Slide 1: Management Presentation November 10, 2021
2 eautifalPlacestoVst Management Presentation November 10, 2021
Slide 2: Disclaimer
Disclaimer : Forward-Looking Statements sc look’ future financial or ‘of Taboola.com Ltd, (the “Company”). In some cases, ooking statements ey such a may’, “Should” “expect, “inten”, “wil”, “estimate”, “anticipate”, “believe”, “predic” “potential” cr “continue”, or the negative ofthese terms or vari
Slide 3: Today's Presenters
Today’s Presenters Adam Singolda Founder & CEO = Founded Taboola over 13 years ago = Has led the company as its CEO ever since Stephen Walker CFO = 6+ years at Taboola * Led several of Idealab's portfolio companies, including Perfect Market = Prior experience at Disney & General Electric
Slide 4: Agenda
AGENDA Taboola Overview Investment Highlights Taboola + Connexity = Even Stronger *« Growing Yield, Explained Financial Information
Slide 5: We Power Recommendations for The Open Web
We Power 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 slpocoV ~@ ylout pnilesi m'l ria1s92 slpood
Slide 7: You Have Seen Taboola Before
YOU HAVE SEEN TABOOLA BEFORE
Slide 8: Having an Amazing Year
HAVING AN AMAZING YEAR Beating guidance, raised expectations each quarter Acquired Connexity, creating a powerful e-Commerce partner for publishers Winning incredible new publishers, building brand safety partnerships and progressing on our growth initiatives e Seeing momentum in High Impact Placeme
Slide 9: Updated Full Year 2021 Guidance
UPDATED FULL YEAR _ 2021 GUIDANCE 2020 oS ae $1,189M ors Pot $319M extacGrssProit! $ 382M $512-$515M = 34-35% Aaj. EBITDA $106M $174-$177M 64-66% Pw ey ‘INCREASED GUIDANCE ACROSS | MEASURES ) Non-GAAP measures, see appendix for reconciliation to GAAP
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. _ . DAILY 516M 2 USERS" y & More than Twitter and Snap combined? 1 Petabyte | 330K
Slide 11: Full Tech Stack for Publishers
FULL TECH STACK FOR PUBLISHERS: LONG-TERM, EXCLUSIVE PARTNERSHIPS WITH PREMIUM PUBLISHERS 118% NDR in 20201 9,000 publishers Global Publishers on a 5+ Year Contract with Taboola @ ces interactive Bloomberg Ymsn sporti @usatoo MB ae CNBC NBC NEWS G synacor DailyenMail —Lagardére~— axel springer_ Tabo
Slide 12: Advertisers Choose Taboola for the Open Web
ADVERTISERS CHOOSE # Active Advertisers TABOOLA FOR THE OPEN WEB ~*~” 13000 12000 + Massive reach — 516M Daily Active Users’ oe 10000 + Performance focus with measurable ROI 9,000 emo Time, - Brand safe ad placements 2OLE1 20182 20183 IOLE4 20191 20192 20193 2019-4 20201 20202 20203 * Target ads bas
Slide 13: Agenda
AGENDA Taboola Overview Investment Highlights Taboola + Connexity = Even Stronger * Growing Yield, Explained Financial Information
Slide 14: Investment Highlights
INVESTMENT HIGHLIGHTS The Open Web is a massive categ f Taboola’s technology is resilient to th disappearance of third-party cookie: ae Product-led growth fueled by a network effec’ RG Platform advantage driven by Taboola’s technology Numerous paths to accelerate growth Proven, founder-led managemen
Slide 15: Taboola Is Poised to Capture Share of the $64B Open Web Market
El TABOOLA IS POISED TO CAPTURE SHARE OF THE $64B OPEN WEB MARKET PT Tube) Google News The Open Web e More than ads, product led - driving engagement, and audience to the entire publisher org e Exclusive & direct relationships with publishers/advertisers - enables end-to-end innovation and predictab
Slide 16: Taboola Tech Is Built for a Cookie-less World
TABOOLA TECH IS BUILT FOR A COOKIE-LESS, IDFA/ . . . Taboola’s strong yield performance despite 3rd party Taboola has its own 1st party cookie . cookies being blocked in the industry for years: recommending personalized editorial content - Apple started blocking 3rd party cookies in 2017 enables ser
Slide 17: Scale Matters: Growth with Built-in Network Effect
SCALE MATTERS IN OUR INDUSTRY - GROWTH WITH A BUILT-IN NETWORK EFFECT More Publisher More Users Reached Partners More Data Generated Higher Yield More Advertisers (Better Results for Advertisers More Successful
Slide 18: Platform Advantage Driven by Investment in Tech
‘4 PLATFORM ADVANTAGE DRIVEN BY INVESTMENT IN — TECH MAD. t f= —— = fee CVs =| y -) == } = —— | 500 pao star rig | 1 00 in Algo & Data | $1 oom Annual R&D Investment Source: Company data, 2021 estimates 18
Slide 19: Recommending Anything, Anywhere
Ei RECOMMENDING ANYTHING, ANYWHERE A MULTI BILLION DOLLAR OPPORTUNITY TabOla Core Business $10M’s in 2020' $10M’s in 2020? $1B+ in 2020 & ANYTHING Growing Rapidly? New products and segments (TV ads, eCommerce, app downloads, gaming...) wD | (eexez) Fig TAD “These Socks Are So Soft You'll Never Want
Slide 20: Fast Growing Premium Video Demand
FAST GROWING PREMIUM VIDEO DEMAND ON PREMIUM en PLACEMENTS — +$90M 9» / a a / Technology Y Integration & Go-To-Market + Acquired ConvertMedia dl $20M 0 21 Annual Run Rate (Revenues)
Slide 21: Proven, Founder-Led Management Team
G PROVEN, FOUNDER-LED MANAGEMENT TEAM Adam Singolda Stephen Walker Eldad Maniv Lior Golan 13 years at Taboola 6 years at Taboola 8 years at Taboola 11 years at Taboola Founder & CEO CFO President & COO cTO Kristy Sundjaja Aviv Sinai Ran Buck 1 year at Taboola 13 years at Taboola 7 years at Taboola S
Slide 22: Agenda
AGENDA Taboola Overview Investment Highlights. Taboola + Connexity = Even Stronger * Growing Yield, Explained Financial Information
Slide 23: 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 Sone bs q pen a year and $40 billion in ad spend! fom foettren ete Social Media platforms such as Instagram and WeChat are becoming e-Commerce networks New + updated e-Commerce
Slide 24: The Future of the Open Web Is E-Commerce
THE FUTURE OF THE OPEN WEB IS E-COMMERCE $1b GMS in 2020, 47% of H1 2021 media revenue, 56% YoY growth 60% of publishers list e-commerce as a top Buzz revenue opportunity.! Feep Publishers generating revenue from e-commerce $500m GMS in 2020, ecommerce has grown over 3x in the last year.2 toes onrev
Slide 25: Expanded Taboola TAM to $124B with E-Commerce Ad Budgets
EXPANDED TABOOLA TAM TO $1 24B Merchants need effective channels WITH E-COMMERCE AD BUDGETS perenne at TSE. Open Web - $64B “For advertisers seeking brand- B B B | B TaboOola safe, transparent partners, reputable publishers deliver B | | | a $64B exposure and qualified customers i j ” e-Commerce - ~
Slide 26: Connexity Publisher Products on Editorial Content
CONNEXITY PUBLISHER ToPodiatrists And User Reviews PRODUCTS ON EDITORIAL CONTENT HEARST Reowhotvaucanscheve, sma CITI. ex. | 12 Best Mattresses of 2021 | Say goodbye to back pain and hello to deep sleep. Oe ‘Connexity Link ate ie Spam 221 pc rg rep tin Lexie Sachs. ty Gon Housezping tite eis Lab Dir
Slide 27: Connexity Publisher: Building a Shopping Site
CONNEXITY PUBLISHER i _—_— BUILDING A SHOPPING SITE Product Listings Syndicated into Curated Shopping Experience $8 meredith Living Room Sets NUN 27
Slide 28: 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 29: Open Web Publisher Revenue Will Be E-Commerce
1 OF OPEN WEB PUBLISHER REVENUE 3 WILL BE E-COMMERCE
Slide 30: Publishers Need Intent
PUBLISHERS NEED INTENT Rare fossil of 25-million-year-old eagle that hunted ko: found in South Australia ~5% of Traffic LETTE Awesome E-Bikes You Can Buy Right Now ~95% of Publisher Traffic Toda —S OTTO Woverstock Tabla Source: Company Estimates.
Slide 31: Intent Drives Yield
INTENT DRIVES YIELD 1 MIN ON GOOGLE SEARCH = 15 MIN ON FACEBOOK
Slide 32: Synergies: $100M+ Annual Ex-TAC in Years
SYNERGIES $100M+ ANNUAL EX-TAC IN 4 YEARS MORE TRAFFIC WITH INTENT + HIGHER YIELD Integrating Connexity: increase traffic with intent + grow yield: - Bring Connexity merchants to existing traffic (~5%) - Data driven approach (what/when to write) - Editorial commitment to e-Commerce - Launching shopp
Slide 33: Synergies: $100M+ Annual Ex-TAC in Years
SYNERGIES - $100M+ ANNUAL EX-TAC IN 4 YEARS e Connexity on Taboola Publishers - and grow publishers % of traffic with intent e Take Connexity Global e Connexity merchant demand on Taboola publisher supply e Expanding Connexity’s Client base by Leveraging Taboola Ad Sales e Better personalization/yie
Slide 34: Strong Initial Integration Momentum
STRONG INITIAL INTEGRATION MOMENTUM People - London office locations merged; NY planned in H1-2022. Complementary teams sharing info, tools, and resources. Ad Sales - Beginning global expansion of Connexity via Taboola’s international ad sales teams (first in China, Brazil) Publishers - started upse
Slide 35: Agenda
AGENDA Taboola Overview Investment Highlights. Taboola + Connexity = Even Stronger * Growing Yield, Explained Financial Information
Slide 36: What Makes Up Yield
WHAT MAKES UP YIELD CTR Click Through Rate Cost Per Click Conversion Rate Yield
Slide 37: What Makes Up Yield: CTR
WHAT MAKES UP YIELD Click Through Rate (CTR): e The number of clicks that an ad receives divided by the number of times the ad is shown (impressions) CTR e A high CTR is a good indication that users Click Through Rate s find your ads relevant Yield
Slide 38: What Makes Up Yield: CPC
WHAT MAKES UP YIELD Cost Per Click (CPC): The amount advertisers pay Ag CPC es for each click on their ads. Cost Per Click Yield
Slide 39: What Makes Up Yield: Conversion Rate
WHAT MAKES UP YIELD @) Yield Conversion Rate The percentage of users who Conversion a have completed a desired action Rate (e.g. purchase) after clicking on an ad. 5a &
Slide 40: Growing Just One Factor Can Also Be Detrimental
GROWING JUST ONE FACTOR CAN ALSO BE DETRIMENTAL Growing CTR can be good Growing CTR can be bad CTR CPC Conversion Rate Yield Base Case 1% $0.30 2% $3 CTR Increases by 26%: 1.25% $0.30 2% $3.75 CTR Increases by 25%: 1.25% $0.22 1.5% $2.75 CTR Decreases by 25%: 0.75% $0.45 3% $3.38
Slide 41: How We Increase Yield: CTR and Conversions
HOW WE INCREASE YIELD CTR and Conversions Click Through Rate, Conversion Rates e Algorithmic improvements drive better prediction of what users will engage with e More advertisers on the platform and higher diversity of campaigns e More data that provides more contextual signals enables more accurat
Slide 42: How We Increase Yield: CPC
HOW WE INCREASE YIELD CPC Cost Per Click e More advertisers on the platform increases auction density e Better attribution measurement better reflects the value of conversions e Automated bidding (SmartBid) optimizes bids dynamically
Slide 43: Introducing SmartBid
INTRODUCING SMARTBID DIMENSION - “Autonomous car experience” for advertisers Optimize bids by publisher performance 40+ situational signals - location, time of day, day of week, device, etc. 43
Slide 44: Agenda
AGENDA Taboola Overview Investment Highlights. Taboola + Connexity = Even Stronger * Growing Yield, Explained Financial Information
Slide 45: Taboola Focuses on Profitable Growth
TABOOLA FOCUSES ON PROFITABLE GROWTH ex-TAC Gross Profit * Adj. EBITDA * (Sin millions) (8 in millions) CAGR "17A-'21E: 24.4% $176} $106 $67 U il a 2015A 2016A 2017A 2018A 2019A 2020A Ere 2015A 2016A 2017A 2018A 2019A 2020A 2021E MM YoY growth HE Ratio of Adjusted EBITDA to ex-TAC Gross Profit . Tab
Slide 46: 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! Given that investment, Ratio of Adj. EBITDA to ex- Without that investment, Ratio of Adj. EBITDA TAC
Slide 47: COVID-19 in 2020 Proved the Resiliency of Our Model
covIi D-1 9 I N 2020 P ROVED TH E Exited 2020 stronger than we entered RESI LI E N CY re) F Ce) U R M Ce] D E L with sustainably higher profitability C1.) — view! Sustainable yield increase, driving higher 200% Ssrong Recovery —_ Relentl margins _ ereness ¢ Worked with publisher partners to 120% Foc
Slide 48: Growth Driven by Core Open Web Business
GROWTH DRIVEN BY CORE OPEN 1] New Publisher ex-TAC Gross Profit 30% x = 20% 8 1% nx 7 | | | 2 ow Q | | # -10% 20% 2018 2019 2020 2.) Net Dollar Retention (ex-TAC Gross Profit) 130% 118% = 20% z 1 = 110% g 104% 5 10% é 2 0% 80% 2018 2019 2020 (2) New digital property partners within the first 12 mont
Slide 49: Selected Non-GAAP Metrics
SELECTED NON-GAAP METRICS 34% - 35% ex-TAC Gross Profit Growth 34% - 35% Ratio of Adj EBITDA to ex- TAC Gross Profit? $176M a 64% - 66% 2020A 2021E Adj EBITDA Growth Ml ADJ. EBITDA' HE oex-TAC Gross Profit? ($ in millions) ($ in millions) 80%+t Adj. Gross Profit Margin* (1),2),3)(4) Adj, EBITDA, ex-
Slide 50: Tab¢?ela
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Slide 51: Appendix
Slide 52: Our Model in a Nutshell
OUR MODEL IN A NUTSHELL Model components: Revenues") Traffic Acq Cost (Value to publishers) ex-TAC Gross Profit??) Cost of Revenues © Gross profit R&D S&M G&A Operating Income Dep, Amort, Share Based Comp, Other item Adjusted EBITDA®) Change in we@tner items() + PP&E and Capitatgsa Platform Costs Fr
Slide 53: Historical & Projected Revenues & ex-TAC Gross Profit
HISTORICAL & PROJECTED REVENUES & EX-TAC GROSS PROFIT' (REPORTED BASIS) Revenues ex-TAC Gross Profit Oooo d QD Q@]QDo 2D $1,189 $1,094 $758 $282 i J 20164 2017 20180, 20190, 2020A 20216 2022E 20160, 20178, 2018A, 20198 20208 20216 202: @ Vor growth (1) Non-GAAP measure, see appendix for reconciiaton
Slide 54: Key Model Assumptions
KEY MODEL ASSUMPTIONS = Operating costs: ex-TAC Gross Profit‘ P s ($ in millions) + Historically, Taboola grew 20%+ (CAGR 17A~20E) (s20) Ea + In 2020, Taboola generated $382 million ex-TAC Gross Profit (6.8%) 6.8% + For FY 2021, the Company currently expects ex-TAC Gross Profit in range of $512 - 51
Slide 55: Selected GAAP and Non-GAAP Metrics
SELECTED GAAP AND NON-GAAP METRICS ($ in millions, FYE) 2018A 2019A 2020A 2021E Long-Term Model Revenues $909 $1,094 $1,189 $1,365 % YoY growth 20.0% 20.3% 8.7% 14.8% ex-TAC Gross Profit $282 $296 $382 $513 % YoY growth 31.8% 5.1% 29.1% 34.3% Gross Profit $234 $232 $319 $428 % margin 83.1% 78.4% 83.
Slide 56: FY 2021 & FY 2022 Guidance: Reported Basis
FY 2021 & FY 2022 GUIDANCE: REPORTED BASIS WITH CONNEXITY AS OF SEPTEMBER 1 (S's in millions) Guidance FY '22 FY 2021 FY 2022 vs. FY '21 (Midpoint) Revenues (1) $1,363 to $1,367M $1,588 to $1,633M 18.1% ex-TAC Gross Profit (2) $512 to $515M $645 to $665M 27.7% Gross Profit $427 to $430M $530 to $550
Slide 57: Revenues Guidance Comparison
REVENUES GUIDANCE COMPARISON (8 in millions) Revenues Q3'21 Guidance Q4'21 Guidance FY '21 Guidance FY '22 Guidance = "i 7 ‘Adjusted 5 7 ; ‘Adjusted Guldence Original ‘Origine! ginal and Adjusted Original orginal and Guidence Original Original, (9128/21) Guidance (a) (9/28/21) Guidance (a) (set) Gui
Slide 58: Additional Modeling Assumptions
ADDITIONAL MODELING ASSUMPTIONS . Interest expense of approximately $3.5M per quarter associated with $300M term loan related to the Connexity acquisition . Share based compensation of approximately $126M in 2021 unusually high as a result of going public triggering event, 2022 estimated at $73M . D
Slide 59: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION ($ in Millions) 2016A 2017A 2018A 2019A 2020A Net income (loss) ($2.7) $2.8 $10.7 ($28.0) $8.5 Adjustments: Financial expenses (income) 0.8 (0.3) 1.3 3.4 2.7 Tax expenses 4.3 5.1 yes} 5.0 14.9 Depreciation and Amortization 13.3 28.2 35.3 39.4 34.0 Share Based Compensat
Slide 60: 2021 Quarterly Results: Adjusted EBITDA Reconciliation
2021 QUARTERLY RESULTS: ADJUSTED EBITDA RECONCILIATION ($ in Millions) Q1-21A Q2-21A Q3-21A Net income (loss) $18.6 ($61.4) $17.3 Adjustments: Financial expenses (income) 0.8 0.1 (14.0) Tax expenses 2:2 79 (3.5) Depreciation and Amortization 8:2 8.6 132 Share Based Compensation 5 78.5 19.9 M&A Cost
Slide 61: ex-TAC Gross Profit Reconciliation
EX-TAC GROSS PROFIT RECONCILIATION ($ in Millions) 2015A 2016A 2017A 2018A 2019A 2020A 2021E Revenues $335.6 $909.2 $1,093.8 $1,188.9 $1,364.6 Traffic Acquisition Cost (TAC) 272.7 427.7 544.2 627.7 $798.0 $806.5 $851.4 Other Cost of Revenues 12.1 23.2 35.1 47.3 63.9 62.9 $84.8 Gross Profit $50.8 $10
Slide 62: Ratio of Adjusted EBITDA to ex-TAC Gross Profit Reconciliation
RATIO OF ADJUSTED EBITDA TO EX-TAC GROSS PROFIT RECONCILIATION ($ in Millions) 2016A 2017A 2018A 2019A 2020A Gross Profit $101 $179 $234 $232 $320 Net Income (loss) (3) 3 11 (25) 8 Ratio of Net income (loss) to Gross profit -3% 2% 5% -11% 3% ex-TAC Gross Profit $124 $214 $282 $296 $382 Adjusted EBIT
Slide 63: ex-TAC Gross Profit Margin Reconciliation
EX-TAC GROSS PROFIT MARGIN RECONCILIATION ($ in Millions) 2016A 2017A 2018A 2019A 2020A Revenues $552 $758 $909 $1,094 $1,189 Gross Profit 101 179 234 232 320 Gros Profit Margin 18% 24% 26% 21% 27% Revenues $552 $758 $909 $1,094 $1,189 ex-TAC Gross Profit 124 214 282 296 382 ex-TAC Gross Profit Marg
Slide 64: Historical & Projected Adj. Gross Profit Margin Reconciliation
HISTORICAL & PROJECTED ADJ. GROSS PROFIT MARGIN RECONCILIATION ($ in Millions) 2020A 2021E Revenues $1,189 $1,365 Traffic Acquisition Cost (TAC) $807 $851 ex-TAC Gross Profit $382 $513 Other Cost of Revenues 63 $85 Gross Profit $319 $428 Gross Profit Margin 27% 31% Adj. Gross Profit Margin 84% 83% T
Slide 65: Historical and Projected Free Cash Flow Reconciliation
HISTORICAL AND PROJECTED FREE CASH FLOW RECONCILIATION ($ in millions, FYE) 2019A 2020A 2021E Net cash from operating activities $18 $139 $80 Net cash used in investing activities ($44) ($18) ($33) Intangible assets 0 (9) (12) Purchase of IT equipment (servers) (44) (9) (21) Free Cash Flow ($26) $12
Slide 66: Consolidated Balance Sheet
CONSOLIDATED BALANCE SHEET As of Dec 31, As of Dec 31, ($ in millions) 2019 2020 Cash, cash equivalents and short-term deposits $116 $ 243 Total Assets $ 482 Total Liabilities & Convertible Shares $ 475 $ 580 $ 533 Accumulated Deficit $ (40) $ (31) Additional Paid-in-capital a Total Shareholders’ Eq
Slide 67: 2021 Quarterly Results: ex-TAC Gross Profit Reconciliation
2021 QUARTERLY RESULTS: EX-TAC GROSS PROFIT RECONCILIATION ($ in Millions) Q1-21A Q2-21A Q3-21A Revenues $303.0 $329.1 $338.8 Traffic Acquisition Cost (TAC) 197.0 212.2 211.9 Other Cost of Revenues 16.4 16.6 19.2 Gross Profit $89.6 $100.3 $107.7 Other Cost of Revenues 16.4 16.6 19.2 ex-TAC Gross Pro
Slide 68: 2021 Full Year Guidance: ex-TAC Gross Profit Reconciliation
2021 FULL YEAR GUIDANCE: EX-TAC GROSS PROFIT RECONCILIATION ($ in Millions) 2021E Revenues $1,363 - $1,367 Traffic Acquisition Cost (TAC) ($850 - $853) Other Cost of Revenues ($84 - $86) Gross Profit $427 - $430 Other Cost of Revenues $84 - $86 ex-TAC Gross Profit $512 - $515