TBLA - Earnings call transcript Q1 2024

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Operator

Â Hello, and welcome. We'll be beginning in 1 minute. Good day, and thank you for standing by. Welcome to the Taboola First Quarter 2024 Earnings Conference Call. [Operators Instruction] Please be advised that today's conference is being recorded. to conference like Kourakos.Â to now would hand over the Jessica I

Jessica Kourakos

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

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

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

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

Adam Singolda

of growth meet to I'm year range are accelerating encouraged flow Adjusted all year. Good of $XXX guidance. see more high All and the to with million last grew be than are for guidance Thanks, thank of metrics. Free also nearly versus strong TAC million ex also EBITDA that doubled our year. all and in end $XX than year. -- million end to metrics XXX%. us. XXXX our and morning, compared guidance our QX a track Jessica. cash of QX last rates We had everyone, the high grew on full joining above you start results range more was last across $XX XX% our

cash flow, is, business, delivering premium can the that just initiatives users lot across recognized a growing advertiser our success, making I attracting Tier all an main us big of while with is X experiences for bulk Xx also is we upside you publishers focus Starting our core to about yield the company our initiatives looking first, for XXXX When second our where and spent successful advertisers. fronts, free tell QX projects in our advertisers talked XXXX adjusted are growth strategy record ability $XXX every QX on same guidance, on $XXX strong our time and the XXX% year and year, flow EBITDA commitment $X use to which share over for our a XXXX and at returns of growing approximately a cash XX% nearly double-digit to and long-term making over growth us. over metric of were accelerated demonstrating almost billion, With our to of growing our cash, Xx XXXX free showing year focus ramping our which this And shareholder TAC to versus expand from our we Yahoo. strong in guidance is execute. million, $XXX Revenue reiterating million, what of Looking and buybacks, return, in last goal to QX make and levels. year-over-year. come growing to XX% at million quality back confidence driving performance and a ex

I've growing and imagined we past. letter, there's many XX% in brands driven the report being I'm crossed ways, a happy fast. big that revenue in here just agencies, more of mark it's wrote by I and upside think We shareholder my in to As top the our than

me for about lot share us material a as think and to even more our as can be this me speak this as partners this. faster.Let onwards, hear year a bit will well You it driving about I yields

of launched includes brands of to advertisers the which partnership, we Open experience. hope Disney, offering. and advertisers on while as Apple, is of reach We but our pay funnel for budget looking to budgets to Hulu, publishers, our and top such NBC, Select Yahoo We're a Taboola the Taboola the City, to are faster. have ourselves to for willing and top deals exclusively even premium enable XX% beyond performance our ad new help not recently premium performance branding as stand-alone Big drive Yahoo!, partnership big go and search marketplace Between the it a not and premium Select, here, for performance. social more Tier success focused X to way Taboola play. This differentiate with in a Verizon, a Apple Web

conversion the million R&D massive making migration continue share We're known and that successful. Tier investment now priority Yahoo!'s biggest AI On is as exceed and QX on midyear focused gears our our data to encouraging MAX seeing to migrating advertisers AI, to rates, our continues in Switching to and to in MDR we We're front goal our to product and has to retention I'm as similar revenue omnichannel advertisers Taboola revenue. complete for $XXX advertisers ones Our supply. in reduce versus by conversions and also work bring in taking first-party Yahoo Maximus we've achieved improving and second adoption growth planned, our was X clickstream to advertisers migrating who year, call equipment to on know-how start double-digit main from this retention track not. progress results in make to is Yahoo!. advantage look center. conversion almost for budgets of and rates and the ramping MDR. by amount improving training to migrated of We're our who advertisers that including happy is MAX past models of XX% top on grow here

momentum to to could Apple the stocks markets. team budget new and be wins U.K. News they are Apple Apple work If seeing of was pleased more reseller one was Xx with finance example the more good confident for and efforts encouraging and the and we the Apple, as it. an the and spoke that use innovation of have share of their is over software be While Taboola partners.Turning here. continue markets. our amazing Apple authorized companies reseller on most work where starting Overall, we to Taboola it and not technology. to partnership this a authorized proud of Apple network. and there AI that advertisers I still just will U.S. bidder. than personal in selected advertisers now about the new has We Australia the us monetize using story to asÂ our happy was And that Apple success expanded has quarter Taboola the campaign the and News we Previously, and an with relationship role serve Taboola is Canada. couldn't become expanded our e-commerce Yahoo!, the lot of I our the now a our performance I'm recently, as proof of so performance are here, supporting one to a leadership product now world's learn in stocks when commercial growth one remain One largest increased our strong ad our recent ever more there and partnership, this and course with drive a done, with lot be largest to engines onboard matters, our that to of last between important

it, Our to getting similar on key Taboola onto and Instagram what engagement. we're more is content seeing seeing you're investment for videos real-type or great Snap, user news vertical

to my introducing In with over such our weather, XX more. a we the ambition the here dish. team we're as have many, over years have refer users engage as people and And may gaming chance minutes addition, various to a to main likes day next many us to product with it, or become spend utilities to like is

new digits Taboola a e-commerce it's solid we again. On the quarter, We front, Press by powered great sites exceeding our growing and e-commerce launched expectations had double Associated and beautiful.

check the AP to check that it should Byline. It chance it's of out, with decisions AP and reviews our relationships leveraging make matter gives to product a retailers. You them, trust people called and

extend recently to DSP Amazon Amazon's We with Taboola. allow into to budgets integrated their sellers also

you As an example, to reach a and in store want buyers let's the open web. say Amazon on you have

now your can You DSP Web the Taboola Open extend reach on publishers. using network Amazon's of

across opportunity that but thousands our which Yahoo can bidder head integrate Our display of over the time is be is including publishers, into potential quite stack, an of meaningful. is to their still here small,

into in core long year strong are create of expecting high engines business year XXXX growth synergies QX term. the growth summary, excited we're last while In coming and reiterating our for over of prospects by Taboola XXXX, record We the double-digit our exceeding their a in to ability across extremely our guidance making guidance metrics, end us. our over this year all with

that, on a year is pass authorization, to laser having buyback growth this more Yahoo!. outlook and million Our million the million let yield and revenue Steve accelerating focused review in growth $XXX call over success, free cash strong continuing advertiser flow. and EBITDA to in We're me financials $XXX of and which ramping of detail. while $XXX our up should With of over our we're result

Stephen Walker

everyone. morning, good and Adam, Thanks,

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

through double-digit Ex-TAC levels. million profit and accelerating advertisers benefit growth by year-over-year, XX% of available $XXX driven gross supply represented we as well $XXX in growth our million, approximately advertising were in having revenues our the was saw spend Yahoo as a was year-over-year. QX e-commerce of platform from by business. and as QX growth grew which growth accelerating Yahoo Ex TAC on-boarded XX% Our

included Yahoo's new note we in advertising financials the of that quarter. spend related note spend, each to our transitioning will organic in addition, party premium our brand as on financial platform demand outs. which saw of our as XX-Q, is and advertising from our well double-digit statements growth Taboola. call you In growth On One this strong

call and party traffic see For instance, our out revenue on we acquisition costs. you statement, related will income that

those revenue -- relatively traffic the for it through statement. supply. share revenue we might not spending disclosure understand. on quite is flows pay on you payables party is As the Yahoo!. guess, flow cost is -- This advertisers numbers The related in sheet of and the Yahoo! types simple simple. to cash as The are change party Yahoo! There acquisition X are related balance and payables to of to

DSP, These advertisers but revenue that are and multiple They formats is what omnichannel have appear we called Yahoo!, and on there are Yahoo! native. still platform, they by revenue are of First, all recognized advertising built as through the as native party revenue. historically advertisers. a Taboola the Taboola collected spent and so the display, video buy by are related

directly that or Yahoo customers customers native on been do appear spending type other the related The video Taboola Taboola there advertisers related customer spend but Yahoo!, revenue is parties, through spending since DSP. because Taboola advertiser they and they disclosure related party on supply note through Taboola advertiser that or the through related of advertiser They the of that amount are not historically small related also only are on. not Taboola. we've by these and to they platform that has Yahoo The second Yahoo! a party. now I from that spent an appear Taboola an is related in last advertiser transitioned formats billed not so in other historical do are collected that but not in brought historically Yahoo by now and other through are no revenue -- is is the the type to collected companies not display, was platform. party either other These of or through will party had now new is on revenue advertisers built

cash our party help ago Yahoo! also year to flow EBITDA, net the full the change preceded loss scheduled However, million, related higher primarily income net the explain related to Supply from million, stronger related these offset of the sheet to very adjusted was adjusted is the programming. regularly representing that EBITDA party benefit EBITDA through than flows the was get EBITDA the receivables and of line revenue into Yahoo!. and $XX.X will in due a expenses the of part In the that what also Yahoo! were our non-GAAP cash revenue. positive disclosures.Now in XX% are was margin. Year-over-year down, flow QX, party onboarding was me $XX.X transitions. $X.X million. was the related the a and back that period partially Free balance onboarding in the the which I small note to to which of forecasted Advertiser expenses by hope not related of let benefited our receivables. adjusted Adjusted in I statement

ex-TAC of happy our drove in associated Operating transitions especially inventory cost million catch costs are improving We performance the the as with QX, as advertiser Through costs, gaining that efficiency, very up from expansion. we expenses in which revenue we significant revenue year, and the margin QX. teams accelerating expect are Yahoo! the of $X up year-over-year the remainder a the the with Yahoo. onboard result to were will drive $XXX million -- addition of incurred

margin strong million included hold that income. of of $XX.X to expectations, to expect XXXX, flat of non-GAAP for to Despite of of expenses back of support the which compensation hiring growth million, all With long-term compensation is of still net ongoing million head adjusted discipline. net in peak continue GAAP our count approach onboarding $XX.X July intangibles Connect will of XXXX. Yahoo!, share-based EBITDA were continue QX focus discipline in roughly acquisition $X.X from we on million to to XX%. We excluded we related amortization $XX.X target our loss cost this our and expenses required and expense relative its the

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

a generation, on free had publisher $XX.X $X.X cash interest of debt, million. which cash payments QX million operating which This our a net of and terms we cash million. includes long-term of of and of use $XX.X of flow prepayments, cash million flow $X.X In were in approximately cash in source were

the I have to cash turn lower balance prepayments previous note that of would net As fact that amortization prepayments.Let's were I in highlighted a historical to new the the prepayments than quarter were quarters, source sheet. publisher due this of

net cash that remains You can our healthy. see balance

the our short-term end loan share of the Cash end cash million above our $XXX.X short-term and even remained investments QX. of and of at long-term QX, and were million $XXX $XX.X of Our net position Cash remained positive repurchases. after equivalents million. plus cash equivalents cash at investments balance

announced and have outstanding $XX repurchase at our dilution was QX of least repurchased our end share our of stated maintain in Speaking offset We our we expansion initiated QX. previously our $XXX authorization When million under of buyback plan. shares $XX of million levels. any XXXX to at and repurchases, that million program, still we we intent of our issued shares

have lower exceeded the million issued the of we goal that our that see almost outstanding by and XXXX shares. can You than of as shares end at QX X were QX XXXX end

cash, In flow. operating organic able terms growth use our of be future to fund to from cash investments of our we continue

that shares. we our at long-term additional of As extent we our that down we to believe valuations, last the To free quarter, current flow cash debt. consider said best paying use buy back the deploy, to we is cash have will

specified working to has report capital. updated post As on repurchases the of that that must sufficient been a repurchases Taboola in still we Under process always, companies buybacks. strength intend no listed in buy days, share within upon Israel. conclude financial a securities contingent debt we Israeli and website to with also to outside of I'm test rules. that can as object Board notice back early availability new we both process the for the process, retirement Israel we if shares, begin share XX for our are requires creditors The like meet the and happy our the

back investor to guidance. you expectations shift Two intention forward-looking going us of let page.Now shares see included important to forward, our our guidance. in our notices to this are So buy may post me

to left the complete migration we be while there is by advertiser of will done, be Yahoo to the expect and work we XXXX. year, into middle this continue First, Yahoo significant ramping

investments advertising as Second, contextual the yield growth of with and data addition to to Yahoo network expect we in turn supply and our of the XXXX performance in positive fruit. our our volume bear increases other

profitability. mentioned, guidance line and to guidance we top reiterating start for are XXXX, implies This strong and with we are our improving As happy strong growth the I XXXX. very

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

$XXX We of profit million is at of the That to expect ex XX% million. TAC ex-TAC to year-over-year up profit and $XXX million gross $XXX midpoint. million gross roughly $XXX

of guidance XXXX. adjusted expectation reiterating flow will and cash adjusted are free of We EBITDA a of over our $XXX guidance XXXX both versus million EBITDA and million. cash roughly I that free the $XXX doubling over represents flow metrics note

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

are guidance. introducing We also QX XXXX

profit million, ex million to $XX adjusted income $XXX $XXX million, positive of we quarter, and $XXX million of TAC $XXX This to of EBITDA $XX $X $XXX profit million gross gross to million. $XX revenues million net of to $XXX million million, to of expect non-GAAP

we me performance. happy finish that our first are very by Let quarter with saying

will be journey to that, And and web. are expecting for new to that to remarks. me we partnership in accelerating with in Apple Our supply closing growth in -- of Adam for pass XXXX, The becoming our and in is additional onboarding a is is some XXXX, scale let additional have accelerating the we must-buy forward we Yahoo! our the it as open part back towards advertisers made with I'm reach XXXX. looking in a the investments bringing growth financials consumers step looking the change

Adam Singolda

accelerating. seen with started Thanks, exciting momentum our Steve. an business high and for guidance metrics. our all Taboola we summary, financials, panning of end here It's with across our investments great above time out. In us our Starting beat a growth it's strong to rates at see XXXX

we're year When free double-digit our us on for overall rates at $X record north million growth QX, XXXX $XXX see. program, demonstrates is are of to are million Yahoo. attracting nearly successful are adopted priorities which On and crossed On accessing select which QX XX% top accelerating, guiding our After ramping revenue, over who QX of on higher in with X almost the ability create a versus complete will MDR. as in NBC growth confidence and $XXX focusing advertisers. in of advertising it's making and advertisers execute to also our double-digit EBITDA a conversion MAX for business, planned, success, on flow. of to adoption we We're last Yahoo!, it billion of is cash advertisers, Our In and midyear value. our X we're Disney, advertisers top have our months, year premium is and and and hit our executing our shareholder buyback We're XX% with we Yahoo!, year track the $XXX this million network, which as looking Apple, including migration by others. thought. good generating

we're momentum that, seeing Beyond great overall.

with header to the is need e-commerce, exactly We expanding U.K. stronger. beyond Australia, more and momentum excited relationship I'm and to and business our bidding bullet and synergetic business, more showing where know we engines, Apple Our U.S. making advertiser are. to what to and now are publisher news our our to becoming and be strong we growth Canada core do.

And We have it advertising to Open company first all Web. you must of working the journey. up Operator? an questions. very part the world buy being incredible the Thank all for open for let's team that, hard our around with for build

Operator

Â [Operators Instructions].

first Needham. comes question Laura the of of Martin Our from line

Laura Martin

great on guys. Congratulations. going and There's lot a numbers

these question first So priorities. on is my

lot trying about talking onboard performance, Yahoo!, So I the performance and know shareholder advertisers to advertisers. that a in omnichannel but letter these there's about you're you're high-quality that at

elevated than advertisers, to advertisers isn't So was number strategy please? I high-quality speak and to Yahoo. -- increase Yahoo! overall the be higher to that, priority of is you've just the that a performance priority performance you this that total surprised Can this -- of #X just a part an

Adam Singolda

forward at I'm or, seeing Sure. Yes. you to the soon very event. looking

us finance that able doing migrate on of or overall, seeing, advertiser and and advertisers the the there is more to performance, with mentioned willing is names to premium Taboola that also which is and mentioned also Apple before, that they're that on to the launched so, ability good and essentially letter we ad fairly and premium spend lot stand-alone seeing double and of we're unit top Taboola a Samsung great is in they're NBC the Select, -- to So which we're and the premium our There unit, largest and allow buy In we when Yahoo!, quite us, for performance pay way segregated interested this advertiser spend index one was technology. Verizon specific a to why of case exciting. Yahoo two, one a study is their others, a I personal thing are of coming and which something of an names are to kind ad pay And general, to create a like company-wide advertisers seeing we're board. and Hulu in like a network between Disney new the it. BBC for

the So performance what of top for of And top-tier opportunity we is a a a of Max think all is Pixel using us on that kind This the like. this conversion, by of there's play. portion page, our we kind grow again, brand tension focus far performance is to things not funnel an advertiser.

Yahoo. coming agencies However, we've of and partnership learned with lot the a and it from from brands

And a I That's short in wallet we've Taboola we're of there's become to why me about Select. So performance revenue, it. excites from a $X grows but of focused. and that's kind billion billion because agencies that's $X lot brands billion much opportunity for more to launched Taboola speaking think to lot $X why as what of an

is I opportunity quality. elevate an also our think company to overall it

#X can the And priority yields that's is, see to and growing And opportunity you just where I are by can So can company's performance such even going, X it. or was many, thing far, over I X and that triple actually, about we far, if actually then the company's about Taboola think we're you we And double years. where by it's because and is and the by the #X question about many and yield. speaking from why our double think I maybe you why biggest accelerate and your yield, advertiser we an next the do to like shareholders. company think revenue, for if double that, I

So team, on we sales advertising performance that tech even from focus our with our work biggest have the Yahoo. the team,

I expansion years, So far X X is Yahoo the course, yield to next on. And the for thing by biggest do have we over Taboola we XXXX, think can thing the do. in is biggest going that of

Laura Martin

like set XX you the And what How then intrigued the engagement secondly, was about of of the between of core of talk I today gap minutes shareholder minutes growth engagement to do a is XX minutes? going your the goal is of letter, And in you're get tools in it is bridge data, of where goal? you is which engagement what to Could today? are a what do? your day. engagement terms to engagement are? level drivers What And your you that

Adam Singolda

far as driver Taboola we see news is today. Well-- for biggest the that as Yes.

the be as even Google to then And main to earlier that us is is interacting screen is integrating happens the whether screen, So more kind is to what itself. Taboola news saying Taboola OEMs go of apps. before becomes joking first before more lake and the Facebook even lock see thing the referring they and was because in the I or is team which or with consumer my call device are other on they dish that they

looking times first over we XXX consumer screen and lock -- do. day. a under the consumers the become average that's thing So is

engagement. videos. that, I now introducing and getting we're Snap and And two, is product road what we time see one letter, is map that expanding the quarter, what like that vertical full-screen of my reels and is engagement seeing our vertical doing, specifically acceleration is we're this around that more videos, in of with over and mentioned Think more more and utilities. consumers, because more like and in year and or oriented video, last Now it

if As what offering now that getting that mean? see does AI with them to might that, different engage we're so introducing we're more things to We're -- We're them to to you consumers an might to example, thanks you utilities And we're offering with Virgo, giving games. time whether and like. like you're you consumers. more personalise we're using

we it's a current time. So But digit tell single of of can share in but growing. kind I now, didn't Taboola's you, as

minutes. this many digit have years, it's XX get cases some that to We over you that next when a of is if you I is my or over be double my to a it. And kind people's minutes believe And many, XX build philosophy business more great around time, time, aspiration consistently than the day. get

they our one think to that and it something build go especially I the and publishers you if things, a be think again, really again with Taboola and of click us Bar, to it growing consumers to it why to because more to matters traffic publishers and to a even it's become I core So those become like again allows and site, Taboola all it the And publishers publisher want then Gemini because important source Jennie to synergetic lot. a that's to use follows. and again, revenue helps news I But consumers. mega it's you

Operator

ofÂ Mat Citizens Our the comes of next line question Condon from JMP.

Matthew Condon

in how help your you to raising macro My first beat you just preventing after your strong XQ And or from guidance happening unchanged. otherwise relative left there is in that's guidance? one to then guidance, something you a Is my as you expect the and just year and full coverage U.K., opportunity this the second U.S. do of News to the Apple financials Apple just your question and can expanding in XXXX? stock impact and contextualise you're is the

Stephen Walker

Yes.

guidance. the on question good So

on basis year of on a obviously revenue year-over-year guidance, we're that terms our QX, grew full happy XX% in ex-TAC So an XX% basis. we and year-over-year

a as the for half. quarter was strong EBITDA improved margins adjusted we we to it very And move expect us. back So

to margins be adjusted least at So we're EBITDA approach XX% our XX%. still year full to expecting or

adjusted So think and is where year ex-TAC highest on our we're I are. record. It record going happy we XXXX, us. be a for EBITDA with will be highest pretty in fact, to

good feel about we think So strong. it's early. we're very the where overall, still But at. guidance really we is

we there's is. a year and early feel about to do, as good So rest to adjust being while work as don't of yet it we're we lot at, of the want where very the

we're where So full we at just the year ready with happy this very to stand. not We're point. change

opportunity... of Apple terms In

Adam Singolda

markets imagine. speak Yes, as is, to great you X also I a a step -- us reasons any to yet very we us advertisers and expand are kind Apple Laura's X good specific what a a don't U.K. to another markets. company for Taboola can for anchor following you our Obviously, think But that drives it's very relationship like accounts forward towards work way the can this one, with. of for company now tell We like with consumers. U.S. premium in to things this exciting the one giving question, do reach is about

than that for have looking there's premium Apple, that's offer that awesome are and relationship So to no more us performance. advertisers that to and brand really quality for

we chance So that's that the brands one Apple with one. largest two, world. of to our more elevating believe around top It fits And getting partners. becoming perfectly has do access our and well a even of all kind of

comfortable without into saying specifics.Â I'm So that getting

Operator

Cummins Zach of line the from comes of B. question next Securities. Riley Our

Zach Cummins

you here year expanded based work relationship the just had relationship, of the on the on Apple talk continue X and I the about outlook. kind year? we can be just you half going of into with guidance baked ramp that of QX that's is half side development to your into and question onboard And the the just required kind as in unchanged to around strong second additional about that the a the should then on the of assumptions this second Congrats results. part QX are going how think progression the follow-up

Stephen Walker

Â Yes.

question So the though the guidance what's about specifically? QX

Zach Cummins

that are how key mean, the into of to the that half year of performance I about guidance full versus, here assumptions the second of baked and date range into the hit reaffirmed. year the should that's Just strong kind that think progression we

Stephen Walker

it. Got

that QX year of think most So I Yahoo! that making are: the the fully and full midyear. one, guidance we're terms assumptions ramped in by guidance, important there the -- is the frankly,

but making we're -- to good of a work do progress. still there's So there. We're lot

to from across, of to of advertisers we really Adam we brought rest the that advertisers the think seeing good how get results some and I but finish alluded earlier work across. we got some the are

for the assumption is advertisers or is result. made, benefit see happens. as one the and to half So yield on from I from back some bringing yield think start which that's And some last of running gains of to some that year. about our own QX other be a basic we've see across will then from year, We're operating we performance advertising, assumption start levels kind gain we talked start to that basically gains assuming work in yield and roughly assumptions those we the we're new also the that, especially, think that we quarter that kind that I at as we that expenses of that

some we think yield So most assumptions from an move X EBITDA back into I midyear, basis, assumption. gains that's start half. see ramping But the X, basic to Yahoo! the the and we important as by the were first

In to ours. dev publisher -- don't Apple make of work there's partner it's terms of successful, anything a required think I

is special So that or dramatically unique or there's different nothing it. about

to doing think advertising successful applies advertisers we're work our applies work. of like to it the publishers. just I that all performance the other any that making on and Apple performance

They there's of true requirements, unique. So but own big have publishers. their our I that's Obviously, don't a think of partner. particularly anything any they're

So nothing there. really unique

Operator

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

James Kopelman

Adam. Â First one is for

doubled. which more You as AI, advertiser And success experienced? advantage mentioned and that of Steve. your more GenAI benefit their over question to The will AI models. mentioned of advertisers larger role time? potentially reap rates, was AI budget tools? take a follow-up retention much that how AI have training from about the benefits I how wanted also you they your of What you then training than budget I allocating is then specifically doubled financial the R&D models toward And And the ask your in are campaign for

Adam Singolda

questions. good And Sure.

initial brand conversion. conversion and play an In seeing important to Taboola that's a that to so an The And lower we great with specific ads objective MAX once question, and we're core to spend case, was starting were looking -- that very they double which funnel what technology first AI us, incredible metrics all had migrating know And was use they seeing is the they're MAX work this get. name what decided the success. the with results by way. their advertiser part on So to fantastic Taboola goal, that of spend. you're significant,

yesterday, and Now it driven was at what now my range all day cost I board by better. I I of see see you to again and we board people came was just you, the the from specifically even is told AI again. those, XXX we just don't it. shown And something DAUs. I want a X,XXX the million per think about Because that within But reach expecting else, all tell is happy and end were if we that said, know I to I and day, a of if acquisition had of like I that's well doubling want again Taboola, about can but right?

size so. the roughly snap or So of

and supply. a so we reach have lot significant And of

So for successful the on why so can for this I company, I make and that and advertisers performance we why tech company. top-tier is much believe me, an making if product successful advertise advertisers to more is triple budget, truly that And is get we performance priority #X and from invest successful. team the continue ideally and can the double the and

our can on Board to of a nearly relating allocation, presents variety things Board, And mind tell board. works company. for that R&D our our a us as management to of team, advertising. of the you performance of top team terms I half In every It's different

of is sure half much our tech I'm specifically that. financials, it's team of not but terms we if In on working dollar-wise, about how shared

Stephen Walker

rates. also little And then you about a bit asked retention

in improvements So are this our how of -- great is advertisers I their they're there of kind using and we tools time in our disclosed doing. think a in that new AI our of which shareholder our NDR measurement have this NDR, that double-digit letter our

new any your you're disclosed NDR haven't be We information about your that losing positive advertiser retention advertisers. obviously, but if rates, can't

good So it's obviously a sign.

Adam Singolda

Yes.

were you I think asking.

do We're spending what and is lot the we're -- and at historic from data a in or taking didn't a list doing that. that resources show so financial of that's transition are -- a again, on AI essentially XXXX. So from more what are of we that we to we're training create But now, can advantage constant recommendations big you. that a we in to advertisers perspective, like look a way greater cost

of opportunities I said I the that campaign So fast. biggest and of if Taboola a you churn. with likelihood really, challenges advertiser remember, retention faster get really one -- the earlier starting around in if you're less the shown today, is can The conversion, success the

So advantage what consumers new recommendations better we're is we And significant doing conversions training we're of list rates. increased come can and our data a that hopefully, that historic take that way in process. of come the models so create faster can to retention from to in now earlier make

what in I that's So we're the did And doing now. mentioned letter. that

James Kopelman

then for one one last Steve. just And

we remind and drivers throughout OpEx Can rise should And -- And year just that should us is do continue your your call-outs this investments? across go cadence the the any it marketing? the sequentially what and you expense given it through sales as XXXX, for other biggest have line. you to sales through of various the On are OpEx line key marketing year year? expense

Stephen Walker

Yes.

in -- were and transition from support of Yahoo of hiring, I is that marketing of think revenue so people Taboola going to this most by and the jump. that hire support to to generally, advertisers we've hired to kind of sales the most the way,

was So that. full we're quarter going what we've mostly at hire hired most for to this QX point. a of

very there forward, be while slight be to a probably not step large. will So going going up it's

now. level, at So generally speaking, I think we're at least about the right

that the work to and and or we're going ramped, for fully we've there's where We're finish supposed do. then Now if resource next let's any to got months to see couple additional over see the anything for from going we're We'll other work as have we'll of reevaluate. of be the need midyear, -- by just that to said, here left at operating we like we that only out like I year. on But is what expenses be now, of call that. the think roughly flat expectation give rest I we need. would the we're And is

generally, feel we're I the all we understand and need good that advertisers to do. reevaluate we caveat we with So think, once have board what on we'll those about we at where

Operator

of Â Our next Helfstein question comes from the line Oppenheimer. ofÂ Jason

Jason Helfstein

questions. X So

it think the million we the given progress year, the Yahoo!, a $XXX on million one for to would going like $XXX had above I definitely around you like given track that you're Just seem did in the target seasonality. quarter, and

about need host to just look geographic on fair either to how a side were category of specific help you side million second, it's a $XXX way us think don't was not million. pockets any product quarter? reasons. have a the we there of the it's know I be, out number for then weakness, the ad if if whether what And be new business we imply talked side $XXX down of for that or So kind really back to like like or about But Yahoo! at in -- it want we would X%, mindful would or although

Adam Singolda

great that million we We'd is as one, still crossed like to would things So we see. $XXX the to see expected, happen. which

that looking of point, Yahoo some being other similar partners at of multiple Apple, think core, at And demand, and is our similar some is publisher. we're have this part to across have of demand I one types big in we source distributed and we way obviously big as a small. to Yahoo a big publishers, that

double do perspective, which if that type math, from it's is to see. growing good that digits, So core, you of

good spending happy happy. even results. that I'm migrating here earlier and see and today. to about that We perspective, getting I'm are performance that spoke advertisers from So

things see. of like track lot work a on there's we us. the complete And planned. midyear as again, So we to to of moving as are by We're ahead migration

ramping But obviously It's a now, fact the share lightly. new planned. do as it's going it the taking partnership. beyond to as of not we're big nothing we and work, that So there's

Operator

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

Jacob

is This for Jacob on Justin.

believe there is revenue Select, in cohort seeing the reception you a recent the with you're top how mark, anything opportunity advertisers this can aggress XX% And efforts advertisers? terms success driving with of Taboola introduction of the With what the these revenue with expands early the and advertisers? these brands from of from share premium you are

Stephen Walker

our why of advertisers and for brands say can we kind growing what's is what business driving above premium agencies is to Â So XX%. success those and

combination a it's of think I factors.

not it's one anything, thing. with As

earlier spoke Adam and of advertisers. conversions we're MAX our for technology seeing fact about So good those performance really that the AI

So that's part big of it. a definitely

came we've out agencies realized have we're with really, that position specifically an well. of works focus what's these our the this we you was we think dramatically. I they got we're grown targeting brands we a of large Like built for announced teams are our -- the into them. capabilities. really brands Like Taboola the for over working on That's the works. right we've financial added everything publisher But technology offering and has supply more Select the Microsoft, to now together so about big the We've in if at Technology got inventory it like you that's we've seeing we've Apple, because when state sales have think capabilities then added had inventory. being the also and we quality the We've So with sales really relationship high-quality think the we right across major at working it and it happened part who works, the budgets. even now think to built it. the right package more We've lot that year, technology to that with get is that that's What because so Yahoo. And helping. time well technology talked we last got with agencies, and and expected about and that a advertiser them. spent building than for is, a success relationships and we and

we called at now an Select offering decided we together Taboola in think is it So that to right place put time succeed. to the really all into

how of all kind came that's So it together.

So the and the having technology, at it sell package to together and it and we're the from from time sales success supply, the right go it right -- comes moment comes focus, right comes now from really aggressively. it

Operator

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

Alex

and e-commerce perhaps relationships? what ex XQ be This how TAC the near growth throughout the then quantify accretion should is lean shift the we potential thinking year about And factored into for on in you this upon as these over new the medium mix ex-TAC you term? Mark. Alex Could penetration your to margin expectations you into revenue and e-commerce

Stephen Walker

So break our business out e-commerce we don't specifically.

So kind I'll what historically. said give we you have flavor of of some

is e-commerce of So what said faster that of growing all, first business. the is we've than our rest

that, business. particular, So great. in by high of growing extremely quality. part about is excited a our that's that is the What's Like way, it's e-commerce demand,

from or a Target coming and as Walmart merchants companies well of Wayfair a brands like like directly that. Skechers it's a or that So other combination like people like and from as selling themselves

business, momentum. our the rate expect and So it of good that, really growth rest that's we the of to continue. showing -- exceeding is we're going It's

we've we much how really over So disclosed it of kind is about disclosed Again, the time. of haven't e-commerce. breakout what that's

what's the to to grow relative of of kind e-commerce. time, terms In ex-TAC opportunity over margins especially

of That's what kind we said the think is ex-TAC around first So all, guidance. be of we've of our at year. we expect midpoint to that that XX% margin this said We've basis. net that reported have will beyond of back be And up a time. will we an and E-commerce that opportunity to be to part growth get that XX% over of e-commerce. on

really just overall. us margins ex-TAC to margins and our because of with helps accretive a highly that. even it's demand it's high-value beyond But that, So

XX% So be that think part believe we grow from over have will of e-commerce. a do above a we back And time. our margins good ex-TAC to I opportunity

Operator

no seeing Singolda. to like the I you. Thank call questions. hand would back to now I'm Adam further over

Adam Singolda

XXXX, take us, year Thanks The a great key hope our one, reiterating in call are: the business record on the today can very to the happy joining which of that a us. end with everyone, momentum high the being we're start today. makes the away year this our you year. I call for see QX strong guidance, showed for things from

Apple was priorities U.K. work, the Last Australia News see we're And going Canada, and everyone there's advertising expanding. hope success joining is Our Yahoo!, see. quarter, which doing are on, then are so And momentum and lot growth it's is to but a us. seen well. great thanks accelerating, in rates our in the far. it of ramping our now both top a now and have lot with U.S. soon, we and happy the to for strong I very X

Operator

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

now may You disconnect.

Taboola.com (TBLA) 8 May 242024 Q1 Earnings call transcript