Outbrain Inc. (OB), a leader in technology for the Open Internet, reported Q4 and full-year 2023 financial results, showcasing resilience and strategic growth initiatives.
Q4 2023 revenue reached $248.2 million, a slight 4% decrease year-over-year, yet the company achieved a gross profit of $53.2 million, an 11% increase from the prior year, improving its gross margin to 21.4%.
Ex-TAC gross profit grew by 8% in Q4 to $63.8 million, driven by an improved revenue mix and key partnerships.
Outbrain posted a net income of $4.1 million for the quarter, a notable recovery from a $7.7 million net loss in the previous year.
Adjusted EBITDA for Q4 was $14 million, nearly doubling from $7.1 million in Q4 2022, thanks to higher gross profit and operational efficiencies.
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Full-Year 2023 Financial Highlights
For the full year, Outbrain reported $935.8 million in revenue, a 6% decline due to macroeconomic challenges.
Despite this, the company achieved a gross profit of $184.8 million, with a slightly improved gross margin of 19.7%.
Net income was $10.2 million, a turnaround from a $24.6 million net loss in 2022. Adjusted EBITDA grew to $28.5 million, reflecting Outbrain’s commitment to efficiency and profitability.
Operating cash flow for 2023 was $13.7 million, with a strong year-end cash position of $231 million in cash, cash equivalents, and marketable securities.
The company repurchased 3.7 million shares for $17.8 million under its $30 million stock buyback program.
Leadership Transition and Strategic Vision for 2024
In 2024, Outbrain is focused on strengthening its position as a primary gateway to the Open Internet. Co-CEO David Kostman will become the sole CEO. Co-Founder Yaron Galai steps down as co-CEO but remains Chairman of the Board.
Kostman highlighted Outbrain’s strategy to drive double-digit Ex-TAC gross profit growth and achieve a 20%+ Adjusted EBITDA margin by 2025.
2024 Financial Guidance and Growth Outlook
For Q1 2024, Outbrain expects Ex-TAC gross profit of $50.5-$53.5 million and Adjusted EBITDA between -$1 and $1 million.
Full-year guidance projects Ex-TAC gross profit of $238-$248 million and Adjusted EBITDA of $30-$35 million, indicating growth.
Outbrain’s focus on innovation, efficiency, and strategic investments positions it for sustainable growth in 2024 and beyond.
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