,935 
Other expense, net:        
Interest expense  (1,953)  (189)  (3,824)  (359)
Other expense, net, and interest income  (3,828)  (943)  (4,909)  (3,196)
Total other expense, net  (5,781)  (1,132)  (8,733)  (3,555)
(Loss) income before provision for income taxes  (8,660)  16,023   (11,538)  28,380 
Provision for income taxes  1,658   822   670   2,433 
Net (loss) income $(10,318) $15,201  $(12,208) $25,947 
         
Weighted average shares outstanding:        
Basic  57,590,308   17,519,243   57,414,636   17,371,162 
Diluted  57,590,308   20,937,154   57,414,636   20,014,953 
         
Net (loss) income per common share:        
Basic  ($0.18)  $0.34   ($0.21)  $0.58 
Diluted  ($0.18)  $0.28   ($0.21)  $0.51 


OUTBRAIN INC.
Condensed Consolidated Balance Sheets
(In thousands, except for number of shares and par value)
 
  June 30,
2022
 December 31,
2021
  (Unaudited)  
ASSETS    
CURRENT ASSETS:    
Cash and cash equivalents $391,409  $455,397 
Accounts receivable, net of allowances  180,411   192,814 
Prepaid expenses and other current assets  30,903   27,873 
Total current assets  602,723   676,084 
Property, equipment and capitalized software, net  34,098   28,008 
Operating lease right-of-use assets, net  12,846    
Intangible assets, net  28,220   5,719 
Goodwill  63,063   32,881 
Deferred tax assets  36,258   32,867 
Other assets  16,933   20,331 
TOTAL ASSETS $794,141  $795,890 
     
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)    
CURRENT LIABILITIES:    
Accounts payable $130,469  $160,790 
Accrued compensation and benefits  17,701   23,331 
Accrued and other current liabilities  130,796   99,590 
Deferred revenue  5,386   4,784 
Total current liabilities  284,352   288,495 
Long-term debt  236,000   236,000 
Operating lease liabilities, non-current  9,766    
Other liabilities  17,426   14,620 
TOTAL LIABILITIES $547,544  $539,115 
     
STOCKHOLDERS’ EQUITY:    
Common stock, par value of $0.001 per share — 1,000,000,000 shares authorized; 59,542,657 shares issued and 56,684,158 shares outstanding as of June 30, 2022 and 58,015,075 shares issued and 56,701,394 shares outstanding as of December 31, 2021 $60  $58 
Preferred stock, par value of $0.001 per share — 100,000,000 shares authorized, none issued and outstanding as of June 30, 2022 and December 31, 2021      
Additional paid-in capital  449,282   434,945 
Treasury stock, at cost, 2,858,499 shares as of June 30, 2022 and 1,313,681 shares as of December 31, 2021  (26,076)  (16,504)
Accumulated other comprehensive loss  (7,211)  (4,474)
Accumulated deficit  (169,458)  (157,250)
TOTAL STOCKHOLDERS’ EQUITY $246,597  $256,775 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $794,141  $795,890 


OUTBRAIN INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
 
  Three Months Ended Six Months Ended
  June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
  (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net (loss) income $(10,318) $15,201  $(12,208) $25,947 
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:        
Depreciation and amortization of property and equipment  2,756   1,681   5,160   3,285 
Amortization of capitalized software development costs  2,416   2,095   4,711   4,092 
Amortization of intangible assets  1,584   892   3,153   1,818 
Stock-based compensation  3,357   1,461   6,090   2,948 
Non-cash operating lease expense  965      2,133    
Provision for credit losses  1,227   732   978   1,385 
Deferred income taxes  (3,655)  (217)  (3,995)  (602)
Other  2,476   814   3,530   3,215 
Changes in operating assets and liabilities:        
Accounts receivable  (7,362)  (17,768)  8,523   (3,852)
Prepaid expenses and other current assets  (6,016)  (3,070)  (4,598)  (4,565)
Other assets  534   (662)  2,094   (465)
Accounts payable and accrued and other current liabilities  14,998   18,370   (16,123)  (8,821)
Operating lease liabilities  (839)     (1,936)   
Deferred revenue  (755)  (447)  904   (7)
Other  143   373   454   483 
Net cash provided by (used in) operating activities  1,511   19,455   (1,130)  24,861 
         
CASH FLOWS FROM INVESTING ACTIVITIES:        
Purchases of property and equipment  (7,546)  (437)  (10,355)  (676)
Capitalized software development costs  (2,888)  (2,560)  (6,333)  (5,089)
Acquisition of business, net of cash acquired        (34,524)   
Other  (111)  (12)  (97)  (31)
Net cash used in investing activities  (10,545)  (3,009)  (51,309)  (5,796)
         
CASH FLOWS FROM FINANCING ACTIVITIES:        
Proceeds from exercises of stock options and warrants  1,479   1,243   3,753   1,791 
Treasury stock repurchases and share withholdings on vested awards  (7,854)     (9,572)  (249)
Deferred financing costs     (494)     (494)
Principal payments on finance lease obligations  (857)  (1,167)  (1,871)  (2,273)
Net cash used in financing activities  (7,232)  (418)  (7,690)  (1,225)
         
Effect of exchange rate changes  (3,212)  269   (3,875)  (161)
         
Net (decrease) increase in cash, cash equivalents and restricted cash $(19,478) $16,297  $(64,004) $17,679 
Cash, cash equivalents and restricted cash — Beginning  411,066   95,449   455,592   94,067 
Cash, cash equivalents and restricted cash — Ending $391,588  $111,746  $391,588  $111,746 


OUTBRAIN INC.
Non-GAAP Reconciliations
(In thousands)
 
The following table presents the reconciliation of Gross profit to Ex-TAC Gross Profit, for the periods presented:
 
 Three Months Ended June 30, Six Months Ended June 30,
  2022   2021   2022   2021 
Revenue $250,883  $247,153  $505,099  $475,177 
Traffic acquisition costs  (191,554)  (180,324)  (382,250)  (347,937)
Other cost of revenue  (10,610)  (7,767)  (20,199)  (14,709)
Gross profit  48,719   59,062   102,650   112,531 
Other cost of revenue  10,610   7,767   20,199   14,709 
Ex-TAC Gross Profit $59,329  $66,829  $122,849  $127,240 


The following table presents the reconciliation of net (loss) income to Adjusted EBITDA, for the periods presented:
 
 Three Months Ended June 30, Six Months Ended June 30,
  2022   2021   2022   2021 
Net (loss) income $(10,318) $15,201  $(12,208) $25,947 
Other expense, net  5,781   1,132   8,733   3,555 
Provision for income taxes  1,658   822   670   2,433 
Depreciation and amortization  6,756   4,668   13,024   9,195 
Stock-based compensation  3,357   1,461   6,090   2,948 
Regulatory matter costs  (1,980)  1,147   (261)  1,147 
Merger and acquisition, public company implementation costs(1)  610   150   1,424   (61)
Adjusted EBITDA $5,864  $24,581  $17,472  $45,164 
Adjusted EBITDA as % of Ex-TAC Gross Profit  9.9%  36.8%  14.2%  35.5%
 
(1) Primarily includes costs related to our public company implementation costs and costs related to our acquisition of vi in January 2022.


OUTBRAIN INC.
Non-GAAP Reconciliations (Continued)
(In thousands)
 
The following table presents the reconciliation of net (loss) income to adjusted net (loss) income, for the periods presented:
 
 Three Months Ended June 30, Six Months Ended June 30,
  2022   2021   2022   2021 
Net (loss) income $(10,318) $15,201  $(12,208) $25,947 
Adjustments:        
Regulatory matter costs  (1,980)  1,147   (261)  1,147 
Merger and acquisition, public company implementation costs(1)  610   150   1,424   (61)
Total adjustments, before tax  (1,370)  1,297   1,163   1,086 
Income tax effect  816      87    
Total adjustments, after tax  (554)  1,297   1,250   1,086 
Adjusted net (loss) income $(10,872) $16,498  $(10,958) $27,033 
         
Adjusted net (loss) income $(10,872) $16,498  $(10,958) $27,033 
Undistributed earnings allocated to participating securities     (10,045)     (16,459)
Adjusted net (loss) income attributable to common stockholders used to compute adjusted net (loss) income per common share $(10,872) $6,453  $(10,958) $10,574 
         
Weighted average shares used to compute diluted net (loss) income per common share  57,590,308   20,937,154   57,414,636   20,014,953 
         
Diluted net (loss) income per common share - reported $(0.18) $0.28  $(0.21) $0.51 
Adjustments, after tax  (0.01)  0.03   0.02   0.02 
Diluted net (loss) income per common share - adjusted $(0.19) $0.31  $(0.19) $0.53 
 
(1) Primarily includes costs related to our public company implementation costs and costs related to our acquisition of vi in January 2022.


The following table presents the reconciliation of net cash (used in) provided by operating activities to free cash flow, for the periods presented:
 
  Three Months Ended June 30, Six Months Ended June 30,
   2022   2021   2022   2021 
Net cash provided by (used in) operating activities $1,511  $19,455  $(1,130) $24,861 
Purchases of property and equipment  (7,546)  (437)  (10,355)  (676)
Capitalized software development costs  (2,888)  (2,560)  (6,333)  (5,089)
Free cash flow $(8,923) $16,458  $(17,818) $19,096 

FAQ

What were Outbrain's Q2 2022 financial results?

Outbrain reported revenue of $250.9 million but faced a gross profit decrease of 18% and a net loss of $10.3 million.

How did Outbrain's revenue change compared to Q2 2021?

Revenue increased by 2% from $247.2 million in Q2 2021 to $250.9 million in Q2 2022.

What is Outbrain's cash position as of June 30, 2022?

Outbrain reported cash and cash equivalents of $391.4 million as of June 30, 2022.

What strategic actions is Outbrain taking in 2022?

Outbrain is focusing on cost-saving initiatives and projects an additional $12 million in savings for the second half of 2022.

What does Outbrain expect for its future growth?

Outbrain anticipates strong growth potential by leveraging its increased market share and investments in technology.

Outbrain Inc.

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