Nexxen International (NasdaqGM:NEXN) opened Q1 2026 with revenue of US$86.8 million and a basic EPS loss of US$0.09, against a trailing twelve month basic EPS of US$0.30 that reflects earlier profitable quarters. Over recent periods the company has seen quarterly revenue range from US$78.3 million in Q1 2025 to US$112.3 million in Q4 2024. Basic EPS has shifted from US$0.03 in Q1 2025 to US$0.32 in Q4 2024 and back into loss territory this quarter, setting up a results season where the key question is how much weight investors put on the trailing earnings profile versus the latest margin pressure.

See our full analysis for Nexxen International.

With the headline numbers on the table, the next step is to set these results against the dominant market stories around Nexxen International to see which narratives about growth, profitability, and risk still hold up and which start to look stretched.

Margins Squeezed As Net Income Swings To Loss

• Q1 2026 net income excluding extra items came in at a loss of US$5.3 million, compared with profits between US$1.6 million and US$24.9 million over the previous five quarters.
• Bears highlight that net profit margin over the last 12 months was 6.9%, down from 9.7%, and this quarter’s loss:
  • Supports the cautious view that higher spending and slower revenue progress in areas like Connected TV can weigh on profitability even when the broader digital ad market is expanding.
  • Lines up with concerns that heavier commitments such as the US$35 million additional VIDAA investment and higher commercial and AI related costs can make it harder to keep margins near prior levels if revenue momentum softens.

On top of this loss, bears argue that Nexxen is still in the early stages of scaling newer initiatives like VIDAA and nexAI, which could keep profitability choppy for a while if growth does not fully offset these added costs 🐻 Nexxen International Bear Case

TTM Profit Of US$18.1 Million Versus Five Year Earnings Decline

• Over the last 12 months, Nexxen earned US$18.1 million of net income on US$373.3 million of revenue, even though earnings have declined about 15% per year over the past five years.
• Supporters of the bullish view point out that this trailing profit base and revenue mix:
  • Provide a foundation for the idea that exclusive partnerships and AI tools can still produce earnings, even in a year when net profit margin eased from 9.7% to 6.9%.
  • Are considered alongside forecasts that earnings could grow about 18.6% per year with revenue growth of 7.4% per year, which bulls see as evidence that the business model can generate more profit from each dollar of sales over time despite the recent loss making quarter.

Bulls argue that if Nexxen manages to support margins while those earnings forecasts play out, the recent five year earnings decline could matter less than the trajectory implied by its data and AI driven businesses 🐂 Nexxen International Bull Case

Valuation Gap Versus DCF And Price Target

• With the share price at US$8.08, Nexxen trades well below the DCF fair value of US$29.79 and the allowed analyst price target of US$11.99, while carrying a trailing P/E of 16.9x versus 14.6x for the wider US Media industry and 37.4x for peers.
• Consensus narrative around upside and risk is shaped by this mix of valuation signals:
  • Supporters of the upside case focus on the gap between US$8.08 and both the DCF fair value and the US$11.99 price target, plus forecast earnings growth of about 18.6% per year as potential reasons the current P/E could be justified.
  • More cautious investors point to the weaker trailing margin of 6.9% compared with 9.7% a year earlier and the five year earnings decline of around 15% per year as reasons the stock might deserve to trade at only a modest premium to the broader media industry despite the larger DCF gap.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Nexxen International on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

With both bullish and cautious views on the table, it helps to see the full picture for yourself rather than rely on one side of the story. Take a closer look at the company’s upside signals by reviewing its 2 key rewards

Explore Alternatives

Nexxen International’s swing back to a loss, softer net profit margin, and five year earnings decline highlight that earnings quality and consistency remain key concerns.

If that level of earnings volatility makes you uneasy, it could be worth shifting some attention to companies filtered for resilient fundamentals using the 67 resilient stocks with low risk scores.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.