Q2 2024 and FY 2024 Key Highlights Q2 Financials - Beat on Revenues, ex-TAC and Adj. EBITDA; Growth rates accelerate Q2 2024 Results: Revenues $428M, Gross profit $115M, ex-TAC Gross Profit $150M, Net loss $4M, Non-GAAP Net Income $23M, Adj. EBITDA $37M, Free Cash Flow $26M Strong YoY growth: Revenues +29%, ex-TAC +21%, Adj. EBITDA +138%, FCF +237% Strong Free Cash Flow conversion: 70%+ from Adj. EBITDA Reiterating 2024 ex-TAC, Adj EBITDA, FCF Guidance; Growth rates accelerate across all metrics Initiating Q3 guidance: $431M in Revenues (+20% YoY), $134M Gross profit (+33% YoY), $164M ex-TAC Gross Profit (+28% YoY), $47M Adj. EBITDA (+106% YoY)* Reiterating 2024 guidance: $667M ex-TAC Gross Profit (+25% YoY), $200M+ Adj. EBITDA (2x+ YoY; ~30% margin), $100M+ FCF (~2x YoY)* Updating 2024 Revenue guidance: $1.735-$1.765B range primarily reflects some Yahoo revenue that will now only be reflected in ex-TAC - no change to ex-TAC/key metrics. Share Buyback - Bought back $27M in shares in Q2; $66M remaining under current authorizationEngaging/reaching users - Yahoo advertiser migration complete, ramping spend. Taboola News wins significant exclusive global OEM partnership Launched "Audience Solution" to help publishers grow traffic Apple News & Stocks - onboarding complete, focus on sales enablement Taboola News - exclusive global OEM win in Q2 Improving yield - continued focus on our number one goal in 2024 Max Conversion adoption rate approaching 70% of revenue; # of ad campaigns 2x Q1 2024 Launch of Taboola Select for brands/agencies looking to drive performance at scale eCommerce continues to exceed expectations with strong performance in Q2 * References midpoints of guidance ranges. NEW YORK, Aug. 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 June 30, 2024. "2024 is a transformational year for Taboola. We've achieved impressive results in the first half of the year and are poised to build on this success," said Adam Singolda, CEO of Taboola. "Our success is driven by our investment in AI, access to unique data, and focus on driving value to our partners and advertisers. I'm proud to be exactly where we are, validated by partnerships such as Yahoo and Apple as well as having 25% of our revenue coming from top brands and agencies. I believe this market will get to a trillion dollars in size, and we'll have a chance to be a great partner and friend to many of them as they look to tap into the advertising market." Second Quarter 2024 Financial Highlights The following table summarizes our consolidated financial results for the three months ended June 30, 2024 and 2023: (dollars in millions, except per share data) Three months ended June 30,     2024   ​   2023     Unaudited Revenues $ 428.2     $ 332.0   Gross profit $ 114.8     $ 97.1   Net loss $ (4.3 )   $ (31.3 ) EPS diluted (1) $ (0.01 )   $ (0.09 ) Ratio of net loss to gross profit   (3.7 %)     (32.3 %) Cash flow provided by operating activities $ 38.8     $ 11.6   Cash, cash equivalents, short-term deposits and investments $ 182.2     $ 246.9           Non-GAAP Financial Data *       ex-TAC Gross Profit $ 149.5     $ 123.1   Adjusted EBITDA $ 37.2     $ 15.7   Non-GAAP Net Income (Loss) $ 23.0     $ (1.4 ) Ratio of Adjusted EBITDA to ex-TAC Gross Profit   24.9 %     12.7 % Free Cash Flow $ 26.2     $ 7.8   1 The weighted-average shares for the three months ended June 30, 2024 and 2023 were 342,566,112 and 351,585,059 shares, respectively. The weighted-average share count for the three months ended June 30, 2024 and 2023 includes 297,660,641 and 306,386,357 Ordinary shares and 44,905,471 and 45,198,702 Non-voting Ordinary shares, respectively. Second 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 Adevinta Global MSA, a360media, Foundry, Mediahuis Ireland, and NESN. Renewed relationships with many well-known publishers including Sky News Australia and Globes IL. Notable product launches and advancements Taboola for Audience, an AI powered technology for publishers to protect against threats of generative AI search and social traffic volatility; publishers see over 10% traffic growth. Taboola earned Great Place to Work Certification™ and was named a "Best Workplaces in New York in 2024." Third Quarter & Full Year 2024 Financial Guidance For the Third Quarter and Full Year 2024, the Company currently expects (dollars in millions):   Q3 2024 ​ FY 2024 Guidance Guidance   Unaudited   (dollars in millions) Revenues $416 - $446   $1,735 - $1,765 Gross profit $129 - $139   $535 - $555 ex-TAC Gross Profit* $159 - $169   $656 - $679 Adjusted EBITDA* $42 - $52   $200+ Non-GAAP Net Income (Loss)* $20 - $30   $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 Q2 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 August 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/BI5ce813978f2245a9b765a2c038ed2289 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 August 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 Company's ability to transition to and fully launch the native advertising service for Yahoo on the currently anticipated schedule; the ability to generate or achieve the increase in Adjusted EBITDA and Free Cash Flow in 2024 or our expected revenue run-rate once 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 17,000 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           June 30,   December 31,     2024       2023     Unaudited     ASSETS       CURRENT ASSETS       Cash and cash equivalents $ 182,198     $ 176,108   Short-term investments   —       5,725   Restricted deposits   1,334       1,407   Trade receivables (net of allowance for credit losses of $7,416 and $10,207 as of June 30, 2024 and December 31, 2023, respectively)   281,674       306,307   Prepaid expenses and other current assets   69,598       69,865   Total current assets   534,804       559,412   NON-CURRENT ASSETS       Long-term prepaid expenses   25,584       39,602   Commercial agreement asset   289,451       289,451   Restricted deposits   4,203       4,247   Operating lease right of use assets   56,138       61,746   Property and equipment, net   71,846       72,155   Intangible assets, net   93,565       125,258   Goodwill   555,931       555,931   Total non-current assets   1,096,718       1,148,390   Total assets $ 1,631,522     $ 1,707,802   CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands, except share and per share data     June 30,   December 31,     2024       2023     Unaudited     LIABILITIES AND SHAREHOLDERS' EQUITY       CURRENT LIABILITIES       Trade payables $ 270,406     $ 282,012   Short-term operating lease liabilities   19,463       20,264   Accrued expenses and other current liabilities   118,664       118,689   Current maturities of long-term loan   —       3,000   Total current liabilities   408,533       423,965   LONG-TERM LIABILITIES       Long-term loan, net of current maturities   145,778       142,164   Long-term operating lease liabilities   42,721       49,450   Warrants liability   2,242       6,129   Deferred tax liabilities, net   6,914       14,815   Other long-term liabilities   15,101       14,217   Total long-term liabilities   212,756       226,775   SHAREHOLDERS' EQUITY       Ordinary shares with no par value - Authorized: 700,000,000 as of June 30, 2024 and December 31, 2023; 291,715,209 and 295,670,620 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively   —       —   Non-voting Ordinary shares with no par value - Authorized: 46,000,000 as of June 30, 2024 and December 31, 2023; 44,210,406 and 45,198,702 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively   —       —   Treasury Ordinary shares, at cost - 27,775,351 (26,787,055 Ordinary shares and 988,296 Non-voting Ordinary shares) and 15,240,471 Ordinary shares as of June 30, 2024 and December 31, 2023, respectively   (109,978 )     (55,513 ) Additional paid-in capital   1,301,159       1,262,093   Accumulated other comprehensive income (loss)   (39 )     942   Accumulated deficit   (180,909 )     (150,460 ) Total shareholders' equity   1,010,233       1,057,062   Total liabilities and shareholders' equity $ 1,631,522     $ 1,707,802   CONSOLIDATED STATEMENTS OF LOSS U.S. dollars in thousands, except share and per share data     Three months ended   Six months ended June 30, June 30,     2024       2023       2024       2023     Unaudited Revenues (1) $ 428,160     $ 332,004     $ 842,168     $ 659,690   Cost of revenues:               Traffic acquisition cost (2)   278,620       208,870       553,740       420,816   Other cost of revenues   34,762       26,077       64,697       52,225   Total cost of revenues   313,382       234,947       618,437       473,041   Gross profit   114,778       97,057       223,731       186,649   Operating expenses: