Summary of Taboola.com (TBLA) FY Conference Call - August 12, 2025 Company Overview - **Company**: Taboola.com (TBLA) - **Industry**: Performance Advertising in the Open Web - **Market Opportunity**: $55 billion market opportunity in performance advertising [4][5] Core Business Model - **Unique Offering**: Taboola is a leading performance advertising platform that complements search and social advertising by providing targeted ads based on first-party data [3][4] - **Daily Reach**: The company reaches approximately 600 million people daily through partnerships with major publishers like Yahoo, Apple News, Disney, and NBC [4] - **Revenue Goals**: Targeting $2 billion in revenue from a $55.7 billion market, with over $200 million in adjusted EBITDA, representing a margin of over 30% [5] Financial Performance - **EBITDA Margin**: The company maintains a strong EBITDA margin of over 30% and a free cash flow of 70% of EBITDA, which is being used for share buybacks [5][67] - **Share Buybacks**: Taboola has repurchased 12% of its shares in the first half of the year and plans to continue aggressive buybacks [5][69] Market Position and Strategy - **Two-Sided Marketplace**: Taboola operates a two-sided marketplace with exclusive long-term relationships with 11,000 publishers, providing predictable inventory and access to consumer data [6][7] - **Shift to Performance Marketing**: The introduction of the Realize product marks a pivot towards broader performance marketing, allowing advertisers to use various ad formats beyond native advertising [12][14] - **Display Advertising Market**: Taboola estimates a $10 billion display ad market among its publishers, aiming to capture 30% market share [18] Growth and Future Outlook - **Growth Strategy**: The company aims to double its revenue from $2 billion to $4 billion primarily through increased demand and spending from advertisers [15][25] - **Realize Product Adoption**: Early signs of success with Realize include 650 advertisers trying the product, with existing advertisers increasing their spending [27][28] - **Focus on Performance Advertising**: Taboola is committed to performance advertising, avoiding branding-focused areas like CTV, which is seen as a competitive and less favorable market [36][39] Challenges and Market Dynamics - **Native Advertising Growth**: The native advertising space is not growing as expected, prompting the shift to a broader performance advertising strategy [22][23] - **Impact of Search Traffic**: Currently, only 5% of Taboola's traffic is driven by search, and the company has not seen significant impacts from changes in search dynamics [48][49] Technology and Innovation - **Use of AI and LLMs**: Taboola is leveraging machine learning and large language models (LLMs) across various departments to enhance productivity and create value [65][66] - **Predictive Audiences**: The company is developing features like predictive audiences to help advertisers optimize their campaigns [64] Conclusion - **Investment Philosophy**: Taboola prioritizes growth while maintaining profitability, with a focus on responsible business practices and maximizing shareholder value through buybacks and strategic investments [56][68] - **Future Expectations**: The company is optimistic about returning to double-digit growth through the successful adoption of Realize and continued investment in technology and partnerships [25][60]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $77.9 million, representing an 18% year-over-year increase and a 10% quarter-over-quarter increase, within guidance range [33] - Contribution ex TAC totaled $48.4 million, up 16% year-over-year and 13% sequentially, also within guidance range [33] - Adjusted EBITDA for Q2 was $11.3 million, exceeding the midpoint of guidance by 3% and growing 18% year-over-year [37] - Non-GAAP net income was $8 million, up 11% from $7.2 million in the prior year [38] Business Line Data and Key Metrics Changes - CTV accounted for approximately 45% of total ad spend on the platform, with CTV spend reaching an all-time high for a second quarter [35][36] - Ad spend linked to Household ID increased 15% year-over-year, indicating strong utilization among advertisers [10] - Contribution ex TAC across the top 100 continuing customers grew by 21% year-over-year on a trailing twelve-month basis [34] Market Data and Key Metrics Changes - Spend across emerging digital channels, including CTV, streaming audio, and digital out-of-home, represented nearly 55% of total platform spend in Q2, up from 50% in 2024 [36] - Video, inclusive of CTV, continues to represent 60% of total platform spend, reflecting a shift towards high-impact measurable performance [36] Company Strategy and Development Direction - The company is focusing on expanding its addressable market beyond mid-market advertisers to include major US advertisers and data-driven advertisers [22][30] - Viant AI is positioned as a fully autonomous solution aimed at improving operational efficiency and cost savings for advertisers [19][31] - The company plans to continue investing in innovation across its product suite, particularly in Viant AI, to capture a larger share of the market [44] Management's Comments on Operating Environment and Future Outlook - Management acknowledged temporary disruptions due to economic policy actions affecting revenue growth, estimating a headwind of approximately 1,200 basis points for Q3 [34][42] - Despite these challenges, the company remains optimistic about long-term growth, supported by a pipeline of new business opportunities exceeding $250 million in ad spend [35][43] - The company expects to see accelerating revenue and contribution ex TAC growth rates throughout 2026 [44] Other Important Information - The company has a strong balance sheet with $173 million in cash and cash equivalents and no debt [39] - A new board member, Brett Wilson, was welcomed, bringing extensive experience in technology and advertising [20] Q&A Session Summary Question: How does Viant AI stand out in a crowded market? - Management emphasized the importance of addressability solutions and the patented Household ID for effective targeting and measurement [48][49] Question: What is involved in the sales team switch to going more upmarket? - The company is actively hiring an enterprise team to target larger customers while maintaining focus on mid-market advertisers [50][51] Question: Can you expand on the $250 million in incremental ad spend? - Management confirmed that the $250 million is incremental and represents opportunities in a sector where the company has not heavily competed before [62][63] Question: What is the impact of losing a sizable advertiser? - The impact on Q3 is significant due to seasonality, but minimal effects are expected in future quarters [59] Question: How does the company plan to build direct relationships with brands? - The company is investing in its salesforce to strengthen direct relationships with advertisers and reduce reliance on agency partners [83]

Financial Data and Key Metrics Changes - The company reported a revenue growth of 6% year over year, with underlying business revenue (excluding affected DSP and political advertising) growing 19% year over year [6][29] - Adjusted EBITDA margin was 20%, marking the 37th consecutive quarter of adjusted EBITDA profitability [6][34] - The company generated $14.9 million in net operating cash flows and $9.3 million in free cash flow during the second quarter [36] Business Line Data and Key Metrics Changes - CTV revenue grew over 50% year over year, representing approximately 20% of total revenue [29][15] - Emerging revenue streams more than doubled year over year, accounting for 8% of total revenue [29] - Display revenue was flat year over year, a significant improvement from a 10% decline in Q1 [30] Market Data and Key Metrics Changes - EMEA and APAC revenues grew 187%, while Americas revenue declined by 1% [32] - Ad spend from performance marketers and mid-tier DSPs grew over 20% year over year [12][32] - The top 10 ad verticals grew in the mid-single digits year over year, with health and fitness, technology, and travel each increasing over 20% [31] Company Strategy and Development Direction - The company is focusing on diversifying its DSP mix and accelerating investment on the buy side, particularly in CTV and emerging revenue streams [10][11] - The integration of AI across the tech stack is a priority to enhance campaign performance and operational efficiency [21][23] - The company anticipates significant market share expansion due to recent antitrust rulings affecting Google, estimating that a 1% market share shift could represent $50 to $75 million in net revenue [24][25] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a recent headwind from a top DSP partner that shifted clients to a new platform, impacting revenue in July but stabilizing in August [38][45] - The company remains confident in its strategy to diversify demand and revenue streams, despite the challenges faced [25][41] - The outlook for Q3 is conservative, with expected revenue in the range of $61 to $66 million, factoring in the impact from the DSP changes [40] Other Important Information - The company has a healthy balance sheet with $117.6 million in cash and marketable securities and zero debt [36] - The company has repurchased $178.2 million worth of Class A common shares since February 2023 [36] Q&A Session Summary Question: Can you provide details about the changes from the DSP? - Management explained that a top DSP shifted clients to a new platform that evaluates inventory differently, leading to a notable drop in spend in July, which has since stabilized in August [45][46] Question: How has the conversation with advertisers evolved with the rise of SPO? - Conversations have deepened around solving advertisers' challenges, particularly in transitioning away from cookies and focusing on performance-based solutions [53][54] Question: What is the company's view on the evolution of the industry regarding DSPs and SSPs? - The company believes the lines between DSPs and SSPs are blurring, with a shift towards end-to-end platforms driven by performance and transparency [58][60] Question: What is the current concentration of DSPs? - The top two DSPs represent about half of overall spending, with efforts ongoing to diversify the DSP mix [63]

Core Viewpoint - The Trade Desk experienced significant stock volatility following its Q2 earnings release, with shares dropping 39% in early trading after a prior gain of 47% since Q1 earnings [1][2]. Financial Performance - In Q2, The Trade Desk reported revenue of $694 million, reflecting a growth rate of 19%, surpassing Wall Street's expectations of $686 million and 17.3% growth [3]. - Adjusted earnings per share (EPS) were 41 cents, slightly below the estimated 42 cents, with overall adjusted EPS growth at 5%, compared to Wall Street's projection of 7.7% [4]. - The company's Q3 guidance of $717 million, indicating 14% growth, aligns with market estimates, but shows a deceleration from the 26% growth in Q2 2024 [4]. Market Dynamics - The Trade Desk's stock valuation faced scrutiny due to a significant drop in growth expectations, with Q2 growth being 700 basis points lower than previous quarters [5]. - Despite the 19% growth exceeding Wall Street estimates, the stock's prior price surge led to inflated expectations that could not be met [6]. Competitive Landscape - The Trade Desk is losing market share to advertising giants like Meta Platforms, which reported nearly 22% growth in advertising revenue in Q2, highlighting the competitive pressure from "Walled Gardens" [7]. - The Trade Desk operates on an open-internet model, contrasting with Meta's controlled ecosystem, which limits the supply and demand dynamics for advertisers [8]. Long-term Outlook - The ongoing competition between The Trade Desk's open-internet model and the Walled Garden approach raises uncertainty about the future viability of its business model [9]. - The Trade Desk leverages AI for ad performance but faces challenges in implementation across diverse data sets compared to Meta's more streamlined approach [10][11]. Stock Forecast - The 12-month stock price forecast for The Trade Desk is $89.91, indicating a potential upside of 63.30%, with a wide range of analyst targets from $45 to $155 [12][13]. - The stark differences in price targets reflect the intense debate surrounding the effectiveness of the Walled Garden versus open internet models [12].

Core Insights - Nexxen International Ltd. has renewed and expanded its strategic partnership with VIDAA, granting exclusive rights to monetize CTV and native display advertising on VIDAA media in North America through at least the end of 2029 [1][4] - Nexxen is investing an additional $35 million in VIDAA, bringing its total investment to $60 million, which represents approximately 6% of VIDAA's outstanding shares [6] Company Developments - The updated agreement allows Nexxen to have exclusive global access to VIDAA's automatic content recognition (ACR) data, enhancing audience targeting and measurement capabilities [4][3] - Since the partnership began in 2022, VIDAA has established a leadership position in key international markets, including Europe and Australia, while Nexxen has integrated VIDAA's ACR data into its platform [3][5] Market Strategy - The partnership aims to scale North American TV distribution and revenue opportunities, increasing monetization within VIDAA by expanding in-stream ad inventory [2][6] - VIDAA plans to leverage its rapid growth and widespread adoption to penetrate the competitive U.S. market, supported by Nexxen's advertising technology expertise [5][7] Future Outlook - The benefits of the updated agreement are expected to take effect starting in 2026, positioning both companies for strategic innovation and revenue growth [4][7] - The collaboration is seen as a significant step forward in supporting VIDAA's next phase of growth in North America, following its success in other global markets [7][6]

Core Insights - Nexxen International Ltd. has renewed and expanded its strategic partnership with VIDAA, granting exclusive rights to monetize CTV and native display advertising on VIDAA media in North America through at least the end of 2029 [1][4] - Nexxen is investing an additional $35 million in VIDAA, bringing its total investment to $60 million, which represents approximately 6% of VIDAA's outstanding shares [6] Partnership Details - The updated agreement extends Nexxen's exclusive global access to VIDAA's automatic content recognition (ACR) data, enhancing audience targeting and measurement capabilities [4][3] - The partnership aims to scale North American TV distribution and revenue opportunities, increasing monetization within VIDAA and expanding in-stream ad inventory [2][3] Market Position and Growth - VIDAA has established a leadership position in key international markets, including Europe and Australia, and is now focusing on the U.S. market [3][5] - The partnership is expected to unlock unique opportunities for Nexxen's retail and direct-to-consumer advertiser clients, enhancing their access to exclusive inventory [4][6] Strategic Goals - Both companies aim to leverage their combined strengths to drive strategic innovation and revenue growth in the competitive CTV market [7] - VIDAA's rapid growth and adoption are seen as indicators of its quality and reliability, positioning it well for further expansion in North America [5][10]

Core Viewpoint - The Trade Desk (TTD) experienced a significant stock price decline of 38%, marking its steepest single-day drop on record, with a year-to-date decrease of 54% [1][4]. Financial Performance - TTD's second-quarter revenue increased by 19% year-over-year to $694 million, slightly exceeding Wall Street's forecast of $685 million [4]. - Adjusted EBITDA for the quarter was $270.8 million, surpassing expectations of $261 million [4]. - Management has guided for at least $717 million in revenue for Q3 [5]. Competitive Landscape - The company faces rising competition from Amazon, which reported a 23% year-over-year increase in advertising revenue to $15.69 billion in Q2 [5]. - Amazon's ad-tech expansion is identified as a significant headwind for TTD [5]. Leadership Changes - CFO Laura Schenkein will step down on August 21, transitioning to a non-executive director role, with board member Alex Kayyal set to take over [6]. - Omar Tawakol, CEO of Rembrand and an AI entrepreneur, has joined TTD's board [6]. Market Reactions - RBC Capital Markets lowered its price target for TTD from $100 to $90 while maintaining an 'Outperform' rating, noting that results were solid but fell short of high expectations [7]. - MoffettNathanson downgraded the stock to 'Sell' from 'Hold', reducing the price target from $75 to $45, suggesting TTD should be valued based on actual earnings and cash flow due to decelerating revenue growth and pressure on profit margins [8]. - Wedbush and Citi analysts downgraded the stock to 'Hold', citing weaker growth trends and increased competition from Amazon's demand-side platform [9].

Trade Desk analysts are bailing on the one-time market favorite amid growing fears that its advertising technology will get steamrolled by Amazon’s offerings https://t.co/E77AlpMTZR ...

Core Insights - Integral Ad Science (IAS) reported a revenue of $149.2 million for the quarter ended June 2025, reflecting a year-over-year increase of 15.7% [1] - The earnings per share (EPS) for the quarter was $0.07, up from $0.05 in the same quarter last year, indicating a positive trend in profitability [1] - The reported revenue exceeded the Zacks Consensus Estimate of $143.7 million by 3.83%, while the EPS surpassed the consensus estimate of $0.04 by 75% [1] Revenue Breakdown - Optimization revenue reached $67.86 million, surpassing the average estimate of $66.87 million by analysts, marking a 16% increase year-over-year [4] - Publisher revenue was reported at $24.3 million, exceeding the estimated $20.9 million, and showing a significant year-over-year growth of 36.5% [4] - Measurement revenue amounted to $57.05 million, slightly above the estimated $55.71 million, with an 8.2% increase compared to the previous year [4] Stock Performance - Over the past month, shares of Integral Ad Science have declined by 2.8%, contrasting with a 1.2% increase in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - Revenue for the quarter was $22.7 million, representing a 25% year-over-year increase, driven by sustained demand from platform clients [21] - Gross profit increased to $17.1 million, a 12% year-over-year rise, but gross margin declined to 75.4% from 84% due to scaling of new platform campaigns [23] - Operating expenses totaled $19.1 million, up 12% year-over-year, primarily due to increased marketing costs [24] - Net loss narrowed to $1.5 million or $0.10 per share compared to a loss of $1.7 million or $0.12 per share in the previous year [27] Business Line Data and Key Metrics Changes - The self-serve adoption accelerated with 18 new deals set up in the quarter, achieving 300% quarter-over-quarter growth [7] - Managed services pipeline remains healthy with four new managed service deals signed in the quarter [8] - Revenue from agencies and brands totaled approximately $3 million for the second quarter, with 22 new clients onboarded, 18 of whom adopted the self-serve solution [22] Market Data and Key Metrics Changes - Connected television (CTV) is gaining interest, with more clients including Inuvo's solutions in their RFPs, making it the highest services margin channel [10] - The marketplace is shifting towards higher quality advertising standards, benefiting Inuvo due to its compliance-oriented infrastructure [14] Company Strategy and Development Direction - Inuvo is focused on breaking through $100 million in sales this year, with a compounded annual growth rate of approximately 24% [6] - The company is investing in compliance, scalable technology, and predictive analytics to meet evolving client needs [30] - New integrations with demand-side campaign platform providers are being pursued to facilitate international expansion and product innovation [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the $100 million annual target, citing improved technology and client understanding of marketing challenges [33] - The company anticipates that margins will improve as seasonality effects diminish [44] - There is a notable shift in the market towards privacy-first, high-integrity digital advertising, positioning Inuvo favorably [30] Other Important Information - The company completed a one-for-ten reverse stock split to improve share marketability and attract institutional investors [27] - Operational enhancements were made to intent key reporting dashboards, receiving positive feedback from clients [11] Q&A Session Summary Question: Confidence in hitting the $100 million annual target - Management feels confident about reaching the $100 million target, noting improved technology and client understanding [33] Question: Evolution of new customer campaigns - New customers typically start with smaller spends and increase as they see performance gains; self-serve clients are also showing a 300% increase in revenue [35][38] Question: Transition from self-serve to managed services - While it hasn't happened yet, management expects some larger self-serve customers may eventually transition to managed services [39] Question: Operating loss despite revenue growth - The decline in gross margins and increased marketing costs contributed to the lower operating profit despite revenue growth [40][42] Question: Opportunities to improve selling process and pricing - Management is continuously exploring ways to optimize the selling process and pricing strategies [47] Question: Clarification on new client numbers - All 18 self-serve deals and four managed service deals mentioned were new clients [54] Question: Partnerships for expansion - Management is working on new demand-side platform integrations to expand opportunities [56] Question: Impact of antitrust suits on the ecosystem - It is difficult to predict the impact of evolving AI technologies and antitrust suits on the ecosystem at this time [62]