TBLA - Earnings call transcript Q2 2022

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Operator

Good day and thank you for standing by. Welcome to the Taboola Second Quarter 2022 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jennifer Horsley. Please go ahead.

Jennifer Horsley

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

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

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

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

Adam Singolda

full good of Jen. gives We of of everyone confidence and thank another for our guidance. which us beat of $XXX you year delivered Thanks, XXXX $XX XX.X% growth to the second and quarter Both Good adjusted ex-TAC, guidance QX million. was for a joining million call. hold end our all morning, us quarter. EBITDA our high

the the business. diversity weeks, the from last our in effects has war we softness over While of in softness few as also in stabilizing. in We're U.S. as since have seen the in well seeing been Europe quarter, U.S. benefit advertising the last the the the

business we're exponential macro in the in environment, of than we Taboola for which we're our spending control to run less we're better same things At see as time, well our News rate showing million a instance, than others. time, revenue For the prioritizing growth we taking operating continue the to and challenging year. in strength the to bit key seeing as first generate this expected, expenses, measures $XX north given are that e-commerce

On publisher strength that into seeing partnerships. and we're We've is about our many of front, the spoken good the pipeline new year translating this business publisher momentum.

to fact, we In will almost record-setting year did in XXXX. a business forecast much as sign that new XXXX, in as in we

equates the new that context, business signed to For we nearly double in XXXX. monthly

our us. for Feed reach many great, Fox recently of renewing than a We strength They across Sports high-impact homepages our will the partnerships daily this us. Taboola offerings, work important that as existing So and U.S. XXX additional rechoosing major digital competitive websites. this well now as than choosing also very signals leadership provides Sports, the others. has many, NBC and partners in networks including insights our and seen to U.S., work Sports and credible and excited all more the mid-article Feed of we our recommendation Taboola the Taboola win. including television Taboola. It's We're new others which X-year incredible its well test partnership many advertisers This of on XXX Taboola Taboola publishers includes many as and digital advanced the AI million about that more for USAToday is been includes by verticalized stations in our a Fox using year give the Sports, won sports integrations and Time.com ESPN, CBS properties Taboola Newsroom, largest X-year with Gray, with is active it's and users assets on Gray, with a also network. as offerings and when win, of proof another to was value reel. technology that sports new PMC, partnership a Sports as We've a busy local in many owner Sports, vertical. big summer Fox of partnership such top-rated

For is Group, single [ph], plan. others. many, record a expectation, of publisher Group in meaning StrOEr our more News a trending than view churn adding momentum, only many keeping Media our is publishers Media content example, Cox we're partners under and not in we Silo are our of data-driven taking group also what amount When every new month,

always scale is Taboola I'm News a we've I for how over that the Apple under of can year new into is highlight news excited we that devices Taboola spoken the product Taboola our infrastructure. so start-up all Taboola turning a business a News, Android is which Another say about. for and but start-ups blueprint

call us meaningful audience mainly viewers and see sign. good of continue financials. not is by in our technology can close growth News wake we to That's screen to publisher publishers publishers forth. editorial we but can $XX Over how business the we they so contributor end is for digit, to Taboola run million rate to with annual our the rest We huge social seek TikTok to as be adding for last of networks the see it huge reaching highest year, the capturing out started are attention to our traffic for doing not homepage, makes their and by results time is time, also this for mobile it bringing think generate, indicated in What reach in OEMs, sites. to challenging as going how new of expect and exciting on only our it so countries, I market. to to and in drive personalized only site. well is work choose Taboola is generating with publisher can recommend so new partnerships the growing devices to their you'll growing This for because some the revenue to In they more publishers them on, partners, us proactively synergistic utilizing becoming a their other many a on because screens new we're a device audience geographies, expanding triple expand other with it have relationship and us. the where deepening news

making area we new with launched Another last where our is bidder offering quarter which progress we're Microsoft. first on

have formats. of We advertising open And banners of increase to most billion numerous involve strategies more our the share while converting $XX to web native market. those

inventory Our and bid that a advantage inventory. new think portion bidder threefold. into allow is our us display will We win of bidding to

from our First, we have of XX% our advertisers. demand. CPC is unique revenue own advertiser

homepage us first-party article unit, on the on user what bottom with bid such. have Second, placement of on them on we they unique in a the data. might better We and see click read see then and the a interact and

Third, we technology. AI have unique

Microsoft years which perfecting to and now a of is learning what a our have in do. is early deep we allowing team open have web, on us performance We We're focused investment exclusively the contract bidding days.

quarter of with a how significant opportunity this The Taboola bidder can Microsoft trending our wallet publisher of a results share when within working is of we dollars consider the this technology X,XXX seeing begun and our partnership. about few second of you outside we're is and publishers have longer-term increase on encouraging millions to However, the We're in generate piloting handful publishers. year.

we're to results our sale solutions of Lastly, guarantee macro paid in ad performance-based, the in e-commerce pullback have spend goals pressure. in business I'm Because type this advertiser are despite seen no spend. also these even effectively exist a able their that to recession. happy seeing ad to we're XXX% commission CPC commission, as a will to little out e-commerce types virtually the Historically, to budgets we or back good in either report that continue ROI the on of same of

together company, market been clients in are online in driven going The an opportunities lot behaviors the tailwinds the about them historically budgets second election go earlier. while surges, to down. a consumers have on that becoming all which we to is us of back. organic can the cases, not Coming also in seeing confidence well full year a we're traffic shoppers optimistic quarter new advertising year, as at year good feel through the priorities mentioned back U.S. right have believe executing help advertising there's good the traffic and pandemic softness, us a has decade. to our ask going off World looking year if business and we past the team are find and are we I the recession as which some the Cup better I of big giving This a In spend half guidance. slowed as and for fact, more the and right reiterate as with is of those that has

its more to side EBITDA whenever do with I you, ever important tell in we thinking adjusted for proud I'll about well to leadership as over cared want about it than financials. cash than advantage ever, now profile. come profitable XXXX fundamentals, to I'm is flow. its year, on is more I and pass my cash But now now to about this, Taboola's even our about Board of And already and competitive the good the company believe team. flow of it finish, beyond. level, out on We time more so talk energized And to and a and work we're a I along carrying free as strong stronger I'm Steve million growth. always our As strongly this focus at this EBITDA other ends. adjusted north this $XXX of the

Stephen Walker

and good everyone. Adam morning, Thanks,

or basis, ex-TAC exceeded would profit we million. QX was with headwinds. constant have pro been million, some shared, ex-TAC had pro Connexity. growth As $XXX.X adjusted on $XXX.X our XX.X% a million the was and year-over-year Revenue This X.X%. all On Adam on solid guidance a second despite EBITDA currency $XX.X of basis or gross forma We forma represented X.X% quarter. growth was QX met a measures in macro

revenue our ex-TAC million. decreased $XX Our properties, driven This pullback to came property on is very business, $X obviously adjusted was U.S. of and -- revenue rest June. and ratio the partners in digital gross spread to of existing $XX resulted our that was of the In of a started shrink a in property margin middle QX adjusted EBITDA weak the which from In the see around the to QX of much million, existing gross Europe of by world yields this those digital This existing decline or event the and new unusual partners. weaker a EBITDA situation advertisers translated year-over-year. by in in profit million while to growth the XX.X%. partners macroeconomic

digital than base transition million had a obviously our This new new was business but as to seeing as partners ex-TAC lower our profit or QX from of from as growth sources. are in our The yield XX.X% year-over-year. Taboola to was growth from million of revenue the property Microsoft the came declines positive we bidder. gross our Our also addition our and to three growth up the $XXX.X benefits offset well Adding network, from impact Connexity. the more diverse as Connexity as offerings the $XX.X News and anticipated the impact growth contract such new we

on Our Taboola stand-alone the yield for net highlighted for earlier. retention driven ex-TAC weaker by XXX% just dollar I basis, our under was XX% publishers a

they $XX as down a unusually lower going was million result Looking compensation The of by public. year-over-year. year were expenses, as was $XX expenses prior share-based at operating million driven high decline the of

of as million, by half with mainly Excluding remaining intangibles investments of Connexity and coming stock-based driven acquisition. slightly the from expenses that which we including the less the and The close higher labor from Connexity expenses the comp, tight $XX by from on environment inflationary business, than operating September came made market increase from depreciation higher job higher amortization X, we were XXXX. inclusion not did well as reflecting in until

to driven lower macro pressures, were share-based which of in margin and of of with million to operating of $X line from guidance included EBITDA going above by $XX year-over-year million actions guidance all we our including of million, to decrease of was hiring. reduce was investments $XX $XX a million reducing We expenses million amortization net As taking XX.X% our the forward, Adjusted adjusted income million, discretionary but EBITDA our of decreasing $XX.X our spend $XX.X Adam $XX of expectations. $XX year-over-year business. of million are the above mentioned, was million, warrant in rate given expenses which liability our and million. GAAP revaluation excluded non-GAAP which compensation loss of of million net intangible $X benefit $XX generated

free while from prepayments. we tax with had generation, terms payments and onetime sheet cash flow million. cash Cash quarter operating In QX million was in impacted and in in cash. approximately positive $X negatively $XX QX, balance a a combination cash million by flow was of flow We ended of $X strong negative the publisher net

cash of above remains debt Our balance investments $XXX and million million. our $XXX.X balance short-term of

credit are We they numbers XXXX. position. and entered secured into the revolving the Overall, our $XX outlined guidance on further for QX detail our our focus to metrics all provides main facility now adjusted of in are in the we rest I QX Shifting also us reiterate press won't recently to liquidity X-year release. which senior EBITDA improves and XXXX overachievement through a our confidence as which in ex-TAC on. our go expectations million

coming mostly Connexity, lower core News with from expectations We revenue, and regions for mix is revenue high-margin certain coming margins are from such as due areas less business. margins. of ex-TAC our is and with ex-TAC higher Taboola areas to lowering More

anticipate strong assumes current World U.S. levels. translated lower which driven a from tailwinds demand weakness QX Connexity we experienced environment weakness throughout in some business. continued macroeconomic quarter. that elections, and also QX the the This advertising note is Cup We the the into from in our has I guidance second at performance should the

the guidance weakening are Our does our seasonality. normal from quarter our of assume or fundamentals demand strong. departure Overall, not a business fourth further of a

year We flow. EBITDA for $XXX cash expect million healthy adjusted over free of the and

in News partnership We e-commerce. growth are publisher and exponential seeing new in near-record growth, strength Taboola

economic investing that, areas that let's important still are and growth. We accelerated closely for strategy will and We this growth come managing period of while of out open judicious costs in all of believe to up our it weakness. position our we in us as are investments to With being this questions.

Operator

first Cowen. from Our line Instructions] the James comes Kopelman of [Operator question from

James Kopelman

On Taboola the for on million run one $XX Adam. congrats First hitting News, rate.

versus more you two if business? then it Taboola out penetration a Steve. largely and growth, manufacturers follow-up terms Taboola opportunity of focused maybe regions? of we in at And Given one News, look in is Or footprint? existing engagement the how size your rapid the device we and the And user there the to should I for years, frame drivers growth adding more on have scaling are overall

Adam Singolda

businesses we existing base base just Taboola So details, shows get financial it's build organically into that to I have before Taboola. News, it can I contribution the future that at think exciting our significant because and

organic I'm It's effort. an about not excited So That's an M&A. that.

So diverse and -- the that shows to that the me, have we infrastructure. under business culture infrastructure to successful, Taboola build

It's further right XXX about the So just year, number. to actually, about clicks this And that it. we're sharing trending million you it's first XX% the time I It's give of to be now Taboola a million over $XX like entire month. on now, color active some it's for in live year. users a our business,

our about previously remember, XX% the XX News of to level So clicks of Taboola overall annual about year. spoke about clicks a is I just clicks show engagement. billion if you of now

we're remember, if with our web how at spoke Tom, more spoke be in and how valuable you open This definitely with So more engagement do time to about we about this Strategy, Investors' to website. get vehicles beyond getting. people our Also, Day, we consumers, the -- biggest consumers. VP we our do of that's one more is where get

trends. good very are trends those of all So

of to the In of your terms a financially, bigger above how of that question. business make we intend terms all in

one, So points. touch more

looks about use we wake average at right, right day. XX their which you're a us screen times So the to either in now, have the screen means swiping XXX OEMs consumer

family they're and high-quality picture getting of news feed swipe can and lock based So they like right on but recipes the then and screen they their may our personalized and they on their things of have data AI.

like more and swipe and the others unlocking in And is and one an when you countries. news minus being point. example is and Taboola broadly. touch one that's you more more is one Xiamoi using that's the touch is mainly right and a is So quite and used have phone traditional different your this adopted that then Samsung which by point you're Apple currently feed

So bringing like that's they some notifications And our about are other have second the with OEMs device. and on news some to the speaking point. then points actually, that widgets of us touch touch

per things will, ARPU, of essentially revenue So all those so increased user. you if

we're would versus it is one say, So to geographies. matter That and devices. financial of more thing doing is I upgrading upselling a OEMs also helps is the use touch us. get have points. And more higher thing implication Obviously, others. to some geographies thirdly, second

advertising you countries term, millions the of in in have Longer we're more be business. the to I the term, strength Taboola a revenue other to U.K., where, Japan dollars this noticeable, News expect the impact. hundreds significant of is penetrating a So expect general, U.S., portion and of more bigger should and mid-to-long our

James Kopelman

And then a quick Steve. follow-up for

verticals, of Just the ad consumer or you’re there’s aligned remains on pullback more what the your that relatively perhaps other would seeing an while ad among enterprise advertiser U.S. been just spend that helpful. companies terms of heard in Any reporting be strong, Is clients? we’ve from with there color side. caution

Stephen Walker

Yes.

seeing. consistent we're So that's roughly with what

perspective, the is So that pullback can't more the on they and has things generally an that ROI you're branding measure as speaking, on from advertising seeing been what advertiser easily.

you funnel go, robust. So the more advertisers. kind Lower funnel we're further been has the our conservatism up of more seeing the performance from

funnel, equivalent funnel. reason strength bottom for very one has because the been that of the that's the bottom of of at area there Google the at Connexity us So they're an are

I funnel. But little advertisers So directed go consumer so from more more seeing hold a consumer fairly strong, towards as bit has is to tend kind up advertiser you're you up you we're better. also the the that's Anything an a the conservatism towards our of bit out, are more pointed perspective, directed think that been more from seeing further softer. enterprise

enterprise For business us, small. fairly our though, is

we what of of do consumers. targeted kind is to most So

another bit that's a better So held reason up little we've in some probably ways.

Jennifer Horsley

Thanks, Operator next James. question.

Operator

will of from question the line Securities. Andrew JMP next come Boone Our from

Andrew Boone

Matt on for Andrew.

just impacting improving So drivers publisher or And And they XXXX? you’re help we excited as publisher a Can potential the new there? there share road should is one success my publishers then this think map? two, letter. the gains, mentioned your you the me significant. just And you just on anything in mature? is that of about first in performance key understand seem tailwinds advertisers priority is pretty XXXX ROI key on How

Adam Singolda

question. the for Thanks

on So I the into our That's more investment. the performance Taboola becoming the successful That's advertising, by far say even that's over time. will liberation North biggest Star.

We recession of source which that see XX,XXX for performance much like relationship time don't but to don't advertisers variety dynamics, again, advertisers. any smart another they bid advertising. of is time so strength us when macroeconomic spending who lot work advertisers have and a who really things relates We're it lower companies performance direct churn is, direct with They -- you but even churn. about with interesting what's or of budgets have a performance may on

One optimization. of sort mentioning, them multi-touchpoint a is which is worth of

to and subscription bid now points single or long So on smart optimize for site that conversion, to a touch smart lot be click a or so all that. was capture whether is like effort a of for bid, them. And our or something multiple able time, of was a for time optimizing

getting that to So with to many us. conversions it make and for again, job conversion, them easier quick easy an advertisers get work getting

conversion that's point. kind trying optimization to beyond of recent So go a a single of been work our lot

last over The has has bidding. our been been second taken time header thing that the quarter

Microsoft encouraging a is bidding We're all ago technology. We successful stack. was you I one launch. know really and quarter bidder talked a a bid used tech that was in basically header mean using that signs. about So that smart seeing publisher

of over header handful X,XXX that publishers days, millions went that's implementing technology bidder the incremental So publishers. from a and digits But and the dollars we we've of X XX called across And technology to overnight. already have X in been same that's generating revenue. last

a which stack tech bid the lower smart again get using been advertisers CPA. right that's users helps at So

bit that. to you a display bid you a but on So inventory script furniture and display java home later show ad. there see just might you or on color on reading a you don't a bid header you might of on we're to though we page furniture seeing have about we there's CNBC give even a on If on then we page, bidder that trying might

bottom multiple perspective. So and that get see us article helps from effectively times, to to advertisers conversion get the to at a of and Taboola you less the pay not opportunities CPA more only

-- the things over biggest been have us that's those So advertising. our last quarter that's performance busy keeping effort and

Stephen Walker

XXXX to about of his monthly even last extremely mentioned new rate publisher amazing. I say And year in It's then their impact remarks. and second-best we're on terms year. gains publisher new your first -- prepared of to on and that question second XXXX of our is double record excited. want Adam so in It's the all, which business

So -- about very very that. that's excited and impressive gain a we're it's

so forward, kind us. going impact usually its with of ramp terms understand of publishers how you have In to

So off on with had more properties, and more they period. we that grow couple usually, over the the start over we initially, -- get few time quarters also first doing them we of positions more and agreed to profitable that launch we as smaller

usually, our we those time bring on put grows lower and publishers. the on to So margins on we a start bit demand over it off as right little

kind of period. that's So the typical ramping

launched the So two. last a lot those of quarter or in

even -- have launching in are launched them of QX. Some

margin see in at I because margins level sustainable as performance what where well as will we'll fully and factored probably them those publishers ramped what And into improved in it will the impact their forecast, XXXX expect at level. then this So QX, improved start you'll gains QX. is revenue -- our would be that's to is really expect from

our good News. in then of if So growth from aspect and that actually those business. overall question growing position. we're about of at have that on we new us business, you impact I'll positive just one talked a growth because to ramping very it's It of is business That more Taboola a them but Adam and strong in really impacts look that publisher about is QX expect kind even XXXX. a also note how going in our

have calling want think us going of mentioned partnership prepared we but either part do because I from other to remarks in we that. in the letter want markets his Taboola to saying some Adam or sites now, we with to a publishers this we have see traffic News we and be you

going So multiple impact to it's business ways. our in really

we area this So very weakness. think we think out we on, of of positioned we're ad of bring we and period going between macro recover be now the that, of between strength we're an kind and Connexity to being well get publisher business new very, rates once

Jennifer Horsley

Thanks, Matt. next question. Operator,

Operator

Our comes from from next Laura Martin Needham. question

Laura Martin

numbers, Good guys.

let’s XX,XXX-foot step And but let’s do time, have level, levels. the a couple two at Microsoft one So first. of a up I at questions

So next they you a Netflix Microsoft of become thereby that think business. point the now in of view has Xandr’s competitor on Adam? disadvantaging they after out whether CTV on I’m years. get the about the of view on incumbents sort that, Do the new a three sorted in Netflix over have Internet, you your point market, open interested

Adam Singolda

for One, happy them. I'm

deal Netflix. And a think obviously, with that's on. I there's lot exciting an going

channels, it what sounds that opportunity. say. me do. mean, for a will develop I good future? do I like I using It's when don't in they they'll might think for to to in they that other demand, what know Netflix Again, hard and utilizing comes that the

like DSPs and that into and is The funnel companies for more that others. relevant maybe other Trade So Desk demand channels

get that So more. maybe into they'll business

analytics. a publishers' and They the just those give side, I in effort and subscription, network to lot a you're they do, expect of help takes Open lot publishers decade want right? goes marketplace and revenue, think time. with that for of you with to audiences about to Internet, build if you so takes four, publishers we're do to they doing It for that of five of sign new So to those drive them differentiated years, much it things advertisers three, relationships so help a when them when long and more good a that building and comes than you win OpenLab a beyond all thinking consumers, now network even all efforts R&D engage CPM. a things them their a we

for publisher-oriented So a direction takes, what they an decade. it's like But -- do a demand But channels to take, think, build want do to idea use me I whoever sounds that's of might open company, and that time. they over they'll I web say if you're in to that if and whichever think kind that going. other where long hard good a

Laura Martin

fast. on Okay. My second because had staying right versus like -- just reported growing [ph] you of top growth level pro macro question, X% up that you, at so XX% numbers is, guys reported Innoven we forma and that’s CTV is

share three us Meta, be opinion to ad They from big the -- give Internet history. Do please? mobile years know, that time feel you to revenues. as open feel the the the growth you is driver is Do had year-over-year you going the share that connected for universe next had it’s the is first and So you question. mobile in television taking my losing that, your Could be digital the next market. connected and mobile television going over on to that

Adam Singolda

Yes.

where revenues Taboola's is general, lot think digital to And are mainly Those going? performance, a out. most competing $XXX most And Google's a a digital the of think, there of then which not -- the performance. question most are that's where is in majority like of traditional and think market. like I think the that budgets you I billion easily pan is are I the during into Open Taboola, that's advertising, are which mainly Facebook, the think and revenues Amazon's video if CTV that's linear that's whole U.S., The think they the TV. revenues TV different environment. right, look you advertising is that transitioning if they where streamers Google, So market So world? advertising right? think at after measurable performance, versus in budget, I vast ads that's I that there's going I TV most how that basically don't show, linear buckets, Web Facebook's with is that's is translate dollars the the advertising performance show, hundreds -- of of CTV, about of fuel into before are a show, going. of of right? And revenues performance, space, performance those billions how

and and way converting down an about web, or funnel to mobile like think forward app. more you if is subscriptions more which buying affiliate think products computer and a environment maybe lean-in, that's type I and So lean marketing e-commerce,

I time, think we're I'm big performance now, in U.S. seeing And and that But to I market as future and where right can the weather way, be seen in big, have think effect the everything these Europe. by war with are recession it But strong just these encouraged the bright. is and do markets advertising is is now. headwinds the the So a different by storm We future. are very the it in some we've and markets. the think over the two two in I

Jennifer Horsley

Thank next you, Laura. Operator question.

Operator

the from come Oppenheimer. question Jason of next Our Helfstein from line is

Unidentified Analyst

Jason. [ph] Rizwan for It's on

in to questions of color we questions. this bidder is, how from segment? planning be quick and on each do your are year? And for, the And are back XXXX? revenue? to expectations say, two like just you operating half when restrain the like to Building additional let's give fully XXXX So product bidder you the second expect of question some the earlier, long-term incremental off expenses can What

Adam Singolda

Sure.

of a can a header tell my X,XXX we letter to publishers is and bidding, regards did millions generate handful we publicly We publishers. that dollars with of on haven't given proxy. I share So guidance. one have you,

you number for I'm multiple I the you again, not So and it I suggesting you priorities, performance one again, I should X,XXX. quarter I just will But advertising. that mentioned the is last Top gave by tell number X mentioned Taboola

win amount the are of advantage across things they sources drive is display our competitive budget, The biggest one is the second investment Web data Those CPC the and must advantage. three that header in of thing part Taboola which most are the the of bidding think for taking Open of will is e-commerce. I third a inventory and first

So one, data one has that think and many so because And do. world. offering because much bidding on very be do like successful widgets CPC recommendation like page differentiated we direct that a in we're our has we mean so of no the space have to staffing hard-coated I advertisers we first-party it one we no in and header are the

advertising I it's So win the not just able enough grab. it's inventory but area expect we're brand it's happen. and us display search it There's not to is an advertising. for which that to enter that there inventory and going We're to will

I’m in I from not do line for do intend goes that. But that. by on continue to hundreds I’m will of good test to XX dollars you So, time a a would publishers. ready our dollars giving of to we’re a wallet me the us share every into and second company. that think very invest launching, by of I That become thing publisher that up. bunch millions encouraged just you this Microsoft of header is of because tell generating the is not And days that’s means Taboola millions sign launching bidding small I a to

generating header if relationships. replace just you’re little of with your as year, a bit a us a million it’s because thinking to just bigger a note portion publisher year we’re level and and So Open working $XX revenue protecting our million and now of a overall another which publisher you’re $XX-something we’re bidding you’re harder Taboola about with is Web generating

again, term ready we’re synergetic. finance. the midterm, dollars, our incremental to but very give be It specific of time of millions believe, long I it’s to it’s over hundreds And a will not I So line. think very

Stephen Walker

terms question, to line In taking expenses of are our now with actions more operating a I question the definitely now the are operating expense very bring we and where think weakness. that's given right macroeconomic revenues in good right

taking plans. hiring already all we've We've some at and that. look our take our discretionary impact reduced impact like and dramatically outer more we'll of they the impacts looked plans, actions. QX probably than hiring quarters additional than will obviously, those will QX. quarters. more they'll probably that already I We've at that spending of most an say near cut expense Things impact we've on budgets taken So ongoing We're actions. already

QX. we generally see improve actions operating in ramp So margins see margin up to we to down impact speaking, expenses We'll improvements publishers bringing as in talked and expect bottom expect QX line our we've that I we're and QX. and we also already that taken in see those their new that about

QX World that elections bit tailwinds of a revenue terms and stronger the in some with of We than be QX there U.S. will also Cup. think

more we're will well. expenses that of those conscious bottom think are very we we But line. operating and help bringing margins our line So improve as in

matters As else. beginning, Adam cash in anything times this, mentioned at we flow more like than the

that sure we maximize for are year. that we this So to make working

Jennifer Horsley

Thank [ph]. next question. Rizwan Operator, you,

Operator

question next of Stephen comes from Suisse. the Ju Our from Credit line

Stephen Ju

like as worse you you channels traffic a what should may go channels principle, how the to And have the Adam, most talk buying may ahead. the from? delivering to versus terms be feedback the guess, superior yes, they be better ROI or it higher-intent able far It seems qualified, in traffic, other other highly be advertisers, be I so -- very, some of any be ROI Connexity there. out so more to of should should thus or it's of get sense been relative much

Adam Singolda

second Yes. No, question? What's ahead. go the

Stephen Ju

the macro, will And hearing probably revenue Second drops? are any your question, from et folks better not as currently revenue better revenue from you regardless. partners any versus your with Taboola new to I cetera. new the doing generation mean partners are be guy, obvious about receiving somebody you partners? all hold suppose else not I their What yield yields who are talked as inquiries publisher you theoretically, And for reasons, and they up seems continues dropping next it like win

Adam Singolda

Yes. Stephen. Sure,

connected. So about one

that source So in started. they way, base macroeconomic what the nevertheless, a was the our the last as By stabilized in the over about you we're year, in holding QX the of though the But few last impacting a of of it it thinking letter, few was over rest the softened weeks was And strength. U.S. it even source have saw of was quarter. happened where times the sort connected year, as interesting strength my organic retailers things a that traffic What to they knew to it that Connexity saw type and was because connected know ROI were for advertising is the they interesting lower in traffic. was sort to looking meant their came they sites decrease and them. of budget and they the ROI us essentially said organic bridge gap a Connected guaranteed for what when They get increase they a is know channel. that They can of with performance the

right channel a And buy by interesting they see. CPC a it's either way, So base or to commission of important that times them. in the it's a it's weakness, of because pay. price of a bottom becomes guaranteed the like Connexity the value a and but especially again, And sort of the that a guarantee was sort funnel of they consumer more even essentially, to and

We really increase stay are others. So do it their that's or probably us us, threshold. saw. us thing means they tells know we meet no than better They the that margin we we if tell they ever that budget how with that don't one one

team, and to spending know Facebook sensitive best But to to growing information. very you want us piece how them to proxy a If just can of we and with we're I of and versus us companies. tell talking sales Google with our is know the because always other we a talk it's doing keep them

because sense. an is I them organic days increase expected. last main reason us, makes the the amazing in seen versus what decrease we the probably by an So they was is over think And told channel the which that for XX way, traffic what I've the Connexity

regards and Connexity signs is is Connexity about we've advertisers exciting scale encouraging the that's So that. seen of ROI Taboola positive that that network. of One to some on with more thing

So because one day. I big, Taboola They X.X people direct last quarter of lot of that synergies was if remember, was right? excited be have the can billion mostly has advertisers. about you a that a

by and e-commerce I base advertisers encouraging some scaling come. meaningful on and mean, So -- to existing we scale is can Taboola's seeing positive more but start be that, publisher signs ROI some

was as you publishers What results is our of e-commerce. about of saw one our that all tell just positive us, holding I strong. performance publisher fairly texting this that we're fairly So morning, is the

I because diverse. think part, very in it's we're

have We commerce.

have We performance.

We have video.

are some now bidding have We of testing. that them header

have news, that's We selling Taboola more traffic.

each times was our making because ways that's in strong closer the year to you So very also go And think other. of for I we XXXX diverse have strong. pandemic, partners back uncertainty, a where publishers of if the to especially come Taboola

it with out means a package a recession seeing want publishers each we to call we're our each we do we essentially not how good have I'm that sure all upgrade times other for to So We we and on and publishers. when bet recession package. more now engagements can -- stay in experiences. there our closer other

publishers talking different things, So not about about test done integrate that Connexity CEO more mean placements, have things A/B Bill, e-commerce. before. to spoke might creating variety more of get intent we of Xx, the content might high

more seeing engagement. are we So

double the a by good strongest year. year ever XXXX, year. growth And versus was of the outside Our last month we've way, the pipeline is seen last a

good right a I encouraged especially is I'm partnerships. our time by and other. do partnerships each on and more publisher And people now, bet think and with this So relationships to

Jennifer Horsley

Do Steven, have do in you other queue? the we any have another questions operator. question? Thanks,

Operator

you now wrap No, call. can up the

Adam Singolda

Okay.

my Steve us. beat strong. like macroeconomic I we’re we’re you the So thanks, quarter, here, holding on Despite joining some challenging factors, but that everyone, for happy and the happy second we and XXXX. hear I’m I fundamentals can wrote letter being

know year. The adjusted million with is the a special $XXX pipeline publishers most EBITDA very momentum importantly, the time. strong And in long seen our it. to a a for of business of strongest I in the cash north has flow we’ve generating We’re

friends especially different Connexity is significant. come that and a family, part we’re our so now, E-commerce, budgets with which Xx the happy we’re Fox into play. joined in have having partners Sports diverse of with hopefully and years -- especially buckets advertising wins three, four, of seeing of effect other good business right the and and good for have five our We and P&C growing that amounts The supply Gray Taboola forever. is and next

the of So to getting business our It to within build and means start to Most of Taboola founder, found, people source the News that just me in lot organically being we things that $XX invest company can us. XXXX. over that is the And able in awesome. to cofound importantly, to ourselves another is mean to was culture which Taboola organically, a as right million to and strength energized. are to have

well for hard. working to in This We’re positioned and rest the good we’re the time work ‘XX do the future. is a of

and to later today looking week. we’re this forward you engage So with everyone and thanks,

Operator

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

a great disconnect. now may day. Everyone, have You

Taboola.com (TBLA) 10 Aug 222022 Q2 Earnings call transcript