TBLA - Earnings call 3 2023 | Taboola.com Ltd.

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Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Taboola Third Quarter 2023 Earnings Conference Call. [Operator Instructions]At this time, I'd like to turn the conference over to Ms. Jessica Kourakos, Head of Investor Relations for the Safe Harbor.Ma'am, please begin.

Jessica Kourakos

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

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

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

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

Adam Singolda

is ever, essential has crisis.I'm instrumental think families implementing future.As their confidence difficult our this Good now professional and hard Jessica. very, the journalism unimaginable for incredibly very well-being been in proud you, as have to more and safe us about we work face talk than priority people top weeks few shows all, our employees during our how it during and we plans continue initiatives our call.Before me Taboola and multiple in events. I we and morning, tremendous been These the thank us and continuity business, our support safety our quarter it this mission, third Israel. of last to The business I in for very to to about time. of Their keeping is is. first clear have our our in war want for in address joining Taboola's resilience everyone, Thanks, implemented

can publishers, open to we is always will our Taboola of all the has count forever on. sources the been more ever. thriving web truth commitment and and of needs Society be supporter than And necessary them biggest

it EBITDA our Our we which now, into across results, for full also income.Free it raise it launched design affect ago XXXX business $XXX We and a gross Microsoft flow. And is cash And EBITDA is will million, here. the of basically growing XX going our Xx profit, same at that how Xx the platform share such proud adjusted in I'm is that make guidance was as our and we time.Yahoo it we're it said, same of us for year to alignment We're $XX had of our reiterating too.And $XXX part open believe track. adjusted over happy given how was time new approach We technology million QX, Microsoft? AI Financially, end investors a partner, period. is million and guidance to integration last $XX XXXX very free ex-TAC new the adjusted flow.Last year, in priorities, Microsoft on we're over asked in is business. let's and year excited XXXX bidder non-GAAP very win-win guidance does this performance many QX, web EBITDA with well, over we free our of when would a nearly I'm our metrics. well million business our what turn $XX on executing in months key well, strong the beating our we last what and do makes the which all of is, achieved midpoint $XXX in million high cash flow net when of. in million year the cash

making Now about also the Google a not first web from happy advertisers, our social, step it's thing with Taboola but were towards for for main a good the I big platform; because this web. buy just Taboola and it's ad why only search, as care are Taboola it some I'm factors because for open highlights drive and open Taboola's for quarter our company.There These a that revenue. Meta for X momentum must

our our spend experiences engaging and web, more ability they The time deliver engage first is with so and the to with open users recommendation in engine. us reach

is had monetize yield base, can here. yield.I in of growth as I our to triple user be our revenue. on referred we to we our to interaction same have ability with now, and consumers There's a Taboola's the with before The investing believe, second said just also that double lot

strong let's such as momentum Group, in going Sports, with And publishers new dive Excite many stronger part continuing of as with Gannett, their with net McClatchy, existing our even business, publishers all and Nexstar, Yahoo, renewals experiences.In to partners partnership largest our get with Cox to Japan long-term create X, core consumers signed and like fifth We and NDTV strong renewed the Sport wins partnership Media world, us, more.Our and of with U.S. more. ability and partnerships. reach our our media publishers the and the core Now, property XX-year start is engaging in trust Absolute we've saw over working seen long-term us to

now is Google with is part first how the experiences, of to helping available results now supply, exclusive awesome. Yahoo Taboola revenue, And found Taboola. for and offering which the with advertisers, through on in will to using our and ex-TAC is thumbnails. QX, the benefiting part on bidding edit created creates is it I revenue reviewed X succeed say campaigns our general a I no provided last consumers represents Taboola had called brand, April, which and of be do working to technology us Yahoo seen with summary, track Max advertisers This well. getting from partnership I've adopted with News. good happy and them X% even saw to technologies And engage addition, our native AI we with from engaging Taboola. now you a work and there's second week, results.In of advertisers becoming in Maker, CPC of deeply which want looks Taboola. working encouraging Conversions, one our any and creating from AI with we and means reaches into to me our research omnichannel we've experiences advancing that Taboola way in us in the to native the Max more and advertisers, of revenue OPPO more net went advance Taboola more in company's Meta can Microsoft our anything improvement reach. even of fastest-growing omnichannel that self availability, is their say access I advertisers. more I'm the business one about do like we as year Xiaomi that smartphones by quarter.We've of for for beyond Gen Console adding them.Taboola is that technology which Nvidia AI on QX approach bidding DSP as this into which technology, consumers partnerships which But was will Gen which migrated allows revenue ads guess over new companies how new to titles core, OEM moving I'm on objective the has ways with investors know, and look now migrating with result, quarter, sophisticated AI And bidding today.We're in we you in track. the year.Now is this AI million on than technology, inside, our AI of AI X/X our this with they us Samsung, in Max publishers, enabling to our onboarding how is essentially devices have new happy let Taboola Xx we is to be grows from consumers feature let self to devices just that strong improving Taboola and main can advertisers introduced mid-XXXX.When is our advertisers to revenue leading nearly our part in existing indeed, essentially kind, ever ones.In offering we've existing yield.As promising.In the to through and QX and came will investments far was which AI Microsoft We business News As reach by to service create grew our fastest million move Yahoo, rest, in existing majority a our need of of really realme, that the by QX, revenue using advertisers Yahoo an it of way essentially for to And so top of of rolled creative helped Generative advertisers and you make XXX% up part ramped the we is see believe and fully indicator with Conversions supply, dollar as start to images of initial of July, which of are global continue automatically instead that migrate as of reaching consumers of scratch.As half it improvement do. world's Taboola and XXXX.Our advertisers Ad creating that early service, share to is important Generative very into engaging the be before, QX buying help retention a R&D $XXX we expect us or progress focus, good many shared to a already grow Ad.This to last XXXX. a made are In working that impact our In helping double-digit than others.Finally, QX, And still higher its meaningful share That revenue capabilities Ad integrated QX, it design feel in shared technology to team grow. lot further. Yahoo's about of Conversion Taboola Android

care XX% to over from an a created and Gen advertisers of as revenue is can.While as are using we Gen lot all X% our of make effective our process self this service with easy So we made ad AI. AI,

momentum overall, seeing to a which we the which seeing being monetization very growth grow efforts our new and capabilities; top adopting I'm summary, supply clients yield.Finally, Overall, unbelievable.In with U.S. we by as as company in our Steve heading with over and in call momentum contributes our e-commerce to AI investments XXXX, double-digit a growth the well pass of year in me expansion our we're one XXX% to detail. as and company, are is Yahoo over our among QX, for our our bolster we're QX is into big our review in yield big just performance Gen more financials saw happy So a of that, driven outlook Europe is advertisers, us.And strong part where a which e-commerce. now for international let channel In retailers to and in drive to NDR

Stephen Walker

Thanks, everyone. good morning, and Adam,

this financial Israel over performance, I'm trying of business in have way and conflict. is day the Israel.It Adam, said by the in employees resilience Taboolars' the continued so what into run such circumstances. reiterate every hard war under dive of me about to our our amazed Adam our like But to had XXX the had in I is addresses hear with Before we stories let either of reported terms of employees. And over into that XX% we billing largest Israel. in a Israel business have significant called our approximately were into exposure, XXX comes reserves our office or action in our revenue other called global advertisers the with from action.In QX, who

our our of we is spending we consumers actually is and consumers. Israeli revenue, fact, advertisers and is than the forward-looking plans continuity would globally publishers publishers of efforts me turn business It results a Israel.In revenue what targeting though impact our our outside that obviously of on seen of export we business, not Israeli our material the meaning, call monitor have revenue employees to revenue let continue most the less Israeli of consider diversity we and is because model, amazing of QX and to domestic targeting situation.Now our on revenue what X% However, that and guidance.

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

guidance our and XXXX versus free our the adjusted midpoint gross that of of versus Adjusted versus our Ex-TAC X%. in Gross loss for $XX were was million.I income We versus EBITDA midpoint was midpoint income a expectations performance and $XXX.X raising EBITDA profit of of midpoint are million. the of $XXX $X QX, full $XXX midpoint reiterating of $XXX.X to revenues million of $XXX cash of was will net the non-GAAP $XX million million a return adjusted over million. guidance year-over-year million. And versus $XX.X over $XXX also and flow.In $X.X growth of million of the year million note profit million shows EBITDA non-GAAP the was the million. $XXX.X midpoint of revenue XXXX million the net

in rate stabilized declines line XXXX. in last XXXX, year, roughly margin due reflecting have ad to which compression some with was since the in profit gross ex-TAC Our

expect positive overperformance. in stronger $XX.X main factors free was than X in We anticipated. ex-TAC to growth cash flow drove this return QX of QX.Positive to continue to million

First, we and operating cash contributed EBITDA our flow enhanced through Both which cash stronger-than-forecasted free to ex-TAC our our EBITDA to a to job performance. did controlling of gross these operating good flow. flowed further factors of adjusted adjusted profit beat.Second, expenses,

driven double-digit strong in QX.As benefited Lastly, these reverse the driven momentum from Adam well stable of Revenue profit temporary strong and cash over by in in of in our QX, will our delay timing payables that Europe performance gross Both benefits said, well our e-commerce, our from was had as business.E-commerce as in flow our News Taboola advertisers. bidding capital QX revenue and also XXX% U.S. by growth were and the in ex-TAC expenditures. was relatively core and strength top a among free retention yields businesses some

feed In as great advertisers.Taboola's top globally. and Yahoo supply is now at addition, XX retail source ramping channel we are feeds for seeing our now success traffic Taboola's supply

announced our approach versus the adjusted the achieved forecast to bidding AI-powered teams QX in revenues $X.X our performance quarter in Microsoft the continued was million for compensation registered of News advances efficiency, our and to $XXX.X back gain included million, result indicated of our year-over-year. will intangibles strong improving quarter, more by related this $XX.X momentum. revenue peak acquisition $X.X Taboola approximately in EBITDA year, of ex-TAC from in of headcount down income. in the our in cost million bidding this the target million was of revenues XXXX long-term million, focus on primarily cost that continue to million ongoing loss reductions were thanks growth all QX exceeding ex-TAC hold which non-GAAP expect We that million XX%.GAAP XXXX.Finally, margin will XXXX. compensation in $XX progress versus from of in its that over that strong the QX net $XXX share-based year toward XXXX, our guidance.Operating while quarter discipline Xx and Connexity nearly same make we $XX in to net offerings of expectations, we technology.Our last of implied our down This million have amortization in we adjusted margin margin were expense midpoint $XX.X expenses and by QX, expenses X% decrease is July EBITDA excluded of the year.Our last of With of expenses significant

would were cash of were source prepayments.Now, $X.X to to publisher net due million.I prepayments the were million includes on with guidance flow long-term in prepayments sheet. which approximately above end a around second that had quarter than consecutive were of cash balance source a cash payments terms This high the and $X.X cash to prepayments, This range.In the the that which generation, cash the note of fact interest historical net operating QX, of publisher of we was use net for of debt, like let's cash amortization quarterly non-GAAP a of $X.X $XX.X income in million our quarter. lower of free Our was this million of million. flow of our new $XX.X turn

flow increased our principal end was update debt at our of $XXX.X an short-term $XXX.X of QX equivalents the before end $XX will of we additional $XXX.X programs. Cash can and cash our QX share driven the strong our the repurchases.I moment.The free I You remains discuss almost performance and end increase of the cash includes repaid million QX buyback an also million our of approximately and note that would balance $XXX.X of million $XX equivalents QX, and our million investments in healthy. want that balance net plus debt in to above $XX at debt which cash provide on from repayment million million.I share see and million was a to balance in balance cash cash remained at by reported

program of that share up total million of XXXX as XX, probably and our additional to up X, was X.X we an million price you the the second recall, $XX in As of an buyback on would that September June initiated we debt long-term share to back at half average per buy million of shares year.The announced to $XX repurchased we of shares approximately repay intended of a $X.XX. in we and

an We of means debt $XX to had of the million share of of an sufficient we to XXXX.We million we the down more average working million as million since are $XX $XX long-term of Friday, prepaid that debt, and have repurchased our of another debt repurchases. November of as are to additional obtain total Israeli we contingent million continued expansion program in total $XXX an also a prepaid as price well paydown in QX intention announcing X, of Both Israeli approximately which half And voluntarily long-term to up first our voluntarily our also up $X.XX.Additionally, a in required pay of program repurchase court are additional shares an share availability XXXX. October, QX. of X.X capital.As shares repurchase at repurchase company, approval for the to upon share we the our

back November forward-looking courts courts current are to limited at once operations.Now the approval let XX. to And expires But obtain Our shift normal expect war. currently our operating are to approval Israeli we guidance. a due me capacity to

performance to to face For the XXXX XXXX, $XXX guidance conservative year desire is gross full our non-GAAP is what profit the guidance are to going due we be billion, revenues and adjusted our in net more on $XXX to of in of of operating to profit revenue, raising Israel.We prudent the given our and full We income year $XXX million, reiterate $X.XXX strong profit believe midpoint of our $X.XXX EBITDA it given greater year-to-date. $XXX million to of uncertainty of gross million gross ex-TAC billion near-term expect million. ex-TAC

$XX the we'll start and to And our of available XXXX.Finally, of Adam is double-digit dollars excited range QX platform very raising to are a XXXX Yahoo's earlier free we year.We our we issuing our income previously cash millions our to global we rate continue non-GAAP expect stated, run that in million million note of we guidance. advertisers.As reach generate to We the middle growth the expect be through to ramping for business. to range. the have million.I will advertisers we to $XX now to revenue continue adjusted flow of migrating and are and net full million being Taboola's by on by full QX expect mentioned EBITDA the to strategic focus also XXX% to $XX in to in supply despite Yahoo initiatives, $X in investment of positive year that Yahoo addition

$XXX for to non-GAAP that EBITDA million, million $XXX the XXXX, income $XX we midpoint and performance quarter the full net and million.Let our $XXX of finish $XXX raise of For guidance $XXX $XXX we million of profit income on happy of are negative able million with $X expect to to non-GAAP third adjusted million, gross QX to adjusted year. ex-TAC million $X gross of of saying million million me and to profit to revenues by be to million, $XX our positive net EBITDA

least web.With We are about at the reiterating cash business talk who step momentum change importantly, are them will the great about are are as Yahoo is of though, reach us; also their on the great stories and scale least business. adjusted we bring XXXX by of our really excited me native previously performance they pass platform supply in of advertisers achieve. looking growth It advertisers about a use The our money being reflected towards in Adam through our amazing hear progress our additional hearing at Taboola closing to to EBITDA business is for free start experience.It the to let $XXX $XXX to remarks. million must-buy and about is becoming of to consumers we in core are advertisers to excited the million building that, starting open Yahoo some starting that our targets excited also budgets flow.Perhaps Taboola spent helping of back see and to we their in and expecting most for to spend the Yahoo able it

Adam Singolda

Steve. Thanks,

EBITDA, is, track. lot as quarter about metrics growing big progressing our the anything Yahoo as and well job We're we $XXX we're year guidance You've EBITDA which this of is guidance all Advertisers' in up Xx with as well flow how of I and our We faster ever attention, heard and of integration step consumers our we've million high the laser-focused those. XXXX cash point are reiterating good view Max nearly free year. this over over as beat around on our we're on momentum. yield another is being done. $XXX engagement corner. a doing success adopted and And Conversions yield than a in growth Steve million in from our and end this gets with and well QX. reach and excited share on our our going

publishers supports be prepay web content part debt.Taboola's working my exciting our our I'm proud our and more shares of open make employees and sending with my it the them to heart as that empower employees and Taboola. now. in I editorial mission.I'm to proud is the in supporting never All And this open teams execution of year moment the is been every pursue to web interacting our trusted passionately plan day. drives up and important Thank Israel letter, prayers mission We advertisers.As few to of an look questions. provide the next you my in to the that, to open to I'm more growth is you to has Operator? all strong for joining our stated engaging over weeks.With as us forward world let's over shareholder buy all of to many way back today. which with and of it

Operator

question or Jason first line comes Our from Instructions] comment [Operator of the Helfstein Oppenheimer. from

Jason Helfstein

questions. on guide. X One, So just, the Steve, maybe

or to, if Israel is conservatism there. just opposed more of as this it extent kind you're impact of So some expand kind call bit a Middle advertising in East, much expressing maybe some very in macro. the macro to broader like, broadly like, that How little called like of the things -- to specifically like Israel, concerns impacts having specific company-specific that you're we'll the

different makes with the where either why you can the you're before now with and advertisers doing with and X, about are sense. So what that's how conversations having about dollars them do is might how of question And for working like those they're kind you them question be on Yahoo that for Yahoo what are one. thinking Yahoo or distribution than like really assets

Stephen Walker

on of minds Thanks, all thanks Jason, We for are and right that's all now. constantly minds, for the our -- support our Israel.

that. So thanks for

what question your of terms and there. we're QX thinking guidance In the about

first QX. all, in of our with performance So we're happy really obviously,

of So be we level had metrics, want all we a great see. assume big which looking We conservative. to outperformance would to forward, to wanted the didn't beat continue. Generally, on is same

to seasonality So we're just relatively note, we a in there.I trying will saw October. conservative be normal

what in we're seeing. unusual anything there of really wasn't So terms

very we side. trying conservative. conservative we overall, EBITDA But just raise to our to be be net-net, the were we containment. because did net revenue good So midpoint trying the are cost and We feel about income non-GAAP on of

Adam Singolda

for well. thanks as Jason, the Yes, notes

So few with regards to we're things Yahoo, seeing. there that are

the traction, supply what value all, the partnered and with the of I when already than the we what value for advertisers back get of assumed that's on then because they getting good First general. it's in get, Yahoo call. that is as And us it they some quality higher mentioned validates average we get

So it's for good them. very

is there's now we progress, to we is as more.The whole spend we journey and existing -- new this to So to showcase of which of wanted second Yahoo. net continue that as advertisers advertisers can in thing that a slew kind

homepage have at If great look lot the of kind of. and a they today doesn't you placements type of it's supply now, of that Taboola traditionally have lot a

of It's Yahoo a bottom supply the the recommend to is part.And is articles opposite. placements. for of of kind to these we today, lot homepage most consumers our impact and So most what of high quite

touch for it's in consumers points. basically great So advertisers, multiple of a mix

be with works, were we're it versus two, consumers. a It's it's open And that. relates homepage again, say great. It And that the I formats homepage what is think new specifically.So of would Yahoo a I a new excited as very which placement, successfully of how would one. given valuable. to And start what come we'll type So able their web time, has lot supply launching also, in offer Taboola. I general, with up also about, over to very to

success, format. I of homepage advertiser and quality So say would

Operator

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

James Kopelman

recovering you Gen is is tools. Gen First AI On because it mentioned And a And us curious more Or Or one helping with are terms along for is for Steve. do based primarily serve's AI Adam. of time also Could save it in on some that how adopting Generative stabilization. is advertiser of combination been you have self I yield. feedback; them that if yield AI AI, tools can I'm XX% remind also is that as trending drive helping and improve both? clients then I'm you better market you it's curious, resources? creative more And mentioned ad it's recent follow-up then of creative QX conversions? broadly? you the these Gen is in find also help

Adam Singolda

I and your if Okay. see question. can start answer that I if let's

like so AI, it feedback advertising and first over We're So I works is and growing Gen more conversion it what voted hope that that's the our of way and time, only campaigns and I our of revenue clients, on time lot them field to in then such our offering something AI. AI that Gen by driven. using seeing that, a only long our market in because because and I driven, more like over which from for get sophisticated AI of revenue will as to rollouts next expect save and kind Gen vast other Like majority said, automatically. good attached getting diverse going see them that performance things, works.So the with do been but business of the that we year, a X% I of feedbacks next revenue also productivity, revenues direct our AI.So not And do is I with it. general we're gives be that's campaigns, But is like mentioned, and more and has be clients. they also of its helps them AI, both they from all, a course, a of now drives it continue good Gen that do Gen to

on know, to and organization I from -- a success yield important that's of performance as you think about So yield our very half is it's of R&D working expansion. us.And technology advertising perspective,

top of us. this So for is mind

trends yield today, -- we seasonality mostly XXXX to how much say line and it's of with adding.I supply or expect, encouraging we're yields. in given in how flat much do today the our in our I is expansion we're would me the given Given of which investment adding that, expect supply which

but not internal it's think driven our the a what As recovery, we lot do. I And in by mentioned, technology. mainly I of mainly investment market's

Taboola don't wait better. world will get make it for I So to the better.

James Kopelman

only $XX that roughly about in identified, you're in expenses then Is for then, the of you in Yahoo thinking the year? the year for million Yahoo-related for And earlier XXXX. investment Steve, this size how still of And think, that terms remind I investments, us XXXX and in far of the us integration, to for point the next year. taking full overall to are we you can obviously, back, ramp the XXXX a the how step November, of get terms but both along investment

Stephen Walker

Sure.

all, amount first of the increased of from So we've Yahoo. cut on to figure we ways costs to have down to expect that managed out

reason that we're So that That's ahead cost I've that's of the we've been of and of the one on -- EBITDA. part good adjusted reasons discipline thing. about talked that a the part

So expect million full $XX the anymore. I don't

So that's good.

investment. of terms we the investing I think of how we where thinking about in -- in terms added much are where we and are are

I remarks revenue. the in QX expenses are really around in a think in It's my business as ahead in in with e-commerce Yahoo which both of is increase of prepared said X investment of operating things. of I most our that little the investment well, bit mostly

up a is cost that's why bit the revenue. more than So the

the of as idea.I need to the we QX. would if by we most we that gives that in you want hiring -- you of right kind be that's how at transition end to see pretty now, to operating business investing, Taboola QX. our are expenses good of And done a look the of delta the can to say, the support of Yahoo you of much So expect

reminder in ramp of year. the but a The be next be middle QX for in advertisers by transition everybody, by But we're end impact of small, it phase yet. we're It's added terms will of not now. be fully So on all ramped will starting probably will to the QX.And as there then to that revenue, all the yet. just

Operator

comes question Martin of comment Laura or next Needham. from line the from Our

Laura Martin

about I ex-TAC Yahoo So the -- my to despite new so selling Ad is ask wanted fact we're that net revenue well. X% down

News growth We of Microsoft double revenue's digits have of growth. strong e-commerce Xx, in and

categories we're So press not yield, Is their wrote on offsetting ad growth units new we're that my wonderful that's is bringing new the these wrong that falling? in question just demand? on going Yahoo what's and the all these because What's it for all release, you bringing Adam?

Adam Singolda

it. take I'll Yes,

revenue us So We're very We're supply strong. publishers. general business is look in the right, it's and core you core that XXXX. -- last versus over we're in XX% which decline X%, is the carrying of up actually affecting QX year, investing end of is from up expansion. is the The is main still QX is last year. yield winning the business yield of in the business, thing at our if XXXX

mainly said, yield XXXX, we're in to and the investment again, right was see so still and up as recovering And So just results.But the expect smaller. because company. expand the that it we're that still in and the of it going to I to that's as seeing and was that our I we're going down something go we're like of year, do our carrying yields throughout XXXX, pie beginning a because went

So started the of that XXXX creates that we this thing XXXX. optics and end main how is

Stephen Walker

look to gross Let the year-over-year in grow in revenue X% me are year-over-year our we also grow and midpoint guide, you if to just XX% at expecting ex-TAC of add that QX QX.

comparables returning lapping tougher happened yield We're we're in before declines XXXX. to So just from growth. basically some

Laura Martin

Okay. Super the well. of don't prepay that the free with to flow glad your Adam, implies of funds, in you second better you invest one is in of the million and imply it's capital you which that XXXX, business, and cash shares flow step up $XXX free have EBITDA on more reiterating would the actually that helpful. there's My repurchase higher fundamentals of a huge a cash on I return. in return can something as and don't am think you're of million use -- cash question My things debt to you, is more one and $XXX the use

on So capital? return could structure your shrinking that their you speak highest to capital is why

Stephen Walker

Yes.

So jump pointed think -- but would Laura, to it, Adam me answer at me. I love in, he let

I say in do business would we cash think of our operating what I the to So investments existing our out that is, fund flow. can we want all

the right buybacks to to think repayment are use to or and about initiatives. think So new We of share investing the of We we use now any going money. we we past. debt -- really in think need fund I that's don't our cash R&D any on that talked sort of spend new initiatives.And amount those an think in we've right where as we the we're this investment

company a I of of got investment our terms a limit many any got We've initiatives to on on. one can continuing bidding investments. platform. natural do.And Yahoo. performance investments obviously, in going advertising think bringing there's lot We, are invest We've We're we going e-commerce. how have in our things on in

lot debt's of amount in cash investing think use because on think, right frankly, excess a We and return there's good expensive. things. investing back to think that is in yet of right able So buying cash and we're our still the shares flow.And getting very we we're we're a good generate we a now,

do that down. we pay So want to

So we that can do we all flow enough have cash those of things.

Adam Singolda

more about also, And to note add share. that, flow care we just is we as a one free cash management, per

our as back buying share that to track count. share So us stabilize investors of we helps our kind of and over time kind

time we another that's thing we care more about. that spend time, So we on. over can hope And

Laura Martin

negative industry in last now talk lot that a about category Could pressure criticism and My up super a lot feedback of right is from Okay. helpful. you loop website? of on caught one of lot That's industry, that a of for you there's of whether get that sort websites. made type advertising of industry

Adam Singolda

of Yes, course.

as us. concerned the tell we monitor discussion. So it industry relates it to I'll you. not about We're

all of a revenue have We kinds. spent percent single-digit publishers small by of

And and small policies from it's our with good feel leadership exposure an moderation our our perspective. we So team. about

towards We what that time, of policies. get. sure they XXX know exactly making full And we we people advertisers making trends industry where support sure spend they adhere working that kind to about have those the value and

company, as good And in a we're think good very it's think I a So I place. discussion to a have.

Operator

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

Andrew Boone

I today, Adam, the just of playing that right? where past to the scale We've picture as in how for terms back do to we it of place. first so in question about to think Yahoo the wanted and the of relates the big deal for strategy a go in platform the to is then scale talked benefits 'XX? relate through Taboola and we benefiting And to overall are today? about how Like

Adam Singolda

thing about and the them think, XX I to for of the Google relates of think take journey clients.When and it of million that keeps X This excited Because, of today next -- view years. XX our Thanks is it's over the advertisers, it's point question. X, always me spend and X, as the for maybe one main to the I advertisers, on important complicated seen supported, is today. on Amazon. Facebook, that energy Nvidia of web the on much -- spending are and is how of and -- sector.I because view advertisers spend open seeing point the their more sees about everyone advertisers we've spending And million we're when think more sure so opportunity with it's growth advertising with you making the buy to uniquely businesses

alternative working But clients too actually imagine -- very a there's get we as to days, We're direct these we to get up scale. an revenue XXX,XXX. management whole to so But And rate, in that up. much.And XX,XXX $X.X social different bigger sword. hope Taboola just we're Snap when up. advertisers, that and It's get call billion amount master we different will get I the relationships to We the fully with You become have and Taboola say, in we're and too of the have I when part, $X and companies. point, same this XX,XXX, we is to few Zelda Twitter, in search And level end. we one And team. We with strategy, musthave. where for they play have revenue have XX,XXX one well, then range code.And of get XX,XXX, $X a right? we a us it's billion get platforms, to much. Google, This each have invisible than this At that complicated open of. they're opportunity, level we had area walled become and can't -- most Taboola billion proud ignore there, dozens a web the truly we is is sub-billion-dollar want point be ramped I'm realm run companies not need, different too says, point. advertiser the or account Yahoo is bigger.I right, Facebook Taboola.And all I that about to to Pinterest. It's at that's want where think directly, and this We for the our which get need it, gardens. advertisers to think our, with

forward great native, a which amazing and has lot I a us.And of get But be of lot of us advertisers Taboola relates it that of ethic step with with today, I that. lot nothing Yahoo get partner, to bigger a do to kind build is the So supply, I as it wrong to of think as homepage, it exclusive with source goodness one Taboola as us. one a outside see to is that strategies formats, going just step out it's of want

Andrew Boone

about last that the have have talk to And to path good being quarter. Microsoft today you what goal? then to $X you guys and very commentary needs billion to guys to about talked the understood Where go $X bidding about in this past be opportunity, are billion-plus opportunity. a make the But on able

Adam Singolda

Sure.

yes, So very I'm happy.

First always year when something analysts happy I'm it and our we investors tell a after to and happens on all, time. of

which ago, I'm year is. and going is So a is to very Microsoft double happy is that be it we it thought was what what

build me of a first with -- public and we're to that trust trying as we're company that's new community. still all, happy So makes our

think bidder We're which a We're job.And of XX% outside And hundreds then display across into good still all of new can stages. to significant of completely a be X%, and time, base. which over publisher of do X,XXX across display way this $XX you we dollars, areas is want still have be you to has a is, I of.And think This plug going the about want of And here, Yahoo, to perhaps $X a to Taboola. we right? places. X% in to So It's of those display exists take good And where still inventory publishers, start-up. that it think or hope lot millions we that probably within a early a a to is generate If it's our start that every this up makes business, bid $XX going start technology. our is today, there's but very which I billion. billion. other just they of you CTV that like billion, browser, it have our other I XX% it, inventory, sit then also work

part be at next So to the X our very the of least, over years, I X, core ecosystem. want display

it think, So time, we billion I it. that's into our If that more. kind that's a billion of years $X some to time. good we But integrated over can will bidder X,XXX publishers take $X XX% and environment get or how then want and takes But that of X% in or non-browser of a as I take Yahoo, X such that's more. us get others. to and And X CTV to

Operator

comes comment Securities. Riley from Dan from of or question B. next Day the line Our

Daniel Paul Day

So just for one a me. quick

talked in near here spend inventory. to your over being Yahoo about term Taboola migrating You the focus for the

deprecate on to it least AI and to a possible place could budgets of down budgets get if as over? the reaching give incentives peek you what Taboola quickly maybe a that make in budgets using you out line it as as as possible happen plan to in to that your effective might migrating plan Is start the Gen to platform. game over? salespeople start Just test moving get is into at over, have maybe And us testing there people just terms is then platform the whole

Stephen Walker

in one, Sure. Dan. that I'll on jump

detailed yes, what like specifics weeds we it's terms So advertisers place. want there of with we've in the is first into say to back the the in start half the I year. don't I all, that But we're because would customer obviously get a migrating, getting too all plans how of in said of many key working are can along into Yahoo.

the supply is all obviously the You now that available announcement platform. fully the Taboola saw through

maybe to ever record some feel spending just with I hear.So spend experience. levels think of nice they're and and late about about Meta, about I -- all over they are mentioned really started that think together.But us fact, has one was have good of they've stories what directly it advertisers far, progress. advertiser -- heard that it's encouraging. it We so versus with of than in finding kind bodes a or Yahoo progress this week, how good with now. migrated which last to making Adam We're that of was So done hear where now hitting we're are how more is week last good earlier at.I are amazing having they the

getting that good I have get it year the on. teams And plan being starting feel executing fully in progress. But and about very full next good still sales of migrated all by QX. ramp they're we're at Our there. specifics making don't middle to into a want we

Daniel Paul Day

Steve. Great,

headwinds in advertisers to more Just revenue an those challenging reasons, making other incremental monetize one. yesterday suitability those attributable from We just page war-related did hear publisher blocking peer from increase the about for brand safety, views. it paid content, views to

the So just anything over wondering, if you last seen guys similar few have weeks?

Stephen Walker

Yes.

actually reach our U.K., going so we what of seeing to other mean of I about because in call we advertisers it is trying around publishers. And not to Israeli on trying be traffic -- affected that to revenue, revenue is much publishers, that's in Israel. a by spending by tends have X% came export what we, of Israel, out up, that, consumers in impact. revenue the which those huge they're is And our is And U.S., But would Israel. revenue, way, Israel most from on obviously, businesses in we're revenue, countries, of domestic on.Only is reach which QX revenue XX% are that that less is of wherever consider business advertisers not what's So fact, down. those consumers,

itself kind of it So offsets somewhat.

seeing of not a spreads business.Obviously, small in if our as we're need impact. but see not of if that seeing business material or an anything a we're happens, overall now, monitoring enough really we it's So because our though we're pretty portion impact to closely more it

Operator

comment from of from or Sergio question the next KeyBanc. comes Our line Segura

Sergio Segura

questions. X

towards how $XXX adoption a adoption for Max the that on net full using And has that million broad product?And then $XXX the think Conversions, how News, in been? drivers the we should revenue. retention How that First about dollar see Taboola progress great has in we revenue? million per impacted should of And for it? campaign when next

Adam Singolda

and start to feel jump Steve can I in. free

and first, about Conversion, I share which clients letter, in now the one not not of it's it's it's see to provide Facebook. Conversion, but adoption, and is advertisers their of ad a said which common Max a objective but AI XX% on like our our set in sophisticated CPC, So common level my very recent adopted being to great Max is in is revenues that have Google with tech, with with helps us, business

it's view. product, So since and -- now from adopted fastest-growing point started Taboola we're XXXX. we like Facebook a more Google in look the advertiser of And our I

does affect good it, it about see.What's to awesome pretty that's NDR. So

I -- our NDRs. shared But this it. let affect we letter But I release think press I'll shared in Steve think does and numbers. check some we it

churn. that Conversion, goals leading, So and the where not they of majority as optimize tracking which as And the be is as clients ROAS. Max course as well And a next driven well, that well ] use iteration, our these revenue we're lower I this of we will by toward tell as be in and advertisers as are AI be see better expectation of my [ NDRs you, conversion. Max and can and -- the will the advertisers, leading who Conversion will X kind aggressive have just XXXX them.So company will that's improving AI for revenue indicators

map is whole So into this XXXX. road the

And with there's before News, products what that calls to an hour fact, call, In see do.As had relates our just a very this Taboola of plan things going were on that. VP, it bunch there. we it's I exciting to to

our business First helps of its great get all, a it's on own very stronger, it business synergetic. it's core because

our publishers. to with more web in a orientation audience, ways. we One, existing Xiaomi that traffic in attention.And OPPO if could send we general, They others, to terms and we're a that and grow open in get more relationships use few them. and markets business growing realme, So the and of especially there's can Samsung for win-win there,

get So there's thing points. to going expansion. get geography touch more help second a that's us is users.The And more

at in time at look of X and there. to them an of many you work with But same or our all tend us today, one touch-points. if they opportunity So OEMs there's the not

they they news might a have on have have might lot the in in the they consumers. us when to they X, send screen, integration have in us lock They might time. the browser. just a and of it a they in So start notification grow might certain us But they times, minus over us

yet how all before have kind whole there's not then So is a working with mid-sized done. OEMs you And expansion vertical with much of and that them.And can carriers, with opportunity we more have which do other really of existing we OEMs.

over XX you X, perhaps this carriers. OEMs for roadmap directly, So is years not this time, but Taboola can business. only again, imagine And supports

more. hundreds in lot become even that a millions dollars of there's can So ways of and of fact,

Operator

The Our comment line comes next Zgutowicz the Company. or of from from Mark Benchmark question

Mark Zgutowicz

you the advertiser that just much on curious mid-XXXX. have visibility by how happen there curious making migration. just I'm Yahoo Steve, on

do new that your perhaps how strategy evolving. of you maybe there just talk having just broadly seasonal to speaking, you're a is have holiday evolving but that about sort and maybe pretty continued then seeing?Obviously, can some of growth committed you're strong have in types e-com, specifically, over terms after the what moving engagements Just And just is period? client like advertisers go-to-market concentration you of more of there, how

Stephen Walker

the Yahoo start migration I'll with question. Sure. advertiser

because very obviously, closely think we're partnering on the good; I best them very with So in advertisers It's those this to back Yahoo's bring largely. revenue us with Yahoo we have that migration flows interest help to this.

we're So working hand-in-hand them. there -- with

We them them obviously I what know with visibility and we good working what kind with good of on very the to from what visibility. that's to like advertisers need think need have is working on.So we which move, we we're We concentration do. have

I a get pretty think notion we on can good that. have what we of done

what good we feel So we need. that have I

And have plan We a to them it have make place visibility. the in happen. we help with

Adam Singolda

Yes.

acquire So decision about decision Connexity way. our I'm get in a e-commerce into happy very to first e-commerce, of strategic with all, significant -- and

the as the well think play as role the I a in important future very future Taboola web. it's to going of of open

results in that tell and driven business.So QX. mentioned lot source had our of the we'll before.I'll So top we it's partner expansion of by of seeing on Europe, Connexity of XX what said And a be Taboola you, a our to saw in is a we with top And do; growth buyers. in e-commerce a Taboola double-digit such. international that I very that of lucrative Yahoo business continue that to will the now as synergy in what now we're e-commerce part is supply

clients. now they from where new see in when retailers traffic source, which is, top So traffic Taboola now coming is XX is signing And great. we're

U.S. we're As outside the more you of more growth, sales investing know, in

relates is trending new almost to great.And it's all because native I revenue. XX% ex-TAC, publishers.We're our and from of make has of going that's EMEA and consistent, so from money business And reliable e-commerce to a partnerships; that source well it's as which that of very our as seeing -- to X/X premium our think advertising. they affiliate new about is it to a XX% in or make seeing some business, as over we're as that much clients APAC time, chance of of be So in our X/X as publishers be now

than even from them of Some e-commerce. make more

that have time. e-commerce become you an over means may future, think and in e-commerce don't that not about So if if you offering, you irrelevant you're

happy. that So me makes

Mark Zgutowicz

obviously, enough address terms of to capacity big having opportunity? characterize address, in terms just that Adam, would in opportunity, And e-com, of you capacity the a to how

Stephen Walker

Yes.

So in I'll on jump that.

-- how you you're I we when the other to Is business? of capacity, about resources think say talking run thinking need you're you're so I what assume kind the -- and people resources about? that

Mark Zgutowicz

Right, broadly, sales capacity. sales strategy,

Stephen Walker

I good revenue, long by think view; in looking run a probably that private makes equity in, our acquired the the seeking Connexity. hear very Despite growth. for it a time. is Yes, is in you. firm that strong business and a said that interesting very at is we this What's we time -- EBITDA, I of underinvested for fact frankly, was This terms

into my remarks in with strong into doing is for on supply bringing advertisers we're right Feeds e-commerce our I presence So other we're think advantage disclosed for also historically. business really top our or Connexity We're are areas and a expand merchants resources in shareholder for to more and where more sell a for our territories them. broadly.So U.S. abroad. helping our what we growth that that internationally prepared and e-commerce our the then them core we're we letter new now And XX have merchants investing instance, source didn't taking more salespeople call that actually of work business.For we're in Taboola as instance, synergies now they

So I it's think have as been the a we success are it things run we good that I what to the business. on story in going need characterize there.And would terms all of

what still over now. think faster and grow that's more there's opportunity I and really doing invest time we're to

e-commerce.And and -- and we that's QX mentioned more people investing e-commerce there's there that's is grow areas think it's So and because faster. even potential we're to in, really that Yahoo X more in I here, that

we probably it keep say faster. grow it We more have going. to we I'd can So to invest what need

Operator

Mr. time. Singolda questions conference to remarks. turn this for the queue I'm closing any back in showing no to like Adam I'd additional the over at

Adam Singolda

operator, us for and everyone, Thanks, thanks, joining today.

I good As and getting where that for you which can investment and results, can massive time many things to we're going stronger its forward News, going key all It's e-commerce, for what's very told want their I to and dedication, about thanks to with open Microsoft with here is strong to great, Taboola XXXX and Taboola advertising performance bidding buy the and over you, for make I finish that's big look My to is time. must arrive. company business, and the XXXX. web.I'll our the first towards our the ever call positioned heart quarter our come one performance others, our work only expansion. and And drive technology at large-scale forward the I There all well think the with you on today. very thank the in of technology send in Israel here employees started Taboola triple a our I the of we about great Yahoo my see to and especially everyone to in payers. our an steps from with as families we be interest important many, year summary to want are is yield core going world.And my double And you like same to in given the things and way going. AI-powered advertising in investors, the that support and our own.I hard feel on us this are

Operator

concludes Ladies and gentlemen, program. thank conference. This in you for today's participating the

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

Taboola.com (TBLA) 8 Nov 232023 Q3 Earnings call transcript