Taboola.com(US:TBLA)2023-02-24 18:39Financial Data and Key Metrics Changes - For the full year 2022, the company achieved $569.6 million in Ex-TAC, $156.7 million in adjusted EBITDA, and positive free cash flow [9][20] - Q4 revenues were approximately $371 million, with an Ex-TAC gross profit of $159 million, and a net income of $15.2 million [21][22] - Ex-TAC gross profit declined approximately 6% year-over-year, impacted by foreign currency exchange rate headwinds [21][22] Business Line Data and Key Metrics Changes - The company signed new publisher partnerships, achieving over 90% higher new revenue per month compared to 2020 and 2021 [9] - Taboola News exceeded $50 million in annual revenue, growing at triple digits [11] - The eCommerce segment gained momentum with the rollout of Dynamic Creative Optimization (DCO) [11][16] Market Data and Key Metrics Changes - The company experienced a decline in existing digital property partners, resulting in a $71 million decrease due to global macroeconomic weakness [21] - The advertising market showed a relatively normal fourth quarter in terms of seasonality, but with a soft December [37] Company Strategy and Development Direction - The company aims to be the largest open web advertising company by revenue, with a focus on contextual advertising partnerships [13] - The strategy includes "Taboola Anything" and "Taboola Anywhere," expanding content and technology to various platforms [10][11] - Significant investments are planned for performance advertising, eCommerce, and header bidding to drive future growth [14][16] Management's Comments on Operating Environment and Future Outlook - Management anticipates a weaker year-over-year performance in 2023, with a guidance of 6% lower Ex-TAC compared to 2022 [12] - The company expects to return to year-over-year growth in Q3 and Q4 of 2023 as they lap hard comparables from 2022 [12] - For 2024, management is confident in generating at least $200 million in adjusted EBITDA and over $100 million in free cash flow [13][27] Other Important Information - The company plans to invest approximately $30 million in the Yahoo transition, which is expected to be accretive to financials [17][26] - The company has a goal of retiring $30 million to $40 million of long-term debt in 2023 due to rising interest rates [23][32] Q&A Session Summary Question: Can you help us understand Yahoo's current activities and the 2023 guidance? - The company is entering 2023 with a lower run rate due to macroeconomic effects and decreased yield, expecting to grow off this lower base [31] Question: Can you provide insights on ad market trends into February? - The advertising market has shown normal seasonality, with no significant changes regionally, but overall demand remains soft [37][38] Question: What verticals were stronger or weaker in Q4 and into 2023? - eCommerce was identified as a stronger vertical, particularly with the success of Connexity DCO [39] Question: What is the progress of Taboola News? - Taboola News is growing significantly, contributing 5% to 10% of traffic for some publishers, and is expected to become a $100 million business [41] Question: How is the company managing complexity with multiple initiatives? - The company is focused on maintaining positive free cash flow while investing in key areas that are expected to yield significant returns [45]