TEAD

You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q (this “Report”) and in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission (“SEC”) on March 16, 2026 (“2025 Form 10-K”). In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, beliefs, and expectations, and involve risks and uncertainties that could cause actual results, events, or circumstances to differ materially from those projected in the forward-looking statements. Factors that could cause or contribute to these differences include those set forth in Part I, Item 1A of our 2025 Form 10-K, which is incorporated by reference in this Report, as such factors may be revised or supplemented in subsequent filings with the SEC, as well as those discussed below and elsewhere in this Report, including under the caption “Note About Forward-Looking Statements.” The purpose of this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is to provide information that management believes is necessary to understand our business, financial condition, and results of operations. The MD&A should be read in conjunction with our condensed consolidated financial statements and notes thereto. In addition to the condensed consolidated financial statements prepared in accordance with the generally accepted accounting principles in the United States (“GAAP”), we use certain non-GAAP financial measures throughout this discussion to provide investors with supplemental metrics used by our management for financial and operational decision making. These measures are supplemental and are not an alternative to our financial statements prepared in accordance with GAAP. See “Non-GAAP Reconciliations” in this Report for the definitions and limitations of these measures, and reconciliations to the most directly comparable GAAP financial measures. Business Overview Teads Holding Co. (together with its consolidated subsidiaries, “Teads,” the “Company,” “we,” “our,” or “us”) is a leading omnichannel advertising platform focused on driving outcomes for brand and performance advertisers across the digital ecosystem. We connect global advertisers with an expansive network of media owners across the open web, connected TV (“CTV”), and in‑app environments. The Company is headquartered in New York, New York, with additional operations throughout North America, Europe, the Middle East, and Asia. We operate a two-sided marketplace that provides a scaled, end-to-end advertising solution by maintaining direct relationships with global advertisers, including Fortune 500 brands and agency holding companies, as well as media owners spanning premium publishers to CTV, application developers, and other existing and emerging content platforms. We generate revenue primarily from advertisers purchasing media owner inventory through our platform. As a result of the acquisition (the “Acquisition”) of TEADS, a private limited liability company (société à responsabilité limitée) incorporated and existing under the laws of the Grand Duchy of Luxembourg (“Legacy Teads”), the accompanying condensed consolidated financial statements include the results of Legacy Teads’ operations from the Acquisition date of February 3, 2025. Our current results therefore reflect the fully consolidated operations of the combined company, and each of the three-month periods ended June 30, 2026 and 2025 reflects a full three months of consolidated operations following the Acquisition. However, the financial information presented for the six months ended June 30, 2026 is not directly comparable to the financial information presented for the corresponding prior year period, which reflects the operations of Legacy Teads only from the Acquisition date. This overview highlights material developments in our business and should be read in conjunction with the more comprehensive business and industry discussion included in the 2025 Form 10-K. Our platform is designed to enable advertisers to reach their audiences across the digital advertising ecosystem and drive desired outcomes from those audiences at each step of the marketing funnel. We continue to focus on providing efficient, high-impact supply chains for advertisers and sustainable advertising revenue for media owners as the digital advertising ecosystem evolves. Recent Trends, Risks and Uncertainties Together with the risk factors identified in our 2025 Form 10-K, we have identified the following developments that may impact our future financial performance or condition: Post-Acquisition Strategy and Implementation Following the Acquisition, we focused on the integration of our operations amid operational challenges inherent in returning a combined global company to growth. Building on the restructuring of our go-to-market organization in the second half of 2025, 29 we substantially completed the actions under our broader strategic restructuring plan (the “Strategic Plan”) announced in December 2025, which is intended to reduce operating costs, improve operating margins and advance the Company’s commitment to profitable growth. The Strategic Plan, which resulted from a comprehensive review of our business portfolio and operational structure, involved a reduction of our global workforce by approximately 10%. A key component of this strategy is the deliberate rationalization of our business portfolio and a focus on supply quality, including the “clean-up” of underperforming inventory. While these optimizations, alongside broader macroeconomic volatility and increased competition on the demand side, contributed to a year-over-year reduction in spend from certain customers, we believe these shifts are essential for the long-term health and transparency of our premium marketplace. Trends in Our Business — Enterprise and Direct Response & Small Medium Enterprise (“SME”) We are a leading omnichannel advertising platform focused on driving outcomes for brand and performance advertisers across the digital ecosystem. Our recent results highlight two different trajectories across our business: Enterprise advertisers, and Direct Response and SME advertisers. Our Enterprise business, focused largely on branding dollars, consists of global brand and agency partnerships utilizing our omnichannel supply inclusive of Connected TV and is our strategic priority. Enterprise delivered $89 million in Ex-TAC Gross Profit in the three months ended June 30, 2026. Our Direct Response and SME advertisers, focused on performance dollars, include affiliates, search and performance buyers. Direct Response and SME delivered $34 million in Ex-TAC Gross Profit in the three months ended June 30, 2026. This component of our business is experiencing headwinds primarily driven by broader industry trends, as described under “—Generative AI and Publisher Traffic Trends” below. Generative AI and Publisher Traffic Trends The digital advertising ecosystem continues to be impacted by structural shifts and evolving user behaviors, evidenced most prominently by declining traffic trends on the traditional publisher side of the Open Internet. These developments are significantly influenced by the integration of generative artificial intelligence (“AI”) into major search engines and web browsers, which provides direct answers and summaries that are increasingly causing users to bypass the publisher pages. Additionally, other changes in policies and practices by third parties we do not control, most recently by Google, have challenged Open Internet publishers’ ability to drive pageviews and monetize effectively, which has in turn impacted our monetization. We have observed these combined factors contribute to an ongoing decline in page view volume for our publisher partners, thereby reducing the advertising inventory available for monetization on our platform. This decline disproportionately impacts our direct response and SME advertisers, which are most closely tied to open-web performance, and specifically our publisher feed inventory. The decline in page views has resulted in reductions in the buying patterns of direct response and SME advertisers. For our premium publisher partners, we estimate that page views declined by approximately 21% and approximately 16% for the three and six months ended June 30, 2026, respectively, compared to the corresponding prior year periods. While this broader evolution presents challenges to traditional publisher traffic patterns, it also creates opportunities for platform innovation and engagement. Our strategy is intended to address these shifts in several respects. We launched Teads EngageOS, an AI-powered operating system for publishers that unifies editorial content and ad inventory, with the objective of optimizing total publisher revenue across a reader session — designed to protect audience engagement while delivering higher yield. In addition, we are opening additional programmatic buying channels at higher margins, including AI-native supply channels in emerging environments such as large language model interfaces, and launching a vertical video format that enables advertisers to use creative assets developed for other platforms. See “—Expansion Into New Environments, New Experiences and New Ad Formats” below. Macroeconomic Environment General worldwide economic conditions continue to experience instability, as well as volatility and disruption in the financial markets. These conditions result from factors including geopolitical tensions, including the effects of the Israel-Hamas conflict and the uncertainty regarding the sustainability of the related cease-fire and the conflict involving the U.S., Iran, Israel and surrounding nations, as well as other geopolitical tensions and uncertainties, global supply chain disruptions, labor market volatility, tariffs and trade wars, general economic uncertainty, inflation, fluctuations in U.S. and global interest rates, and currency exchange rate fluctuations. The global economy is also experiencing heightened uncertainty due to market reactions to changes in international trade and tariff policies, recessionary concerns, corporate bankruptcies, and the impact of actual or potential U.S. government shutdowns, which have the potential to further exacerbate inflationary pressures. These conditions have negatively impacted our advertisers and, as a result, our business has been impacted and could be 30 adversely impacted in the future if these conditions continue or worsen, including if our advertisers were to reduce or further reduce their advertising spending. We continue to monitor our operations, and the operations of those in our ecosystem (including media partners, advertisers, and agencies), but these conditions make it difficult to accurately forecast and plan future business activities. Such volatility could cause a further reduction or delay in overall advertising demand and spending, or further affect our advertisers’ ability to pay, each of which has negatively impacted, and may continue to negatively impact, our business, financial condition, and results of operations. For additional information regarding the potential impact of macroeconomic factors on our business, see Item 1A, “Risk Factors” in our 2025 Form 10-K. Conditions in Israel Many of our employees, including certain members of our management team and board of directors (“Board”), operate from our offices in Israel. Accordingly, political, economic and military conditions in Israel and the surrounding region directly affect our business and operations. Following the October 7, 2023 attacks by Hamas terrorists on Israel’s southern border, Israel declared war against Hamas and since then, Israel has been involved in military conflicts with Hamas, Hezbollah (a terrorist organization based in Lebanon), Syria and Iran, both directly and through proxies. Although a ceasefire between Israel and Hamas took effect on October 10, 2025, there is no assurance that this agreement will continue to be upheld. On February 28, 2026, the U.S. and Israel initiated air strikes against Iranian military targets and leadership. Since then, retaliation by Iran against U.S. and Israeli interests in the Middle East has been widespread. As of the date of the filing of this Report, significant volatility and uncertainty persist throughout the Middle East region, with the potential for continued escalation into a broader and more sustained regional conflict. The draft of Israeli military reservists, as well as the evacuation of Israeli citizens from areas near conflict zones have adversely affected, and continue to adversely affect, our employees impacted by such actions. In addition, government-imposed restrictions and precautions in response to such conflicts may negatively impact our employees, management and directors by interrupting their ability to effectively perform their roles and responsibilities. In addition, further hostilities involving Israel could lead to damage to facilities and infrastructure, increased cyber attacks, the interruption or curtailment of trade between Israel and its trading partners, and/or the willingness to do business with companies with operations in Israel. Furthermore, macroeconomic indications of the deterioration of Israel’s economic standing as reflected in the downgrading of Israel’s credit rating by rating agencies (such as Moody’s and S&P Global) could adversely affect our business, financial condition and results of operations and could make it more difficult for us to raise capital. The intensity and duration of these conflicts are difficult to predict and we are continuing to monitor these events and assessing their current and potential impacts on our business. We cannot attribute the impact of the current trends in advertising demand to any particular factor, including conditions in Israel, and cannot predict the impact if these conflicts continue or escalate further. See Item 1A, “Risk Factors” included in our 2025 Form 10-K for more information regarding certain risks associated with the conditions in Israel. Factors Affecting Our Business Advertiser Retention and Growth Our growth is partially driven by retaining and expanding the amount of spend by advertisers on our platform and by acquiring new advertisers. Our total addressable market includes top, middle, and bottom of the marketing funnel, which allows us to attract diverse, premium demand. We view our full-funnel offering of both branding and performance capabilities as an opportunity to increase advertiser and agency spend on our platform. We invest in our relationships with agencies, both on a local and global basis, aligning on mutually beneficial service level agreements, and building products that help to solve their goals and streamline their operations. In addition, our joint business partnerships (“JBPs”) with large enterprise brands represent a significant overall portion of our revenue and are strategic for driving advertiser retention and growth. We continually invest in enhancements to our platform that allow advertisers to drive concrete business outcomes and return on advertiser spend (“ROAS”). In particular, we are expanding our use of AI to automate manual tasks in campaign setup and optimization, while enhancing advertiser creative and overall performance. We also support advertisers with developing creative ads across formats, as a value added service to our advertisers. Advertiser budgets and pricing on our platform fluctuate from period to period for a variety of reasons, including advertiser-specific cycles and preferences, quality of performance and ROAS, supply and demand balance, macroeconomic conditions, and seasonality. In order to grow our revenue and Ex-TAC Gross Profit and maximize value for our advertisers and media partners, our focus as a business is on driving business outcomes and ROAS for advertisers. 31 For the three and six months ended June 30, 2026, thousands of unique advertisers were active on our owned and operated platforms, in addition to the thousands of advertisers who access the platform through programmatic partnerships. Retention and Growth of Relationships with Media Partners We rely on our relationships with our media partners for our advertising inventory and our corresponding ability to drive advertising revenue. To further strengthen these relationships, we continuously invest in our technology and product functionality to drive user engagement and monetization by taking steps designed to (i) improve our algorithms, referred to as our AI prediction engine; (ii) attract and procure relevant demand; (iii) expand the adoption of our enhanced products by media partners; and (iv) expand our demand capabilities to new formats. Our relationships with our media partners are typically long-term and strategic in nature, providing us with valuable ad inventory, often on an exclusive basis. Our top 20 media partners leveraged our platform for an average of 7 years (based on 2025 revenue). Our growth depends on media partners’ ability to drive traffic to their sites, apps or other properties. The proliferation of social media properties, streaming services and other platforms, as well as the adoption of AI, have negatively impacted, and may continue to negatively impact, the growth of key segments of our media partners, namely digital publishers. These dynamics have contributed to a decline in page view volume across our publisher partners, thereby reducing the advertising inventory available for monetization on our platform, as described under “—Generative AI and Publisher Traffic Trends” above. At the same time, the trends in user engagement underscore the media partner need for our solutions to engage users and enhance overall monetization. Expansion Into New Environments, New Experiences and New Ad Formats The available mediums and formats for consumers to engage with media have greatly expanded over the last several years. As this evolution in media consumption and consumer behavior continues, we are focused on utilizing our AI prediction technology to bring curated, relevant consumer experiences to these new devices, experiences and formats. Fundamentally, we plan to continue to make our platform available for media partners on all types of devices and platforms and evolve our business to apply our technology to the most popular methods of media consumption, such as CTV environments including HomeScreen advertising placements. Examples of environments in which content consumption is growing include CTV, online video, mobile in-app environments, and within Large Language Models (“LLMs”) interfaces. Our omnichannel outcomes platform enables advertisers to not only reach their audiences across the broad digital advertising ecosystem — from web, to CTV, to app environments — but to drive outcomes from those audiences at each step of the marketing funnel. The development and deployment of new ad formats and further penetrating new and growing environments allow us to better serve advertisers who seek to target and engage consumers at scale. We believe this continues to open and grow new types of advertiser demand, while ensuring the relevance of the environments in which we operate. User Engagement and Driving Desired Outcomes Driving outcomes is a key pillar of our platform that drives value for media partners and advertisers. Our AI prediction engine manages this dynamic, matching consumers with editorial and advertiser experiences that will deliver desired outcomes across the digital advertising ecosystem. The ability to deliver on outcomes for our media partners and advertisers is driven by several factors, including enhancements to our AI prediction engine, growth in the breadth and depth of our data assets, the size and quality of our content and advertising index, user engagement, new media partners, expansion on existing media partners and expansion to new media environments and formats. As we expand and invest, we are able to further maximize our efficacy across different screens and devices, support brands effectively across the lifecycle of their needs, and collect and connect more data and, as a result, continually improve our prediction engines, which drives better results for our advertiser and media owner partners. Investment in Our Technology and Infrastructure Innovation is a core tenet of our Company and our industry. The dynamic and continuously evolving nature of the digital advertising ecosystem will be significantly impacted by the use of AI in further driving innovative new technologies and solutions. We plan to continue our investments in our people, our technology, and moreover our people’s use of AI in order to retain and enhance our competitive position. For example, improvements to our AI prediction engine, or use of additional data 32 signals, help us deliver more relevant ads, driving higher user engagement, thereby improving ROAS or other desired outcomes for advertisers and increasing monetization for our media partners. We believe in the transformative power of AI in shaping the future of sustainable media, and we are powered by our deep expertise in using predictive AI technology for years to empower both media owners and advertisers in their businesses. We leverage predictive AI in a manner designed to enable media owners to increase their revenues and connect with audiences on their own platforms. We use machine learning to predict consumer interest and propensity to convert ads to sales. Our technology has developed into a robust AI machine learning system and is largely homegrown by our Research and Development team. One of the strongest long-term levers in our business is the continuous improvement of our algorithms and the data sets our algorithms learn from. Our direct integrations across our media partners’ properties provide us with a large volume of proprietary first-party data, including context, user interest and behavioral signals. The more data points we have, the better we believe our advertisers’ ROAS and yield potential can be. Our placement optimization and ad serving technology dynamically adjusts both the arrangement and the formats of content delivered to a user, depending on the user’s preferences and a media partner’s key performance indicators, designed to provide a tailored and engaging experience. We continue to invest in media partner and advertiser focused tools, technology, and products as well as privacy-centric solutions. Industry Dynamics Demand for Outcomes Across the Funnel Our business depends on the overall demand for digital advertising, on the continuous success of our current and prospective media partners, and on general market conditions. Digital advertising is a rapidly growing industry, with growth that has outpaced the growth of the broader advertising industry. Content consumption continues to evolve, requiring media owners to adapt in order to successfully attract, engage and monetize their consumers. As audiences are increasingly engaged across digital media platforms, and as more purchase data is created, collected, integrated and analyzed digitally, advertisers are increasingly able to leverage sophisticated measurement and attribution solutions in order to optimize their advertising spend across the marketing funnel. As a result, advertisers are increasingly shifting spend away from legacy media offerings towards data-based solutions, driven by performance-centric metrics. We believe that our strength in delivering engagement and clear outcomes for advertisers, from high-impact branding to lower-funnel performance, built on our proprietary AI prediction engine, aligns well with the ongoing market shift towards increased accountability and expectations of ROAS from digital advertising spend. The Role of AI in Content and Personalization AI is revolutionizing content creation, distribution, and personalization; automating tasks like video editing, image recognition, and language translation. AI-powered systems are also improving content delivery, helping media platforms suggest relevant movies, shows, articles, and advertisements to consumers. This is especially important at a time when advertisers increasingly anticipate measurable results from their digital advertising investments. We believe that our experience in this space enables us to more nimbly capitalize on the opportunities for media owners and advertisers to leverage AI and automation to engage consumers and optimize their business goals. For additional information regarding our strategic approach to these technologies, see “Business—Industry” and “Risk Factors” in our 2025 Form 10-K. Generative AI and Search Trends At the same time, the proliferation of generative AI tools, particularly their integration into major search engines and web browsers, is causing a shift in how users discover and consume content online. These tools can provide users with direct answers and AI-generated summaries, which has reduced their need to click through to original publisher websites. This trend of bypassing the traditional user journey to a publisher’s site has contributed, and could continue to contribute to a decline in direct user traffic. A reduction in traffic to our media partners directly decreases the inventory of advertising impressions available for us to monetize, which has affected, and could in the future have a significant effect on, our revenue and results of operations. For additional information regarding the impact of these trends on our business, see “—Recent Trends, Risks and Uncertainties—Generative AI and Publisher Traffic Trends” above, and for the related risks, see “Business—Industry” and “Risk Factors” in our 2025 Form 10-K. Regulatory and Platform Changes Regulators across most developed markets continue to be focused on enacting and enforcing user privacy rules, as well as requirements relating to the development and deployment of AI, including transparency and labeling obligations for AI- 33 generated content, and on maintaining significant oversight over the competitive practices of the major “walled garden” platforms. In the United States, the absence of a comprehensive federal privacy law has produced fragmented state frameworks that continue to create compliance complexity. In the EU, the Digital Markets Act and Digital Services Act are actively being enforced against designated gatekeeper platforms, with recent actions targeting consent practices, data portability and advertising transparency. Industry participants will likely continue to be impacted by changes implemented by platform leaders. For example, although Google has announced that it does not intend to deprecate third-party cookies in its Chrome web browser, its evolving approach to privacy and tracking controls in Chrome will continue to affect our and our clients’ compliance requirements. For additional information regarding changing industry dynamics with respect to industry participants and the regulatory environment, see “Business—Industry,” “Business—Regulatory” and “Risk Factors” in our 2025 Form 10-K. Seasonality The global advertising industry experiences seasonal trends that affect most participants in the digital advertising ecosystem. Our revenue generally fluctuates from quarter to quarter as a result of a variety of factors, including seasonality, as many advertisers allocate the largest portion of their budgets to the fourth quarter of the calendar year to coincide with increased holiday purchasing, as well as the timing of advertising budget cycles. Historically, the fourth quarter of the year has reflected the highest levels of advertiser spending, and the first quarter generally has reflected the lowest level of advertiser spending. In addition, expenditures by advertisers tend to be cyclical and discretionary in nature, reflecting changes in brand advertising strategy, budgeting constraints, and buying patterns, and a variety of other factors, many of which are outside of our control. The quarterly rate of increase/decrease in our traffic acquisition costs is generally commensurate with the quarterly rate of increase/decrease in our revenue. However, traffic acquisition costs have, at times, grown at a faster or slower rate than revenue, primarily due to the mix of the revenue generated or contracted terms with media partners. We generally expect these seasonal trends to continue, though historical seasonality may not be predictive of future results given the potential for changes in advertising buying patterns and macroeconomic conditions. These trends will affect our operating results and we expect our revenue to continue to fluctuate based on seasonal factors that affect the advertising industry as a whole. Definitions of Financial and Performance Measures Revenue We generate revenue primarily from advertisers who purchase media inventory from us to deliver digital advertising across a broad range of environments, including web, mobile app, online video, and CTV. Advertisers buy media through our platform using multiple buying models, including cost‑per‑click (“CPC”), cost‑per‑thousand impressions (“CPM”), video completion‑based pricing, and other outcome‑based formats. Revenue is recognized when an advertisement is delivered or when the specified outcome—such as an impression, click, completed video view, or other measurable event as defined in the contract—occurs. The nature of the outcome depends on the campaign objective and the applicable pricing model. In most arrangements, we act as the principal in the transaction because we control the advertising inventory before it is transferred to the advertiser. In these cases, we recognize revenue on a gross basis for the amount billed to the advertiser. In certain arrangements, where we do not control the advertising inventory prior to transfer, we act as an agent and recognize revenue on a net basis. Our revenue is impacted by the level of advertiser demand for our products and by the volume, quality, and performance of available advertising inventory. Demand fluctuates based on macroeconomic conditions, seasonal advertising patterns, campaign performance, advertiser ROAS expectations, and budget dynamics across advertiser types. Enterprise marketers and agencies deploy budgets to drive a range of brand outcomes, from awareness, consideration and intent to lower-funnel outcomes such as site traffic or app downloads. By contrast, direct response and SME advertisers generally operate against defined performance targets, with spend scaling based on measurable conversion efficiency. To the extent advertisers (of all types) achieve their desired outcomes on our platform, they may increase budgets or expand usage of our solutions over time. We continue to expand and introduce new platform features that are adopted by our advertisers, expand our omnichannel capabilities, extend our reach to more CTV, video offerings, and other inventory and add additional customers whose businesses may have different underlying business models. Our agreements with advertisers provide them with considerable flexibility to modify their overall budget, price (CPC and CPM), and the ads they wish to deliver on our platform, which can impact the timing and amount of revenue recognized. 34 Traffic Acquisition Costs We define traffic acquisition costs (“TAC”) as amounts owed to media partners for the purchase of inventory. We incur costs with our media partners, which may be publishers, third-party intermediaries, or other parties such as original equipment manufacturers, in the period in which certain actions, such as click-throughs, impressions or views occur. Such costs due to media partners are based on the media partners’ contractual revenue share, programmatic bidding or guaranteed minimums based on certain media partner conditions. In some circumstances, we incur costs based on a guaranteed minimum payment, which may be based on either impressions, page views or a fixed amount if the partner reaches certain performance targets, in exchange for guaranteed placement on specified portions of the media partners’ online properties. As such, traffic acquisition costs may not correlate with fluctuations in revenue, as our costs may remain fixed even with a decrease in revenue. Traffic acquisition costs also include amounts payable to media partners whose supply is purchased programmatically. Other Cost of Revenue Other cost of revenue consists of costs related to the management of our data centers, hosting fees, data connectivity costs, research and insight costs, and depreciation and amortization. Other cost of revenue also includes the amortization of capitalized software that is developed or obtained for internal use associated with our revenue-generating technologies and amortization of intangible assets. Operating Expenses Our operating expenses consist of research and development, sales and marketing, and general and administrative expenses. The largest component of our operating expenses is personnel costs. Personnel costs consist of wages, benefits, bonuses, stock-based compensation and, with respect to sales and marketing expenses, sales commissions. Research and Development. Research and development expenses are related to the development and enhancement of our platform, and consist primarily of personnel and the related overhead costs, amortization of capitalized software for non-revenue generating infrastructure and facilities costs. Sales and Marketing. Sales and marketing expenses consist primarily of personnel and the related overhead costs for personnel engaged in marketing, advertising, client services, and promotional activities. These expenses also include advertising and promotional spend on media, conferences, and other events to market our services, and facilities costs. General and Administrative. General and administrative expenses consist primarily of personnel and the related overhead costs, professional fees, facilities costs, insurance, and certain taxes other than income taxes. General and administrative personnel costs include, among others, our executive, finance, human resources, information technology and legal functions. Our professional service fees consist primarily of accounting, audit, tax, legal, information technology and other consulting costs, including costs relating to the Acquisition, as well as our compliance with Sarbanes-Oxley Act requirements. Impairment Charges. Impairment charges consist of non-cash charges recognized when the carrying amount of an asset or asset group is not recoverable or exceeds its estimated fair value, as applicable. These charges may include impairments of goodwill, acquired intangible assets, property and equipment, capitalized software and other long-lived assets. Impairment charges recognized during the six months ended June 30, 2025 relate to intangible assets and capitalized software associated with the discontinuance of the video product offering associated with vi during the first quarter of 2025. Restructuring Charges. Restructuring charges include non‑recurring severance and related costs incurred in connection with (i) the workforce reduction announced following the Acquisition in February 2025, and (ii) the Strategic Plan initiated in December 2025 to streamline operations and reduce costs. These charges are not reflective of ongoing operating performance and are excluded from certain financial and performance measures. Other (Expense) Income, Net Other (expense) income, net is comprised of interest expense, and other (expense) income and interest income, net. Interest Expense. Interest expense primarily consists of interest on our 10.000% senior secured notes due 2030 (“Senior Secured Notes”), the Overdraft Facility (as defined below) assumed in the Acquisition, our revolving credit facilities, and amortization of debt discounts and deferred financing cost. Interest expense for 2025 also included interest and fees on our senior secured bridge term loan credit facility drawn and repaid during the first quarter of 2025. Interest expense may increase if we incur any borrowings under our 2025 Revolving Facility (as defined below) or if we enter into new debt facilities or finance lease arrangements. 35 Other (Expense) Income and Interest Income, net. Other (expense) income and interest income, net primarily consists of interest earned on our cash, cash equivalents and investments in marketable securities, discount amortization on our investments in marketable securities, and foreign currency exchange gains and losses. Foreign currency exchange gains and losses, both realized and unrealized, relate to transactions and monetary asset and liability balances denominated in currencies other than the functional currencies, including mark-to-market adjustments on undesignated foreign exchange forward contracts. Foreign currency gains and losses may continue to fluctuate in the future due to changes in foreign currency exchange rates. Provision (Benefit) for Income Taxes Provision (Benefit) for income taxes consists of federal and state income taxes in the United States and income taxes in certain foreign jurisdictions, as well as deferred income taxes and changes in valuation allowance, reflecting the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Realization of our deferred tax assets depends on the generation of future taxable income. In considering the need for a valuation allowance, we consider our historical and future projected taxable income, as well as other objectively verifiable evidence, including our realization of tax attributes, assessment of tax credits and utilization of net operating loss carryforwards. 36 Results of Operations We have one operating segment, which is also our reportable segment. The following table sets forth our condensed consolidated results for the periods presented. Our 2026 results incorporate a full six months of combined operations, whereas our 2025 results include the Legacy Teads business only from the Acquisition date of February 3, 2025, through June 30, 2025 for the year-to-date period. Because the prior year six-month period includes the results of the acquired business for only a portion of the six-month period, the financial information presented for the six months ended June 30, 2026 is not directly comparable to the corresponding prior year period. Conversely, the financial information presented for the three months ended June 30, 2026 and 2025 is directly comparable, as both quarterly periods reflect a full three months of consolidated operations following the Acquisition. Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (In thousands) Revenue $ 284,589 $ 343,096 $ 550,572 $ 629,453 Traffic acquisition costs 161,200 198,927 319,309 382,162 Other cost of revenue 27,789 23,905 52,047 44,377 Gross profit 95,600 120,264 179,216 202,914 Gross profit margin 33.6% 35.1% 32.6% 32.2% Total operating expenses 111,249 122,523 216,671 249,609 Loss from operations (15,649) (2,259) (37,455) (46,695) Total other (expense) income, net (19,530) (17,805) (37,498) (41,413) Loss before income taxes (35,179) (20,064) (74,953) (88,108) Provision (benefit) for income taxes 7,300 (5,751) 6,312 (18,952) Net loss $ (42,479) $ (14,313) $ (81,265) $ (69,156) Net loss as a percentage of gross profit (44.4)% (11.9)% (45.3)% (34.1)% Non-GAAP Financial Measures: Ex-TAC Gross Profit (1) $ 123,389 $ 144,169 $ 231,263 $ 247,291 Adjusted EBITDA(1) $ 6,986 $ 26,976 $ 7,747 $ 37,665 Adjusted EBITDA as a percentage of Ex-TAC Gross Profit (1) 5.7% 18.7% 3.3% 15.2% ______________________ (1)Ex-TAC Gross Profit, Adjusted EBITDA and Adjusted EBITDA as a percentage of Ex-TAC Gross Profit are non-GAAP financial measures. See “Non-GAAP Reconciliations” in this Report for definitions and limitations of these measures, and reconciliations to the comparable U.S. GAAP financial measures. Three and Six Months Ended June 30, 2026 Compared to Three and Six Months Ended June 30, 2025 Revenue Revenue for the three months ended June 30, 2026 decreased $58.5 million, or 17.0%, to $284.6 million, from $343.1 million for the three months ended June 30, 2025. Revenue for the six months ended June 30, 2026 decreased $78.9 million, or 12.5%, to $550.6 million, from $629.5 million for the six months ended June 30, 2025. These decreases were primarily driven by lower revenue from our direct response and SME advertisers, reflecting changing search and open-web traffic dynamics, including lower publisher traffic and available advertising impressions, as well as the impact of actions taken throughout 2025 to exit certain lower quality supply and demand sources. These decreases were partially offset by continued growth in our CTV offerings. The decrease for the six-month period was also partially offset by the inclusion of an additional month of consolidated results in 2026 compared to 2025, as the Acquisition was completed on February 3, 2025. 37 Revenue for the three and six months ended June 30, 2026 included net favorable foreign currency effects of approximately $0.8 million and $11.6 million, respectively. On a constant currency basis, revenue decreased $59.3 million, or 17.3%, and $90.5 million, or 14.4%, respectively, compared to the corresponding prior year periods. See “Non-GAAP Reconciliations” for information regarding the constant currency measures provided in this discussion and below to supplement our reported results. Cost of Revenue and Gross Profit Traffic acquisition costs — decreased $37.7 million, or 19.0%, to $161.2 million for the three months ended June 30, 2026, from $198.9 million for the three months ended June 30, 2025. Traffic acquisition costs decreased $62.9 million, or 16.4%, to $319.3 million for the six months ended June 30, 2026, from $382.2 million for the six months ended June 30, 2025. These decreases were primarily driven by lower revenue and a favorable change in revenue mix toward higher-margin offerings. As a percentage of revenue, traffic acquisition costs decreased to 56.6% for the three months ended June 30, 2026, from 58.0% for the three months ended June 30, 2025 and decreased to 58.0% for the six months ended June 30, 2026 from 60.7% for the six months ended June 30, 2025. Traffic acquisition costs for the three and six months ended June 30, 2026 included net unfavorable foreign currency effects of approximately $0.2 million and $6.1 million, respectively. On a constant currency basis, traffic acquisition costs decreased $37.9 million, or 19.1%, and $69.0 million, or 18.0%, respectively, for the three and six months ended June 30, 2026 compared to the corresponding prior year periods. Other cost of revenue — increased $3.9 million, or 16.3%, to $27.8 million for the three months ended June 30, 2026, compared to $23.9 million in the prior year period. The increase was primarily driven by higher technology costs associated with our expanded platform, including hosting fees, as well as higher contract commitment costs. As a percentage of revenue, other cost of revenue increased to 9.8% for the three months ended June 30, 2026, from 7.0% for the three months ended June 30, 2025. Other cost of revenue increased $7.6 million, or 17.2%, to $52.0 million for the six months ended June 30, 2026 compared to $44.4 million in the prior period. The increase was primarily driven by the inclusion of an additional month of consolidated operations in 2026 compared to 2025, higher technology costs associated with our expanded platform and higher amortization expense of approximately $1.5 million. As a percentage of revenue, other cost of revenue increased 2.4% to 9.5% for the six months ended June 30, 2026 from 7.1% for the six months ended June 30, 2025. Gross profit — decreased $24.7 million, or 20.5%, to $95.6 million for the three months ended June 30, 2026, compared to $120.3 million for the three months ended June 30, 2025. Gross profit decreased $23.7 million, or 11.7%, to $179.2 million for the six months ended June 30, 2026 compared to $202.9 million for the six months ended June 30, 2025. These decreases were primarily driven by the lower revenue discussed above, partially offset by lower traffic acquisition costs. The six-month decrease was also partially offset by the inclusion of an additional month of consolidated results in 2026 compared to 2025. Ex-TAC Gross Profit Our Ex-TAC Gross Profit decreased $20.8 million, or 14.4%, to $123.4 million for the three months ended June 30, 2026, from $144.2 million for the three months ended June 30, 2025. Our Ex-TAC Gross Profit decreased $16.0 million, or 6.5%, to $231.3 million for the six months ended June 30, 2026, from $247.3 million for the six months ended June 30, 2025. The decreases were primarily driven by lower revenue, partially offset by the corresponding decreases in traffic acquisition costs. The six-month decrease was also partially offset by the inclusion of an additional month of consolidated results in 2026 compared to 2025. See “Non-GAAP Reconciliations” for the related definition and reconciliations to gross profit. Operating Expenses Operating expenses decreased $11.3 million, or 9.2%, to $111.2 million for the three months ended June 30, 2026, from $122.5 million for the three months ended June 30, 2025. The decrease was primarily driven by a $9.4 million decrease in Sales and marketing expenses due to lower employee-related expenses as a result of headcount reductions and cost efficiencies achieved through the integration of our global operations. Operating expenses for the three months ended June 30, 2026, included net unfavorable foreign currency effects of approximately $3.0 million. On a constant currency basis, operating expenses decreased $14.3 million, or 11.7%, compared to the corresponding prior year period. As a percentage of revenue, total operating expenses increased to 39.1% for the three months ended June 30, 2026 from 35.7% 38 for the three months ended June 30, 2025, primarily due to lower revenues, partially offset by a $9.4 million decrease in Sales and marketing expenses due to lower employee related expenses. Operating expenses decreased $32.9 million, or 13.2%, to $216.7 million for the six months ended June 30, 2026 compared to $249.6 million for the six months ended June 30, 2025. The decrease was primarily driven by the following factors: •Impairment charges — the absence in 2026 of $15.6 million in impairment charges recorded in the first quarter of 2025 related to the discontinuation of a legacy video product offering; •General and administrative expenses — decreased $9.4 million from $64.4 million during the six months ended June 30, 2025 to $55.0 million during the six months ended June 30, 2026, driven by strategic, transaction and integration-related costs which decreased $19.0 million during the six months ended June 30, 2026 compared to the prior year period. This decrease was partially offset by a $3.4 million increase in bad debt expense and a $2.0 million increase in non-income tax expense, primarily reflecting a sales tax refund recognized in the prior-year period; •Restructuring charges — decreased $6.0 million compared to the six months ended June 30, 2025. The actions associated with the Strategic Plan have been substantially completed, subject to the completion of certain actions governed by local law and consultation requirements. We expect the Strategic Plan to result in annualized cost savings of approximately $35.0 million to $40.0 million; •Research and development expenses — decreased $5.2 million compared to the six months ended June 30, 2025, primarily due to lower employee-related costs, resulting from higher capitalization of internal labor costs toward qualifying development activities, partially offset by foreign currency exchange impacts and an additional month of base operating costs resulting from a full six months of consolidated operations in 2026 compared to five months in 2025; and •Sales and marketing expenses — The decreases discussed above were partially offset by $3.3 million increase compared to the six months ended June 30, 2025, primarily driven by additional amortization of acquired intangible assets. Operating expenses for the six months ended June 30, 2026, included net unfavorable foreign currency effects of approximately $9.5 million. On a constant currency basis, operating expenses decreased $42.4 million, or 17.0%, compared to the corresponding prior year period. Other (Expense) Income, Net Other (expense) income, net decreased $1.7 million, or 9.7%, to $(19.5) million for the three months ended June 30, 2026, from $(17.8) million for the three months ended June 30, 2025. The decrease was primarily attributable to the absence in 2026 of a $1.2 million gain on the repurchase of long-term debt recognized during the second quarter of 2025. Other (expense) income, net improved $3.9 million, or 9.5%, to $(37.5) million for the six months ended June 30, 2026, from $(41.4) million for the six months ended June 30, 2025. The improvement is primarily attributable to a $5.8 million decrease in interest expense. The decrease in interest expense reflected the absence in 2026 of $13.3 million in fees and interest related to the $625 million senior secured bridge term loan credit facility (the “Bridge Facility”) which was incurred and repaid during February 2025 in connection with financing the Acquisition. This decrease was partially offset by a $7.6 million increase in interest expense related to the Senior Secured Notes. Interest expense for the Senior Secured Notes was $33.7 million for the six months ended June 30, 2026, compared to $26.1 million for the six months ended June 30, 2025, reflecting a full six months of interest expense and amortization of related debt discount and deferred financing costs in 2026, compared to a partial period in 2025. The improvement was also partially offset by the absence in 2026 of the $1.2 million gain on the repurchase of long-term debt recognized during the second quarter of 2025. Provision (Benefit) for Income Taxes Provision for income taxes was $7.3 million and $6.3 million for the three and six months ended June 30, 2026, respectively, compared to a benefit of $5.8 million and a benefit of $19.0 million for the three and six months ended June 30, 2025, respectively. The increases in the provision for income taxes for the three and six months ended June 30, 2026, as compared to their respective prior year periods, were primarily due to U.S. and various non-U.S. losses for the three and six months ended June 30, 2026 being subject to valuation allowances. Our effective tax rate decreased to (20.8)% and (8.4)% in the three and six months ended June 30, 2026, respectively, compared 39 to 28.7% and 21.5% in the three and six months ended June 30, 2025, respectively. These decreases in effective tax rates for the three and six months ended June 30, 2026, as compared to their respective prior year periods, were primarily due to pre-tax losses, including U.S. and various non-U.S. losses for the three and six months ended June 30, 2026 being subject to valuation allowances. As of June 30, 2026, we are in a three-year cumulative loss position in the U.S.. Under applicable accounting guidance, a cumulative loss in recent years represents significant, objective evidence that is difficult to overcome. After weighing all the evidence, we determined that the weight of the objective negative evidence continues to outweigh the positive evidence and we retain the valuation allowance against U.S. federal and state deferred tax assets. The Company will continue to consider existing evidence, both positive and negative, that could impact its view with regard to future realization of deferred tax assets. On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted into law in the U.S.. In 2026, Global Intangible Low-Taxed Income and Foreign-Derived Intangible Income have been modified to net controlled-foreign-corporation tested income (“NCTI”) and foreign-derived deduction eligible income (“FDDEI”), respectively. The OBBBA provisions did not have a material impact on the Company’s total tax benefits for the six months ended June 30, 2026. Our future effective tax rate may be affected by the geographic mix of earnings in countries with different statutory rates. Additionally, our future effective tax rate may be affected by our ongoing assessment of the need for a valuation allowance on our deferred tax assets or liabilities, or changes in tax laws, regulations, or accounting principles, tax planning initiatives, as well as certain discrete items. Net Loss As a result of the foregoing, we recorded net losses of $42.5 million and $81.3 million, respectively, for the three and six months ended June 30, 2026, as compared to net losses of $14.3 million and $69.2 million, respectively, for the three and six months ended June 30, 2025. Adjusted EBITDA Our Adjusted EBITDA decreased $20.0 million to $7.0 million for the three months ended June 30, 2026 from $27.0 million for the three months ended June 30, 2025, including net unfavorable foreign currency effects of approximately $2.5 million. Our Adjusted EBITDA decreased $30.0 million to $7.7 million for the six months ended June 30, 2026 from $37.7 million for the six months ended June 30, 2025, including net unfavorable foreign currency effects of approximately $4.1 million. These decreases were primarily driven by the lower revenue and Ex-TAC Gross Profit discussed above, partially offset by lower operating expenses. See “Non-GAAP Reconciliations” for the related definitions of Adjusted EBITDA and reconciliations to our net loss. Non-GAAP Reconciliations Because we are a global company, the comparability of our operating results is affected by foreign exchange fluctuations. We calculate certain constant currency measures and foreign currency impacts by translating the current year’s reported amounts, excluding new acquisitions, into comparable amounts using the prior year’s exchange rates. All constant currency financial information being presented is non-GAAP and should be used as a supplement to our reported operating results. We believe that this information is helpful to our management and investors to assess our operating performance on a comparable basis. However, these measures are not intended to replace amounts presented in accordance with U.S. GAAP and may be different from similar measures calculated by other companies. We present Ex-TAC Gross Profit, Adjusted EBITDA, Adjusted EBITDA as a percentage of Ex-TAC Gross Profit, Free Cash Flow, and Adjusted Free Cash Flow because they are key profitability measures used by our management and our Board to understand and evaluate our operating performance and trends, develop short-term and long-term operational plans, and make strategic decisions regarding the allocation of capital. Accordingly, we believe that these measures provide information to investors and the market in understanding and evaluating our operating results in the same manner as our management and the Board. These non-GAAP financial measures are defined and reconciled to the corresponding U.S. GAAP measures below. These non-GAAP financial measures are subject to significant limitations, including those identified below. In addition, other companies in our industry may define these measures differently, which may reduce their usefulness as comparative measures. As a result, this information should be considered as supplemental in nature and is not meant as a substitute for revenue, gross profit, net loss or net cash provided by (used in) operating activities presented in accordance with U.S. GAAP. 40 Ex-TAC Gross Profit Ex-TAC Gross Profit is a non-GAAP financial measure. Gross profit is the most comparable U.S. GAAP measure. In calculating Ex-TAC Gross Profit, we add back other cost of revenue to gross profit. Ex-TAC Gross Profit may fluctuate in the future due to various factors, including, but not limited to, seasonality and changes in the number of media partners and advertisers, advertiser demand or user engagements. There are limitations on the use of Ex-TAC Gross Profit in that traffic acquisition cost is a significant component of our total cost of revenue but not the only component and, by definition, Ex-TAC Gross Profit presented for any period will be higher than gross profit for that period. A potential limitation of this non-GAAP financial measure is that other companies, including companies in our industry which have a similar business, may define Ex-TAC Gross Profit differently, which may make comparisons difficult. As a result, this information should be considered as supplemental in nature and is not meant as a substitute for revenue or gross profit presented in accordance with U.S. GAAP. The following table presents the reconciliation of Ex-TAC Gross Profit to gross profit, the most directly comparable U.S. GAAP measure, for the periods presented: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (In thousands) Revenue $ 284,589 $ 343,096 $ 550,572 $ 629,453 Traffic acquisition costs (161,200) (198,927) (319,309) (382,162) Other cost of revenue (27,789) (23,905) (52,047) (44,377) Gross profit 95,600 120,264 179,216 202,914 Other cost of revenue 27,789 23,905 52,047 44,377 Ex-TAC Gross Profit $ 123,389 $ 144,169 $ 231,263 $ 247,291 Adjusted EBITDA We define Adjusted EBITDA as net income (loss) before gain on repurchase of long-term debt; interest expense; other expense (income) and interest income, net; provision (benefit) for income taxes; depreciation and amortization; stock-based compensation, and other income or expenses that we do not consider indicative of our core operating performance, including, but not limited to acquisition and integration costs, restructuring, and impairment charges. We present Adjusted EBITDA as a supplemental performance measure because we believe it facilitates operating performance comparisons from period to period. We believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and the Board. However, our calculation of Adjusted EBITDA is not necessarily comparable to non-GAAP information of other companies. Adjusted EBITDA should be considered as a supplemental measure and should not be considered in isolation or as a substitute for any measures of our financial performance that are calculated and reported in accordance with U.S. GAAP. 41 The following table presents the reconciliation of Adjusted EBITDA to net loss, the most directly comparable U.S. GAAP measure, for the periods presented: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (In thousands) Net loss $ (42,479) $ (14,313) $ (81,265) $ (69,156) Gain on repurchase of long-term debt — (1,225) — (1,225) Interest expense 17,417 17,524 34,826 40,648 Other expense (income) and interest income, net 2,113 1,506 2,672 1,990 Provision (benefit) for income taxes 7,300 (5,751) 6,312 (18,952) Depreciation and amortization 17,547 18,337 34,981 31,210 Stock-based compensation 2,285 3,790 4,431 6,731 Acquisition and integration costs 1,565 5,434 2,849 21,852 Restructuring charges 1,238 1,674 2,941 8,953 Impairment of intangible assets — — — 15,614 Adjusted EBITDA $ 6,986 $ 26,976 $ 7,747 $ 37,665 Net loss as % of gross profit (44.4)% (11.9)% (45.3)% (34.1)% Adjusted EBITDA as % of Ex-TAC Gross Profit 5.7% 18.7% 3.3% 15.2% Free Cash Flow Free cash flow is defined as cash flow provided by operating activities, less capital expenditures and capitalized software development costs. Adjusted free cash flow is defined as free cash flow plus direct acquisition costs. Free cash flow and adjusted free cash flow are supplementary measures used by our management and the Board to evaluate our ability to generate cash and we believe it allows for a more complete analysis of our available cash flows. Free cash flow and adjusted free cash flow should be considered as supplemental measures and should not be considered in isolation or as a substitute for any measures of our financial performance that are calculated and reported in accordance with U.S. GAAP. The following table presents the reconciliation of free cash flow to net cash (used in) provided by operating activities: Six Months Ended June 30, 2026 2025 (In thousands) Net cash (used in) provided by operating activities $ (25,712) $ 24,078 Purchases of property and equipment (1,841) (4,064) Capitalized software development costs (10,356) (7,105) Free cash flow $ (37,909) $ 12,909 Direct acquisition costs — 14,447 Adjusted free cash flow $ (37,909) $ 27,356 LIQUIDITY AND CAPITAL RESOURCES We regularly evaluate our cash requirements for operations, commitments, development activities and capital expenditures and manage our liquidity in a manner consistent with our corporate priorities. This discussion should be read in conjunction with our 2025 Form 10-K. As of June 30, 2026, we believe that our operating cash flows, together with our cash and cash equivalents, investments, and available borrowing capacity, will be sufficient to fund our anticipated operating expenses and capital expenditures for at least the next 12 months. Our assessment of liquidity is subject to various risks and uncertainties, including our operating performance, the timing and collectability of receivables from advertisers and obligations to media partners. 42 Sources of Liquidity Our primary sources of liquidity have been cash receipts from advertisers, cash and cash equivalents, investments in marketable securities, and available borrowing capacity under our 2025 Revolving Facility (as defined below). As of June 30, 2026, we had cash and cash equivalents of $88.0 million and short-term investments of $3.0 million. In addition, we had up to $40.0 million of available borrowing capacity under our 2025 Revolving Facility (as defined below), subject to customary conditions and covenant limitations. As of June 30, 2026, approximately $58.3 million of our cash was held by non-U.S. subsidiaries. The Company’s previously undistributed earnings of foreign subsidiaries are not indefinitely reinvested due to current U.S. funding needs. At June 30, 2026, we have a deferred tax liability of $8.7 million associated with the expected tax consequences of future distributions of foreign earnings, including amounts related to cash and cash equivalents held outside the United States. We have historically experienced higher cash collections during the first quarter of the calendar year due to seasonally strong fourth quarter sales, which typically results in a reduction in working capital requirements during that period. We expect this seasonal collection pattern to continue, subject to the impact of the factors described above under “Factors Affecting Our Business”; however, our net cash from operating activities is also subject to the timing of semi-annual interest payments on our Senior Secured Notes, discussed below, which occur in February and August of each year. During the six months ended June 30, 2026, the February interest payment resulted in a $31.4 million cash outflow. There was no comparable interest payment during the six months ended June 30, 2025 as the underlying debt was issued in the first quarter of 2025, with the first semi-annual payment occurring in August 2025. Revolving Credit Facility We maintain a $100.0 million revolving credit facility (“2025 Revolving Facility”) pursuant to the credit agreement dated February 3, 2025, among the Company, OT Midco Inc., the additional borrowers party thereto from time to time, Goldman Sachs Bank USA, as sole administrative agent and swingline lender, U.S. Bank Trust Company, National Association, as the collateral agent, and the lenders, issuing banks and arrangers party thereto from time to time. The 2025 Revolving Facility may be used for working capital and general corporate purposes. As of June 30, 2026, we had no borrowings outstanding under the 2025 Revolving Facility and were in compliance with all applicable financial covenants. The 2025 Revolving Facility includes a customary springing financial covenant that requires the Company and our restricted subsidiaries to comply with a maximum senior secured net leverage ratio, in the event that utilization under the 2025 Revolving Facility exceeds 40%. As of June 30, 2026, our available borrowing capacity was limited to $40.0 million to maintain compliance with the springing financial covenant. See Note 8 to the accompanying condensed consolidated financial statements for additional information regarding the terms of the 2025 Revolving Facility. Material Cash Requirements We plan to meet our liquidity needs through available cash, cash generated from operations and available borrowing capacity. Our primary uses of liquidity include payments to media partners, operating expenses, capital expenditures, and interest payments on our long-term debt. Our arrangements with media partners are generally based on variable bids tied to impressions or may include guaranteed minimum payments if specified performance targets are achieved, and in certain cases include revenue-sharing arrangements. As of June 30, 2026, we had approximately $628.2 million aggregate principal amount of Senior Secured Notes outstanding, which mature on February 15, 2030. The Senior Secured Notes require annual interest payments of approximately $62.8 million, payable semi-annually in February and August. We do not have any significant contractual principal debt maturities in the near term. We were in compliance with all applicable financial covenants as of June 30, 2026. In addition, the Company’s French subsidiary, Teads France SAS (“Teads France”), previously maintained a short-term overdraft credit facility with HSBC (the “Overdraft Facility”) which was used to fund the general working capital needs of Teads France. In May 2026, the Company commenced a repayment plan with HSBC to terminate and fully pay down the Overdraft Facility. As of June 30, 2026, approximately $7.1 million (€6.2 million) in borrowings were outstanding under the Overdraft Facility, reflecting payments made during the second quarter of 2026. These outstanding borrowings are recorded within short-term debt in the Company’s condensed consolidated balance sheets. Subsequent to quarter-end, in July 2026, the 43 Company made an additional payment of €1.25 million, reducing the remaining outstanding balance to €5.0 million. The Company expects to pay down the remaining balance of the Overdraft Facility by the end of 2026. We may from time to time pursue acquisitions or investments in complementary businesses or technologies. We may from time to time seek to purchase or exchange our outstanding debt through privately negotiated transactions, open market purchases, redemptions, tender offers or otherwise. Any such purchases or retirement of debt will be made in our sole discretion in light of prevailing market conditions, applicable contractual limitations, liquidity requirements and other relevant factors. The amounts involved in any such purchase transactions, individually or in the aggregate, may be material. See Note 8 to the accompanying condensed consolidated financial statements for additional information regarding our debt obligations and other commitments as of June 30, 2026. Share Repurchases On December 14, 2022, our Board approved a stock repurchase program authorizing us to repurchase up to $30 million of our Common Stock. There were no shares repurchased under the stock repurchase program during six months ended June 30, 2026. As of June 30, 2026, the remaining availability under our $30 million share repurchase program was $6.6 million. In addition, we periodically withhold shares to satisfy employee tax withholding obligations in connection with the vesting of equity awards. During the three and six months ended June 30, 2026, the Company withheld 63,309 and 108,470 shares, respectively, with fair values of less than $0.1 million and $0.1 million, respectively, to satisfy employee tax withholding obligations. During the three and six months ended June 30, 2025, the Company withheld 70,108 and 143,108 shares, respectively, with fair values of $0.2 million and $0.6 million, respectively. Capital Expenditures and Capitalized Software Development Costs Our cash flows used in investing activities include capital expenditures and capitalized software development costs. We expect capital expenditures to be between $3 million and $5 million for the year ending December 31, 2026, primarily related to servers, computing equipment, and other infrastructure. We also expect capitalized software development costs to be between $20 million and $27 million in 2026, primarily related to continued investment in our platform, including infrastructure to support AI and machine learning capabilities and the development of internal software to enhance scalability and operational efficiency. Actual amounts may vary from these estimates. Other Contractual Cash Obligations In the ordinary course of business, we enter into non-cancelable purchase commitments, primarily related to data services, hosting and network infrastructure, and other technology and platform-related costs. These commitments support the ongoing operation and scalability of our platform. See “Other Contractual Cash Obligations” disclosure within the “Liquidity and Capital Resources” section of our 2025 Form 10-K for detailed disclosures of our other material cash obligations as of December 31, 2025. We also enter into arrangements with certain media partners that may include guaranteed minimum payments tied to performance metrics. These arrangements may result in losses on individual contracts if guaranteed amounts exceed the revenue ultimately generated. In addition, we have obligations under our long-term debt arrangements and operating leases, as well as liabilities related to uncertain tax positions, the timing of which cannot be reasonably estimated. See Notes 7, 8 and 10 to the accompanying condensed consolidated financial statements for additional information regarding these obligations and commitments. See Cash Flows below for a discussion of changes in our cash position during the period. 44 Cash Flows The following table summarizes the major components of our net cash flows for the periods presented: Six Months Ended June 30, 2026 2025 (In thousands) Net cash (used in) provided by operating activities $ (25,712) $ 24,078 Net cash used in investing activities (4,117) (548,869) Net cash (used in) provided by financing activities (11,108) 585,553 Effect of exchange rate changes 199 147 Net (decrease) increase in cash, cash equivalents and restricted cash $ (40,738) $ 60,909 Operating Activities Net cash provided by operating activities decreased $49.8 million, from net cash provided of $24.1 million for the six months ended June 30, 2025 to net cash used of $25.7 million for the six months ended June 30, 2026. The decrease primarily reflected lower operating profitability, a $30.1 million increase in cash paid for interest, including the $31.4 million semi-annual interest payment on our Senior Secured Notes made in February 2026, and changes in working capital. Investing Activities Net cash used in investing activities decreased $544.8 million to $4.1 million for the six months ended June 30, 2026, from $548.9 million for the six months ended June 30, 2025. The decrease was primarily attributable to the absence in 2026 of $598.3 million of cash consideration paid, net of cash acquired, in connection with the Acquisition. This decrease was partially offset by lower net proceeds from sales and maturities of marketable securities in 2026 compared to the prior-year period. Financing Activities Net cash provided by financing activities decreased $596.7 million, from net cash provided of $585.6 million for the six months ended June 30, 2025 to net cash used of $11.1 million for the six months ended June 30, 2026. The decrease was primarily attributable to the absence in 2026 of $625.3 million of proceeds from the issuance of the Senior Secured Notes in connection with financing the Acquisition. Financing cash flows during the 2025 period also included $625.0 million of proceeds from the Bridge Facility and the corresponding $625.0 million repayment of the Bridge Facility, as well as $30.8 million of deferred financing cost payments. Net cash used in financing activities during the 2026 period primarily reflected $10.3 million of net repayments under the Overdraft Facility. Critical Accounting Policies and Estimates Our condensed consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates. There have been no material changes to our critical accounting policies and estimates as compared to those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth in our 2025 Form 10-K. Recently Issued Accounting Pronouncements See Note 1 to the accompanying condensed consolidated financial statements for recently issued accounting standards, which may have an impact on our financial statements upon adoption. Off-Balance Sheet Arrangements We do not currently engage in off-balance sheet financing arrangements. In addition, we do not have any interest in entities referred to as variable interest entities, which includes special purpose entities and other structured finance entities. 45