• Revenue: Q1 2024 revenue was approximately $414 million, a 26% increase year-over-year.

• Net Loss: Reported a net loss of $26.2 million in Q1 2024.

• Non-GAAP Net Income: Achieved a non-GAAP net income of $3.8 million.

• Adjusted EBITDA: Reached $23.5 million, with a 17% margin year-over-year.

• Free Cash Flow: Generated $26.8 million in Q1 2024.

• X-Tack Revenue: Grew by 20% to $139 million.

• Share Buybacks: $28 million worth of shares repurchased in Q1 2024.

• 2024 Revenue Guidance: Expected to be between $1.89 billion to $1.94 billion.

• 2024 Adjusted EBITDA Guidance: Projected to exceed $200 million.

• 2024 Free Cash Flow Guidance: Anticipated to be over $100 million.

• Warning! GuruFocus has detected 5 Warning Sign with TBLA.

Release Date: May 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Taboola.com Ltd reported Q1 results above the high end of guidance across all metrics, indicating a strong start to 2024.

• Revenue growth is accelerating, with a 33% increase projected for 2024, reaching nearly $2 billion.

• Adjusted EBITDA and free cash flow have more than doubled compared to the previous year, with EBITDA expected to exceed $200 million.

• Significant investments in AI and technology have improved advertiser success, with MAX conversion adoption nearly 60% of revenue.

• Expansion of partnerships, including with Apple and Yahoo, is enhancing Taboola.com Ltd's market position and offering new growth avenues.

Negative Points

• Despite strong Q1 performance, full-year guidance remains unchanged, suggesting potential caution about future market conditions or challenges.

• Net loss reported for Q1 was $26.2 million, indicating ongoing financial pressures despite revenue growth.

• The onboarding of Yahoo and integration processes are complex and still ongoing, posing risks to smooth operations and expected outcomes.

• Operating expenses have increased due to the costs associated with onboarding significant inventory and partnerships like Yahoo.

• While e-commerce is growing, specific financial details and the exact contribution to revenue are not fully disclosed, making it difficult to assess the precise impact on the financial health of Taboola.com Ltd.

Q & A Highlights

Q: Can you discuss the prioritization of onboarding omnichannel advertisers at Yahoo over other strategies? A: Adam Singolda, CEO of Taboola, explained that focusing on premium performance advertisers is crucial because of their potential to significantly increase spending when they observe good performance. This focus is part of why Taboola launched 'Taboola Select', which targets top-tier performance advertisers, aiming to increase the company's share of wallet among brands and agencies.