Taboola.com(US:TBLA)2025-05-07 13:30Financial Data and Key Metrics Changes - The company reported Q1 revenues of $427 million, representing a 3% year-over-year growth, with ex TAC gross profit of $152 million, which is 9% higher than last year [8][21] - Adjusted EBITDA for Q1 was $36 million, reflecting a 53% year-over-year growth, with margins expanding significantly [8][25] - Free cash flow for the quarter was $36 million, growing 35% year-over-year [8][25] Business Line Data and Key Metrics Changes - The number of scaled advertisers grew by 9% year-over-year, reaching 1,996, while the average revenue per scaled advertiser declined by 3% [12][22] - The core native business saw positive growth, and the company completed its format testing with Yahoo, which had a marginal revenue reduction impact [23][24] Market Data and Key Metrics Changes - The company noted a 1% decrease in advertising spend related to tariffs, primarily affecting its China business, which now accounts for around 5% of total Q2 revenue [9][53] - The company is seeing positive trends in Taboola News and other parts of the business, supporting its decision to maintain full-year guidance [9][10] Company Strategy and Development Direction - The company is focused on capturing a $55 billion market opportunity in performance advertising outside of search and social channels [6][10] - The launch of the Realize platform is a significant step forward, offering new ad formats and a CPC pricing model, which is expected to unlock previously inaccessible advertising budgets [13][14][15] - The company aims to drive incremental ad spend through Realize's new capabilities and is focusing on verticalizing its sales organization [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the business despite macroeconomic uncertainties, emphasizing cost discipline and investment in growth initiatives [19][20] - The company reiterated its full-year guidance for 2025, expecting revenues between $1.84 billion and $1.89 billion [30][31] Other Important Information - The company has a strong balance sheet with a net cash balance of $89.7 million and cash equivalents totaling $216.2 million [28][29] - The company repurchased approximately 16.2 million shares at an average price of $3.3 during Q1, with an additional 15.1 million shares repurchased since then [30][31] Q&A Session Summary Question: Progress on verticalizing the sales force and the impact on scaled advertisers - Management indicated that the restructuring of the sales teams is complete and early returns are positive, with the number of scaled advertisers growing by 9% [34][36][38] Question: Impact of Google news on the ad tech industry - Management noted that the shift towards privacy and the potential reduction of cookies could benefit companies with first-party data, positioning them well in the market [45][46][48] Question: Performance of different business components in uncertain macro environments - Management stated that the performance advertising space is well-positioned, and they have not seen material impacts from macroeconomic changes so far [64][66][68] Question: Guidance for the second half of the year - Management explained that the expected decline in ex TAC revenue in the second half is due to conservative guidance and the impact of prior testing with Yahoo [69][72] Question: Future hiring trends and cost management - Management indicated that while there will be some ramp in R&D hiring, overall cost increases will be limited, focusing on productivity improvements through AI [88][90]