Core Points - Taboola will release its second quarter 2025 financial results on August 6, 2025, at 8:30 a.m. ET [1] - A conference call and webcast will be held to discuss the financial results, accessible via a provided link [1] Company Overview - Taboola is a leader in performance advertising technology, focusing on measurable outcomes beyond traditional search and social media [2] - The company collaborates with thousands of businesses, reaching approximately 600 million daily active users through its ad platform, Realize [3] - Major publishers like NBC News and Yahoo, as well as OEMs such as Samsung and Xiaomi, utilize Taboola's technology to enhance audience engagement and revenue [3]

Core Insights - Taboola.com Inc. (TBLA) operates in a digital advertising landscape dominated by major players like Google, Meta, and Amazon, which limits independent ad tech companies' access to premium audiences and budgets [1] - Taboola positions itself as a significant open-web alternative, focusing on content recommendations and native advertising, which does not directly compete with traditional search or display ads [2] - The company has entered a 30-year exclusive partnership with Yahoo, enhancing its native advertising capabilities and investing in AI to improve ad personalization [3][8] Strategic Initiatives - Taboola is expanding into performance-based advertising through its Realize platform, targeting measurable outcomes such as conversions and customer acquisition, aligning with industry trends towards ROI-driven marketing [2][8] - The company emphasizes a publisher-first approach, promoting transparency and revenue-sharing models, which helps build resilience against major tech platforms [4] Competitive Landscape - The Trade Desk (TTD) is a leading independent demand-side platform that offers advertisers access to the open web, focusing on transparent, data-driven strategies [5] - Magnite (MGNI) is the largest independent sell-side platform, providing publishers with monetization options beyond walled gardens, and is focused on innovation and global reach [6] Financial Performance - TBLA shares have gained 0.3% year to date, outperforming the industry [7] - The stock is trading at a price-to-earnings multiple of 20.2, which is below the industry average of 28.1, indicating it is currently affordable [10] - Consensus estimates for TBLA's EPS and revenues indicate year-over-year increases for 2025 and 2026, with no revisions in estimates over the past 30 days [11][12]

Core Insights - Taboola Ltd. (TBLA) has benefited from the shift in advertising budgets from traditional media to digital platforms, focusing on performance-driven display advertising through its Realize platform targeting a $55 billion market opportunity [1][8] - The company has established strong partnerships with over 9,000 publishers, including Microsoft, Yahoo, and Apple News, providing access to unique first-party data from 600 million daily users [2][3] - Taboola's R&D investments are projected to account for approximately 8% of revenues in 2024, indicating a commitment to enhancing its competitive edge through acquisitions and AI technologies [4] Company Positioning - The Realize platform utilizes AI technologies to deliver performance-oriented advertising solutions, enhancing campaign efficiency for both small and medium-sized businesses (SMBs) and larger advertisers [2] - Key strategic agreements with Microsoft and Apple News validate Taboola's market positioning in premium performance advertising channels [3] - The company is transitioning from a native ad widget provider to a full-scale performance advertising platform, poised to capture the growing shift toward data-driven digital marketing [4] Financial Performance - TBLA shares have gained 0.8% year to date, outperforming the industry [7] - The consensus estimates for TBLA's 2025 and 2026 revenues and EPS indicate expected year-over-year growth [12][13] - TBLA is currently trading at a price-to-earnings multiple of 20.4, which is lower than the industry average of 28.5, indicating an affordable valuation [10] Competitive Landscape - Competitors like The Trade Desk (TTD) and Magnite (MGNI) are also well-positioned to capture growing digital marketing budgets, with TTD focusing on transparent, data-driven programmatic solutions and Magnite maximizing publisher revenues through programmatic channels [5][6]

Core Insights - Taboola.com Ltd. (TBLA) prioritizes research and development (R&D) as a key driver of long-term growth and competitiveness in the digital advertising sector [1][3] - The company is increasing its R&D spending, which is projected to be around 8% of revenues in 2024, to enhance AI capabilities and product innovation [1][7] R&D Investment and Impact - Continuous investment in R&D allows Taboola to improve its proprietary recommendation engine and data analytics framework, delivering billions of personalized content and ad recommendations daily [2] - R&D enhances contextual targeting and ad relevance, leading to increased user engagement, advertiser ROI, and publisher monetization [2][7] - The advancements in generative AI and the development of a self-serve ad platform highlight R&D's role in expanding product capabilities and creating new revenue streams [3][7] Competitive Landscape - Competitors like The Trade Desk (TTD) and Magnite (MGNI) also rely on strategic R&D spending to enhance targeting accuracy and optimize platform performance, maintaining their competitive edge in the digital advertising market [4][5] Financial Performance - TBLA shares have gained 0.8% year to date, outperforming the industry average [6] - The company is currently trading at a price-to-earnings multiple of 20.2, which is lower than the industry average of 30.2, indicating an affordable valuation [9] Earnings Estimates - The Zacks Consensus Estimate for TBLA's second-quarter 2025 EPS has increased by 2 cents, while the third-quarter estimate has decreased by 3 cents over the past 60 days [10] - Estimates for full-year 2025 and 2026 EPS have also seen upward adjustments, indicating positive growth expectations [10][11]

Core Insights - Taboola.com Ltd. (TBLA) shares have increased by 36.5% over the past three months, outperforming its industry, sector, and the Zacks S&P 500 composite [1][9] - The company is positioned to capitalize on a $55 billion market through its Realize platform, which focuses on performance advertising [2][11] - TBLA is currently trading at a price-to-earnings multiple of 20.2, which is lower than the industry average of 29.7, indicating affordability [8] Company Performance - TBLA generated approximately $1.8 billion in revenues in 2024, with expectations to reach between $1.84 billion and $1.89 billion in 2025 [9][14] - The company reported over $200 million in adjusted EBITDA and about $150 million in free cash flow last year, with significant improvements in first-quarter results [13] - Management is increasing R&D spending to enhance AI capabilities while also expanding share buyback authorization to $240 million [15] Market Position and Strategy - Taboola is shifting its focus from native advertising to a broader performance advertising market, aligning with the growing demand for comprehensive digital solutions [11] - The company aims to drive incremental ad spend through new capabilities in its Realize platform and a targeted go-to-market strategy [12] - Online shopping is projected to grow at about 8% annually through 2027, which is expected to benefit TBLA as advertising budgets shift from traditional media to digital channels [11] Analyst Sentiment - The Zacks Consensus Estimate for TBLA's 2025 earnings per share indicates a significant increase of 3900% on higher revenues, with a Growth Score of A [16][18] - Analysts have shown optimistic sentiment, with earnings estimates for 2025 and 2026 moving upward in the past 60 days [16][18] Investment Consideration - Given its growth prospects, affordability, and positive analyst sentiment, TBLA is considered a strong candidate for investment [19][20]

Core Viewpoint - Needham analyst Laura Martin maintains a Buy rating on Taboola.com (TBLA) and raises the price target from $3.34 to $4.50, highlighting the company's unique advantages and growth potential in the AdTech space [1] Group 1: Company Overview - Taboola is recognized as a leading performance AdTech company that operates in the open internet, leveraging exclusive supply and unique data [1] - The company aggregates data from 600 million Daily Active Users (DAUs) through direct integrations with publishers' websites, providing significant targeting advantages [2] Group 2: Product and Technology - Taboola's generative AI assistant, Abby, facilitates self-service ad creation and campaign management, attracting small- and medium-sized advertisers [2] - The company integrates generative AI across various functions, including treasury, FP&A, R&D, and sales, to enhance productivity and reduce costs [4] Group 3: Revenue Model and Partnerships - More than 90% of Taboola's revenue is derived from direct advertiser relationships, and about 90% of its supply comes from exclusive five- to seven-year contracts with website owners [5] - The partnership with Yahoo, established in November 2022, allows Taboola to sell all native ads on Yahoo properties, which has doubled its adjusted EBITDA and free cash flow (FCF) within 18 months [7] Group 4: Financial Performance - For the second quarter, Taboola is expected to report net revenue (ex-TAC) of $161.7 million, reflecting an 8% year-over-year increase, and adjusted EBITDA of $41.9 million, up 13% year-over-year, with a 26% margin [7] - The company anticipates converting 50%–60% of adjusted EBITDA into free cash flow [7] Group 5: Market Expansion - Taboola's new Realize platform broadens its Total Addressable Market (TAM) by enabling revenue generation from display and video ads, with display ad spending being approximately three times larger than native ad revenue [6]

Core Insights - Taboola has launched DeeperDive, an industry-first Generative AI answer engine designed to operate directly on publisher websites, enhancing user engagement and content discovery [5][6][12] - Gannett's USA TODAY Network is the first to implement this technology in the U.S., while The Independent is the first in the U.K., showcasing a significant step in the evolution of digital publishing [3][5][12] Publisher Empowerment - DeeperDive aims to combat the challenges posed by Generative AI-powered search engines that scrape content without permission, thereby reducing traffic and revenue for publishers [6][10] - The technology allows publishers to leverage their own content, providing readers with trusted sources and a richer experience by connecting them with relevant articles and context [7][10] User Experience Enhancement - The platform offers users multifaceted answers to their queries, utilizing real-time insights from over 600 million daily active users across a network of 9,000 publisher partners [10] - DeeperDive not only answers questions but also suggests related topics, enhancing the overall search experience and keeping users engaged longer on publisher sites [8][10] Monetization Opportunities - DeeperDive introduces a new monetization channel for publishers by integrating contextually relevant, high-intent ads directly into the AI-powered results page, allowing publishers to capture search-like advertising revenue [10][12] - This shift is expected to significantly increase revenue potential, moving from traditional click-based models to conversion-based opportunities, thereby enhancing the financial sustainability of publishers [12][10] Industry Impact - The launch of DeeperDive is seen as a pivotal moment for the open web, promoting innovation and fairness in the digital landscape, and ensuring that publishers receive value for their content [12][10] - Taboola's initiative is positioned to redefine how users discover and engage with content online, potentially transforming the relationship between publishers and their audiences [12][10]

Financial Data and Key Metrics Changes - Taboola's current gross revenue run rate is just under $2 billion, while the performance advertising market opportunity is estimated at over $55 billion [1][9] - The company has seen a 17% growth in scaled advertisers, which represent about 75-80% of its revenue, over the last two years [40][41] Business Line Data and Key Metrics Changes - Taboola is focusing on performance advertising, particularly in the open web, which is seen as a significant growth area due to diminishing returns in social media advertising [5][9] - The company has launched the Realize platform, which allows advertisers to pay on a CPC basis for display ads, enhancing the ease of use and performance tracking [21][24] Market Data and Key Metrics Changes - The performance advertising market is segmented, with approximately $25 billion from open web performance advertising and $30 billion from diminishing returns in social media [9][10] - 75% of advertisers are experiencing diminishing returns on their social media spend, indicating a shift in advertising strategies [16] Company Strategy and Development Direction - Taboola aims to capture a larger share of the performance advertising market by leveraging unique first-party data and AI capabilities [7][39] - The company is focusing on verticals such as travel, financial services, and direct-to-consumer products, where it has seen lower churn rates and higher spending growth [18][19] Management's Comments on Operating Environment and Future Outlook - Management believes that the shift towards performance advertising will continue due to macroeconomic challenges and the saturation of search and social media advertising [4][5] - The company is optimistic about its growth potential, particularly with the Realize platform, which is expected to contribute meaningfully to the business by 2026 [40][41] Other Important Information - Taboola has access to a unique dataset of 600 million daily active users and over a trillion monthly recommendations, which enhances its advertising effectiveness [35][39] - The company is committed to maintaining a conservative approach to guidance, allowing for potential upside as it executes its strategy [63] Q&A Session Summary Question: Can you walk us through the performance advertising opportunity? - The performance advertising market is estimated at over $55 billion, with significant potential in open web advertising and diminishing returns in social media [1][9] Question: How does the Realize platform enhance advertiser engagement? - Realize allows advertisers to pay only for clicks, improving transparency and performance measurement [21][24] Question: What metrics will be used to track Realize's client adoption? - The company will track scaled advertisers spending over $100,000 annually, which has grown 17% over the last two years [40][41] Question: What is the outlook for potential M&A opportunities? - Management is open to small, synergistic acquisitions but is focused on executing its current strategy without dilutive events [65][66]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investing can be risky as stocks may lose momentum when their valuations exceed future growth potential [1] - Investing in bargain stocks with recent price momentum may be a safer approach [2] Group 2: Taboola.com Ltd. (TBLA) Analysis - TBLA has shown a price increase of 15.1% over the past four weeks, indicating growing investor interest [3] - The stock gained 8.7% over the past 12 weeks, demonstrating its ability to deliver positive returns over a longer timeframe [4] - TBLA has a beta of 1.21, suggesting it moves 21% higher than the market in either direction [4] - The stock has a Momentum Score of A, indicating a favorable entry point for investors [5] - TBLA has a Zacks Rank 1 (Strong Buy) due to upward revisions in earnings estimates, which attract more investors [6] - The stock is trading at a Price-to-Sales ratio of 0.61, indicating it is reasonably valued at 61 cents for each dollar of sales [6] Group 3: Investment Opportunities - TBLA appears to have significant potential for growth at a fast pace, alongside other stocks that meet the 'Fast-Paced Momentum at a Bargain' criteria [7] - There are over 45 Zacks Premium Screens available to help identify winning stock picks based on various investing styles [8]

Group 1 - Moretus Research provides high-quality equity research focused on U.S. public markets, aiming to deliver clarity, conviction, and alpha for serious investors [1] - The research framework identifies companies with durable business models, mispriced cash flow potential, and intelligent capital allocation, emphasizing a structured and repeatable approach [1] - Valuation methods are based on sector-relevant multiples tailored to each company's business model and capital structure, prioritizing comparability, simplicity, and relevance [1] Group 2 - Research coverage focuses on underappreciated companies experiencing structural changes or temporary dislocations, where disciplined analysis can yield asymmetric returns [1] - Moretus Research aims to elevate the standard for independent investment research by providing professional-grade insights and actionable valuation [1]