Slide 1: Investor Presentation
INVESTOR — PRESEN LS i a é _
Slide 2: Forward-looking statements
‹#› Certain statements in this presentation are forward-looking statements, including our Q3 and full-year 2022 guidance. 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 ident
Slide 3: Today's Presenters
TODAY’S PRESENTERS ADAM SINGOLDA FOUNDER & CEO STEPHEN WALKER CFO Founded Taboola over 13 years ago Has led the company as its CEO ever since 7+ years at Taboola Led several of Idealab's portfolio companies, including Perfect Market Prior experience at Disney & General Electric
Slide 4: Agenda
AGENDA Capturing Share of $64B Ad Market & Taboola Overview Q2 Updates & Momentum Taboola’s Differentiation and Why We Win 1 2 3 Financial Update 4
Slide 5: Powering Recommendations for the Open Web
POWERING RECOMMENDATIONS FOR THE OPEN WEB HELPING PEOPLE DISCOVER THINGS THEY MAY LIKE
Slide 6: Taboola = Search "In Reverse"
TABOOLA = SEARCH “IN REVERSE” FROM PEOPLE LOOKING FOR INFORMATION TO INFORMATION LOOKING FOR PEOPLE
Slide 7: The Open Web: $64B
THE OPEN WEB where we spend 25% of our time $64B WHAT video, product, tv show, app,... WHERE article page, homepage, app, ctv,... RECOMMENDATION AI, personalized, relevant, based on the user and the context
Slide 8: ‘SHOP GIFTS
‘SHOP GIFTS UNDER*50 acrestaurants) in your city Save up to 75* off a5
Slide 9: ...Done Right
...DONE RIGHT Walled garden integrated ad experience Paid Organic Paid Organic Organic Paid Paid Paid
Slide 10: Taboola Revolution
TABOOLA REVOLUTION Bring power of walled gardens to open web with Tens of billions clicks a year Paid Editorial
Slide 11: (But) Open Web Today Is Not Personalized
(BUT) OPEN WEB TODAY IS NOT PERSONALIZED
Slide 12: Rocket Engine (AI)
ROCKETENGINE (AI) Deep Learning since 2017 $100M Annual R&D Spend1 Editorial recommendations Paid recommendations SmartBid Source: Company data, see slide titled “Key 2022 Model Assumptions”
Slide 13: Rocket Fuel
ROCKET FUEL NASA/MAF/Steven Seipel 500M+ DAU Context Tens of billions clicks a year Curiosity graph(“people who read this also do this”) 90% of revenue direct(pixel on page) Source: Company data
Slide 14: We Build the Best Rockets
Slide 15: Tech Differentiation
TECH DIFFERENTIATION 10 years partnerships, trust
Slide 16: An Open Web Powered by Taboola Recommendations
AN OPEN WEB POWERED BYTABOOLA RECOMMENDATIONS 298 584 1,426 4,909 2010 2015 2020 2025 Source: Data Age 2025, sponsored by Seagate with data from IDC Global DataSphere Nov 2018 The Number of interactions/Capita/Day
Slide 17: We Expect to Cross $1B ex-TAC Maintaining Our Margins
Over the next 3 years WE EXPECT TO CROSS $1B EX-TAC MAINTAINING OUR MARGINS
Slide 18: Anything. Anywhere.
ANYTHING. ANYWHERE.
Slide 19: Anything. Anywhere.
Slide 20: Anything. Anywhere.
4))) What are Blue Zones and why they are the secret to A Lt ANYWHERE.
Slide 21: Agenda
AGENDA Capturing Share of $64B Ad Market & Taboola Overview Q2 Updates & Momentum Taboola’s Differentiation and Why We Win 1 2 3 Financial Update 4
Slide 22: Taboola's Differentiation
TABOOLA’S DIFFERENTIATION Growth fueled by a network effect Long-term yield increases Taboola’s technology is resilient to the future disappearance of third-party cookies Platform advantage driven by Taboola’s technology (Brands & Agencies, Taboola News, Newsroom) Connexity provides further differen
Slide 23: Expanding ex-TAC Margins Point to Competitive Advantage
ex-TAC Margin has increased significantly since 2015 Competitive landscape has not changed significantly in that time period Margins increase as competitive advantages increase 1 1 (1) Non-GAAP measure, see appendix for reconciliation to GAAP EXPANDING EX-TAC MARGINS POINT TO COMPETITIVE ADVANTAGE 1
Slide 24: Growth with a Built-In Network Effect
More Publisher Partners More Users Reached More Frequently More Data Generated Higher Yield Better Targeting Drives Better Results for Advertisers GROWTH WITH A BUILT-IN NETWORK EFFECT SCALE MATTERS IN OUR INDUSTRY 1
Slide 25: What Makes Up Yield
WHAT MAKES UP YIELD Click Through Rate (CTR): The number of clicks that an ad receives divided by the number of times the ad is shown (impressions) A high CTR is a good indication that users find your ads relevant Cost Per Click (CPC): The amount advertisers pay for each click on their ads. Conversi
Slide 26: How We Increase Yield
CTR and Conversions Click Through Rate, Conversion Rates CPC Cost Per Click HOW WE INCREASE YIELD Algorithmic improvements drive better prediction of what users will engage with More advertisers on the platform and higher diversity of campaigns More data that provides more contextual signals enables
Slide 27: Built for a Cookie-less, IDFA/ATT World
(1) Source: Company data. Clicks represent total clicks on Taboola recommendations, including paid advertisements (“sponsored content”) and editorial ("organic") content Taboola’s strong yield performance despite 3rd party cookies being blocked in the industry for years: Apple started blocking 3rd p
Slide 28: Comprehensive Publisher and Advertiser Platform
COMPREHENSIVE PUBLISHER PLATFORM PLATFORM ADVANTAGE DRIVEN BY INVESTMENT IN TECHNOLOGY CAPABILITIES NOT AVAILABLE FROM OUR COMPETITORS COMPREHENSIVE ADVERTISER PLATFORM 4
Slide 29: Taboola for Brands & Agencies
TABOOLA FOR BRANDS & AGENCIESHigh Impact Placements: a premium solution for achieving brand awareness Premium Ad Placements & Experiences Brand Safety & Adjacency Control Unique Readership Data & Insights 4
Slide 30: Taboola News
TABOOLA NEWS Bringing Premium Content To People Everywhere & Driving Audience For Our Publisher Partners Taboola News delivers relevant content from our premium publisher partners, integrated into mobile phones and other user touchpoints. It creates new opportunities for engagement and revenue for m
Slide 31: Newsroom
Easily ANALYZE: Real-Time Audience Data Article Engagement Metrics Trending Topic Insights Subscription Analytics Instantly ACT: Identify high-performing content A/B test Headlines & Images Boost subscriptions ACTIONABLE INSIGHTS TO GROW READERSHIP & ENGAGEMENT 4 NEWSROOM
Slide 32: For All / For You
Must-know information, hand-curated by editors Personalized recommendations, powered by editor-enhanced algo FOR ALL FOR YOU 4
Slide 33: 1/3 of Open Web Publisher Revenue Will Be E-commerce
1/3 OPEN WEB PUBLISHER REVENUE Source: Company Estimates. 1/3 OF OPEN WEB PUBLISHER REVENUE WILL BE E-COMMERCE 5
Slide 34: Connexity Furthers Our Competitive Advantage
5 CONNEXITY FURTHERS OUR COMPETITIVE ADVANTAGE INTRINSIC VALUE OF BUSINESSSignificant expansion of our addressable TAM with long runway of growth SYNERGIESTremendous opportunity to leverage our scale, combined relationships and Connexity’s e-commerce market maker capabilities STRATEGIC VALUE⅓ of Ope
Slide 35: Connexity Synergies
5 CONNEXITY SYNERGIES $100M+ ANNUAL EX-TAC IN 4 YEARS SHORT-TERM Connexity on Taboola Publishers, growing publishers % of traffic with intent Take Connexity Global Expanding Connexity’s Client base by Leveraging Taboola Ad Sales MEDIUM-TERM Connexity merchant demand on Taboola publisher supply Bette
Slide 36: Agenda
AGENDA Capturing Share of $64B Ad Market & Taboola Overview Q2 Updates & Momentum Taboola’s Differentiation and Why We Win 1 2 3 Financial Update 4
Slide 37: Q2 2022 in Review
Q2 2022 IN REVIEW - capturing more of the $64 billion ad market Renewing and building new long term relationships Announced new digital property partner agreements, including competitive wins with Gray Television, Media News Group, Jagran and Prensa Ibérica. Signed key renewals, including with Cox M
Slide 38: Consistently Exceeded 2021 Financial Expectations
$1,378M Revenues $519M ex-TAC Gross Profit1 2021 (1) Non-GAAP measures, see appendix for reconciliation to GAAP $179M Adj. EBITDA1 $1,277M $445M ORIGINAL PIPE EXPECTATIONS $127M 16% 36%2 GROWTH RATE 69% $441M Gross Profit $365M 38% CONSISTENTLY EXCEEDED 2021 FINANCIAL EXPECTATIONS (2) Pro Forma ex-T
Slide 39: FY 2022 Guidance
(1) Non-GAAP measures, see appendix for reconciliation to GAAP. We calculate Adjusted EBITDA as Net income (loss) before net financial expenses, income tax expenses/ benefit and depreciation and amortization, further adjusted to exclude share-based compensation and other noteworthy income and expens
Slide 40: Agenda
AGENDA Capturing Share of $64B Ad Market & Taboola Overview Q2 Updates & Momentum Taboola’s Differentiation and Why We Win 1 2 3 Financial Update 4
Slide 41: Taboola Focuses on Profitable Growth
TABOOLA FOCUSES ON PROFITABLE GROWTH Upside in our model Conservative growth assumed for core base Additional upside from existing growth initiatives Long-term model 20%+ ex-TAC Gross Profit Growth 30%+ Ratio of Adjusted EBITDA to ex-TAC Gross Profit (1),(2),(3) Non-GAAP measure, see appendix for re
Slide 42: Continued Growth from New Supply and Installed Base
CONTINUED GROWTH FROM NEW SUPPLY... HELPS PROVIDE FUEL FOR GROWTH FROM A STRONG INSTALLED BASE. (1) New digital property partners within the first 12 months that were live on our network (2) Net Dollar Retention (ex-TAC Gross Profit) is the net growth of ex- TAC Gross Profit from existing digital pr
Slide 43: Anything, Anywhere Growth Initiatives Provide Upside
Core Business $1B+ in 2021 & Growing Rapidly2 A N Y T H I N G $100M’s in 20213 $10M’s in 20211 A N Y W H E R E New products and segments (TV ads, eCommerce, app downloads, gaming...) Taboola News (mobile carriers, device manufacturers, CTV...) (1)(2)(3)Source: Company data, Revenues(3) Includes Conn
Slide 44: Strong Financial Profile
STRONG FINANCIAL PROFILE 2022 ESTIMATES ARE GUIDANCE MIDPOINTS HIGH PROFITABILITY FAST GROWING STRONG BALANCE SHEET GENERATING CASH FLOW 23% 25.8% $308.5M $146M $605M 2022E ex-TAC1 $156M 2022E Adj. EBITDA2 $20.9M Q2 2022 Net Cash3 Strong Positive Free Cash Flow Generation Five Year Compounded ex-TAC
Slide 45: Thank you.
Thank you. ‹#›
Slide 46: Appendix
APPENDIX
Slide 47: Our Model in a Nutshell
OUR MODEL IN A NUTSHELL ‹#› Revenues(1) Traffic Acq Cost (Value to publishers) ex-TAC Gross Profit(2) Cost of Revenues Gross profit R&D S&M G&A Operating Income $909 ($627) $282 ($48) $234 ($73) ($110) ($34) $17 $1.00 (100%) ($0.69) $0.31 ($0.05) $0.26 ($0.08) ($0.12) ($0.04) – = – = – – – = Model c
Slide 48: Historical & Projected Revenues & ex-TAC Gross Profit
HISTORICAL & PROJECTED REVENUES & EX-TAC GROSS PROFIT1 (REPORTED BASIS) ‹#› (1) Non-GAAP measure, see appendix for reconciliation to GAAP Note: 2022 projections reflect the mid-point of current company guidance.
Slide 49: Key 2022 Model Assumptions
KEY 2022 MODEL ASSUMPTIONS ex-TAC Gross Profit1 Historically, Taboola grew 20%+ (CAGR ’17-’21) In 2021, Taboola generated $519 million ex-TAC Gross Profit For FY 2022, the Company expects ex-TAC Gross Profit in range of $595 - 615M ADJUSTED EBITDA2 $179 million in 2021 and grew faster than ex-TAC Gr
Slide 50: Selected GAAP and Non-GAAP Metrics
SELECTED GAAP AND NON-GAAP METRICS ‹#› 1 2 (1)Non-GAAP measures, see appendix for reconciliation to GAAP Note: 2022 projections reflect the midpoint of current company guidance. 2 1 2 (1) (1)
Slide 51: FY 2022 Guidance
(1) Non-GAAP measure, see appendix for reconciliation to GAAP FY 2022 GUIDANCE ‹#› 1 2 2 1 2 (1) 1
Slide 52: Additional Modeling Assumptions
ADDITIONAL MODELING ASSUMPTIONS Interest expense of approximately $4M per quarter associated with $300M term loan related to the Connexity acquisition Share based compensation of $128M in 2021 unusually high as a result of going public triggering event, 2022 estimated at $77M Depreciation & Amortiza
Slide 53: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION ‹#› Note: Although we provide guidance for Adjusted EBITDA, we are not able to provide guidance for projected Net income (loss), the most directly comparable GAAP measures. Certain elements of Net income (loss), including share-based compensation expenses, are not pred
Slide 54: 2021 Quarterly Results: Adjusted EBITDA Reconciliation
2021 QUARTERLY RESULTS: ADJUSTED EBITDA RECONCILIATION ‹#› 1A substantial majority is Share-based compensation expenses related to going public. 2 Relates to the acquisition of ION Acquisition Corp. 1 Ltd. and going public. 1 2 1 2
Slide 55: ex-TAC Gross Profit Reconciliation
EX-TAC GROSS PROFIT RECONCILIATION ‹#› Note: 2022 projections reflect the midpoint of current company guidance.
Slide 56: Ratio of Adjusted EBITDA to ex-TAC Gross Profit Reconciliation
RATIO OF ADJUSTED EBITDA TO EX-TAC GROSS PROFIT RECONCILIATION ‹#›
Slide 57: ex-TAC Gross Profit Margin Reconciliation
EX-TAC GROSS PROFIT MARGIN RECONCILIATION ‹#›
Slide 58: Historical & Projected Adj. Gross Profit Margin Reconciliation
HISTORICAL & PROJECTED ADJ. GROSS PROFIT MARGIN RECONCILIATION Note: Adj. Gross Profit Margin is calculated by dividing Gross profit by ex-TAC Gross Profit. 2022 projections reflect midpoint of company’s current guidance. ‹#›
Slide 59: Historical Free Cash Flow Reconciliation
HISTORICAL FREE CASH FLOW RECONCILIATION (1) Adj. EBITDA plus the change in working capital reflects the Net cash provided by operating activities. For estimated periods, Net cash from operating activities assumes 53-57 days payables outstanding and 40-45 days sales outstanding. ‹#› 1
Slide 60: Consolidated Balance Sheet
CONSOLIDATED BALANCE SHEET ($ in millions) As of Dec 31, 2019 As of Dec 31, 2020 As of Dec 31, 2021 Cash, cash equivalents and short-term deposits $ 116 $ 243 $ 319 Total Assets $ 482 $ 580 $ 1,598 Total Liabilities & Convertible Shares $ 475 $ 534 $ 830 Accumulated Deficit $ (40) $ (31) $ (56) Addi
Slide 61: Quarterly Results: ex-TAC Gross Profit Reconciliation
QUARTERLY RESULTS: EX-TAC GROSS PROFIT RECONCILIATION ‹#›
Slide 62: 2022 Full Year Guidance: ex-TAC Gross Profit Reconciliation
2022 FULL YEAR GUIDANCE: EX-TAC GROSS PROFIT RECONCILIATION ‹#›
Slide 63: Thank You!
THANK YOU!