Taboola.com (TBLA) FY Conference Transcript

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]