Taboola.com (TBLA) FY Conference Transcript

Summary of Taboola.com (TBLA) FY Conference Call - May 13, 2025 Company Overview - Company: Taboola.com (TBLA) - Industry: Performance Advertising - Core Business: Taboola is a leading global performance advertising platform that helps businesses place performance ads across the open internet, leveraging unique data and AI to target ads effectively [7][8][9]. Financial Projections - 2025 Revenue Projection: Expected to achieve approximately $1.9 billion in revenue [10]. - EBITDA Margin Target: Aiming for 30% EBITDA margins, translating to about $211 million to $212 million in adjusted EBITDA [10]. - Free Cash Flow Conversion: Targeting a conversion rate of 50% to 60% of adjusted EBITDA to free cash flow, with expectations to be closer to the 60% end [10]. New Product Launch - Realize Platform: Introduction of a new advertising platform that expands beyond native advertising to include display ads and vertical video ads, allowing performance advertisers to achieve their goals across various media formats [11][12]. Market Position and Strategy - Addressable Market Expansion: The company aims to capture a larger share of the display ad market, which is three times larger than the native ad market [13]. - Performance vs. Branding: Emphasizes the difference between performance advertising (specific goals like CPA and CPL) and branding advertising, noting a gap in the market for automated performance advertising solutions [14][15][16]. - Unique Data Advantage: Taboola's data is derived from being hard-coded on publisher pages, providing a unique targeting capability that competitors may struggle to replicate [28][29]. Competitive Landscape - End-to-End Solution: Taboola operates as both a Demand-Side Platform (DSP) and Supply-Side Platform (SSP), providing a competitive edge in the open internet space [26][27]. - Response to Competitors: Acknowledges competition from other DSPs and SSPs but believes its unique data and direct relationships with advertisers and publishers provide a significant advantage [27][30]. Generative AI and Technology Integration - Generative AI Utilization: The company is integrating generative AI to enhance internal productivity and improve customer experience through tools like Abby, a self-service generative AI assistant for advertisers [70][72][123]. - Deep Learning AI: Continues to invest in deep learning AI to optimize ad targeting and improve revenue per ad spot [118][120]. Capital Allocation and Financial Strategy - Share Buybacks: The primary focus for excess cash flow is on aggressive share buybacks, with over $90 million repurchased in the first quarter and a half of the year [105]. - M&A Strategy: Plans to pursue smaller, tuck-in acquisitions rather than large-scale mergers, while also considering debt repayment as a lower priority following a recent refinancing [106][107]. Yahoo Integration and Performance - Impact of Yahoo Deal: The acquisition of Yahoo has significantly increased adjusted EBITDA and free cash flow, although some expected demand sources have not materialized as quickly as anticipated [94][96]. - Brand Advertiser Engagement: The company has successfully transitioned several large brand advertisers to its platform, although some have opted to remain exclusive to Yahoo supply [96][97]. Future Outlook - Focus on Incremental Demand: Plans to bring in new forms of demand and verticalize the sales team to better serve specific industries [48][49]. - CTV Opportunities: Exploring potential in Connected TV (CTV) advertising, particularly in connecting video ads to performance outcomes [36][37]. Key Takeaways - Taboola is positioning itself as a leader in performance advertising by leveraging unique data and AI technology to meet the evolving needs of advertisers. - The company is focused on expanding its market reach, improving profitability through technology, and maintaining a strong financial position through strategic capital allocation.