Earnings call transcript Q1 2023

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Operator

Good day and thank you for standing by. Welcome to the Taboola Quarter One 2023 Earnings 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 note that today's conference is being recorded.

to Hoss, conference of Head like speaker to Taboola. now Rick today, of will hand over the your I Investor Relations Please go ahead.

Richard Hoss

first our issued our they the Founder good welcome CEO; market and call. and and everyone. our and website. materials here quarter CFO. Investors today Walker, Taboola's the We I'm Singolda, you, in conference earnings XXXX section are Adam Thank with available Steve of earnings our morning, to And before

Safe Harbor. for our the risks law. them, update statements undertake today, forward-looking Now, They based expectations cover required I'll described as facts SEC except material Certain including our statements we are no subject on future statements. duty in quickly These and by uncertainties to are currently to periods filings. and and available are not are information

Today's limitations statement anticipated. could materially the and discussion adversely Future in the to also those events is press release. differ forward-looking from subject earnings

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

and definitions in refer our to on posted GAAP, reconciliations please tables release earnings website. the the non-GAAP to For

that, the call over to With I'll Adam. turn

Adam Singolda

free in quarter Thanks for joining first in EBITDA $XXX achieved you gross Rick. flow. $XX thank had ex-TAC end profit, cash call. in our the beating and all million We adjusted all morning strong our for Good metrics. We high us everyone $XX performance of QX, across and guidance million million in

guidance. also We’re the raise of year excited to full midpoint our XXXX

in and $XXX confidence cash have that a financial and expect rare in the step are said Now, it free change level clarity fully we EBITDA flow. a in not to our over million with $XXX in of while company performance, have year a in for full I past guiding advance. this XXXX, for is million over we adjusted

to we of in continue up and also that share to in intention such announced numbers this our XXXX, up $XX year. debt today have to We million $XX confidence million a paying those down buyback program

things. incredible work Our existing strong News. with the who wins core performance The publishers, see in we business, can QX and a such me few us to publishers to how yet with seeing drive the audiences those I’m and we Blaze, publisher conversation Nast, revenue and it’s can diversify quality publishers Germany. editorial was for how keep by of time help of Conde the how through and lot teams, Univision, empower as are In our Taboola their Taboola can we a Kicker in spending driven new help meaningful around

Additional drivers than of for in performed strong our better both was expected and performance business quarter. which News, first QX the eCommerce Taboola

looking video, While of The is rest, is call about plan when it ex-TAC we XX% XXXX, is you on X% quarterly, Taboola our don’t at revenue XX% our our roughly core advertising. and diverse; native reporting business, see is XX% approximately eCommerce, is can this of News.

the the are Amazon, ads are and to is to is TikTok, engines, making These and from native AI, AI-driven the Open brand Web. for vision their money safe recommendation engine to experience, that of Instagram, user best Think to Web. platform. Taboola's as walled Open data, brings mission be such Taboola’s recommendation they things advertising. advertisers the the the look native environment gardens, of feel

with ad of through rather XX% our us is advertisers exchanges. than Our revenue business is working directly coming from predictable because

signed and now long-term exclusive partnerships recently with sign publishers a Our to with three partnerships with a are partnership. XX-year Taboola, most publishers XX-year and

significant We now reaching have XXX day. million about active scale, users a

cash adjusted profit, flow. we on reminder, business a EBITDA measure our free As gross ex-TAC and

to Over converted has which an to we business free about about cash margin to investment. ex-TAC XX% XX% adjusted after adjusted on consider has generated basis, last Over more has EBITDA for publishers, EBITDA be to interest go year-over-year years, payments prepayments time than and to our flow these three and expect payments we the zero. grown XX% adjusting an of two

strong. is core Our business

source the We publishers We bidding, developed X,XXX streams partner over our often technology decisions, and subscription, publishers. optimizing content relevant, to AI eCommerce Taboola to value, three native, our on make are time as their is for editorial choice diversify dynamically life unique build their publishers. to of a deploy homepage, tools and that Publishers match they such use eCommerce, a ads for they empowering top video. and sections, revenue header revenue are our

buying it’s used a day, IBM business. for say XX,XXX and grow around to revenue, than Taboola audience and safe publishers X,XXX to got use their about can in Taboola fired advertisers More same said engagement, to choose bet Back grow the people be nobody and the days, these Taboola.

the entire get spend that they to engineering this spirit, my Israel Taboola and about clients updating wanted joining am encourage tech priorities, I other. teams, to day, our Zero things month direct fly year, to sessions closer recent I experience. access believer Before distance theme a making year. In you get and management share every our once a and product working at to business is personal. our We four our core an with view get to I to in our business. each everyone and a global and teams. strong of I

energy, me hard The culture, it and high. four never the was was our tell so the Let incredible. focus top you, priorities work on

mainly we we do in as the talented that. enter markets, best execute, to future a the to people moves, to our rare is the make company to hands, in new where we are don’t need in have a world position don’t and need we We need big

and longer engineering of just the how that impact. good teams up how visit that and no managers development One of is, again in of things product client terms mainly are adoption in is the about our but in code terms again came and thinking

things know people we XXX build, to and there have and clients. is our how affecting obsession We deliver a in are Israel, growing

than we’ve more for core Switching gears, business, a operating been about decade. which let’s talk our

working Life to platform have us exclusively publishers help their partner, their to them three globally, reach XX Value and as for years Time with using broad objectives. native advertising We our

revenue We working sales on advertisers by publishers' appearing drive sites. from with to us generate our

seen by you’ve paid we advantage You’ve if news, products from Time.com $XX and the think Open competitive it. to ever advertisers billion offerings discovered the us This CNBC, meaningful is you’ve visited before, be in and or BBC, we all estimated have a Web. market

started first I ago, became this the the and of market, though years not board. choice we Taboola were partner to we across XX

and growth Our has driven advantage. technological been client obsession, execution our by

look which ex-TAC editors usage technology, proxy margin advantage optimizing X,XXX our homepage This new by a writers, over other our companies offerings advertising personalization, as for on monitor is we more. based for partnerships, Time We such Value. and and Web. call used Life You core, our In momentum and our and For in Newsroom, includes Open which Homepage renewed as publisher of at now the we

all publisher globe. remains strong. Our In the publisher momentum across uniquely won the past we partnerships quarter,

Some Seven the key Dumont. L'Express, We world’s names Conde include Local, wins publishers and largest with Sinclair, Media Nast, Univision, like Kicker, Advance renewed more. well-known including West of some new relationships Funke, and

our into as key move let’s Now a company. priorities

going $X focused laser growth discussing priorities, one time them. billion four to each of now engines We spend I representing am on opportunity each some key for Taboola. are and

Starting with performance advertising.

of using is advertisers As of as revenue Trade and The our a programmatic who Amazon, reminder, About directly, XX% comes AI. the from Desk, partners coming others. Taboola Google, revenue own our from vast buy Taboola’s majority such from

on and to us existing are when advertisers grow. on more, spend objectives XX,XXX room Meta, hundreds advertisers around a with net of retention, companies Snap. market be thousands of they buying two by lot is advertisers, to and and to Our advertisers Google to get Taboola to millions massive, have or and dollar we stay The like get has of new successful so try NDR. Taboola buying measured

advertisers focus it main workflows improving work succeed is make Taboola. with for and Our to and to AI on easier

with strategies easy successful and to year, work bidding it target giving we out be for our technology, to Google. advertisers to of or CPA all advertisers, part can launched and variety as about maximize this of It they this with These SmartBid rolling find Taboola. as Meta with be our I’m later is use success excited us are year. conversions a Early should

is on our which metrics, When a advertising we our engineering company. there two About our gets ago, publishers us. from moat it think our advertisers performance resources we competitive with higher, here given financial also as not upside succeed quarters only XXX grew XX engineers improving bolsters yield the we for become as us, even to on working more

our investment on of here Part the front. creative is also

exceptional are results. on a we us our beta lives things get Generative to investing We so advertisers offer for Taboola that and completed an for focused use them. more are thumbnails, helping Generative Hackathon because we advertisers work in to stay landing AI, titles, more in advertisers, data historic produce which Ads. We on Generative can our pages of Being and tuned AI AI, bigger adopting on come. can gives just to focusing can are advantage working offering, Hundreds easily

our that estimate make our bidding the a data display We and more our increasing publishers, X,XXX providing us to X% Moving even $XX display engine, publishers advantage generate about first payments share with This access bidding. and work core them in our of billion well scale. given that for roughly party XX% inventory auction with relationships. think the as our to with of we header on our as advertisers revenue growth in while year. second We partners we wallet, AI, will of publishers’ advertisers our win our solution, more can our even business, to valuable direct

We where we biding. have are three areas already

of is April in Microsoft. This first launched year. The last

not are on solutions. one one display able that yet partner also as our advantage, launches, we’ll be have their where inventory second is as with publishers party bidding Yahoo and on Yahoo well. the publisher The first third to believe using we We partners

and to excited bidding. to because to and come generate the and have with as millions as the of a sites, don’t. reason page, that coded a we Taboola DSPs a much of hard while hundreds on meaningfully. it’s we SSPs advantage no when dollars much meaningful we more world environment back privacy very still from publishers we here The they But mainly cookies moves is within know we grow can get driven think being people startup IDFA, Today, our

publishers to optimistic with out we’re I’m plus we’re seeing. focused rest testing XX laser before about on the network. what it rolling of the our We’re

it’s engine. to expectations eCommerce that eCommerce and share the this quarter, our is strength is our beating third growth happy impressive it. to see I’m of

a is offer clients local their trust to There lot, both opportunity and offer financial eCommerce as on on an those. sites. is and for the find retailers upside sites reminder, travel, This a a decisions impact as care big retailers national represents if opportunity a people or Open users product publishers’ make education, people review they the they to those to a Web make truly where publishers As services, about. we trust and positive

to are eCommerce There and we focus pillars creation, on; three driving content monetization. traffic,

of for and relationships data from to we’ve it do content of driving wants that Over publisher Every can work months, content the of the providers. sense service do with it, in the last no to get little attractive but with to launched now a on it know the makes of Taboola has all write merchants six to which monetizing with to publisher, for or Turnkey Commerce. box our using that’s to eCommerce, retailers, and We the eCommerce behalf launch into course, Taboola. us with publishers, traffic

Last quarter Advance publisher Time first for and we partners initiative; Local. our this announced two

are to monetization and fast Turnkey off start. Commerce a sites of the to Traffic already Taboola is launches good both has both early, begun. growing While sections

phase event, which test technical the X developing allow Gemini the Yahoo. on Yahoo explained we to means single At information finally have specific through platform phases. percentages our phase engine, held are year, of zero, Taboola’s of in this into into we And the network we transitioned process in we March infrastructure ad that Since demand. and fourth spend integrating to Taboola session digit of from our growth four the

from half transition year. gradually ad second of go the Gemini We and X, in this supply into expect spend, phase is to to Taboola which

can The capture we daily Taboola I Yahoo faster. our to spend. rollout interacting Taboola that into can on and share team are performance Yahoo Taboola the platform teams migrate is on with focusing revenue accelerating advertisers working so advertisers’ and

In closing, market. in the energized position I’m our about

can social, opportunity an for large scale, for Open first have build we and for rely company Web. think the buy search, and I Taboola advertisers must Web Google to the on. publishers Open Meta

focused. are We

our have four We priorities. key company

We are on lean plans. executing and our

Web we on it as for in What still billion small These times have myself, to strategy all Taboola so While market, employees the is our Taboola and Open among $XX about. to dreams. growth all lay is to execute, space, the lot execute we that of and our relates there low we’re to a largest capture. we need and us care tell and I are that’s is

CFO, for joining Steve, I’ll pass our and more to us, financials. Thanks talk over to about now our it

Stephen Walker

good and morning Adam Thanks everyone.

Adam QX results high guidance As on of beat noted, end metrics. all our the our

midpoint also guidance of over in and flow. reiterating our and year in our million $XXX expectations XXXX million raising cash the We XXXX are $XXX adjusted full EBITDA over free of

and $XX XXXX since our As million which we repaid very of and our up likely another also million to long-term in debt. XXXX, April, share therefore are in after Adam $XX QX, forecasts up we a certain announced million repay a today of in in buyback continue explained, repaid million the We of intention quarter both paydown to balances to program intend $XX $XX total confident those to means cash become that this available. our long-term third year, have we and debt to

our on metrics. all me exceeded talk the now QX Let which high our results, of end guidance about

$XX.X $X.X million. were cash guidance or of revenues negative $XXX.X midpoint versus positive adjusted million; million the QX, of midpoint $XX.X the of million. versus profit midpoint million; $XXX $XX zero of income non-GAAP EBITDA million free $XX.X net $XXX.X million; the breakeven; midpoint of of gross midpoint the the $XXX of versus generated versus of of of $XX profit For million million of our We gross flow ex-TAC and versus million negative

that note weakness. QX in market QX comparables will rates from difficult and I before digital the growth suffer advertising XXXX

XXXX. half We expect to second of the return to positive growth in

of saw Relative momentum to particularly the our U.S. quarters of in year. this the XXXX last LATAM. several the overperformance into impress, we and to taking eCommerce guidance, continues

advertising partners, as bottom strong immediate benefits channels, Macy’s, on Wayfair, which spend of funnel means returns from advertisers Walmart, spend. seeing our key We’re our some and offerings. as their increase on such focus of the Taboola for This eCommerce

this achieved ex-TAC outpacing performance cost have revenue net by gross improving EBITDA teams revenues adjusted overperformance non-GAAP Our and while efficiency, and income indicated profit.

million was focus last year-over-year. primarily reductions $XXX.X our $X.X decrease down result were quarter, in expenses announced million QX cost year. of This the that the on in Operating we of

on XXXX. We a expect to year-over-year show basis of for lower full percentage expenses as revenue a

at of Our peak from approximately X% and employees. approximately headcount XXXX full-time is X,XXX its down July in currently stands

and Connexity of $XX.X million net amortization to $XX included compensation GAAP compensation the of expenses which intangibles expenses loss the excluded of non-GAAP quarter income. share-based of for $X.X million, holdback of net acquisition were million, $XX.X related million from

net our million $X.X high range. non-GAAP approximately of end was loss above of guidance Our the

around flow we cash In $XX.X approximately cash terms had cash million. $XX.X in generation, with QX, in of operating flow of million free

million, of payments cash this our impact of of were a on interest million. $X.X which removed publisher of quarter source the our you have been $X.X use debt, million, cash $XX.X and were would which If net prepayments, cash a long-term of flow

a prepayments prepayments of fact This quarter. than of historical net cash to the were was quarterly that It due interesting the publisher to new note source lower amortization were is that prepayments. this

expect still future. to net it we in publisher of a While does a use in how source to cash they the prepayments cash can of be become show neutral XXXX,

at the end the short-term collect tends Cash cash from Historically, and end positive million increased $XXX.X quarter QX. us higher to at from $XXX.X Let’s turn of sheet. XXXX to balance revenues cash for we our XXXX. equivalents the investments to flow be million plus the on as a QX of QX,

industry, our the to we relationships exposure evaluate and This stable internationally. adjust to and we with the I would continue in is banks regional a current less our to U.S. and continue that minimized will as that the also instability have like developing banks necessary. banking obviously banking to in note monitor situation

Now me forward shift let guidance. to looking our

upper but For we lower our the bound, the the year steady. guidance keeping XXXX, raising of full the increasing are by midpoint bound

million $X.XXX revenues adjusted expect profit of million; $XXX million. million $XX and profit $XXX to to income $XX positive $XXX million; million of gross of billion; million; $X.XXX to of $XX $X non-GAAP billion gross million We to negative EBITDA ex-TAC $XXX to net of

assume but in not partnership, our in the be For we factoring Yahoo we associated to could in year, that the are XXXX. full be that revenues will still invest generated conservative, we

in This this in update quarters. future eCommerce. priorities advertising, will We bidding continued also guidance company investment assumes other key of our performance and

positive all normal Despite year. significantly positive anticipate we for being in and XXXX free to a cash full cash due investment, QX, the expect QX, year of to in generate seasonality. turn cash free flow generation We with in strategic negative to QX flow

Finally, we are guidance. issuing QX

XXXX, we $XXX adjusted and million; income $XX and million and million million. For EBITDA QX, between gross million; to negative and and between $XXX profit between ex-TAC of million positive $XXX million; gross $XX of profit and be $XXX revenues net million; $XX expect negative $X negative $XX million and million $X non-GAAP

Let our able me to of by guidance be year. the to performance saying full first our and quarter we raise happy the are with finish that midpoint for

also are EBITDA we our intention is which debt. to to flow bright confident free buyback for targets point, The in future and adjusted continue paydown looks XXXX. are and announcing from shares excited both We our our our why vantage about cash very

Needham, we hope hear If more those at you we of quarter, many to about story, you Cowen see this Oppenheimer, want and events. investor will events to our attending be TD the so

questions. let’s that, With up open it to

Operator

this Instructions] time, session. conduct we At [Operator will you. question-and-answer Thank the

of question Oppenheimer. comes from Helfstein first Jason Our

line Your is now open.

Jason Helfstein

Two Hey, questions. everybody. thanks. Hi,

pace Analyst integration since color the changed Yahoo First, of the Day? there. has Any the

in a there free formula cash certain on then basis? why just just of is And investors know this more EBITDA buyback, should want two, being forward the go on over opportunistic? to Or of of Thanks. a about a is repurchasing think number terms now. And amount kind

Adam Singolda

Good Hey, Jason. morning.

So, event then systems. half front, back share, the together. to faster. of the this phase year so of since I will also one, have functionality into start on our even revenue and momentum we still another means a we're revenue. our growing seen, What of which we're that plan Yahoo it wonder have end and that's great was an looking accelerated teams that's transitioned We to the building gradually two back into zero, to phase time revenue phase moving start that lot capturing spending having piece is of But expect information

that see And if good updating, get keep can to we on even momentum. we're one, but So trying overall we'll this faster.

Stephen Walker

Jason. Hey,

second the buyback. So to your share question about

first think, now, I about So good of very we about our numbers XXXX $XXX free and cash of plus in EBITDA so and flow. of why projections all, million plus of terms million of especially $XXX our feel QX

good confidence a I'll is this share us time. gives that got note core strong. that So We've publisher at to buyback wins. good our do

are investment particularly eCommerce looking with strong. Adam mentioned, And Our is strong performance Yahoo about projections. our mentioned advertising in Taboola good where that. right engines News and is we're beating just feel we growth now. promising. our as at is we And

that's So why the now.

how of think terms what how and investors about of doing we're to it. about kind In think should

be share XXXX, on. So share, we're flow in and we flow shareholders in per want because that's to cash free on what per free cash focused particular focused

offset shares of outstanding buying maintaining current that goal employee shares is from the investors can So levels. hold the kind dilution of so of expectation back shares to

levels. that's stable the say that always expectation but goal, set, be our the obviously to things current and I is I achieve -- So maintain should account. happen that's you that's share aren't share will think that, able that the we'll

think back the other to back share ROI shareholders frankly, right the we for I'll point. is note at And for our kind given that shares both of of why paying reason it's a buying and this price debt cost debt, be good just now and now, also

Jason Helfstein

Yep.

Stephen Walker

think ready next the I we're for question.

Operator

Thank you. One moment, please.

from comes the James line question Cowen. next Kopelman TD of of Our

Your line is now open.

James Kopelman

the morning, for question. Good taking and thanks

best prepayment First a the years all view can factors are after for you these quick attract publishers? last year? the and relative follow then, X,XXX the as I up to trend And for continuing then you Adam, roughly one what Steve. for year that of publisher differentiating do remind what is the us I wins, for have your remainder having of think to

Adam Singolda

Sure. I can start.

can advertisers strong, wins both So think one, X,XXX XX,XXX -- you in as directly, as and well our that working with we're is core terms and very see us advertisers of publishers. publisher I and

really the Homepage our that or and about existing conversations having with I that working yet is platform We For publishers front, of us. publisher editors. much You, conversation mentioned as to personally for the homepage personalization. offering, so publishers the relates I'm on it letter, the And On incredible full Newsroom with to call and be quality

with drive on a workflows We should organization using using think do because they content when editors and decision to what have now is from own. Taboola, it And its how Taboola X,XXX the so that's perspective. many on of to how which around product, as writers it's company -- make write, people publishers which Newsroom and they subscription, our them journey valuable the the traffic is a helps move means work

have Time.com we is year. eCommerce advanced this News we their traffic have Taboola Then launched which nj.com help launched and to site. drive them the recently, Then Turnkey, earlier

who time think and they companies, integration, can of that, publisher publishers them. of you as partners of and especially have more think, when do longer to I want view, see more with over different less a of trend and to they quality part lot for deeper And term them and conversations. and more but things kind vendors a in today's making world, partners, this of do of decisions of point want So less a honestly with partnerships, more we'll work

for say, to that, safe a choose feel I levels to not comes bet gets think I all publishers, And it to when when Taboola. buying younger, it's that joke IBM. people more publishers and I was at I for nobody more fired made -- So used a it's

Stephen Walker

prepared prepayment expect it prepayments source the this though publisher million. actually part question to about than the in of the that my remarks was full expectations, of cash. on prepayments we that probably a previous second were Because quarter mentioned -- that them $XX your sub To the of our use were of we expect first -- I cash lower do amortization that year, of a order in prepayments, for be did quarter so the

going it'll last think towards we that that and from So down be zero. year

over As be lower so for said, thinks these will Adam this has a time, we year zero to that he go think.

will now with win there'll cash the be would only came I but caveat year. right for that of is if deal right we that use the a obviously to in along, that our terms of right as tool the expectation the publisher publishers, sub $XX million use

James Kopelman

then about we how there XXXX? to modeling ex-TAC, call Great. we in Thank for How is this additional think about higher. of out the seasonality should factors XQ And are that quick XXXX that then year's year? and seasonality as I sometimes the you'd of and Steve. help Is ex-TAC like similar a think And we you. follow us any of full XQ up should the think percentage XQ know terms with quarters? being for to

Stephen Walker

Sure.

QX right ex-TAC expect, to is QX. basis actually we going So on an now, to be similar

QX you're are particularly looking to mentioned and QX. I my improve, second last it's a become And So comps, seasonality go -- of be to half especially basis. easier upward several then way, By QX year, of QX prepared tough the actually the you if the trend as expect kind and a the years you to but comps. shifted expect the see this QX kind it's through bit remarks. QX year-over-year and a on an has we we in over similar --

which well. We point that us some also will expectation the Yahoo revenue, seeing our -- help at half we'll in as is start back

upward is then think be expectation there. QX our QX, from will and we see to an similar So will I that's trend

James Kopelman

very Great. much. Thank you

Operator

moment, please. One you. Thank

next comes the with from Our of JMP Securities. Andrew Boone question line

now is line Your open.

Andrew Boone

roadmap your Good to can more what and morning little Adam, to are questions. more product for product then in about taking questions. the go yield talk and rest you of oriented and key as about the learnings two bit engineers? time thanks and spent my performance Talk with a you Israel for wanted drivers the there, today I advertising XXXX?

to dollar header happen your on testing billion are business? that integrations, Where what so publishers Thanks telling for and can next talk to needs what in you bidding, are you? about much. guys then display And the publisher become you

Adam Singolda

thanks for joining. Sure. And hey,

So fun day join different product I see in there I and joined engineers -- and point for being was they to to for managers, my I Israel. it with so see month tracks, we always and spent I me what a was came am. was energized. hands. all energizing. really and And but I And not we share back of clients, that view. I was, that's every more met easy, with me, It had even

see focusing Taboola. so We're advertisers metrics One we and new a are focused then and first into is on who we can our successful? they and on on living to advertisers to indicators What variety kind of thinking momentum of stay many two want time different grow. simplify get their side. We're come buckets laser the to conversions the good to that they how conversions, new engineering believe is experience, how do for make get them

speak I'll bucket, that second. in one to that's a and So

bucket second existing advertisers. is The

or now here That's then the proud at clients. which is is New have question of. are they and their performance growing performance? right? those least a We XX,XXX, even I'm great. good clients increase buckets, spend us number, can And predictability. of like So they which sustaining and improving can existing two rely think how How while on

helping be things focused track biggest that excited are have multiple those the tracks then I'm we buckets two And successful. mostly about The -- on are threefold. probably

way to we and advertiser measure first our improve how the journey. we on The business continue is one measurement the

front. is, matching the on The second

we an this with -- the right of match which more right more And and third consumer. is fairly strategies, the is help, bidding big. how is this advertiser So AI is the and content right one the do

grasp they Taboola, can all And beta they is nature, about CPA you my who many so what flower become the going you mentioned general they year. -- with quarter budget after fully that if work right client is get what XX trying advertisers happen worth a to is get just the and We're find of cost your willing to about we launched and to conversions. that know what how can and shared not you're $XX, that two get and really a hundreds by and in to great. of do to do to you're by try I Taboola with of at want to someone a as that successful $XX, in advertisers. success max we today CPC, ago. and That's conversions what a the they many to is can shop as is to, care things bidding move used client how if get? you it. me acquisition here $XX,XXX. and tell see about I'm second pay Taboola the for those And target those It's on if that's really going half strategies So work and I be time. letter, launching, we're the us mean, and give of few to was availability, that they with used us, this So

the to and advertisers. us. some to really they're It's going like of used of Facebook, how early Google are work kind how It's test great. seen these future. back with I've to things It's of early advertisers with our it's with and work soon like

upside It that's more about to features working when my six one. have year advertisers those performance biggest We're has the mainly on go our that's I XXX I XX. number performance field now dream did engineers about And to for business. of advertisers sleep. a versus ago. we because the than force. And we times full five, things all are happening So shipping

I said, we and we're advertising $XX billion Like the good Board we just pretty better. nothing, can if this company doing a Board by Taboola much And performance yesterday, but meeting. had we're at so told I be do that already. it well, revenue doing a

top us. mind is So this for of

one a well. just well. of momentum About bidding, the as good Microsoft so lot header that me let say doing is on

front display the -- on I mentioned opportunity bidding is the and I just launch think on front Taboola for there's that. Steve think the Yahoo. MSN that Yahoo another on a

a XX of that like that more And our can kind phase rolling are to in to that we current bucket. level XX, publishers next So us, moving be big the publishers. progress of have of then

feel to sight hundreds much dollars want just that So millions continuing in say and becoming I I of just Microsoft, more And good at this to perform don't incremental, too Taboola of point, it's I'll publishers. line for now of this share about well. but between

general availability So that keep that to executing, publishers use what us, mainly it. us, do that is can X,XXX to moving are with need that testing get working so for currently then and we to publishers there Andrew,

Andrew Boone

Thank you.

Operator

moment, please. One

of Our Needham. Laura comes Martin from from next call line the

Your line is now open.

Laura Martin

Hey, there.

up Let's just answer there. follow that on right

this -- Adam, beside you like out how How tasks? the those improving do onboarding performance enormous to resources allocate how figure you do -- Yahoo? resources between two allocate public compared So engineering advertising to to

Adam Singolda

and nature. level I energy top we that Taboola, will increasing So -- you but we both as yield, EBITDA spend for resources, long-term, is those, the first resources for prioritize higher is to and us, So are midterm Performance upside our do advertising, business which things -- increasing and allocate of Yahoo, improves on priorities. yield making ex-TAC But margin high Taboola there big all, in things margin know, short-term, a eCommerce a our our level within mainly and in bidding. at improving only priorities, moat and right? management also and stronger performance revenue, because then we said, as not Yahoo a of terms doing. of think the four like four advertising and top And no, we just there many

those get more So resources. two

of believe modeled terms in then, And ROI. that we correctly that we've

year next that can year Yahoo, we Yahoo. for we believe on and this again it relates for we -- of We're working as about speak together you how know ramping and So half year. to faster the it's even going the that. second hopefully, put it's start to

of will those think the live. invest things is other resources go to in we're it's So I do that. obviously -- some to thing Yahoo once right And to

Stephen Walker

we focused payback is, with last about very a we bit allocate QX periods on Yeah. in our year. sub now. and cutting two-year we add We're back of only R&D terms thing of talked things The I in did would how right cost this when resources little

called of things our had on they're that So or initiatives, which now priorities previously things whereas sub most We've our and we in previously focused had future. Adam resources some cut on, have them initiatives that the on back we have speedboat his out further believe we that payback. two-year

our and So biggest can the leverage think four have the are on business. those because short-term frankly that's why we we list of all have the payback priorities very

Laura Martin

over think next the And and get Super creation interested Generative I for years, for content other cases Adam, for. will the your my helpful. you built on and AI you is, years about next I'm what models know in talked Generative AI the use talk seeing over you you're but Generative the question AI. you've three cases three in use specialization touched you about how could into past, then,

Adam Singolda

Yeah. Absolutely.

only productivity about right already now of In going seen out. bit if about listen, be at have suggested the in that we previous AI in know thumbnails would our rather into by not -- we using past worked for Advertisers can they advertisers prompting think prompt edge because but advertisers, things that is should are a but because success. Taboola Taboola you vertical It's think I so already who I'm not and Taboola, you get I So console. on to Generative talking context. It's business, Generative we're testing. type case is We good what talk and ads you creatives part Laura, everyone the on to interesting suggested the to that. advertisers that if an with back talk can that other about it, you've or think's point AI give suggested what data it, seen think for boring thumbnails. check historic title of That's to I experience and haven't our fairly gives of now segment. it based And for And -- -- titles cool. those this us insurance from

general, is as they will use but differentiation garbage be AI, can to belief it use a consumers data. It's differentiation, it comes use anyone when say my the it, And business out, in the big in the in, can and computer can Generative science. that garbage it,

engines. companies data, think advantage. unique and can into will those We'll have have I So an an they edge prompt

-- people space. have We day. we're every We reach fairly XXX million biggest We're in big. probably our among the

with that an a lot as advertisers an advantage. So using that edge working going are have to and of we we us we're have data use -- and performance

more it'll and happening So and that's happening now more. be

second But be imagine on more landing thing be that. the that in glimpse might create saw yet. the that workflows is channels. build think to the a products, opportunity. now Hackathon the the they're how the might could interesting not successful. They have how not just so they're have and had a successful not integrate sure to they can for you pixels and that way pages of a of one We but really, really creation page landing that building can good different ready page challenges advertisers I landing I've that's is that Obviously be

universe be automatically optimization. some but my creative time, generated AI. very to different Taboola, fascinating So the and step are And Generative next optimized can it going I you by to see could pages landing work That or that take in be think I can a be if you Facebook And pages. that think whole with will need landing that being where Google or be opinion. that's creative after

Laura Martin

Super very helpful. you much. Thank

Stephen Walker

Thanks. Sure.

Operator

moment, you. please. One Thank

Our Susie. Jue question of Stephen Credit from comes from next the line

open. now is line Your

Stephen Jue

All right. you. Thank

the So cited first are results. this you ramp eCommerce primarily are the strength larger well in think, generally here cited and advertisers And product? previously resourced. Connexity Adam, quarter a Is a I in function you pretty of and or

here? we can to So do base what broaden the client

a more advertisers. It are concern the just time of you the any cuts talk are what about hearing overall also, there hearing Thanks. or like sort broadly rising about if I'm bit, you optimism? any for worry have conversely stopped little from seem wondering of seems back but And you're and sources being stepping does can budget stable, or

Adam Singolda

Yeah.

are eCommerce advertisers and you've partners that very So at so are doing of is to all, first I and working. is think that overall it's it's channels what and for seen, attribution well showcase looking of to that good performance with part work why

in happy more the focusing place retention, show the that you're So advertisers their to that you're much, for and able that's budget, going ROI, a clients. get spend in you're going to on money so why you're get to going them we're you're good get to it, to

Taboola of -- on is front, and I have we XX,XXX started now it commerce which it's Skimlinks more holistically. as So with just and eCommerce Connexity those mentioned the

in greater advertiser there. As We're I over eCommerce even seeing mentioned, the box. success

with that stronger even seeing the eCommerce us say we're I'll So front. work coming in to advertisers just on

search, like momentum don't they're I it me feels think with great to especially working for as now -- as know looking the if initiatives. I good really based Google we're eCommerce that but advertisers on our

momentum. just great see good again, we're macro on job I or I'm because happy overall if and So know both, doing of or but the that because to eCommerce don’t a we're that's

Two, think, company. holistically I the one since acquisition, we're working more as

Connexity, data advertisers synergies core core buying like Taboola. DCO buying lot initiatives between So of Taboola integrations, different advertisers, Connexity there's a advertisers

selling salespeople and more have cross-selling. We

contributing it's you, goal should business. mean, be So those It's for It tell is that ex-TAC a a to such this great business. double want eCommerce. great are year. my business. XX%. consumers. it's It's to last of XX% I I quality about things I'll to -- And be advertising

good acquisition, So of I and together -- combination we're better think one. of it's really the doing And that. the as we're benefits advertisers working we're since a for enjoying

does don't was my see, -- way, I else need the work, and nature. part work. personally. recession work? don't I think We performance. you in do. to to is So to during advertisers and product, do what we that. and focus it it I I anymore not upside huge anything I does need from do. I work and by hear come tell have execution to to a the we what We And basically or think we about letter, that And question. one things Feedback and I on focus wrote softness I can I that of market on the of this know need want know

fast, dreams. They plans that our as at to work it need same. want execute They're think stick than they increase we the things more see want spend. so disposal to can on everything want companies They have can we around with can are mainly And showcase advertisers, now many So them advertisers I fast. of into they our ever. to relates their putting money channels. and and the conversions, These two

Stephen Jue

you. Thank

Stephen Walker

Thanks Steven.

Operator

moment, you. Thank One please.

Our next Justin the from KeyBanc Markets. Capital line Patterson of comes question from

open. now line Your is

Sergio Segura

is for questions. Segura Sergio This had you. We Thank Justin. on two

additions up the publisher on Just And should about we of then of rest Generative AI. the follow pipeline year? for how a think the

how investments? about from these should think implications we you. Thank cost Just the

Stephen Walker

Sorry.

quick? you had So breakup real audio I question here. the repeat can

Sergio Segura

how from And the We two the rest additions, is for just way Generative had about Yeah. publisher that any investments the looking cost on the implications in should of pipeline we Sure. the AI. year? think

Stephen Walker

Yeah.

revenue, the pub this so additions so plan ahead year. our on new publisher far and we're of So

very progress. earlier, we looks publishers. so we good but speaking, Pipeline of in new seeing up this new Adam adding terms generally So publishers. of good continue to see year on will momentum signing good very be names expect some the mentioned year strong, still another we're that

tend fact we add the they then when over initially, talk lower margin we're grow and margin think able that to publishers, we to to the tend new always about be And time. I

think time I think improve it's it'll as us grow look because those as us also future I to we on So we the it'll margin forward, publishers. ex-TAC the help for very promising -- help over

AI implications we do it I Generative think be and terms again, of boost. to In productivity cost and expect things, Adam a said

important side So help generate and be they be instance, to can even -- It'll become new work on headlines and initiatives. more AI Generative they on advertisers. productive -- more our AMs, they and it'll we the But more performance help help our is advertising do expect successful for advertiser advertising help for that have there don't account advertisers it managers our can to sit with that, that. the more than don't with us expectation our things them platform. success because to

the ways getting new like message of platform Test landing landing ways can people different even advertising key for it's new email converting of Generative things you're important things. Test new newsletter, advertiser out is different test AI that's a product, when headlines, ours wants to up and page things. them Whether sign list, up buy pages service, that help the and different to test of what buy one an to a a images, do. your with on of is all for Because a sign test messaging there. those

advertisers. Adam using Landing headlines it we're to generate mentioned, already our As probably it We're generate using to page advertisers. already images our for for coming is soon.

think it's positive more on impact productivity our So I have think even the We boost. the a it'll than on success platform. important of advertisers

things works AI, the what of to that the it gives that also that the using is one is mention area advantage thing us that most doesn't. a train having what I'll on Generative particular effectively Generative in data it and and important about AI

your And advertisers, So tools has to the for good basically Taboola if what can that make worked your on has headlines so new that the Most these who we train what what companies space. of largest is Generative to need you AI what one on our we're therefore, larger generate to need recommendations what a tools than you and train to want about the you lot tools advantage historically, on do advertisers. do that data Open people we do, people much front doesn't. have the in that is most the Web. more And works to

real and we translate we more advantage just will into like success successful. I and make and time have that advertiser us advertiser said, we them expand a help base think, our over So think there,

Sergio Segura

Steve. you, Thank

Operator

Thank our for today. to concludes back that now turn Q&A this it closing management for At session I'll time, you. remarks.

Adam Singolda

us you Thank joining everyone for today.

our you as personally very the to our from tell the and communication, we we're think about excited can are. recent where remarks position questions I'm and market. the be I energized in

scale large those by Web. want. user Google by side side things publishers side can other Open that that both Web have advertisers all company, to AI and can Two to can think and and side and that the be to data Open or and an Taboola we side build optimize the advertisers the social for Meta rely gateway on, publishers need search first I experience, opportunity marketplace and companies. of to the by very must

We're fully our on four our We And is focused execute eCommerce, Yahoo. on rate. out Yahoo at run advertising, market. we billion expect a And We're Web lean. billion and launched, Open $XX this of once be performance plus key $X.X priorities, plans. to bidding, is

portion a this, of we're So market. but bigger, small still big

for growth excited lot of go there. a there's and us to we're So

and earlier, that's lay what I have are like and need myself And our reach work, that These all at what and execute said do objectives we dreams. -- is we we tell and Taboola I to our everything size, execute, I times about. and financial low, care the tell to

you. of joining things all and look we to Thanks. you may never knew today. for So forward you love And with Thanks existed. many interacting discover

Operator

you. program. you your for the in And thank Thank today's does participation conclude conference. This

You now may disconnect.

Taboola.com (TBLA) 10 May 232023 Q1 Earnings call transcript