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Good evening, and welcome to NIQ's Second Quarter 2026 Earnings Conference Call. With that, I'd like to turn the call over to Will Lyons, Head of Investor Relations. Please go ahead.
Thank you. Hello, everyone, and welcome to NIQ's Second 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 Treangen. 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 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 compared with prior year period. And with that, I'll turn the call over to Jim.
Thank you, Will. Good afternoon, everyone. Before I begin, I just want to apologize. I have a cold, and so I'm sure my voice is a little bit raspy and we'll just do the best we can. Q2 marked our fifth consecutive quarter exceeding the top end of our guidance across all key metrics. We accelerated organic constant currency revenue growth to 5.8%, grew adjusted EBITDA nearly 22% and expanded adjusted EBITDA margin 270 basis points to 23.3%. Adjusted earnings per share came in at $0.27, well above the top end of our range. Levered free cash flow inflected positive at $74.1 million, and we reduced leverage to 3.1x. That's progression from top to bottom line. We are raising full year 2026 guidance across the board, reflecting our upside performance and positive outlook. It's been a year since our IPO and several things stand out: strong demand for our solutions, our structural advantages and our strengthening financial profile, including durable growth and retention with 10 consecutive quarters of 5% plus growth in organic constant currency and strong Q2 retention at 105% NDR and 99% GDR. This is a strong core with emerging AI growth opportunities. We're also seeing expanded margins approaching our mid-20s target with a longer-term path into the 30s, increased profitability, tracking to more than $1 billion of adjusted EBITDA and more than $1 of adjusted EPS this year, inflecting cash flow in our raised outlook for $245 million to $255 million and continued deleveraging on track to achieve our sub-3x target. We're delivering results today while reinvesting in competitive differentiation in our future: AI-native innovation, consumer panel expansion, technology platform enhancements and disciplined tuck-in M&A. As I've described on our recent calls, NIQ sits on one of the world's most defensible data assets in our view: decades of permission-harmonized data and a vertical-specific context layer across consumer, retail and market intelligence. We believe that combination is impractical, if not impossible, to replicate. Last quarter, I outlined how NIQ Intelligence drives client decision-making and how AI adoption is creating additional growth opportunities. Today, it's about progress we're making on our innovation roadmap. Optiq Bridge and Connect AI deliver NIQ Intelligence, the ground truth layer that enterprise AI runs on and to clients' decision flows. Whether through our tools and LLM integrations or clients' own environments, we're moving up the AI value chain from informing decisions to executing them. The balance of my remarks today will cover three areas: first, how a broadly healthy client demand environment is driving our core growth; second, our progress laying the foundation for additional AI-powered growth; and third, our progress expanding profitability by embedding AI across our organization. On point one, clients are buying more NIQ. Looking at our regions, Americas OCC growth led the way, growing 8.3%. EMEA OCC growth accelerated to 4.9%. In both, we saw new wins and strong upselling of our intelligent solutions. In the U.S., a leading coffee manufacturer consolidated onto NIQ from two incumbent providers at once. They told us why: our AI capabilities and product roadmap as well as the seamless unified Full View experience across every data set. In EMEA, leading Swiss and U.K. grocers paired measurement with consumer panel to get the Full View. And a major U.K. grocer came back to us from a competitor on that same value proposition, choosing our new product granularity and e-commerce expertise. APAC returned to 1.9% OCC growth. Here, we saw strong activation, cross-sell and early improvement in China, Japan and Korea from the retailer relationships and partnerships we outlined last quarter. In Vietnam, we won back a global CPG manufacturer from a competitor mid pilot by designing a tailored measurement plus field solution in weeks, not quarters. That is the pattern across the region. We start with granular measurement data and expand into analytics to power go-forward decisions. We also beat two major global incumbents on the largest global contract in that market to date, helping a major automaker expand overseas. We also recently acquired YiMian, an e-commerce data and insights business in China and Southeast Asia. It strengthens our digital commerce capabilities, accelerates the Full View and extends NIQ into adjacent opportunities like agentic commerce in these markets. We also opened new categories and buyer types that were not in NIQ a couple of years ago. A global ad tech platform licensed our purchase data to power privacy-safe campaign planning at scale, selecting NIQ over a direct competitor and traditional panel providers; and Unlimitail, a leading European retail media platform chose NIQ to measure business outcomes across its multi-retailer, multi-country network, our first client of its kind. Ad tech and retail media are newer adjacent demand pools, proof our data travels well beyond CPG. Growth was not only strong by region, but by product. Q2 Intelligence growth reaccelerated to 5.7% on new wins and strong upselling motion, particularly in e-commerce and consumer panel. Annualized Intelligence subscription revenue, our version of ARR, grew 5.8% in Q2 and eclipsed the $3 billion mark. Activation OCC growth accelerated for a second straight quarter to 6.1%, signaling our commercial and go-to-market efforts are working. A few proof points: in North America, a global convenience retailer expanded its renewal into SKU-level analytics, price and promotion and category management across more than a dozen countries, adding over $5 million of incremental value. In the Middle East, a regional manufacturer layered shopper and consumption analytics onto its core measurement subscription, and we took that work back from a competitor across three markets. And a global personal care leader extended its worldwide agreement, adding analytics and servicing on top of core measurement. Within Activation, demand remains strong for our analytics and innovation-based solutions. Year-to-date, these solutions were nearly 60% of Activation revenue and grew low double digits. Looking deeper, our AI-native solutions, BASES AI and Retail Activate, drove a meaningful share of that growth. This growth isn't a one-off. It's driven by newer AI-native offerings that feed directly from our proprietary core data. And that data is growing fast. We added 4.3 trillion consumer transaction data records per week in Q2, 23% faster than last year. This spans 260 million product items with 10.5 billion product attributes in our 160-petabyte data engine, all rooted in NIQ's vertical-specific expertise. That granularity benefits our entire portfolio. In fact, more than 90% of our revenues derive from this proprietary data, and our capabilities are increasingly at the fore as client AI adoption accelerates. Let me share some proof points from our first wave. Data point consumption on our platform grew 25% year-over-year. Roughly 51% of our top 100 clients now use at least one of our AI-native solutions, and the number of clients using them has grown 64% year-to-date. This is also translating into financial results. Revenue from AI-native solutions grew by 34% in Q2, and more than 80% of AI-native revenue comes from recurring clients, a good sign of stickiness and long-term value. Clients are at the center of everything we do, and we're focused on doing more. In June, our annual flagship client event, C360, drew more than 600 CPG, tech and durables and retailer decision-makers from across the globe. Their message was clear: help them cut through fragmented data and disconnected systems and decide faster in a fast-changing consumer landscape and help them capitalize on their AI strategies. Which brings me to my second point, our progress laying the foundation for additional AI-powered profitable growth. Last quarter, I described our three-pillar strategy to fuel the future of trusted AI. In Q2 and year-to-date, we accelerated innovation to deliver AI-native value for clients and our business. On our first pillar, building NIQ AI applications for smarter outcomes: at C360, we announced Optiq Suite, our insights assistant, and NIQ Cadence, our GenAI-native marketing effectiveness platform. Aligned to our second pillar, NIQ IP that fuels AI: we announced the launch of Optiq Bridge and Connect AI suite, which embed decision-grade NIQ intelligence directly into market-leading applications, AI-powered workflows and the enterprise. We've also progressed MCP access and integrations with all of the leading AI platforms so clients can securely and governably reach NIQ intelligence directly through these platforms. These launches let us meet clients exactly where they are. Whether they're an AI buyer of NIQ solutions directly or through an LLM or an AI builder embedding NIQ within their own AI environment. Importantly, every solution has permission service layers built in. Clients can embed NIQ intelligence into their AI use cases while keeping the NIQ decoder — the IP, methodologies and models that power our differentiated analytics. Last week, we announced the first charter clients for Connect AI. These include Purina, a global personal hygiene company; a leading beauty company; and two global beverage companies. Each is working with a dedicated NIQ engineering and data science team to build AI-ready intelligence infrastructure and decision workflows inside their own environment. Early client demand has been strong. Our pipeline has grown quickly to 49 live opportunities, including our charter clients and active discussions with many of our top clients. It is also broad-based across FMCG and tech and durables as well as with clients large and small. We plan to add more charter clients, including retailers, in the next phase. We are also in active discussions on several AI partnerships with major players that can accelerate our objectives. These include a partnership leveraging forward-deployed engineering expertise to accelerate deployment of Optiq Bridge and discussions with multiple partners around our agentic commerce measurement launch targeted for later this year. On our third pillar, powering commerce intelligence and agentic commerce, we see a long-term growth opportunity. AI is playing a bigger and bigger role in consumer shopping, moving from answering questions to influencing consumers' decisions to helping execute them. As that happens, NIQ's granular content on product attributes, availability, pricing and consumer preferences moves directly into the commerce flow and rises in value. Our capabilities span product intelligence and availability, channel and media measurement and agentic transaction integration, positioning NIQ, we believe, to play an operative role in the next phase of AI-powered commerce. During Q2, we built toward that future. NIQ Commerce Lab is establishing the data, API and measurement infrastructure for AI-driven commerce. We launched Product Intelligence, the first offering in our Commercial Intelligence portfolio. It resolves fragmented product data under a single structured layer. This allows AI commerce systems to accurately identify, compare and recommend products to drive shopping conversion. Taken together, we believe this wave of AI launches positions us for significant growth. 2026 is a foundation-building year, driving early adoption, expanding partnerships, validating monetization models and scaling our first client implementations. Over time, we look to layer on additional revenue streams: premium AI-ready data, usage-based AI services, AI-native applications like Optiq Bridge and Connect AI, as well as AI deployment services. While we expect these initiatives to contribute some revenue in 2026, our raised 2026 outlook does not assume a material contribution from them. This year is about building. We expect to begin scaling commercially in 2027 and beyond. Leading that effort is Irina Stoian, who joined us as our Chief AI Commercial Officer in July from Palantir, where she scaled technology and analytics businesses. She's partnering with Troy and the team to drive our next chapter of AI-powered client value, and I look forward to you meeting her in the future. So our core revenue base is strong, and we're building AI value on top of it, which brings me to my third point: the benefits of AI-led operating efficiency. AI is accelerating our ability to build, deliver and support our products and our clients. We're seeing AI-led productivity gains across data operations, engineering, commercial and support functions, contributing roughly half of the 270 basis points of year-over-year margin expansion in Q2. In the first half, we completed the vast majority of actions under our 2026 restructuring program, achieving most of the $70 million to $80 million of expected run-rate savings. These are structural efficiency gains with less than one-year payback, and we believe we've only scratched the surface. We're pursuing additional efficiencies across our largest expense areas, prioritizing those that carry little to no one-time cost to achieve. We'll remain disciplined, harvest efficiently, reinvest a portion in long-term growth and expand profitably. As I outlined last quarter, the path from the mid-20% margins into the 30s is fundamentally about flowing durable revenue growth across a largely fixed cost base that we're making more efficient. As a result, every incremental dollar of revenue should carry higher margin than the last. To close, we are doing what we said we would do. And as I've said before on a prior call, we are going to show you that we're an execution machine: driving our core algorithm, expanding margins, raising EPS, inflecting cash flow and laying the foundation for AI-native monetization and operating efficiency into 2027 and beyond. Thank you to NIQ's associates worldwide for delivering a great quarter. I'm excited about what we're building. With that, I'll hand it to Mike to cover our detailed Q2 financials and our raised full year outlook.
Thanks, Jim, and good morning, everyone. As Jim outlined, it was a stronger quarter. Results exceeded our expectations and our guidance across every key metric. Revenue grew 5.8% in organic constant currency. Adjusted EBITDA grew 21.9%, and margins expanded by 270 basis points to 23.3%. Adjusted EPS was $0.27 and levered free cash flow improved by $137 million to positive $74.1 million. Taken together, these results reflect disciplined execution, improving profitability and continued progress toward a stronger balance sheet. Our raised guidance reflects continued strength in our core business and AI-driven efficiencies from our 2026 cost program starting to ripple through our cost structure. I'll cover the details after walking through our strong top and bottom line results. Q2 reported revenue accelerated to 8% growth or $1.1 billion, 5.8% in organic constant currency. This growth came from execution of our revenue growth algorithm, strong retention, pricing and cross-selling and upselling with contribution across Intelligence and Activation. Net loss was $30.5 million, while adjusted net income improved by $80 million year-over-year to $78.7 million. Consolidated adjusted EBITDA grew 21.9% year-over-year to $262 million, and we expanded margins 270 basis points to 23.3%. This came from increased operating leverage as well as AI-enabled automation benefits and our 2026 productivity program, making our largely fixed cost base more efficient. From a segment perspective, our largest markets continue to lead the way. Americas grew 8.3% in organic constant currency, driven by Intelligence and cross-selling our Activation solutions. In the U.S., a global personal care company consolidated its retail analytics work with NIQ, displacing a legacy provider on the strength of our data quality and analytical depth. Americas adjusted EBITDA grew 10.5% to $143 million with margins of 31.4%. Our EMEA segment grew 4.9% in organic constant currency, with the same drivers as we saw in Americas. EMEA adjusted EBITDA grew 26.1% to $179 million with margins expanding 550 basis points to 35.3%. And our APAC region returned to year-over-year growth, up 1.9% in organic constant currency, a meaningful sequential improvement from Q1 and in line with the trajectory we outlined in May. Growth was driven by improving commercial momentum and cross-sell for our analytics and innovation-based Activation solutions as well as improvement in key markets that Jim cited earlier. APAC adjusted EBITDA increased 9.2% to $32 million with margins expanding 120 basis points to 19.8%. So strong results. Americas and EMEA signal competitive strength and APAC is recovering. Outside Americas performance remains solid despite the ongoing conflict in the Middle East. We believe Q2 demonstrates healthy client demand for both our measurement and analytics solutions in any macro backdrop. We believe our top line results demonstrate that our revenue growth algorithm is working. From a product perspective, Q2 was our tenth straight quarter of Intelligence revenue growth above 5% and annualized Intelligence subscription growth above 5.5%, extending our performance track record. As Jim highlighted, annualized Intelligence subscription revenue exceeded $3 billion, up 5.8% and continued strong net and gross dollar retention underscores our mission criticality with our clients. Activation revenue improved for the second straight quarter, growing 6.1% in organic constant currency. Looking deeper across all regions, we've seen low double-digit growth in our analytics and innovation-based offerings. This has been driven by traction, scaling our retail analytics wins in Americas as well as high single-digit growth in APAC. Overall, we see a broadly healthy client pipeline for our Activation solutions. Looking down the P&L, Q2 operating expenses increased by 5.7%, driven primarily by targeted investments in data coverage and granularity and to a lesser extent by one-time costs related to our 2026 restructuring program. Excluding these charges, operating expenses grew much slower than reported revenue growth, demonstrating the ongoing cost discipline and increasing operating leverage across the business. One-time restructuring costs totaled approximately $36 million in the quarter: $15 million came from our 2026 restructuring program and the balance from our legacy NIQ and GfK transformation initiatives and one-time deal-related costs. These legacy transformation programs continue to roll off as planned. As Jim mentioned, we've completed nearly all of our 2026 program actions in the first half and we're tracking towards a $75 million cost-to-achieve target for 2026. These actions, which have less than one-year payback, are setting us up for increased structural cost efficiency for years to come. From a cash standpoint, we incurred $20 million cash outlay for this program in the first half. We expect the majority of the balance to be paid out in the second half of 2026. This program has less than a one-year payback and we expect to continue to identify additional efficiency opportunities as we move forward. Depreciation and amortization was $154 million for the quarter, approximately 14% of revenue, in line with prior quarters. If I look below the operating line, GAAP interest expense was $55 million, $40 million lower than the prior year, reflecting lower debt balances and our transformed post-IPO capital structure. Changes in foreign currency resulted in a de minimis gain in Q2 compared to a $57 million gain in Q2 of 2025, a period that contained significant FX volatility. The lower gain primarily reflects less foreign currency impact on the remeasurement of foreign currency-denominated debt. Income tax expense was $38 million or approximately 14% of adjusted EBITDA, roughly in line with expectations we provided. The net loss was $30.5 million, primarily reflecting lower FX gains versus Q2 of 2025. Adjusted net income improved by $80.3 million to positive $78.7 million, driven primarily by higher adjusted EBITDA and lower interest expense. Correspondingly, Q2 adjusted EPS came in very strong at $0.27, well ahead of our guidance and consensus. If I turn to liquidity and free cash flow, as of June 30, we had $417 million in cash and cash equivalents and $747 million available revolver capacity resulting in total available liquidity of approximately $1.2 billion. We remained undrawn on this revolver during the quarter. Cash flow from operating activities was $140.1 million versus a use of $80.6 million in Q2 2025. Capital expenditures were $66 million reflecting continued investment in strategic growth initiatives, such as building our AI capabilities, expanding our technology platform and growing our data assets such as our omnichannel consumer panels. Levered free cash flow was positive $74.1 million in Q2, up $137.3 million on a year-over-year basis and $197.3 million versus Q1. This is driven by revenue growth and stronger flow-through, given prudent cost management; as well as improved working capital and lower cash interest expense. I'd also note that we saw a particular outperformance from net working capital execution versus what underpinned our Q2 guidance in May. Our 2026 is the strong cash flow inflection we've previewed since our IPO. And our raised full year 2026 free cash flow guidance implies approximately $300 million of levered free cash flow generation in the second half alone. This factors in our strong Q2 outperformance from working capital execution and aligns with our broader guidance philosophy of providing expectations we believe we can achieve, if not outperform. Net debt was $3.1 billion at quarter end, and our net leverage ratio improved to approximately 3.1x, down from 3.4x at the end of Q1. We remain firmly on track to achieve our net leverage target by the end of 2026. And a quick note on capital allocation: our capital priorities are unchanged: fund growth, expand margins and particularly pay down debt. We have successfully reinvested some of our cost program savings to fuel our AI growth strategy and we'll continue to pursue strategic tuck-in M&A where we see compelling returns. As cash builds, we gain capital allocation flexibility. This is strengthening ahead of expectations in 2026 and positions us well as we head into 2027. We will update you on our 2027 priorities as those plans firm up. Now before getting into guidance details, a quick reminder about our guidance philosophy. The strong back half and higher full year 2026 outlook is grounded in our first half overperformance. If that momentum continues, we expect to finish at or modestly above the top of our ranges. And we've set that range at the level we believe is appropriate. So for the third quarter, we expect reported revenue growth of approximately 4.9% to 5.3%, organic constant currency revenue growth of approximately 5.2% to 5.5%, adjusted EBITDA growth of 15% to 17%, driving margins of 23% to 23.5%; and adjusted EPS of $0.22 to $0.24. Our raised full year 2026 expectations include reported revenue growth of 7.1% to 7.4%, organic constant currency revenue growth of 5.2% to 5.6%, adjusted EBITDA growth of 15% to 17%, driving margins of 23.5% to 23.9%; adjusted earnings per share of $1.08 to $1.12, a more than 13% increase at the midpoint; levered free cash flow of $245 million to $255 million, up approximately $8 million at the midpoint; and we expect to be below 3x net leverage by year-end. Our raised guidance reflects our business outperformance and favorable foreign currency from Q2 as well as our YiMian acquisition. I'll also note that we hit the ground running, integrating YiMian into our business and their solutions into our distribution channels. Based on our reported results and our Q3 and full year guidance, our implied Q4 outlook reflects OCC growth in line with our Q3 expectations, EBITDA margin expansion on a year-over-year basis, implying approximately 370 basis points of improvement versus Q3 2026, reflecting our typical Q4 revenue and cost seasonality; and adjusted EPS nearly double our Q3 expectation. I'll note that our full year 2026 modeling assumptions remain unchanged: Depreciation and amortization of $614 million to $619 million. GAAP net interest expense of $230 million to $235 million, income tax expense of $165 million to $170 million. Diluted share count of approximately 300 million and CapEx of 6.5% to 7% of revenue. In closing, it was a strong quarter. We're delivering on our promises. Our financials are strengthening. We're executing well on our core offerings, and we're building additional monetization opportunities on top. With that, operator, we're ready for Q&A.
分析師問答
Your first question comes from the line of Manav Patnaik with Barclays. Please go ahead.
I just wanted to ask about the general trends in the quarter. If you look, the Intelligence subscription growth remained strong, but it was really Activation and I guess the transaction piece of Intelligence that did well this quarter. I'm trying to appreciate how much of that was pull-forward you talked about last time or push-forward in April, and how sustainable these growth rates in Activation are maybe for the second half of the year?
Sure, Manav. We'll let Mike take that one right out of the gate.
Thanks, Manav. We're excited about the growth that we saw in both Intelligence and Activation for the quarter. Intelligence at 5.7% and Activation at 6.1% — we're continuing to see that momentum build. In particular, when we look at our APAC business, we saw it improve to 1.9% in Q2, and we expect that to continue to contribute overall growth, which will help both Intelligence and Activation as that continues to grow overall. As I highlighted, our e-commerce and CPS growth rates are very strong — north of 30% — in terms of the growth rates associated with those two areas in particular. And we should see those continue to move both our Intelligence in particular and to some degree Activation. So we're very excited about it. As you know, 80% of our business is three- to five-year contracts. We're continuing to grow through win-backs in the marketplace, as we highlighted in the course of our prepared remarks. So we're very excited about the trends in both Intelligence and Activation.
Okay. Got it. And Jim, maybe just on Connect AI, help me visualize exactly what you're building for clients and perhaps how that gets monetized?
Sure. What we've started seeing is clients trying to accelerate their ability to innovate, save money and operate better using the assets at their disposal. They clearly need our information and models inside their world. They also need our know-how on how to integrate information together. These charter deals are a lot about that — new use cases with new budgets where we're helping clients do what they normally do, just better, faster and cheaper. I'll turn it over to Troy to give you more color.
Our Connect AI services target our AI Builder segment. These are clients that want to bring NIQ insights and analytics into their environments and use NIQ intelligence to amplify workflows. We announced our first charter clients last week; Purina was the first named client, and that group also includes a global personal hygiene company, a leading beauty company and two global beverage companies. We'll add more charter clients through the end of the year, including retailers. Each charter client gets dedicated engineers and data scientists that help make our intelligence work within their workflows — they help write code and connect their environments to ours. As Jim mentioned, our new products have permission service layers built in. This creates additional value where NIQ acts as the decoding and certified answer for things around our data and our intelligence. Demand has come quickly: 49 live opportunities in the pipeline and many more active discussions. The charter phase is about proving value and hardening a repeatable model. It's deep, it's sticky, and it's where we see the biggest medium- to long-term opportunity in our space. We also have active discussions with partners to scale this, including forward-deployed engineering partnerships and multiple partners around agentic commerce measurement. That product will be launched later this year.
Your next question comes from the line of Kevin McVeigh with UBS.
Congratulations on the results. Given the trends in organic constant currency growth, can you talk to Activation because that looks really good? On the Intelligence side, even off a tougher comp, you saw a real nice reacceleration. Maybe you can revisit that a little bit.
Kevin, I think your question in essence is: tell me about Intelligence and Activation growth and how we feel about it?
Appreciate it, Kevin. When we look at Intelligence, we saw the rebound associated with APAC at 1.9% growth. We improved coverage by signing up more retailers we discussed in Q1, and that's starting to pay off. Our e-commerce and panel-on-demand offerings have been very attractive to the marketplace, growing above 30%, contributing to Intelligence growth. Activation is seeing strong interest in our analytics solutions — our AI BASES screener is one example. Both business lines are growing at better than double-digit rates overall, and demand has been very strong for Activation.
And then real quick, as you're phasing in AI, how should we think about geographic penetration — where is initial penetration and how should that evolve over the balance of the year?
Initial penetration is strongest in the U.S., but it's not exclusive to the U.S. At C360, clients — both formally and informally — told us they want help moving faster internally to use these AI tools with our data combined with theirs. Our AI Builder customers are well positioned to move quickly. The pipeline is broad: Western Europe, Asia and EMEA have opportunities. Our Optiq products and other Optiq capabilities are being released this month for clients to use. It's global, with the charter deals primarily U.S.-based but with plenty of global opportunities in the pipeline.
Your next question comes from the line of Alexander Hess with JPMorgan.
Thanks. I wanted to start with the callouts that CPS — the consumer panel business — and e-commerce grew north of 30%. As Intelligence is growing in the mid-single digits, does that imply you have products in traditional measurement and retail analytics that are growing below that number? Is that the right way to think about it?
The core business, what we call our RMS business, is primarily in Intelligence. CPS and e-commerce are portions growing faster but, as a percentage of total revenue, they're smaller. I wouldn't over-interpret it that way. Intelligence on its own is a healthy recurring revenue stream. A little of the AI-based revenue is included but our forward guidance does not assume material AI revenue yet. For the most part, these revenues are counted in Intelligence and will be captured in that metric.
Awesome. Can you give us an update on Full View measurement client count and any recent traction? You put out press about integrating more Amazon 3P data in certain categories. Any color on Full View measurement in Q2 and outlook beyond Q2?
We have more than 200 clients now on Full View measurement. That strategy is expansive beyond single retailers or e-commerce platforms. It's the foundation of what we do and it's driving adoption and stronger renewals. Full View enables AI and remains central to our relevance. We're in more use cases, accessing more budgets within clients, and that drives growth and deeper engagement.
We also have multiple product enhancements coming for Full View measurement; the one you referenced is just one of several that will be released in the back half of this year.
Your next question comes from the line of Kyle Peterson with Needham.
Nice results. On the data consumption disclosure — up plus 25% year-over-year — how should we think about this over the medium term? Does higher consumption drive higher revenue across the product base and push revenue higher, or is it more correlated to the AI products specifically? I'm trying to parse the link between consumption and revenue over the medium term. And second, are you seeing growth in budgets for demand-based solutions away from traditional marketing or SKU-based placement? How is agentic commerce and data-driven product decisioning translating into conversion or demand?
Thanks, Kyle. Data consumption is a measure of our relevance with clients. The more granular and broader the data, the better any tool will work. Clients are consuming more because as they combine their assets with our granular data, they see improved outcomes — better cost efficiency or faster innovation and top-line improvements. That trend should continue: it's an insatiable demand for our data and the improved results clients see from using it. On budgets and client conversations, yes, we're seeing new budgets and demand from different parts of client organizations. This is why we brought in Irina Stoian to scale our efforts with deployed engineers and analytics teams to address those needs.
Got it. On client conversations, are these new budgets coming from different stakeholders and translating into higher conversion or demand? How is that happening in practice?
Yes. These are different budgets and stakeholders — more strategic conversations. We're seeing higher-level buyers, and that leads to deeper, cross-functional engagements. Troy can elaborate further.
It's a different client base: not typically market research teams but Chief Data Officers and Chief Technology Officers. Connect AI services are designed to go after these budgets. They enable multiple workflows throughout a client's organization and represent untapped demand.
Your next question comes from the line of Andrew Nicholas with William Blair.
Good afternoon. On AI as a benefit to your data assets: is your data estate being augmented by AI so you can gather more detailed attributes or information? That seems beneficial long term — can you speak to that specifically? And as a follow-up, can you comment on realized synergies in Q2 and why EMEA margins stepped up so meaningfully? Any reason EMEA might be structurally higher than Americas or APAC long term?
Yes. AI augments our capabilities in multiple ways. We have four buckets of product capability: one, premium AI-ready data solutions — collect data faster, code and characterize faster, and get more breadth and depth; two, services that harmonize and enrich data in clients' environments; three, applications and solutions like Optiq Bridge and Cadence; and four, deployed engineers and data scientists that sit with clients. All four come together to collect better attributes and enable AI to do deeper correlations and causal analysis. That helps product development, targeting and overall commerce capabilities.
Thanks. About margins: any color on Q2 synergies and EMEA's margin step-up?
On the 270 basis points of margin improvement to 23.3%: roughly half came from restructuring actions and NIQ transformation flow-through, and the other half came from revenue growth on a largely fixed cost base — about 80% of our costs are fixed, so you're getting flow-through. EMEA's 550 basis points improvement reflects disciplined cost management in that market and some timing benefit in variable costs associated with Activation projects that favored Q2. That combination contributed to the step-up in EMEA margins.
Your next question comes from the line of Curtis Nagle with Bank of America.
Two questions. First, can you clarify how much of the cash restructuring costs you'll bear in Q3 and how to think about the flow from Q3 to Q4? Second, thinking longer term, you mentioned potential for more AI efficiencies in the cost base. How much quicker could that pull you to above 30% EBITDA margins?
If you look at the cash spend on the programs, it was $28 million in Q1 and $24 million in Q2. The remaining roughly $50 million of expected spend for the year is expected to be largely in the second half, and I'd estimate about 70% of that remaining amount will land in Q3.
And on the AI efficiencies, how much could that accelerate your path to above 30% EBITDA margins?
We haven't put an exact timeframe on reaching above 30% EBITDA margins, but we have line of sight to it. AI is a meaningful driver because it improves efficiency across data operations, engineering, and many people-heavy activities. We're early in realizing these benefits, and you can already see significant margin expansion. We haven't exhausted our ability to gain more margin via AI and other efficiency programs.
Your next question comes from the line of Shlomo Rosenbaum with Stifel.
Your cash flow clearly did well. For the rest of the year, you're talking about another $50 million of restructuring payments. You're still guiding to $300 million of levered free cash flow in the second half. Can you quantify the total one-time-ish cash payments that are absorbed in the guided free cash flow so we can think about the business longer term? Is the $245 million to $255 million guidance with or without these restructuring payments? How should we think about cash flow moving into 2027?
The full-year free cash flow guidance includes those payments. Our guidance implies roughly $300 million of levered free cash flow generation in the second half, and that factors in the spend associated with the restructuring program. We're continuing to drive onetime items down. The NIQ-GfK integration is largely behind us and winding down. The 2026 program is efficient, and we'll continue to evaluate efficiency opportunities with one-year paybacks. As cash builds, we'll prioritize paying down debt and reinvesting where appropriate. We'll provide more color on 2027 plans when those are firmed up.
On guidance versus last quarter: how much of the guidance change is FX versus the YiMian acquisition? It looks like organic was raised modestly. Any more color on the FX component?
FX impacts in Q2 were minor. Americas had about a 3% impact from FX, EMEA about 2% and APAC was flat. Overall, the FX environment is much calmer than Q2 2025 when volatility was higher. Our raised guidance reflects business outperformance, favorable FX from Q2 and the YiMian acquisition, but FX is not a large factor going forward based on current forward rates.
Your next question comes from the line of Jason Haas with Wells Fargo.
Could you give a sense for what percentage of your data is now available for MCP consumption and what the pricing model looks like for that? Are you charging customers more for access to the data via an MCP and is there a consumption-based pricing model? Also, you teased a product to track agentic commerce measurement — how are you going to collect that data when consumers shop agentically?
On pricing, we'll experiment with several models: some consumption-based and some not. The charters are the beginning of these engagements to learn how much value we create inside client environments and how best to monetize it. We'll learn and iterate. Troy can add details on the product availability.
The product for MCP consumption is Optiq Bridge, which we announced at C360. It's launching in full product mode at the beginning of September, and we're in beta now. The data in beta is primarily U.S.-focused, but we have scheduled releases throughout the rest of the year to bring retail measurement globally and consumer panel data accessible through the platform. The goal is to ultimately enable access to all our data assets across NIQ through this platform with iterative releases every few weeks.
And on agentic commerce measurement, how will you collect the data as consumers shop agentically?
Agentic commerce is an emerging channel. We'll treat it like another channel to measure. We'll track share of prompt, share of discovery, share of accuracy of results, clicks and ultimately conversion. More detail will come as we roll out the product.
Your final question comes from the line of Jeff Meuler with Baird.
Can you go into more detail on the retailer monetization opportunity? Historically it's been more of a value exchange where you're getting data. Is that changing because you can provide significantly more value through AI solutions and other capabilities?
Yes. The short answer is yes. It's not just AI — it's consumer panels and other data sets that increase our value to retailers. Larger retailers have previously engaged in value exchanges, but we're seeing strong engagement with midsized and smaller players too. Conversations are becoming more strategic versus transactional, and clients are realizing additional capabilities we can provide. That drives deeper penetration across retailers.
On AI monetization: for early adopters, do you use short-duration trial periods with capped volumes or discounted pricing and then shift to normal monetization in '27? How should we think about that?
We're focused on ensuring clients use the tools and see value quickly. Our experimentation includes ensuring adoption first. Commercial approaches vary — some engagements may include contract changes or different commercial terms. For consumption, we expect API-based access and usage-based pricing in many cases, but the priority now is to demonstrate value. Once clients see value, commercial arrangements will follow, whether through contract renegotiations or consumption-based pricing tied to specific use cases.
There are no further questions.
Okay. Great. Well, thank you all for joining. It's been about a year now since our IPO. Certainly, the world has changed quite a bit. I think we have anticipated some of it and reacted to some of it, but you're seeing it not only in our results financially, but in the way we're able to talk about our business with real-world examples of what we're doing to serve our clients in this world where we're providing both the Full View and these AI capabilities to become even more relevant. We look forward to the next call.
This concludes today's call. Thank you for attending. You may now disconnect.