Outbrain Inc. Price & Performance (OB)

Good morning, and thank you for joining us on today's conference call to discuss Outbrain's fourth quarter and full year 2024 results. Joining me on the call today, we have David Kossman and Jason Kibiot, the CEO and CFO of Outbrain. Which will operate under the Teades Outbrain, During this conference call, management will make forward looking statements based on current expectations and assumptions, including statements regarding our business outlooks and prospects. And our recently complete acquisition of Teades. These statements are subject to risks and uncertainties that may cause actual results to differ materially from our forward looking statements.

These risk factors are discussed in detail in our Form 10 ks filed for the year ended December 31, 2023, in our definitive proxy statement filed with the Securities and Exchange Commission on 10/31/2024, and as updated in our subsequent reports filed with the Securities and Exchange Commission Forward looking statements speak only as the call's original date and we do not undertake any duty to update any such statements. Today's presentation also includes references to non GAAP financial measures, You should refer to the information contained the company's fourth quarter earnings release for definitional information and reconciliations of non GAAP measures to the comparable GAAP financial measures. Our earnings release can be found on our IR website investors.outbrain.com Outbrain, under News and Events. With that, let me turn the call over to David.

Thank you, Meng. Good morning thank you for joining us today. On February 3, we closed our acquisition of Teeds. This merger brings together two open Internet category leaders combining the extensive expertise of our brand in performance and OfTeed's in video and branding, into a single solution for omnichannel outcomes across the marketing funnel. This new and expanded company will operate under the name Teens. It's a huge opportunity to take advertising on the open Internet to the next level. Today's open Internet platforms focus on scale and efficiency. Marketers have shown us they expect more from their advertising. They need a partner that can surface the meaningful moments in the consumer's buying journey. Using a deeper understanding of audience engagement, and behavior, to identify when they are ready to discover new products or services and evaluate purchase decisions. Our unique dataset AI driven prediction technology better positions us to provide these solutions. The new teams will better serve enterprise brands and agencies as well as mid market advertisers and direct response advertisers by delivering elevated outcomes on branding, to performance objectives. This foundation will enable us to derive new incremental value from the open Internet as a true brand format solution.

Now let me provide an update on Outbrain's standalone Q4 and full year results. For Q4, I'm pleased to report that Outbrain delivered both extra gross profit and adjusted EBITDA within our guidance range. We also generated record free cash flow This is part of our continued trajectory for several quarters. Q4 results were driven by strength in the same key pillars we presented to you over the last couple of years. These will continue to be important drivers of our business. The first pillar, expanding our share of wallet from advertisers. It is important to clarify that we serve enterprise brands and their agencies both for branding and performance needs as well as the segment of small and medium enterprises and direct response advertisers that are looking primarily for performance in ROAS. So with brands and agencies, we've seen continued momentum in our Performance Solutions. Our direct response advertisers have embraced the use of our outbound DSP which saw growth of 45% in advertiser spend in 2020 due to the continued delivery of superior performance both on the Outbrain publisher base and in third party properties across different formats such as native, display and video. As a reminder, we have been doing this for several years, leveraging the performance DSP we acquired in 2017 which also provides a value of the bidding engine and DSP capabilities expanding our platform's reach.

The second pillar, expanding beyond our traditional feeds, Revenue generated from supply beyond our traditional feed represented approximately 30% of our revenue in Q4 twenty twenty twenty four versus 26% in Q4 twenty twenty three. We have continued to grow this metric quarterly for the last two years demonstrating our focus on expanding our inventory diversity beyond our exclusive publisher base and extending the reach for our advertisers, to OEMs, apps and other platforms. One of the more exciting developments here was the launch as a beta in September of Moments. Our vertical video experience that brings social media experiences to the open Internet. To date, we have more than 40 media owners using Moments, including New York Post, News Australia, RTL and Rolling Stone. Initial user engagement results are strong, with swipe depth growing from about three videos on average to 7.2. And the percentage of people engaging with the experience growing from about 35% to over 47%. In addition, we are encouraged by the interest that legacy PZ, but I'll just have expressed in moments, as it provides powerful video experiences for premium brands. Another example of how this combination will provide meaningful synergy. And the third pillar is deepening our premium media owner partnerships.

In Q4, we successfully renewed agreements with some of our important publishing partners, including Spiegel in Germany, in Messagingero in Italy and Grape in Japan. We also secured new business partnerships from and Pranza Iberica in Spain. We believe this again demonstrates the significant value proposition we offer when it comes to strategic relationships with premium publishers globally, On the technology front, over 70% of our customer base has used our AI based creative automation suite As a reminder, the Creative Automation Suite uses our algorithms and predictive insights to fuel the product's generative AI delivering more relevant highly targeted creatives optimized for consumer engagement. The strong foundation we built with the AI creative Automation Suite informs how we think about some of the highest potential applications of AI at the new teams. We plan to leverage AI to create a greater continuity of experience across the consumer journey leveraging the exclusive inventory environments we own from CTV home screens to premium publishers as well as in our in house creative studio that utilizes data and interactivity to deliver video and viewable display assets that deliver on advertisers KPIs. The new one of the largest platforms on the open Internet that can create meaningful audience moments across screens.

From mobile to CTV to apps and beyond. We believe that the combination of our unique core assets positions us extremely well to capture more and more share of wallet away from other platforms. First, the new Teats brings extensive expertise in branding and creative capabilities across screens. Advertisers are looking for KPIs way beyond just reach. They want results. It's also evident that the combined performance plus branding strategy can increase return on investment for advertisers. With an independent study estimating a total revenue impact increased by 90%. That's why in the future, brand performance is a huge opportunity. Second, the new Teeth has the most direct exclusive to Pie Pass on the open Internet. Across the digital landscape. As you've heard over the last couple of years, including from many of our peers, this is becoming increasingly important as advertisers are looking for premium environments to limit the risk of open exchange buys on DSPs. And we believe that also CTV is becoming a core part of the performing market performance marketing mix. Our CTV presence from the feed side combined with the leadership with performance marketers that legacy Outbrain brings to the table, positions us well for growth in this area which is an important element of our combined product strategy.

And third, we had exceptional global reach. With more than 2,000,000,000 unique users and proprietary data signals, to our exclusive Conan page with the most premium media properties. I want to underscore the Tease already has more than 50 joint business partnerships with the leading premium brands of the world, including Apple, Visa, Louis Vuitton, Meg Nissan and many others. These partnerships generate an average of $5,000,000 per year in upwards of $20,000,000 per year. It's important to note that even before the combination without Outbrain, Teets had a significant amount of performance budgets from these advertisers. These types of relationships are the privilege of only the largest players in the digital advertising space. Feeds has been growing these direct relationships with advertisers and their agencies for many years. Having developed a winning multi touch strategy of working directly with and their agencies which are primarily the largest agency holding companies. The response from these advertisers to the new team's value proposition of branding and performance has been overwhelmingly positive. Which bodes well for our cross sell synergy plan. If you combine these joint business partnerships, with the strong focus on small medium enterprises of the legacy Outbrain, we believe we have a great coverage of the market.

I want to spend a minute talking about the status of post merger integration. As Jason will discuss, we are also well underway in the realization of the synergies of $65,000,000 we presented to you We had the opportunity to plan the post merger integration in detail for over six months And as a result, we first executed on the headcount reductions in our plan in the first week which we expect to result approximately $35,000,000 of just the compensation savings on an annualized basis. Second, we affected the reorganization and combination of two organizations in the first two weeks meaning that emerged new company structure with clear leaders and roles and responsibilities is in place. Third, we already implemented certain synergies by connecting the demand and supply of the two platforms where feasible. And fourth, our global sales teams are working on the cross selling opportunities as one team with aligned incentives and books of business. Already testing the water and actually have already sold the first campaigns with key elements of our combined performance and branding value proposition. We've seen strong enthusiasm and confidence in our new combined teams since closing the deal. With many already seizing the new business opportunities this merger has unlocked.

We expect this to begin positively impacting our Q2 results. Operating, as we said internally, as one team and one dream is underway. Which I believe will ensure we are ready to capture the large opportunity [indiscernible] despite some short term increased disruptions, which are natural consequences of such quick and decisive moves when merging two same size companies. To sum it up, the early momentum is energizing and we're just getting started. Now, I'll turn it over to Jason for more detailed financial updates. Thanks, David. As David mentioned, we achieved our Q4 guidance for Extech gross profit and adjusted EBITDA.

Generating significant free cash flow in the quarter and for the year. As we saw solid profitability and cash generation. As we see continued benefits from the changes we've been making to our revenue mix and cost structure as noted on prior calls. Revenue in Q4 was approximately $235,000,000 reflecting a decrease of 5% year over year. Than the quarter and increased year over year on a full year basis. VMedia Partners in the quarter contributed nine percentage points or approximately $21,000,000 revenue growth year over year. And net revenue retention of our publishers was 86%. Which reflects downward pressure of ad impressions, particularly from one key supply partner as noted in prior quarters. And although our retention remained high, finishing for the full year at 98%. We saw CPCs remain stable to positive netting to a slight increase year over year for the quarter for the second quarter in a row. This, along with continued improvements in click through rates, drove further growth in RPMs. Which have improved in each quarter of 2024. Exact gross profit was $68,300,000 an increase of 7% year over year. Continuing the trend of acceleration and outpacing revenue for the seventh quarter in a row.

Driven primarily by net favorable change in our revenue mix and improved performance from certain deals. While ex Tech gross profit continued year over year growth in Q4 on the strength of our growth areas and positive momentum of RPMs, As noted in prior quarters, one of our key partners transitioned to new bidding technology we completed the transition in early May twenty twenty four. This volatility continued to impact our overall growth in Q4 a high single digit percentage. And our overall Q4 ex Tech plus profit would have grown in the mid teens percentage year over year, excluding this one isolated headwind. We remain focused on rescaling and optimizing this supply. Operating expenses increased year over year. Predominantly driven by one time costs of $5,500,000 related to our transaction As a result, we grew our adjusted EBITDA 21% year over year to $17,000,000 which reflects another consecutive quarter of margin improvement. Moving to liquidity. Free cash flow, which as a reminder we define as cash from operating activities less CapEx and capitalized software costs, was approximately $38,000,000 in the fourth quarter and $51,000,000 for the year, This is a tremendous outcome and comes as a result of cash profitability, strong working capital performance and timing benefits.

As a result, we ended the quarter with $166,000,000 of cash, cash equivalents and investments in marketable securities on the balance sheet and no debt. While we maintain an authorized amount of $6,600,000 under our existing share repurchase program, There were no share repurchases in Q4. Given the finalized acquisition of Tease, we currently do not intend to repurchase shares in the near term. As we have previously stated in August when we announced the Teets acquisition. We announced that we completed the acquisition of Teets in February and subsequently completed the private offering of $637,500,000 in aggregate principal amount of 10% senior secured notes due in 02/1930. As I mentioned, when we closed the transaction, we are very excited about the combined company's transformative financial profile, including the significant expected impact of synergies on our top and bottom lines. We estimate $65,000,000 to $75,000,000 of an annual impact adjusted EBITDA including $60,000,000 from costs to be realized fully in 2026. As David covered, about half of the goal we set for our ourselves in annual run rate was already secured in the first couple of weeks post closing. Focusing initially on cost related synergies. Naturally, that will have a significantly greater impact on our bottom line as the year progresses.

Now turning to our outlook. Given the short time elapsed since we closed the transaction, the fact that the transaction closed almost mid quarter and our focus on integration and synergy capture While we are sharing our outlook for both ex pet gross profit and adjusted EBITDA for Q1, we are currently only sharing our full year outlook for adjusted EBITDA. Also, I'll provide some points of additional context to help frame how we see this year playing out. And we will plan to update more on our progress and outlook on upcoming calls. In our guidance, we factor in the closing date of the merger of February 3 and note that the company's accounting is subject to further policy alignment analysis. With that context, we have provided the following guidance. For Q1, we expect ex Tech gross profit of $100,000,000 to $105,000,000 and we expect adjusted EBITDA of $8,000,000 to $12,000,000 For full year 2025, we expect adjusted EBITDA of at least $180,000,000 Now a few points of additional context. On a pro form a basis, while we are still expecting an overall year over year decline in ex tech gross profit in Q1, we have seen improvement in the year over year performance of legacy teas in the first few months of the year.

Relative to Q4 of last year. On a pro form a basis, we expect to see improvement in year over year growth rates over the course of 2025. With H2 seeing single digit positive growth year over year. And note, provide continued transparency, we have provided legacy T's 2024 quarterly ex tech and adjusted EBITDA in our Q4 earnings release.

Note that these are as legacy tubes presented them on a non IFRS basis and reconciled to IFRS measures. And potentially subject to further U. S. GAAP and policy alignment. With respect to expenses, we anticipate the synergy realization to increase over the course of 2025. A few million dollars in Q1 up to Q4 reflecting the run rate of our 2026 estimated synergy amount. Lastly, on a personal note, I'm very excited about the future. The combined company's financial profile is very attractive and the combined team's excitement has never been higher. We look forward to keeping you updated while we continue along this exciting new chapter. Now, I'll turn it back to the operator for Q and A. Thank you. Ladies and gentlemen, we will now be conducting a question and answer session. It may be necessary to pick up your handset Our first question comes from Andrew Boon with Citizens JMP. Please go ahead.

Morning and thanks so much for taking my question. I wanted to ask about the transition of publishers and advertisers onto what is the combined platform? Can you guys help us understand where we are in that transition, whether there is any concern around dissynergies from maybe potential leakage or anything else that you guys are seeing as we understand that 1Q twenty twenty five guidance? And then a little bit of a bigger picture yesterday you had a competitor talk about potential issues with the TAM of native advertising. Dickie, it would be great if you can just address that. What are you guys seeing around demand for native advertising and that format more broadly? How do you guys think about the opportunity? Thanks so much.

Thanks, Andrew. So I'll take that.

First on the transition. Our focus right now was to sort of unify the teams, start cross selling have a very clear roadmap around the integration of of the platforms and a strategic roadmap that is focused both on the traditional publisher side and particularly on CTV and the ability to deliver performance on CTV. So that's we've had six months of planning to do, so we have that in place. Eventually, what we plan to do is really to deliver a lot of the performance capabilities from Outbrain into Teed's Outbrain Manager, which is the platform where we're going to be serving primarily brands and agencies and SMEs.

We're going to continue to invest in our DSP business for direct response advertisers. The tech transition and integration will take time, but our teams already sort of are cross selling with the back office supporting that. We already had I think, three actually cross selling opportunities that we are answering, which is super exciting. And in terms of the sort of [indiscernible] legacy market, I think we've been talking for the last two, three years about three core growth drivers that actually and I repeated today. One is expanding beyond the feed. So we have already embarked on that journey a couple of years ago. Today, it's about 30% of our business is beyond traditional feed. We sort of saw the need to deliver to performance advertisers at larger scale around the whole open Internet. So we did that. The second is really shifting a lot of the performance buyers, the direct respond into the Outbrain DSP formerly known as Zimento. So that is been another growth driver we saw 45% growth in in the revenue spend, in the ad spend on that platform. And third, if you look at our numbers, which we delivered the organic numbers, we've been continuously growing our extra gross profit and accelerating So it's still single digits, but growing nicely towards the higher single digits.

We will continue to invest in these growth drivers Thank you.

Thank you. The next question comes from James Cieni with Jefferies LLC. Please go ahead.

Great. Thanks guys for the question. In your prepared remarks, you mentioned the impressive growth that you saw in Outbrain DSP. Can you just talk about some of the drivers of that growth and how we should think about the strategy for Outbrain DSP going forward under the combined company? And then I just had another one. Thanks.

Thank you. Hi. So So generally, I mean, we've been we bought ZEMENTA about seven years ago and we used the bidding technology and the ability to broaden the the ability to get more share of wallet from performance advertisers by broadening the ability to bid not only on Outbrain inventory, traditional Outbrain inventory that's connected to Amplify, which is our exclusive publisher base. But to be outside of that inventory into native, into display, and video. So we've been doing that and that has been a growth driver we identified. I mean, traditionally, we used to sell it when we bought the business as a sort of mid market performance DSP competing with other DSPs. And we identified certain segments of buyers where the performance is so superior to sort of our direct connection which allowed us to significantly grow the share of wallet with performance advertisers. And I think again, we will continue, as I said earlier, we will continue to invest in that. We think it's a great platform for performance and that will serve the segment of direct response advertisers. We will consolidate many of the capabilities of performance that we have from their platform into Teed's ad managers so that our brand agency segment and SMEs will also be able to enjoy the ability to sort of launch campaigns and sort of in the future.

I talked about brand formats. I mean, that's sort of a little bit futuristic, but the ability, the unique ability to connect in sort of the same instance, the launch of a campaign for branding and performance, I mean, it has been proven many times that those two sort of really support each other with a lot of research also talk about growth in revenue when you you combine these two and we will have the unique capability to really link a branding campaign with a performance campaign. But today, our focus is to sell branding and performance and bring a lot of the capabilities that [indiscernible] into the team's ad manager. [indiscernible] Maybe one quick point, we've talked about the last couple of quarters, but for clarity. So when a customer is spending on the DSP, the accounting for it is a net revenue recognition as opposed to [indiscernible] On our core demand platform. That's the biggest driver of the disparity between when I say gross revenue for as reported on our P and L is down a few points year over year, but our total ad spend is up year over year. That's the big difference and that we've actually been growing ad spend overall it might not reflect on the face of the P and L and the biggest reason why is the shift to the DSP business.

Okay. Yes, that's helpful. And then just another one on the you mentioned the traditional supply outside of your traditional feed now 30% of revenue versus twenty six six last year. How do you envision that progressing over the next few years under the combined company? Is that does it ever got to a majority or how do we think about that?

I think when we report this number, it's sort of just of legacy outbursts sort of as a percentage of the combined company, it's going to get much lower, but we continue to invest we will continue to invest in that. We think it's a great capability for performance buyers that are looking at buying sort of into display, into other formats So we think that is a growth driver that will continue to support our overall growth.

Great. Thank you both. Thank you. Our next question comes from the line of Vijal Arunyan with Citi. Please go ahead.

Hey, good morning guys. Maybe just on on the Teets sales force factor, sort of transitioning out and that impacts in 1Q, can you talk about better performance in February? Just how is that trending? And as we look at the full year EBITDA guidance, maybe relative to the initial outlook you had when you proposed the merger. What are the factors there? Is it a slower rollout of the cost synergies? Are there revenue synergies in 2025 at all? Just help us kind of bridge through the integration over the course of the year and into next year.

Sure. So maybe I could take both of those, David. Certainly feel free to add. So as far as what we've seen with the legacy Teens business and maybe just quickly a disclaimer that the closing date of February 3 so our guidance forward in our reporting obviously in the future will be effective as of that day. For transparency, as I said on the call, we did share in the earnings release the legacy Teds twenty twenty four results by quarter just for transparency, because we do plan going forward to talk about the combined business. So obviously, right now, just based on the fact that we're so so recent to closing. I'll give a little color on the two legacy businesses separately. For Q1 and for how we see the year playing out to answer your two questions. So in terms of the Q4 legacy TV business we talked at closing about the idiosyncratic drivers of French political instability. And as you pointed out the sales force decline and just merger kind of pending merger impact distraction overall that that the U. S. And global team saw as a headwind We've seen both of those really turnaround in the last couple of months to different extent.

So with respect to France, we saw the recovery very quickly in January, returning to year over year growth.

Which really proves that that was really a one time thing that's quickly snapped back. In terms of the distraction, the global The global revenue and ex techs that we're seeing from the legacy TS business has improved in January versus Q4. On a relative year over year basis in February versus January. On a relative year over year basis. And we feel good about obviously the March up pipeline based on where we are now entering March. So we've seen positives bringing the team together pretty quickly and energizing the combined team has been has been already showing up in the results is the good thing here. And what that nets to is we do expect a year over year decline in Q1 from the ex tech from the legacy Teets business, but to a lesser extent than we saw in Q4. And again, it's improved over the course of the quarter as well. And that's despite actually an incremental FX headwind that we see in Q1 relative Q4 as well. So net net, positives, we see good trends and we obviously project that forward As far as your question on the year, we do expect Outbrain to the legacy Outbrain side to continue the acceleration of growth that we've seen over the course of this past year.

Through continuous growth of yields and contributions from the areas that we just talked about to James' question, the DST and supply outside of feeds. So we entered the year with that momentum. And then on the tube side, like I said, we've seen the trends turning positive over the last couple of months. Obviously, pretty early days still here. And to your question, we gotten pipes connected on the cross selling and on the synergy capture on the top line, but but we expect that to play out more over the course of the year. And we do expect to return to overall pro form a growth by the second half of the year.

Maybe just color on a couple other things with respect to the year? Seasonality, obviously, our seasonality changes as a combined company. Maybe a couple of data points that could be helpful to modeling. We do expect the ex TEC and the EBITDA to be a little bit different pacing than what you might be used to with legacy Outbrain. If you look at the last few years, the average ex TAC by quarter 21% in Q1, 23% to 24% in Q3 and 32% in Q4, while expense are much more much more flat over the course of the year. And what that means is the EBITDA two thirds of the EBITDA typically recognized in the second half of the year. So between that and the synergy realization ramping up, I said on the call, we do expect a few million dollars of synergy realization in Q1. But just based on the timing of close and the actions we've taken, we do expect it to ramp up over the course of the year and finish the year at that 2026 run rate that we've estimated for 2026. So So it's early days. We're obviously focused on the integration We plan to keep you updated on our progress as we move forward.

I just want to add a couple of points. One is really there's excitement on the sales teams around the cross selling and we've seen already some actually materializing and we've seen many customers and the feedback is excellent. So I think that's not something that sort of we're baking into what you see here And I will talk about CTV also has been it's a business that last year Forteves it's close to tripled It was 10% of Q4 and it's going to be potentially a higher percentage in Q1. So we see a lot of [indiscernible] And when CTV growth, it also helps Teats particularly because of the omni channel capabilities. So will also have a positive impact around the online video business, which we've think, talked about it when we announced the deal. What we see when advertisers spend both on CTV and on online video with ease, normally 50% the higher total spend than when you just spend on one of the platforms. So the growth of CTV will also we believe, continue to support growth in the online video.

Okay. That's really helpful. Thank you.

And just a follow-up on the CTV opportunity, particularly given the strength that TES is seeing there. And just kind of I think what you're implying this shift from where CTV has been historically more upper funnel and brand and there seems to be grown focus around performance. Is that a learning change for advertisers? Are they kind of knocking on the door to be a little bit more performance and maybe just what's that whether it's competitive lower conversations with advertisers. What's that like maybe kind of broadly No, I would take that. So I think we're very excited about CTV and the progress that Teed's made over the last couple of years, which has been mostly focused around branding and really leveraging the joint business partnerships that Heath had with more than 50 of the most premium brands of the world that are sort of doing omni channel video with them. We believe that the performance is a huge huge opportunity We've had many of our SME buyers ask us for video and ability to deliver on CTV. We think it's the early days. I think CTV is a medium that will sort of drive a lot of value for performance.

Both for brands, I mean, when we talk about enterprise brands that want to drive not just brand awareness, but eventually want to control the sales. And for small medium enterprises, that today video production with AI is in a different level than it was before. So you can generate those creative assets, Part of the strength of Teeds is the sort of studio, which is helping advertisers take those assets and make them sort of more interactive and trigger more of sort of either attention or performance. So we believe that the combination of Tete's capability that Tietz has on CTV.

The huge client base, customer base that Outbrain has on the performance side, the combination of those is going to be something that is pretty unique in the market. And it's a significant part of our strategic product roadmap investments Thank you. Ladies and gentlemen, a reminder to all the participants Our next question comes from the line of Laura Martin with Needham and Company. Please go ahead.

Hi there. So I appreciate So, at the high end, at that 60% to $75,000,000 of synergies, How much of that is cost and how much of that is revenue synergy? At this point, Sure. So I can give some color to that Laura. Thanks for the question. So yes, we estimate for 2026 an annual number in 2026 achieved of $65,000,000 to $75,000,000 Of that, sixty six zero is costs, I could break that down further. And then the remaining €5 to €15 is is the EBITDA impact of revenue synergies. So we're keeping that revenue synergies number fairly conservative for these first couple of years here. It is I think the biggest long term opportunity for sure and what makes us all very excited. Between the various drivers there of cross selling and geographies and just the data combined data impact. So that one's big, but we're keeping it pretty small for our estimates right now. The $60,000,000 of costs that we expect to achieve by next year that is three quarters of that or $45,000,000 is personnel related. As David said, we've actioned the majority of that 70 plus percent of this [indiscernible] secured. We have a limited impact in Q1 just based on the timing.

But it should play out over the next couple of quarters. And get there by year end pretty confidently. The other $15,000,000 of that six year cost is a combination of non compensation, which is things like headcount related items, software licenses, combining offices, community etcetera. Discretionary spend like on marketing and then of course professional fees and things that you just don't need to have anymore. So that one will play out a little bit kind of in time. Some of them are right away, some of them take time until you do your insurance policy or do your marketing events, etcetera. But we have pretty high confidence in that number as well. With some upside. And then the third area there is traffic acquisition costs, which as you know is the largest cost here This is the most exciting one for me personally. There's just there's just always a lot of room to optimize how we put our demand on supply to optimize our margins from a tax perspective. We've already connected the pipes of supply to demand in both directions and we already have items flowing at a small scale right now, but we do believe that we're able to capture a several million dollars of putting demand on supply where it makes more sense.

Just in context on the top line synergy, I mean, we're talking here on what we sort of giving in these numbers, it's It's less than 2% in total. So we believe there's significant uplift All set. Second, in the press release, you said that your go to market is going to be teed. Does that imply we're changing the name of the company, we're changing the ticker symbol? Can you this comment in the press release that you're going that you're going to mark OBTs going forward?

Yes, Laura. So when we announced the deal and when we announced the closing, we said yes, we're going to move forward and operate under the name Teets, the name we made a decision to take that name. It's we call it the new I mean, if you look at the old team, the IMO logo and positioning, it's a totally refreshed ease in the sense that it's combining performance capabilities with branding capabilities, many more formats. So we refreshed the whole branding and positioning of the company and we're going to be calling it T and that will be a name change and over time also a ticker change. So we are very excited about this sort of change. I think the market in sort of our industries has been very well received. I think Teed's brand is associated with sort of quality premium brands video, which are the areas where we're going with CTV. So we felt that this is the right decision. And I think everyone also at Legacy Outburn is very excited about it.

Okay. And then stay with you, David, my last question is about news.

So the drumbeat of ad agencies talking about we need to fund news is really getting louder. My question is, do you see money coming back into news or do we still have entire agencies that are buying no news regardless of whether it's political or war, is there any money coming back into the new genre that you're seeing?

So I would say, Lorie, our mix of inventory is way beyond use, but I do see some positive trends. I think it's early days. I think you and I talked about it. I mean, we're in at CES. There's a lot of effort going on between sort of the the industry talking to CMOs and to the agencies about sort of the value actually and the fact that having brand advertising need to news is a positive impact. So I think it's it's happening. I think it's small steps in the right direction.

All right. Thanks very much. Appreciate Thank you.

Thank you. Ladies and gentlemen, that brings us to the end of the question and answer session. As there are no further questions, I would now like to hand the conference over to the management for closing comments.

So thank you all for joining us. As you can I hope you you can see how excited we are about this combination the new journey we're embarking on? I think we are very excited about about the legacy Outbrain business and the growth drivers. We can see the benefits of the combination already materializing and we look forward to continuing to update you on the progress. Thank you.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time.