Operator
Hello everybody and welcome to the Perrion Network's second quarter 2026 earnings conference call. Today's conference call is being recorded. An archive of the webcast will be posted on the company's website. The press release detailing the financial results is available on the company's website at www.perrion.com. Before we begin, I'd like to read the following safe harbour statement. Today's discussion includes forward-looking statements. These statements reflect the company's current views with respect to future events. These forward-looking statements involve known and unknown risks, uncertainties, and other factors, including those discussed under the headings Risk Factors and elsewhere in the company's annual report on Form 20F that may cause actual results, performances, or achievements to be materially different, and any future results, performance, or achievements anticipated or implied by these forward-looking statements. The company does not undertake to update any forward-looking statements to reflect future events or circumstances. As in prior quarters, the results reported today will be analysed both on a gap and a non-gap basis. While mentioning EBITDA, we will be referring to adjusted EBITDA. We have provided a detailed reconciliation of non-gap measures and their comparable gap measures in our earnings release, which is available on our website and has also been filed on Form 6K. Hosting the call today are Tal Jacobson, Perrion's Chief Executive Officer, and Elad Zubry, Perrion's Chief Financial Officer. I would now like to turn the call over to Tal Jacobson. Please, go ahead.
Good morning, and thank you for joining us on Perrion's earnings call for the second quarter of 2026. Nearly two years ago, we made a deliberate decision to to diversify Perion away from the open web. We quickly adapt to the demands of the marketplace ahead of the budget shift the industry is experiencing today. This diversification was driven by both our organic investment in CTV and retail media and our M&A strategy, from HiveStack and digital out of home to GreenBids and the Outmax AI agent. Ever since, we've been doubling down on that strategy and these quarter results reflect that conviction with strong traction across all our key growth engines. In the second quarter of 2026, we saw a massive adoption of the Pellion One platform and its product lines. This reflects a growing advertising trust and accelerating adoption of our solution across our client base. CTV, retail media, and digital out of home all outpaced the market, and our advanced AI technology Outmax continue to scale rapidly with a triple-digit year-over-year spend growth. We also continue to expand our reach this quarter, both geographically and in the depth of our platform capabilities. In retail media, Best Buy Canada selected Perion as its end-to-end in-store retail media technology partner, which is now available to our retail and digital out of home advertisers as part of our strategy to double down on retail media and digital of home especially with in-store inventory we expect those new partnership to unlock new budget from high growth verticals the same verticals that are targeting consumers at the moment of purchase decisions this quarter we also added a new distribution partner to bring outmax to greece and to the Central and Eastern Europe. This partnership extended our reach into new regions through the partner-led model. On the technology side, we extended our full-stack digital out-of-home infrastructure into Google DV360, giving buyers the ability to activate our programmatic guaranteed inventory through Google's media platform. We also launched an agentic self-serve mobile application within Pellion One, which we call Ask Pellion. This upgrade transformed our execution capability to be more accessible to advertisers and agencies. New distribution channels, new retail media, and each side-of-home partnership, and advancing our technologies are exactly what's driving the sustainable momentum we're seeing across our growth engines. Marketers navigate a universe of channels, screens, platforms, formats, data sets, and buying environments, all while consistently chasing higher performance. Budget, signals, and optimization remain siloed by channels. This fragmentation is exactly what breaks efficiency and performance. PerianOne is designed to close that gap with advanced technology-driven solutions. PerianOne is our unified AI-native execution infrastructure for advertisers. It is built to plan, activate, and optimize advertising campaigns across CTV, social, digital out-of-home, retail media, and open web. At the center of Perion One is Outmax, a proprietary AI agent, continuously optimizing outcomes across channels and platforms. Perion One is an infrastructure, not a tool set. Here's what it looks like in practice. The advertiser's entry point is Perion One, our platform and AI execution layer. Under the hood, whenever we need outcome-driven activations, Outmax operates as an agent that plans and executes on our advertisers' behalf. Perian 1 leverages multiple connections to audiences' data and measurement technologies, including our own sort audience segmentation technology. From there, Perian 1 reaches into the channels themselves, every major open and walled garden DSP and SSP, from YouTube, Meta, TikTok, and the broader open web, plus our own Perion-owned digital out-of-home DSP and SSP. It's an open ecosystem with effectively unlimited connections we keep adding, giving advertisers the reach to the entire global market. Outmax, our AI agent, works across all major channels, which allows us to optimize complex campaigns and drive better business outcomes to advertisers. Outmax removes the guesswork and replace it with algorithm certainty, allocating spend, managing pacing, and optimizing outcomes inside Perrion 1 and beyond. This quarter we introduce Ask Perrion, sparking deeper conversation with CMOs and agencies eager to get ahead of the agentic media buying curve. Ask Perrion puts the power of Perrion One directly into the hands of advertisers and agencies through a simple conversational interface. Ask Perrion is about making sophisticated execution more accessible to more customers. This expansion gives our customers easier access to our technology, while embedding Perrion One more deeply within the infrastructure they use. This quarter, Best Buy Canada selected Perrion as its end-to-end in-store retail media technology partner for its digital signage network. Using Perlion's ad server, SSP, and header bidding technologies, Best Buy Canada is moving from a fixed loop-based signage to a programmatic retail media model that selects ads dynamically. This technological adoption is designed to give advertisers more measurable in-store retail media campaign capabilities. For Perlion, This partnership expands our retail media reach, deepens our role as a full-stack infrastructure partner, and supports a repeatable model for building more predictable infrastructure-level revenue streams over time. This full-stack infrastructure is also becoming easier for buyers to access. We added programmatic guaranteed deal execution for our digital out-of-home directly within Google's DV360 media platform. This gives buyers access to premium digital out-of-home inventory through their primary DSP, with fixed pricing, committed inventory, and predictable delivery. This capability is available across our full global digital out-of-home supply reach, covering more than 1.6 million screens in over 40 countries. By bringing guarantee digital out-of-home buying into the same workflow advertisers already use for display, video, and CTV, we are making our supply more accessible and expanding its monetization potential. We are also extending our reach geographically through our capital-efficient, partner-led model. Most recently, we partnered with Across Media 2 for 1 to bring Outmax to agencies and brands across Greece and the broader Central and Eastern European region. Across Media, 2 for 1 brings established relationships across agencies, national tourism boards, and international buying desks, as well as existing experience with the Perrion's digital out-of-home technology. Through this partnership, Outmax can be applied across major digital channels and optimized toward advertisers' defined business outcomes. This builds on a distribution model we have already applied in other markets. The partnership is expected to accelerate Outmaq's path to revenue growth and extend our reach with low incremental costs and margin accretive growth potential. This quarter, we also added a new data partnership with Fetch, the leading consumer reward and purchase intelligence platform access through live ramp this gives our advertisers access to verified sq level purchase data from over 13 million monthly active users and 26 thousands plus merchants purchase behavior is the most direct signal of consumer intent and accessing it at a scale outside the closed platform has been a persistent industry challenge fetch data spends more than 1,300 retail agnostic segments from category level shopper profiles to SKU specific competitor targeting taken together those initiatives show how Perion one scales first by embedding more deeply with enterprise customers secondly by expanding access to our infrastructure and finally by extending Outmax into new markets through our partners. This reach and trust are the foundation of our land and expand model giving us a strong base to deepen customer relationships and drive sustainable growth over time. With that But I will hand it over to El-Ad to walk through the financials.
Thank you Tal and good morning everyone. Our second quarter performance reflects our continued operational focus on driving scale and adoption across Perion One. In the second quarter, Perion One spend increased 15% year over year to $156.7 million. This was driven by the strong momentum in CTV and digital out-of-home channels growing 56% and 45% year-over-year respectively. In addition, our retail media vertical spend grew by 60%, partially offset by continued softness in the open web advertising across the industry. Perion One Contribution XTAC came in at $34.9 million, down 4% year over year. This was driven by the use of promotional terms to acquire new accounts and drive incremental spend from existing customers, which temporarily impacted our take rates. As we scale the platform, take rates naturally normalized over time, though we expect them to modestly improve in the second half of the year. Outmax, our AI agent, continues to scale rapidly, with spend growing 136% year-over-year on a pro forma basis, reflecting strong adoption across wall gardens. Our focus on delivering advanced technological solutions is translating into tangible enterprise During the quarter, Best by Canada selected Perion as its end-to-end retail digital out-of-home technology partner deploying our complete ad server ssp and header bidding technologies to power one of the largest ssp-enabled digital out-of-home media networks in canada this relationship validates our digital out-of-home business strategy and it allows us to replicate this offering to other retailers growing our retail media business globally we also remain focus on creating immediate value through our shareholders return program our highly disciplined approach to capital allocation allowed us to repurchase 2.7 million shares for 24.5 million dollars during the quarter finally based on our growing visibility going into the second half of the year the strong momentum we are seeing in our pipeline new strategic agreements and the structural efficiencies we have secured we are narrowing our full year guidance ranges. We are adjusting the high end of our contribution egg stack outlook to reflect the softer first half while maintaining the midpoint of our EBITDA guidance. I will discuss this in more detail shortly. Let's take a look at spend, the top line metric which reflects customers' adoption of Perion solutions. Total spend for the quarter increased 9% year over year, reaching $194.7 million. More importantly, spend on the Perion One platform grew 15% year-over-year to $156.7 million, accounting for 80% of our total spend. This compares to 76% in the same period last year, proving that our unified platform strategy is successfully attracting enterprise media budgets. This was driven by the continuous acceleration of our core growth engines. CTV spend grew 56% year-over-year to $17.7 million. Digital out-of-home spend grew 45% year-over-year to $87.7 million. Both continue to vastly outpace the broader market growth expectations as advertisers are actively shifting budgets towards Perion 1 to gain precise performance and cross-channel execution. In addition, our retail media vertical spend significantly accelerated, growing 60% year-over-year to $59.4 million. Retail media represents a strategic focus for Perion, bringing together our CTV, digital out-of-home and display capabilities. Enterprise mandates, like Best Buy Canada, demonstrate our ability to modernize in-store media networks. This uniquely positions us to bridge the physical and digital worlds. The combination of physical and digital unlocks powerful synergies between in-store digital screens and external digital out-of-home screens, delivering a truly unified end-to-end customer journey that few in the industry can match. Revenue for the second quarter was $98.2 million, down 5% year-over-year. Contribution X-TAC for the second quarter was $42.3 million, down 11% year-over-year. Perion 1 Contribution X-TAC was $34.9 million, representing 83% of total Contribution X-TAC in the quarter, up from 76% last year. Perion 1 Contribution X-TAC declined 4% year-over-year, mainly due to our use of promotional terms to acquire new accounts and drive incremental spend from existing customers through our platform. As we continue to scale the platform, we expect take rates to naturally normalize over time, though modestly improve in the second half of the year. As expected, search revenue declined 2% year-over-year, while search contribution XTAC declined 30% year-over-year. We continue to manage the search business to maximize cash flow to reinvest into Perion 1 and return capital to shareholders through a share repurchase program. Adjusted EBITDA for the second quarter was $2.8 million, representing a 7% margin of contribution XTAC. This includes a $1.6 million of foreign exchange headwind. Excluding this foreign exchange impact, adjusted EBITDA would have been $4.4 million. As we are scaling our top line and capturing more market share, we remain focused and disciplined on improving our operational efficiency. At the end of the second quarter, we executed targeted efficiency initiatives to optimize our cost base as part of this year's efficiency plan. While the second quarter did not benefit from these actions, we expect adjusted EBITDA margin to meaningfully inflect upward in the second half of the year to reach our full-year targets. On a gap basis, second quarter net loss was $6.8 million, or $0.18 per diluted share. On a non-gap basis, net income was $3.9 million, or $0.09 per diluted share. It is important to emphasize that the year-over-year increase in our gap net loss was almost entirely driven by negative foreign exchange impact to our non-operating financing income and lower interest income from our cash balance. While our underlining operations remain profitable on a non-gap basis, the combination of these non-operating financial headwinds and a lower outstanding share count mathematically amplifies our gap loss per share this quarter. However, we are making a highly strategic trade-off. By aggressively executing our buybacks now at depressed valuations, we are permanently reducing our share count. As our profitability scales in the second half of the year and into 2027, this concentrated equity base is expected to serve as a powerful multiplier for future EPS growth. In the second quarter, we generated $2.5 million in net cash from operating activities, while adjusted free cash flow reached $4.8 million. On a yearly basis, we expect to maintain a strong conversion rate relative to adjusted EBITDA, as we did in previous years. This reliable cash generation provides us with the financial flexibility to fund our organic growth initiatives, invest in platform innovation, and support our shareholders' return commitments, all without stretching our balance sheet. As of June 30, 2026, we held $268 million in cash, cash equivalents, short-term bank deposits, and marketable securities with zero debt. During the second quarter, we continued the strong execution of our shareholder return program. We repurchased 2.7 million shares for $24.5 million at an average price of $9.12 per share. Since the initiation of this buyback program nine quarters ago, we have repurchased a cumulative total of 18 million shares for $166.8 million. By the end of this year, we plan to fully execute the remaining $33.2 million under the current plan. Repurchasing our stock at current valuation levels reflects our confidence in Perion's long-term value and future prospects. Turning to our updated 2026 outlook, based on our increased visibility for the second half of the year and the momentum we see building in our pipeline, we are narrowing our full year 2026 outlook ranges. We now expect contribution XTAC of $215 to $225 million and adjusted EBITDA of $51 to to $53 million, implying an adjusted EBITDA margin of 24% at the midpoint. Our confidence in meeting this guidance is driven by tangible second half catalysts. Leading these catalysts is the execution of large-scale strategic agreements. These recently signed agreements are actively in the onboarding phase. Their material financial contribution is expected to kick in towards the end of the third quarter and accelerate moving forward. In addition, the continued scaling of Perion 1 growth engines combined with a streamlined sales organization is rapidly converting a robust pipeline into realized spend. In parallel to our top-line expansion, operational efficiency remains a core priority. In the first half of the year, we took decisive steps to optimize our cost structure and streamlined operations. These deliberate actions are yielding productivity gains and cost savings designed to positively impact our profitability starting in the second half of the year and beyond. With an optimized expense base and growing momentum across Perion One, we are scaling our business on a strong agile foundation and we remain completely on track to achieve our 2028 growth and efficiency targets. With that, I will now turn the call back to the operator for the Q&A sessions. Thank you.
Operator
If you wish to ask a question, we ask that you please use the raised hand function at the bottom of your Zoom screen. Or if you have dialed in today, please press star 9. Our first question comes from Andrew Marrock at Raymond James. Andrew, you may now unmute your line and ask your question. Thank you.
Thank you for taking my questions. Maybe first on the Outmaps and Ask Arion trends that you've seen so far. Obviously, the double-digit growth in Outmaps is great to see, but can you also talk about the synergy possibilities you've seen between Ask Arion and Outmaps and maybe more generally what you're seeing with clients and schools like this are helping to make complex workflows more accessible?
Thank you, Andrew. You were breaking off, so I'll see if I got all of it. So, Outmax grew and continues to grow very fast. We do see synergies between our products as Outmax is now pushing out of CTV, retail, and social. And Outmax is becoming an integrated part of Thelion One. It actually drives a lot of the AI technologies within the platform. uh again i you were breaking off a bit so i'm not sure i answered the entire question so if you want to if i didn't if you want to repeat the parts that uh were not answered that would be great i think you got most of it it was really just kind of the synergies between ask carry on and out max both kind of these agentic tools and how generally the agentic uh workflows that you're you're bringing the market are helping make some of these complex workflows for advertisers more Yeah, so absolutely. The generic solution that we have, including Ask Perion, is fully integrated with Outmax. So Out2x actually provides a lot of the answers within Ask Perion, including the suggestion of how do you reallocate budgets in between platforms. If you just completed a campaign on different social platforms, it will suggest what's next, right? So it would say, I would put more money towards open web CTV or Meta or YouTube or whatever it is.
But Outmix is becoming an even more integrated solution within our entire agentic platform and as well, obviously. all right maybe one more if my audio will allow me um you talk a little bit about the trajectory toward your medium term goals given the 2026 performance you're seeing so far are those still um you know accessible for you and what you in the past to get there thank you i'm sorry it's very hard to hear you if you can repeat this for a second um just talking about your your medium
term goals and the uh and the 2026 performance so far you know if you are still on track for the medium term goals beginning of the year and the track how to get both yeah all right so i think uh towards the h2 of uh of 2026 We are starting right now to onboard some strategic agreement we discussed about in Q1. We're seeing right now onboarding into our pipeline and we see all of our growth engines are continuing to generate healthy pipeline as we're looking at Q3 and Q4. And looking at last year as well, when we see the X-TAC and EBITDA had waited on the second half of the year, we feel that right now we have the right visibility to narrowing down a bit the guidance for the continuous of the year. And of course, taking into account everything that we already did with respect to efficiency measure that took in a Q1, we have the right disability right now towards the second half of the year.
Operator
Thank you. Our next question comes from Jason Helstein at Oppenheimer. Jason, you may now unmute your line and ask your question. Thank you.
Hey, everybody. Can you hear me okay? Yes. Thank you. Okay. So can you give us a little bit of help? Obviously, you're giving us kind of the the spend for period on one, but we, we don't know the revenue. So, I mean, obviously the, you know, the other parts of the business are still having a negative mix shift because overall revenue is still down. I'll be, you are guiding for, you know, like a mid team dish type of growth in the back at the year. So just maybe help us understand how much was either period on one revenue in the quarter or the non period on one revenue year over year declines. So that's question number one. Number two, would you think about perhaps changing like the segment disclosure to revenue X tax since you're now guiding to revenue X tax and not revenue and to maybe giving us that like level of detail? Next question, you highlighted a RIFT, a headcount reduction. I'm just curious if we can get some more details like what percent of people, how many people or what percent that impact. And then just lastly, with the $268 million of cash, should investors assume it's entirely goes to buybacks or, you know, are there other M&A opportunities you're looking at?
Okay. Okay. Thank you, Andrew. So I will start with the revenue. Jason, sorry. The revenue for Q2 for Payone 1 was $74.2 million. you'll have it obviously in the presentation after the end to the website it did shows a slight decline year over year when you're looking at the revenue but it's something we will expect this week on more and more customers into the period one from a revenue recognition method most of it will come on a net perspective not necessarily as growth so we expect you to see this way from looking at the segment and how we are breaking it down it is important for us to really think about the spend and how we are contributing to spend towards a different channel because we believe that the real adoption of our solution, what's our customers is really coming into place when you're the spend level it's more giving indication of our of the adoption of the customs and in the end parent one is a channel agnostic so when we are contributing for different channels it makes more sense to give it breaking down through the span and parent one is a total is a total number which obviously supposed to produce the better our life with our defensives from the reduction standpoint so as we discussed i believe even starting last year we are constantly doing improvements on how we're operating our business and improving our cost base to be more efficient we'll be able to first of all, of course, support all of this scale with the current cost base and improve wherever we can. In H1, we're very focused about also creating this operational leverage going into the second F of the year. We just announced right now the restructuring that we did. Roughly, I can tell you that we reduced roughly 10% of the cost base. It was intentionally made also to support the different fluctuation in the effects, but also to give us some room to invest more in when we are going into 2027, when we want to hit the top-line expansion that we are aiming to get and the growth rates to a fair amount. So not everything will be baked into 2027 without even getting into the values right now. For a question with respect to the cash, we currently have almost $270 million in cash in our balance sheet. We are continuously trying to do, also looking at the buybacks. So we expect to end the buyback by the end of the current plan, by the end of the year. But we are constantly also looking on M&A activities to see if there are any interesting opportunities out there that can generate more value to the customers and to really increase our synergy dollars. Something very important to hire from that, we are taking a very disciplined approach when we are looking at our cash. and we're always trying to see what will get the best value to our shareholders whether this can be a buyback or an M&A or investing in our own business for the growth but we're always trying to balance between those three I'll just echo what Alat said and say with our current cash obviously buyback we still have a hefty chunk to complete this year we're investigating our technology so all the growth engines
you know we're putting some investments there to make sure that they continue to grow and continue to outpace the market and we're constantly looking at M&A but as you can see in the past two or three years we've always been disciplined in buying the right things you know with HiveStack which is showing almost three years after it's still showing amazing growth with digital at home reinvents without max showing amazing growth so we're not running to just spend the money we are looking for good opportunities and when we find something that makes sense and it's extremely synergetic and profitable
Operator
then we can explore that thank you as a reminder if you would like to ask a question and you are in the Zoom webinar, we ask that you please use the raised hand function at the bottom of your Zoom screen, or if you have dialed in, please press star nine. Our next question today comes from Matthew Weber at Canaccord. Matthew, you may now unmute your line and ask your question. Thank you.
Hi, great. Can you hear me okay?
Yeah. Okay, great. Thanks, guys. Just one for me. You talked about execution of recently signed agreements, actively on the onboard of those that we started taking towards the end of Q3. Can you just talk about some of the factors that go into sort of the pacing of those contributions and what could cause them to either exceed or, you know, to drive some variance relative to your expectations in a sort of interest of customers on my line?
Yes, thank you, Matthew, for the question. So we gave a bit of color of those agreements, but it's basically a volume play to a very large agency that it operates. I can tell you that it took us a lot of time to do the onboarding and all of the testing phases. And the entire H1 we're focusing about showcase the parent one capabilities and why it can drive better results for them and for their customers. Right now, we just signed them. I think it will take a bit more time to do the onboarding phase. And then I believe that those contracts will be more materialized towards the end of Q3 and obviously towards Q4 and mostly QK and obviously in 2027 as well. It can be faster and I want to be a bit careful about when you look at a few months of testing, even though onboarding can take more time and it's something that they are controlling on. We are very capable to take any volume that they will decide to give. So there can be an upside on that, but it's not under our control and that's why currently we still see a range in the HSTAC level from those specific reasons and the fact that obviously the entire industry are very heavy on the second half of the year specifically towards Q4.
I'll just say again to echo what Elad said we spent H2 mainly showcasing how our technology can provide better outcomes than anything else to those two strategic clients that we have now. And we're actually happy to know, it was a frustrating process to take so long to close those agreements. But the fact that the value for entry was so high gives us the confidence that our technology can provide great value. And that others are going to have a very high value to entry, which we are we're considering is a very good thing. So, you know, we're feeling very confident, very optimistic about those two agreements. And we're now looking how do we duplicate that with with other clients?
Operator
Thank you. Our next question today comes from Jason Cryer at Craig Hallam Capital Group. Jason, you may now unmute your line and ask your question.
Thank you. Can you guys unpack the commentary about the promotional activity on Perion One? It seems like there's maybe some take rate concessions up front that'll moderate over time. I'm just trying to understand how you migrate take rates to normalized levels and why there's more of an outsized impact in the near term.
Yeah, absolutely. Thank you for the question. So as we said, you know, during H1, we ran a lot of test campaigns. Test campaigns come with very low margins, as their name suggests, it's tests. But now, again, as we close those two strategic agreements, obviously, they're not going to stay at testing rates. So that should be normalized. But going forward, even though we do think this is going to be normalized, we think testing budgets is a great tool for us to use to showcase our technology and gain market share. So our goal is to gain as much market share as possible. But obviously, once we close those agreements and future agreements, we believe tick rates will go back to normal.
And just to add on what Stan said, already starting from the second half of the year, I believe that we're going to see the tick rate to be a bit slightly increasing towards the second half of the year. thank you and then as a follow-up you know you guys had impressive growth across ctv and out of home and retail media you just reconcile that to to the you know cxt growth that was that declined in the quarter you know when do you think the consolidated growth rates more closely align with these segments as opposed to kind of the legacy segments which which are in decline thanks
so i think it's not a secret that the web uh uh is driving it uh is driving it down the entire industry is uh uh we see bugs are shifting away from the from the open web and moving towards digital out of home and ctd um see our solutions of digital out of home and ctd are very much focusing most of them around uh self-serve which which increasing the ticket from what we used what we used to saw in the in the past but having said that i think that our tickets are still very healthy when you're looking at total uh fair and one and we even there there were even relatively high when we're looking at the steel so it gives us some room uh for all of those uh promotional use of the discuss when we are looking about the different channels again in our opinion the best structural way to give it is on the spend list because this is what really the discussion with the customers and showcase really the adoption of how much we are using the platform and the third one usually it's a channel agnostic and it's not something that's under our control in terms of the take rate. We are, of course, controlling the overall take rate that we are expecting to get out of a certain campaign, but not necessarily about where the money will be deployed in which channel. So I'm assuming also next up, we'll start to see more, it links towards CTV, additional other forms well and obviously uh uh will influence that but i would not expect it to go relatively lower than the 20 rate that we see uh uh right now as i said in q in h2 even we're going to see a moderate increase thank you okay thank you our final question today comes from eric martinuzzi at lake streak eric you may now unmute your line and ask your question thank you I'm curious to know the repeat customers that are using Outmax.
Are you seeing larger spend on subsequent campaigns?
Yes, thank you. I think the interesting thing about Outmax, specifically, it's a great product for the lend and expend model. The majority of our clients that are using it started from small budgets, and now they're growing quarter over quarter within the same account.
So since Outmix is outcome-driven, it can show actual business results for our clients. it's a very natural type of model with the majority of our clients of Outmix and I noticed you in your guidance you lowered the midpoint for the contribution XTAC for 2026 was this a result of a slower than expected ramping of these two large strategic accounts?
Yes, Eric. I think that, first of all, our initial expectation was that this onboarding and those agreements will be signed earlier in the year, and we will be able to see more growth out there. But also, factoring all of the macro headwinds that we saw in H1, we had better visibility to see where we are, but the reduce of the XDAG was narrowing down to the lower end was actually because those two main factors.
Yeah, and I did note that you reiterated the midpoint on the adjusted EBITDA, so that was good to see.
Thank you, Eric. this concludes today's q a i'll now hand back to management for any closing remarks thank you thank you thank you all for joining uh billion one adoption is accelerating across every growth engine and we're entering the second half with delayed momentum we look forward to updating you for the next quarter thank you for your time this concludes today's call thank you everyone for joining you may now disconnect
