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The call highlighted multiple operational and financial positives: consistent organic growth (5%+ OCC for nine quarters), strong adjusted EBITDA expansion (19.1% YoY) and margin improvement, robust subscription and retention metrics, accelerating AI product adoption and demonstrable client impact, meaningful commercial wins and improved liquidity. Near-term headwinds include APAC weakness (notably China), substantial one-time restructuring and AI integration costs (~$65M–$75M full-year), and elevated net leverage (≈3.4x) that management plans to reduce to <3x by year-end. Management reaffirmed guidance, raised FX-driven reported revenue/EBITDA expectations, and articulated a credible long-term path to higher margins via AI-driven revenue growth and cost efficiencies. On balance the positives — growth, margin expansion, AI momentum and cash generation trajectory — materially outweigh the regional and near-term cost/turnaround issues.
NIQ gave Q2 guidance of reported revenue growth ~6.0–6.3%, organic constant‑currency (OCC) revenue growth ~4.9–5.2%, adjusted EBITDA growth 12–14% with an adjusted EBITDA margin of 22.0–22.2%, and adjusted EPS of $0.19–$0.21. For full‑year 2026 (revised up for FX) they expect reported revenue growth ~6.4–6.7%, OCC revenue growth ~5.0–5.3%, adjusted EBITDA growth 14–16% with margins of 23.5–23.8%, and adjusted EPS of $0.95–$0.99. They forecast levered free cash flow of $235–$250M, aim to deleverage to below 3.0x net leverage by year‑end (from ~3.4x), expect full‑year restructuring costs of $65–$75M (mostly in Q2) tied to AI integration, and project $70–$80M of annualized run‑rate savings by end‑2026. Other modelling assumptions include D&A $614–$619M (~14% of revenue), GAAP net interest expense ~16% of adjusted EBITDA (implying ~$230–$235M), income tax expense $165–$170M, diluted shares ~300M, and CapEx ≈6.5–7% of revenue.
Reported revenue grew 11.1% year-over-year to $1.1 billion; organic constant-currency (OCC) revenue growth was 5.1% in Q1. Management has delivered 5%+ OCC growth for nine consecutive quarters and reaffirmed full-year OCC guidance of ~5.0%–5.3%.
Adjusted EBITDA increased 19.1% year-over-year to $224.8 million and adjusted EBITDA margin expanded 150 basis points to 21% in Q1. Management reiterated full-year adjusted EBITDA margin guidance of 23.5%–23.8% and a pathway to mid-20s and eventually low-30s margins over time.
Adjusted net income turned positive at $43.4 million and adjusted EPS was $0.15, ahead of guidance and consensus ($0.10). Net loss improved by $29.7 million year-over-year and adjusted net income improved by $47.9 million.
Levered free cash flow improved by $93.1 million year-over-year in Q1. Cash and cash equivalents were $362.3 million with $747.5 million revolver capacity (total liquidity ~$1.1 billion). Net debt was stable at $3.2 billion and all-in weighted average interest rate ~5%.
Annualized Intelligence subscription revenue reached $2.9 billion (up 5.9%). Net dollar retention (NDR) was 104% and gross retention was 99%, demonstrating durable, sticky recurring revenue.
Accelerating AI investments and product launches: Arthur AI Analyst and Arthur Chat betas, BASES AI adopted by >70 clients across 27 countries with 2,300 product concepts tested; deployed AI-assisted development tools across ~2,600 engineers; activation solutions reporting measurable client benefits (e.g., Reckitt cited 65% faster research at 50% lower cost).
Closed 17 seven-figure deals averaging ~3 years; multiple high 7-figure renewals and an 8-figure 5-year global renewal in APAC; expanded Full View Measurement to 209 clients; notable takeaways from competitors in Americas and EMEA renewals (including a 7th consecutive renewal with a leading financial services client).
eCommerce revenue growth accelerated to 33% in Q1. Activation revenue accelerated to 5.3% OCC and Intelligence revenue grew 5.1% OCC; management highlighted significant cross-sell runway (Activation revenue sourced largely from Intelligence clients).
Expanded into new verticals (Beauty, Auto, Telecom, Retail media), launched Activate Lite for SMB retailers, monetized loyalty data product in Eastern Europe across 15 brand clients, and scaled retailer-analytics programs (e.g., Wakefern) demonstrating diversification of go-to-market and monetization levers.
Raised full-year reported revenue and adjusted EBITDA guidance (largely FX-driven). Q2 outlook: reported revenue growth ~6.0%–6.3%, OCC revenue growth ~4.9%–5.2%, adjusted EBITDA growth ~12%–14% and margin ~22.0%–22.2%. Full-year levered free cash flow guidance $235M–$250M and target net leverage <3.0x by year-end 2026.
Good morning, and welcome to NIQ's First Quarter 2026 Earnings Conference Call. [Operator Instructions] With that, I'd like to turn the call over to Will Lyons, Head of Investor Relations. Please go ahead.
Thank you. Good morning, everyone, and welcome to NIQ's First Quarter 2026 Earnings Call. Joining me today are CEO, Jim Peck; CFO, Mike Burwell; and Chief Product Officer, Troy Treangen. Following Jim's and Mike's prepared remarks, we'll open the line for Q&A. As a reminder, today's remarks will include forward-looking statements regarding our expectations and outlook. Actual results may differ materially from those expressed or implied in these statements. For information about factors that could cause actual results to differ materially please refer to today's earnings press release and our SEC filings. We undertake 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 IR website. A replay of this call will also be available there. And finally, a few housekeeping items. Unless otherwise noted, growth rates mentioned on this call are compared with the prior year period. In addition, a supplemental file is posted alongside our Form 10-Q and earnings release, reflecting the retrospective reallocation of revenue and costs from our end-to-end businesses, which are now reported based on geographic l...