Taboola.com(US:TBLA)2025-11-05 14:30Financial Data and Key Metrics Changes - The company reported Q3 2025 revenue of $497 million, representing a 15% year-over-year increase [12] - Ex-TAC gross profit was $177 million, up 6% year-over-year, with an adjusted EBITDA of $48 million, reflecting a strong EBITDA margin of over 27% [6][12] - Free cash flow for the quarter was $46 million, with a year-to-date total of $117 million, indicating a 96% conversion of adjusted EBITDA in Q3 [6][18] Business Line Data and Key Metrics Changes - The number of scaled advertisers grew by 4% to 2,064, while average revenue per scaled advertiser increased by 11% [8][13] - The growth in ex-TAC gross profit was primarily driven by strong advertising spending, particularly from scaled advertisers [14] Market Data and Key Metrics Changes - The company expects nearly $2 billion in gross revenue for 2025, with over $700 million in Ex-TAC gross profit [5] - The advertising market is estimated to be a $55 billion opportunity, with Taboola positioned to capture market share as advertisers seek alternatives to search and social platforms [6] Company Strategy and Development Direction - The company is focusing on its performance platform, Realize, which aims to enhance advertiser success and drive growth [4][10] - Taboola is committed to increasing its market presence in performance advertising, aiming to become a leading platform outside of Google, Meta, and Amazon [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to double-digit growth over time, citing strong momentum and positive feedback from advertisers [4][22] - The company raised its full-year guidance, expecting revenues between $1.91 billion and $1.93 billion, reflecting continued business momentum [21] Other Important Information - The company repurchased approximately 10 million shares for a total consideration of $34.4 million in Q3, representing 14% of the company year-to-date [7][20] - The company secured a new $270 million revolving credit facility, allowing for reduced interest expenses and increased liquidity [19] Q&A Session Summary Question: What are the next steps for the Realize platform to capture more advertiser budgets? - Management highlighted three key areas: shifting market perception, focusing on the right clients, and continuous technology iteration [26][27] Question: Can you elaborate on the partnership with Paramount and its implications for CTV? - Management described the partnership as a demand generation opportunity, integrating TV and performance advertising to track conversions effectively [29][30] Question: What is the current state of traffic and its quality? - Management reported an increase in overall traffic, particularly from app traffic, and emphasized the importance of maintaining high-quality traffic for advertisers [40][41] Question: How is AI being utilized to improve yields and conversion rates? - Management explained that AI is used extensively for ad targeting and campaign optimization, with a focus on driving higher yields for advertisers [45][46] Question: What are the expectations for operating expenses and headcount growth? - Management indicated that operating expenses would grow in line with business growth while maintaining a target of 30% adjusted EBITDA margins [96][97] Question: What is the sustainability of growth for Taboola News? - Management expressed optimism about the growth of Taboola News, noting its unique supply strategy and immunity to LLM disintermediation [115]