TBLA - Earnings call 4 2023 | Taboola.com Ltd.

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Operator

Good day. Thank you for standing by. Welcome to Taboola's First Quarter -- excuse me, Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.I would now like to turn the conference over to your speaker for today, Jessica Kourakos. Please begin.

Jessica Kourakos

morning, XXXX welcome Earnings good Quarter Taboola's and Fiscal and Conference you, everyone, to and Fourth Thank Call. I'm Founder here CFO. and Taboola's CEO; and with Steve Walker, Adam Singolda, Taboola's they today Taboola's of I'll quickly harbor. the materials Investors safe website.Now earnings the issued in the company market The and are cover available section before expectations including Certain periods forward-looking statements our today statements. are future for They our SEC in and uncertainties are not described facts and are subject to material risks filings. as to required currently available law.Today's information we update These them subject are duty except earnings press also statement based on is release. statements forward-looking limitations by the undertake discussion and the no to in Future events differ and anticipated. adversely from could materially those

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

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

Adam Singolda

you Thanks, for And all joining us. Jessica. everyone. Good morning, thank

was with XXXX effectiveness driving guidance.Turning yield company's our this nearly open culture users, proud resilience word tremendous Before in during always new is web, it million, said we end our EBITDA million, with financial million, start our displayed of over talk progress, bringing QX a XXXX a million, $XXX.X to shows guidance innovation by QX growing adjusted in cash war be a cash the about the and adjusted our $XX.X to a goal.XXXX adjusted high ex-TAC XXXX, for Taboolars of and end for which the results record with strong QX year, people. EBITDA, beat to well to results monetization XX% our Free EBITDA delivering I'm free by flow. desired is so experiences I've in measures; all $XX.X XX% strong of want significant resilience people XXXX, and improving EBITDA, is flow first QX. QX engaging our $XX I what's profit, key true real margin. stated and our representing enriching momentum is about and into million, our at a of driving over X,XXX the the coming representing our growth quarterly in revenue, business, Taboola Israel.The as free that across to and its to Xx conversion expected flow $XX.X cash gross XXXX as to year ex-TAC, X%

front, $XXX XX% this On back billion grown to has growth. XX% has year. the we're fast million. Revenue to grown to nearly Ex-TAC revenue $X

which Xx of We a are AI is there's adjusted of million, X good is is are reiterating $XXX our of up, the crossing XXXX.On offerings, we Yahoo benefiting the teams. flow year momentum. XXXX of great of and guidance lot from already XXXX. reiterating Xx our fast our And softness. assume EBITDA and free also collaboration trust this QX years front, $XXX million, after between cash business $XXX over expansion guidance mark million in yield of adoption nearly a we our ramping with over

with them and search experience in and will What balance of going spend We're cap.XXXX investors to just and X, the bring revenue partnership be Taboola million, getting Yahoo, the our amazing we're $XXX and platform. happy they I partnership? we're users what as chosen very of I our was share buyback this announcing Snap, size on business current remember later, partner day sheet, returns, social back I'm next? And Yahoo AI commitment to they same new XX in of way for very paving growth. R&D year in others and advertisers interact soon.On generated represents journey, over like year, approximately asked a ago, that billion. hope to Every shareholder very, Pinterest, years investment more a it signed XX ad $X and share our investing year the to for $XXX strong to market than an to more share essentially we many closer its iconic the be million our us, and just have million becoming X% we're was and about which momentum, of business. choice Now web.As a the first to is $XXX with must-buy has very brand approaching reflect this their another yesterday next revenue. the when platform of I consumer have we're type it advertising help to grow years authorization open

X Now looking transformation us that in allow XXXX. achieve themes ahead, financial key will see to I our

and users is engaging the The first in web. open reaching one

addition another lot consumer and the a iconic of Yahoo brand, With here. momentum now of there's

of others.On Yahoo and to Verizon, to technology team, asked mid-funnel empower come. the consider publishers, these thousands are of and Disney, Taboola starting just publishers, present Names and Samsung We we're advertising publishers publishers a editorial we Internet, Starting profitable is most focused money sum, Editora open the the from with and of premium StoreDash, increasingly with best the big on with terrific and new get and shift existing industry, brands, on The advertisers Media, more.In team, in a Taboola team, beginning.Now advertising thousands the choice these the like advertising year monetization And publisher win become executing web. and already audience best incredible seeing with Taboola to directly to companies an advertising how team, Globo, around access to box.Signing great engine with users while we're users of there. one of in expect performance the rates to their will advertisers. to performance Airlines, a I specifically I new well out reach seeing will News, that choosing Ynet, second of is a it technology as expanded more. or will momentum the to we and years this market one with back our company in the with and Walmart getting Fortune are and how companies McClatchy, all scope we to executive that as seeing upfront, hundreds Or brands like many Postmedia, Hilton big Times reach globe, more. joining spend Entertainment and areas. already AXXX AI they try to including partnering renewed these of of monetize We're I we have. strategic the platforms, This you, includes had web. than business Citibank, publish to much Nine of partnerships improve entire the NBC Netflix, is way including, another This of our of so believe tell many would with can plans of give reach offsite yield.Now can Taboola Prisa, consumer into strategy trillion-dollar in with leadership, an just time our family and industry advertising sell lines the to continue be open growth partners way. Uber, consumer our Hotels, great a Amazon, let's advertising many expand tens bigger both consumers, We We're into into subscription to collect more CEOs and drive on just Southwest XXX the the and more.Publisher the Hulu, advertising investments. Yahoo opportunity to organization, XXXX. become we're

revenue, in I'm to good we volume Yahoo share XX% Our biggest $XXX priority lower Xx tell the of recently which is happy of fast-ramping. million we results. is advertisers advertisers. at cost.To seeing large some migration demand good case seeing we're the cross you, revenue omnichannel expect to of study QX Yahoo's progress, shared lead And in

publishers, around work users users experiences. of year we News Taboola in is us, differentiated to we ahead part as million. offerings year we XXXX, another strong personalized a of seek revenue all that devices. early yet reach is world with still to in a spectacular XXXX.This $XXX Beyond stages, Android manufacturers in the expect delight with to working News device with with News because publishers' lot for of continue It bring also over our had content Taboola growing Taboola as

to a tech QX, driver Beyond in continuing site of including with publishers exclusively a which ad data, included to and ours.Microsoft partner dollars Bidder. to is inventory partners we had all second impact we and of the can impact XXXX. Taboola from that growth, monetize direct our and News, be unique how time of Yield generate tech our to work some demand, impacted Header take of the single-digit we're we bidder across network that revenue grow a into scope also QX in already publishers in yield. we switch us. We're Microsoft advantage represents expect users revenue is XXXX, millions with changes with reaching bid to ad This our on not to per our small its how continues made they expand and user. guidance.Let's consumers, largest AI our essentially

makes think year to make open the we $X in Meta per comes when the $X user Taboola comparison, U.S. about a among it year.Well, in For Snap of user is a revenue per attention. I and estimate makes user $XXX $XX we monetizing to best the web

runway we have to open and better wins. web open When how much You the web we improve can how can the win, imagine much do.

such the and it companies only monetization asked interstitials Google using capabilities ago, don't open years web, are bid billion $XX advertisers text the web to as is Meta or on invented top which or yields do. low about CPM, CPC XX banners, of display Now that, uses ads, like open in more.And because market

are grow yield. Now Taboola there X ways will

is being This getting network of volume the where code advertisers first from bigger us data. at a to conversions makes one clicks driving and is on faster. page large The better

to for is Deep AI. And element years. We've as is to information.And users to added is is the one between third second one key relates really do. a advertisers. this been it hard learning matchmaking The

are Google We they CPA, the mean bidding have of diversity conversions, We're XX%. better more XX and technology.Advertisers seeing by advertisers have XX,XXX Bringing seeing are XX% our advanced advertisers, up great in advertisers cost now offer well million maintaining boost to as reduced as ad their nearly XX,XXX like. users maximized from while personalization Meta while advertisers AI each. or CPA to seeing to conversions some and per may acquisition as momentum

give Let's example. an

bouquets at costs acquire XX If that the single sell the bouquets same customer. flower to up it XX per and $XX sold with a get XX can same now to or cost at to customer bouquets cost you you Taboola the sell you $XX $XX of customer,

Max launched Conversions, a great.Now flowers expect essentially as more Now a advertisers retention, us that's advertisers increase which as net our are improved more able and retentions, selling faster. we well is time.In Generative as to lot in QX, advertisers means saving we more, kick helping AI churns, off over Admaker, spend more which campaign AI adopt lower dollar with NDRs, and

Taboola's adopted is Generative creatives this Revenue.Maximize with driven new product X e-commerce of momentum, XX% on I'm on roadmap, revenue launching optimize year.Another direct Conversions we're is so our as say I'm to XX% an advertisers, of growth happy an desired like Taboola and Maximize segment years Press, as the my at continue to Max we using traffic the to our is essentially the yield called important Yahoo, are self-service it, remiss generated part, investment. back which the that in integration happy driver We of see of combined revenue one recession industry and we've the to AI. who the Taboola. and in to growth conversions where that premium by establish space in it very this advertising our largest by as from not adoption ready. year, tectonic represents that launched we a say of Associated For ex-TAC, content, or exciting in Taboola.I'm come.Now advertisers up advertisers have this acknowledging and powered e-commerce. end to XXXX, our most advertisers our growth be already way associated of to Turnkey GenAI, drive monetize we're facing expand would create with return their need XXXX, the with optimization Connexity, deprecation, In firepower using the demand. data news conversions, We and with high value for like for as publishers market to to its yield is is and new destination XXXX, Commerce, And changes publishers and and approximately maximize with is that commerce we Commerce.E-commerce cookie being are commerce momentum ROAS all to In is its times world, helping their softness. maximize continuing power and wrapping drive trusted it, for where us in partner we business. new in the X new benefited enhancing that well improvement Turnkey focused same Skimlinks, of agreement in This signed I very, e-commerce performance Revenue

authorization and coming revenue EBITDA announcing than have We soft, product to page developed tens deprecated do growth started over future, I clients adopt after back proxy history well We extending year our growth anyone. on Steve to our free cash and a We're outlook XXXX, we as profile. a million more more new of detail. understand years strong X we're faster and when clicking review fast did times if Taboola.With users AI $XXX Taboola financials strong in in we're pass is since with summary, partnership, billions to of flow growth, than and code of that, for buyback intent and call a the into being with a on cookies.In I the any Apple

Stephen Walker

good and Adam, everyone. Thanks, morning,

a we As had Adam strong XXXX. to end mentioned,

by period.Operating Year-over-year positive been million were million $X.X from XXXX. represented factors higher XX% of XXXX. Ex-TAC revenues onboarding EBITDA was the was which levels. XXXX, to representing and was was in approximately margin. and into income was in ad since down, excluding million, year-over-year. in was year-over-year, plan expenses of adjusted primarily $XXX XX% growth X% adjusted partially were in growth $XXX from million, offset QX was included would and cost strong expenses not which year-over-year, quarter.These EBITDA Yahoo the $XX.X declines EBITDA contribution income that stabilized accelerating growth small non-GAAP Yahoo spend to margin Ex-TAC to Our profit a supply a Yahoo gross the have by were in $XX.X net grew due compression the rate continue QX flat due million. which double-digit advertising discipline have related Net in we which reflecting year-ago XXXX, relatively to Adjusted driven

flow the even in inventory controls expenditures quarter. onboarding the by would not partially mentioned QX capital delayed cost and reflects been offset related billion which the and the a ex-TAC adjusted EBITDA. have non-GAAP than For of profit free were from in the full cash timing to $XXX forecasted year EBITDA, flow million over expenses that million million the in previously, $XX stronger of for up flow in and revenue, which adjusted with XXXX, versus period.Free XXX% net of $XX stronger last some Yahoo payables benefited we we if $X.X loss in of also XXXX. $XX gross income Free had in generated cash net finished was the of XXXX, We million.We $XX million mentioned cash of

in our well by our and ex-TAC News e-commerce, profit As said, Europe. yields growth some budgets growth in advertisers, driven in by our core business.E-commerce strong double-digit as our in well stable had largest Yahoo driven businesses, the from initial Taboola bidding, strength gross as revenue relatively contributions momentum and and as of in was as Adam advertising performance retail XXXX, strong strong from

now as advertisers. we great are addition, Yahoo Feeds seeing for success our Taboola's ramping and sources retail In supply

year. revenues grew In as $XX ex-TAC and indicated globally Header have exiting incurred top and exceeded stated of flat Taboola Feed each Operating revenue XXXX, onboard I that $XXX these were traffic gaining earlier, we very million strong for exciting the achieved supply quickly supply are XX% valuable EBITDA advertisers.Our previously, of addition high-quality with XXXX. in Yahoo.Excluding $XXX operating has because to accelerating as In very the million improving gross fact, inventory essentially ex-TAC Taboola's of a significant XX teams expenses efficiency, by adjusted in in up advertisers.As become have News margin prior now the we by million costs year-over-year profit. while valued Bidding Taboola with of forms Yahoo, cost XXXX. is our News, performance result represent represents expenses were This a e-commerce, and are approximately our the total, mentioned source

acquisition XX%.GAAP of its Connexity is in compensation long-term of down margin amortization to strong all target ongoing holdback $XX.X were approach loss adjusted million from income. in Our we our net approximately our $XX.X compensation XXXX non-GAAP we for expect $XX related and July X.X% million, of share-based will peak $XX.X net of headcount and XXXX. of our With the of expense EBITDA growth discipline of expectations, that of expenses which from included intangibles million, expenses excluded million, XXXX,

end our and approximately non-GAAP net generation, $XX.X turn on than the our net prepayments debt, a were includes quarters, high operating were the terms cash use income of million.As a cash that $XX.X This flow year highlighted of source to have of $XX.X million. of in sheet. and publisher cash guidance were XXXX, I prepayments, I full cash range.In in free of were that due payments $XX.X the of the source $XX.X lower above which would was a publisher million fact amortization new Our note of which net had the in to balance interest of cash for prepayments long-term prepayments.Let's historical of previous flow of cash we million million

balance see remains You healthy. net cash that can our

end the of after end million cash our remained activity Cash of million end of replaces QX. repurchases, to share and XX% the average million remained QX, of new and over short-term X, and of in on million buyback I prepayment from our closing repurchases. investments at investments average above also Our $XXX at $XXX.X plus equivalents net and was Cash of a QX. as even The cash share plan, share for of and like positive also short-term our price the provide our repurchases cash exhausted. was approximately buyback reflected balance which repayment QX for at million on million.Speaking to of an of position used an total of XX, million June announcing $XXX.X our $XX.X debt $XX are buyback debt principal debt equivalents The million This share $XXX.X of $XX a and decreased of that buyback Monday.Today, $X.XX our million. price at we update return a program programs. repurchase initiated $XX.X buyback on $X.XX represented authorization of shares XX share repurchased December price on based largely we our former share would had

fortunate fund our operating to are our cash flow. enough from able be to investments growth We organic

debt.We we we valuations, the that shares. current of our flow to use deploy, that, cash that our bringing is million prepaid have our long-term this to the pay down when another cash voluntarily buyback of October believe fact, Given million. in debt, debt best in did the long-term $XXX $XX we have we that To of at voluntarily additional total extent XXXX, intend we to the prepaid free

file. also for repurchases. company it Israeli Israeli stage good to Also at the coming shelf shelf approval filing both have are always, consider hygiene the we obtain We debt the of repurchase will share court of capital.As working are to our a required a on an a contingent availability and upon note, general-purpose in program corporate company, days. the be general-purpose sufficient for share we As paydown

authorization I new believe let me we we new -- today, forward-looking at levels that to wanted have current to intend not great our issue make at that time. stock clear.Now to shift and just make announced sure was do a this is obviously buyback shares guidance. Given value our a

network.XXXX earlier, in onto mentioned all which sometimes Yahoo's Taboola in revenue. offerings, last initiatives, supply As and advanced of successfully in year invested Maximize in native advance the XX Adam we technology months, in was global e-commerce a that we the onboarded these launched our invested heavily and Conversions Taboola News of

our ahead, As through we following XXXX. growth business look driving in tailwinds the outsized we see

materially complete growth by ramping XXXX.Second, continue we Yahoo XXXX. advertiser expect into turn and XXXX the First, to in QX expect positive migration yield to to we be

time Third, brand our we expect our from contextual a XXXX iconic consumer gains as And further in XXXX. supply partner phased onboarding and over yield expect lastly, other XXXX, with a we the to we of the new yield.As volume supply of further top-line increases that and enhance guidance our will data the which for network, are addition profitability. improving Yahoo initiating result, growth includes and strong of

which the of expect billion revenue of growth billion, $X.XX $X.XX We midpoint. at XX% to represents

the $XXX midpoint.We our $XXX ex-TAC to cash million of adjusted ex-TAC to profit versus guidance We million. $XXX EBITDA up are $XXX and That note expect and over XXXX metric $XXX of the represents of million that a year-over-year million I $XXX is million EBITDA profit guidance XXXX. free adjusted roughly reiterating of gross doubling million. XX% flow of over at gross expectation that will

Finally, are we of expecting $XX million to non-GAAP net XXXX. in million $XXX income

addition progress to feel very our QX. expect Yahoo million by the $XXX to in exceed revenue about the Yahoo good excited be continue on and we earlier, We Yahoo, business.Adam mentioned of with to we

the our going-forward how guidance. For network basis.Finally, network, similarly and publisher due Yahoo been XXXX major fully Yahoo other we on we are purposes integrated fact treat disclosures our we publishers on a that into around broader treat QX to has supply introducing will competitive to

$XX me million, and million, of $XX finish to $XX step million ex-TAC negative growth new we This Yahoo and non-GAAP in excited gross that, we towards $XXX profit part to for closing is with let $X Adam fourth business about journey change for that that we the it some happy the the we a expecting becoming me looking to will our additional are to in have The onboarding million open of we our XXXX. that a million performance quarter, $XXX million consumer made net accelerating growth the be negative $XX remarks. supply are gross million.Let to and saying pass in additional reach brand, is bringing consumers adjusted income XXXX, quarter to our of of profit by must-buy revenues EBITDA to investments back of with in iconic million, $XXX of expect web.With partnership $XXX scale million, advertisers as an $XXX million

Adam Singolda

about the mania. $XXX I Taboola's nearly in an through box million. thank of is flow difficult more I'm of never $XXX consumer our has we're company gardens. of signed another And to validates Free times. is many over To Today our million. Thanks, the Disney, coming industry Ex-TAC for at Netflix over to most web high-performing open record been I've $X strong I'm the an a going. expending grown the in good us advertising open the proud for has engine the day Uber, and apps into I'm as Amazon, of XX% of and advertisers vision Steve. a to advertising said year Taboola questions. reach XXXX, of of of Operator? it X% of recommendation walled back everyone, excited grown choice And like and Taboolars' passion, it with to get the bullish $XXX XXXX first we're nearly XX% companies our let's partner our to and you and proposition.Our build at We're suspect us. brand becoming cash for DoorDash, very ad numbers, the them, is initiatives, dedication, with to is in I the to so for more, up essentially on publishers, excited doubling to $XXX beginning buyback, company.As have million. our Revenue to to chance multibillion-dollar billion. to call, their just for making of I journey.And to that, making EBITDA and outside addition these is that gateway of mentioned, being changing. part incredibly of doubling iconic beginning Yahoo, value Taboola's exciting authorization looking announcing of buy a us. OEMs, become million

Operator

will of be first Our today Boone Andrew coming question Securities. [Operator Instructions] from JMP

Andrew Boone

go well can big-picture that guys your think And about as Adam, we XXXX, products question yield $X.X that terms maybe then XXXX, the about revenue, of what yield I back we map are, are is for want as If us that over the are the as year? about that next in on table? the are you inflection help as in Taboola. think billion about of you about and Yahoo of and talk expecting, revenue I what kind pro drivers kind improvements that still puts takes think of what are understand the and just improving key that priorities of a to key step the XXXX? and Or road I forma and kind back gross still we think the Is of benchmark? as

Adam Singolda

the for Thanks Sure. question. Good morning, everyone.

company we're drives just XX% crossing Taboola in and as value business.So to let in it's we're our clients, as XXXX, amount adopting ad into investment and to way itself the going dive our on already lapsed adoption. And after starting this think partners with the you of new conversion So on. me the strong a competitive our a that. we front, #X there's because a going as of lot know, most

perspective, just to they goals XX additive year, of mainly is that us are you fantastic. perspective, of us that launch gardens the the client's around and and optimize allows case the on with or and And is the give it's examples really their because going case want to as we price end another looking used do fastest we're other I to those us coming reminder, that to working is what is work Google second using by kind the advertisers numbers really half but Facebook, to a to they to us AI And in less. really of what AI.So know, advertisers, to have and the We're great CPMs essentially Revenue. revenue with do either the with target do is essentially next allowing know reduced XX%, Taboola's we're a argue they heels us a one more And of for using good I XX% ad they my studies, give simpler of strategy, margin Max At As experience tell seeing ad Achilles' tech quick of spend just don't adoption of would continuing studies clients what from much XX%. the so have amount to easy of is we're the bidding and work since it's clients adopting which the also the their Max the with seeing where to seeing Taboola's work metrics same at price numbers. with They us follow.Again, that launch way our business, still in for conversion are not on is everyone or amount advertisers from this vast to product Yahoo publishing that These kind they $X tech story platforms are the and the industry from walled and the which by for able way than approaching in Conversion bid know to year, I'm the with be price. Taboola, more they and have by letter, times, buy. to is we're CPC from and we're being with to AI advertisers we also working past. churning have just client's are in -- we a ago, times, have in they're Max we boost it's get industry, evolved the the seeing majority work of and the years that.This be the budgets. to the conversions, advertisers for to is Taboola's us, they be to that now flower the whereby in purchase but give these and migrating going advertisers only up rest.It's HX, a GenAI to where to This to Max Conversion. will technology, us, billion new I self-service. What's associated similar essentially great how AI CPM started same CPC Conversion, want serious are sophisticated top us of

that's opportunity but to As an creative and get lot big new been introduced of titles times you X already and who kind great video E-commerce thumbnails, of saw creation, I A they another of come in XXXX. AI This about bolstering become small, -- is talking in where X source is every industry in that is with self-service. X you using so they're love clients. and yield our But great. Open goes. creatives X know, potentially is GenAI.So to knows the they now

the seen launch Associated go business. e-commerce to mentioned chose have in its You that may to I just letter that Press

weighted and also to And You Turnkey improve our all is know of cookie advanced segments working that us about, basically essentially network.Then the today. announcement data across of kind expand attract very that Time.com data and AP, back looking something with integration, I'm yield you HX new in retailers deprecation. was all That's average we're now new excited e-commerce that on a the to Yahoo. of especially with helping our contextual add

our ability going also not drive compound but to that's least, last yield.And advertisers. more to So

migrating advertisers we're Yahoo. from So

fully de best. QX. We expect the of la that are to best, the best creme, be creme these in And complete the

client mentioned Samsung and the things the seen compounding You may the our Verizon, yield see Citi these I you all and from side of and enterprise that that have data are in others, fantastic of nothing technology those kind that side, and yield are advertisers, also kind side of this in of if the kind market, of that will market. in have than do of industry, Taboola, assume experienced my softness earlier we us X we all happens after in better years the expansion.And remarks,

is our in assume So our yield growth that It's we budget, it's guidance. in XXXX. to in back

So to we all of initiatives expect to these fruition. come

Stephen Walker

yes, QX. believe we that your to way, about in did $XXX the the $X By value than we still there's more simple say to we partnership. question then million And with from that supply answer in that revenue second is, see expect the Yahoo, billion-dollar of in billion the on opportunity

QX. fully only good So towards encouraging. migrated that.Advertisers be will that's in a step That's

expect to base get capture that to us the value is will of there also to we capturing So continue the value. that's And what then the key partnership. from full as the synergies grow we billion-dollar revenue to

So will happen time. over expect yes, we it. It

Operator

Helfstein question next our And from Oppenheimer. will Jason coming of be

Jason Helfstein

then Just a and some clarification question.

So to be clear, not that's cumulative, correct? Yahoo, so the $XXX million quarter, in for that's like first

Stephen Walker

on million QX. in $XXX That's Correct. Yahoo supply

Jason Helfstein

number, meaningfully to was -- said like not you And the obviously, that, below we and giving then it have a guess. you're quarter, but just fourth

way in Just like repeat -- the said, the how described fourth the quarter? you language much you

Stephen Walker

said of we millions. Well, tens low

Jason Helfstein

so elephant demand, business to we're the all of of in like -- math different sources, like at kind you're of right, think to get.So of amount thinking like decelerating, about the I here. impact, of year have but mean, you -- really not with how down. I Yahoo end there's you the next around like room just if with certain kind don't mean, like because yields without of the to describing kind day, the means business the is slowing math, a fair, publishing ex-Yahoo, are is we that's it you're trying going that I that play hit the So play advertiser the how kind because different at look, for and the with look we should you the all the

follow-up of cookies. be inventory bringing we and get you other on like then So just one on and the doing that growth around inventory puts yields math versus think identity the that in quick about kind like how And and of Thanks. you like ex-Yahoo? out just do that should takes the

Adam Singolda

Okay.

question. that it's take And I'll good first So question. a

revenue this of top-line growing $XXX in So year-over-year. XX% year, first we're so all, nearly million

A strong Yahoo, not good chunk of it all of it. obviously is So but growth.

revenue of of is million $XXX the it's we Yahoo Yahoo that advertisers. advertisers As Taboola demand. QX, mix that talked is but the a complexity and supply you the observed, -- just that about, advertiser and on with that and comes Yahoo In supply.And that's both

So great where we the really our top-line this growth overall comes from over high-quality time have. is also migrating base, the Yahoo supply growing advertisers thanks to advertiser over and

in the to the answer then to the to mentioned QX.And there, synergies advertisers by full X full in question, is to have to then of And we value. go to that's before, Andrew's X. So migrated dollars get expect as billion need growth, to I we order grow start get Wave to Wave

you that correct So and supply done. over just you're the it's are not as you simple as bring

We advertisers, have over it's the to more complex. bring

way So Yahoo to that is business you're time It's that's just think And take to our get kind ramp. full right, will the core still of it. about the growing. to

Jason Helfstein

go just then that you've on so of identity, we folks on cookies not concerned the should less And dependent talked kind past where in from here. be you're and about

can be third-party to don't more coming Like, obviously and going going that you there's metrics even be to market, to of drive yield use kind to to use metrics those need are identity? However, metrics. adopted though the identity even you more

Stephen Walker

Yes.

I in the think cookies with is it in we'll have that fact, protection take risk of is XXXX, did way reasons in might the -- accelerated Apple believe I X past from mitigated about risk we terms deprecated yield. the well, have, downside for a we think companies actually we while we

store click that of day Taboola million amount of as the thing large second on people times. today of -- people good.And XXX is that's reached cookies a first-party a we have billions that and we So tens we

we setup kind deprecation. think cookie have for good we So of a

channel the that because on.If in don't need any in well new grow it can came there's So couldn't when we to past, I we'll to because, the I the way from further, accelerate money it. don't we solution just that do channels, and to were is potentially other even good do a and market think take find we can comfortable personally again, other us feel anything even spend well. demands about it

their and to no about that who publishers just conversion. successfully our we know bridge need which pages.So think a we comes as revenue from have means our that publishers again, their Taboola buy direct, XX% the that we we advertisers. from pixels clients moves to [indiscernible], vast to when from of what drove have agencies, And someone we reminder, I our no majority, cross on pages,

further is There's buy that's cookies demonstrate potentially yield, mitigated. a third-party value So fundamental clients the to -- why us. from upside need they I This but there downside is don't as we feel point. to to is even

Operator

question coming & next will Needham of Martin be Company. Laura from Our

Laura Martin

is first My one on political.

a and really second And remind impression a your one growth on after I'll leadership strong us my and how flows to there's can globally, please? you answering election that how year, in XXXX. through political one. you And in going that ask cycle So that revenue your then impacts

Stephen Walker

Thanks for the question.

we to we happen. But bumps. nice like and things business, Again, that to on increase us. don't kind material did of planning. and we way like nothing to the did that would financial more political guidance more conservative might that from demand see don't There's terms think in we some nature. bump our again, in as there's in in like what the of especially we coming potential demand kind of in things assume video historically saw So embed is too of some but want about, of viewership benefit we be our see manage assume traffic we where of season, kind significant those coming.So of of kind kind we video, because also acceleration But a historically, we in sort

Laura Martin

talking upside an because in it's spending that's By billion helpful. driver numbers, not the the So the U.S. of $XX about they're it's in way, alone.

new a So people than think the be it lift. political I might year bigger -- historical

Stephen Walker

good. That's

Laura Martin

of interested Adam, what The like Taboola? of about for maps? growth Are could have not?And road accelerate it point develop a branding these second historical high-quality question Citi, asking enterprise on big as you product that bring curious are need Verizon What's new over kinds challenges of of kinds in that, -- that? and what I'm they secondly, types things is you, you of Does I'm that advertisers them, the Yahoo, these had I had forever of customers. think when trajectory really if never for a, Taboola's things your advertisers revenue really of advertisers view of does give product you could your or ideas really types these with you new that there the sort

Adam Singolda

is Most obviously, Taboola on such new it's right a type Taboola. question introduced all that -- what bring is Yahoo this is, it they table. appreciate can we first technologies and publisher of side, kind of is we're because good now very all, a advertisers.But of we Yes, filling a the -- the get of mix clients that right, segments to like incredible of this to we're seeing with of really

of a it So lot see us Conversion, -- managers and and allows these our I they're account things And them. speak our to pixels to are daily our and almost adopting and account to only Max performance terms of new managers budgets conversion to the really are $XXX in in it's increase it relates CPA.So draft trends, to these as rights days. both million. and trends. early of It's And the see good to

So happy. it's they're but still really early days, I'm and things, very good seeing

on historically kind to So ads this going all well think new or of other might to time. want experience develop I the contents time Where Yahoo us as and Taboola is in team, clients either up getting, experiences to way with network, I think over us used as that Yahoo on it's good new potentially these sponsored are that and those Yahoo allow spend would new and and formats is channels.And beginning. will the clients from users a whole open this

brand So I that tuned innovation advertisers would yet stay UX to experiences those that say, offer. and looking are we for potential for and are formats

better rest develop mainly the and the further might further thing. to I'm But I'm the they would think not and us how important the humble. clients.And and render affect across do the excited We're present web, we be try Disney we're our questions, with That's our ads great that might network, open them, our ads Yahoo, relationship but and NBC like partners. to entire we learning, I us make of we're only with we on way those about they So performance. time sensing most asking even spending but

Operator

Cowen. coming question be James Our from Kopelman of will next TD

James Kopelman

Steve. AI you the talk time? The about as learning. set the leveraging I contextual Can referenced first follow-up to then training of data you differentiator and that one for a when view you is Taboola's for for In letter, over how deep And Taboola growing a and it has Adam. have comes amount AI AI data Generative

Adam Singolda

Sure. Yes.

place you on the become like because, fragmented for advertisers worth too companies $X I'm or industry tech X, just their web. is, your relates a I spend at range.So for speak Taboola I everything and to open enough lot of nature.And is again, that the as with that a to by thing, time So what the relying big gives to because it's that that I page that that first-party the has is you must of and scrolling amount bit it's revenue you're Taboola think I us And into web good to how Yahoo. of and purchases, think, the with things first spend on a revenue to have, looking and fragmented big about world. Two, any important our know in and advertisers the to to becoming the open -- it's mean clicks page flywheel money data relationship range. largest must because and that's matter of is to work like proxy advertisers to I the buy Pinterest ad obviously, the really or a that the growing it has, rely this think context important with become at time. we gross is company worth becoming the Snapchat your in on a our publishers today, getting in most first actually I for think target you it's we of on growing partner and $X billion we're how billion exponentially, going, from don't footprint access size, which now code takes want so get have that to all, probably you is buy and thing the most your I And with the

get timed us as data and that authentic the billion partnership. leading grow kind to mentioned the I company thumbnails seen, we biggest able and GenAI it's kind engine, exclusively a a know What's because $X as things other of have able starting the to there's and can I don't us for tell can new is an the can And type last on we So Today has, prompt make insurance we're we a an also can this so GenAI, their very me," exactly that gives And amount original I GenAI And example, say, page is we of data the And of comes I predictability on size. -- going Yahoo in the titles of simplify into most simple. and the here insurance the also succeed. as client senior advertising think exciting Taboola experience can very can to reference to special take us, spend is be give of to love prompt complicated And we've is the another one the expect long way is that going more and why the into shift to an and letter, which then Taboola, is we term. is let's or and well, have is "suggest this the available the brand that the what is opportunity you believe look iconic company those make then us I in the think what very, will difference of over on makes this to think consumer big the you data assets code I GenAI advertiser the from with can GenAI. important to an we of are you to important for to it's is think business to ads. prompt eventually years, getting amount data says, any I is better all what technology to market. person one other.And great working GenAI, to engine. we're has of do GenAI into one outcomes.So as Taboola example, to the own, industry everyone. of we I the few really say, when And to comes we've really client.So titles suggest we're to seen of that into to really it buying to thumbnails a

data that come others to GenAI have. is what's don't creatives into unique producing So our and special

James Kopelman

this And XXXX, gross And revenue partner year, high seasonality? able even are then headcount seasonality to then parts I historical you ex-TAC think typical publishing given that level, your as in and efficiencies. moving ask how Steve, the finally, unnamed the just scale? both to new want of for Yahoo, about the of OpEx some the should limit various What about in you're ways we around increases

Stephen Walker

of So business. very large in in the is a publisher Yahoo core our so like seasonality, terms traditional

think to I historical pre-Connexity similar is seasonality their So very our seasonality.

bringing very way think it's and obviously, way sports, or similar large #X this than you that's have fourth more adding our Yahoo about as with like dominated a think the our the to of to business, think They're that's seasonality. of seasonality e-commerce the our large of about as become to to year, way the Yahoo #X a loaded we've other company, But over and in particular. the publishers. generally, And know, much is.So usual kind in back-half with you and finance, of So publisher, them base more core because quarter the the be on more is is what they year of that seasonality network.As pretty will well. course news,

a to for support cost on find more.Frankly, how similar the some of is probably result it that did we're of Yahoo, OpEx to generate hiring my do control productivity this here, year. And Generative may mentioned that we we tools quarter we who And what Historically, the would There time slight do things. of Yahoo OpEx fact expect improve fourth and working advertisers except lot pretty be hiring we XXXX, headline, base talked a the for over good of ways we of have rest we increase be exactly other about. that for ad. have additional is the would I is out discipline as QX in going is flat OpEx that kind that.I a a good remarks costs. but of this for have that all to account year-over-year, our for to like to AI I of In year. course our lid last creative internally for now what been a do headcount what's advertiser terms and and our we efficiencies prepared in shown think we're that to to people we've the way and leverage helping on find managers good to support the image using used really or our great a AI what's example keeping a and to Adam spend figure of

do up have a with of take of Now tools lot Generative come to it, whereas used a AI thought dozen. we a them of generate time help and it instantly, can dozen them to a that lot

doing accounts. we're productivity, leverage ways your all it's think good on to across finding I job people more about that. a So And pretty

Operator

from will question coming Our Riley B. of Securities. Dan Day next be

Daniel Paul Day

a And a retail business something or any this new like type possible publisher or to of advertising calling specifically out it's brand the say open lines. partner that a typically a maybe feel to web new that network maybe anything associated else prepayment with those here, could so there's flows publisher? on media something So this or mentioned it's traditional worth iconic maybe cash bigger a but with if or scale, thinking whether you've impact like like partner, consumer you you then that I'm company along

Stephen Walker

can't We It's publisher. the not traditional Yes. say name. a

hope that we So rolling I can can the don't brand iconic us. out signed but soon. an it's and mention think we mention that name, I has with

Daniel Paul Day

how question, really have struggling about open of these on in level how either So So last struggling opportunity the reported, we're you social of web to that it they're part in to traffic for dependent and them, properties, how lot publishers, hearing a every traffic for generate layoffs and near industry -- for about past? this generating anywhere headwind at them like much the since search at struggles? you to do especially they to seems is help survive as through think them week you given you're their

Adam Singolda

it of Sorry, Can Daniel. I give missed you to again? that question. part me

Daniel Paul Day

Yes. Yes.

struggling. open like publishers web going lot struggling generate them A generally, layoffs Just traffic. to of through and

them your and in generate you to there? just role as you continue partner traffic what ad tech think can helping do an So here how about

Adam Singolda

Sure.

take can I So this one.

-- network, over on our seeing impact today. we're So not any material

I our are traffic. lot think also direct that a many of enterprise of publishers big publishers have

publisher, was on this a you the senior diversification it. for them personalization.They're a you publishers, think we you're I then at date, we us product because lands side And also, way like the to fairly "What to a haven't an a once work if really week Are we can the is News? you, getting about any to such then course." So think material the I opportunity put think of they page said, Taboola want going me, "Well, homepage with work it's you're with with when people And work deal?" and impact. think companies you level, differentiation concerned is the especially about I And yields, publishers make that our want whereby are value.So able wasn't users to consumers, News seen companies person personalize if just ] conversation guarantees, senior about help audience homepage about. was we're I on or off."And have entire to [ about you're part publisher, on of ARPU kind important about manager, of that other And kind and can from well match down, of drive a do approach with to it long CEO It tell It and your or subscription. work for you can because sure that for with, asked use a can I with to this call wasn't engagement had things about lifetime about CPMs. you as you most to as your who strategic you can't Taboola I to pressure. because your make about have. it sure just It e-commerce do that about the wasn't an our thinking CEO. ago a And time of added the we value. business want growth publisher revenue said, wasn't And we drive just we able of to big drive have AI "But increase use kind we working

moment a want job us publishers that well investments made, So money. because this an such technology fun my exciting is, just as to to work of me, of the part beyond with we as all

Stephen Walker

PR checked say back point. question an about to I first advertising we our to with Daniel, Australia Apple brand, your and we're the partner is official as selected at this were consumer what for allowed So folks by iconic Canada and

to allowed So what that's say. I think we're

Operator

is coming Our of Patterson from KeyBanc. next question Justin

Justin Patterson

of what's to wanted now past seems and just bigger one, like business door these that in I is opening up a about just for support the brands lot a brands It bit little through this then win over of the how guess, and year? like a these originally just conversation bigger these Yahoo, Taboola power brands. scale this more new we more over up-level should are Was Apple there. opportunity gone the around Yahoo incremental changed that? that then, opened up it just you've around think time? And just X, investment really Yahoo to as I more

Adam Singolda

choosing obviously, Steve, excited first able we're about have very Apple do I believe this -- to this it's can't the to news start and But Apple, I'll exciting to about going to talk we're all, is of Taboola into the market. -- afterwards. about bring CFO

market. reach consumers, being advertising members fantastic Fortune most it's they it's So of to pan companies build Amazon to is CEO for And And of become the or see the you Not is EBITDA Board like I what's are is big. second trend the is be a sell only already to Fortune great advertising it be trillion-dollar to that companies to the that ignored. They with advertising going if fascinating -- going want your to their relationship because XXX I ask the the would all is about it's can your growth market. of way that, the cannot believe question, XXX think it too going me strategy around I to all companies many would think could one line a these top accounts. to engines of lucrative not enterprise and of you that companies have.So speaking others like out directly third what world.Now

knew again, new exactly, in excited great what can works whole -- space.So like happening. with going be very really thousands company I it. beginning and few for ago, a a will are partnership; develop I I a we're about sell is years performance do AI with Yahoo, This of I'm This $X stole but a an I this of I it there X mid-funnel to get Taboola. opportunity, data well, in billion think to has opportunity Steve we of that technology all ever about. buy.And never able use to the continue Microsoft. we'll $X call would thing the say, now ads an way of exciting or the think, Apple is in seeing can I is it's a a from thought tens company than or and my play things Yahoo be part thunder, kind big this And announced box missing. a that ad never chose Taboola And However, with more Netflix I hundreds excited engine advertisers companies it's now to opinion. it's be to is advertising And more or, that unlikely think One, advertisers. users for But they'll billion in to which potentially matchmake that become second I partnership we and happen. they're thousands I'm And mean between thought when this for hope unlikely should that is we it. and position Pinterest these advertiser my

Stephen Walker

sorry. In oops, terms of --

Adam Singolda

go ahead. No,

off. Sorry, cut Steve, I you

Stephen Walker

Yes.

Adam to us advertisers, think Obviously, would they required innings some kind our but do And incremental that has are some our business, I do.So so we any for consider advertisers, we're we positively like every some from of us there would from we being think partnership previously. that's these while terms all here as And learning said, of in terms definitely I Maybe great their partnership. things guess, still early types just We're way and Adam you learning something in impact advertising from I core would great.We impact In partnerships, of these we're learning of not partnerships learning all mentioned partnerships. our support helps but partnership, like. is will world-class go, part I of want. terms we're we're of requirements. from of as what things that got I these building earlier, That in the long there's what of scale unique at have win always it. business, that from they in we're like winning the performance Maybe it. investing large think we never yes, it's investment they significant these reason say capabilities a things it of Yahoo, they they new Yahoo much Yahoo, I to that capabilities. in have of because could invested invest got is that

just these signing. that there it's basically while So advance partnerships and of is way we're a investment, to business it's your all true

Justin Patterson

still thunder brought you Adam, worth, it's what for the there. And

Adam Singolda

you, review thank get Thank can We but you. a you. that. sir. appreciate after Thank this, still I

Operator

today's you. Thank conference call. And does conclude this

disconnect. may You all

Taboola.com (TBLA) 28 Feb 242023 Q4 Earnings call transcript