Teads Holding Co's Business Segments

The company operates in the global digital advertising industry, generating revenue primarily from advertisers who purchase media inventory to deliver digital ads across web, mobile apps, online video, and connected TV (CTV) environments. Advertisers utilize various buying models, including cost-per-click, cost-per-thousand impressions, video completion-based pricing, and other outcome-based formats. The company generally acts as the principal in transactions, recognizing revenue on a gross basis, but in certain cases acts as an agent and recognizes revenue on a net basis. Revenue is affected by advertiser demand, inventory volume and quality, macroeconomic conditions, seasonal advertising patterns, and advertiser return on ad spend (ROAS) expectations. The company is expanding its platform features, omnichannel capabilities, and inventory reach. Traffic acquisition costs (TAC) are payments to media partners for inventory, determined by contractual revenue shares, programmatic bidding, or guaranteed minimums. Additional costs include data center management, hosting, connectivity, research, and amortization of software and intangible assets. Operating expenses encompass research and development, sales and marketing, and general and administrative costs, with personnel expenses as the largest component. The company also incurs impairment charges related to discontinued products and goodwill, as well as restructuring charges from workforce reductions and strategic efforts to streamline operations.

The registrant operates a single reportable segment. For the year ended December 31, 2025, the segment's revenue increased by $410.6 million, or 46.1%, reaching $1,300.5 million compared to $889.9 million in 2024. This increase was primarily driven by $517.2 million in incremental revenues from the Acquisition, partially offset by a $106.6 million decline in revenues from the legacy Outbrain business. The decline in Outbrain revenue resulted mainly from lower ad impressions from certain media partners and reduced revenue from select legacy products. Traffic acquisition costs rose by $117.1 million, or 17.9%, to $770.8 million in 2025, including $214.3 million related to the Acquisition and a $97.2 million decrease related to Outbrain, consistent with the revenue changes. As a percentage of revenue, traffic acquisition costs decreased year over year, reflecting the revenue mix impact of the Acquisition and lower traffic acquisition costs associated with Outbrain.