Nexxen International (NEXN) Q4 2016 earnings summary

Executive summary

• First full year as a mobile-focused ad-tech business; revenue and margins rose sharply, with strong operating cash generation.

• Mobile advertising growth, Tier 1 customer expansion and international market entry supported confidence in sustained growth during 2017.

Financial highlights

• FY2016 revenue increased 66% to $125.9m from $75.8m; gross profit more than doubled to $46.0m from $21.1m.

• Operating profit rose to $19.7m from $2.9m; net income was $16.5m versus $2.1m.

• Adjusted EBITDA was $25.7m versus $7.4m; operating cash flow increased to $20.3m from $6.2m.

• Sales and marketing costs rose to $14.2m from $8.6m, and R&D expenses to $6.1m from $4.1m, reflecting investment in growth, offices and technology.

Outlook and guidance

• Entered 2017 at a run rate significantly above the comparable prior-year period; the Board expected strong YoY revenue growth for 2017.

• Growth expectations reflected rising advertiser investment in mobile, anticipated spend growth from existing clients and new advertisers, and continuing demand in Asia-Pacific, the US and Europe.

• Organic and inorganic expansion were planned, supported by platform, data and mobile R&D investment.