Nexen (NEXN) Q3 2025: CTV Revenue Drops 17% as DSP Shift Drives Guidance Cut
Nexen’s Q3 showcased robust programmatic momentum, but a 17% CTV revenue drop and a major DSP partner’s spending shift forced a guidance reduction, underscoring the company’s exposure to evolving channel and partner dynamics. Management is doubling down on its proprietary DSP, exclusive CTV data, and AI-driven platform capabilities to offset third-party risk and reignite growth into 2026. Investors should monitor execution on self-serve, in-app, and data licensing as Nexen pivots to reduce reliance on external DSPs and capture new sources of demand.
Summary
- CTV Weakness Exposed Reliance: CTV revenue decline and DSP partner pullback highlight channel and partner concentration risk.
- Strategic Shift to Proprietary Stack: Accelerated investment in Nexen’s self-serve DSP, data, and AI to drive direct enterprise adoption.
- 2026 Hinges on Execution: Recovery depends on scaling new CTV solutions, mobile in-app, and data licensing to offset lost third-party spend.
Performance Analysis
Nexen’s Q3 headline: programmatic revenue up 10% year-over-year, with ex-political growth at 15%, reflecting continued omnichannel strength and enterprise DSP adoption. Contribution ex-TAC (traffic acquisition cost) reached a record $92.6 million, up 8% YoY, but this was offset by a sharp 17% drop in CTV revenue to $24.5 million, which management attributed to reduced activity from select DSP partners, competitive CPMs, and tariff-related cutbacks.
Growth was concentrated in desktop (up 67%) and mobile (up 3%), while self-serve contribution ex-TAC grew 11% and data products surged 154%. However, non-programmatic lines and display both declined, and CTV’s underperformance weighed on overall momentum. Adjusted EBITDA margin held at 30%, supported by cost discipline and AI-driven efficiency, but net cash from operations fell to $35.8 million from $39.9 million last year. Share buybacks continued, with 36.6% of shares repurchased since 2022, underscoring capital return discipline even amid growth volatility.
- CTV Revenue Drop: A 17% YoY CTV decline was the most material segment drag, driven by DSP partner changes and CPM pressure.
- Self-Serve and Data Outperformed: Self-serve DSP and data products delivered standout growth, validating the pivot to proprietary channels.
- Non-Programmatic Drag: Legacy non-programmatic units remain a headwind, with management signaling potential divestiture or wind-down.
Overall, while programmatic and data-driven lines are scaling, exposure to third-party DSP spend and CTV volatility remain core risks that management is seeking to mitigate through platform and product diversification.
Executive Commentary
"Our renewed and expanded Vida partnership also adds a long-term growth engine via exclusive ACR data and CTV media, while enabling innovation like the industry's first solution for programmatic smart TV on-screen activation through the Nexen DSP and SSP. This opens a new frontier for advertisers to reach self-oriented media via high attention placement never before available programmatically."
Ofer Druker, Chief Executive Officer
"Despite meeting our expectations for both Q3 and the first nine months of 2025, we are lowering our full-year 2025 guidance. We now expect contribution X-TAC in the range of $350 to $360 million, adjusted EBITDA in the range of $113 to $117 million, and for programmatic revenue to represent roughly 95% of total revenue."
Sagi Neri, Chief Financial Officer
Strategic Positioning
1. DSP and Data Platform Integration
Nexen’s strategic pivot centers on its proprietary DSP and data stack, aiming to reduce reliance on third-party DSPs whose shifting strategies have directly impacted revenue. The company’s self-serve DSP, now enhanced with AI-powered automation and proprietary data from Nexen Discovery, is positioned to win direct enterprise demand and generate higher-margin, end-to-end revenue. Integration with exclusive ACR (automatic content recognition) data via the Vida partnership further differentiates Nexen’s targeting and measurement capabilities.
2. CTV Innovation and Exclusivity
The renewed Vida partnership extends exclusive access to CTV media and data through 2029, giving Nexen a unique lever as OEM (original equipment manufacturer) smart TV inventory becomes available for programmatic activation. The launch of industry-first smart TV home screen activation is pitched as a premium, high-attention ad product, designed to command higher CPMs and attract incremental spend from both agencies and brands seeking alternatives to walled gardens.
3. Mobile In-App and SPO Resilience
Mobile in-app is now a strategic focus, with management highlighting direct SDK partnerships as the preferred route to scalable, AI-resilient supply. Nexen is shifting resources and executing new agreements to build out this channel, aiming to capture budgets less exposed to AI-driven disruption and SPO (supply path optimization) changes.
4. Data Licensing and Platform Monetization
Data licensing is rapidly scaling, with Nexen’s ACR audience segments now live on Yahoo DSP and growing interest from additional platforms. Management views this as a 100% margin opportunity, with potential for both segment targeting and raw data integration, especially as advertisers seek open, independent alternatives to walled gardens. Early traction suggests this could become a meaningful revenue stream over the next two years.
5. M&A and Non-Core Divestiture
M&A will focus on vertical expansion and client acquisition, not redundant tech, as the core stack is now considered complete. Non-programmatic legacy units are under review for divestiture or shutdown, as they no longer contribute to data or core growth and are a drag on consolidated results.
Key Considerations
Nexen’s Q3 marks a transition point, as management confronts the limits of third-party channel dependence and accelerates the shift to direct, data-driven, and AI-enabled solutions. The ability to execute on these priorities will determine if 2026 delivers on the double-digit growth ambition.
Key Considerations:
- CTV Recovery Is Critical: Nexen’s CTV exclusivity and new ad formats must translate into tangible revenue rebound to offset recent declines.
- Self-Serve DSP Scaling: Continued enterprise adoption of Nexen’s proprietary DSP is key to reducing partner concentration risk and capturing end-to-end margin.
- Data Licensing Monetization: Early wins with Yahoo and The Trade Desk validate the model, but scaling to material revenue remains a multi-quarter effort.
- Mobile In-App Execution: Direct SDK partnerships are strategically sound, but require rapid scaling to become a meaningful growth lever.
- Non-Core Rationalization: Timely exit from legacy non-programmatic units will help focus resources and improve margin profile.
Risks
Exposure to third-party DSP spending patterns remains a core vulnerability, as evidenced by the Q4 guidance cut. CTV remains highly competitive, with CPM compression and volatile demand. Tariff-driven macro softness and the uncertain pace of mobile in-app ramp add further unpredictability. Failure to scale direct channels or monetize exclusive data could prolong revenue stagnation and margin pressure.
Forward Outlook
For Q4 2025, Nexen guided to:
- Contribution ex-TAC of $350 to $360 million for the year
- Adjusted EBITDA of $113 to $117 million
- Programmatic revenue to comprise 95% of total
For full-year 2025, management lowered guidance, citing:
- Reduced spend from a major DSP partner (expected to normalize in 2026)
- Continued CTV CPM pressure and non-core business drag
Management expects CTV, self-serve, and data licensing to drive double-digit programmatic growth in 2026, contingent on successful execution and market adoption of new solutions.
Takeaways
Nexen’s Q3 underscores the risks of channel concentration but also demonstrates the company’s commitment to platform differentiation and direct demand capture. The path to double-digit growth in 2026 is plausible but depends on execution in CTV, data, and mobile in-app.
- CTV and DSP Volatility: Channel and partner shifts can quickly impact results, reinforcing the need for proprietary demand and diversified revenue streams.
- Strategic Platform Build-Out: Exclusive data, advanced DSP, and AI integration are now central to Nexen’s competitive positioning and margin expansion thesis.
- Execution Watchpoint: Investors should track adoption rates for new CTV ad products, self-serve DSP share, and data licensing revenue as leading indicators for 2026 recovery.
Conclusion
Nexen’s Q3 was defined by a CTV setback and a major DSP spending shift, prompting a guidance cut and a renewed focus on proprietary platform growth. Management’s pivot to self-serve, exclusive data, and AI-driven solutions is strategically sound, but tangible execution will be critical to restoring growth and margin in 2026.
Industry Read-Through
Nexen’s results reflect a broader industry reality: DSP and channel concentration risk is rising as major platforms adjust SPO strategies and buyers chase lower CPMs. OEM smart TV inventory and exclusive data are emerging as differentiators, but require direct platform investment and partner relationships. The race to monetize CTV, scale mobile in-app, and license unique data assets will define winners among independent ad tech players, while legacy non-programmatic businesses are increasingly non-core. Competitors should note the growing importance of end-to-end stack integration and the need to insulate against third-party platform volatility.