Taboola.Com Ltd. ((TBLA)) has held its Q4 earnings call. Read on for the main highlights of the call.
Taboola.com Ltd. Earnings Call Highlights Strong Performance Amid Cautious Future Outlook
The recent earnings call for Taboola.com Ltd. was marked by a positive sentiment, driven by strong financial performance and strategic initiatives. The launch of the Realize platform was a focal point, positioning the company for growth beyond its current native advertising constraints. However, the conservative 2025 growth guidance reflects challenges in scaling advertiser demand and a heavy reliance on Yahoo’s network. While the company exceeded cash flow expectations and is investing aggressively in share buybacks, the guidance indicates caution due to slower growth in native advertising.
Record Free Cash Flow
Taboola.com Ltd. reported a remarkable achievement in free cash flow, generating nearly 50% more than planned for 2024. The company reached $149 million, significantly surpassing its original target of $100 million, highlighting its strong financial management and operational efficiency.
Strong Financial Performance
For the full year 2024, Taboola.com Ltd. achieved an ex-TAC gross profit of $667 million, representing a 25% growth compared to the previous year. Additionally, the company more than doubled its adjusted EBITDA to $201 million, showcasing its robust financial health and growth trajectory.
Major Product Launch: Realize
The introduction of the Realize platform marks a strategic expansion for Taboola.com Ltd., moving beyond native advertising into the $55 billion performance advertising market. This initiative leverages the company’s first-party data, AI capabilities, and global distribution network, setting the stage for future growth.
Solid Revenue and Growth in Key Segments
In 2024, Taboola.com Ltd. achieved revenues of $1.77 billion, with notable growth in enterprise advertising, e-commerce, and AI investments driving the company’s performance. These segments have been pivotal in bolstering the company’s overall revenue growth.
Incremental Share Buyback Authorization
The board of Taboola.com Ltd. approved an additional $200 million for the share repurchase program, bringing the total authorization to approximately $240 million. This move underscores the company’s commitment to returning value to shareholders and confidence in its financial stability.
Below Historical Growth Guidance for 2025
The guidance for 2025 reflects a conservative outlook, with expectations of single-digit growth. The company forecasts a 2% ex-TAC gross profit and adjusted EBITDA growth, which falls below historical rates and long-term ambitions, indicating a cautious approach amid market challenges.
Challenges with Yahoo Advertiser Spend
Taboola.com Ltd. faced challenges with Yahoo advertisers, who spent less than anticipated on the network. The spending on bottom-of-article native ads was less than $15 million, highlighting the need for the company to expand beyond native advertising to drive growth.
Ex-TAC Gross Margin Impact from Testing
The Q4 ex-TAC gross margin stood at approximately 43%, reflecting the marginal benefit from Yahoo supply testing. This factor impacts the perceived growth in gross profit, suggesting that further optimization is necessary to enhance profitability.
Forward-Looking Guidance
During the earnings call, Taboola.com Ltd. provided its 2025 guidance, forecasting a 2% growth in ex-TAC gross profit and adjusted EBITDA, while aiming to maintain a 30% EBITDA margin. The company highlighted 2024 as a record year and announced a $200 million expansion to its buyback program. The launch of the Realize platform is expected to drive double-digit growth, despite the current single-digit forecast.
In summary, Taboola.com Ltd.’s earnings call conveyed a strong performance in 2024, with significant achievements in cash flow and profitability. The strategic launch of the Realize platform positions the company for future growth, although the conservative 2025 guidance reflects caution amid market challenges. Investors will be keen to see how the company navigates these challenges and capitalizes on new opportunities in the coming year.