Taboola (Nasdaq: TBLA), a global leader in powering recommendations
for the open web, helping people discover things they may like,
today announced its results for the quarter ended June 30, 2023.
“We had a strong performance in Q2, beating the
high end of our guidance across all metrics. Publishers all around
the world continue to trust us and sign long term partnerships,
which we saw with new and competitive wins this quarter from
Barstool Sports, Cambium Media, Nexstar Media, Futura, and A Cidade
On. This is on top of key partners like Time, Disney, Unidad
Editorial, BBC, One India, The Print and Bangkok Post renewing
their relationships with us. We’re seeing eCommerce and Taboola
News significantly outpacing our expectations, with eCommerce now
being nearly 20% of our ex-TAC and Taboola News roughly doubling in
size, approaching $100M from $50M last year. Our focus for the rest
of the year continues to be making our four company priorities
successful–Yahoo, Performance Advertising, eCommerce and
Bidding–each representing a $1B opportunity for us. I’m bullish
about our future, and believe Taboola can soon become the first
‘must buy’ in the Open Web,” said Adam Singolda, CEO and Founder,
Taboola.
For more commentary on the quarter, please refer
to Taboola’s Q2 2023 Shareholder Letter, which was furnished to the
SEC and also posted on Taboola’s website today at
https://investors.taboola.com.
Second Quarter Results
Summary
(dollars in millions, except per share data) |
Three months ended June 30, |
|
|
|
|
|
2023 |
|
2022 |
|
|
|
|
|
Unaudited |
|
% change YoY |
|
Guidance |
|
Revenues |
$ 332.0 |
|
|
$ 342.7 |
|
|
(3.1% |
) |
|
$296 - $322 |
|
|
Gross profit |
$ 97.1 |
|
|
$ 116.4 |
|
|
(16.6% |
) |
|
$78 - $88 |
|
|
Net loss |
$ (31.3 |
) |
|
$ (5.0 |
) |
|
523.7% |
|
|
|
|
|
EPS diluted (1) |
$ (0.09 |
) |
|
$ (0.02 |
) |
|
344.8% |
|
|
|
|
|
Ratio of net loss to gross profit |
(32.3% |
) |
|
(4.3% |
) |
|
— |
|
|
|
|
|
Cash flow provided by operating activities |
$ 11.6 |
|
|
$ 2.1 |
|
|
456.5% |
|
|
|
|
|
Cash, cash equivalents, short-term deposits and investments |
$ 246.9 |
|
|
$ 308.5 |
|
|
(20.0% |
) |
|
|
|
|
|
Non-GAAP Financial Data * |
|
ex-TAC Gross Profit |
$ 123.1 |
|
|
$ 143.2 |
|
|
(14.0% |
) |
|
$105 - $115 |
|
|
Adjusted EBITDA |
$ 15.7 |
|
|
$ 34.2 |
|
|
(54.2% |
) |
|
($4) - $6 |
|
|
Non-GAAP Net Income (Loss) |
$ (1.4 |
) |
|
$ 15.8 |
|
|
NA |
|
|
($26) - ($16 |
) |
|
Ratio of Adjusted EBITDA to ex-TAC Gross Profit |
12.7% |
|
|
23.9% |
|
|
— |
|
|
|
|
|
Free Cash Flow |
$ 7.8 |
|
|
$ (7.3 |
) |
|
NA |
|
|
|
|
|
|
1 The weighted-average shares used in the
computation of the diluted EPS for the three months ended June 30,
2023 and 2022 are 351,585,059 and 250,777,915, respectively. The
weighted-average shares for the three months ended June 30, 2023
include 45,198,702 Non-Voting Ordinary Shares.
Business Highlights for Q2
2023
- Revenue from new publisher partners continues to be an area of
strength - Publisher wins from competitors included Barstool
Sports, G/O Media, Cambium Media, Futura, and A Cidade On.
- Renewed relationships with many well-known publishers including
Time, Disney, Unidad Editorial, BBC, One India, The Print and
Bangkok Post.
- Taboola News is continuing to experience strong growth and will
approach $100M in revenue this year (from over $50M in 2022).
- We’re outpacing our expectations on eCommerce, which now
represents nearly 20% of ex-TAC (up from 15%).
- Our Generative AI technology was made generally available and
of the brands using our technology, 80% of those early users ran
multiple campaigns.
Third Quarter and Full Year 2023
Guidance
For the Third Quarter and Full Year 2023, the
Company currently expects:
|
Q3 2023 Guidance |
|
FY 2023 Guidance |
|
|
Unaudited |
|
(dollars in millions) |
Revenues |
$331 - $357 |
|
$1,438 - $1,469 |
|
Gross profit |
$83 - $95 |
|
$420 - $436 |
|
ex-TAC Gross Profit* |
$112 - $124 |
|
$531 - $546 |
|
Adjusted EBITDA* |
($2) - $10 |
|
$73 - $80 |
|
Non-GAAP Net Income (Loss)* |
($20) - ($8) |
|
$5 - $10 |
|
|
Although we provide guidance for Adjusted EBITDA
and Non-GAAP Net Income (Loss), we are not able to provide guidance
for projected net income (loss), the most directly comparable GAAP
measure. Certain elements of net income (loss), including
share-based compensation expenses and warrant valuations, are not
predictable due to the high variability and difficulty of making
accurate forecasts. As a result, it is impractical for us to
provide guidance on net income (loss) or to reconcile our Adjusted
EBITDA and Non-GAAP Net Income (Loss) guidance without unreasonable
efforts. Consequently, no disclosure of projected net income (loss)
is included. For the same reasons, we are unable to address the
probable significance of the unavailable information.
Webcast Details
Taboola's senior management team will discuss the
Company's earnings on a call that will take place on August 9,
2023, at 8:30 AM ET. The call can be accessed via webcast at
https://investors.taboola.com. To access the call by phone, please
go to this link to register
https://register.vevent.com/register/BIc37f11a51ded4f36a084ea5acda51c57
and you will be provided with dial in details. The webcast will be
available for replay for one year, through the close of business on
August 9, 2024.
*About Non-GAAP Financial
Information
This press release includes ex-TAC Gross Profit,
Adjusted EBITDA, Ratio of Adjusted EBITDA to ex-TAC Gross Profit,
Free Cash Flow, Non-GAAP Net Income (Loss), which are non-GAAP
financial measures. These non-GAAP financial measures are not
measures of financial performance in accordance with GAAP and may
exclude items that are significant in understanding and assessing
the Company’s financial results. Therefore, these measures should
not be considered in isolation or as an alternative to revenues,
gross profit, net income (loss), cash flows from operations or
other measures of profitability, liquidity or performance under
GAAP. You should be aware that the Company’s presentation of these
measures may not be comparable to similarly-titled measures used by
other companies.
The Company believes non-GAAP financial measures
provide useful supplemental information to management and investors
regarding future financial and business trends relating to the
Company. The Company believes that the use of these measures
provides an additional tool for investors to use in evaluating
operating results and trends and in comparing the Company’s
financial measures with other similar companies, many of which
present similar non-GAAP financial measures to investors. Non-GAAP
financial measures are subject to inherent limitations because they
reflect the exercise of judgments by management about which items
are excluded or included in calculating them, which may vary from
period to period. Please refer to the appendix at the end of this
press release for reconciliations to the most directly comparable
measures in accordance with GAAP.
**About Cash Investment
in Publisher Prepayments (Net)
We calculate cash investment in publisher
prepayments (net) for a specific measurement period as the gross
amount of cash publisher prepayments we made in that measurement
period minus the amortization of publisher prepayments that were
included in traffic acquisition cost during that measurement
period, which were the result of cash publisher prepayments made in
that measurement period and previous periods.
Note Regarding Forward-Looking
Statements
Certain statements in this press release are
forward-looking statements. Forward-looking statements generally
relate to future events including future financial or operating
performance of Taboola.com Ltd. (the “Company”). In some cases, you
can identify forward-looking statements by terminology such as
“may”, “should”, “expect”, “guidance”, “intend”, “will”,
“estimate”, “anticipate”, “believe”, “predict”, “target”,
“potential” or “continue”, or the negatives of these terms or
variations of them or similar terminology. Such forward-looking
statements are subject to risks, uncertainties, and other factors
which could cause actual results to differ materially from those
expressed or implied by such forward looking statements.
These forward-looking statements are based upon
estimates and assumptions that, while considered reasonable by the
Company and its management, are inherently uncertain. Uncertainties
and risk factors that could affect the Company’s future performance
and cause results to differ from the forward-looking statements in
this press release include, but are not limited to: the Company’s
ability to grow and manage growth profitably, maintain
relationships with customers and retain its management and key
employees; the Company’s ability to successfully integrate the
Connexity acquisition; changes in applicable laws or regulations;
the Company’s estimates of expenses and profitability and
underlying assumptions with respect to accounting presentations and
purchase price and other adjustments; the extent to which we will
voluntarily prepay additional long-term debt or buyback any of our
Ordinary shares pursuant to authority granted by the Company’s
Board of Directors, which may depend upon market and economic
conditions; other business opportunities and priorities; and, with
respect to the buyback of our Ordinary shares, the availability of
sufficient continuing authority being approved and re-approved as
necessary by the Tel Aviv District Court Economic Department to
permit share buybacks (and our continued use of a net issuance
mechanism to satisfy tax withholding obligations related to
equity-based compensation on behalf of our directors, officers and
other employees) or other factors; the Company’s ability to
transition to and fully launch the native advertising service for
Yahoo on the currently anticipated schedule or at all; the ability
to generate or achieve the increase in Adjusted EBITDA and Free
Cash Flow in 2024 or our expected revenue run-rate once Yahoo
integration is live, in each case to the levels assumed in this
press release or at all; ability to attract new digital properties
and advertisers; ability to meet minimum guarantee requirements in
contracts with digital properties; intense competition in the
digital advertising space, including with competitors who have
significantly more resources; ability to grow and scale the
Company’s ad and content platform through new relationships with
advertisers and digital properties; ability to secure high quality
content from digital properties; ability to maintain relationships
with current advertiser and digital property partners; ability to
prioritize investments to improve profitability and free cash flow;
ability to make continued investments in the Company’s AI-powered
technology platform; the need to attract, train and retain
highly-skilled technical workforce; changes in the regulation of,
or market practice with respect to, “third party cookies” and its
impact on digital advertising; continued engagement by users who
interact with the Company’s platform on various digital properties;
reliance on a limited number of partners for a significant portion
of the Company’s revenue; changes in laws and regulations related
to privacy, data protection, advertising regulation, competition
and other areas related to digital advertising; ability to enforce,
protect and maintain intellectual property rights; and risks
related to the fact that we are incorporated in Israel and governed
by Israeli law; and other risks and uncertainties set forth in the
Company’s Annual Report on Form 10-K for the year ended December
31, 2022 under Part 1, Item 1A “Risk Factors” and in the Company’s
subsequent filings with the Securities and Exchange Commission.
Nothing in this press release should be regarded
as a representation by any person that the forward-looking
statements set forth herein will be achieved or that any of the
contemplated results of such forward-looking statements will be
achieved. You should not place undue reliance on these
forward-looking statements, which speak only as of the date they
were made. The Company undertakes no duty to update these
forward-looking statements except as may be required by law.
About Taboola Taboola powers
recommendations for the open web, helping people discover things
they may like.
The Company’s platform, powered by artificial
intelligence, is used by digital properties, including websites,
devices and mobile apps, to drive monetization and user engagement.
Taboola has long-term partnerships with some of the top digital
properties in the world, including CNBC, BBC, NBC News, Business
Insider, The Independent and El Mundo.
Approximately 18,000 advertisers use Taboola to
reach nearly 600 million daily active users in a brand-safe
environment. Following the acquisition of Connexity in 2021,
Taboola is a leader in powering e-commerce recommendations, driving
more than 1 million monthly transactions each month. Leading
brands, including Walmart, Macy’s, Wayfair, Skechers and eBay are
among key customers.
Learn more at www.taboola.com and follow @taboola
on Twitter.
Investor Contact: |
Press Contact: |
Stephen Walker |
Dave Struzzi |
investors@taboola.com |
press@taboola.com |
|
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share
data
|
June 30,2023 |
|
|
December 31,2022 |
|
|
Unaudited |
|
|
|
ASSETS |
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
Cash and cash equivalents |
$ |
204,595 |
|
|
$ |
165,893 |
|
|
Short-term investments |
|
42,256 |
|
|
|
96,914 |
|
|
Restricted deposits |
|
1,170 |
|
|
|
750 |
|
|
Trade receivables (net of allowance for credit losses of $9,685 and
$6,748 as of June 30, 2023 and December 31, 2022,
respectively) |
|
217,437 |
|
|
|
256,708 |
|
|
Prepaid expenses and other current assets |
|
70,817 |
|
|
|
73,643 |
|
|
Total current assets |
|
536,275 |
|
|
|
593,908 |
|
|
|
NON-CURRENT ASSETS |
|
Long-term prepaid expenses |
|
40,230 |
|
|
|
42,945 |
|
|
Commercial agreement asset |
|
289,451 |
|
|
|
— |
|
|
Restricted deposits |
|
3,974 |
|
|
|
4,059 |
|
|
Deferred tax assets, net |
|
3,121 |
|
|
|
3,821 |
|
|
Operating lease right of use assets |
|
64,364 |
|
|
|
66,846 |
|
|
Property and equipment, net |
|
71,079 |
|
|
|
73,019 |
|
|
Intangible assets, net |
|
157,215 |
|
|
|
189,156 |
|
|
Goodwill |
|
555,931 |
|
|
|
555,869 |
|
|
Total non-current assets |
|
1,185,365 |
|
|
|
935,715 |
|
|
Total assets |
$ |
1,721,640 |
|
|
$ |
1,529,623 |
|
|
|
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share
data
|
June 30,2023 |
|
December 31,2022 |
|
|
Unaudited |
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
CURRENT LIABILITIES |
|
|
Trade payables |
$ |
222,232 |
|
|
$ |
247,504 |
|
|
Short-term operating lease liabilities |
|
16,231 |
|
|
|
14,753 |
|
|
Accrued expenses and other current liabilities |
|
105,234 |
|
|
|
102,965 |
|
|
Current maturities of long-term loan |
|
3,000 |
|
|
|
3,000 |
|
|
Total current liabilities |
|
346,697 |
|
|
|
368,222 |
|
|
|
LONG-TERM LIABILITIES |
|
|
Long-term loan, net of current maturities |
|
192,307 |
|
|
|
223,049 |
|
|
Long-term operating lease liabilities |
|
54,583 |
|
|
|
57,928 |
|
|
Warrants liability |
|
5,782 |
|
|
|
6,756 |
|
|
Deferred tax liabilities, net |
|
26,938 |
|
|
|
34,133 |
|
|
Other long-term liabilities |
|
5,000 |
|
|
|
5,000 |
|
|
Total long-term liabilities |
|
284,610 |
|
|
|
326,866 |
|
|
SHAREHOLDERS' EQUITY |
|
|
Ordinary shares with no par value- Authorized: 700,000,000 as of
June 30, 2023 and December 31, 2022; 300,637,035 and 254,133,863
shares issued and outstanding as of June 30, 2023 and December 31,
2022, respectively |
|
— |
|
|
|
— |
|
|
Non-voting Ordinary shares with no par value- Authorized:
46,000,000 as of June 30, 2023 and December 31, 2022; 45,198,702
and 0 shares issued and outstanding as of June 30, 2023 and
December 31, 2022, respectively |
|
— |
|
|
|
— |
|
|
Treasury Ordinary shares, at cost - 1,442,000 and 0 Ordinary shares
as of June 30, 2023 and December 31, 2022, respectively |
|
(4,358 |
) |
|
|
— |
|
|
Additional paid-in capital |
|
1,226,572 |
|
|
|
903,789 |
|
|
Accumulated other comprehensive loss |
|
(834 |
) |
|
|
(834 |
) |
|
Accumulated deficit |
|
(131,047 |
) |
|
|
(68,420 |
) |
|
Total shareholders' equity |
|
1,090,333 |
|
|
|
834,535 |
|
|
Total liabilities and shareholders' equity |
$ |
1,721,640 |
|
|
$ |
1,529,623 |
|
|
|
CONSOLIDATED STATEMENTS OF LOSS
U.S. dollars in thousands, except share and per share
data
|
Three months ended June 30, |
|
Six months ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Unaudited |
Revenues |
$ |
332,004 |
|
|
$ |
342,695 |
|
|
$ |
659,690 |
|
|
$ |
697,421 |
|
|
Cost of revenues: |
|
|
|
|
|
|
|
Traffic acquisition cost |
|
208,870 |
|
|
|
199,486 |
|
|
|
420,816 |
|
|
|
415,984 |
|
|
Other cost of revenues |
|
26,077 |
|
|
|
26,848 |
|
|
|
52,225 |
|
|
|
53,046 |
|
|
Total cost of revenues |
|
234,947 |
|
|
|
226,334 |
|
|
|
473,041 |
|
|
|
469,030 |
|
|
Gross profit |
|
97,057 |
|
|
|
116,361 |
|
|
|
186,649 |
|
|
|
228,391 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
Research and development |
|
34,001 |
|
|
|
34,079 |
|
|
|
65,986 |
|
|
|
64,491 |
|
|
Sales and marketing |
|
61,198 |
|
|
|
66,405 |
|
|
|
121,767 |
|
|
|
127,773 |
|
|
General and administrative |
|
26,858 |
|
|
|
25,428 |
|
|
|
52,694 |
|
|
|
53,377 |
|
|
Total operating expenses |
|
122,057 |
|
|
|
125,912 |
|
|
|
240,447 |
|
|
|
245,641 |
|
|
Operating loss |
|
(25,000 |
) |
|
|
(9,551 |
) |
|
|
(53,798 |
) |
|
|
(17,250 |
) |
|
Finance income (expenses), net |
|
(3,827 |
) |
|
|
4,764 |
|
|
|
(6,981 |
) |
|
|
15,959 |
|
|
Loss before income taxes benefit (expenses) |
|
(28,827 |
) |
|
|
(4,787 |
) |
|
|
(60,779 |
) |
|
|
(1,291 |
) |
|
Income tax benefit (expenses) |
|
(2,487 |
) |
|
|
(234 |
) |
|
|
(1,848 |
) |
|
|
158 |
|
|
Net loss |
$ |
(31,314 |
) |
|
$ |
(5,021 |
) |
|
$ |
(62,627 |
) |
|
$ |
(1,133 |
) |
|
|
|
|
|
|
|
|
|
Net loss per share attributable to Ordinary and Non-voting Ordinary
shareholders, basic and diluted (1) |
$ |
(0.09 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.00 |
) |
|
|
1 The weighted-average shares used in the
computation of the basic and diluted net loss per share the three
months ended June 30, 2023 and 2022 are 351,585,059 and
250,777,915, respectively, and for the six months ended June 30,
2023 and 2022 are 342,491,457 and 249,095,931, respectively. The
weighted-average shares for the three and six months ended June 30,
2023 include 45,198,702 Non-Voting Ordinary Shares.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE
LOSS U.S. dollars in thousands
|
Three months ended June 30, |
|
Six months ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Unaudited |
Net loss |
$ |
(31,314 |
) |
|
$ |
(5,021 |
) |
|
$ |
(62,627 |
) |
|
$ |
(1,133 |
) |
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
Unrealized gains (losses) on available-for-sale marketable
securities |
|
130 |
|
|
|
(259 |
) |
|
|
457 |
|
|
|
(259 |
) |
|
Unrealized gains (losses) on derivative instruments, net |
|
199 |
|
|
|
(3,294 |
) |
|
|
(457 |
) |
|
|
(3,524 |
) |
|
Other comprehensive income (loss) |
|
329 |
|
|
|
(3,553 |
) |
|
|
— |
|
|
|
(3,783 |
) |
|
Comprehensive loss |
$ |
(30,985 |
) |
|
$ |
(8,574 |
) |
|
$ |
(62,627 |
) |
|
$ |
(4,916 |
) |
|
|
SHARE-BASED COMPENSATION BREAK-DOWN BY
EXPENSE LINE U.S. dollars in
thousands
|
Three months ended June 30, |
|
Six months ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Unaudited |
Cost of revenues |
$ |
1,039 |
|
$ |
851 |
|
$ |
2,083 |
|
$ |
1,554 |
|
Research and development |
|
6,181 |
|
|
7,443 |
|
|
12,025 |
|
|
13,545 |
|
Sales and marketing |
|
4,401 |
|
|
7,397 |
|
|
8,686 |
|
|
12,697 |
|
General and administrative |
|
4,914 |
|
|
4,741 |
|
|
9,823 |
|
|
12,465 |
|
Total share-based compensation expenses |
$ |
16,535 |
|
$ |
20,432 |
|
$ |
32,617 |
|
$ |
40,261 |
|
|
DEPRECIATION AND AMORTIZATION BREAK-DOWN
BY EXPENSE LINE U.S. dollars in
thousands
|
Three months ended June 30, |
|
Six months ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Unaudited |
Cost of revenues |
$ |
8,460 |
|
$ |
8,419 |
|
|
$ |
16,758 |
|
$ |
16,520 |
|
Research and development |
|
589 |
|
|
695 |
|
|
|
1,194 |
|
|
1,340 |
|
Sales and marketing |
|
13,509 |
|
|
13,722 |
|
|
|
27,035 |
|
|
27,225 |
|
General and administrative |
|
234 |
|
|
(23 |
) |
|
|
406 |
|
|
404 |
|
Total depreciation and amortization expense |
$ |
22,792 |
|
$ |
22,813 |
|
|
$ |
45,393 |
|
$ |
45,489 |
|
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS U.S. dollars in thousands
|
Three months ended June 30, |
|
Six months ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
Unaudited |
Cash flows from operating activities |
|
|
|
|
|
|
|
Net loss |
$ |
(31,314 |
) |
|
$ |
(5,021 |
) |
|
$ |
(62,627 |
) |
|
$ |
(1,133 |
) |
|
Adjustments to reconcile net loss to net cash flows provided by
operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
22,792 |
|
|
|
22,813 |
|
|
|
45,393 |
|
|
|
45,489 |
|
|
Share-based compensation expenses |
|
16,535 |
|
|
|
20,432 |
|
|
|
32,617 |
|
|
|
40,261 |
|
|
Net loss from financing expenses |
|
564 |
|
|
|
3,645 |
|
|
|
236 |
|
|
|
4,316 |
|
|
Revaluation of the Warrants liability |
|
702 |
|
|
|
(11,958 |
) |
|
|
(974 |
) |
|
|
(26,000 |
) |
|
Amortization of loan and credit facility issuance costs |
|
391 |
|
|
|
357 |
|
|
|
891 |
|
|
|
715 |
|
|
Amortization of premium and accretion of discount on short-term
investments, net |
|
(249 |
) |
|
|
(137 |
) |
|
|
(530 |
) |
|
|
(137 |
) |
|
Change in operating assets and liabilities: |
|
|
|
|
|
|
|
Decrease (increase) in trade receivables, net |
|
(5,091 |
) |
|
|
(319 |
) |
|
|
39,271 |
|
|
|
45,616 |
|
|
Decrease (increase) in prepaid expenses and other current assets
and long-term prepaid expenses |
|
7,921 |
|
|
|
(3,033 |
) |
|
|
8,642 |
|
|
|
(6,350 |
) |
|
Decrease in trade payables |
|
(6,923 |
) |
|
|
(6,661 |
) |
|
|
(29,730 |
) |
|
|
(52,525 |
) |
|
Increase (decrease) in accrued expenses and other current
liabilities and other long-term liabilities |
|
10,251 |
|
|
|
(6,402 |
) |
|
|
1,812 |
|
|
|
(22,946 |
) |
|
Increase (decrease) in deferred taxes, net |
|
(4,284 |
) |
|
|
(8,390 |
) |
|
|
(6,494 |
) |
|
|
(12,476 |
) |
|
Change in operating lease right of use assets |
|
3,924 |
|
|
|
4,744 |
|
|
|
8,075 |
|
|
|
7,639 |
|
|
Change in operating lease liabilities |
|
(3,621 |
) |
|
|
(7,986 |
) |
|
|
(7,460 |
) |
|
|
(12,262 |
) |
|
Net cash provided by operating activities |
|
11,598 |
|
|
|
2,084 |
|
|
|
29,122 |
|
|
|
10,207 |
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
Purchase of property and equipment, including capitalized
internal-use software |
|
(3,828 |
) |
|
|
(9,350 |
) |
|
|
(10,178 |
) |
|
|
(16,252 |
) |
|
Cash paid in connection with acquisitions, net of cash
acquired |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(620 |
) |
|
Proceeds from (investments in) restricted deposits |
|
(61 |
) |
|
|
10 |
|
|
|
(341 |
) |
|
|
10 |
|
|
Proceeds from (Investment in) short-term deposits |
|
— |
|
|
|
40,026 |
|
|
|
— |
|
|
|
— |
|
|
Proceeds from sales and maturities of short-term investments |
|
35,696 |
|
|
|
— |
|
|
|
77,636 |
|
|
|
— |
|
|
Purchase of short-term investments |
|
(21,991 |
) |
|
|
(74,855 |
) |
|
|
(21,991 |
) |
|
|
(74,855 |
) |
|
Payments of cash in escrow for acquisition of a subsidiary |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,100 |
) |
|
Net cash provided by (used in) investing
activities |
|
9,816 |
|
|
|
(44,169 |
) |
|
|
45,126 |
|
|
|
(93,817 |
) |
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
Exercise of options and vested RSUs |
|
1,121 |
|
|
|
2,633 |
|
|
|
2,456 |
|
|
|
6,032 |
|
|
Payment of tax withholding for share-based compensation
expenses |
|
(1,117 |
) |
|
|
(340 |
) |
|
|
(1,908 |
) |
|
|
(2,185 |
) |
|
Repurchase of Ordinary shares |
|
(4,358 |
) |
|
|
— |
|
|
|
(4,358 |
) |
|
|
— |
|
|
Repayment of long-term loan |
|
(30,750 |
) |
|
|
(750 |
) |
|
|
(31,500 |
) |
|
|
(1,500 |
) |
|
Net cash provided by (used in) financing
activities |
|
(35,104 |
) |
|
|
1,543 |
|
|
|
(35,310 |
) |
|
|
2,347 |
|
|
Exchange rate differences on balances of cash and cash
equivalents |
|
(564 |
) |
|
|
(3,645 |
) |
|
|
(236 |
) |
|
|
(4,316 |
) |
|
Increase (decrease) in cash and cash equivalents |
|
(14,254 |
) |
|
|
(44,187 |
) |
|
|
38,702 |
|
|
|
(85,579 |
) |
|
Cash and cash equivalents - at the beginning of the period |
|
218,849 |
|
|
|
277,927 |
|
|
|
165,893 |
|
|
|
319,319 |
|
|
Cash and cash equivalents - at end of the
period |
$ |
204,595 |
|
|
$ |
233,740 |
|
|
$ |
204,595 |
|
|
$ |
233,740 |
|
|
|
|
Three months ended June 30, |
|
Six months ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Unaudited |
Supplemental
disclosures of cash flow information: |
Cash paid
during the year for: |
|
|
|
|
|
|
|
Income taxes |
$ |
2,575 |
|
$ |
13,744 |
|
$ |
6,833 |
|
$ |
16,162 |
|
Interest |
$ |
4,700 |
|
$ |
6,803 |
|
$ |
9,767 |
|
$ |
10,373 |
|
Non-cash
investing and financing activities: |
|
|
|
|
|
|
|
Purchase of
property and equipment, including capitalized internal-use
software |
$ |
1,705 |
|
$ |
7,353 |
|
$ |
1,705 |
|
$ |
7,353 |
|
Share-based
compensation included in capitalized internal-use software |
$ |
680 |
|
$ |
503 |
|
$ |
1,332 |
|
$ |
1,020 |
|
Creation of
operating lease right-of-use assets |
$ |
5,593 |
|
$ |
3,107 |
|
$ |
5,593 |
|
$ |
3,107 |
|
|
APPENDIX: Non-GAAP
Reconciliation
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023
AND 2022 (Unaudited)
The following table provides a reconciliation of
revenues to ex-TAC Gross Profit.
|
Three months ended June 30, |
|
Six months ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
(dollars in thousands) |
Revenues |
$ |
332,004 |
|
$ |
342,695 |
|
$ |
659,690 |
|
$ |
697,421 |
|
Traffic acquisition cost |
|
208,870 |
|
|
199,486 |
|
|
420,816 |
|
|
415,984 |
|
Other cost of revenues |
|
26,077 |
|
|
26,848 |
|
|
52,225 |
|
|
53,046 |
|
Gross profit |
$ |
97,057 |
|
$ |
116,361 |
|
$ |
186,649 |
|
$ |
228,391 |
|
Add back: Other cost of revenues |
|
26,077 |
|
|
26,848 |
|
|
52,225 |
|
|
53,046 |
|
ex-TAC Gross Profit |
$ |
123,134 |
|
$ |
143,209 |
|
$ |
238,874 |
|
$ |
281,437 |
|
|
The following table provides a reconciliation of
net income (loss) to Adjusted EBITDA.
|
Three months ended June 30, |
|
Six months ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
(dollars in thousands) |
Net loss |
$ |
(31,314 |
) |
|
$ |
(5,021 |
) |
|
$ |
(62,627 |
) |
|
$ |
(1,133 |
) |
|
Adjusted to exclude the following: |
|
|
|
|
|
|
|
Finance (income) expenses, net |
|
3,827 |
|
|
|
(4,764 |
) |
|
|
6,981 |
|
|
|
(15,959 |
) |
|
Income tax (benefit) expenses |
|
2,487 |
|
|
|
234 |
|
|
|
1,848 |
|
|
|
(158 |
) |
|
Depreciation and amortization |
|
22,792 |
|
|
|
22,813 |
|
|
|
45,393 |
|
|
|
45,489 |
|
|
Share-based compensation expenses |
|
13,890 |
|
|
|
17,640 |
|
|
|
27,417 |
|
|
|
34,679 |
|
|
Holdback compensation expenses (1) |
|
2,645 |
|
|
|
2,792 |
|
|
|
5,200 |
|
|
|
5,582 |
|
|
M&A and other costs (2) |
|
1,334 |
|
|
|
474 |
|
|
|
1,571 |
|
|
|
524 |
|
|
Adjusted EBITDA |
$ |
15,661 |
|
|
$ |
34,168 |
|
|
$ |
25,783 |
|
|
$ |
69,024 |
|
|
|
1 Represents share-based compensation due to
holdback of Taboola Ordinary shares issuable under compensatory
arrangements relating to Connexity acquisition. 2 Includes one-time
costs related to the Commercial agreement.
We calculate Ratio of net income (loss) to gross
profit as net income (loss) divided by gross profit. We calculate
Ratio of Adjusted EBITDA to ex-TAC Gross Profit, a non-GAAP
measure, as Adjusted EBITDA divided by ex-TAC Gross Profit. We
believe that the Ratio of Adjusted EBITDA to ex-TAC Gross Profit is
useful because TAC is what we must pay digital properties to obtain
the right to place advertising on their websites, and we believe
focusing on ex-TAC Gross Profit better reflects the profitability
of our business. The following table reconciles Ratio of net income
(loss) to gross profit and Ratio of Adjusted EBITDA to ex-TAC Gross
Profit for the period shown.
|
Three months ended June 30, |
|
Six months ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
(dollars in thousands) |
Gross profit |
$ |
97,057 |
|
|
$ |
116,361 |
|
|
$ |
186,649 |
|
|
$ |
228,391 |
|
|
Net loss |
$ |
(31,314 |
) |
|
$ |
(5,021 |
) |
|
$ |
(62,627 |
) |
|
$ |
(1,133 |
) |
|
Ratio of net loss to gross profit |
|
(32.3% |
) |
|
|
(4.3% |
) |
|
|
(33.6% |
) |
|
|
(0.5% |
) |
|
|
ex-TAC Gross Profit |
$ |
123,134 |
|
|
$ |
143,209 |
|
|
$ |
238,874 |
|
|
$ |
281,437 |
|
|
Adjusted EBITDA |
$ |
15,661 |
|
|
$ |
34,168 |
|
|
$ |
25,783 |
|
|
$ |
69,024 |
|
|
Ratio of Adjusted EBITDA margin to ex-TAC Gross Profit |
|
12.7% |
|
|
|
23.9% |
|
|
|
10.8% |
|
|
|
24.5% |
|
|
|
The following table provides a reconciliation of
net income (loss) to Non-GAAP Net Income (loss).
|
Three months ended June 30, |
|
Six months ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
(dollars in thousands) |
Net loss |
$ |
(31,314 |
) |
|
$ |
(5,021 |
) |
|
$ |
(62,627 |
) |
|
$ |
(1,133 |
) |
|
Amortization of acquired intangibles |
|
15,962 |
|
|
|
15,828 |
|
|
|
31,931 |
|
|
|
31,608 |
|
|
Share-based compensation expenses |
|
13,890 |
|
|
|
17,640 |
|
|
|
27,417 |
|
|
|
34,679 |
|
|
Holdback compensation expenses (1) |
|
2,645 |
|
|
|
2,792 |
|
|
|
5,200 |
|
|
|
5,582 |
|
|
M&A and other costs (2) |
|
1,334 |
|
|
|
474 |
|
|
|
1,571 |
|
|
|
524 |
|
|
Revaluation of Warrants |
|
702 |
|
|
|
(11,958 |
) |
|
|
(974 |
) |
|
|
(26,000 |
) |
|
Foreign currency exchange rate losses (gains) (3) |
|
(663 |
) |
|
|
2,490 |
|
|
|
(234 |
) |
|
|
2,706 |
|
|
Income tax effects |
|
(3,962 |
) |
|
|
(6,451 |
) |
|
|
(7,791 |
) |
|
|
(10,077 |
) |
|
Non-GAAP Net Income (Loss) |
$ |
(1,406 |
) |
|
$ |
15,794 |
|
|
$ |
(5,507 |
) |
|
$ |
37,889 |
|
|
|
1 Represents share-based compensation due to
holdback of Taboola Ordinary shares issuable under compensatory
arrangements relating to Connexity acquisition. 2 Includes one-time
costs related to the Commercial agreement. 3 Represents income or
loss related to the remeasurement of monetary assets and
liabilities to the Company's functional currency using exchange
rates in effect at the end of the reporting period.
The following table provides a reconciliation of
net cash provided by operating activities to Free Cash Flow.
|
Three months ended June 30, |
|
Six months ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
(dollars in thousands) |
Net cash provided by operating activities |
$ |
11,598 |
|
|
$ |
2,084 |
|
|
$ |
29,122 |
|
|
$ |
10,207 |
|
|
Purchases of property and equipment, including capitalized
internal-use software |
|
(3,828 |
) |
|
|
(9,350 |
) |
|
|
(10,178 |
) |
|
|
(16,252 |
) |
|
Free Cash Flow |
$ |
7,770 |
|
|
$ |
(7,266 |
) |
|
$ |
18,944 |
|
|
$ |
(6,045 |
) |
|
|
APPENDIX: Non-GAAP Guidance
Reconciliation
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES FOR Q3 2023 AND FULL YEAR 2023
GUIDANCE
(Unaudited)
The following table provides a reconciliation of
projected gross profit to ex-TAC Gross Profit.
|
Q3 2023 Guidance |
|
FY 2023 Guidance |
|
|
Unaudited |
|
(dollars in millions) |
Revenues |
$331 - $357 |
|
$1,438 - $1,469 |
|
Traffic acquisition cost |
($220) - ($234) |
|
($907) - ($923) |
|
Other cost of revenues |
($29) - ($29) |
|
($110) - ($111) |
|
Gross profit |
$83 - $95 |
|
$420 - $436 |
|
Add back: Other cost of revenues |
($29) - ($29) |
|
($110) - ($111) |
|
ex-TAC Gross Profit |
$112 - $124 |
|
$531 - $546 |
|
|
Although we provide a projection for Free Cash
Flow, we are not able to provide a projection for net cash provided
by operating activities, the most directly comparable GAAP measure.
Certain elements of net cash provided by operating activities,
including taxes and timing of collections and payments, are not
predictable therefore projecting an accurate forecast is difficult.
As a result, it is impractical for us to provide projections on net
cash provided by operating activities or to reconcile our Free Cash
Flow projections without unreasonable efforts. Consequently, no
disclosure of projected net cash provided by operating activities
is included. For the same reasons, we are unable to address the
probable significance of the unavailable information.
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