Taboola.com Ltd. · NASDAQ:TBLA
Taboola.com — Merger or Acquisition (September 2021)
57 slides from Taboola.com's merger presentation, Sep 28, 2021
Slide 1: Commerce with Connexity: Powering e-Commerce Recommendations for the Open Web
Commerce wit? Connexity Powering e-Commerce Recommendations for September 28, 2021 the Open Web
Slide 2: Disclaimer
DISCLAIMER Forward-Looking Statements Certain statements in this Presentation may be considered forward-looking statements. Forward-l Heoking esemeniegnerly relat fo fra events cr Taboclicom Lia's (the “Conan fatre sani or opening perfomance In some case, you can ienilyfoewart-lookng satemens by ter
Slide 3: Today's Presenters
TODAY’S PRESENTERS Adam Singolda Founder & CEO Bill Glass CEO of Connexity Stephen Walker CFO Tom Inbal VP Strategy & Corporate Development
Slide 4: E-Commerce Is Revolutionizing the Open Web
E-COMMERCE IS REVOLUTIONIZING THE OPEN WEB e-Commerce is skyrocketing with $5 trillion in online retail sales €\Wirecutter bila Q coal a year and $40 billion in ad spend’ fept Wome caren Teh Sey Kleen Aolmer Meeps, Dads Social Media platforms such as Instagram and WeChat are becoming e-Commerce netw
Slide 5: Agenda
AGENDA About Taboola Market Opportunity Taboola E-Commerce (with Connexity) Synergies Mid Term (3-5 years) Financial Information - 2021, 2022 Guidance
Slide 6: We Power Recommendations for the Open Web
: Ss “Sayles We Power Recommendations for The Open Web Helping people discover things they may like
Slide 7: Taboola = Search In Reverse
TABOOLA = SEARCH “IN REVERSE” From people looking for information to information looking for people slpcoU EC) ywiout pnilesi m'l rlo1s92 slpooD
Slide 8: You Have Seen Taboola Before
YOU HAVE SEEN TABOOLA BEFORE
Slide 9: 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. q DAILY 516M 2 USERS' wv fa) More than Twitter and Snap combined? 1 Petabyte | 330K
Slide 10: Full Tech Stack for Publishers
FULL TECH STACK FOR PUBLISHERS: Janews =| MISSION CRITICAL FOR THE OPEN WEB —_— $2B+ Paid To Publishers Over 3 Years! a= — srensoeeD / LK —— Monetization Apple Recommends The App All The Monetizing with non-interruptive, Intellectuals Are Using To Beat... native ads Engagement _\<_e_ 7 | Engaging us
Slide 11: Long-Term, Exclusive Partnerships with Publishers
THAT’S WHY TABOOLA GETS LONG- TERM, EXCLUSIVE PARTNERSHIPS Ww ITH PUBLISHERS “NBC News Group is excited to continue working with Taboola to expand the reach + 118% NDR in 2020" of our content and continue driving our already impressive growth. We recognize the + 9,000 publishers value of Taboola’s t
Slide 12: Leading Premium Network of Trusted Publishers
LEADING PREMIUM NETWORK OF TRUSTED PUBLISHERS @. MOAT IAS Bice @ white ops [D\Z | DoubleVerify
Slide 13: 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 9,00 # Active Advertisers Time - Brand safe ad placements * Target ads based on what people truly care about 2. © Mercedes-Benz 2018-1 2018-2 2018-3 20184 2019-1 20192 20
Slide 14: Having an Amazing Year
HAVING AN AMAZING YEAR Tab@9laNews AND IT’S JUST THE BEGINNING Went public, raised $500M+ from great investors - Fidelity, Federated, Baron, others Beat Q1 and Q2 projections, raising expectations each quarter Winning incredible partners, and progressing on our growth initiatives organically and ino
Slide 15: Recommending Anything, Anywhere
RECOMMENDING ANYTHING, ANYWHERE A MULTI BILLION DOLLAR OPPORTUNITY Taboela Core Business $10M’s in 2020! $10M’s in 2020° ANYWHERE $1B+in 202008 | ANY THING Growing Rapidly? Taboola News New products and segments 1 (mobile carriers, device (TV ads, eCommerce, app manufacturers, CTV...) downloads, gam
Slide 16: Agenda
AGENDA About Taboola Market Opportunity Taboola E-Commerce (with Connexity) Synergies Mid Term (3-5 years) Financial Information - 2021, 2022 Guidance
Slide 17: The E-Commerce Market Is Growing Fast
Retail Ecommerce Sales Worldwide, 2019-2025 trillions, % change, and % of total retail sales 2019 2020-2021 Retail ecommerce sales @%change — @ %of total retail sales Note: includes products or services ordered using the internet, regardless of the method of payment or fulfillment; excludes travel a
Slide 18: E-Commerce: One of the Fastest Growing Digital Ad Segments
E-COMMERCE IS ONE OF THE FASTEST GROWING DIGITAL AD SEGMENTS AND DRIVEN BY INTENT Retail Industry Digital Ad Spending US, 2019-2023 $66.64 2019 2020 2021 2022 2023 @ billions @% change Source: eMarketer, June 2021 eMarketer | Insiderintelligence.com US Ecommerce Channel Ad Spending, 2019-2024 billio
Slide 19: The Future of the Open Web Is E-Commerce
THE FUTURE OF THE OPEN WEB IS E-COMMERCE 60% of publishers list e-commerce as a top revenue opportunity." Publishers generating revenue from e-commerce has grown over 3x in the last year.? There are nearly 150 Commerce Editors currently in the US - one of the fastest growing roles in the newsroom.?
Slide 20: Expanded Taboola TAM to $124B with E-Commerce Ad Budgets
EXPANDED TABOOLA TAM TO $124B WITH E-COMMERCE AD BUDGETS Open Web - $64B SEEES Tota SEES sas e-Commerce - ~$40B Walled Garden - $260B + e-Commerce - ~$60B Merchants need effective channels beyond the walled gardens. “For advertisers seeking brand- Safe, transparent partners, reputable publishers del
Slide 21: Agenda
AGENDA About Taboola Market Opportunity Taboola E-Commerce (with Connexity) Synergies Mid Term (3-5 years) Financial Information - 2021, 2022 Guidance 21
Slide 22: Connexity Is One of the Largest Open Web E-Commerce Media Platforms
CONNEXITY IS ONE OF THE LARGEST OPEN WEB E-COMMERCE MEDIA PLATFORMS sg connexity | , Open Web I Walled | [| O | | ' Gardens Merchants TabOla Note: Illustrative diagrams, not to scale.
Slide 23: How Connexity Drives Shoppers to Merchants in the Open Web
HOW CONNEXITY DRIVES SHOPPERS TO MERCHANTS IN THE OPEN WEB 1 Percentage of ex-TAC Gross Profit in 2020. 75%! Hemey ———————————+ Publishers Solutions Open Fa} :, . ae | Web Monetized Links in Editorial Content Product Listings in Shopping Experiences 25%! Merchants wae — Audience Network (Walled Gard
Slide 24: Connexity's Direct Relationships with Blue Chip Partners
CONNEXITY’S DIRECT RELATIONSHIPS WITH BLUE CHIP PARTNERS Select Direct h lationshif 7, 5 ee ; ig BALLARD . Vries. DesicNs BIRKENSTOCK "=r" paz cy BuzzFeep conpii ast BPchewy..n — ay shop Dyrenep COSMOPOLITIN © Baityzeanan ~=.dash Forbes - i PA) wurescron ebay Sruuncscon LANDS’ Jenovo GQ ‘eguardian H
Slide 25: Publisher Evolution with Connexity in Commerce Content
PUBLISHER EVOLUTION WITH IN COMMERCE CONTENT Plugging in eCommerce Connexity enabling monetization for shopping leads from content that was already being written Connexity Value-Add One line of code = easy access to thousands of Investing in Commerce Content Strategy Dedicated “commerce” editors usi
Slide 26: Connexity Publisher Products on Editorial Content
CONNEXITY PUBLISHER meta a moti PRODUCTS ON EDITORIAL CONTENT 12 Best Mattresses of 2021 HEARST Ser oulytobackpain ad blot dep sep QP rcs Lexie Sachs. *Connexity Link $1,699.00 BUY TODAY one thats actully worth the cost. GO GAD Soe en 26
Slide 27: Connexity Publisher Products on Editorial Content
CONNEXITY PUBLISHER PRODUCTS ON EDITORIAL CONTENT GANNETT oreioned Cloud Sofa *Connexity Monetized Link Throne, The Home Depot may have you whipping out your wales ata glance, Bone Throne. a *Connexity Pus, wo just ely wanted to fo he Daanonys fora dey Monetized Link ‘About the Bone Throne Tab2la aS
Slide 28: Connexity Publisher Products on Editorial Content
CONNEXITY PUBLISHER PRODUCTS ON EDITORIAL CONTENT ate vee ye Yok Cine onion Fane Set Bet or no 12 top-rated weighted blankets that help to Neus Cone Australia deliver your best sleep yet 58-inch A5 Series 4K *Connexity Monetized Link up to 50 per cent off Calming *Connexity Monetized Link 28
Slide 29: Connexity Publisher: Building a Shopping Site
CONNEXITY PUBLISHER BUILDING A SHOPPING SITE Product Listings Syndicated into Curated Shopping Experience $& meredith REALSINPLE Makeup Syndicated Product Listings 29
Slide 30: Connexity by the Numbers
CONNEXITY BY THE NUMBERS’ - POWERING E-COMMERCE IN THE OPEN WEB AT SCALE 1,600+ $4B+ 750M direct merchant Gross Merchandise Product offerings relationships Sales (SKUs) 1IM+ Monthly transactions (1) | Company data. Connexity information includes pro forma Skimlinks results for periods prior to its a
Slide 31: Direct Relationship with Merchants
DIRECT RELATIONSHIP WITH MERCHANTS * 90%+ of revenue comes from direct merchants relationships * 10% from affiliates that Connexity is not directly managing ¢ 65% of revenue is CPC, 35% is CPA * CPC budgets demonstrate how merchants completely trust Connexity’s unique technology
Slide 32: Agenda
AGENDA About Taboola Market Opportunity Taboola E-Commerce (with Connexity) Synergies Mid Term (3-5 years) Financial Information - 2021, 2022 Guidance NY20000842X3---000032 32
Slide 33: Of Open Web Publisher Revenue Will Be E-Commerce
VE Source: Company Estimates OF OPEN WEB PUBLISHER REVENUE WILL BE E-COMMERCE 33
Slide 34: Publishers Need Intent
PUBLISHERS NEED INTENT Rare fossil of 25-million-year-old eagle that hunted koalas found in South Australia ~95% of Publisher a Oda Has NO Intent TabOOla Source: Company Estimates. \ OTTO overstock *kmacys ebay ewayfair 34
Slide 35: Intent Drives Yield
INTENT DRIVES YIELD 1 MIN ON GOOGLE SEARCH = 15 MIN ON FACEBOOK TIME 15Tmin PL _-___------------- per month $87B* 420Bmin | __.- bee eee G per month 1 on Search 0.38 6.04 YIELD cents cents per per min min Tabla * Search revenue Source: Company Analysis. Numbers cited are 2020.
Slide 36: Over the Next Years: More Traffic with Intent and Higher Yield
OVER THE NEXT 5 YEARS MORE TRAFFIC WITH INTENT + HIGHER YIELD - Bring Connexity merchants to existing traffic (~5%) - Data driven approach (what/when to write) - Editorial commitment to e-Commerce - Launching shopping sites PUBLISHER TRAFFIC WITH INTENT YIELD Integrating Connexity: increase traffic
Slide 37: Synergies - $100M+ Annual Ex-TAC in Years
SYNERGIES - $100M+ ANNUAL EX-TAC IN 4 YEARS Synergy Description 1. Connexity on Taboola Publishers - and grow publishers % of traffic with intent 2. Take Connexity Global 3. Connexity merchant demand on Taboola publisher supply 4. Expanding Connexity’s Client base by Leveraging Taboola Ad Sales 5. B
Slide 38: 1. Upsell Connexity to Taboola Publishers
1. UPSELL CONNEXITY TO TABOOLA PUBLISHERS IN EXISTING MARKETS 6% ae ‘St Germany of Connexity’s Revenue rong MOC comes from Taboola ho publishers. eo +$30M Intent Traffic % in Ex-TAC = a 4 38
Slide 39: 2. Take Connexity Global
2. TAKE CONNEXITY GLOBAL (where Connexity isn’t operating) Finland Sweden, +$25 M Denmark 4 Russia Netherlands Pola in Ex-TAC 5 Spain Israel ( Colombia. gy = , Argentina FS New Zealand Intent Traffic %
Slide 40: 3. Connexity Demand on Taboola Supply
3. CONNEXITY DEMAND ON TABOOLA SUPPLY +$10M in Ex-TAC Buy Headphones and Earphones Online - Premium High End Headphones Specie | HesphontNcorh Shop Now | homes vandalized to approve $2K... Tabeola }d Earphones Online - Headphones Shop Now 40
Slide 41: 4. Expanding Connexity's Client Base Leveraging Taboola Ad Sales
4. EXPANDING CONNEXITY’S CLIENT BASE BY LEVERAGING TABOOLA AD SALES 2 40 US Advertiser ; +$20M sellers US Advertiser a ECTAC (Connexity alone) sellers (with Taboola) 4
Slide 42: 5. Better Personalization/Yield by Merging Datasets
5. BETTER PERSONALIZATION/YIELD BY MERGING DATASETS - RECOMMENDATIONS + E-COMMERCE Tabla Tab99la Readership Data‘ - 500M daily active users - 30billion clicks (“people who read this also read”) (1) Source: Company data ‘sf connexity 2, Commerce Data’ —— ®——_ Intent data from 1M transactions i a mont
Slide 43: Agenda
AGENDA About Taboola Market Opportunity Taboola E-Commerce (with Connexity) Synergies Mid Term (3-5 years) Financial Information - 2021, 2022 Guidance 43
Slide 44: Important Notes on Financials
IMPORTANT NOTES ON FINANCIALS . Connexity business is reported on a Gross / Net hybrid basis . Transaction closed September 1, so one month of Connexity will be included in Q3 financials . Important definitions in the financials we are sharing: o “Reported Basis” means that Connexity only appears in
Slide 45: Transaction Recap
Transaction Recap One of the largest e-Commerce, media platforms in the world» Subject to regulatory approval and customary closing conditions $800 million Total Consideration Including purchase price and retention incentives $590M cash of which $300M debt financed $210M in Taboola stock and equity
Slide 46: Strong H1: Beat Expectations Across All Measures in Q1 and Q2
STRONG H1: BEAT EXPECTATIONS ACROSS ALL MEASURES IN Q1 AND Q2 Q1 2021A projection orojection Q22021A Q2 Guidance guidance Revenues $303 $286 6% $329 $315 - $320 4% ex-TAC Gross Profit (1) $106 $95 12% $117 $108 -$113 6% Gross Profit $89 $78 14% $100 $88 - $95 9% Adjusted EBITDA (1) $34 $25 34% $41 $
Slide 47: Historical & Projected Revenues & ex-TAC Gross Profit (Reported Basis)
HISTORICAL & PROJECTED REVENUES & EX-TAC GROSS PROFIT‘ (REPORTED BASIS) Revenues ex-TAC Gross Profit @Dd Dd OD ~- @]DdO @Q ®@ @> $1,724 $1,189 $382 $758 $282 2016A 2017A 2018A 2019A 2020A 2021E 2022E 2016A 2017A 2018A 2019A 2020A 2021E 2022E @ YoY growth (1) Non-GAAP measure, see appendix for reconc
Slide 48: Historical & Projected Revenues & ex-TAC Gross Profit (Pro Forma Basis)
HISTORICAL & PROJECTED REVENUES & EX-TAC GROSS PROFIT’ (PRO FORMA BASIS) Revenues ex-TAC Gross Profit $1,724 $1,352 $869 $344 a $276 $193 2016A 2017A 2018A 2019A 2020A 2021E 2022E 2016A 2017A 2018A 2019A 2020A 2021E 2022E @ @® Yor growth (1) Non-GAAP measure, see appendix for reconciliation to GAAP
Slide 49: Q3 2021 Guidance: Reported Basis with Connexity as of September 1
Q3 2021 GUIDANCE: REPORTED BASIS WITH CONNEXITY AS OF SEPTEMBER 1 (S's in millions) Guidance Revenues $338 to $342M ex-TAC Gross Profit (1) $122 to $124M Gross Profit $101 to $103M Net income (loss) ($7) to ($5M) Adjusted EBITDA (1) $36 to $37M Acquisition of Connexity closed on September 1, 2021, t
Slide 50: FY 2021 and FY 2022 Guidance: Reported Basis
FY 2021 and FY 2022 GUIDANCE: REPORTED BASIS WITH CONNEXITY AS OF SEPTEMBER 1 Tabla ($'s in millions) Guidance FY '22 FY 2021 FY 2022 vs. FY '21 (Midpoint) Revenues $1,392 to $1,400M $1,698 to $1,748M 23.5% ex-TAC Gross Profit (2) $503 to $509M $645 to $665M 29.6% Gross Profit $418 to $424M $530 to
Slide 51: Additional Modeling Assumptions
ADDITIONAL MODELING ASSUMPTIONS Interest expense of approximately $3.5M a quarter associated with $300M term loan Share based compensation of approximately $126M in 2021 unusually high as a result of going public triggering event, 2022 estimated at $73M " Fully weighted diluted share count was appro
Slide 52: Key Financial Takeaways
“ss connexity KEY FINANCIAL TAKEAWAYS. Strong H1 2021, exceeding expectations, builds on multi-year positive track record Adding Connexity strengthens further our financial profile and brings high value demand and product capabilities in important e-commerce category Expect $100 million in ex-TAC Gr
Slide 53: Taboola
TabO?ela
Slide 54: Appendix
TabOela APPENDIX
Slide 55: ex-TAC Gross Profit Reconciliation (Reported Basis)
EX-TAC GROSS PROFIT RECONCILIATION (REPORTED BASIS) ($ in Millions) 2016A 2017A 2018A 2019A 2020A 2021E 2022E $1,188.9 $1,396.0 $1,724.0 Traffic Acquisition Cost (TAC) 427.7 544.2 627.7 $798.0 $806.5 $890.0 $1,069.0 Other Cost of Revenues 23.2 35.1 47.3 63.9 62.9 $85.0 $93.0 Gross Profit $101.2 $178
Slide 56: ex-TAC Gross Profit Guidance Reconciliation
EX-TAC GROSS PROFIT GUIDANCE RECONCILIATION (REPORTED BASIS) (S's in millions) Guidance Q3 2021 FY 2021 FY 2022 Revenues $338 - $342M $1,392 - $1,400M $1,698 - $1,748M Traffic Acquisition Cost (TAC) ($217 - $219M) ($886 - $894M) ($1,048 - $1,090M) Other Cost of Revenues ($20 - $22M) ($84 - $86M) ($1
Slide 57: Adjusted EBITDA Guidance Reconciliation
ADJUSTED EBITDA GUIDANCE RECONCILIATION (REPORTED BASIS. BASED ON THE MIDPOINT OF CURRENT GUIDANCE) ($'s in millions) Q3 2021E FY 2021E FY 2022E Estimated Net Income (Loss) ($6) ($38) ($8) Estimated Adjustments: Finance Expense 2 5 15 Tax Expense 5 22 31 Depreciation and A izati 12 49 76 Share Based