Slide 1: Management Presentation August 10, 2021
Management Presentation August 10, 2021
Slide 2: Forward-Looking Statements
Forward-Looking StatementsCertain statements in this Presentation may be considered forward-looking statements. Forward-looking statements generally relate to future events or Taboola.com Ltd.’s (the “Company”) future financial or operating performance. For example, projections of future Revenue, Ad
Slide 3: Today's Presenters
Today’s Presenters Adam SingoldaFounder & CEO Founded Taboola over 13 years ago Has led the company as its CEO ever since 6+ years at TaboolaLed several of Idealab's portfolio companies, including Perfect MarketPrior experience at Disney & General Electric Stephen WalkerCFO 3
Slide 4: Agenda
AGENDA 4 Taboola OverviewInvestment HighlightsTaboola + Connexity = Even StrongerFinancial Information
Slide 5: We Power Recommendations for The Open Web
We Power Recommendations for The Open Web 5 Helping people discover things they may like
Slide 6: Taboola = Search "In Reverse"
TABOOLA = SEARCH “IN REVERSE” 6 From people looking for information to information looking for people
Slide 7: You Have Seen Taboola Before
YOU HAVE SEEN TABOOLA BEFORE 7
Slide 8: Solving Tremendously Difficult Technological Challenges
SOLVING TREMENDOUSLY DIFFICULT TECHNOLOGICAL CHALLENGES Predicting what people might be interested in without the intent data that Google has or the personal data that Facebook has and doing it at massive scale. 1 PetabyteData Processed by Taboola AI Daily3 330K+CPU & GPU Cores4 1 Trillion 516M DAIL
Slide 9: Enabling Publishers to Compete with Walled Garden Behemoths
ENABLING PUBLISHERS TO COMPETE WITH WALLED GARDEN BEHEMOTHS WALLED GARDENS1 SOCIAL SEARCH ECOMMERCE OPEN WEB2 25%3 Walled Gardens includes other closed platforms including Snap, Twitter, and NetflixOpen Web: Digital properties not owned by walled gardens such as websites, apps, games, Connected-TV a
Slide 10: Taboola Can Capture Share of the Highly Fragmented $64B Open Web Market
TABOOLA CAN CAPTURE SHARE OF THE HIGHLY FRAGMENTED $64B OPEN WEB MARKET1 SOCIAL SEARCH E-COMMERCE RECOMMENDATIONS ENGINE Open Web App Install Video Banners Affiliates (1) Jounce Media, 2020 Market Outlook Report e-Commerce 10
Slide 11: Full Tech Stack for Publishers: Mission Critical for the Open Web
FULL TECH STACK FOR PUBLISHERS: MISSION CRITICAL FOR THE OPEN WEB Engagement Engaging users by recommending organic content Monetizing with non-interruptive, native ads Audience $2B+ Paid To Publishers Over 3 Years1Monetization (1) See Appendix for historical annual Traffic acquisition costs (TAC) D
Slide 12: Long-Term, Exclusive Partnerships with Publishers
THAT’S WHY TABOOLA GETS LONG-TERM, EXCLUSIVE PARTNERSHIPS WITH PUBLISHERS 118% NDR in 202019,000 publishersGlobal Publishers on a 5+ Year Contract with Taboola (1) Source: Company Data. Net Dollar Retention (ex-TAC Gross Profit) is the net growth of ex-TAC Gross Profit from existing digital property
Slide 13: Advertisers Choose Taboola for the Open Web
ADVERTISERS CHOOSE TABOOLA FOR THE OPEN WEB Massive reach – 516M Daily Active UsersPerformance focus with measurable ROI Brand safe ad placements Target ads based on what people truly care about Largest advertiser is 3% of total ad spend10th largest advertiser is 1% of total ad spend1101% Net Dollar
Slide 14: Having an amazing year and it's just the beginning
Having an amazing year and it’s just the beginning Went public, raised $500M+ from great investors - Fidelity, Federated, Baron, othersBeat Q1 and Q2 projections and raised guidance for Q3 and full year 2021Winning incredible partners, and progressing on our growth initiatives organically 14
Slide 15: Agenda
AGENDA 15 Taboola OverviewInvestment HighlightsTaboola + Connexity = Even StrongerFinancial Information
Slide 16: Investment Highlights
INVESTMENT HIGHLIGHTS 16 ● ● ● ● ● ● ● The Open Web is a massive categoryTaboola’s technology is resilient to the future disappearance of third-party cookiesProduct-led growth fueled by a network effectPlatform advantage driven by Taboola’s technologyNumerous paths to accelerate growth Proven, found
Slide 17: Taboola Is Poised to Capture Share of the $64B Open Web Market
More than ads, product led - driving engagement, and audience to the entire publisher orgExclusive & direct relationships with publishers/advertisers - enables end-to-end innovation and predictable growth 1st party & contextual data, built for a cookieless world - We’re “always on” - all users, all
Slide 18: Taboola Tech Is Built for a Cookie-Less World
Taboola has its own 1st party cookie - recommending personalized editorial content enables serving our own 1st party identifierUnique readership context - deep access to the context of the page, allowing advertisers to target context (vs. “3rd party cookie behavior”)People click on Taboola recommenda
Slide 19: Scale Matters in Our Industry - Growth with a Built-In Network Effect
SCALE MATTERS IN OUR INDUSTRY - GROWTH WITH A BUILT-IN NETWORK EFFECT 3 More Publisher Partners More Users ReachedMore Data Generated More AdvertisersMore Successful Higher Yield(Better Results for Advertisersand Publishers) 19
Slide 20: Platform Advantage Driven by Investment in Tech
PLATFORM ADVANTAGE DRIVEN BY INVESTMENT IN TECH 500 R&D staff100 in Algo & Data$100M Annual R&D Investment 20 4 Source: Company data, 2021 estimates 20
Slide 21: Recommending Anything, Anywhere: A Multi Billion Dollar Opportunity
RECOMMENDING ANYTHING, ANYWHEREA MULTI BILLION DOLLAR OPPORTUNITY Core Business $1B+ in 2020 & Growing Rapidly2 A N Y T H I N G $10M’s in 20203 $10M’s in 20201 New products and segments (TV ads, eCommerce, app downloads, gaming...) A N Y W H E R ETaboola News (mobile carriers, device manufacturers,
Slide 22: Fast Growing Premium Video Demand on Premium Placements
FAST GROWING PREMIUM VIDEO DEMAND ON PREMIUM PLACEMENTS 5 2016 Acquired ConvertMedia$20MAnnual Run Rate(Revenues) 2020 $90M+ Technology Integration & Go-To-Market 2222 MID ARTICLE VIDEO
Slide 23: Proven, Founder-Led Management Team
PROVEN, FOUNDER-LED MANAGEMENT TEAM 6 Kristy Sundjaja1 year at TaboolaSVP, People Operations Ran Buck7 years at TaboolaSVP, Global Revenue Aviv Sinai13 years at TaboolaSVP, R&D Adam Singolda13 years at TaboolaFounder & CEO Eldad Maniv8 years at TaboolaPresident & COO Stephen Walker 6 years at Tabool
Slide 24: Q2 Results
Q2 RESULTS Strong Q2-21 Results.Driven by revenue growth from new and existing digital property partners and improved network yield relative to historic seasonal expectations Unaudited results for Three Months Ended June 30, 2021As published in Taboola’s first quarter 2021 earnings releaseNon-GAAP m
Slide 25: Updated Full Year 2021 Guidance
UPDATED FULL YEAR 2021 GUIDANCE INCREASED GUIDANCE ACROSS ALL MEASURES(1) Non-GAAP measures, see appendix for reconciliation to GAAP 25 RevenuesGross Profitex-TAC Gross Profit1 Adj. EBITDA1 2 0 2 0 2021 GUIDANCE GROWTH RATE $1,189M $1,316-1,323M 10-11% $319M $390-396M 22-24% $382M $468-472M 22-23% $
Slide 26: Agenda
AGENDA 26 Taboola OverviewInvestment HighlightsTaboola + Connexity = Even StrongerFinancial Information
Slide 27: Connexity Is One of the Largest Open Web E-Commerce Media Platforms
Merchants CONNEXITY IS ONE OF THE LARGESTOPEN WEB E-COMMERCE MEDIA PLATFORMS Open Web($35B US TAM1)Walled Gardens 27 (1) Source: eMarketer, “Digital Ad Spending, By Industry, US” Note: Illustrative diagrams, not to scale.
Slide 28: How Connexity Drives Shoppers to Merchants in the Open Web
HOW CONNEXITY DRIVES SHOPPERS TO MERCHANTS IN THE OPEN WEB Merchants Open Web ($35B TAM) Audience ExtensionSearch Social 25%1 Publishers Solutions75%1Shopping SiteProducts on Editorial Content 1 Percentage of Revenue in 2020. 28
Slide 29: Connexity for Publishers
CONNEXITY FOR PUBLISHERS Products on Editorial Content Shopping Site 29
Slide 30: Connexity by the Numbers
CONNEXITY BY THE NUMBERS1 -POWERING E-COMMERCE IN THE OPEN WEB AT SCALE At Impressive Scale:1,600+ direct merchant relationships 750M product offerings (SKUs) 1M+ monthly transactions6k+ publisher relationships Strong 2020 Financial Results:1$77M ex-TAC gross profit2$38M Adjusted EBITDA220%+ ex-TAC
Slide 31: Direct Relationship with Merchants
DIRECT RELATIONSHIP WITH MERCHANTS 90%+ of revenue comes from direct merchants relationships10% from affiliates that Connexity is not directly managing65% of revenue is CPC, 35% is CPA
Slide 32: Partners and Clients Love Connexity
PARTNERS AND CLIENTS LOVE CONNEXITY: NDR 32 Merchants12 year average tenure of strategic merchants140% Net Revenue Retention among strategic merchantsTop 10 merchants in 2020 had 88% CAGR in 2017-2020Publishers4.5 year average tenure of top publishers247% Net Revenue Retention among managed service
Slide 33: Synergies
SYNERGIES Driving yield growth by bringing Connexity Merchants to Taboola’s existing relationships with publishersUpselling Existing Connexity publisher products - shop section and commerce content - to Taboola’s 9,000+ publishersBringing Connexity global by leveraging Taboola’s worldwide presenceCr
Slide 34: Addition of E-Commerce Data Signals Will Increase Yield and Enhance Network Effect
ADDITION OF E-COMMERCE DATA SIGNALS WILL INCREASE YIELD AND ENHANCE NETWORK EFFECT More Publisher Partners More Advertisers More Users ReachedGenerating more data Higher Yield(Better Results for Advertisersand Publishers) +1,600 Merchant Advertisers1 34 +1M Monthly Transactions1 +6,0001 publishers w
Slide 35: Strong Strategic Rationale
STRONG STRATEGIC RATIONALEBringing e-commerce Recommendations to the Open Web 35 Accelerates Taboola Growth into $35B e-CommerceMedia TAM (US alone)1Adds Direct Relationships with 1,600+ Brand Name Merchants2Leverages contextual signals - not reliant on 3rd party cookiesExpected to increase Yield, m
Slide 36: Agenda
AGENDA 36 Taboola OverviewInvestment HighlightsTaboola + Connexity = Even StrongerFinancial Information
Slide 37: Upside in Our Model
UPSIDE IN OUR MODELGrowth from Core Open Web business onlyConservative growth assumed for existing baseAdditional upside from existing growth initiatives and inorganic PROFITABLE GROWTHRule of 40 Business (1),(2),(3) Non-GAAP measure, see appendix for reconciliation to GAAP Note: Projections reflect
Slide 38: 2019 Metrics Were Influenced by Our Investment Strategy
2019 METRICS WERE INFLUENCED BY OUR INVESTMENT STRATEGY In 2019, Taboola made the decision to invest $60 million in long-term partnerships with a number of very large, brand name publishing networks1 2018A 2019A 2020A Given that investment, Ratio of Adj. EBITDA to ex-TAC Gross Profit2 was 11.5%...27
Slide 39: COVID-19 in 2020 Proved the Resiliency of Our Model
COVID-19 IN 2020 PROVED THE RESILIENCY OF OUR MODEL Exited 2020 stronger than we entered with sustainably higher profitability Sustainable yield increase, driving higher margins Worked with publisher partners to optimize for yieldSigned more advertisers seeking consumers digitallyDramatic improvemen
Slide 40: Growth Driven by Core Open Web Installed Base
GROWTH DRIVEN BY CORE OPEN WEB INSTALLED BASE New Publisher1 ex-TAC Gross Profit Historically 10-15% new supply growthProjecting similar range going forward Net Dollar Retention2 Growth Has Two Elements Improvements in yieldMore supply from existing publishersHistorically 110-120% on average Continu
Slide 41: Selected Non-GAAP Metrics
SELECTED NON-GAAP METRICS 23%ex-TAC Gross Profit Growth 32%Ratio of Adj EBITDA to ex-TAC Gross Profit3 43%Adj EBITDA Growth 80%+Adj. Gross Profit Margin4 (1),(2),(3),(4) Adj. EBITDA, ex-TAC Gross Profit, and Ratio of Adj. EBITDA to ex-TAC Gross Profit, and Adj. Gross Proft Margin are Non-GAAP measur
Slide 42: Thank you.
Thank you. 42
Slide 43: Appendix
APPENDIX
Slide 44: Our Model in a Nutshell
OUR MODEL IN A NUTSHELL 44 Revenue paid by Advertisers, before traffic acquisition costs (TAC) paid to Publishers.Revenue to Taboola after TAC paid to Publishers. Non-GAAP measure, seeappendix for reconciliation to GAAPNon-GAAP measure, see appendix for reconciliation to GAAPNon cash charges, Cash c
Slide 45: Historical & Projected Revenue & ex-TAC Gross Profit
HISTORICAL & PROJECTED REVENUE & EX-TAC GROSS PROFIT1 45 (1) Non-GAAP measure, see appendix for reconciliation to GAAP (2) ex-TAC Gross Profit Margin reflects ex-TAC Gross Profit / Revenue, a Non-GAAP measure. See appendix for reconciliation to GAAP Note: 2021 projection reflects the mid-point of cu
Slide 46: Key Model Assumptions
KEY MODEL ASSUMPTIONS ex-TAC Gross Profit1Historically, Taboola grew 20%+ (CAGR ’17A-’20E)In 2020, Taboola generated $382 million ex-TAC Gross ProfitFor FY2021, the Company currently expects ex-TAC Gross Profit in range of $468 - 472M ADJUSTED EBITDA2$106 million in 2020 and growing faster than ex-T
Slide 47: Selected GAAP and Non-GAAP Metrics
SELECTED GAAP AND NON-GAAP METRICS Ratio of Adjusted EBITDA to ex-TAC Gross Profit3Return to “normal” operations and cost basis in H1 2021Investing in serving infrastructure and Algo beginning 2021IPO readiness costs added starting 2021 LONG-TERM EX-TAC GROSS PROFIT GROWTHCurrent Model only forecast
Slide 48: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION Note: Although we provide guidance for Adjusted EBITDA, we are not able to provide guidance for projected Net income (loss), the most directly comparable GAAP measures. Certain elements of Net income (loss), including share-based compensation expenses, are not predicta
Slide 49: 2021 Quarterly Results: Adjusted EBITDA Reconciliation
2021 QUARTERLY RESULTS: ADJUSTED EBITDA RECONCILIATION 1A substantial majority is Share-based compensation expenses related to going public.2 Relates to the acquisition of ION Acquisition Corp. 1 Ltd. and going public. 12 1 49 2
Slide 50: ex-TAC Gross Profit Reconciliation
EX-TAC GROSS PROFIT RECONCILIATION Note: 2021 projections reflect the midpoint of current company guidance. 50
Slide 51: Ratio of Adjusted EBITDA to ex-TAC Gross Profit Reconciliation
RATIO OF ADJUSTED EBITDA TO EX-TAC GROSS PROFIT RECONCILIATION 51
Slide 52: ex-TAC Gross Profit Margin Reconciliation
EX-TAC GROSS PROFIT MARGIN RECONCILIATION 52
Slide 53: Historical & Projected Adj. Gross Profit Margin Reconciliation
HISTORICAL & PROJECTED ADJ. GROSS PROFIT MARGIN RECONCILIATION Note: Adj. Gross Profit Margin is calculated by dividing Gross profit by ex-TAC Gross Profit. 2021 projections reflect midpoint of company’s current guidance.
Slide 54: Historical and Projected Free Cash Flow Reconciliation
HISTORICAL AND PROJECTED FREE CASH FLOW RECONCILIATION (1) Adj. EBITDA Plus the change in working capital reflects the Net cash provided by operating activities. For estimated periods, Net cash from operating activities assumes 53-57 days payables outstanding and 40-45 days sales outstanding. 2021 F
Slide 55: Consolidated Balance Sheet
CONSOLIDATED BALANCE SHEET ($ in millions) As of Dec 31, 2019 As of Dec 31, 2020 Cash, cash equivalents and short-term deposits $ 116 $ 243 Total Assets $ 482 $ 580 Total Liabilities & Convertible Shares $ 475 $ 533 Accumulated Deficit $ (40) $ (31) Additional Paid-in-capital $ 47 $ 78 Total Shareho
Slide 56: 2021 Quarterly Results: ex-TAC Gross Profit Reconciliation
2021 QUARTERLY RESULTS:EX-TAC GROSS PROFIT RECONCILIATION 56
Slide 57: 2021 Full Year Guidance: ex-TAC Gross Profit Reconciliation
2021 FULL YEAR GUIDANCE:EX-TAC GROSS PROFIT RECONCILIATION 57