Taboola.com (TBLA) Q2 2024 earnings summary

Executive summary

• Q2 2024 delivered strong results, with revenue up 29% year-over-year to $428.2M, ex-TAC gross profit up 21% to $149.5M–$150M, and adjusted EBITDA up 138% to $37.2M, all exceeding guidance.

• Net loss narrowed to $4.3M–$4M from $31.3M in Q2 2023, while non-GAAP net income reached $23M, reflecting improved operating leverage.

• Free cash flow surged to $26.2M, up 237% year-over-year, with a conversion rate above 70% from adjusted EBITDA.

• Strategic initiatives in AI, premium supply, and advertiser success, including completion of Yahoo advertiser migration, new OEM partnerships, and product launches, are driving momentum.

• Over 100% of free cash flow was allocated to share buybacks, reflecting a focus on shareholder returns.

Financial highlights

• Q2 2024 revenue: $428.2M, up 29% year-over-year; ex-TAC gross profit: $149.5M–$150M, up 21%.

• Adjusted EBITDA: $37.2M, up 138% year-over-year, with a 25% margin.

• Free cash flow: $26.2M, up 237% year-over-year, with 70% conversion from adjusted EBITDA.

• Net loss narrowed to $4.3M–$4M from $31.3M in Q2 2023; non-GAAP net income was $23M.

• Operating expenses were flat year-over-year at $122.4M, reflecting strong cost discipline.

Outlook and guidance

• 2024 guidance reaffirmed: ex-TAC gross profit $656M–$679M (25% YoY growth at midpoint), adjusted EBITDA over $200M, free cash flow over $100M.

• Revenue guidance updated to $1.735B–$1.765B (22% YoY growth at midpoint) due to Yahoo test impacting revenue recognition.

• Q3 guidance: revenue $416M–$446M, ex-TAC gross profit $159M–$169M, adjusted EBITDA $42M–$52M, non-GAAP net income $20M–$30M.

• Long-term model targets 20%+ ex-TAC gross profit growth, 30%+ adjusted EBITDA to ex-TAC gross profit ratio, and 50%+ free cash flow conversion.

• Normalized core business growth expected at 10–15% annually, with growth drivers pushing total growth to 15–20%.