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 March 31, 2023.
“We had a strong performance in Q1, beating the high end of our
guidance across all metrics. This was primarily driven by the core
business tracking ahead of our expectations, helped by key
publisher partners like Condé Nast, Univision, The Blaze, Kicker in
Germany and others along with continued strength from eCommerce.
We’re also seeing Taboola News outperforming our internal
expectations,” said Adam Singolda, CEO and Founder, Taboola.
“From where we are now, we are hyper focused on what we need to
do to execute on our objectives and mission. Once the Yahoo
integration is 100% live we expect to be at a $2.5B revenue
run-rate. This will still be a small portion of the $70B Open Web
market, so there remains a lot of growth for us to capture. To do
that we are laser focused on four company priorities - performance
advertising, ecommerce, bidding, and Yahoo. We have all we need to
execute and generate our financial objectives. These are times to
remain focused, stay very close to our partners and customers, and
execute - that’s all we care about now,” continued Singolda.
For more commentary on the quarter, please refer to Taboola’s Q1
2023 Shareholder Letter, which was furnished to the SEC and also
posted on Taboola’s website today at
https://investors.taboola.com.
First Quarter Results Summary
(dollars in millions, except per
share data) |
Three months endedMarch 31, |
|
|
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
Unaudited |
|
% change YoY |
|
Guidance |
Revenues |
$ |
327.7 |
|
|
$ |
354.7 |
|
|
(7.6 |
%) |
|
$299 - $325 |
Gross profit |
$ |
89.6 |
|
|
$ |
112.0 |
|
|
(20.0 |
%) |
|
$76 - $88 |
Net income (loss) |
$ |
(31.3 |
) |
|
$ |
3.9 |
|
|
NM |
|
|
EPS diluted (1) |
$ |
(0.09 |
) |
|
$ |
0.01 |
|
|
NM |
|
|
Ratio of net income (loss) to
gross profit |
|
(35.0 |
%) |
|
|
3.5 |
% |
|
— |
|
|
|
Cash flow provided by
operating activities |
$ |
17.5 |
|
|
$ |
8.1 |
|
|
115.7 |
% |
|
|
Cash, cash equivalents,
short-term deposits and investments |
$ |
274.4 |
|
|
$ |
318.0 |
|
|
(13.7 |
%) |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial
Data* |
|
|
|
|
|
|
|
ex-TAC Gross Profit |
$ |
115.7 |
|
|
$ |
138.2 |
|
|
(16.3 |
%) |
|
$103 - $115 |
Adjusted EBITDA |
$ |
10.1 |
|
|
$ |
34.9 |
|
|
(71.0 |
%) |
|
($6) - $6 |
Non-GAAP Net Income (Loss)
(2) |
$ |
(4.1 |
) |
|
$ |
22.1 |
|
|
(118.6 |
%) |
|
($23) - ($11) |
Ratio of Adjusted EBITDA to
ex-TAC Gross Profit |
|
8.7 |
% |
|
|
25.2 |
% |
|
— |
|
|
|
Free Cash Flow |
$ |
11.2 |
|
|
$ |
1.2 |
|
|
815.2 |
% |
|
|
1 The weighted-average shares used in the computation of the
diluted EPS for the three months ended March 31, 2023 and 2022 are
333,424,276 and 260,036,934, respectively.2 Three months ended
March 31, 2022 have been adjusted to exclude the impact of foreign
currency exchange rates to be consistent with current period
presentation.
Business Highlights for Q1 2023
- Revenue from new publisher partners continues to be an area of
strength - Publisher wins from competitors included L’Express,
Condé Nast, Kicker, Funke, and DuMont.
- Renewed relationships with many well-known publishers including
Sinclair, Advance Local, O Dia, Slate France, and Seven West
Media.
- Received approval from Israeli regulators to finalize the Yahoo
deal; transitioned into the next phase of integration, the build
and test phase.
- Launched TIME and Advance Local on Taboola Turnkey Commerce,
publishing over 100 finance articles on TIME with subsequent launch
of the TIME eCommerce section planned for May.
- Further deployed AI to enhance our Life Time Value (LTV)
vision, a holistic approach that enhances publisher revenue and
empowers diversification of channels (eCommerce, subscription,
native, bidding and video).
- Continued to see eCommerce strength in the bottom of funnel
channel from key partners such as Walmart, Wayfair, and
Macy’s.
- Rolled out Generative AI in beta form on Taboola Ads which
suggests data-driven titles and thumbnails to creatives,
accelerating the speed and efficiency of launching campaigns.
Second Quarter and Full Year 2023 Guidance
For the Second Quarter and Full Year 2023, the Company currently
expects:
|
Q2 2023Guidance |
|
FY 2023Guidance |
|
Unaudited |
|
(dollars in millions) |
Revenues |
$296 - $322 |
|
$1,427 - $1,469 |
Gross profit |
$78 - $88 |
|
$418 - $436 |
ex-TAC Gross Profit* |
$105 - $115 |
|
$529 - $546 |
Adjusted EBITDA* |
($4) - $6 |
|
$65 - $80 |
Non-GAAP Net Income
(Loss)* |
($26) - ($16) |
|
($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.
Authorization to Buyback Ordinary Shares
On May 9, 2023, the Company's Board of Directors authorized the
buyback of up to $40 million of the Company’s ordinary shares. Any
share buybacks under the program may be made from time to time in
the open market, including through trading plans intended to
qualify under Rule 10b5-1 under the Securities Exchange Act of
1934, as amended, in privately negotiated transactions or
otherwise. The timing and amount of any share buybacks will be
subject to market conditions and other factors determined by the
Company. The Company may suspend, modify or discontinue the program
at any time in its sole discretion without prior notice. This press
release is neither an offer to purchase nor a solicitation of an
offer to buy any securities.
Under Israeli law, the Company’s ability to buyback ordinary
shares must be within a maximum dollar amount authorized by the Tel
Aviv District Court Economic Department (the “Israeli court”). The
maximum amount includes both share buybacks and net issuances to
satisfy tax withholding obligations related to equity-based
compensation. The Israeli court approval typically expires in six
months. The Company previously obtained Israeli court approvals for
such activities, and expects to continue to make successive
requests for the foreseeable future absent unusual circumstances.
In anticipation of the May 16, 2023 expiration of the Company's
most recent $50 million approval, on April 17 2023, the Company
requested the Israeli court to provide another $50 million of
authority. The Company will announce the Israeli court’s decision
promptly once it is obtained. The decision is currently expected by
the end of this month or shortly thereafter.
Webcast Details
Taboola's senior management team will discuss the Company's
earnings on a call that will take place on May 10, 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/BI425cebdda8864199aaeeb8bd8ccc5cf2 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
May 10, 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 ability to
recognize the anticipated benefits of the Connexity acquisition and
the business combination between the Company and ION Acquisition
Corp. 1 Ltd. (together, the “Business Combinations”), which may be
affected by, among other things, competition, the ability of the
Company 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; costs related to the Business Combinations;
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 TaboolaTaboola 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 over 500
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: |
Rick Hoss |
Dave Struzzi |
investors@taboola.com |
press@taboola.com |
|
|
|
|
CONSOLIDATED BALANCE SHEETS |
|
|
|
U.S. dollars in
thousands, except share and per share data |
|
|
|
|
March 31, |
|
December 31, |
|
2023 |
|
2022 |
|
Unaudited |
|
|
ASSETS |
|
|
|
CURRENT
ASSETS |
|
|
|
Cash and cash equivalents |
$ |
218,849 |
|
$ |
165,893 |
Short-term investments |
|
55,582 |
|
|
96,914 |
Restricted deposits |
|
1,091 |
|
|
750 |
Trade receivables (net of allowance for credit losses of $9,242 and
$6,748 as of March 31, 2023 and December 31, 2022,
respectively) |
|
212,346 |
|
|
256,708 |
Prepaid expenses and other current assets |
|
73,531 |
|
|
73,643 |
Total current
assets |
|
561,399 |
|
|
593,908 |
NON-CURRENT
ASSETS |
|
|
|
Long-term prepaid expenses |
|
41,262 |
|
|
42,945 |
Commercial agreement asset |
|
289,451 |
|
|
— |
Restricted deposits |
|
3,998 |
|
|
4,059 |
Deferred tax assets, net |
|
3,218 |
|
|
3,821 |
Operating lease right of use assets |
|
67,740 |
|
|
66,846 |
Property and equipment, net |
|
71,731 |
|
|
73,019 |
Intangible assets, net |
|
173,177 |
|
|
189,156 |
Goodwill |
|
555,931 |
|
|
555,869 |
Total non-current
assets |
|
1,206,508 |
|
|
935,715 |
Total
assets |
$ |
1,767,907 |
|
$ |
1,529,623 |
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS |
U.S.
dollars in thousands, except share and per share data |
|
|
March 31, |
|
December 31, |
|
|
2023 |
|
|
|
2022 |
|
|
Unaudited |
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
CURRENT
LIABILITIES |
|
|
|
Trade payables |
$ |
223,040 |
|
|
$ |
247,504 |
|
Short-term operating lease liabilities |
|
15,663 |
|
|
|
14,753 |
|
Accrued expenses and other current liabilities |
|
95,182 |
|
|
|
102,965 |
|
Current maturities of long-term loan |
|
33,000 |
|
|
|
3,000 |
|
Total current
liabilities |
|
366,885 |
|
|
|
368,222 |
|
LONG-TERM
LIABILITIES |
|
|
|
Long-term loan, net of current maturities |
|
192,737 |
|
|
|
223,049 |
|
Long-term operating lease liabilities |
|
58,223 |
|
|
|
57,928 |
|
Warrants liability |
|
5,080 |
|
|
|
6,756 |
|
Deferred tax liabilities, net |
|
31,319 |
|
|
|
34,133 |
|
Other long-term liabilities |
|
5,000 |
|
|
|
5,000 |
|
Total long-term
liabilities |
|
292,359 |
|
|
|
326,866 |
|
SHAREHOLDERS'
EQUITY |
|
|
|
Ordinary shares with no par value- Authorized: 700,000,000 as of
March 31, 2023 and December 31, 2022; 297,822,375 and 254,133,863
shares issued and outstanding as of March 31, 2023 and December 31,
2022, respectively. |
|
— |
|
|
|
— |
|
Non-voting Ordinary shares with no par value- Authorized:
46,000,000 as of March 31, 2023 and December 31, 2022; 45,198,702
and 0 shares issued and outstanding as of March 31, 2023 and
December 31, 2022, respectively. |
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
1,209,559 |
|
|
|
903,789 |
|
Accumulated other comprehensive loss |
|
(1,163 |
) |
|
|
(834 |
) |
Accumulated deficit |
|
(99,733 |
) |
|
|
(68,420 |
) |
Total shareholders'
equity |
|
1,108,663 |
|
|
|
834,535 |
|
Total liabilities and
shareholders' equity |
$ |
1,767,907 |
|
|
$ |
1,529,623 |
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF INCOME (LOSS) |
U.S.
dollars in thousands, except share and per share data |
|
|
Three months endedMarch 31, |
|
|
2023 |
|
|
|
2022 |
|
|
Unaudited |
Revenues |
$ |
327,686 |
|
|
$ |
354,726 |
|
Cost of revenues: |
|
|
|
Traffic acquisition cost |
|
211,946 |
|
|
|
216,498 |
|
Other cost of revenues |
|
26,148 |
|
|
|
26,198 |
|
Total cost of revenues |
|
238,094 |
|
|
|
242,696 |
|
Gross
profit |
|
89,592 |
|
|
|
112,030 |
|
Operating expenses: |
|
|
|
Research and development |
|
31,985 |
|
|
|
30,412 |
|
Sales and marketing |
|
60,569 |
|
|
|
61,368 |
|
General and administrative |
|
25,836 |
|
|
|
27,949 |
|
Total operating expenses |
|
118,390 |
|
|
|
119,729 |
|
Operating loss |
|
(28,798 |
) |
|
|
(7,699 |
) |
Finance income (expenses),
net |
|
(3,154 |
) |
|
|
11,195 |
|
Income (loss) before income
taxes |
|
(31,952 |
) |
|
|
3,496 |
|
Income tax benefit |
|
639 |
|
|
|
392 |
|
Net income
(loss) |
$ |
(31,313 |
) |
|
$ |
3,888 |
|
|
|
|
|
Net income (loss) per share
attributable to Ordinary and Non-voting Ordinary shareholders,
basic |
$ |
(0.09 |
) |
|
$ |
0.02 |
|
Weighted-average shares used
in computing net income (loss) per share attributable to Ordinary
and Non-voting Ordinary shareholders, basic |
|
333,424,276 |
|
|
|
247,378,428 |
|
Net income (loss) per share
attributable to Ordinary and Non-voting Ordinary shareholders,
diluted |
$ |
(0.09 |
) |
|
$ |
0.01 |
|
Weighted-average shares used
in computing net income (loss) per share attributable to Ordinary
and Non-voting Ordinary shareholders, diluted |
|
333,424,276 |
|
|
|
260,036,934 |
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(LOSS) |
U.S.
dollars in thousands |
|
|
Three months endedMarch 31, |
|
|
2023 |
|
|
|
2022 |
|
|
Unaudited |
Net income
(loss) |
$ |
(31,313 |
) |
|
$ |
3,888 |
|
Other comprehensive income
(loss): |
|
|
|
Unrealized gains (losses) on available-for-sale marketable
securities |
|
327 |
|
|
|
— |
|
Unrealized gains (losses) on derivative instruments, net |
|
(656 |
) |
|
|
(230 |
) |
Other comprehensive income
(loss) |
|
(329 |
) |
|
|
(230 |
) |
Comprehensive income
(loss) |
$ |
(31,642 |
) |
|
$ |
3,658 |
|
|
|
|
|
|
|
|
|
SHARE-BASED COMPENSATION BREAK-DOWN BY EXPENSE
LINE |
U.S.
dollars in thousands |
|
|
Three months endedMarch 31, |
|
2023 |
|
2022 |
|
Unaudited |
Cost of revenues |
$ |
1,044 |
|
$ |
703 |
Research and development |
|
5,844 |
|
|
6,102 |
Sales and marketing |
|
4,285 |
|
|
5,300 |
General and
administrative |
|
4,909 |
|
|
7,724 |
Total share-based
compensation expenses |
$ |
16,082 |
|
$ |
19,829 |
|
|
|
|
|
|
DEPRECIATION AND AMORTIZATION BREAK-DOWN BY EXPENSE
LINE |
U.S. dollars in thousands |
|
Three months endedMarch 31, |
|
2023 |
|
2022 |
|
Unaudited |
Cost of revenues |
$ |
8,298 |
|
$ |
8,101 |
Research and development |
|
605 |
|
|
645 |
Sales and marketing |
|
13,526 |
|
|
13,503 |
General and
administrative |
|
172 |
|
|
427 |
Total depreciation and
amortization expense |
$ |
22,601 |
|
$ |
22,676 |
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
U.S.
dollars in thousands |
|
|
Three months endedMarch 31, |
|
|
2023 |
|
|
|
2022 |
|
|
Unaudited |
Cash flows from operating
activities |
|
|
|
Net income (loss) |
$ |
(31,313 |
) |
|
$ |
3,888 |
|
Adjustments to reconcile net
income (loss) to net cash flows provided by operating
activities: |
|
|
|
Depreciation and amortization |
|
22,601 |
|
|
|
22,676 |
|
Share-based compensation expenses |
|
16,082 |
|
|
|
19,829 |
|
Net loss (gain) from financing expenses |
|
(328 |
) |
|
|
671 |
|
Revaluation of the Warrants liability |
|
(1,676 |
) |
|
|
(14,042 |
) |
Amortization of loan and credit facility issuance costs |
|
500 |
|
|
|
358 |
|
Amortization of premium and accretion of discount on short-term
investments, net |
|
(281 |
) |
|
|
— |
|
Change in operating assets and
liabilities: |
|
|
|
Decrease in trade receivables, net |
|
44,362 |
|
|
|
45,935 |
|
Decrease (increase) in prepaid expenses and other current assets
and long-term prepaid expenses |
|
721 |
|
|
|
(3,317 |
) |
Decrease in trade payables |
|
(22,807 |
) |
|
|
(45,864 |
) |
Decrease in accrued expenses and other current liabilities and
other long-term liabilities |
|
(13,439 |
) |
|
|
(16,544 |
) |
Increase (decrease) in deferred taxes, net |
|
2,790 |
|
|
|
(4,086 |
) |
Change in operating lease right of use assets |
|
4,151 |
|
|
|
2,895 |
|
Change in operating lease liabilities |
|
(3,839 |
) |
|
|
(4,276 |
) |
Net cash provided by
operating activities |
|
17,524 |
|
|
|
8,123 |
|
Cash flows from investing
activities |
|
|
|
Purchase of property and equipment, including capitalized
internal-use software |
|
(6,350 |
) |
|
|
(6,902 |
) |
Cash paid in connection with acquisitions, net of cash
acquired |
|
— |
|
|
|
(620 |
) |
Investments in restricted deposits |
|
(280 |
) |
|
|
— |
|
Investment in short-term deposits |
|
— |
|
|
|
(40,026 |
) |
Proceeds from sales and maturities of short-term investments |
|
41,940 |
|
|
|
— |
|
Payments of cash in escrow for acquisition of a subsidiary |
|
— |
|
|
|
(2,100 |
) |
Net cash provided by
(used in) investing activities |
|
35,310 |
|
|
|
(49,648 |
) |
Cash flows from financing
activities |
|
|
|
Exercise of options and vested RSUs |
|
1,335 |
|
|
|
3,399 |
|
Payment of tax withholding for share-based compensation
expenses |
|
(791 |
) |
|
|
(1,845 |
) |
Repayment of long-term loan |
|
(750 |
) |
|
|
(750 |
) |
Net cash provided by
(used in) financing activities |
|
(206 |
) |
|
|
804 |
|
Exchange rate
differences on balances of cash and cash equivalents |
|
328 |
|
|
|
(671 |
) |
Increase (decrease) in cash
and cash equivalents |
|
52,956 |
|
|
|
(41,392 |
) |
Cash and cash equivalents - at
the beginning of the period |
|
165,893 |
|
|
|
319,319 |
|
Cash and cash
equivalents - at end of the period |
$ |
218,849 |
|
|
$ |
277,927 |
|
|
Three months endedMarch 31, |
|
2023 |
|
2022 |
|
Unaudited |
Supplemental disclosures of cash flow
information: |
Cash paid during the year
for: |
|
|
|
Income taxes |
$ |
4,258 |
|
$ |
2,418 |
Interest |
$ |
5,067 |
|
$ |
3,570 |
Non-cash investing and
financing activities: |
|
|
|
Purchase of property and
equipment, including capitalized internal-use software |
$ |
36 |
|
$ |
1,809 |
Share-based compensation
included in capitalized internal-use software |
$ |
652 |
|
$ |
517 |
Creation of operating lease
right-of-use assets |
$ |
5,045 |
|
$ |
— |
|
|
|
|
|
|
APPENDIX A: Non-GAAP
Reconciliation
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND
2022 (Unaudited)
The following table provides a reconciliation of revenues to
ex-TAC Gross Profit.
|
Three months endedMarch 31, |
|
2023 |
|
2022 |
|
(dollars in thousands) |
Revenues |
$ |
327,686 |
|
$ |
354,726 |
Traffic acquisition cost |
|
211,946 |
|
|
216,498 |
Other cost of revenues |
|
26,148 |
|
|
26,198 |
Gross profit |
$ |
89,592 |
|
$ |
112,030 |
Add back: Other cost of
revenues |
|
26,148 |
|
|
26,198 |
ex-TAC Gross
Profit |
$ |
115,740 |
|
$ |
138,228 |
|
|
|
|
|
|
The following table provides a reconciliation of net income
(loss) to Adjusted EBITDA.
|
Three months endedMarch 31, |
|
|
2023 |
|
|
|
2022 |
|
|
(dollars in thousands) |
Net income
(loss) |
$ |
(31,313 |
) |
|
$ |
3,888 |
|
Adjusted to exclude the
following: |
|
|
|
Finance (income) expenses,
net |
|
3,154 |
|
|
|
(11,195 |
) |
Income tax benefit |
|
(639 |
) |
|
|
(392 |
) |
Depreciation and
amortization |
|
22,601 |
|
|
|
22,676 |
|
Share-based compensation
expenses |
|
13,527 |
|
|
|
17,039 |
|
Holdback compensation expenses
(1) |
|
2,555 |
|
|
|
2,790 |
|
M&A and other costs
(2) |
|
237 |
|
|
|
50 |
|
Adjusted
EBITDA |
$ |
10,122 |
|
|
$ |
34,856 |
|
1 Represents share-based compensation due to holdback of Taboola
Ordinary shares issuable under compensatory arrangements relating
to Connexity acquisition.2 Includes commercial agreement asset
acquisition costs.
We calculate Ratio of net income (loss) to gross profit as net
income (loss) divided by gross profit. We calculate the 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 endedMarch 31, |
|
|
2023 |
|
|
|
2022 |
|
|
(dollars in thousands) |
Gross profit |
$ |
89,592 |
|
|
$ |
112,030 |
|
Net income (loss) |
$ |
(31,313 |
) |
|
$ |
3,888 |
|
Ratio of net income (loss) to
gross profit |
|
(35.0 |
%) |
|
|
3.5 |
% |
|
|
|
|
ex-TAC Gross Profit |
$ |
115,740 |
|
|
$ |
138,228 |
|
Adjusted EBITDA |
$ |
10,122 |
|
|
$ |
34,856 |
|
Ratio of Adjusted EBITDA
margin to ex-TAC Gross Profit |
|
8.7 |
% |
|
|
25.2 |
% |
|
|
|
|
|
|
|
|
The following table provides a reconciliation of net income
(loss) to Non-GAAP Net Income (Loss)*.
|
Three months endedMarch 31, |
|
|
2023 |
|
|
|
2022 |
|
|
(dollars in thousands) |
Net income
(loss) |
$ |
(31,313 |
) |
|
$ |
3,888 |
|
Amortization of acquired
intangibles |
|
15,969 |
|
|
|
15,780 |
|
Share-based compensation
expenses |
|
13,527 |
|
|
|
17,039 |
|
Holdback compensation expenses
(1) |
|
2,555 |
|
|
|
2,790 |
|
M&A and other costs
(2) |
|
237 |
|
|
|
50 |
|
Revaluation of Warrants |
|
(1,676 |
) |
|
|
(14,042 |
) |
Foreign currency exchange rate
losses (3) |
|
429 |
|
|
|
216 |
|
Income tax effects |
|
(3,829 |
) |
|
|
(3,626 |
) |
Non-GAAP Net Income
(Loss) |
$ |
(4,101 |
) |
|
$ |
22,095 |
|
* Three months ended March 31, 2022 have been adjusted to
exclude the impact of foreign currency exchange rates to be
consistent with current period presentation.
1 Represents share-based compensation due to holdback of Taboola
Ordinary shares issuable under compensatory arrangements relating
to Connexity acquisition.2 Includes commercial agreement asset
acquisition costs.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 endedMarch 31, |
|
|
2023 |
|
|
|
2022 |
|
|
(dollars in thousands) |
Net cash provided by
operating activities |
$ |
17,524 |
|
|
$ |
8,123 |
|
Purchases of property and
equipment, including capitalized internal-use software |
|
(6,350 |
) |
|
|
(6,902 |
) |
Free Cash
Flows |
$ |
11,174 |
|
|
$ |
1,221 |
|
|
|
|
|
|
|
|
|
APPENDIX A: Non-GAAP Guidance
Reconciliation
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES FOR Q2 2023 AND FULL YEAR 2023
GUIDANCE
(Unaudited)
The following table provides a reconciliation of projected Gross
profit to ex-TAC Gross profit guidance.
|
Q2 2023Guidance |
|
FY 2023Guidance |
|
Unaudited |
|
(dollars in millions) |
Revenues |
$296 - $322 |
|
$1,427 - $1,469 |
Traffic acquisition cost |
($191) - ($207) |
|
($898) - ($923) |
Other cost of revenues |
($27) - ($27) |
|
($110) - ($111) |
Gross profit |
$78 - $88 |
|
$418 - $436 |
Add back: Other cost of
revenues |
$27 - $27 |
|
$110 - $111 |
ex-TAC Gross Profit |
$105 - $115 |
|
$529 - $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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