Teads cuts 15% of workforce after $900 million merger
Company projects $40M in cost savings in 2025 as integration challenges slow growth expectations.

The newly formed Teads Holding Co. announced its first full quarter as a combined company following the February 3, 2025 acquisition of TEADS by Outbrain Inc. for approximately $900 million, with the entity now operating under the Teads brand.
On February 3, 2025, in connection with the completion of the Acquisition, the Company announced a restructuring plan (the "Plan"), as part of its efforts to streamline operations and reduce duplication of roles. The Plan involves a reduction in workforce of approximately 15%.
The Company estimates that it will incur approximately $14 million to $20 million in charges in connection with the Plan, of which approximately $10 million to $12 million is expected to be incurred in 2025. These charges primarily consist of severance and other related payments.
Cost efficiencies form a significant component of the merger rationale. The company projects annual synergies of $65-75 million by fiscal year 2026, with approximately $60 million coming from cost reductions. Of these cost savings, $45 million relates to compensation expenses, with 70% expected to be implemented within the first month after closing.
According to the six months ended June 30, 2025 filing, the employee severance and related costs for the period were related to the termination of approximately 194 employees. The Company recorded $8.3 million in severance costs and $0.7 million in legal costs during the first half of 2025.
Operational restructuring and leadership changes
CEO David Kostman's candid assessment during the Q2 earnings call revealed the scope of organizational challenges: "We are not fully satisfied with our financial performance in Q2 and how we are guiding for Q3". The executive team identified specific operational issues requiring immediate attention.
"Our initial focus was on allowing the merge teams to settle in, creating alignment and clarity on roles and responsibilities. However, several learnings from the first few months resulted in us identifying necessary structural changes to improve the effectiveness of the sales organization," Kostman explained during the earnings call.
The company implemented sweeping leadership changes across key markets. "In early July, we consolidated our European business under new managing director, Alex Savage, who ran the legacy teams Central European and LatAm businesses to drive better operations and effectiveness in our key markets," according to management.
The U.S. market received particular focus given its challenges. "We instructed The USA's leadership, ensuring a focused mandate for The US team, our largest market, removing decision making bottlenecks, enabling the team to focus on the customers, and instilling a stronger operational rigor and focus on business KPIs."
Market headwinds and strategic response
The earnings call revealed significant market challenges beyond integration issues. "The US market continues to be the main headwind on our business with a year over year decline of more than 20%," Kostman disclosed.
CFO Jason Kiviat detailed the factors impacting Q2 performance: "One, a lower rate of conversion from our sales pipeline, particularly in key countries, U.S, UK and France, that we attribute largely to operational issues. Two, some softness in a couple of our key verticals, consumer goods, automotive and luxury goods, primarily driven by tariff related uncertainty and softer demand in certain geographies."
The company also made deliberate quality improvements that temporarily impacted revenue. "We made a deliberate and aggressive reduction in publishers and properties that don't meet our elevated quality standards post merger, removing over 200 publishers in the last few months. This came up led to a roughly 5% year over year reduction of legacy Outbrain revenues."
Technology integration and AI advancement
Despite operational challenges, the company highlighted technological progress. "We are accelerating investment in our next generation advertising platform, Teams Ad Manager. We expect that the next generation of our platform will be built leveraging agentic AI modules, delivering increased efficiencies for agencies and effectiveness for advertisers," Kostman explained.
The company launched several new products during the integration period. "In Q2, we launched new offerings that align with our core differentiation. We introduced connected ads in beta, a distinctive format that allows a single brand to occupy both mid article and end of article placement demonstrating the potential of brand formats."
Connected TV emerged as a growth driver. "We continue to see strong growth in our CTV business with 80% year over year growth in Q2 on a pro forma basis," according to management remarks.
Financial performance and guidance challenges
The integration challenges materialized in financial metrics. Revenue in Q2 was $343.1 million, representing a 60% increase year-over-year due to the acquisition, but the company fell short of expectations with an EPS miss that led to a 19.19% stock price decline in pre-market trading.
Adjusted EBITDA reached $27.0 million for Q2, compared to $7.4 million in the prior year period. However, the company withdrew its full-year 2025 EBITDA guidance due to uncertainty about integration timing.
"Considering the fact that Q4 is our most significant quarter of the year, historically contributing nearly 50% of annual adjusted EBITDA for the pro form a business and an unusually wide range of outcomes we currently see for Q4 due to the uncertainty of how quickly this steps we're taking will impact revenue trends, we have made a decision not to reaffirm adjusted EBITDA guidance for the full year 2025," CFO Kiviat explained.
Future outlook and workforce optimization
Despite near-term challenges, management expressed confidence in the strategic direction. "We have made some organizational decisions that we expect to lead to market share gains, growth, and stronger yields and profitability. While Q3 may still reflect some of the traditional effect of the merger, including our reorg and realignment, we expect to see clear momentum building to Q4," Kostman stated.
The company maintained its commitment to cost discipline. "We continue to expect total cost synergy savings to match approximately $40,000,000 for the year and maintain our expectation of $60,000,000 for 2026," according to management.
With the completion of the merger between Israeli digital advertising company Outbrain and French company Teads, the merged entity will part ways with about 200 employees, most of them outside Israel. This move is part of what is known in the business world as the realization of synergies, meaning the elimination of duplicate roles.
Scale and market position
The merger created substantial scale in the digital advertising sector. The combined company reaches 2.2 billion consumers monthly through premium digital environments across CTV and mobile. As one of the most scaled advertising platforms on the open internet, Teads maintains direct partnerships with more than 10,000 publishers and 20,000 advertisers globally.
"The union creates one of the largest open internet companies, with combined advertising spend of approximately $1.7 billion (FY24)," according to company statements.
Timeline
- February 3, 2025 - Outbrain completes acquisition of Teads for $900 million, announces 15% workforce reduction plan affecting ~200 employees
- June 6, 2025 - Corporate name change from Outbrain Inc. to Teads Holding Co. completed
- June 10, 2025 - Stock begins trading under new "TEAD" ticker symbol
- July 2025 - European business consolidation under new management structure, U.S. leadership restructuring
- August 7, 2025 - Q2 2025 earnings call reveals slower-than-expected integration progress, company withdraws full-year guidance
- Q1 2026 - Expected completion of restructuring plan
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Key Terms Explained
Teads
Teads represents both the original French advertising technology company and the new brand identity for the combined entity following the merger. The company specializes in premium video advertising and omnichannel marketing solutions, focusing on brand-safe environments across the open internet. Teads has evolved from a video advertising pioneer to a comprehensive outcomes platform serving over 10,000 publishers and 20,000 advertisers globally.
Merger
The $900 million strategic combination between Outbrain and Teads created one of the largest independent advertising platforms on the open internet. This transaction combined Outbrain's AI-driven performance technology with Teads' premium video and branding capabilities, aiming to offer advertisers comprehensive solutions spanning the entire marketing funnel from awareness to conversion across multiple digital channels.
Company
The combined entity operates as Teads Holding Co., trading under the TEAD ticker symbol on Nasdaq. The company serves as an omnichannel outcomes platform, leveraging predictive AI technology to connect quality media with data-driven creative experiences. With nearly 1,800 employees across 36 countries, the company reaches 2.2 billion consumers monthly through premium digital environments.
Integration
The post-merger integration process involves combining two distinct organizational cultures, technology platforms, and operational approaches into a unified business model. This complex undertaking includes consolidating leadership structures, harmonizing sales processes, integrating technology systems, and eliminating duplicate functions while maintaining service continuity for clients and partners across global markets.
Cost
Cost management represents a critical component of the merger's financial rationale, with projected annual synergies of $65-75 million by 2026. The company expects $60 million in cost reductions, primarily from eliminating duplicate roles and streamlining operations. Immediate restructuring charges of $14-20 million will generate long-term savings, including $45 million specifically from compensation expense reductions.
Workforce
The global workforce reduction affects approximately 200 employees, representing 15% of the combined organization's total headcount. The restructuring primarily targets duplicate roles created by the merger, with most layoffs occurring outside Israel. The severance process involves terminating 194 employees during the first half of 2025, with completion expected by Q1 2026.
Revenue
Revenue performance reflects both the benefits and challenges of the merger, with Q2 2025 reaching $343.1 million, a 60% increase from the prior year due to the acquisition. However, underlying business trends show weakness, particularly in the U.S. market with a 20% year-over-year decline. The combined entity generated approximately $1.7 billion in advertising spend during fiscal year 2024.
Management
The leadership structure combines executives from both legacy organizations, with David Kostman serving as CEO of the combined entity. Jeremy Arditi and Bertrand Quesada, former Teads co-CEOs, assumed roles as Co-Presidents and Chief Business Officers for the Americas and International markets respectively. Recent organizational changes include European business consolidation and U.S. leadership restructuring to improve operational effectiveness.
Business
The business model focuses on delivering measurable outcomes for advertisers across the open internet, differentiating from closed ecosystem platforms. The company operates a two-sided marketplace connecting advertisers with premium publishers through AI-driven technology. Connected TV represents a key growth area with 80% year-over-year growth, while the platform processes billions of data points to optimize campaign performance.
Performance
Performance challenges emerged during the integration period, with slower-than-expected return to growth and withdrawal of full-year financial guidance. Despite reaching $27.0 million in Adjusted EBITDA for Q2, operational issues in key markets including the U.S., UK, and France impacted conversion rates. The company expects performance improvements in Q4 2025 as organizational changes take effect and integration benefits materialize.
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Summary
Who: Teads Holding Co. (formerly Outbrain Inc.), led by CEO David Kostman, implementing workforce reductions affecting approximately 200 employees across global operations
What: 15% workforce reduction involving termination of 194 employees in first half of 2025, part of post-merger integration to eliminate duplicate roles and achieve $40-75 million in annual cost synergies
When: Initiated February 2025, largely implemented in Q2 2025 with $8.3 million in severance costs recorded, completion expected by Q1 2026
Where: Global implementation with most cuts occurring outside Israel, affecting the combined 1,800-person workforce across 36 countries, with specific focus on U.S., UK, and France operations
Why: Streamlining operations after $900 million merger to eliminate role duplication, reduce costs by $45 million in compensation expenses, address 20% U.S. market decline, and position for future growth despite slower-than-expected integration progress and withdrawal of full-year financial guidance