Slide 1: Analyst Day Presentation March 30, 2021
Analyst Day Presentation March 30, 2021
Slide 2: Forward-Looking Statements
Forward - Looking Statements Certain statements in this Presentation may be considered forward - looking statements . Forward - looking statements generally relate to future events or ION Acquisition Corp 1 LTD . (“ION”) and Taboola . com Ltd . ’s (the “Company”) future financial or operating perfor
Slide 3: Use of Projections; Industry and Market Data
Use of Projections This Presentation contains financial forecasts with respect to the Company’s projected financial results, including Revenue and Adjusted EBITDA, for the Company's fiscal years 2021 through 2025 . The Company's independent auditors have not audited, reviewed, compiled or performed
Slide 4: Agenda
A GEN D A 4 • Introduction • Overview • About Taboola • Investment Highlights • Financial Information • Valuation & Comparables
Slide 5: Presenters and Senior Leadership
PRESENTERS AND SENIOR LEADERSHIP Adam Singolda Founder & CEO Stephen Walker CFO ▪ 6+ years at Taboola ▪ Previously held positions in Idealab’s New Ventures Group and also led several of Idealab's portfolio companies, including Perfect Market ▪ Prior experience at Disney & General Electric ▪ CE O o f
Slide 6: Agenda
A GEN D A 6 • Introduction • Overview • About Taboola • Investment Highlights • Financial Information • Valuation & Comparables
Slide 7: We Power Recommendations for The Open Web
We Power Recommendations for The Open Web 7 Helping people discover things they may like
Slide 8: Taboola = Search "In Reverse"
TABOOLA = SEARCH “IN REVERSE” 8 From people looking for information to information looking for people
Slide 9: You Have Seen Taboola Before
YOU HAVE SEEN TABOOLA BEFORE 9
Slide 10: 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 Petabyte Dat a Processe d b y T abool a A I Dail y 3 330K+ CPU Cores 4 1 Trillion 516M
Slide 11: Enabling Publishers to Compete with Walled Garden Behemoths
ENABLING PUBLISHERS TO COMPETE WITH WALLED GARDEN BEHEMOTHS WALLED GARDENS 1 SOCIAL SEARCH ECOMMERCE OPEN WEB 2 25% 3 (1) Walled Gardens includes other closed platforms including Snap, Twitter, and Netflix (2) Open Web: Digital properties not owned by walled gardens such as websites, apps, games, Co
Slide 12: Taboola Can Capture Share of the Highly Fragmented $64B Open Web Market
TABOOLA CAN CAPTURE SHARE OF THE HIGHLY FRAGMENTED $64B OPEN WEB MARKET 1 SOCIAL SEARCH ECOMMERCE RECOMMEND A TIONS ENGINE Open Web App Install V ideo Banners Affiliates (1) Jounce Media, 2020 Market Outlook Report 12
Slide 13: Taboola Is for Advertising What Shopify Is for E-Commerce
E - COMMERCE TABOOLA IS FOR ADVERTISING WHAT SHOPIFY IS FOR E - COMMERCE ADVERTISING 13
Slide 14: Agenda
A GEN D A 14 • Introduction • Overview • About Taboola • Investment Highlights • Financial Information • Valuation & Comparables
Slide 15: 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 Years 1 Monetization (1) Se e Appendi x fo r historica l annua l T ra f fi c Acquisitio n
Slide 16: Long-Term, Exclusive Partnerships with Publishers
THAT’S WHY TABOOLA GETS LONG - TERM, EXCLUSIVE PARTNERSHIPS WITH PUBLISHERS • 120% NDR in 2020 1 • 9,000 publishers • Global Publishers on a 5+ Year Contract with Taboola (1) Source: Company Data. Net Dollar Retention is the simple arithmetic average of our Monthly Net Dollar Retention for the last
Slide 17: Advertisers Choose Taboola for the Open Web
ADVERTISERS CHOOSE TABOOLA FOR THE OPEN WEB • Massive reach – 516M Daily Active Users • Performance focus with measurable ROI • Brand safe ad placements • Target ads based on what people truly care about Largest advertiser is 3% of total ad spend 10th largest advertiser is 1% of total ad spend 1 101
Slide 18: Keeping the Open Web Safe
KEEPING THE OPEN WEB SAFE Ongoing monitoring of the network and removal of undesirable content and actors. 30+ Reviewers 24/5 manual review + 14h per day on weekends 24/7 automated review - Taboola automations including AI tools 13 Languages English, Danish, Swedish, Norwegian, Spanish, Portuguese,
Slide 19: Discovering Direct-To-Consumer Brands on Taboola
- Zach Jacobs, Director of Marketing at Mack Weldon “Mack Weldon is a digitally native — growth focused — menswear startup brand that designs and delivers premium basics for men. As a performance marketer I’m constantly looking for new ways to create awareness for our products while growing our cust
Slide 20: Generating Quality Leads for Samsung Life Insurance with Taboola
- Gahee Lee, Digital Sales Section Manager, Samsung Life Insurance “We built a website to sell our insurance product online. To drive more sign ups, we started running digital campaigns. To encourage sign - ups, the completion of our quote calculator was the most important behavior. Taboola hugely c
Slide 21: Marketplace Business Model
MARKETPLACE BUSINESS MODEL AI - Powered Biddable Marketplace Advertisers place bids to appear on Taboola and pay per click/view Taboola shares ad revenue with Publishers $ $ $ $ $ $ $ $ 21
Slide 22: Agenda
A GEN D A 22 • Introduction • Overview • About Taboola • Investment Highlights • Financial Information • Valuation & Comparables
Slide 23: Investment Highlights
INVESTMENT HIGHLIGHTS 23 Ɣ Ɣ Ɣ Ɣ Ɣ Ɣ Ɣ The Open Web is a massive category Taboola’s technology is resilient to the future disappearance of third - party cookies Product - led growth fueled by a network effect Platform advantage driven by Taboola’s technology Numerous paths to accelerate growth Prove
Slide 24: 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 org • Exclusive & 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
Slide 25: 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 identifier • Unique readership context - deep access to the context of the page, allowing advertisers to target context (vs. “3rd party cookie behavior”) • People click on Taboola re
Slide 26: Product-Led Growth with a Built-In Network Effect
PRODUCT - LED GROWTH WITH A BUILT - IN NETWORK EFFECT 3 More Publisher Partners More Users Reached , More Often More User Data Gathered Higher Yield (Better Result s fo r Advertisers an d Publishers) 26
Slide 27: Platform Advantage Driven by Investment in Tech
PLATFORM ADVANTAGE DRIVEN BY INVESTMENT IN TECH 500 R&D staff 100 in Algo & Data $100M Annual R&D Investment 27 4 Source: Company data, 2021 estimates 27
Slide 28: Recommending Anything, Anywhere: A Multi Billion Dollar Opportunity
RECOMMENDING ANYTHING, ANYWHERE A MULTI BILLION DOLLAR OPPORTUNITY Cor e Business $1B+ in 2020 & Growing Rapidly 2 A N Y T H I N G $10M’s in 2020 3 $10M’s in 2020 1 New products and segments (TV ads, eCommerce, app downloads, gaming...) A N Y W H E R E T abool a News (mobile carriers, device manufac
Slide 29: Recent Developments: Taboola High Impact Launch
RECENT DEVE L OPMENTS: TABOOLA HIGH IMPACT LAUNCH 29 Premium Ad Placement s & Experiences Brand Safety, Suitability & Adjacenc y Control Unique Readership Data & Insights Specialized Solution for Brands & Agencies Running Bran d A warenes s Campaigns
Slide 30: Growth Case Study: ConvertMedia Acquisition
GROWTH CASE STUDY: CONVERTMEDIA ACQUISITION 5 2016 Acquire d ConvertMedia $20M Annua l Run Rate 1 2020 $90M + Technology Integration & Go - T o - Market (1) Annual run - rates are expressed in Gross Revenue 3 3 0 0
Slide 31: Proven, Founder-Led Management Team
PROVEN, FOUNDER - LED MANAGEMENT TEAM 6 Krist y Sundjaja 1 year at Taboola SV P , Peopl e Operations Ran Buck 7 years at Taboola SV P , Globa l Revenue Aviv Sinai 13 years at Taboola SVP, R&D Adam Singolda 13 years at Taboola Founder & CEO Eldad Maniv 8 years at Taboola President & COO Stephen Walke
Slide 32: Financial Highlights
FINANCIAL HIGHLIGHTS 7 Gross Revenue ex - TAC 1 $160M Raise d to date $240M+ on the balance sheet 3 2 0 2 0 WE POWER RECOMMEN D A TIONS FOR THE OPEN WEB (1),(2) Non - GAAP measure, see appendix for reconciliation to GAAP (3) Cash & cash equivalents, balance as of 12/31/2020 32 $1.2B $382M $106M Adj.
Slide 33: Agenda
A GEN D A • Introduction • Overview • About Taboola • Investment Highlights • Financial Information • Valuation & Comparables 33
Slide 34: Our Model in a Nutshell
OUR MODEL IN A NUTSHELL 34 (1) Revenue paid by Advertisers, before traffic acquisition costs (TAC) paid to Publishers. (2) Revenue to Taboola after TAC paid to Publishers. Non - GAAP measure, see appendix for reconciliation to GAAP (3)(4) Non - GAAP measure, see appendix for reconciliation to GAAP (
Slide 35: Taboola Focuses on Profitable Growth
TABOOLA FOCUSES ON PROFITABLE GROWTH UPSIDE IN OUR MODEL • Growth from Core Open Web business only • Conservative growth assumed for existing base • Additional upside from existing growth initiatives and inorganic PROFITABLE GROWTH Rule of 40 Business (1),(2) Non - GAAP measure, see appendix for rec
Slide 36: 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 networks 1 2018A 2019A 2020A Given that investment, Adj. EBITDA Margin 2 (% of ex - TAC) was 11.5%... 27.8%
Slide 37: COVID in 2020 Proved the Resiliency of Our Model
COVID - 19 IN 2020 PROVED THE RESILIENCY OF OUR MODEL • COVID - 19 / Recession Dip Stron g Recovery Yield 1 Leaving 2020 stronger than we entered with sustainably higher profitability Sustainable yield increase, driving higher margins • Worked with publisher partners to optimize for yield • Signed m
Slide 38: Growth Driven by Core Open Web Installed Base
GROWTH DRIVEN BY CORE OPEN WEB INSTALLED BASE New Publisher ex - TAC Revenue 1 • Historically 15% new supply growth • Projecting 8 - 11% going forward Net Dollar Retention 2 Growth Has Two Elements • Improvements in yield • More supply from existing publishers • Projecting 101 - 103% net dollar rete
Slide 39: Selected Non-GAAP Metrics
SELECTED NON - GAAP METRICS $106M $382M $127M $445M $143M $516M 16% ex - TAC Revenue Growth 1 27%+ Ad j EBITD A Margi n 2 16%+ Ad j EBITD A Growt h 3 80%+ Adj. Gross Profit Margin 4 (1),(2),(3) Growt h rates reflect 2020 - 202 3 CAGR . ex - T AC , Adj . EBITD A Margin, an d Adj . EBITD A ar e Non -
Slide 40: 2021 Quarterly and FY Projection
2021 QUARTERLY AND FY PROJECTION 40 Quarterly results in 2020 do not reflect standard seasonality due to impact of recession and special publisher arrangements related to COVID - 19. Note: dollar values in this table reflect rounded values; growth and margin calculations are based on exact values ca
Slide 41: Agenda
A GEN D A 41 • Introduction • Overview • About Taboola • Investment Highlights • Financial Information • Valuation & Comparables
Slide 42: Valuation Framework
VALUATION FRAMEWORK Mid - Cap Advertising Technology • Funded by digital marketers / advertisers looking for new customers • Similar scale • Funded by digital marketers / advertisers looking for new customers • Recurring revenues • B2B - oriented solutions that are consumer focused • Support markete
Slide 43: Thank you.
Thank you. 43
Slide 44: Appendix
APPENDIX
Slide 45: Historical & Projected Revenue & ex-TAC Revenue
HISTORICAL & PROJECTED REVENUE & EX - TAC REVENUE 1 YoY growth ex - TAC revenue margin 2 (1) Non - GAAP measure, see appendix for reconciliation to GAAP (2) ex - TAC Revenue Margin reflects ex - TAC Revenue / Gross Revenue, Non - GAAP measure, see appendix for reconciliation to GAAP 45
Slide 46: Key Model Assumptions
KEY MODEL ASSUMPTIONS Operatin g costs: Operating margin (% of ex - TAC revenue) Operating income ($ in millions) REVENUE (ex - TAC) 1 ▪ Historically, Taboola grew 20%+ (CAGR ’17A - ’20E) ▪ In 2020, Taboola generated $382 million ex - TAC ▪ Conservatively modeled ~16% growth, doubling ex - TAC in 5
Slide 47: Selected GAAP and Non-GAAP Metrics
SELECTED GAAP AND NON - GAAP METRICS LONG - TERM EX - TAC REVENUE GROWTH ▪ Current Model only forecasts growth from Core Business ▪ Long - Term Growth of 20%+ includes core business growth, inorganic and existing growth initiatives AD J . EBIT D A MA R GIN 3 ▪ Return to “normal” operations and cost
Slide 48: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION 48
Slide 49: Projected Adjusted EBITDA Reconciliation
PROJECTED ADJUSTED EBITDA RECONCILIATION 49
Slide 50: ex-TAC Revenue Reconciliation
EX - TAC REVENUE RECONCILIATION 50
Slide 51: Projected ex-TAC Revenue Reconciliation
PROJECTED EX - TAC REVENUE RECONCILIATION 51
Slide 52: Adjusted EBITDA Margin Reconciliation
ADJUSTED EBITDA MARGIN RECONCILIATION 52
Slide 53: Projected Adjusted EBITDA Margin Reconciliation
PROJECTED ADJUSTED EBITDA MARGIN RECONCILIATION 53
Slide 54: ex-TAC Revenues Margin Reconciliation
EX - TAC REVENUES MARGIN RECONCILIATION 54
Slide 55: Projected ex-TAC Revenues Margin Reconciliation
PROJECTED EX - TAC REVENUES MARGIN RECONCILIATION 55
Slide 56: Historical & Projected Adj. Gross Profit Margin Reconciliation
HISTORICAL & PROJECTED ADJ. GROSS PROFIT MARGIN RECONCILIATION
Slide 57: 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. 202 1 Fre e Cas h Flo w Reduce d b y Pla n T o Inves t i n T w o Areas: 1) Purchase of $30M of servers beyond “normal” levels as part of i
Slide 58: Consolidated Balance Sheet
CONSOLIDATED BALANCE SHEET ($ in millions) As of Dec 31, 2019 As of Dec 31, 2020 Cash, cash equivalents and short - term deposits $ 116 $ 243 T ota l Assets $ 482 $ 580 Total Liabilities & Convertible Shares $ 475 $ 533 Accumulated Deficit $ (40) $ (31) Additional Paid - in - capital $ 47 $ 78 Total
Slide 59: Valuation Benchmarking
VALUATION BENCHMARKING Source: Wall Street research, filings and FactSet as of 3/26/2021. Taboola figures calculated using ex - TAC revenue. Figure s fo r Alphabet , MediaAlpha, Magnite, PubMati c an d T rade Des k calculated o n a ex - T A C equivalent revenue basis . Dat a fo r Advertisin g T echn
Slide 60: Operational Benchmarking
OPERATIONAL BENCHMARKING Source: Wall Street research, filings and FactSet as of 3/26/2021. Taboola figures calculated using ex - TAC revenue. Figure s fo r Alphabet , MediaAlpha, Magnite, PubMati c an d T rade Des k calculated o n a ex - T A C equivalent revenue basis . Dat a fo r Advertisin g T ec