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Taboola.com(TBLA) - 2024 Q3 - Earnings Call Transcript
TBLATaboola.com(TBLA)2024-11-08 13:31
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Financial Data and Key Metrics Changes - Q3 2024 revenues reached 433million,reflectinga20433 million, reflecting a 20% year-over-year increase, while ex-TAC gross profit grew by 30% year-over-year to 166.4 million [31][32] - Adjusted EBITDA for the quarter was 47.9million,up11047.9 million, up 110% year-over-year, with a margin of 29% [33] - Free cash flow was 42.9 million, benefiting from growth in adjusted EBITDA and favorable operating leverage [33] - The GAAP net loss narrowed to 6.5millionfrom6.5 million from 23.1 million in Q3 2023, with non-GAAP net income at 22.2million[32][36]BusinessLineDataandKeyMetricsChanges−Thecorebusinessisfocusedonincreasingthenumberofadvertisersandtheirspending,withanotableincreaseinTier−1advertiserengagement[9][15]−TheadoptionofAIbypublishersisseenasasignificantgrowthopportunity,withexpectationsforincreaseduserengagement[10][11]−E−commerceisperformingwell,particularlythroughthe"ShopYourLikes"initiative,whichisdrivingstronggrowth[25][86]MarketDataandKeyMetricsChanges−Thecompanyisexperiencinggrowthininternationalmarkets,particularlyinChina,whereadvertiserspendinghasdoubledyear−over−year[16][22]−ThepartnershipwithXiaomihasbeenexpanded,enhancingthecompany′spresenceinnewmarkets[23]−TaboolaNewsisdrivingtraffictopublishers,withoveramillionusersdaily,andaimstobecomeasignificanttrafficsourceforpublishers[24][59]CompanyStrategyandDevelopmentDirection−Thecompanyisfocusedonenhancingitstechnologyofferingstoattractmoreadvertisersandimproveperformance[9][27]−Long−termexclusiveagreementswithpublishersprovideacompetitiveadvantageandapredictableinventorybaseforadvertisers[14]−InvestmentsinAIandnewdistributionchannelsarecentraltothecompany′sgrowthstrategy[10][12][27]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedoptimismaboutthecompany′sgrowthtrajectory,reaffirmingguidancefor2024andraisingthefreecashflowtargettoover22.2 million [32][36] Business Line Data and Key Metrics Changes - The core business is focused on increasing the number of advertisers and their spending, with a notable increase in Tier-1 advertiser engagement [9][15] - The adoption of AI by publishers is seen as a significant growth opportunity, with expectations for increased user engagement [10][11] - E-commerce is performing well, particularly through the "Shop Your Likes" initiative, which is driving strong growth [25][86] Market Data and Key Metrics Changes - The company is experiencing growth in international markets, particularly in China, where advertiser spending has doubled year-over-year [16][22] - The partnership with Xiaomi has been expanded, enhancing the company's presence in new markets [23] - Taboola News is driving traffic to publishers, with over a million users daily, and aims to become a significant traffic source for publishers [24][59] Company Strategy and Development Direction - The company is focused on enhancing its technology offerings to attract more advertisers and improve performance [9][27] - Long-term exclusive agreements with publishers provide a competitive advantage and a predictable inventory base for advertisers [14] - Investments in AI and new distribution channels are central to the company's growth strategy [10][12][27] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's growth trajectory, reaffirming guidance for 2024 and raising the free cash flow target to over 105 million [7][43] - The company is focused on driving demand and improving advertising success through technology investments [27][45] - Management highlighted the importance of adapting to industry changes and the growing role of AI in advertising [99][100] Other Important Information - The company plans to hold an Investor Day early next year to share new developments [28] - The company has been recognized for its technology and advertising platform, winning awards for its innovations [29] Q&A Session Summary Question: Progress with Apple relationship - Management is optimistic about the Apple partnership, seeing it as a potential major revenue contributor and a way to attract premium advertisers [48][49] Question: Feedback on Max Conversions - The adoption rate of Max Conversions is about 70%, with significant growth in campaigns and advertisers using the solution [50][52] Question: Traffic growth goals - Management aims for Taboola News to become a significant traffic source for publishers, targeting over 10% of their traffic [54][59] Question: Impact of potential tariffs on revenue from China - Revenue from China is low single-digit percentages, with minimal risk from potential tariffs [64][66] Question: Expectations for next year - Management is excited about growth prospects but will provide specific guidance in February [68][70] Question: E-commerce growth and future product roadmap - E-commerce is performing well, with investments in sales teams to drive growth, and a focus on expanding product offerings [84][86]