Good morning, and welcome to NIQ's third quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. With that, I'd like to turn the call over to Will Lyons, Head of Investor Relations. Please go ahead.

Good morning, everyone, and welcome to NIQ's third quarter 2025 earnings call. Joining me today are CEO Jim Peck, COO Tracy Massey, and CFO Mike Burwell. Following Jim and Mike's prepared remarks, Jim, Tracy, and Mike will take your Q&A. As a reminder, our remarks today will include forward-looking statements. Actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause these results to differ materially are set forth in today's earnings press release. Any forward-looking statements that we make on this call are based on our assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. Also, during this call, we will present both GAAP and certain non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in today's earnings press release, which is available on our IR website, investors.nielsoniq.com. A replay of this call will also be available on our IR site. And lastly, just a quick housekeeping item. Posted alongside our 10-Q and earnings release, you'll find a supplemental file that reflects recasted financials related to our post-IPO legal reorganization. This includes a non-cash mark-to-market adjustment on the Nielsen Media Warrant for all historical periods prior to Q3 2025, where the instrument has converted to equity treatment. And with that, I'll now hand the call to Jim.

Thanks, Will. Good morning, everyone, and thank you for joining us. I'm very pleased to report that our Q3 results beat expectations across the board. 5.8% organic constant currency revenue growth, 21% margins, up 300 basis points, and $224 million of leveraged free cash flow, achieving most of our second-half cash flow guidance in Q3 alone. We've raised our 2025 outlook, and we're heading into 2026 with momentum. Q3 is further proof that we are reaping the financial benefits of our multi-year transformation. In terms of revenue, EMEA and Americas grew 8.8% and 4.1% respectively on an organic constant currency basis, and APAC growth was improved. Intelligence revenue grew 6.6% in organic constant currency. Intelligence subscription revenue, our version of ARR, also grew 6.6%. This was our sixth straight quarter of 5-plus percent organic constant currency growth and 6-plus percent intelligence subscription growth. Activation revenue improved in a quarter, and our pipeline remains robust. On profitability, net loss and adjusted net loss improved, while adjusted EBITDA of $223.7 million accelerated to 25% growth. We expanded adjusted EBITDA margin and were tracking to significant expansion in 2026. And with our strong Q3 performance, we now expect to be free cash flow break-even on a levered basis for the full year 2025. The first step of what we expect will be a multi-year free cash flow inflection. As an important reminder, levered free cash flow in the first half of the year did not reflect the $100 million of annual interest savings we achieved as part of the IPO. Looking at high-level business performance, aligned to our revenue growth algorithm, Q3 was driven by strong pricing as well as innovation cross-sell and up-sell. In intelligence, we're seeing continued strong adoption of our omni-channel measurement products such as e-commerce, consumer panel, and full-view measurement, which contribute nicely to our growth. We're also successfully executing our proven integration playbook at GFK. Tech and Durable's revenue has grown year-to-date, and we're aiming to accelerate further in 2026. In activation, our AI-first bases, analytics, and media products are growing rapidly, supporting 2025 revenue and bolstering momentum heading into 2026. Lastly, integrations of our Gastrograph AI and Emtrix acquisitions are going well, and we're penetrating new markets and converting new business. In short, it was a strong quarter. We're growing profitably and improving margin and free cash flow ahead of schedule. For the balance of my prepared remarks, I will address how AI is widening the moat around the NIQ ecosystem and improving our financial profile. We are not simply participating in the AI revolution in consumer data intelligence, we're leading it. Let me start by highlighting three key takeaways. First, AI widens the NIQ data moat. Today and into the future, AI models need the right data in scope, accuracy, and depth. Our data assets are vast and hard to replicate, are enriched, are proprietary, and spend decades of consumer spend and behavior, and are updated constantly. Second, we are rapidly embedding AI across our solutions portfolio. We're also evolving the NIQ user experience to enable client speed to insights and further enhance our revenue growth. And third, we believe we're in the first innings of capturing significant AI-driven operating efficiencies and margin expansion. On my first point, today's consumer brands and retailers face a daunting and expensive reality. Consumer behavior is changing rapidly and shopping data is exploding in volume and complexity. Identifying, collecting, and analyzing this data across a rapidly growing number of channels and touch points is more challenging and costly than ever. As generative and agentic AI reshape this competitive landscape, CPGs and retailers seek real-time, granular insights so they can act faster and compete smarter. General-purpose AI models alone are insufficient to extract meaningful signals from messy, unstructured data and not built to support high-stake decision making. Try asking a general purpose LLM who sold the most chocolate during October 2025, and the result is incomplete, outdated, and inaccurate. This is because the accurate data simply isn't available in the public domain. But we have this granular data at NIQ. To discover, clients can click into sales data by day, week, location, which specific candy bar, at what price point sold through which retailer, why the consumer bought, what else the consumer bought, everything and more about that transaction. In our ecosystem, we harness advanced technologies and draw on decades of industry leadership to amass the global superset of consumer shopping behavior data, which is continuously updated with first-party data. Our data covers every dimension that matters to clients including geography channel and category we also believe our data is the most granular available anywhere down to the specific product skew this data moat is intentionally designed our data scale is vast global and proprietary our harmonized data assets are extremely difficult and highly impractical to replicate we ingest retail point of sale data from thousands of retail chains in over 90 markets, and our robust industry reputation for data stewardship facilitates these exchanges. In traditional trade retail, our extensive network of field auditors and digitized collection methods enable us to cover consumer purchases with less technology forward retailers in key developing markets, a feat unmatched by others. We also believe we have the most comprehensive digital commerce assets, offering the most detailed view of the digital marketplaces, as well as the largest global e-receipt consumer panel. In fact, panels are a key area of focus and differentiation for us. We have collected decades of consumer shopping data from our panels, and we're investing to expand our panel footprint. By pairing the what the consumer bought from our leading measurement data with the why from our robust panel data, we are uniquely able to deliver clients the full view of consumer shopping behavior globally. In addition to the massive amounts of data we ingest, it's the rich data that we create that further enhances our mode. We generate a substantial layer of rich reference data and metadata, which includes tens of millions of product attributes, taxonomies, hierarchies, and harmonized product information across the 220 million items in our database. This includes brand, category, size, ingredients, packaging type, and more. A rich layer of descriptive data enables NIQ to organize, analyze, and pair products at a granular level, making it possible for clients to uncover trends, benchmark performance, and make smarter decisions faster. Which brings me to my second point, how our solutions drive clients speed to insights and unlock new growth. NIQ data and insights power mission-critical client decisions across their enterprise, and our clients are leaning in. By Q3, users on our Discover platform grew 9%. Total data points consumed grew 29%, and the average monthly data consumed grew 39% versus last year. As clients increasingly rely on our data and insights, we're leveraging AI to deliver deep value. For example, NexIQ is our proprietary AI engine, which we purpose trained on our 160 petabytes of global consumer and retail data. Unlike generic large language models, NexIQ understands the nuances of consumer shopping. This enables 10 to 12 times faster data processing than general-purpose LLM and with near-perfect categorization accuracy. NextIQ isn't just automation. It's NIQ intelligence at scale, delivering real-time insights with unmatched precision and speed. Developed with partners like Microsoft, Snowflake, Google, and Intel, NextIQ is also the backbone of our AI-powered product suite, driving innovation across intelligence and activation products. We're building tools to transform how our clients make decisions, from predicting winning product concepts in minutes to generating automated KPI narratives. NextIQ's integration into our ecosystem ensures that every insight is grounded in the most granular, harmonized data available, giving NIQ a defensible edge in the market. And from this strong foundation, we're rapidly evolving our AI solutions. For example, version one of our Gen AI co-pilot, Ask Arthur, has accelerated speed to insights by 40% across our omni-channel measurement and consumer panel data. In 2026, we plan to launch Arthur version two, an intelligence research hub with predictive signals and analytic storytelling that can chat, anticipate, act, and summarize. Eventually, Arthur will be able to suggest NIQ products, data sets, and analysis based on client needs, enhancing our Discover software into an AI-powered cross-sell and upsell engine. We're also driving AI innovation throughout our activation suite. For example, Revenue Optimizer is our AI-driven analytics solution helping clients optimize pricing and manage trade spend for maximum profit. Precision Area uses AI data harmonization to segment countries into local markets by demographics and by retail data. This enables clients to find a needle in the haystack in terms of growth opportunities and investment optimization down to the granular neighborhood level. This year, we also launched two AI-first solutions, FACES AI Screener and Product Developer. These solutions seamlessly combine our leading global data assets with our advanced analytics offerings. With BASY's AI, clients can now rapidly test, develop, and commercialize products that consumers want to buy. We're driving expansion and seeing strong early client adoption. BASY's AI screener is now live in 11 markets across 129 product categories. Client feedback has been overwhelmingly positive, and we've added 18 large clients since launch. With BASY's AI product developer, 31 clients, including our largest CPG clients to SMB, tested 500 product concepts in Q3 alone. Unilever reported a 65% reduction in product development time, stronger innovation success rates, and accelerated speed to market, launching products up to six months sooner compared to traditional testing methods. And as showcased in our IPO roadshow, Brown-Forman used Basies AI to identify a winning Jack and Coke formulation, adapted for new markets, and planned future line extensions. They reported a 350% sales increase, two-and-a-half-time sales velocity increase, and repeat consumer purchases that nearly doubled. So, AI is embedded broadly across our entire product suite, supporting revenue growth and innovation. We believe we're well positioned to capitalize further in 2026 and beyond. Lastly, on my third point, artificial intelligence is a key driver of operating efficiency and margin improvement at NIQ. It helped us deliver better-than-expected margin expansion in Q3 and year-to-date, and it's laying the groundwork for continued expansion in the years to come. For example, we're harnessing agentic AI to automate our entire data operations workflow, from acquisitions to coding to delivery. We're finding that the combination of advanced AI and operational expertise boosts efficiency, elevates data quality, and accelerates our innovation. Clients benefit from our ability to bring products to market faster, and to expand into new markets on the customer support front our globally launched niq service suite now delivers dynamic personalized and contextual support powered by gen ai ai driven support ticket routing and automated intelligence unlock faster resolutions and more seamless client experiences since launch user engagement with gen ai support tools has increased efficiency by over 40%, and our Igentic customer success ecosystem is setting new standards for end-to-end client satisfaction. Across our corporate support functions, including HR, legal, and finance, we're deploying advanced AI and automation to streamline operations, enhance compliance, and unlock new efficiencies. In finance, AI-powered process automation has enabled us to standardize reporting, reduce transactional workloads, and deliver real-time insights for executive decision-making. In HR, intelligent analytics are helping us optimize talent acquisition and workforce planning, while legal teams leverage AI for faster contract review and improve regulatory compliance. In summary, we believe AI is a strength for NIQ on all fronts. It's a differentiator and a profitable growth enabler. We use it to turn global omni-channel consumer complexity into competitive advantage. We turn client questions and needs into client value. As we close out 2025, we are excited about what's ahead in 2026. We'll continue to lead, shaping and building the AI-powered future of consumer intelligence. With that, I'll turn it over to Mike to cover our financials.

Thanks, Jim, and good morning, everyone. Q3 was another strong quarter. We exceeded expectations across the board and demonstrated a powerful free cash flow inflection, delivering most of our back half levered free cash flow guidance in Q3 alone. AI-powered automation is reducing manual effort and increasing efficiency across NIQ. This contributed a margin expansion in Q3 2025, and we expect it will be a margin driver in 2026 and beyond. We are raising our 2025 guidance. We believe this further demonstrates the mission-critical value we bring for clients and the embedded operating leverage in our business. Turning to our Q3 results. In Q3, organic constant currency revenue grew 5.8% to $1.1 billion, to passing the top end of our August guidance. We saw particular strength in our EMEA segment with intelligent solutions driving renewal, value-based pricing, cross-sell, upsell, and expansion into new verticals. On an organic, constant currency basis, EMEA grew 8.8%. From a product perspective, total intelligence revenue grew 6.6%. Annualized intelligence subscription revenue also grew 6.6%, our sixth straight quarter of 6% plus growth. Annualized intelligence subscription net dollar retention and gross dollar retention remained strong at 105 and 98% respectively, reinforcing the strength in our revenue growth algorithms. As Jim mentioned, Q3 activation revenue improved the year-over-year growth, and our client pipeline remains robust. On expenses, total operating expenses increased 89.3 million, or 8.9 percent, on a year-over-year basis, driven primarily by a $50 million one-time stock-based compensation charge triggered by the IPO, which we previewed to analysts as part of our IPO process. This is the life-to-date catch-up related to pre-IPO equity awards. Other factors driving expenses included higher amortization, driven by our GastroGraph AI and Emtrex acquisitions, as well as fluctuations in foreign currency exchange rates. It's important to note that outside of these aforementioned factors, OPEX growth remains modest and well below revenue growth. Adjusted net loss improved $16.1 million and $47.6 million on a year-over-year basis, respectively. We accelerated adjusted EBITDA growth to 25%, delivering $223.7 million for the quarter. We expanded adjusted EBITDA margin by 300 basis points to 21.3%. Profitable organic revenue growth, as well as ongoing GFK integration and AI-driven synergies, remain key drivers this year. Importantly, we remain firmly on track towards our mid-term margin target of mid-20% that we shared during our IPO roadshow. We expect 2026 will be another year of significant margin expansion as revenue growth flows through and we drive AI-powered efficiency across the business. Turning to free cash flow, we delivered $224.4 million of leveraged free cash flow, achieving most of our back half 2025 guidance in Q3 alone. This is driven by higher adjusted EBITDA, lower interest expense, and significantly improved networking capital as we improved DSOs by seven days compared to Q2, well ahead of schedule versus our August guidance. I'll also note that Q3 working capital benefited from a vendor payment that we accelerated in Q2 in exchange for more favorable contract terms moving forward. For better-than-expected Q3, we're raising full-year 2025 leverage-free cash flow guidance to break even. This is an exciting inflection point for our business as we continue to improve and progress towards our steady-state profile in the coming years. Up $20 million from our previous guidance midpoint, full-year breakeven implies a $225 million improvement versus 2024. It also implies $280 million of leverage-free cash flow in the second half of 2025, which is above the high end of our prior $245 million to $275 million range. As an important reminder, leverage-free cash flow in the first half of the year was burdened by our pre-IPO capital structure and did not reflect the $100 million of annual interest savings we achieved by deleveraging the balance sheet and repricing our debt. In fact, our strong Q3 performance triggered another interest rate spread step down, generating an additional $9 million of annual interest savings moving forward. Turning to our balance sheet. At the end of Q3, we had cash and cash equivalents of $446 million and $750 million of available capacity under our revolver for a total of $1.2 billion of available liquidity. On capital allocation, as I've mentioned before, as free cash flow ramps, debt repayment remains our top priority. At the same time, we continue to pursue accretive, tuck-in acquisitions that complement our growth strategy. We are confident that our collecting free cash flow and strong liquidity position enables us to simultaneously achieve our financial priorities. Now turning to our increased guidance. Based on our strong Q3 performance and favorable business dynamics, we're setting Q4 guidance ahead of what was implied at our August call. We now expect reported revenue growth of approximately 7 to 7.3 percent. Organic constant currency revenue growth of approximately 5% to 5.3%, and adjusted EBITDA growth of approximately 25% to 26%. This implies adjusted EBITDA margin nearing 25% for 360 basis points of expansion on a year-over-year basis. On free cash flow, we now expect to deliver positive $55 to $60 million for the quarter. This implies that for the full year of 2025, we expect reported revenue growth of approximately 5.1% to 5.2%. Organic constant currency revenue growth of approximately 5.5% to 5.6%. Adjusted EBITDA growth of approximately 22% to 23%. This implies adjusted EBITDA margin nearing 22% or 300 basis points of expansion on our year-over-year basis. And our expectation for break-even leverage-free cash flow is a $20 million improvement versus a midpoint of our previously stated range. I'll note that margin expansion has exceeded our expectations in recent quarters. We've triviced this outperformance to AI-driven operating efficiencies, including as part of our ongoing GFK integration. Heading into 2026, we're actively identifying additional AI-driven operational efficiencies across the business. In summary, it was a strong Q3, and we're excited about what's ahead. We're focused on closing out a strong 2025. We're in the midst of finalizing our plans for 2026, which we expect to be another year of mid-single-digit growth, strong margin expansion, and significantly increased free cash flow generation. We intend to provide more details on our Q4 and year-end earnings call tentatively scheduled for late February. Operator, we're ready to open a call for Q&A.

Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. We ask that you please limit yourself to one question and one follow-up to allow everyone an opportunity to ask a question. We'll take our first question from Alexander Hess at JPMorgan.

Good morning, Jim. Good morning, Tracy. Good morning, Mike. NIQ exceeded its guidance at a time when many of your CPG clients have been paring back their expectations for their calendar years or fiscal years, at least those that we follow. Can you walk us through the general trajectory of your clients' wallets of trade, R&D marketing, sort of that wallet that you're able to capture a share of, and then what you guys are doing that's specifically increasing your share of wallet, which feels like sort of where you're at and what the trajectory is right now.

Yeah, yeah, great question. It lets us explore a lot of questions that a lot of other spokesmen have, and I'll start out by saying, as you know, whether things are going really well or things aren't going so well for our clients they really need um our mission critical services so in in good times they need us more for innovation maybe in bad times they need more to help them understand where they want to spend their money and where they're going to get the most bang for the buck and that's holding true right now and of course we have um a lot of new innovations that are part of our growth strategy that are increasing our share of our clients wallets as you know they're they're on their own journey for growth and so i as you know tracy worked at one of the

biggest uh manufacturers in the world i'm going to turn it over to her to give her perspective from kind of a client's perspective yeah our clients are in different different places some of them are really driving innovative solutions so if you look at the market and performance of our clients the ones that are winning that have the best innovation are the ones that are partnering with us on our with our basis ai screener our basis product developer we're helping them get much quicker to market with their innovation with some of our new ai products but also then we're able to help them with their innovation if it's working then where to double down increase your advertising increase your trade if it's not working where to pair back and where to move your money around so whether you're growing or you're struggling we're absolutely critical to them across all their decisions and if i look at our top customers Eight of our top 14 customers are growing mid to high single digit, some of them in double digit. Some of them are struggling a little bit more where they've had internal, we've talked about this before, where they've got internal changes like they've changed their CEO or they've got restructuring or they've got divestitures. They tend to double down internally for a few months and then they pick their heads back up. So we're seeing really good momentum with our clients as they're coming out with some of these internal changes. We expect to see even better performance from some of them that are picking their heads up now and looking at where they can drive innovation and growth. But what you have to remember with these CPG clients, the ones that are growing are the ones that are winning. So they're all looking for our help to maximize their growth performance. That's where they get the ROI from their spend with us.

Great. Thank you. That's all from us today. Thank you.

We'll move next to Manav Patnak at Barclays.

Thank you. Jim, I appreciate all the detail on the AI debate. I think that was really important and helpful. I just had a follow-up in terms of, you know, can you talk about the data acquisition that And, you know, I guess the debate is how much of that data do you buy that somebody else can buy and how much you collect yourself?

I know you alluded to adding, you know, your context around it, but I was just hoping you could address that you know where the data comes from question yeah so we as you know we get data from literally thousands and thousands and thousands and thousands of sources and some of it we you know i'm not going to give you a percentage of anything actually um and part of the moat around our business which i think is what you're really asking me is that to collect that amount of data is really quite improbable, I think, for someone to try and do that the way we do it. But that's a chunk we get from retailers. And then we get another massive amount of data from going into a huge network of people going into stores in the traditional trade and actually having to, by the way, using AI-empowered technology, going in and understanding what's selling in India, what's selling in different parts of Latin America, what's selling in different parts of Asia PAC. And then on top of that, of course, we have some of the biggest consumer panels in the world delivering us all their e-receipts, telling us who they are demographically. And we collect that massive amount of information every day, every second of every day, and add it to our database. That data is often very messy and so not only do we have to do the normal cleaning we also have to put it in context with which each of our clients view their world and that's part of what we call coding so there's a ton of metadata that goes into making our database function properly and function properly with ai by the way for our clients and so that that is really the moat and i think you're trying get at well someone can just go buy data and they'll slap on chat gpt and they're gonna you know they're gonna create something that's just that's not gonna happen um and you know i i try to give the example in uh in my in my um my remarks i was at halloween i was like okay let's see what let's see what's out there who is selling the most chocolate bars right now in the united states and i won't say which clients came back uh on top i could easily tell right away boom this is what's happening real time with chocolate sales this is what's happening uh this day this week up to the month uh you know of halloween or up to the day of halloween here's what's happening in this region here's what's happening in this city here's what's happening in this store here's why they're winning certain you know somebody is discounting pricing so they're selling more units but their prices aren't as high as they normally are and you can't get any of that kind of thing from anywhere um uh where you know like it's somehow uh going to come through somebody throwing uh you know an ai tool on top of some public data but you can go ahead and look it up yourself right now you may be able if there's an annual report out there you may be able to see someone's annual tour at a very high level but you're just not going to get to the level of granularity even close um that our clients need to run their business and it's not going to be right and i i'm going to go off on this one for a little bit if our clients make huge decisions based on what we do and if we give them the wrong information they can make decisions that will cost them millions and millions and millions of dollars and so we also have the responsibility to make sure this stuff works right and so we do a significant amount of testing to make sure that rai tools sitting on top of this information and other analytic tools are providing the right answers and while i well have got this subject if you think about it we're sitting on all this data and what has been a constraint for any company like ours on providing more and more innovation it's just enough access to capital or you know how much capital do we have to invest in all these new tools that we know we can build and that maybe others are building. With AI now, we have kind of a way to develop things much more cheaply and efficiently. And we know what our clients want. And so we can spend all day long innovating. So I think what you're going to find is that we are the ones who have access to this information to actually build things and test them and get them in our clients' hands. And so it's just it's just going to make our innovation engine run that much faster and then i'll just conclude with that to do what we do we have to have a lot data stewardship is very very important so making sure that we're doing the right things with the data that we're allowed to do we it's not just a contract it also has to be done technically there are a lot of things we have to do to make sure that certain clients' data don't get in the hands of others, that they don't want them. And so that's a big part of our ecosystem as well. And then just another moat around the business.

Got it. Thanks, Shane. That's super helpful. And then just to follow up, Mike, you talked a little bit about, I think you were planning for 26. I missed that part a bit, but just early thoughts into this momentum continuing into next year and how we should think about the kind of prior numbers we had.

Yeah, so, you know, I think the numbers that you had are still make sense, but, you know, look, when we announce at the end of February, you know, we'll give you guidance in terms of looking, you know, what 26 is. But we're excited about the momentum that we're seeing, right, in terms of what's happening, you know, from a revenue standpoint and, you know, the launch of both of our AI activities in terms of what it's doing to drive revenue as well as what it's doing for us in terms of coding and margin improvements as well. So I'm excited to be able to give you more of that preview. I guess I just think we're continuing to move in that direction and momentum. And I guess I look forward to giving you that update when we get through Q4 and update year-end in terms of what we look like for 26. But nothing further at this point other than I like where we're trending.

Got it. Fair enough. Thank you.

We'll move next to Ashish Shabadra at RBC Capital Markets.

Thanks for taking my question. I just wanted to focus on India in particular, where we've seen some really material acceleration in growth. I was just wondering if you could drill down further and talk about what's really driving that robust growth in Europe in particular.

Sure. You know, when we look at Europe, we have continued, and I'm sure Tracy will comment on that, our panel on demand service offering is doing very, very well. It's being widely accepted and that people can look at Discover. And in Discover, they can get the overall market read, but they also then can look at consumer panel information. So they get both what was sold and why it was sold. And it's really powerful to be able to bring that together, particularly as you look across the markets that represent EEMA. It's been very, very well received. But, Tracy, maybe, I don't know, you want to comment on that?

Yeah, sure. There's two big impacts in our EMEA region. Firstly, it's where our GFK acquisition was the biggest, the tech and durables part of our business. If you remember, we acquired that in 2023. It was a bit of a drag on our growth in 2024, and we've been able to turn that around this year. So that's a big part of their growth is that business, that large business turns around. But also, like Mike said, the consumer panel business, growing over 20% in EMEA. and that's really a result of this panel on demand. If you remember, when we acquired the GFK business, we had to divest our panels in Europe, and we weren't allowed to compete against YouGov until Q4 of last year. So we've seen a massive acceleration once we've been able to compete in consumer panel. We've built our own panels and significantly increased the size. Have we seen many, many takeaways in that part of the world as we've done that? And the main reason, like Mike says, is because we've got panel on demand. you can see measurement which is our rms solution which tells you what happened and you can see why it happened which is our panel solution you can see it in one place if you don't buy we're the only people that can do it in one place so i'll give you an example one of our clients had some out of stocks on one of their chocolate products and they saw their sales go down they were able to see that in our measurement business and then when they looked at why that happened not only did they find that their sales went down because they were out of stock but when they came back in stock Customers have switched, they've switched to other brands, and they've had an impact on penetration and loyalty. They can see all of that on one platform. You can't get that if you're with anybody else because you've got measurement in one platform, panel in another, and you've got to go in and out of systems and you've got to try and work out what's going on. We're winning a ton of business in EMEA in particular because we can put both in one place, and in particular that panel business is really picking up.

A lot of our RMS clients are getting more efficient too because if you can buy from one supplier, that's a cost saving so not only are they getting better information and being more efficient internally they're more efficient on their spend because they're moving the second part of that business the panel business to us and having both together that's great color and then maybe just on the activation side again we've seen some improvement there as we in the third quarter but fourth quarter tends to be the seasonally stronger quarter for activation i was just wondering what the kind of visibility that you have for activation revenue in the fourth quarter obviously your fourth quarter guidance was really strong but any incremental color on the activation side yeah we see strong momentum for our activation business quite often in q4 um clients are trying

to spend their budget i know that sounds crazy but they've got budget they will spend it in the fourth quarter they've been they know where their business is going they know what they can and can't spend so we have very good visibility into our pipeline feeling good about that activation business it picked up in growth in q3 up against some very top tough comps last year we had a very strong activation comps in Q2 and Q3 of last year, and we expect to see a good Q4 on that activation side.

That's great, Carlos. Thank you very much.

We'll take our next question from Andrew Nicholas at William Blair.

Hi. Good morning. This is Tom Ratshaw for Andrew Nicholas. Good morning. Thanks for taking my call. I was wondering if you could provide color on your pipeline in the fourth quarter, nice in the year, across intelligence and activation, and just kind of the visibility of having to both as well.

This is Jim. So we obviously have a ton of visibility into our pipeline. I want to make sure I'm covering your question because we just talked about activation. But both in intelligence and activation, we actively manage our pipeline every day, of course. and so it's very it's highly predictable to begin with as you know and so the variable part which is i think what you're talking about which would include new wins or new projects um is very very very visible to us um i want to let you have a follow-up question though because i don't know if there's something behind your question that you're trying to get at yeah i was um mainly focused on like new wins you're seeing those come in during the fourth quarter like thus far

and kind of what are you projecting as you go into 2026?

So it's really more of the same where we are focusing on multiple things right now. So let's make sure we get all our various forms of price increases all set and ready to go in 26. Let's continue to make the big push on SA&I or what we call activation. as the year is ending, and our clients are just by their nature spending their different parts of their budget, and so we need to get that closed and fulfilled, and we feel really good about that. And then, of course, just continuously as contracts come up with our clients looking for new wind and looking to penetrate with our different innovation projects or different new product capabilities. And so, we feel like we have good momentum there already, right? It's been building since last year, really. 224, 225, and we just see the same as we run into 2026.

Thanks. And then for my follow-up, I was wondering if you could double-click on SMB market and just kind of what the health of the end market is, especially given all the tariff noise. And then And also, if you have any call around the drone, if you saw on the quarter there.

I think we'll let Tracy talk to that. She manages that every second of every day.

Yeah. So, on the SMB market for the smaller clients, we grew 20% in 24. We're growing 20% year-to-date in 25. Very strong market for us. There's a big market out there that we've got opportunity to activate against. We're winning against our competition, taking business in that space, and also creating lots of new clients. It's a high-term business. They go in and out of business, and many of them go from small to then become bigger clients as they grow their business. But we're very, very happy with that part of the business, like I say, double-digit growth.

Thank you.

Next, we'll move to Jeff Mueller at Baird.

Yeah, thank you. Can you comment on the sustainability or runway for growth in panel-on-demand just as you anniversary the relaunch in EMEA? And if you can comment on how adoption is going forward in other geographies or if they require more of a displacement sale? Yeah.

Go ahead, Tracy.

No, go ahead.

It's a very – we've got a lot of runway there. In terms of panel, we're not – in terms of RMS, retail measurement, we're the largest player. In terms of panel, we're not. So we have a long, long runway there and a lot of runway in many parts of the world. And me, it was very strong growth rate because we were restricted from actually having that competition for a while. Now that restriction is off. Expect it to come down a little bit, but not a lot. There's a massive market out there. And like I say, nobody else can do both. So long, long runway and across the world.

Okay. And then on the AI-driven margin improvement narrative, I just want to see if we can better tie that to what we're seeing in margins on a geographic basis, because if it was more AI-driven, I wouldn't expect the margin expansion to be so concentrated in Amea, and I'd expect more in the Americas, if you can comment on that. but I think you were making a point that AI tools were helping with GFK synergies or something to that effect, if you could provide more perspective on that. Thank you.

Yeah, let me just talk broadly about AI, and then maybe, Mike, if you want to sweep in and talk about the MIA. So, you don't have to look hard at our company to know that ai applies or we're a data company so everything from collecting the information with you know for the people out in traditional trade just helping them know where to go when they get in a store helping them know what to look for um doing recognition and it's just going to keep getting better and better and better at doing that and so that's not only enabling efficiencies, but that's enabling better collection, right? And so you're going to find that helps us in areas that are emerging markets. But AI also applies in how we code the data and how we prepare it to go online, and that's some of our biggest costs. And just like any other company, we are using AI to get more efficient in HR, to get more efficient in finance to get more efficient in legal and all our support groups and um of course we're using ai to to get much more efficiency in our in our let's call it coding so actually writing code software code um so i you're seeing the beginning of that in our margin expansion and as we run into next year i think you're going to see even more um if i could foreshadow that you're going to see even more expansion as we've I think even in the last six months had further epiphanies on how we can use AI to get more efficient in everything we do so we're feeling very much on our front foot with understanding how to make it work and we're every one of the people who report into me um is becoming very very or has become very very ai uh proficient in how to lead it and then how to generate results from it and so it's something we're focusing on quite a bit and i think you're you're going to see it in our results and you're already you're already seeing it in our results and maybe jim just to add to your to your um comment when When you think about the GFK business, and we've been focused on that integration, the largest piece of that historical business is an EMEA, and a big part of margin improvement has been the integration that's been going on.

So that's the driver of why you're seeing that margin being driven. And equally, just to repeat back what Jim said, and when you look at our operations and we're doing coding more efficiently and what that means for us in terms of margin and using AI to assist us in terms of coding, as well as customer success, as we continue to become more and more AI driven and our customer success support, All of those are becoming operating efficiencies that are flowing through in terms of margin.

Thank you, both.

We'll move to our next question from Waheed Amin at Bank of America.

Hi, good morning. Good morning. In your prepared remarks, I think you mentioned strong pricing and up or cross-sell within the quarter. Is there anything in particular that contributed more in this quarter or region-specific? I think last quarter was called out a bit, but any commentary there would be helpful.

Yeah, so I'm going to re-repeat our revenue algorithm. And so the pricing just is consistent, right? And that roughly equates to about 2.5% of our growth. And then the new capabilities, what we call innovation, contributes roughly 2.5%. And that's where you get your cross-sell, up-sell balanced across those initiatives. i think you we would note that um ecom and our consumer panels um uh with panel on demand are especially strong and continue contribute but that those also have a long runway for growth and then our smb is again it's it's like a machine it's a steady drumbeat of establishing launching new clients, more like with telephonic sales, if you know what I mean. And so we have more of a machine there. We know who all the new entrants into the market are. And so we were able to identify them, tell them how we can create value. We already know how we're creating value. And so that's just a steady drumbeat. And so that algorithm continues to march on and will continue to march on every month and every quarter.

Got it. And then on a region specific, America has sort of come down a bit on organic growth. I know it faces difficult comps, but is there anything you're seeing from a client perspective where you're a bit more confident on the go-forward basis of that region?

Yeah, so the biggest reason is the comp. So in Q3 last year, we grew 9% in the Americas. So the biggest reason for the slight deceleration is just that comp year on year. It's an easier comp in Q4. We're not seeing anything specific related to clients. That part of the business is also very strong. I would say some of the launches happened a little bit later. So we recently launched our panel on demand in the U.S. later than we launched in Europe. So that big Omni Shopper panel, we moved to 500,000 consumers. That was only recently launched in the U.S. So I expect to see an acceleration as we go into Q4 and into next year as that product really takes hold. And people see the benefit of that much larger panel because it's a massive difference. You can get much more granular in your understanding of the consumer, where they live, what they're doing, the bigger your panel is. So expect to see that continue. But nothing out of the ordinary. We're seeing good pickup of our new solutions on full view measurement, whether that be e-com or our Costco and Amazon reads. We're starting to see some really nice momentum there, and in particular, momentum on the activation side of the business with BASIS Innovation AI Screener.

All right. Thank you.

We'll go next to Shlomo Rosenbaum at Stifo.

Hi. Thank you very much for taking my questions. Hi, Shlomo.

Yeah, thank you.

I just want to start out a little bit, just getting a little bit more granular, if you could, on the status of the GFK integration. It looks like the top line growth is really moving in the right direction, which is usually the hardest part. Could you talk a little bit about what's going on in terms of the operational side and margins, how much of the margin expansion is because you're outperforming the top line versus the, you know, the efficiencies you were trying to get? And where are you operationally? There was just also like a comment about the integration driving at higher ARDS. So over there, maybe you can kind of talk about that as well, and then I'll have a follow-up.

Sure, Shlomo. Maybe I'll start off here. When you think about it from a revenue standpoint, you may remember when we talked about it at the IPO timeframe, we said that the strategy was going to be rinse-repeat, similar to what we had done with NIQ. And we knew the playbook, and we were going to continue to execute it, and Tracy alluded to it in her comments, and that's a playbook we've been running. We've gotten discipline around our service offering, discipline around our contracting process, and making sure we're exceeding clients' expectations overall and making sure pricing is flown through the same algorithm that Jim commented on. When you think about it in terms of price, you know, what we're doing in terms of markets and what we're doing across sell and upsell activities, that algorithm is in place and operating and driving top line for the legacy GFK business. And, you know, look, I look at it, you know, roughly a couple hundred basis points in terms of being driven through that. When you look at it from the back office side, it really feels good as the back office is getting principally done. Ops is going to be complete through next year, and we're continuing to drive margin through that. So I think about half of that margin improvement that you're seeing from us is coming through the GFK integration. So the top line is obviously helping that, but we'd anticipated that, and we're delivering it through the bottom line overall. So, look, we're very pleased with where we are, what's going on, and how that business is performing. And as I say, you know, it was the same playbook we pulled out and executed and have been driving.

Okay. And before – the next question I had is just to go through the sequential margin trends in the mirror if as an APAC or they were down a little bit. And is there a seasonal impact, a mix issue, or anything else about that? And also, if you could just, you know, to put a bow on the last answer, just to comment a little bit about that AR-DSO comment that was in the press release about GFK, what that was about.

Sure. So when I look at the, you know, what's been happening on the GFK side, we're continuing to see, you know, that margin improvement, you know, flowing through. So when we look at the DSO comment, we did see when we put the two systems together at the end of Q2, you know, we had a little bit of a timing issue in terms of getting that cash collected, build collected, et cetera. just as we integrated those systems, we were all over it, and you saw that improvement happen in Q3, and you really saw that improvement being driven through that DSO drive or reduction of seven days that I commented on, you know, overall. You know, the GFK, you know, is – we're continuing to drop that bottom line. So, maybe Shlomo, go back, just make sure I covered your questions.

Yeah, just on that GFK one, there was just some kind of comment about DSO going up a little bit on GFK. That was the only thing I was wondering if there's some kind of lag that's still going on.

Yeah, that was a key, too, and really, you know, not at all. When I've only seen working capital, as you're seeing it, the numbers really flow through in a very, very positive fashion.

Okay, so then we're fine on that. And then if you could just finish up on the sequential margin trends under America's and APAC, and if it's seasonal mix or something else.

So when you look at the APAC margins, you know, we're continuing to invest in improved coverage. And that's really, you know, what's driving that side of the equation. I think we touched on EMEA. And when you think about North America, as Tracy said, you know, you had a little bit tougher comps in terms of where that revenue was flowing. And then therefore, with our fixed cost base, You saw a little bit of impact on that as it relates to margins, but, you know, we look at an aggregate and feel very good about where our margins are and continue to drive that 300 basis points improvement over the past, you know, versus a prior year and over 60 basis points improvement from Q2 to Q3, and we're going to continue to, you know, drive margin improvements going forward, kind of going back to Manaf's comment. Good question.

Thank you so much.

No problem.

We'll take our next question from Jeff Silber at BMO Capital Markets.

Thanks so much. I know it's late. I'll just ask one. I hate to nitpick here, but when looking at gross margins, you didn't have a lot of gross margin expansion on a year-over-year basis, and we've seen that play out in prior quarters. Was there anything specifically going on this past quarter in terms of fixed or anything?

No, nothing specific. I mean, we tend to manage the business really looking at EBITDA margins in terms of thinking about it in total, but there's nothing that I would call out or, you know, that was unusual, Jeff, to make sure to call out to you now.

Okay, great. Thanks so much. No problem.

Thanks for the question.

And we'll move next to Jason Haas at Wells Fargo.

Hey, good morning, and thanks for taking my questions. The fourth quarter guidance does imply a D-cell on an organic basis from 3Q to 4Q, despite the compares getting easier. Your commentary sounds pretty positive on how the business is trending. So, I was just curious if there's any factors to think about that could be driving that D-cell in 4Q.

Yeah. So, we're, as you know, from the last quarter's guidance, right, we're, and in my opening remarks, we're, We are very confident in our growth algorithm, and we're really going to stick to that as we're kind of training the company and training ourselves to hit the targets that or beat the targets that we're getting out. So there's nothing systemic or something like that that you're looking for that you would associate with a slowdown. And as you know, we're fairly conservative here. And I think as a new company becoming public, that's the track record we just want to establish. And we're managing a whole portfolio of geographies, a whole portfolio of new initiatives, a whole portfolio of renewals and takeaways. And so we feel like very comfortable in the range that we're in. And you can expect us to continue that pattern going forward. Okay, that's great.

That's very helpful. And then as a follow-up, in the prepared remarks, you did – yeah, sorry, thanks. Yeah, just so for the follow-up, I just wanted to ask about in the prepared remarks, there was a comment about you're expecting significant margin expansion next year. And I know you're not giving guidance for next year, but what was the thought behind putting that comment out there? Are you trying to say that there's not any sort of, like, one-time benefits in the margins this year, and therefore this is the right run rate? Or, like, yeah, what was the genesis behind that comment? You know, if you can't, like, talk to next year, maybe you could just unpack, like, this year's margins so we know what's one-time, what isn't.

All right. I'll let Mike unpack this year's margins. But, of course, our comments are very deliberate when we say something like that. between continued synergies that we're going to get from the GFK integration, which will manifest next year, and continued just good operating efficiencies. We are going to see AI starting to contribute now, but it's going to continue to accelerate. And we're very confident in the things that we're doing. They're going to allow that to happen. And we'll be able to talk more about that, of course. you know, next year when we're on the same call. Mike, do you want to talk about?

Yeah, Jim, just to add to your comments, you know, we have been talking about getting to mid-20s, you know, margins in the midterm is what we had, you know, talked about. But we're continuing to see AI, as Jim said, really kick in. We know that GFK's, you know, You know, synergies are driving two-thirds of that margin improvement and organic revenue growth, as we've talked about previously, 50 to 100 basis points, you know, improvement. So, you know, we are continuing to drive margin improvements, and we'll see that going forward.

All right. That's great to hear. Thank you very much.

And that concludes our Q&A session. I will now turn the conference back over to Jim Peck for closing remarks.

Yep, so thanks everyone for joining us. We look forward to continuing our journey with you and with our clients, with all the people who work for NIQ who do such an amazing job, and of course with our investors. And we'll see you in February.

And this concludes today's conference call. Thank you for your participation. You may now disconnect.