The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors including, but not limited to: the ability of Outbrain to successfully integrate Teads or manage the combined business effectively; our ability to realize anticipated benefits and synergies of the Acquisition, including, among other things, operating efficiencies, revenue synergies and other cost savings; our due diligence investigation of Teads may be inadequate or risks related to Teads’ business may materialize; unexpected costs, charges or expenses resulting from the Acquisition; our ability to raise additional financing in the future to fund our operations, which may not be available to us on favorable terms or at all; our ability to attract and retain customers, management and other key personnel; the volatility of the market price of the Common Stock, $.001 par value per share (the "Common Stock”); overall advertising demand and traffic generated by our media partners; factors that affect advertising demand and spending, such as the continuation or worsening of unfavorable economic or business conditions or downturns, instability or volatility in financial markets, tariffs and trade wars and other events or factors outside of our control, such as U.S.and global recession concerns, geopolitical concerns, including the ongoing war between Ukraine-Russia and conditions in Israel and the Middle East, supply chain issues, inflationary pressures, labor market volatility, bank closures or disruptions, the impact of challenging economic conditions, political and policy changes or uncertainties in the U.S., and other factors that have and may further impact advertisers’ ability to pay; our ability to continue to innovate, and adoption by our advertisers and media partners of our expanding solutions; the potential impact of artificial intelligence ("AI”) on our industry and our need to invest in AI-based solutions; the success of our sales and marketing investments, which may require significant investments and may involve long sales cycles; our ability to grow our business and manage growth effectively; our ability to compete effectively against current and future competitors; the loss or decline of one or more of our large media partners, and our ability to expand our advertiser and media partner relationships; conditions in Israel, including the ongoing conflict between Israel and Hamas and any conflicts with other terrorist organizations or other countries; our ability to maintain our revenues or profitability despite quarterly fluctuations in our results, whether due to seasonality, large cyclical events, or other causes; the risk that our research and development efforts may not meet the demands of a rapidly evolving technology market; any failure of our recommendation engine to accurately predict attention or 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; our ability to extend our reach into evolving digital media platforms; our ability to maintain and scale our technology platform; our ability to meet demands on our infrastructure and resources due to future growth or otherwise; our failure or the failure of third parties to protect our sites, networks and systems against security breaches, or otherwise to protect the confidential information of us or our partners; outages or disruptions that impact us or our service providers, resulting from cyber incidents, or failures or loss of our infrastructure; significant fluctuations in currency exchange rates; political and regulatory risks in the various markets in which we operate; the challenges of compliance with differing and changing regulatory requirements, including with respect to privacy; the timing and execution of any cost-saving measures and the impact on our business or strategy; and the risks described in the section entitled "Risk Factors” and elsewhere in the Annual Report on Form 10-K filed for the year ended December 31, 2024.
Condensed Consolidated Statements of Cash Flows(In thousands) Three Months Ended March 31, 2025 2024 (Unaudited)CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $(54,843) $(5,041)Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation and amortization of property and equipment 1,935 1,639 Amortization of capitalized software development costs 2,472 2,409 Amortization of intangible assets 8,466 852 Amortization of discount on marketable securities (425) (642)Stock-based compensation 2,941 2,927 Non-cash operating lease expense 2,307 1,195 Provision for credit losses 298 1,693 Amortization of debt issuance costs 12,843 — Deferred income taxes (17,786) (174)Impairment of assets 15,614 — Unrealized foreign currency transaction (gains) losses 1,688 312 Other 30 26 Changes in operating assets and liabilities: Accounts receivable 37,605 30,398 Prepaid expenses and other current assets 5,901 7,262 Accounts payable and other current liabilities (22,374) (31,875)Operating lease liabilities (2,614) (1,205)Deferred revenue (830) (1,471)Other non-current assets and liabilities 5,806 300 Net cash (used in) provided by operating activities (966) 8,605 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of a business, net of cash acquired (598,319) (181)Purchases of property and equipment (2,921) (1,335)Capitalized software development costs (2,699) (2,627)Purchases of marketable securities (16,602) (31,578)Proceeds from sales and maturities of marketable securities 74,221 31,492 Net cash used in investing activities (546,320) (4,229) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from the Bridge Facility 625,000 — Repayments of borrowings under the Bridge Facility (625,000) — Proceeds from senior secured notes 625,305 — Payment of deferred financing costs (28,155) — Payment of stock issuance costs (775) — Treasury stock repurchases and share withholdings on vested awards (355) (4,015)Principal payments on finance lease obligations — (255)Proceeds from bank overdrafts, net 74 — Net cash provided by (used in) financing activities 596,094 (4,270)Effect of exchange rate changes (57) 363 Net increase in cash, cash equivalents and restricted cash $48,751 $469 Cash, cash equivalents and restricted cash — Beginning 89,725 71,079 Cash, cash equivalents and restricted cash — Ending $138,476 $71,548 OUTBRAIN INC.
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, Ex-TAC gross margin, Adjusted EBITDA, free cash flow, adjusted net income (loss), and adjusted diluted EPS.
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