NIQ earnings call transcript, November 12, 2026

Hello, everyone, and welcome to NIQ's third quarter. 2026 earnings call. Joining me today are CEO, Jim Peck, and CFO, Mike Burwell. Following Jim's and Mike's prepared remarks, we'll open the line for Q&A with Jim, Mike, and our Chief AI and Product Officer, Troy Triangin. As a reminder, today's remarks will include forward-looking.

No obligation to update any forward-looking statements made on this call, except as required by law. During this call, we will also discuss both GAAP and non-GAAP financial measures. Reconciliations of non-GAAP measures to the most directly comparable GAAP measures are included in our earnings. Press release, which is available on our investor relations website. A replay of this call will also be available there. And finally, unless otherwise noted, revenue growth rates mentioned on this call are in organic constant currency and are compared with the prior year period. And with that, I'll turn the call over to Jim.

Good morning, everyone. Q3 was a milestone quarter for NIQ. There were several key takeaways. Ongoing demand for our solutions. Our resilient business and relentless execution in a dynamic operating environment. And our strengthening financial profile. We also announced a new agentic commerce partnership with Google, which I'll cover in detail shortly. Some financial highlights. It was our sixth consecutive quarter, exceeding the top end of our guidance across all key metrics. We grew organic constant currency revenue growth by 5.8%. Our 11th straight quarter of mid single digit growth. Adjusted. EBITDA grew 17.8% and we expanded and adjusted EBITDA margin by 230 basis points year over year to 23.6%. We delivered positive GAAP earnings per share for the first time since our IPO. We generated levered free cash flow of $181 million and adjusted earnings per share of 30 cents, both considerably above expectations. We achieved 2.9 times leverage reaching our sub. 3-tier times milestone a quarter ahead of schedule. And our recently announced $150 million share repurchase authorization as return of capital to a disciplined capital allocation framework. So, we continue to deliver from the top line to the bottom line and strengthen our balance sheet. We're raising full-year 2026 guidance to reflect year-to-date outperformance and, with a strong core, real AI momentum and our new partnership with Google, putting NIQ data at the center of eugenic commerce, we believe 2027 begins a new phase of durable, profitable growth. Looking at the quarter from a segment

perspective. Americas grew 11.5% with broad strength across intelligence and activation. In North America, we had several key wins with key retailers. We won our first ever convenience retail collaboration with Maverick, displaced the incumbent across more than 830 stores in 20 states. We established a full store data partnership with a leading department store and off-price retailer, representing roughly $15 billion in retail sales. We also expanded our BEVL retail collaboration with a global mass merchandise retailer. In Latin America, we won competitive business from a global CPG leader across five markets, renewed and expanded. We founded a global spirits maker in Mexico, and we scaled a clothing partnership nearly eightfold from a single brand pilot into a multi-brand program. EMEA grew 2.9 percent, and we continue to work. We worked closely with clients impacted by the ongoing conflict in that region. Despite the challenge, EMEA delivered some of our strongest wins of the quarter. In Western Europe, a global home furnishings retailer signed a landmark eight-figure, three-year activation renewal of its global program. Expanding across more than 60 markets. Our largest deal of the quarter. This relationship spans nearly 25 years and has always run on annual renewals. This was the first ever multi-year commitment made even as they were under real budget pressure. and reviewing their all-around spend. We also won a European frozen food maker from the incumbent in a high seven-figure multi-year deal. And in the Middle East, despite the volatile landscape, we're

renewed a global telecom operator's customer experience program, extending a 15-year partnership. APAC grew 0.2% as a tough year-over-year growth comparison masked the progress we continue to make in that region. A global social commerce platform went live with us across six markets after a year-long build. We also opened up a new vertical adding our first agricultural sector or client in Vietnam. Our go-forward APAC strategy remains intact. Develop retailer-related relationships and wind collaborations, improved coverage, and improved data quality. We've made progress this year and believe we're on the right path to make APAC a more consistent growth contributor. Zooming out, while our segment growth rates differ today, we believe growth rates can converge over time. America's growth reflects strong upsell of full view and cross-sell traction for our activation offerings, as well as initial demand for our AI native solutions. As the EMEA conflict debates and our APEC strategy takes hold, we believe growth can broaden over time. Turning to growth by product, we saw strength across intelligence and activation. Intelligence grew 5.5% on new wins and strong upsell. promotion. Client demand for NIQ's full view drove 20% plus growth in e-commerce and consumer panel. Measurement wins stood out. We anchored the largest retail census undertaken in South Africa and Nigeria. Each covering roughly 180,000 outlets and displaced the incumbent at a global sparkling wine leader, expanding it from 12 to 23 markets in a high seven-figure deal.

Activation growth accelerated. For a third straight quarter, up 7%. Analytics is a prime space for agentic tools when coupled with NIQ's decision-grade data. Marquee wins in the quarter included a competitive takeaway in Japan and a region-wide creator effectiveness study for a major technology platform. Growth remains resilient thanks to our global reach and diverse offerings. Clients need NIQ in every environment, and that need increases in an AI world. Clients are accessing AI-powered NIQ intelligence several new ways. Through NIQ applications, through our new solutions that embed NIQ intelligence directly into their AI platforms, and the LLM tools they have. already used. And with Connect AI, some of our largest and most sophisticated AI builder customers are embedding NIQ intelligence deep inside their own AI applications and workflows. Over the past year, we've shown how NIQ's AI value builds for clients in stages from usage to adoption to deep integration and now to incremental revenue. Here's where each stands. Data usage comes first. It's the leading indicator we began sharing late last year. Client use of NIQ data is growing roughly 20% a year, and clients are engaging with our new AI features. Some recent proof points include more than half of our discovery users engage with AI features in Q3, double what we do. We saw in Q2. Since August, we added global measurement and U.S. panel data sets to U.S. retail measurement, increasing the number of data sets available to OPTIC users by 13 fold. We also beta launched NCP connections across four major

Cloud, ChatGPT, Gemini, and Copilot. Users can now access automated insights and AI-powered reports, and we have more enhancements planned over the coming quarters. Next, the data usage is turning into AI product adoption. Nearly 60% of our top 100 clients now buy at least one of our AI-powered applications. Basis AI and Retail Analytics, our first wave of AI-native innovation over the past year plus. Revenue from these products is up 28% year-to-date, and roughly 74% of AI-native revenue comes from clients who bought our AI-native solutions in 2025. Assign these solutions are driving cross-sell. And we're gaining traction with our new AI-native solutions launched this year. In less than six months, we have reached 10 charter commitments with AI Builder, including Mara Snacking and Purina. We're earning revenue from these initial projects, and as we progress and deliver value, stand to turn these into even bigger commitments over time. And we have a global pipeline of 79 qualified proof of concepts behind them, spanning categories like food, beverage, personal care, pet care, and beauty across every region in which we operate. Now, let me. Let me describe how we're going about deep integration. Clients choose NIQ because, while AI models are abundant, AI that drives value can't be bought as software. It has to be built from the inside and with granular trusted data. And lots of it. With OpticBridge and Connect AI now launched, our four deployed engineers are working side-by-side with our clients, and in some cases, their integration partners, to build and enable AI products that plug directly into the network.

In one charter program engagement, we match the client's product records to NIQ data covering 96% of their category's retail sales. The foundation that lets their systems and the market speak wonderfully. We're now embedding NIQ's harmonization and innovation frameworks directly into the client's own agents and workflows, powering their AI-driven innovation decisions. With a global beverage leader, we're building... ...an innovative system that matches their product data to NIQ's measurement to guide post-launch decisions. In partnership with OpenAI Deploy Co., we're building an AI agent to automate commerce intelligence workflows for manufacturers. Starting with U.S. duty and planning to expand into additional categories in 2027. Every deployment creates a path to additional data consumption and product subscriptions after go-live. As NIQ intelligence flows and deploy... ...AI tools, co-pilots, and LLMs, NIQ moves from mission-critical input to critical business infrastructure. And that value is already starting to show up in our results. Just months after launch, we're beginning to monetize. We expect about a tenth of a point of growth from these AI solutions in 2026, which remains a foundation-building year. We're gaining adoption, building pipeline, expanding partnerships, and validating our monetization models. That momentum builds... ...into 2027. We're not setting formal 2027 guidance today, but we believe our new AI-native product suite can contribute about a quarter to a half point of growth. Our new AI products are putting us at the table with client CIOs.

and CTOs as they build their own AI tools as a trusted partner and thought leader on how to maximize AI value. Because Optic, Bridge, and Connect AI connect NIQ's data directly into their AI environments, we're opening technology budget pools we haven't historically accessed. A leading global consulting firm sized the prize. It estimates technology budgets at the top 100 global manufacturers will grow from roughly 60% to 60% to 60% to 60% to 60% to 60% to 60% to 60% to 60% to 60% to 60%

to be on the show. mock new revenue streams, from consumption-based revenue, to data licensing, to implementation fees, to agentic service fees. And that's before widening the aperture to our 23,000-plus clients. So we think our progress is showing that AI tools are only as good as the data that powers them. And we believe no one has granular consumer intelligence like NIQ. Our proprietary permission harmonized data is the critical ground truth. And we think our advantage compounds as client adoption grows. We're pleased with our early progress this year, and we look forward to scaling with clients in 2027. And nothing illustrates that better than our new partnership with Google, one of the most important developments of the quarter. Extends everything I just described. NIQ intelligence beyond our clients' own AI tools and into the consumer-facing AI experiences or shopping decisions are increasingly made. This partnership will integrate NIQ's granular proprietary semantic data span. Manning more than 265 million products in 90 countries into their shopping graph. The first-order objective is to strengthen product discovery and local availability. When a consumer asks an LLM for something like the best fragrance-free sunscreen, for sensitive skin nearby. Our shared goal is to drive more sales for retailers and brands that have stronger ROI than other channels. Stepping back a bit, AI is changing how consumers shop

and what it takes for our brand and retailer clients to compete and work. AI assistants increasingly help consumers discover, compare, and decide what to buy. Agentic Commerce goes further, acting on the shopper's behalf, and the channel is growing fast. NIQ and World Data Lab report that nearly three-quarters of shoppers use AI for product discovery. McKenzie estimates that AI agents could mediate $3 to $5 trillion in global consumer goods commerce by 2030. including up to $1 trillion in the U.S. An opportunity in Agenic is the same as it's been in other two new channels. Lead the change, help brands and retailers understand the shift, act on it, and measure the results. We're advancing that work in three areas. First is measurement. Helping manufacturer and retailer clients see where AI is in changing demand and choice. We're building products to help clients understand their presence in AI shopping journeys. Competitive performance and the connection to purchase behavior. We entered a data partnership in the U.S. in Q3 and we plan to expand in other markets in 2027. Next is agentic. Commerce readiness. Helping products get discovered and accurately recommended. We're building capabilities to assess how brands appear in AI shopping experiences, identify gaps in product content and distribution, and prioritize fixes. A product intelligence suite helps connect verified product facts to the needs shoppers express in natural language. Measuring the outcomes will help establish whether those improvements translate into stronger visibility and incremental sales.

Third is store intelligence, where we connect shopper intent on energetic channels to where products can be bought. By connecting to AI platform commerce feeds such as Google Merchant Center, our store intelligence links, agent recommendations to retail locations and local offices. It helps AI shopping experience answer a practical question. Where can I buy this sunscreen nearby? We're already working with clients. We're designing an initial pilot with a global consumer health leader to benchmark its brand. Agenda commerce readiness, identify what influences AI recommendations, prioritize improvements, and test their sales impact. There are more than a couple dozen brand and retailer customers in the pipeline. So, with Google as a marquee validation of our data, we're building great momentum on our three-pillar AI growth strategy and positioning the business ahead of significant potential growth. Lastly, AI is working on the cost side too. This quarter, we substantially completed the actions under our 2026 restructuring program. Heading into 2027, we're actively identifying additional AI-driven operating operational efficiencies across our data operations, engineering, commercial, and support functions. Our approach remains disciplined. Identify and harvest efficiency. Reinvest a portion in long-term growth initiatives, such as building. our AI capabilities, and expand profitability. Any measures we choose to take will come with compelling payback of less than one year. In closing, we're aiming to finish strong in 2026, and our entry

during 2027 with exciting opportunities ahead, including our new partnership with Google, which positions NIQ data at the heart of how consumers will discover and buy products in an AI world. With that, I'll hand it to Mike.

$187 million improvement over the same period last year. As expected, Q3 itself was modestly below the prior year quarter, which had benefited from the timing of vendor payments. I'll come back to that. The year-to-date... ...improvement is the clear inflection driven by higher EBITDA flow-through, improved working capital from client prepayments, and stronger collections and lower interest expense as we deleverage. Digging deeper into Q3 results... ...from a segment perspective, Americas grew 13.8% on a reported basis or 11.5% organic constant currency to 463 million. Our growth algorithm is working. Client retention, pricing, upselling motion with consumer panel and e-commerce and higher activation cross-sell. In North America, we believe we're gaining share on two fronts. A largest share of our clients' wallets and competitive share through takeaways like Maverick. America's adjusted EBITDA grew 16.3% to $145.4 million, with margin expanding 70 basis points to 31.4%. EMEA revenue increased 1.4% reported. For 2.9% organic constant currency, to $491.2 million. This reflects the combination of pricing and upselling our full-view offerings more than offsetting softer ad hoc project demand amidst the ongoing Middle East conflict. EMEA-adjusted EBITDA increased 5.5% to $165.3 million, with margin expanding 140 basis points to 33.7%. APAC revenue grew 2.4% to $164.9 million reported, while growth was basically flat in organic constant

currency against a difficult year-over-year comparison. We saw ongoing demand for full view, as well as our analytics and innovation solutions. New economy wins stood out, a social commerce platform scaling across six markets, and an inventory optimization upsell with the leading Indonesian convenience retailer. APAC adjusted EBITDA rose 13.7% to 34 million, with margin up 200 basis points to 20.6%. The largest margin expansion of our three regions this quarter. Looking at growth by product, intelligence grew 5.5%, delivering 5% plus growth for the 11th quarter in a row. Annualized intelligence subscription revenue growth also grew 5.5% to 3.1 billion with solid revenue retention at 105% NDR and 99% GDR. These results signal durable sticky demand for our measurement based solutions. And we keep layering new subscription growth onto that base. For example, this quarter a leading European frozen food maker consolidated all of its retail measurement data onto NIQ, winning back three markets from the incumbent. Jim mentioned continued demand for our analytics and innovation offerings across all regions. Q3 growth was led by Americas. Our year-to-date performance and pipeline reflects overall industry trends. Specifically, increased demand for AI-led analytics more than offsetting soft demand for legacy survey-based consumer insight projects. Also, our new retailer collaborations, such as Maverick in the U.S. this quarter and Unlimitail Global Media last quarter, at a layer of growth.

that we expect to build through 2027, as we lap our big retailer collaboration win from Q4 last year. Moving down the P&L, Q3 operating expenses declined 6.9%, driven by by lower SG&A expenses, as we continue to realize benefits from our legacy transformation programs, along with lower stock-based compensation expense versus a prior year period, which included IPO-related charges. We continue to find additional savings opportunities across SG&A. AI-led productivity gains now span data operations, engineering, commercial, and G&A support functions. We're doing more with less. For example, corporate costs not allocated to our segments declined 7.7% this quarter to $81.1 million, reflecting this continued cost discipline. One-time and restructuring costs totaled approximately $9 million in the quarter, including $6 million. And from the 2026 program, this program, as well as our legacy NIQ and GFK transformation programs are now complete. We've accrued approximately $77 million in cost to achieve. From a cash standpoint, we accrued $35 million cash outlay for this program year-to-date and expect the balance to be paid out in the fourth quarter of 2026 and the first half of 2027. These programs delivered roughly half of year-over-year margin expansion in Q3. As we move into 2027, we're likely to receive additional investments that carry a less than one-year payback supporting increased structural efficiency moving forward.

Crossed other line items. Depreciation and amortization was $141.5 million for the quarter, or 13% of revenue in line with prior quarters. Gap interest expense was $54 million, $24 million lower than the prior year, reflecting lower debt balances and our transformed post-IPO capital structure. Changes in foreign currency resulted in a loss of approximately $7 million, compared to a $19 million loss in Q3 2020. The lower loss reflects favorable foreign currency movements, particularly between the U.S. dollar and the euro, which resulted in lower re-measurement losses in the current period. Income tax expense was approximately $30 million, modestly below prior quarters, reflecting a more favorable jurisdictional earnings mix, turning to liquidity and free cash flow. As of September 30, 2026, we had total available liquidity of approximately $1.3 billion, including $573 million in cash and cash equivalents, and $748 million on our undrawn revolver. Cash flow from operating activity was $254 million. CapEx was $70 million. or 6.5% of revenue, reflecting continued investment in our growth priorities, AI capabilities, our technology platform, and proprietary data assets like our omni-channel consumer panels. Leverage-free cash flow was $181 million in Q3 and $132 million year-to-date. The modest year-over-year decline in Q3 reflects the timing of vendor payments benefiting Q3 2025 and higher cash.

Paid for capital expenditures to support growth investments. I'll note that while we raised our full-year cash flow guidance implies Q4 will step down versus Q3 due to the timing of tax obligations, CapEx, and certain vendor payments, the midpoint implies roughly $303 million of leverage-free cash flow in the second half, up $3 million versus our prior guidance. This is the cash flow inflection we've been building toward. After years of transformation investment, this business is now meaningfully more cash generative. The cash brought net debt to $3 billion and net leverage to 2.9 times a quarter ahead of plan. It also now enables us to fund a measured return of capital through our new $150 million. Repurchase Authorization. To be clear, reaching 2.9 times is a positive milestone, but is not an end goal. We don't have a specific new net leverage target to share with you today. I'll tell you that deleveraging remains a top priority. We'll continue to balance that along with disciplined organic growth investments, strategic M&A, and opportunistic share repurchases. Now turning to guidance. Our raised outlook is rooted in our year-to-date. Over-performance, supported by core strength and discipline execution. As a reminder, our guidance philosophy is to endeavor to provide ranges that we believe we can achieve. For Q4, we expect reported revenue growth of 5.2 to 5.3%. 5.5%. OCC revenue growth of 5.4 to 5.7%, consistent with our full year range. Two things to keep in mind. In Q4, we lap a big retailer collaboration win from last year. In Q4,

typically carries a higher mix of ad hoc activation work, which is harder to forecast than our majority recurring subscription base. Adjusted EBITDA margin of 26.3% to 26.7%, reflecting our typical Q4 revenue and cost seasonality, as well as continued operating leverage. Adjusted earnings per basic and diluted share of 43 cents to 47 cents. For the full year of 2026, we now expect reported revenue growth of 7.5 to 7.7 percent. OCC revenue growth of 5.5 to 5.7 percent. Adjusted EBITDA growth of 16 to 17 percent driving margins of 23.6 to 23.8 percent. Adjusted earnings per basic and diluted share of $1.16 to $1.20, a roughly 8 percent increase at the midpoint. Leverage free cash flow. 249 to 257 million, up roughly 3 million at the midpoint. And to update some of the full year 2026 modeling assumptions, we expect DNA of 600 to 605 million, gap interest expense of approximately 210 to 215 million, income tax expense of 155 to 160 million, or roughly 15% of EBITDA, share count of approximately 300 million, and CapEx at 6.5 to 7% of revenue. And although we're not providing a full-year 2027 outlook today, I'll provide some early views to help you think about your models. Overall, we expect our financial profile to strengthen further in 2027. This includes durable mid-single-digit growth with potential AI upside. Steady margin expansion driven by operating leverage post-major transformation over the past few years. Increased free cash flow and better conversion.

And a balanced approach to deleveraging and capital allocation. We foresee OCC growth building through the year due to several potential factors. These include new wind scaling, APAC improvements taking hold, and increase increasing contribution from our AI native offerings. As Jim mentioned, we believe these offerings can contribute a quarter to a half point of growth next year. Of course, the mix by region and product may shift quarter to quarter. Since about a third of our business is ad hoc, and the global backdrop remains dynamic. We expect typical quarterly seasonality on cash flow, including a seasonal cash low point in Q1 as a result of our typical front half. weighted tech and IT expenses and back half weighted revenue contribution. Further to cash flow, while we expect to be a user of cash in Q1, we expect a significant year over year improvement in that period as part of our overall growth for the year. This view is inclusive of any incremental AI-led productivity measures we may take, and we continue to prioritize one-time investments that carry one-year payback. In closing, Q3 showed our business resilience and increasing... ...AI progress. We delivered durable growth, margin expansion, cash flow, and a balance sheet now strong enough to support broader capital allocation. We're focused on closing out a strong 2026 and believe we're...

Your first question comes from the line of Manav Putnick with Barclays. Manav, your line is open. Please go ahead.

Kevin, your line is open. Please go ahead.

They go with Bank of America. Curtis, your line is open. Please go ahead.