Taboola.Com Ltd. ((TBLA)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Taboola.Com Ltd.’s recent earnings call painted a picture of robust financial health, underscored by impressive revenue and profitability growth. The positive sentiment was further buoyed by a successful share buyback program and the promising early results of the Realize platform. Despite these achievements, the company acknowledged challenges in expanding existing advertiser budgets and navigating the China market. Overall, the upbeat outcomes overshadowed these concerns, leaving a positive impression on investors.
Strong Financial Performance
Taboola reported a strong second quarter, surpassing the high end of its guidance across all major metrics. The company achieved a revenue of $465 million, marking a 9% increase year-over-year. Ex-TAC gross profit rose by 15% to $172 million, while adjusted EBITDA saw a 21% increase to $45 million. These figures underscore Taboola’s ability to deliver solid financial results and maintain growth momentum.
Successful Share Buyback Program
The company executed a significant share buyback program, repurchasing approximately 32 million shares at an average price of $3.13, totaling $100.1 million. This move reduced the outstanding shares by nearly 12% in the first half of the year, reflecting Taboola’s commitment to returning value to shareholders and confidence in its stock.
Launch and Traction of Realize
Taboola’s new performance advertising platform, Realize, has shown promising early traction since its launch in February. With 650 advertisers testing its new display and social capabilities, the platform is positioned to capture a share of the $55 billion performance advertising market, signaling a strategic growth opportunity for the company.
Growth in Scaled Advertisers
The number of scaled advertisers increased by nearly 9%, with the average revenue per scaled advertiser rising by about 2% compared to the previous year. This growth indicates Taboola’s success in expanding its advertiser base and enhancing revenue streams.
Minimal Growth in Existing Advertiser Budgets
Despite the positive growth in scaled advertisers, the average revenue per scaled advertiser only increased by 2%, which was a point of concern. The company had aimed to boost budgets from existing clients through the Realize platform, highlighting an area for potential improvement.
Challenges in China Market
Taboola faced headwinds in the China market, where revenue accounted for about 5% of the total. A reduction in spend had a notable impact last year, presenting a challenge that the company needs to address to sustain its global growth strategy.
Forward-Looking Guidance
Looking ahead, Taboola has raised its full-year guidance, now forecasting revenues between $1.86 billion and $1.89 billion. The company expects ex-TAC gross profit to range from $689 million to $703 million, and adjusted EBITDA to be between $208 million and $214 million. Additionally, an extra $200 million has been authorized for its share repurchase program, underscoring confidence in its long-term value and growth prospects.
In summary, Taboola’s earnings call highlighted a strong financial performance with positive growth indicators, despite some challenges. The successful share buyback program and the early success of the Realize platform were key highlights, while the company remains focused on overcoming hurdles in advertiser budget expansion and the China market. Investors can look forward to continued growth as Taboola raises its full-year guidance and strengthens its market position.