Taboola Reports Strong Q3 2024, Beating Revenues, ex-TAC and Adj. EBITDA; Reiterating 2024 Revenues, ex-TAC, & Adj. EBITDA Guidance; Raising 2024 Free Cash Flow Target
Q3 2024 and FY 2024 Key Highlights
Q3 Financials - Beat on Revenues, ex-TAC, and Adj. EBITDA; $97M YTD FCF already approaching FY 2024 target of $100M+
Q3 2024 Results: Revenues $433M, Gross profit $133M, ex-TAC Gross Profit $166M, Net loss $6M, Non-GAAP Net Income $22M, Adj. EBITDA $48M, Free Cash Flow $43M
Strong YoY growth: Revenues +20%, ex-TAC +30%, Adj. EBITDA +110%, FCF +88%
Strong Free Cash Flow conversion: 89% conversion from Adj. EBITDA
Reiterating 2024 Revenues, ex-TAC, Adj. EBITDA guidance; Growth rates accelerate across all metrics; Raising 2024 FCF Target to $105M+
Q4 guidance: $475M in Revenues (+13% YoY), $188M Gross profit (+36% YoY), $213M ex-TAC Gross Profit (+26% YoY), $91M Adj. EBITDA (+82% YoY)*
Reiterating 2024 guidance: $1,750M Revenues (+22% YoY), $667M ex-TAC Gross Profit (+25% YoY), $200M+ Adj. EBITDA (2x+ YoY; ~30% margin)*
Raising 2024 FCF target from $100M+ FCF (2x+ YoY) to $105M+
Business highlights - Yield growth turns positive in Q3 driven by growth in ad spend; met our internal Q3 Yahoo advertiser spend targets
Released Abby, advanced GenAI ad assistant, allowing advertisers to "talk" to Taboola and successfully launch ads in minutes
Max Conversions adoption of ~70%; +1,500 advertisers QoQ; # of campaigns +36% QoQ
Tier 1 brand & agency spend very strong led by auto, e-commerce, and finance verticals
Another quarter when ad spend out of China is up 2x vs last year
Apple News/Stocks seeing significant commercial traction - Sept # advertisers 2x vs July
Taboola News - Xiaomi expands partnership to more global markets and across more touchpoints per device
* References midpoints of guidance ranges, where applicable.
NEW YORK, Nov. 07, 2024 (GLOBE NEWSWIRE) -- Taboola (NASDAQ:TBLA), a global leader in powering recommendations for the open web, today announced its results for the quarter ended September 30, 2024.
"I'm happy with our Q3 performance, beating our Revenues, ex-TAC and Adjusted EBITDA guidance and raising our 2024 Free Cash Flow target," said Adam Singolda, CEO of Taboola. "2024 is a big year for us, and I'm so proud of our execution, leading into a strong Q4. We are looking forward to delivering on our guidance, and having a very strong close to the year. We remain laser focused on driving demand and improving advertiser success. We are confident in our strategy of building the largest scale performance advertising company in the open web outside of the walled gardens, and look forward to sharing more about our long-term strategy at Taboola's Investor Day early next year."
Third Quarter 2024 Financial Highlights
The following table summarizes our consolidated financial results for the three months ended September 30, 2024 and 2023:
(dollars in millions, except per share data)
Three months ended
September 30,
2024
2023
Unaudited
Revenues
$ 433.0
$ 360.2
Gross profit
$ 132.9
$ 100.7
Net loss
$ (6.5)
$ (23.1)
EPS diluted (1)
$ (0.02)
$ (0.07)
Ratio of net loss to gross profit
(4.9%)
(23.0%)
Cash flow provided by operating activities
$ 49.8
$ 32.5
Cash, cash equivalents, short-term deposits and investments
$ 217.2
$ 250.7
Non-GAAP Financial Data *
ex-TAC Gross Profit
$ 166.4
$ 128.4
Adjusted EBITDA
$ 47.9
$ 22.8
Non-GAAP Net Income
$ 22.2
$ 6.7
Ratio of Adjusted EBITDA to ex-TAC Gross Profit
28.8%
17.8%
Free Cash Flow
$ 42.9
$ 22.8
1 The weighted-average shares for the three months ended September 30, 2024 and 2023 were 342,886,216 and 352,591,043 shares, respectively. The weighted-average share count for the three months ended September 30, 2024 and 2023 includes 298,675,810 and 307,392,341 Ordinary shares and 44,210,406 and 45,198,702 Non-voting Ordinary shares, respectively.
Third Quarter 2024 Business Highlights
Revenue Highlights
Revenue growth driven by the addition of new publisher partners and Tier 1 advertisers to the Taboola network.
Publisher wins that were new and from competitors included National World and Axiom Media Alliance.
Renewed relationships with many well-known publishers and OEM partners including Xiaomi, El Universal, and Network18.
Notable product launches and advancements
Introduction of Abby, a Generative AI technology that advertisers can use to start and manage campaigns, even without being an expert in advertising.
Taboola was chosen as a winner for ‘Best Native Advertising Platform' with the Digiday Technology Awards.
Taboola was re-awarded the Interactive Advertising Bureau (IAB) UK Gold Standard Certification in recognition of its commitment to upholding the latest key advertising industry standards.
Fourth Quarter & Full Year 2024 Financial Guidance
For the Fourth Quarter and Full Year 2024, the Company currently expects (dollars in millions):
Q4 2024
FY 2024
Guidance
Guidance
Unaudited
(dollars in millions)
Revenues
$460 - $490
$1,735 - $1,765
Gross profit
$180 - $196
$535 - $555
ex-TAC Gross Profit*
$205 - $221
$656 - $679
Adjusted EBITDA*
$83 - $99
$200+
Non-GAAP Net Income (Loss)*
$37 - $53
$84 - $104
Although we provide guidance for Adjusted EBITDA and Non-GAAP Net Income (Loss), we are not able to provide guidance for projected net income (loss), the most directly comparable GAAP measure. Certain elements of net income (loss), including share-based compensation expenses and warrant valuations, are not predictable due to the high variability and difficulty of making accurate forecasts. As a result, it is impractical for us to provide guidance on net income (loss) or to reconcile our Adjusted EBITDA and Non-GAAP Net Income (Loss) guidance without unreasonable efforts. Consequently, no disclosure of projected net income (loss) is included. For the same reasons, we are unable to address the probable significance of the unavailable information.
For more commentary on the quarter, please refer to Taboola's Q3 2024 Shareholder Letter and Investor Presentation, both of which are posted on Taboola's website today at investors.taboola.com
Webcast Details
Taboola's senior management team will discuss the Company's earnings on a call that will take place on November 7, 2024, at 8:30 AM ET. The call can be accessed via webcast at https://investors.taboola.com. To access the call by phone, please go to this link to register https://register.vevent.com/register/BI066e4776a6904de2b616a491677f1c32 and you will be provided with dial in details. The webcast will be available for replay for one year, through the close of business on November 7, 2025.
*About Non-GAAP Financial Information
This press release includes ex-TAC Gross Profit, Adjusted EBITDA, Ratio of Adjusted EBITDA to ex-TAC Gross Profit, Free Cash Flow, Non-GAAP Net Income (Loss), which are non-GAAP financial measures. These non-GAAP financial measures are not measures of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing the Company's financial results. Therefore, these measures should not be considered in isolation or as an alternative to revenues, gross profit, net income (loss), cash flows from operations or other measures of profitability, liquidity or performance under GAAP. You should be aware that the Company's presentation of these measures may not be comparable to similarly-titled measures used by other companies.
The Company believes non-GAAP financial measures provide useful supplemental information to management and investors regarding future financial and business trends relating to the Company. The Company believes that the use of these measures provides an additional tool for investors to use in evaluating operating results and trends and in comparing the Company's financial measures with other similar companies, many of which present similar non-GAAP financial measures to investors. Non-GAAP financial measures are subject to inherent limitations because they reflect the exercise of judgments by management about which items are excluded or included in calculating them, which may vary from period to period. Please refer to the appendix at the end of this press release for reconciliations to the most directly comparable measures in accordance with GAAP.
Note Regarding Forward-Looking Statements
Certain statements in this press release are forward-looking statements. Forward-looking statements generally relate to future events including future financial or operating performance of Taboola.com Ltd. (the "Company"). In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expect", "guidance", "intend", "will", "estimate", "anticipate", "believe", "predict", "target", "potential" or "continue", or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward looking statements.
These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by the Company and its management, are inherently uncertain. Uncertainties and risk factors that could affect the Company's future performance and cause results to differ from the forward-looking statements in this press release include, but are not limited to: the Company's ability to grow and manage growth profitably, maintain relationships with customers and retain its management and key employees; changes in applicable laws or regulations; the Company's estimates of expenses and profitability and underlying assumptions with respect to accounting presentations and purchase price and other adjustments; the extent to which we will buyback any of our Ordinary shares pursuant to authority granted by the Company's Board of Directors, which may depend upon market and economic conditions, other business opportunities and priorities, satisfying required conditions under the Israeli Companies Law and the Companies Regulations or other factors; the ability to generate or achieve the increase in Adjusted EBITDA and Free Cash Flow in 2024 or our expected revenue now that the Yahoo integration is live, in each case to the levels assumed in this press release or at all; ability to attract new digital properties and advertisers; ability to meet minimum guarantee requirements in contracts with digital properties; intense competition in the digital advertising space, including with competitors who have significantly more resources; ability to grow and scale the Company's ad and content platform through new relationships with advertisers and digital properties; ability to secure high quality content from digital properties; ability to maintain relationships with current advertiser and digital property partners; ability to prioritize investments to improve profitability and free cash flow; ability to make continued investments in the Company's AI-powered technology platform; the need to attract, train and retain highly-skilled technical workforce; changes in the regulation of, or market practice with respect to, "third party cookies" and its impact on digital advertising; continued engagement by users who interact with the Company's platform on various digital properties; reliance on a limited number of partners for a significant portion of the Company's revenue; changes in laws and regulations related to privacy, data protection, advertising regulation, competition and other areas related to digital advertising; ability to enforce, protect and maintain intellectual property rights; risks related to the fact that we are incorporated in Israel and governed by Israeli law; the potential impacts of the war in Israel to the Company's operations; and other risks and uncertainties set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 under Part 1, Item 1A "Risk Factors" and in the Company's subsequent filings with the Securities and Exchange Commission.
Nothing in this press release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on these forward-looking statements, which speak only as of the date they were made. The Company undertakes no duty to update these forward-looking statements except as may be required by law.
About Taboola
Taboola is a market leading technology powering recommendations for the open web.
The Company's platform, powered by artificial intelligence, is used by digital properties, including websites, devices and mobile apps, to drive monetization and user engagement. Taboola has long-term partnerships with some of the top digital properties in the world, including CNBC, BBC, NBC News, Business Insider, The Independent and El Mundo.
Approximately 18,000 advertisers use Taboola to reach nearly 600 million daily active users in a brand-safe environment. Following the acquisition of Connexity in 2021, Taboola is a leader in powering e-commerce recommendations, driving more than 1 million monthly transactions. Leading brands, including Walmart, Macy's, Wayfair, Skechers and eBay are among key customers.
Learn more at www.taboola.com and follow @taboola on X.
Investor Contact:
Press Contact:
Jessica Kourakos
Dave Struzzi
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share data
September 30,
December 31,
2024
2023
Unaudited
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$ 217,230
$ 176,108
Short-term investments
—
5,725
Restricted deposits
1,312
1,407
Trade receivables (net of allowance for credit losses of $7,640 and $10,207 as of September 30, 2024 and December 31, 2023, respectively)
297,330
306,307
Prepaid expenses and other current assets
61,995
69,865
Total current assets
577,867
559,412
NON-CURRENT ASSETS
Long-term prepaid expenses
24,470
39,602
Commercial agreement asset
288,061
289,451
Restricted deposits
4,078
4,247
Operating lease right of use assets
60,329
61,746
Property and equipment, net
73,696
72,155
Intangible assets, net
78,485
125,258
Goodwill
555,931
555,931
Total non-current assets
1,085,050
1,148,390
Total assets
$ 1,662,917
$ 1,707,802
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share data
September 30,
December 31,
2024
2023
Unaudited
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Trade payables
$ 273,618
$ 282,012
Short-term operating lease liabilities
21,873
20,264
Accrued expenses and other current liabilities
146,732
118,689
Current maturities of long-term loan
—
3,000
Total current liabilities
442,223
423,965
LONG-TERM LIABILITIES
Long-term loan, net of current maturities
146,070
142,164
Long-term operating lease liabilities
44,970
49,450
Warrants liability
1,504
6,129
Deferred tax liabilities, net
3,853
14,815
Other long-term liabilities
12,482
14,217
Total long-term liabilities
208,879
226,775
SHAREHOLDERS' EQUITY
Ordinary shares with no par value - Authorized: 700,000,000 as of September 30, 2024 and December 31, 2023; 322,370,752 and 310,911,091 shares issued, and 292,633,697 and 295,670,620 shares outstanding as of September 30, 2024 and December 31, 2023, respectively
—
—
Non-voting Ordinary shares with no par value - Authorized: 46,000,000 as of September 30, 2024 and December 31, 2023; 45,198,702 shares issued, and 44,210,406 and 45,198,702 shares outstanding as of September 30, 2024 and December 31, 2023, respectively
—
—
Treasury Ordinary shares, at cost - 30,725,351 (29,737,055 Ordinary shares and 988,296 Non-voting Ordinary shares) and 15,240,471 Ordinary shares as of September 30, 2024 and December 31, 2023, respectively
(120,030)
(55,513)
Additional paid-in capital
1,319,043
1,262,093
Accumulated other comprehensive income
165
942
Accumulated deficit
(187,363)
(150,460)
Total shareholders' equity
1,011,815
1,057,062
Total liabilities and shareholders' equity
$ 1,662,917
$ 1,707,802
CONSOLIDATED STATEMENTS OF LOSS
U.S. dollars in thousands, except share and per share data
Three months ended
Nine months ended
September 30,
