Taboola.com (TBLA) Q2 2024 earnings summary

Executive summary

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

• Net loss narrowed to $4–$4.3 million from $31–$31.3 million in Q2 2023, while non-GAAP net income reached $23 million, reflecting improved operating leverage.

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

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

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

Financial highlights

• Revenue: $428.2 million, up 29% year-over-year; ex-TAC gross profit: $149.5–$150 million, up 21%.

• Adjusted EBITDA: $37.2 million, up 138% year-over-year; margin at 24.9–25%.

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

• Net loss narrowed to $4–$4.3 million from $31–$31.3 million in Q2 2023; non-GAAP net income was $23 million.

• Cash and equivalents at quarter end: $182–$182.2 million, exceeding long-term debt.

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 2024 guidance: revenue $416M–$446M, ex-TAC gross profit $159M–$169M, adjusted EBITDA $42M–$52M.

• 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%.