EL7.AI
StocksMedium•12 November 2026•
4 min read

Nexxen Targets 34% Adjusted Profit Margin in 2027, Expects More Than 40% in Fourth Quarter

Key Facts

1Nexxen expects an adjusted EBITDA margin of about 34% in 2027.
2The company expects the adjusted EBITDA margin to exceed 40% in the fourth quarter of 2026.
3The company reaffirmed its 2026 contribution revenue range of 388 to 402 million dollars.
4Third-quarter revenue rose 9% to 102.9 million dollars.
5Connected TV revenue was 34.1 million dollars, up 39% year over year.

On November 12, Nexxen reaffirmed its 2026 financial guidance and said its adjusted EBITDA margin could reach about 34% in 2027. The third-quarter earnings call transcript quoted CFO Sagi Niri as saying the company expects the margin to exceed 40% in the fourth quarter of 2026. The company maintained its full-year estimates for contribution ex-TAC revenue at between 388 and 402 million dollars. It also expects programmatic revenue of between 380 and 393 million dollars, and adjusted EBITDA of between 122 and 132 million dollars. These estimates provide a framework for assessing the company's fourth-quarter outlook and margin trajectory over the coming year.

The guidance followed third-quarter revenue of 102.9 million dollars, up 9% year over year, according to the company's statement. Programmatic revenue rose at the same rate to 97.8 million dollars. Contribution ex-TAC revenue reached a record 100.3 million dollars, up 8% from the same period. Adjusted EBITDA was 34.5 million dollars, an annual increase of 22%. Nexxen said adjusted EBITDA as a share of contribution revenue rose to 34%, compared with 30% in the third quarter of 2025.

Connected TV advertising stood out among the drivers of quarterly growth, with revenue of 34.1 million dollars, a quarterly record and a 39% year-over-year increase. Its share of programmatic revenue rose to 35%, compared with 27% in the third quarter of 2025. Management forecast new record revenue from the activity in the fourth quarter. The company attributed this to broad-based momentum and the continued expansion of its TV home screen offering. This trajectory accompanies management's expectation of record contribution and programmatic revenue in the fourth quarter.

Nexxen attributed the growth in adjusted EBITDA and margin expansion in the third quarter to continued enterprise momentum and increased customer use of its integrated platform. It also cited disciplined cost management as a supporting factor. The company added that a more favorable shekel-to-U.S. dollar conversion contributed to the results, alongside growing benefits from AI initiatives. Management said its expectation of record levels in the fourth quarter was based on visibility available at the time and preliminary October results. The company described October as its best month ever for overall revenue performance, based on preliminary unaudited results.

For the period from the start of the year through the end of September, revenue rose 10% to 290.3 million dollars, while programmatic revenue increased 12% to 275 million dollars. But adjusted EBITDA fell 4% to 78.4 million dollars in the first nine months of 2026. In the third quarter alone, operating profit rose 75% to 12.7 million dollars compared with the same period a year earlier. Diluted earnings per share were 0.18 dollars, versus 0.07 dollars a year earlier, an increase of 150%. The figures show a divergence between revenue growth and adjusted EBITDA over the nine-month period, and the improvement in profitability recorded in the third quarter.

According to the company's statement, management expects sequential and annual growth in adjusted EBITDA and margin expansion in the fourth quarter, with most of the incremental increase in contribution revenue flowing through to adjusted EBITDA. Nexxen said the benefit associated with U.S. midterm election advertising in the third quarter and early fourth quarter is not expected to pose a significant headwind to year-over-year comparisons in 2027. As of September 30, 2026, the company had 152.9 million dollars in cash and cash equivalents, no long-term debt, and an additional 50 million dollars available under an undrawn revolving credit facility. It also extended its share repurchase authorization to 40 million dollars and said it expects to resume repurchases in the second half of the fourth quarter. The upcoming fourth-quarter results will be the point at which the company’s expectations for record revenue levels and margin expansion are measured.