Taboola.com (TBLA) 7 Aug 24 2024 Q2 Earnings call transcript

Taboola, a leading digital advertising platform, held its second-quarter earnings call on a sunny morning in 2024. The call was led by Jessica Kourakos, Head of Investor Relations, with Adam Singolda, Founder and CEO, and Stephen Walker, CFO, in attendance. The call began with a review of financial highlights, followed by an in-depth discussion of the company's strategy and future outlook.

Financial Performance

Taboola reported a strong second quarter, with ex-TAC (total advertising cost) growing 21% year-over-year to $150 million. Adjusted EBITDA reached $37 million, representing a 138% increase, and free cash flow surpassed $26 million, marking a 237% growth. These figures underscore Taboola's ability to convert revenue into cash, a key metric for assessing the company's financial health.

Strategic Focus

Adam Singolda emphasized the company's focus on premium advertising and driving advertiser success. He highlighted the launch of Taboola Select and the completion of Yahoo's advertiser migration as significant steps forward. Singolda also shared the company's commitment to investing in AI technology to enhance advertiser performance and improve retention rates.

Market Trends

Taboola's earnings call highlighted the growing trend towards performance advertising and the importance of data-driven marketing strategies. The company's success with Yahoo and Apple underscores the demand for high-quality, contextually relevant advertising, particularly in the open web. Singolda's vision of creating a "must-buy" platform for advertisers looking to engage with consumers globally is a testament to the company's ambition and strategic foresight.

Future Outlook

Looking ahead, Taboola reiterated its guidance for ex-TAC, adjusted EBITDA, and free cash flow, projecting significant growth in 2024. The company's focus on premium advertising and performance-driven marketing is expected to continue, with a particular emphasis on attracting Tier 1 brands and agencies. Stephen Walker highlighted the company's cost discipline and ongoing efforts to optimize efficiency, positioning Taboola for long-term success.

Investor Perspectives

Analysts on the call expressed optimism about Taboola's strategic direction and financial performance. They asked about the company's plans for monetizing Yahoo's inventory, the impact of Apple's partnership, and the potential for ecommerce growth. The management team provided reassuring responses, emphasizing the company's commitment to maximizing advertiser value and delivering shareholder returns.

Conclusion

Taboola's second-quarter earnings call underscored the company's strong financial performance and strategic focus on premium advertising and performance marketing. The company's partnerships with Yahoo and Apple, combined with its investment in AI technology, position Taboola as a leader in the digital advertising space. As the company looks to the future, its commitment to driving advertiser success and maximizing revenue is expected to fuel further growth and innovation.