Taboola.com (TBLA) Q3 2024 earnings summary

Executive summary

• Q3 2024 exceeded guidance for revenue, ex-TAC gross profit, and adjusted EBITDA, with strong business momentum driven by new publisher wins, AI-powered ad tools, and expanded partnerships with Yahoo, Microsoft, Apple, and Xiaomi.

• Focus remains on expanding the advertiser base, leveraging AI-driven personalization, and deepening partnerships with major publishers and OEMs.

• Strategic investments in AI (Abby, Maximize Conversions) and e-commerce are driving growth and advertiser success.

• Taboola operates in the $80B+ open web ad market, leveraging exclusive publisher relationships and scalable technology.

Financial highlights

• Q3 2024 revenues reached $433 million, up 20% year-over-year; ex-TAC gross profit was $166.4 million, up 30% year-over-year; adjusted EBITDA was $47.9 million, up 110% year-over-year.

• Net loss narrowed to $6.5 million from $23.1 million a year ago; non-GAAP net income was $22.2 million.

• Free cash flow was $42.9 million in Q3 and $97.3 million for the first nine months, with a trailing eight-quarter EBITDA-to-FCF conversion rate of 60%.

• Share repurchases totaled $10 million in Q3, with $55.6 million remaining under the buyback program; 15.5 million shares repurchased YTD.

• Cash and equivalents at quarter-end were $217.2 million; net cash position was $64.5 million.

Outlook and guidance

• FY 2024 guidance reaffirmed: revenues $1.735–$1.765 billion (+22% YoY), ex-TAC gross profit $656–$679 million (+25% YoY), adjusted EBITDA $200M+ (~2x YoY), and free cash flow target raised to over $105 million.

• Q4 2024 guidance: revenues $460–$490 million (+13% YoY), ex-TAC gross profit $205–$221 million (+26% YoY), adjusted EBITDA $83–$99 million (+82% YoY).

• Free cash flow conversion projected at 50%+ of adjusted EBITDA long-term.