TBLA - Earnings call transcript Q1 2022

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Operator

Good day, and thank you for standing by. Welcome to the Taboola’s First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference maybe recorded. to Horsley, conference Head like speaker to now Jennifer today of would hand over the your I Investor Relations. ahead. go Please

Jennifer Horsley

our Thank Investors and it along Shareholder our CEO; earnings welcome is and Steve Walker, earnings available, here morning, release section We first in website. and Adam Letter Good issued CFO. with Founder XXXX I'm conference QX yesterday to our with Singolda, press of our our quarter the call. you. Taboola's everyone, aftermarket and

no required except Now, statements. undertake differ quickly Harbor. also events update currently are statements materially not I'll These and the in discussion statement cover is Certain filings. are Future future and adversely SEC and risks statements duty today, Safe by for anticipated. to expectations Today's based earnings from uncertainties periods available as the including forward-looking the our could described and subject facts subject They our limitations we to them, law. material release. are to in press forward-looking information those are on

use defined During we will measures. and non-GAAP terms this release in the refer call, to earnings financial

definitions refer non-GAAP in our to earnings GAAP, to tables call on and I'll website. release Adam. the posted turn that, reconciliations the With the For to please over

Adam Singolda

profit, basis. and year, gross a pro Thank strong ex-TAC on quarter, a was you right you our for all delivering from Good quarter morning, XX% call. QX thank QX our X% we Jen. over everyone, for first forma of the joining us targets, growth beat last

very a EBITDA $XX environment. also million generated We adjusted macro despite of challenging

in the want and with basically uncertainty in revised we highlights caused increased way; the The was our the in issued bigger the our of in to is walk as today war by economic we by I mainly scale I Europe. through than advertisers where in somewhat the smaller spending, More slowed the their a by of Europe. our secondly conjunction which Europe in this from guidance revenue ways obviously XX% in saw factors: pandemic, factor many world, case driven second yields quarter in similar Ukraine, results. and business but in down the revision but main a advertising in quarter many two the it's global address Before to the around in businesses what though, all

factor start, of second good plan. our now which and behind but launch is the bidder, is live to off still The a

our can our to tell keeps to having fundamentals do investors guidance technological I our is we and adjusted and guidance the expectation. guidance intention real passionate clients, are opportunity Due to on we short-term. plan million. both have more to want which and on not live strong we're much to Microsoft and only and obviously these in profitable The our that bidding in you, expect $XXX full-year seeing growth itself, to profit not not and strong, team minutes of there EBITDA is our our and data cash, but to well. $XXX here, header these about ranges I'm are a adjust business partners integrating energized first events we're we of million as again. via in especially million this we we and factors, even are two happy new more factors million lowering Now advantages, meeting generating $XXX beating after and also on will do Steve is a how one-time bullish to guidance platforms, speak two our XXXX $XXX gross having do about quarter. other few

is getting more new in do relationships won progress want I expanded generate expect significant that the XXXX this flow of the $XX partners, I'm and cash We very in lot to to about. guidance of with growing, we're profitable, a in highlight business products web momentum look love. those There I beyond important As things deals, and two all excited new events, made we launched new with billion the few that market. open are capturing things advertising overall

that rely and on taking big Snap SmartBid We're innovation. on imagine many, you and companies performance I'm successful only big going relevance. much here Amazon, more them. growing making them Google, ever to First, Facebook a with advertisers advertisers even achieve small and for attention grow and should to bigger Aiming greater have focus achieving them our done, scale believe something many with and I even get

our example, that the one assumes over AI year we next and area new over our an next will includes course in x the years. that two double That engineers of guidance four well. As our as engineers

as a Taboola other see we it On check social able to not future the will and side a they being to in web big ROI fund positive used over advertisers. of contextual consumers as part the of especially the in I performance time advertiser and networks as succeed any advertising believe be can place open and

replacing I second is relevant I recommendations. Investor traditional at banners spoke thing to our Day, growth our and we're about a highlight momentum The getting with opportunity endless lot want in personalized

when same $XX market but now, XX-years banners, and Tamagotchi the billion banners are here of is advertising You are and invented DVDs and open of advertising the the made gone out were web still ago, Tamagotchi DVDs remain. formats of invented. obviously see most

gardens of web. At our that but on about on on liberating the this away banners, paid the growth there experiences moved Twitter As but paid banners think banners journey are are you wall you open replacing we paid into stage, is banners endless Taboola. Amazon from open growth this to of but and our the from bringing banners web personalized recommendations, into Instagram of TAM for remain, it where the invented some see was power with search don't banners, room no are in this there obviously, middle you see relevant Australia post, ago, page market have in replace Media advantages and seven XX-years in quarter, capturing results. examples we others. homepage first and Israel, no The is continue West globes placements the the place is there in web the paid it. post and the on E-Online, banners our open pages only we include and other In and banners and search to

Spain, agreement. saw and and new and monthly the global length world, U.S., more publisher Stones deals, people hope moved of million business, OEM becoming independent Variety, it's I will with competitors, that the the team, fast drive revenue. some empower them expansion here, Media provide they win because This Thirdly, as that progress very More is of I'm our you only publisher Taboola to proxy Forbes, media give most week on XXX we partners really but and as and want we XX-years scaling. more be advantage. publishers, help growth to chose I growing our about the significant like my time France, leading with Day. not examples, margin of meaningful CEOs an which Publishers and our all and There to just News. It beyond a to update into XXX% soon. high it's Rolling part a told is with that of Italy, than our is in as also an market to in over of and time just many as in the our features pipeline these to about technologies [indiscernible] well people higher Taboola. to very personally a gross they get Penske from incredibly excited Taboola to believe Corporation, first size to of they with the able look competitive Metropolis moved sure their expensive just name also markets a you not to Australia quarter, with in publisher reason to strong business. and worth renewals. we as had fast a Brazil, chance for A It consumers, To run which I I Taboola sites audiences generate more is our we the Investor in lot capture XX% is I on Taboola scaling just editorial have PMC take cases, Corning very in explains to technology the talk of some the this few. they talked rates, Board We of exciting revenue with momentum our relates spending increasingly the Taboola. vision them them have other

five publishers examples, one globally just extending of five top with years. revenue our us for Another

recently great also Press Associated Taboola. have Altice are AP, chosen names Insider, that

just Air expanded our work excited Emirates, In very about many mark, recently As can of among the percentage crossed in Hyundai, earlier, I business. that Heinz, advertiser Insurance Michelin, signed agreements in with TMF, partnership UK, a of and also this we revenue trade Germany, QX, and number and QX our renewed including and XX% the I'm Volvo, our well-known base our Progressive agencies, updated agencies as Publicis, We you in many, from In Goldschmidt in others. and and say grow. Chipotle, to we mentioned QX AC such Canada of Israel. we Goose, Dense the Omnicom brands side Honda XX,XXX were with advertiser brands Digital, expect

well Investor anywhere Day, our want we automobile devices, being we VP have they debt keep about to audio As what by Inbal, be. additionally, future CTV, consumers call with to want we we recommend about and that we the our the business, and as may diversifying video, we on time Tom core talked on strategy you the Strategy mobile anything call recommend, that more. commerce, wherever gaming, think beyond grow recommend

read lot can January You for editorial They may Homepage than every the Washington product, Taboola us, to a of homepage idea about just it early winning you Internet suite editorial is thanks homepages. for referenced to which New imagine on choosing writers are York Digiday money and make speaking publishers team with AI. plus by Times you personalized, on recently. as recently it's launched and have the our speaking part We personalized It editors is we've the the newsroom, more You been in offering, a and importance and of if Post, it. driven article

the NDTV, saw team Miami just of asociados examples beautiful. Independence, Some I with morning include examples The McClatchy it's and this others. Synacor, Other [indiscernible] Herald,

advantages together critical partnerships an expansion actively publisher with which solution content we're country. to a seeing e-commerce, Connexity's On comprise all the cosigning IAS, We EMEA, our retail we in place, vertical advertising family. deal a protected demonstrating safe, Guard, agencies. offices team and of pitching also spoken We've and We building been with profit new advertisers, Taboola brand and one bunch portfolio. new and begun with trained are new also and includes Tag out the one privacy ad are is announced in new It's solution time. leader to expanding trained We're this DoubleVerify, safety Connexity's the front, just on trust these sales weekly QX steady over success ex-TAC in new and has expanded expansion brands Taboola's e-commerce IBUK. Teams e-commerce the pitching on since to on including merging work publishers partnerships are safety and gross commitment also XX% with up leaders, a coming QX. China little of we're in APAC of making selling closed acquisition as Connexity countries. and Success believe and web, Progress previously solution. basis which and privacy review strong advertisers and including we a one Connexity work of sales signed in things, where and synergies of our our of is commerce we team, within six U.S. good is Connexity seeing several progress monetization the XX in months, supports we importantly a News of of multiple and per headway

off both merchants Taboola with taking of supply pixel. and over have Taboola's move leveraging forward U.S. merchants. XXX has already clients robust pipeline Connexity of network is consistent Europe given to existing for a the within consent prospects new XX Within been advertisers Lastly, built

all had we performance are We've executing hand events those to included strong. that one-time in Before when guidance past. the now We I our new and started in Steve, it things that off think our things we're dive strong, business XXXX with two and our business guidance. and the to in to matter and advertisers anything publishers web. to financial deeper and to who And our will with going our growth Steve, anywhere recommend now core over open in

Steve Walker

morning, Thanks, Adam, everyone. and good

revised me Let address upfront right our guidance.

reduce factors were our earlier us guidance. As to Adam that there caused discussed two

cut back The again the macro political and caused of their early towards We uncertainty been weakness, is the initial European and impact overall that and a spend war, war March than European global in our in of month but started, war seem U.S. in the reduced to the our the by an Ukraine in on end caused first of negative main yield business, This has users effect which our when was XX% the other and our caused and dip of advertising declining one economic before target April. many to since saw Europe. advertisers countries. the revenue. by recover yield in business more advertisers on subsequent The on

was the which is revenue a when for QX weakening euro X.X% our factored conservative We the in yield of dollar. revenues translates the This our both on year foreign full-year balance dollars. we judicious into weaker and into of the against into convert a exchange for We also and lower our growth, the on euro felt of have was a cautious and the We the related the U.S. it our impact impact we'll denominated be rate U.S. therefore similar to impact growth effect estimate XXXX. seen outlook guidance. forward-looking euro have

was Microsoft Xst. bidder XXX% The April on the launched second factor that on

start While behind it's good is off a our to it plan.

bidder to levels other sites, as there We bidders improve will via forward-looking header Microsoft. to we also into the bidder identified performance current this guidance. believe have upside factored publisher display have start than potential to the is we and for opportunities using We of the our bidding inventory on compete

not However to can that be factor this adjust I prefer guidance, not year. in obviously we have to we position our happy later want again and conservative. upsides these assure I'm since to of our to be chose I either don't guidance potential this to you into

believe So our factors, we in the we of two one-time both updated events. are fully guidance these bakes believe which impact of

X.X% as in more Now on macro Adam a quarter, million results, we our EBITDA measures pro a was gross or with specifically profit, ratio on ex-TAC some is profit was forma XX.X% we and of $XXX shared, XX% headwinds EBITDA refer on represented I despite ex-TAC $XXX EBITDA approximately all QX growth and solid often which to ex-TAC had met This year-over-year million. $XX or of basis just exceeded Revenue adjusted at on our currency which QX we basis to as was guidance as a constant million first adjusted discussed. margin. Connexity, XX% adjusted gross is what

digital of Of an $XX from challenging grew new gross profit property mentioned performance. XX% and XXXX from came As partners. in a is came year-over-year exceptionally $XX strong because I existing XXXX, quarter, QX $XX digital comparable, million growth last ex-TAC million gross was which QX of growth properties the organic revenue QX million,

from Our existing such platform yield our of and offering. high publishers improvements additional growth capabilities in impact combination a placements to existing upsells revenue of as came

ex-TAC gross This $XX of came million and digital QX was to three and Our up $XXX property year-over-year. new our growth million The partners to network, sources. digital from was addition partners the business. or our of Connexity growth additional of property existing profit XX%

at positive on XXX% standalone retention net to a basis. ex-TAC for dollar our continues be for publishers Our Taboola

up driven at $XX factors. expenses, year-over-year, operating million consistent with were is Looking multiple by they expectations which

investment business. First, in growth and our

the intangibles Connexity, coming Connexity inclusion well acquisition. the as from and Second, as depreciation amortization higher of from

$XX adjusted the given $XX and higher higher $X.X cost was expenses benefit $XX million, $XX year-over-year. margin our million liability market. being of million labor of an Third receded. the of Fourth, public environment reflecting expense was inflationary which it travel I described. the to million a to offices tight and million. fifth, increase above of due costs million, just net guidance amortization $XX our pandemic of from opening of a to and resumption million, We non-GAAP job generated EBITDA of And the Adjusted GAAP as share-based however, million million, XX.X% was of year-over-year, company. additional income costs million $XX compensation related some income expectations, $X.X EBITDA was lower line of to million, the with which $XX in were of of which $XX included $XX.X warrant above net intangibles of operating planned all excluded guidance revaluation of

we cash free of year-over-year. is QX sheet balance positive quarter improvement generation, $X to cash $X.X QX generation position We terms have strong a and and was net with in million lowest pleased cash million cash. flow million an flow, In operating of the in $XX cash which were ended and seasonally

Our $XXX our is million cash and million. debt short-term deposits balance balance of above of $XXX

$XXX we ex-TAC and profit expectations in between Gross and financial $XXX of million generation to now $X.XX as updating XXXX, our $XX between like gross and $XXX EBITDA $XX million $XXX So business the have are a good I profit between $XXX million for between $XXX and billion. terms our now strong. cash million revenues say, and rest fundamentals expect Shifting non-GAAP $X.X and and flexibility. of million. mentioned ample and of net guidance million. result XXXX to our continue to billion Adjusted million million, we are between I'd the income

we Looking positive rate, that a with EBITDA and a for be we've is two our company to one-time beyond profitable at events that those guidance, new significant good that cash flow. strong growing generates adjusted continue now is that and

in XXXX. ex-TAC average of Our new and for $XXX generate will XX% is based EBITDA rate we on compound this guidance growth adjusted five-year million over

strong XX%. which to continue on demonstrate We is based competitive almost margin, our ex-TAC advantage

that grower is plus and the adjusted time believe do in downturns, that Because business. growth it over to believe investment benefit reducing Taboola let's open we the position that, With and in fundamentals invest us year EBITDA our and XX% through we plan per business acceleration. bullish strong continuing questions. that believe from XX% are at margin strongly this to time. strong businesses are investments going into will up for our XXXX a We We not on business these about

Operator

Jue comes Suisse. Our question Thank with Stephen Instructions] [Operator from you. first Credit

is line open. Your

Stephen Jue

Okay, thank you.

did reason what is for or the And do? think before point can recover in called the of this Europe, Adam, being pace to does a that problem? of for as thereafter. an weakness and it guidance color do really overall war at -- the year? versus seems balance What down product guys designed assume give regards you product do us planned problem. think So on activity in out XX% you had is and it And on down activity? that little Thanks. behind plan. cite you of basically the just not is math, the Europe, a stepped an bidder what heels where the the sounds think it's ROI awareness persist back envelope you a that Or the about like customer you of it's Do slower the you the I you this like guess to And

Adam Singolda

morning, good Hi, everyone. and morning good Steve Sure.

about So take Steve in financial the part can the Europe. and bidder

and that opportunity Day Microsoft forward from if of and Microsoft of we few say we and the start good others now, look I Microsoft Microsoft seeing on past behind. last you have believe that as we're mentioned we be here update, that it's of a a with expectation, or happy that that really better the than fully as would in job are but our we in to expected for good us, specifically that. there's lot years, into overall because growth growth as So things drag say it's But future. down has kind integrating on over designing in an a Investor was doing will developed the are look us the even the done outside so our so team supporting year case the even not off the I'm bidder, recall, that we to live

a time, to build building companies in you the we So other was with and think such that know, doing I'm XX-years the them. that of some really in I bidder team is what opportunity have able technology a a lot done have happy from quick now

over start The thing things the just really short-term nature. inventory next, so be integrating and the second into is beyond that will of header bidder Microsoft, other bidding

a for Taboola. So, growth overall bidder nice will the become opportunity

Stephen Walker

Stephen of the to things as Yes, that so a from a in what happens see what way as that in when Europe, and economic except it them. think what happened regarding see whole. think advertisers almost is small And not world they is pandemic Europe in think I Europe, two about we can the uncertainty, you

reduce factors per are that to we our up to are cost less see make about going to we down become some their about basically much they so end that they they them on spend, way consumers not to the less-per-click, because much cut is adjust worried it. to in and think that cases how yields click always click-through we've conversions. willing reduce budgets, fact fact so for one as as the pay-per-click they're So, the their driven rates, is, earning what on And talked that not they're three much buy activity also and from they by going

effects Asia those reach our yields, Pacific all softer, it us just happened European our then global because because what is, consumers with actually in Europe, consumers cases and got U.S. see many we advertising not advertisers So basically the trying and and business impacted others. to European are

So it global yields. impacted our actually

to which think So of happened business there. when full global European Europe so yields, what not that's and fact our gets XX%, was it's about in impacted down that you the mentioned just business, kind is business, it the really affects where our way our

Adam Singolda

a happened only we've the way know and we forward are events it's single both has one revised guidance you the Europe we everything the from one-time Stephen includes perspective, think and bidder in think moving up. from But and case that now

Stephen Walker

business of expect we we millions I the million of this and EBITDA, of XXs just are $XXX high so dollars of cash expect our to do flow flow to strong we still the as or of fundamentals well. still year significant adjusted to tune to And plus that generate want generate cash positive mention Yes. of

Stephen Jue

Right.

Steve Walker

Thank you.

Stephen Jue

Thanks.

Jennifer Horsley

we'll the next take Operator, question.

Operator

Our Laura comes with Martin from next Needham. question

is open. line Your

Laura Martin

ask one at let's I'll morning. time. two, do Good a

want open trade because journalistic path path customer somebody I don't they job to because is ask supply isn't sellers. is your of trade going supply new essentially are you a buyers of optimized, direct just open but just you you desk companies when a if these you take take for your adopt So to from path, really open have that do doing you need way, to going relationships which that doesn't that have you But guys the desks the meaning, if is, a speak or is it’s Washington about understand away Post sort in open big like I really that. question -- cost path. with could and optimized it in and cost charge one really Internet to for not chain, basically customer, to isn't from to really business open doing up path harder it at sign promises away brand they than my

Adam Singolda

good all, and so morning Yes, Laura, first hi. of

Taboola's demand all, important So first to and are that us. unique remember both supply of it's to Taboola's

editorial open looking real we estate you publishers path, any go BBC right? paid single not or So with ad. you on you we desk just to that as publisher those in of about, things to create like our recommendations, is create CNBC as the achieve banner well cannot form our anything or that partners replace or one with serve or recommendations, trade the of if both two any look if what we ESPN think does actually So

supply by it's XX% of from unique, advertising, is perspective, a also brands is very and that performance unique, the that's of agencies. so about it native, perspective, it's most supplemented because from So very demand

looking quite make desk market trade something unique the and not the replace. of same to in is is both So is that those dynamics believe we it what addressable

banner XXs suspect paid that of my momentum momentum to money with or of any at carousel then anyone into sort of banners can make there experiences content. Taboola users I engage over it I and most, East would make is NBC this where being replacing And billions -- half case paid to a we're sort hard letter, I of in that I'll more is is will I XX-years, dollars of And look be of imagine, I and paid time, risk XXXX the half recommendations competition, this point sentiment buy portion video so can by I grow of good that's seeing section from would banner if because and a next in are in page, the mentioned front of with or E-Online, are middle editorial have we're that South that that I prefer the and second Sports, and The and as which dissolved, replaced the that either recommendation. potentially and you native basically any I is others next the mentioned good really advertising. a of have, half and homepage, or will the prefer actually publisher editorial think banners seeing think if over my editorial of e-commerce, you perspective, very time banners

Stephen Walker

Adam add thing the to other demand unique we that supply mentioned, and in also just me unique have Let unique addition one data.

about. know what in data. know remember, past, reading it's they're desk people doesn't you in, have a trade the is we've different are form that about We of if what but what interested the talked we have, we So

consumers than from I contextually the trade oriented a different targeting So with desk, think that also way different they of us makes the gives get because advertisers something that highly -- it's data. with

Adam Singolda

of And that's the SmartBid. revenue X% why

Stephen Walker

Right.

Laura Martin

That's super helpful. you for Thank that.

as softer. revenue to area, other in resources keep quickly next been if and given issues you said to going market. Okay, to is you My hiring is, one hire the labor thing and be able is your And line around Steve question as your you're Adam little in the hiring, even to have over the is spending though a you've going going you ramp that engineering year. said had costs wanted tight you're you double up

Stephen Walker

Yes.

I comes a challenging to So especially And environment. resources, is very for tight it it's tech when sure. think it

So, so far instance this XX-months. in best but last year we're was on month a our for bit plan, the our behind April basically hiring hiring

at be targeted expect are of that do year. the had we to things up higher to by it end a So close kind the we initially what opening and bit could of something

gap are could but that think things So that loosening on and bit can be experience. close we I'd but it's it recent up we our still, behind, say based definitely, competitive

Adam Singolda

we're our of expand tech taking hubs, right. to And our also strategy international sort

Israel initially. have we So

have office Connexity LA now then part We good momentum. of a the growing in that's we're also fast. Taiwan, lot And an seeing of in as

So expand in sort attract to also to able great hubs our we're talent. tech be to international, general, of, looking

Laura Martin

office. back that hearing been We've to

If policy you let your what's recruit, in-office people [indiscernible] Adam? distant it’s to easier

Adam Singolda

Well, other -- anyone hundreds we of of opportunity their we was less, we just in offices in that's China, and local decide, we in sort force countries you to -- -- to come the give say have XX of what know, don't all that leaders, we are would and work every first I back, in regions people Israel, the it's people very Israel Israel coming home. people to different. office day, in I so at are much half the

So I regional. it's very mean

of in empower hired the we seeing that to want people tell Personally, my being you to XXX decide. I can opinion office, we north last is So the year. people, our leaders

them, execution. such you empathy to interacting seeing with other boost can a each in culture showing imagine eventually is and So them,

it's So I to each think important other. see

gaps, will I and take I will I too time, will come think But office. person. remotely that be culture time to that aggressive the and execution suffer choose over companies so in from being

Jennifer Horsley

Thanks, Laura.

Laura Martin

Thank you.

Jennifer Horsley

question. next Operator

Operator

Thank you.

Kopelman question next comes Our Cowen. with from James

open. Your line is

James Kopelman

morning. Good

factors saw talk and you're verticals you with from secondly, you versus best which can impact which cited. would your factors across of biggest about improvement industry Thanks. the you And two As like broader look market remainder mentioned upside the macro quarter your macro guide year? much on including the verticals, the color could in approach, where strength or of conservative come SmartBid. view as over quarter? having other during that drive the upside forward of do saw the new April or around potential and conversations you could you execution you How helpful? the through Any held versus be May initiatives, growth that a from advertiser verticals three advertisers features and Connexity terms taking In most up into have the or what digital

Stephen Walker

James. Thanks,

the verticals. address I'll So

so most on all, first certain than of we've rather way all, I impact verticals. First the seen think geographically of the

there in talked we some has an weak, been flow-through Europe an has U.S., has the in much Latam. been impact less Asia less U.S. the on as impact So although been but there Pacific about advertisers of of and and

in for more it's a generally and one thing, across has it's that instance, much advertisers. pretty pretty, definitely I performance of would speaking, The board. and the regional evenly say agencies impact it So Europe been than been impacted more it's impacted brands is

they've he had war. So telling of was for Europe I me to me yesterday single show that in was brand on instance please in about our said, every don't almost any EMEA pages the Europe, and VP talking

spend, they about cut single on has that be same shown So war them pages. they've on want said whereas, targets, on, with back not to they've reduced conversation they had a not cut advertiser being he significantly performance what

agencies. you brands it's just So give a definitely sense, to more and

We to are mostly, due supply e-commerce bit chain of also in issues. a seeing softness

little been that by a softer core again a not our than bit advertising, lot. but has performance So

agents across dollars and performance. branding core more more the little on So performance our than board, generally bit e-commerce and but the impact speaking, with a bit brands then it's a relatively on little

Adam Singolda

I with we we the the and from are said, like can execution, assuming meet that guidance beat events expectations. our two one-time the here in not we can past those second and assumes believe one, Yes, people's so take

traditionally So just is know very our also revenue strong recent greater seen not others have are few with us that becoming real where success. the also but to execution share thanks a to choose our pipeline, the we're opportunities for market, One, are there you've just within wins estate. winning publisher PMC banner, our because impact our operated. winning Taboola business, people to and and methodical by advantages technology We control. We're we we in that

that advertisers spoke and banners performance and believe huge have company growth really those Google, mentioned unique bigger the we about a have also Taboola. win, we're vertical that with I ambition into history publishers we move So taking I outside in is fifth Amazon, very the advertising to what that of -- here I success become in dream that was a and and performance a Snap.

Facebook. think, and I So

we're on growth huge News it's fund publisher so momentum. seeing We're and on -- think AI and that's advertising advertising and basically in the growth, a making just us. performance the engineering, is has So a explosive I the core. three-digit Taboola experiencing I great for we opportunity investments have mentioned

tech we share financial from we off growing about bidder, live good is grow. Investor of but Microsoft very You've making second see a happen Day, going slide. to sort together them We opportunity publicly, stage excited to more outside I'm the bidder business. that impact about on more a of the header uncertainty when about the soon do like The on and all we we'll our of, a the to is what's with bidding because of basically hopefully about Microsoft. seen the it's no the is, One, thing Steve is lot on this Samsung be lot optimistic It's able is of a is it partnership The have can and where very there fact part said, have team launching speaking start advantage, advertisers. to things here.

we unique believe technology, a with data We can and we become now a have significant bidder the bidder.

review.com, a mattress Times, everyone to I just driver no others, to to on all what two that and good one for a exactly that I be bought number think part idea, personally and also starting is my one, did a buy decisions what have that and the strollers future. daughter I trusted what's the of e-commerce, will experience the and about will into I future. need because now, this and big York trampoline but We and mean, call So Garden able be make New Walled on sources of believe huge I us that that's to that this I third all knows -- be a trampoline

publisher say and up would Taboola pipeline, strong growth, expressive things, up News advertiser bidder and four I going e-commerce So synergies.

Stephen Walker

two numbers on add things the on talked four Yes, perspective those that let a four, me about. Adam -- the upsides just from

So to an first of on all, on the other there bidder, bidder. it header he publisher also opportunity And mentioned the that take improve to that we bidding sites. to is --

already improvements clear, bidder current which in in seeing on. factored Just current guidance, we performance, we be our are to

So over is as think we bidder definitely we that upside the improve time.

bidding not I in we So of tried that's, there at terms header guidance and we to we've did think what into conservative be very our bake factored all. in

are So successful upside that's if with we pure that.

would the currently talked our supply year in new publisher new be and say most The exceptional, which story We're best other year second that publisher you I XXXX, history know for other will winning publishers. revenue Adam about thing on than was there. new this that our the forecasting of

supply it to publisher perspective. a good very shaping new a up is be So year from

Jennifer Horsley

next question? Operator James. Thanks,

Operator

Securities. with comes question Andrew from JMP next Our Boone

line open. is Your

Andrew Boone

an I've Good morning then got operational and my and thanks guidance taking just question. questions. for questions

profit think I ex-TAC. historically XX% gross was Microsoft So of around

on? fixed Europe And so help through impacts a now Can new these rates? how revenue, two? focus to should amount think between Thanks in right advertiser do the more lastly that of missing operationally XX% is time. how contracts softer and hopefully from of words, that little we as are size And in your Adam, think much. the highlighted suite. more think us had about difference just bit guys you What the us investment of you rolling can you softer CPM revenue. is given to we What's take other secondly, then remind highlighted demand the advertising. demand, performance then guidance we going two about engineering resources about percentage are versus the You you

Stephen Walker

All right, components like me split different here. between impacts the so start with let the the of

of first currency our remarks my So I prepared all, growth. X.X% rates about on kind foreign that in said is exchange drag of

a European off forward-looking a So factor, but smaller to of majority that war. The softness the rest our demand it the of is was was guidance. of overall due the directly A comes of launch reduction. part bidder of the the

guarantees you without of out think To question components. TAC under QX I numbers, the QX that can filings, our X%. about percentage so believe, second So getting about the guarantees, that we was we into in that's different was specific how said three your paid

a sense our of guarantees was paid so base we X% consistent expect our of We again. April, under be TAC that at in to with give out QX, you just out paid to X% TAC

but to trends to slightly, we that consistent, expect it maybe very expect go we lot. So be it relatively up a don't up

our we business perspective. to from risk don't that's, So see that

Adam Singolda

to me Andrew, then Hey advertising Yes. question. you're and going ask an

you I'm So happy did.

and Snap rest about a people of work talking let advertising, we is believe the So not amount I I well companies say, just performance me big just Facebook, than have space it's about. talking -- the which quarter technology quashed they with about the I'm a and advertisers, to advertising billion of your on And the direct Weibo as as million $XX you have That just in is know, rely as saw advertisers, get we well, problematic, XX millions mostly I'm think advertising directly to us. the on Google opportunity side of less thing that's that there. advertisers, main we believe you're who contracts I in had and the Amazon clients

amount Facebook, the Taboola And able social and credits reach. may to what an most goal cost do to be done craze whether rely have I So part by me, we positioned tell lot to of they so come on in the be I drive they very ever successful them give acquisition doing of be. to for can and I search well for and company us investing the whatever is of the Google They want product we that me and they them, of a or to the to that advertisers and trying as know, successful to us, them AI, that the mean, to they company we sales it. make with is things are a to their said, rest as fifth fifth huge understand far were interesting terms we're able that some that's in as but engineering has I to it, like of go that make is you roadmap, create amount to like and what much us also,

because will be very that multi-year be unlimited, mean, right? is here to I But impactful. one Now a would continue effect be journey, I the that's as successful, yield we upside and think

Jennifer Horsley

Andrew. Thanks,

Andrew Boone

Thank you.

Jennifer Horsley

Operator next question.

Operator

question next Oppenheimer. comes Our Roman with from Steven

Your line open. is

Jason Helfstein

Hey, hey guys. it's Jason,

kind and of questions two I related. So guess they're

again of the just and you're concern understand of, getting is are market the you seeing I the the prior is a you of So more tools to, guess, your get look cut others you. companies two, you a opposed content plan you is like what going click the the are how for what macro seems that second investments, back where paid So through back help Thank out business, we're I early market how valuing then two-part stock is value cut current people cutting And understand you how thinks intrinsic you help worth guess of you're And some then treating gain theme value everyone we're some cash obviously the on more by to this spending, still making help to we're us, you to, back? to focused and of us not to days so what us is kind now do a you're talked the on ultimately business us of more of the today? the question even understand, it meaningfully generating talk within recession the right will flow as what now reward market narrow know, business, not control? back? is just some recommendation, relates about to question, the that business of So versus, Laura you're was which your while there you creating. model cutting to to do think the

Stephen Walker

is first getting What back. are not with spending. thanks. the which start by I'll for Great, cutting we question,

our of about talked know that you doing probably Day many disproportionate operating in and growth towards as expenses R&D. as investments our going the we're So business, we at the our of is of Investor amount

So that can of obviously what things we terms in products, that new publisher we're value from to services bring partners. advertiser and gaining new our is

into expansion growth of frankly business. and core our areas -- the outside So

publishers, growing not and on ago more growth So by where our down them add rates of single well we growth part our for by percentage our been double that two for portion is few we for this very for triple-digits year. business of News Adam mentioned growing a That's be driving Taboola homepage It's our And to the it’s publishers which received of something, by new want terms that the fastest more continue really is advertisers to wouldn't a ago, that yield business, like in making minutes us in areas, then our of yield. R&D core bringing to have value in instance, been has our publisher successful, publishers individual translates significant tools on growing our business, to terms it's our revenue growing in had overall partners we if and publisher investing that will business. you, it's years invest in with something that. that up that

mentioned and generating are companies $XXX millions us special that for would and cash XXs great I the and with expect over we our frankly a and that of without a still financial back that what our fundamentals in makes thing cash to million in we at flow we dollars So business time of -- positive high in position, it be cut in of invest through unique businesses, them investment. by strong. areas that's think as growth get we fortunate downturns, now. continuing generate We're adjusted we're strong we we flow this think big get that's type year. of the mistake And this plan of we to to our advantage our said, in kind of point invest that EBITDA of enough new in free position that wouldn't case

invest. to time the is Now

Adam Singolda

where is market about it continue. and as is the company have goes you Yes. And what going addressable you the the the think think have and a that that already I we to also back we question, think we're scale industry large advantages fact we second and

I going walled just today, you a unbundle the doesn't by gardens, which over company web, the do if to So revenue in right. think this side that, be to billion exist side but $XX in is time over that open

$XX channel, a that can company, and the open scale social. big by that web search side on so have side advertisers So does to rely revenue really over not billion

personalized with when see is what homepage be happen we DVDs belief going way it's is it's more I in click going the formats you Amazon. that's of on that will replaced of feed they that that advertising children something the happen. recommendations will experience. So think going And to our to my watch I think I That of not and is cubes a like do in people on. invented X.X% to see that were traditional

So that very on -- bullish that I'm is future.

organization, ever and company subscription that money, the good you empowered Secondly, to believe into other it's we friend, need just opportunities the get editorial friend no we I for five on very, people team strategy, very the a with has that's XX which why partnerships, you're think the more year commerce help as look get I entire seeing and it’s the than and publishers, they had. are we best Internet you can newsroom publishers get you partner

think So I well said web's friend, it's to positioned we invest because we're -- technology. in open so the best Steve much become also like

you think Samsung. your you'll TV from a banners but personalized think think look your I car. you'll on may don't recommendation phones, see think your car, Samsung you're see see I think do as don't mobile into But I see on you'll see recommendations like. I your banners of Thirdly, don't automobile. feed in do you'll will you'll I banner TV, your but you TV, and I a do think say in

that people, people you says, also liked. you be engine to well positioned at are other other time So that with look know, as spent future we

and because still stock but control but short-term stock it can about dynamics very one little we're company the dollars can't execution $X and and millions this that I either, I ex-TAC, beginning. we're scale web. to part company by we're can't I Steve of XXXX is growing, of close of in open like of really tricky I billion And that XXs in So as world of I that of think profitably about -- long-term control high control the significant care a part the least as the growing are is dynamics we which producing flow in said cash XXXX, at is again a we're in free of which even

it me to be. add those It's things when to up. a So, all you good place

Jason Helfstein

quick let Just follow-up. me

concern it you're short-term like employee So compensation understand and looking to now a are on your answer. taking long-term on employees price with have making a focused to point who the all at from money, of their retention. out stock stock my clearly mean being I'm the not and because view whatever the Do RSUs? I you or is at do money, have lot saying, I'm -- you options less massively a

Adam Singolda

all, we a of first public I you, it tell can I became company. when Yes, know

build traders used this is happened we but also now and that new and and thing And that you thing also for from me, new market. we first to almost public have dream. reflection The the ship people because X,XXX that's are thing, only it's a have become

we least, I is And at there, there that know, alone like of course, for what we because people I've great when They so care We than where asked, care, don't money the many things how and of Taboola care and adjusting are more we're about that amazing I people all-hands it's is diversified, it. speak place new able the someone definitely to if but these not years, the thing stock you that can nature. to stocks, want a but very career the control are it. focus be you been speak every dynamics. it. will answer about companies I their it’s a their we're part to through So a career People have who's what stock five don't care over of, all-hands, next in doing on, and long short-term, perspective, tell about it this in we're also not as himself two about can going that it's can't Taboola things to be I to questions weeks about think global that an an a developed, reinvent and they three going from be they they to they it's people time, we're than culture, manager, for more about I think care much employee how and be price. people the is most great

Jason Helfstein

you. Thank

Jennifer Horsley

Jason. Thanks, last think one have we Operator, question. I

Operator

Yes.

Our last question comes from with Shyam Susquehanna. Patil

is open. Your line

Unidentified Analyst

little saw is guys, near-term. core Hey this macro roughly a question. a the Connexity of little quarter, is there. performed versus XX% or that taking is this that similar did of the ex-TAC gross we line on with comfortable in ahead anything in you in that on to the to range to sensitivity this in business Thanks pretty expectations? for looking think there profit ex-TAC the gross with for profits own pretty Jared of you about Connexity represented bit Shyam. factors Are out XQ? And Digging How bit do call your that

Stephen Walker

in expectations. with performed line question So yes, the basically our for Connexity. has Jared. Thanks Connexity

So at. we're, we're where we're with happy

of going He a I also about we publisher things a the little that in to that this revenue think is future. about we're believe that the Adam some be are to the of seeing bit his the positive in the some bit still talked and we that fact core talked remarks positive prepared trends strongly seeing.

So the we publisher be still in third a going it's future. of think to revenues

and for short-term, terms of there it the headwinds up is despite and by for the down had to supply fact it's the in time forever very some in still way, a saw on challenges Amazon are quarter we're the So e-commerce you performing first around them. bullish in chain that that, and year-over-year expectations

we're So some there’s feel headwinds, about future. very performance we we're the roughly where bullish with with it's line at but in and our and the happy we're good expectations about

Jennifer Horsley

Jared. Thanks,

Unidentified Analyst

you. Great. Thank

Jennifer Horsley

Now, I'll up. hand Adam back wrap to to it

Adam Singolda

All right.

you for all thanks us today in So, will to everyone of weeks. spending the base over I forward next with few look investor joining our time

the about guidance. two and fundamentals strong this fully one-time events, are of to So by the very business are let saying bullish We now they our had again. I'm are want do that Taboola's me The they me this just they in start past very in factored we growth. Trust do revision. were like before not

see be of replaced As as buy will Sports, be and business. you'll because of of they that connect will before. a it. NBC Internet our something brands $XXX recommendation team I and XXs XXXX It only is EBITDA, shows in free look partners checkout like the to into engines TV all is and Amazon million competitive and to over Online, every exactly part and of like to others flow in buy cash with and never People We of also advantage. see we and over don't we'll we they will. and high ads Samsung, with not say high where native, three Xiaomi gross A We're a you future what growth and Twitter, here our mean. do it of energized just trusted rest homepage, in think margin, go generating every things, traditional huge growth millions banners are needs. and would I e-commerce you the replacing like like adjusted explosive will banners about of Two, my Instagram direct-to-consumer proxy, the think we've had time winning, amazing we I everywhere. Three publishers need Internet, our be car make personalized that us the decisions will Altice I'll XXXX and drive make one, want everybody what experiences I -- dollars

as up. Joe here, from and all Now quote American the way rapper it's says him the will Fat I

Operator

for This participating. conference Thank concludes today's call. you

may disconnect. You now

Taboola.com (TBLA) 13 May 222022 Q1 Earnings call transcript