Outbrain Inc. (Nasdaq: OB), a leading recommendation platform for the open web, announced financial results for the quarter and full year ended December 31, 2021.
“We are pleased to report a strong finish to a pivotal year for Outbrain,” said David Kostman, Outbrain’s Co-CEO. “We completed our IPO, grew our team by nearly 200 people, surpassed $1 billion in revenues with more advertisers than ever using our platform, and finished the year with the acquisition of video intelligence AG. I want to take this opportunity to thank our more than 1,000 employees that are making this happen every day. With a world class team, strong momentum in media partner wins and a strong balance sheet, I believe we are very well positioned to continue to execute across all of our main growth drivers.”
“As pioneers of our space, I’m most proud of our continued thought leadership and innovation on products and technologies that drive value for our media and advertising partners. I believe that leveraging our unique position with media owners to provide them with additional solutions to promote their business objectives and solidifying our differentiated product leadership with Smartlogic for media owners and Conversion Bid Strategy (CBS) and Engagement Bid Strategy (EBS) for advertisers will continue to fuel our growth,” added Yaron Galai, Outbrain’s Co-Founder and Co-CEO. “I’m excited about the deep product pipeline that will be positioning us to expand to broader services and value propositions for our partners in the future.”
Fourth Quarter and Full Year 2021 Key Financial Metrics:
* See reconciliation below; Net income for the three months ended December 31, 2021 includes, among other items, a one-time $31.8 million tax benefit due to a release of the valuation allowance on certain U.S. deferred tax assets.
** See non-GAAP reconciliations below
Fourth Quarter 2021 Highlights:
- Revenue increased 18% year over year to $289.7 million, compared to $245.4 million. Net revenue retention on existing media partners1 drove increased revenues of approximately $26 million or 10%, and approximately $18 million or 7% of additional growth came from new media partners.
- Gross profit increased 15% year over year to $67.5 million, compared to $58.5 million.
- Ex-TAC gross profit increased 17% year over year to $76.7 million, compared to $65.4 million.
- Net income of $39.0 million compared to $14.0 million in the prior year. Net income included a one-time tax benefit of $31.8 million due to a release of the valuation allowance on certain U.S. deferred tax assets.
- Adjusted net income of $11.8 million compared to $14.0 million in the prior year.
- Adjusted EBITDA increased by 13% to $23.9 million from $21.1 million in the prior year, primarily due to the increase in Ex-TAC gross profit, partially offset by increased operating expenses as we continue to invest in growth and costs of operating as a public company.
- Use of cash from operating activities was $4.3 million in the period and free cash flow was a use of $13.1, primarily driven by the timing of payments and increased capital expenditures; cash and cash equivalents were $455.4 million as of December 31, 2021.
- In Q4, we announced a definitive agreement to acquire video intelligence AG (“vi”), a Swiss-based Company, with a contextual video technology platform for digital and Connected TV media owners, for an aggregate purchase price of approximately $55 million. We completed the acquisition in January 2022.
Full Year 2021 Highlights:
- Revenue increased 32% year over year to $1,015.6 million, compared to $767.1 million.
- Gross profit increased 46% year over year to $240.3 million, compared to $165.1 million.
- Ex-TAC gross profit increased 40% year over year to $272.1 million, compared to $194.3 million.
- Net income of $11.0 million compared to $4.4 million in the prior year.
- Adjusted net income of $45.5 million compared to $13.2 million in the prior year.
- Adjusted EBITDA more than doubled to $88.9 million from $41.1 million in the prior year.
- Generated $56.8 million of net cash from operating activities and $36.7 million of free cash flow.