Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Taboola.com Ltd (TBLA, Financial) exceeded its Q3 revenue, ex-TAC gross profit, and adjusted EBITDA guidance, showcasing strong financial performance.
- The company raised its 2024 free cash flow target to over $105 million, more than doubling the level from 2023.
- Taboola.com Ltd (TBLA) is experiencing growth in advertiser spending, particularly from Tier 1 brands and agencies, contributing to a 20% year-over-year revenue increase.
- The company has expanded partnerships with major tech companies like Microsoft, Yahoo!, and Apple, enhancing its premium supply and advertiser reach.
- Taboola.com Ltd (TBLA) is investing in AI technologies like Abby and Max Conversions, which are driving advertiser success and yield growth.
Negative Points
- The company reported a GAAP net loss of $6.5 million for Q3, although it narrowed from the previous year.
- There is a relatively high income tax expense charge due to timing of tax provisions, impacting net income.
- Taboola.com Ltd (TBLA) faces constraints on share buybacks due to Israeli regulations, limiting shareholder ownership.
- The company's Chinese business, although a small percentage of revenue, could be impacted by potential tariffs and geopolitical tensions.
- Despite strong supply partnerships, the company needs to continue growing advertiser budgets to maintain momentum and yield growth.
Q & A Highlights
Q: Can you talk about your progress with your Apple relationship and when it might become a meaningful revenue contributor?
A: Adam Singolda, CEO, explained that the Apple partnership is progressing well, with opportunities to attract premium advertisers through Taboola Select. Apple is seen as a significant growth engine, and the partnership validates Taboola's position in the market. The expectation is for Apple to become one of Taboola's larger partners over time.
Q: What feedback have you received from advertisers using Max Conversions, and what is the mix of advertisers using this offering?
A: Adam Singolda noted a 70% adoption rate for Max Conversions, with 1,500 advertisers joining in the recent quarter. The solution has driven a 36% growth in campaigns quarter-over-quarter, with significant growth in sectors like healthcare and automotive. Max Conversions is a key part of Taboola's AI investment strategy.
Q: Can you provide a goal for traffic growth, and how significant is China to your revenue given potential tariffs?
A: Adam Singolda stated that Taboola News aims to become a significant traffic source, potentially reaching over 10% of publishers' traffic. Stephen Walker, CFO, mentioned that China represents a low single-digit percentage of revenue, with minimal impact expected from potential tariffs.
Q: Is the 3Q TAC rate representative for next year, and what is the progress on filling Yahoo! inventory?
A: Stephen Walker indicated that while specific guidance for next year will be provided in February, the company is on track to meet 2024 goals. The focus remains on growing advertiser budgets, with Yahoo! inventory integration progressing well and contributing to Taboola's core business.
Q: How are you educating publishers about AI tools, and are clients more comfortable now?
A: Adam Singolda highlighted that the industry is increasingly open to AI-driven personalization, with publishers recognizing the potential upside. Taboola's long-standing investment in AI and trusted relationships with publishers position it well to lead this transition.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
