Q1 2025 Taboola Ltd Earnings Call
Operator: Good day, and thank you for standing by. Welcome to Taboola's Q1 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised today's conference is being recorded. I would now like to turn the conference over to your speaker today, Jessica Kourakos, Head of Investor Relations. Please go ahead.
Good day, and thank you for standing by. Welcome to the Bull's first quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode.
After the speaker's presentation, there will be a course in an answer session.
Speaker Change: To ask a question during the session, you need to press star one one on your telephone. You will then hear an automated method advising your hand is raised. To withdraw your question, please press star one one again. Please be advised, today's conference is being recorded. I would like to turn the conference over to your speaker today. Jessica Kourakos, Head of Investor Relations, please go ahead.
Jessica Kourakos: Thank you, good morning, everyone, and welcome to Taboola's Q1 2025 Earnings Conference Call. I'm here with Adam Singolda, Taboola's Founder and CEO, and Stephen Walker, Taboola's CFO. The company issued earnings materials today before the market, and they are available in the investors section of Taboola's website. Now, I'll quickly cover the safe harbor. Certain statements today, including our expectations for future periods, are forward-looking statements. They are not facts and are subject to material risks and uncertainties described in our SEC filings. These statements are based on currently available information, and we undertake no duty to update them except as required by law. Today's discussion is also subject to the forward-looking statement limitations in the earnings press release. Future events could differ materially and adversely from those anticipated. During this call, we will use terms defined in the earnings release and refer to non-GAAP financial measures.
Speaker Change: Thank you and good morning everyone, and welcome to Taboola's first quarter 2025 earnings conference call. I'm here with Adam Singolda, Taboola's founder and CEO and Steve Walker, Taboola's CFO . The company issued earnings materials today before the market and they are available in the investor section of Taboola's website.
Speaker Change: Now I'll quickly cover the safe harbor. Certain statements today, including our expectations for future periods, are forward-looking statements. They are not facts and are subject to material risks and uncertainties described in our SEC filings.
Speaker Change: These statements are based on currently available information and we undertake no duty to update them except as required by law. Today's discussion is also subject to the forward-looking statement limitations in the earnings press release.
Future events could differ materially and adversely from those anticipated.
Speaker Change: During this call, we will use terms to find in the earnings release and refer to non-GAAP financial measures. For definitions and recommendations to gap, please refer to the non-GAAP tables in the earnings release posted on our website. With that, I'll turn the call over to Adam.
Jessica Kourakos: For definitions and reconciliations to GAAP, please refer to the non-GAAP tables in the earnings release posted on our website. With that, I'll turn the call over to Adam.
Adam Singolda: Thanks, Jessica. Good morning, everyone, and thank you all for joining us today. Before we dive into the results, I want to quickly remind everyone how we see our market opportunity, who we are, and why we believe we can win. There's a major shift in advertising towards performance to drive growth to your business. It's a result-driven approach focused on measurable outcomes versus brand advertising, which is mostly for awareness. While most advertisers buy ads on search and social for that need, many advertisers feel that they've maxed out on those channels. We estimate that there's about $55 billion opportunity to serve advertisers' performance needs outside of search and social in the open web, and that is our focus. Taboola is a global leader in performance advertising, helping businesses grow across the open web.
Adam Singolda: Thanks, Jessica. Good morning, everyone, and thank you all for joining us today.
Adam Singolda: Before we dive into the results, I want to quickly remind everyone how we see our market opportunity who we are and why we believe we can win.
Adam Singolda: There's a major shift in advertising towards performance to drive growth to your business. It's a result-driven approach focused on measurable outcomes versus brand advertising which is mostly for awareness.
Adam Singolda: While most advertisers buy ads on search and social for that need, many advertisers feel that they've next out on those channels.
Adam Singolda: We estimate that there's about $55 billion dollar opportunity to serve advertisers performance needs outside of search and social in the open web, and that is our focus.
Stephen Walker: Adam Singolda, Stephen Walker, Adam Singolda, Stephen Walker, Adam Singolda, Stephen Walker,
Speaker Change: Taboola is a global leader in performance advertising, helping businesses grow across the open web.
Adam Singolda: Our platform, Realize, connects thousands of advertisers to approximately 600 million daily users through premium publishers like Yahoo, Apple, and ESPN, top device manufacturers like Samsung and Xiaomi, and leading utility apps like LINE. Our extensive first-party data and AI investments enable us to uniquely identify user intent by analyzing their reading habits and genuine interests. This is information we uniquely know and can package in a way that advertisers can act upon. This makes us a key growth engine for advertisers side by side with search and social, and a trusted partner for publishers all over the world. Taboola today has a bit over 2,000 employees globally, with 700 salespeople and 650 engineers. Last year, we generated about $1.8 billion in revenue, over $200 million in Adjusted EBITDA, and about $150 million in free cash flow. Now turning to our Q1 results.
Stephen Walker: Our platform realized, connects thousands of advertisers to approximately 600 million daily users through premium publishers like Yahoo, Apple, and ESPN, top device manufacturers like Samsung and Xiaomi, and leading utility apps like Lyon. [inaudible]
Stephen Walker: Our extensive first-party data and AI investments enable us to uniquely identify user intent by analyzing their reading habits and genuine interests.
Stephen Walker: This is information we uniquely know and can package in a way that advertisers can act upon.
Stephen Walker: This makes us a key growth engine for advertisers side-by-side with search and social and a trusted partner for publishers all over the world.
Stephen Walker: Taboola today has a bit over 2,000 employees globally with 700 salespeople and 650 engineers.
Stephen Walker: Last year we generated about $1.8 billion in revenue, over $20 million in adjusted EBDAM, and about $150 million in free cash flow.
Adam Singolda: We're happy to start the year off strong with our Q1 revenue, ex-TAC gross profit, and Adjusted EBITDA all coming in above the high end of our guidance range. It is a clear reflection of solid execution, strong team focus, and the resilience of our model. For Q1, we reported revenues of $427 million, representing growth of 3% year over year. ex-TAC gross profit of $152 million, 9% higher than last year. Adjusted EBITDA of $36 million, 53% higher than last year, with margins expanding significantly. Free cash flow of $36 million, grown 35% year over year. While the macro environment is something that we're tracking closely, we haven't seen material impact to our business. We've seen about 1% decrease in advertising spend related to the tariffs so far, which is mainly China to us.
Stephen Walker: Now turning to our first quarter results. We're happy to start the year off strong with our first quarter revenue, X-Tex close profit and adjusted EBDA all coming in above the high end of our guidance range.
Stephen Walker: It is a clear reflection of solid execution, strong team focus, and the resilience of our model.
Stephen Walker: For the first quarter, we reported revenues of 427 million representing growth of 3% year-over-year, XX gross profit of 152 million, 9% higher than last year.
Stephen Walker: Adjusted EBDA of $36 million, 53% higher than last year, with margins expanding significantly.
and free cash flow of 36 million grown 35% year-over-year.
Stephen Walker: All the microenvironment is something that we're tracking closely. We haven't seen material impact to our business.
Stephen Walker: We've seen a much 1% decrease in advertising spend related to the tariffs so far, which is mainly China to us.
Adam Singolda: This brings our China business to around 5% of total Q2 revenue as of now. We're currently seeing positive trends in Taboola News, bidded supply, and other parts of the business. These recent tailwinds, together with our strong performance in Q1, support our decision to reiterate our full year 2025 guidance and continue aggressively buying back shares as part of our $200 million share buyback program. Let's turn to some highlights from the quarter. In March, we hosted our Investor Day, where our management team, alongside several of our key advertiser and publisher partners, took a deep dive into the $55 billion market opportunity ahead of us and how we're positioning Taboola to capture share in the performance advertising space, particularly through our Realize platform. Roughly a third of the event was dedicated to partner panels offering direct validation of our technology, data, and strategic direction.
Stephen Walker: This brings our China business to a 15% of total Q2 revenue as of now.
Stephen Walker: At the same time, we're currently seeing positive trends in Taboola news, bit of supply, and other parts of the business.
Stephen Walker: This was in tailwinds, together with our strong performance in Q1, support our decision to reiterate our full year 2025 guidance and continue aggressively buying back shares as part of a 200 million share by the program.
Now let's turn to some highlights from the quarter.
Stephen Walker: In March, we hosted our investor day, where our management team, alongside several of our key advertisers and publisher partners, took a deep dive into the $55 billion market opportunity ahead of us, and how our position in Taboola to capture share in the performance advertising space, particularly through our realized platform.
Stephen Walker: Roughly a third of the event was dedicated to partner panels offering direct validation of our technology, data and strategic direction.
Adam Singolda: Our partners essentially echoed a clear message. There is a real gap in the market that Taboola is uniquely positioned to fill as advertisers are maxed out on search and social channels. The market appreciates having a company of our scale that is laser-focused on performance, measurement, and outcomes, not trying to be everything to everyone, but offering a real alternative when it matters most. Our management team is focused on tracking net new impacts from Realize, which is incremental to us. We define it as a combination of new demand formats and budgets we previously could not access, alongside new supply placements that open new opportunities for advertisers. While it's still early, initial results are promising, and we're excited to share continued progress as adoption increases and our capabilities expand. At our Investor Day, we laid out three focused areas to accelerate growth in our business.
Stephen Walker: Our partners essentially echoed a clear message. There is a real gap in the market that Taboola is uniquely positioned to feel as advertisers are maxed out on search and social channels.
Stephen Walker: The market appreciates having a company of our scale that is laser focused on performance, measurement and outcomes, not trying to be everything to everyone but offering a real alternative when it matters most [inaudible]
Stephen Walker: Our management team is focused on tracking net new impacts from realize, which is incremental to us.
Stephen Walker: We define it as a combination of new demand formats and budgets we previously could not access, alongside new supply placements that open new opportunities for advertisers.
Stephen Walker: While it's still early, initial results are promising, and we're excited to share continued progress as adoption increases and our capabilities expand.
Stephen Walker: At our investor day, we laid out three focused areas to accelerate growth in our business.
Adam Singolda: First, driving incremental ad spend through Realize's new capabilities. Second, focusing our go-to-market strategy on things such as verticalizing our sales organization, as well as going after ideal customer profiles, ICP, where we see better retention rates and lower churn rates. As part of our focus on growth, last quarter, we introduced a new metric, scaled advertisers, defined as those spending over $100,000 annually. In Q1, the number of scaled advertisers has grown by 9%, reaching 1,996, which is great to see. Third, going after new supply partners that have unique data our advertisers are looking for, which would help us drive incremental growth in advertising budgets. Let me take this opportunity to highlight some of the progress we've made this past quarter. Starting with the launch of Realize. We officially launched Realize in Q1, marking a major step forward for Taboola.
First, driving incremental ad spend through realizes new capabilities.
Stephen Walker: Second, focusing on our go-to-market strategy on things such as virtualizing our sales organization as well as going after ideal customer profiles, ICP, where we see better retention rates and lower turn rates.
Stephen Walker: As part of our focus on growth, less quarter we introduced a new metric, scaled advertisers, defined as those spending over $100,000 annually.
Stephen Walker: In Q1, the number of skilled advertisers has grown by 9% reaching 1996, which is great to see.
Stephen Walker: Third, going after new supply partners that have unique data our advertisers are looking for, which would help us drive incremental growth in advertising budgets.
Stephen Walker: Let me take this opportunity to highlight some of the progress we've made this past quarter.
Stephen Walker: Starting with a launch of Realize, we officially launched Realize in Q1, marking a major step forward for Taboola. Realize leverages are call strengths, proprietary technology, unique data we have that others don't, and massive reach across the internet.
Adam Singolda: Realize leverages our core strengths, proprietary technology, unique data we have that others don't, and massive reach across the internet. Some of the new things Realize offers to our advertisers include new ad formats like vertical videos, social creatives, and display. You can easily import your social and display creatives to Realize which advertisers really like. We have a new pricing model, so advertisers can now pay on a CPC even when buying display from us. Imagine an industry that for 30 years charged advertisers on impressions for display and with Realize, for the first time, you can get the value of people seeing your ad, but you only pay us if a user actually clicked on it. This is big. We also launched a new predictive audiences solution that helps advertisers target users based on historical conversion data.
Stephen Walker: Some of the new things realized offers to our advertisers include new at-form at technical videos, social creatives, and display. You can easily import your social and display creatives to realize which advertisers really like.
Stephen Walker: We have a new pricing model so advertisers can now pay on a CPC even when buying display from us.
Speaker Change: Imagine an industry that for 30 years charged advertisers on impressions for display and would realize for the first time you can get the value of people seeing your ad but you only pass if a user actually clicked on it. This is big.
Speaker Change: We also launched a new predictive audience dissolution that helps advertisers target users based on historical conversion data.
Adam Singolda: Similar to lookalike modeling, this capability allows advertisers, like an insurance company that acquired 100 customers through Taboola, to efficiently find the next 100 by leveraging patterns from past conversions. Next, we're adding new display supply, which means that advertisers will be able to access all ad inventory on our publisher sites, not just bottom of article. Last but not least, we launched a whole new refresh to our user interface, so it feels like what advertisers are used to on the big platforms. With Abby, our intelligent AI assistant, embedded into the Realize dashboard, advertisers have dedicated support with their campaigns every step of the way. While Realize is only out for 2 months, all of these new capabilities enable us to unlock performance advertising budgets that historically were out of reach.
Speaker Change: Similar to Lookalike Merling, this capability allows advertisers like an insurance company that acquired 100 customers through Taboola to efficiently find the next 100 by leveraging panors from past conversions.
Speaker Change: Next, we're adding a new display supply, which means that advertisers will be able to access all-add inventory on our publisher's sites, not just bottom of article.
Speaker Change: Unless but not least, we launched a whole new refresh to our user interface, so it feels like what advertisers are used to on the big platforms.
Speaker Change: And with Abbey, our intelligent AI assistant embedded into the realized dashboard advertisers have dedicated support with their campaigns every step of the way.
Speaker Change: While Realize is only out for two months, all of these new capabilities enable us to unlock performance advertising budgets that historically were out of reach.
Adam Singolda: I'm encouraged by the energy this new product has injected into our sales teams, the early reception we're seeing, and the results from our initial advertisers like Babbel, Motley Fool and others. I'm confident Realize will play an increasingly meaningful role in driving our growth in the years to come. Moving to onboarding unique supply and data. We've also seen good momentum with top publisher partners adding Realize display inventory, which is net new supply for advertisers. Our focus is adding inventory that is differentiated and is highly valued by advertisers because we have unique data, enabling us to drive better ROI. As an example, we only bid on our own publishers where we have first-party data and massive amount of historic conversions, which is an advantage. Or another example is Taboola News and utility apps where we have deep data integrations.
Speaker Change: I'm encouraged by the energy this new product has injected into our sales teams, the early reception we're seeing, and the results from our initial advertisers like Babel, Motley Fool, and others.
Speaker Change: I'm confident realize we'll play an increasingly meaningful role in driving our growth in the years to come.
Speaker Change: Movements onboarding unique supply and data. We've also seen good momentum with top publisher partners adding realized display inventory which is net new supply for advertisers.
Speaker Change: As an example, we only bid on our own publishers where we have first-party data and massive amount of historic conversions, which is an advantage.
Adam Singolda: In Q1, we announced exciting expansions of our partnerships with Microsoft and Gannett, adding display inventory for Realize advertisers. We also signed an exclusive global partnership with LINE, which is one of the largest messaging app in Asia, allowing us to bring personalized content and ads to LINE users globally in new, engaging ways. This is the first utility app that has signed with Taboola News, which is very exciting, and I believe utility apps will become a whole new wave of publishers for Taboola as everyone wants a piece of the advertising market. In summary, we've kicked off the year with real momentum. The early signals from Realize to capture net new advertising budgets are exciting and reinforce the opportunity we see ahead. We're heads down doing the work on what matters most as we move through 2025, and that is execution.
Speaker Change: In the first quarter, we announced exciting expansions of our partnerships with Microsoft and GANET, adding display inventory for realized advertisers.
Speaker Change: We also find an exclusive global partnership with Lion, which is one of the largest messaging app in Asia, allowing us to bring personalized content and add to Lion users globally in new engaging ways.
Speaker Change: This is the first utility app that is signed with Taboola News, which is very exciting and I believe utility apps will become a whole new wave of publishers for Taboola as everyone wants a piece of the advertising market.
Speaker Change: In summary, with kicked off the year with Real Momentum, the early signals from Realize to keep your net new advertising budgets are exciting and reinforce the opportunity we see ahead.
Adam Singolda: We're confident in the strength of our business and continue to take a prudent approach to the guidance we've provided. While we have not seen a material impact to the business from the macro environment, we're tracking it while making sure we prioritize cost discipline and investment in our key growth initiatives. Our balance sheet is strong. We have access to a revolving credit facility while generating healthy free cash flow. We continue to believe that the highest return capital is through investing in our own growth, and we intend to continue being aggressive with share repurchases. With that, I'll turn it over to Steve to walk you through our Q1 results and outlook in more detail.
Speaker Change: We're confident in the strength of our business and continue to take a potent approach to the guidance we've provided. While we have not seen a material impact to the business from the macro environment, we're tracking it, while making sure we prioritize cost discipline and investment in our key growth initiatives.
Speaker Change: Our balance sheet is strong. We have access to revolving credit facility while generating healthy, free cash flow. We continue to believe that the highest return capital is through investing in our own growth and we intend to continue being aggressive with shared repurchases.
Speaker Change: With that, I'll turn it over to Steve to look through our first quarter results and outlook in more detail.
Stephen Walker: Thanks, Adam, and good morning, everyone. As Adam mentioned, we had a strong start to the year, and we are well positioned to build on this momentum throughout the year. Let's dive into the details of our financial performance. In Q1, we reported results above the high end of our guidance range across all metrics. Revenues reached $427.5 million, representing 3% growth year-over-year, while ex-TAC Gross Profit reached $151.7 million, representing 9% growth year-over-year, which included a 70 basis point headwind from foreign exchange. Our revenue growth was primarily driven by 9% growth in the number of scaled advertisers, which was partially offset by a 3% decline in the average revenue per scaled advertiser, both measured on a year-over-year basis. As we said last quarter, we expect these two metrics to sometimes have an inverse correlation.
Speaker Change: Thanks Adam and good morning everyone. As Adam mentioned, we had a strong start to the year and we are well positioned to build on this momentum throughout the year. So let's dive into the details of our financial performance.
Speaker Change: In the first quarter, we reported results above the high end of our guidance range across all metrics.
Speaker Change: Revenues reached $427.5 million, representing 3% growth year-over-year, while Extact Growth Profit reached $151.7 million, representing 9% growth year-over-year, which included a 70 basis point headwind from foreign exchange.
Speaker Change: Our revenue growth was primarily driven by 9% growth in the number of scaled advertisers, which was partially offset by a 3% decline in the average revenue per scaled advertiser, both measured on a year-of-year basis.
Speaker Change: As we said last quarter, we expect these two metrics to sometimes have an inverse correlation.
Stephen Walker: As we successfully onboard new advertisers and grow them into scaled advertisers, it can sometimes pull down the average, as happened this quarter. However, the strong growth in the number of scaled advertisers is a good leading indicator for our business as it shows good traction bringing on new advertisers and scaling them over the last year. Having more advertisers fuels future growth as we can work with these advertisers to increase budgets over time. Q1 revenue growth was broad-based and included positive growth in our existing core native business. As we indicated last quarter, the format testing that we were doing with Yahoo on select supply wound down this quarter and is now fully completed. As in the past, there was marginal reduction of Q1 revenue due to the way we were accounting for this test.
Speaker Change: As we successfully onboard new advertisers and grow them into scaled advertisers, it can sometimes pull down the average as happened this quarter.
Speaker Change: However, the strong growth in the number of scaled advertisers is a good leading indicator for our business as it shows good traction bringing on new advertisers and scaling them over the last year.
Speaker Change: Having more advertisers fuels future growth as we can work with these advertisers to increase budgets over time.
Speaker Change: First quarter revenue growth was broad-based and included positive growth in our existing
Speaker Change: As we indicated last quarter, the format testing that we were doing with Yahoo on select supply wound down this quarter and is now fully completed.
Speaker Change: As in the past, there was marginal reduction of first quarter revenue due to the way we were accounting for this test Without this impact, first quarter revenue growth would have been approximately 5% year-over-year [inaudible]
Stephen Walker: Without this impact, Q1 revenue growth would have been approximately 5% year over year. Ex-TAC gross profit growth was primarily driven by growth in overall revenue and advertising spend. Ex-TAC also benefited from margin expansion in our core native business, as well as growth in Taboola News and our bidded supply, which includes Microsoft. Gross profit of $119.3 million primarily benefited from our ex-TAC Gross Profit growth. In addition, gross profit increased due to reductions in our other cost of revenues, driven by increased efficiencies in how we operate our servers and networking equipment. These were the result of investments that we made in our software platform, as well as advances in hardware technology. The end result was an increase in the estimated useful lives of our servers and networking equipment from 3 years to 6 years, which allowed us to increase the amortization period commensurately.
Speaker Change: Hextack Gross' profit growth was primarily driven by growth in overall revenue and advertising spend.
Speaker Change: David, XTAC also benefited from margin expansion in our core native business, as well as growth in Taboola News and our bidded supply, which includes Microsoft.
Speaker Change: Gross Profit of $119.3 million, primarily benefited from our X-TAC Gross Profit Growth.
Speaker Change: In addition, Gross Profit increased due to reductions in our other costs of revenues driven by increased efficiencies and how we operate our servers and networking equipment.
Speaker Change: These were the result of investments that we made in our software platform as well as advances in hardware technology.
Stephen Walker: This change took effect on 1 January 2025, and applies to all servers with a carrying value on our books as of that date, as well as to any other servers purchased after 1 January 2025. This will primarily benefit our GAAP gross profit since most of our servers depreciation are classified within other costs of revenues. The change will also have a smaller benefit on operating profit and net income since some equipment amortization expense hits operating expenses. In terms of our profitability, our net loss was $8.75 million with non-GAAP net income coming in +$25 million. Adjusted EBITDA for the quarter was $35.9 million, reflecting 53% year-over-year growth. Our Adjusted EBITDA margin was 24%, which is a significant improvement over 17% Adjusted EBITDA margin in Q1 2024.
Speaker Change: This change took effect on January 1, 2025, and applies to all servers with a carrying value on our books as of that date, as well as to any other servers purchased after January 1, 2025.
Speaker Change: This will primarily benefit our gap gross profit since most of our servers depreciation are classified within other costs of revenues.
Speaker Change: But the change will also have a smaller benefit on operating profit and net income since some equipment amortization expense hits operating expenses.
Speaker Change: In terms of our profitability, our net loss was $8.75 million, with non-GAAP net income coming in positive at $25 million.
Speaker Change: Pajeste Badoff for the quarter was $35.9 million, reflecting 53% year-over-year growth.
Speaker Change: R. Jessie Bidabmargin was 24%, which is a significant improvement over 17% adjusted Eidabmargin in Q1, 2024.
Stephen Walker: This improvement reflects the benefit of our 9% year-over-year growth in ex-TAC Gross Profit, along with strong cost discipline that we maintained in 2024 and into the Q1 of this year. In terms of cash generation, we had $48.1 million in operating cash flow in the Q1 and free cash flow of $36.1 million. Our free cash flow benefited significantly from a couple of factors. First, free cash flow benefited from our improved profitability. Our net losses decreased from $26.2 million in Q1 2024 to $8.75 million in Q1 2025. Second, free cash flow benefited from strong management of our working capital. Q1 free cash flow also included a one-time benefit of approximately $11 million related to the timing of payments from the testing we did on certain Yahoo supply.
Speaker Change: This improvement reflects the benefit of our 9% year-over-year growth in X-TAC growth profit, along with strong cough discipline that we maintained in 2024 and into the first quarter of this year.
Speaker Change: In terms of cash generation, we had $48.1 million in operating cash flow in the first quarter and free cash flow of $36.1 million.
Speaker Change: Our free cash flow benefited significantly from a couple of factors.
Speaker Change: First, free cash flow benefited from our improved profitability. Our net losses decreased from $26.2 million in Q1 2024 to $8.75 million in Q1 2025.
Speaker Change: Duck and free cash flow benefited from strong management of our working capital.
Speaker Change: Q1 Free Cash Flow also included a one-time benefit of approximately $11 million, related to the timing of payments from the testing we did on certain Yahoo Supply.
Stephen Walker: Our free cash flow conversion from Adjusted EBITDA has been over 70% over the last 4 and the last 8 quarters, which we are very happy about. Looking forward, while we continue to expect to convert free cash flow from Adjusted EBITDA at a 50% to 60% rate over any typical trailing 8-quarter period, I would hope to remain at the higher end of that range. Turning to the balance sheet, we remain in the strong financial position, ending the Q1 with a robust net cash balance of $89.7 million. Cash and cash equivalents totaled $216.2 million, which more than offset our long-term debt of $126.5 million. As announced in March, we proactively entered into a new $270 million revolving credit facility, which was good timing given everything that has happened since.
Speaker Change: Our free cash flow conversion from Adjustity Badaw has been over 70% over the last four and the last eight quarters, which we are very happy about.
Speaker Change: Looking forward, while we continue to expect to convert free cash flow from the Jesse Badaw at a 50-60% rate over any typical trailing eighth quarter period, I would hope to remain at the higher end of that range.
Speaker Change: Turning to the balance sheet, we remain in the strong financial position, ending the first quarter with a robust net cash balance of $89.7 million.
Speaker Change: Cash and Cash Equivalence totaled $216.2 million, which more than offset our long-term debt of $126.5 million.
Speaker Change: As announced in March, we proactively entered into a new $270 million dollar revolving credit facility, which was good timing given everything that has happened since.
Stephen Walker: We used the proceeds to fully repay our prior long-term loan and still have over $140 million of excess capacity on the revolver. This refinancing provides multiple benefits. First, the revolver has a lower interest rate, which will reduce our interest expenses. Second, the revolver will allow us to more proactively manage our working capital. Rather than have a fixed amount of debt outstanding each quarter, we will be able to draw upon and repay the revolver multiple times each quarter, which will reduce our average debt balance and further reduce our interest expenses. Together, these benefits are expected to reduce annual interest expense by $3 to $5 million. In addition, the revolver gives us the ability to operate in a more capital-efficient way over time as we will be able to operate with a lower cash balance while preserving access to significant liquidity.
Speaker Change: We use the proceeds to fully repay our prior long-term loan and still have over $140 million of excess capacity on the revolver.
Speaker Change: This refinancing provides multiple benefits. First, the revolver has a lower interest rate which we will reduce our interest expenses.
Speaker Change: Second, the revolver will allow us to more proactively manage our working capital [inaudible]
Speaker Change: Rather than have a fixed amount of debt outstanding each quarter, we will be able to draw upon and repay the revolver multiple times each quarter, which will reduce our average debt balance and further reduce our interest expenses.
Speaker Change: Together, these benefits are expected to reduce annual interest expense by $3 to $5 million in dollars.
Speaker Change: In addition, the revolver gives us the ability to operate in a more capital-efficient way over time as we will be able to operate with a lower cash balance while preserving access to significant liquidity.
Stephen Walker: This puts us in a stronger position to navigate macro uncertainty and continue executing on our long-term strategy. Regarding share repurchases, as we announced in our Q4 2024 earnings call, our board approved an incremental $200 million to our share repurchase program. Given our current share price, we believe share repurchases are the best use of capital to drive shareholder value. During the course of Q1, we repurchased approximately 16.2 million shares at an average share price of $3.03 for a total consideration of $49 million. Since the end of Q1, we have repurchased an additional 15.1 million shares at an average share price of $2.83 for a total consideration of $43 million. At this point, we anticipate remaining aggressive in our share buyback program.
Speaker Change: This puts us in a stronger position to navigate macro uncertainty and continue executing on our long-term strategy.
Speaker Change: Regarding share repurchases, as we announced in our fourth quarter of 2024 earnings call, our board approved an incremental $200 million to our share repurchase program.
Speaker Change: David. Given our current share price, we believe share repurchases are the best use of capital to drive shareholder value.
Speaker Change: During the course of the first quarter, we repurchased approximately 16.2 million shares at an average share price of $3.03 for total consideration of $49 million.
Speaker Change: Since the end of the first quarter, we have repurchased an additional 15.1 million shares at an average share price of $2.83 for a total consideration of $43 million.
Speaker Change: At this point, we anticipate remaining aggressive in our share-by-back program.
Stephen Walker: Over the past year, our shares outstanding have declined from 338.6 million at the end of Q1 2024 to 324.5 million at the end of Q1 2025. This represents a decline of 4% of total shares outstanding. Moving to guidance. For Q2 2025, we expect revenues to be between $438 and $458 million, gross profit from $124 to $134 million, ex-TAC gross profit from $156 to $166 million, Adjusted EBITDA from $38 to $44 million, and non-GAAP net income from $26 to $32 million. We are reiterating our guidance for the full year. We continue to expect revenues to be between $1.84 to $1.89 billion, gross profit from $536 to $552 million, ex-TAC gross profit from $674 to $690 million, Adjusted EBITDA from $201 to $209 million, and non-GAAP net income from $122 to $128 million.
Speaker Change: Over the past year, our shares outstanding have declined from $338.6 million at the end of Q1 2024 to $324.5 million at the end of Q1 2025. This represents a decline of 4% of total shares outstanding.
Speaker Change: Moving to Guidance, for the second quarter of 2025, we expect revenues to be between $458 million and $458 million.
gross profit from $124 million to $134 million.
Speaker Change: X-Tact Gross Profit from $156 to $166 million, I just leave it off from $38 to $44 million and non-GAAP net income from $26 to $32 million.
We are reiterating our guidance for the full year.
Speaker Change: We continue to expect revenues to be between $1.84 to $1.89 billion, gross profit from $536 to $552 million.
Speaker Change: X-Tat Gross Profit from $674 to $690 million, Adjust the Bidoff from $201 to $209 million, and non-GAAP net income from $122 to $128 million.
Stephen Walker: While we had a strong Q1 and we are pleased with the momentum of our business, we do not think it would be prudent to raise guidance at this point in time given the level of macro uncertainty. It is also important to note that due to the test we did with Yahoo and the implications that had on our revenue and ex-TAC, we expect H2 year-over-year revenue growth to be stronger than in H1. This is already factored into our guidance and will normalize beginning in Q1 2026. In summary, we're pleased to report a strong Q1 with results exceeding the high end of our guidance and that we are reaffirming our full-year outlook.
Speaker Change: While we had a strong Q1 and we are pleased with the momentum of our business, we do not think it would be prudent to raise guidance at this point in time given the level of macro uncertainty.
Speaker Change: It is also important to note that due to the test we did with Yahoo and the implications that had on our revenue and XTAC, we expect second half year-of-year revenue growth to be stronger than in the first half.
Speaker Change: This is already factored into our guidance and will normalize beginning in Q1, 2026
Speaker Change: In summary, we're pleased to report a strong first quarter with results exceeding the high end of our guidance and that we are reaffirming our full year outlook.
Stephen Walker: With clear momentum behind the growth initiatives we shared at Investor Day and a large runway of opportunity ahead, we believe we are well positioned to drive meaningful value for our shareholders over the long term. With that, let's move to Q&A. Operator, can you please open the line for questions?
Speaker Change: With clear momentum behind the growth initiatives we shared at Investor Day, and a large runway of opportunity ahead, we believe we are well positioned to drive meaningful value for our shareholders over the long term.
Speaker Change: and with that, let's move to Q&A. Operator, can you please open the line for questions?
Operator: Our first question comes from Mark Zgutowicz with The Benchmark Company. Your line is open.
Speaker Change: Thank you, ladies and gentlemen. If you have a question or a comment at this time, please press star 1-1 on your telephone. If your question has been answered, do you wish to move yourself from the queue? Please press star 1-1 again. We'll pause for a moment while we compile our Q&A roster.
Speaker Change: My first question comes from Mark Zgutowicz with the benchmark company, your light is open.
Mark Zgutowicz: Thank you. Good morning, guys. Just curious, first question just on progress that you're seeing in fully verticalizing your sales force, and maybe you could just quantify it in terms of what inning you're in and whether you have the right amount of capacity to get to scale there. Also curious, Stephen, you talked about the 9% scaled advertiser growth offset by a 3% decline at average rev. I'm just curious if you could maybe talk around the puts and takes there in terms of whether you always expect there to be an offset or whether you can sort of remove that offset at some point in time, sort of what the put and takes are there. I had just one follow-up. Thanks.
Mark Katawas: Thank you, good morning guys. I'm just curious, first question, just on progress that you're seeing in fully verticalizing your sales force and maybe you could just quantify it in terms of what ending you're in.
Mark Katawas: and whether you have the right amount of capacity to get to scale there. And then also curious, and you talked about the 9% scaled advertiser growth offset by a 3% decline at average rev.
I'm just curious if you can maybe talk. Okay.
Speaker Change: on the puts and takes there in terms of whether you always expect there to be an offset or whether you can sort of remove that offset at some point in time sort of what the put and takes are there, and then I just want to follow up. Thanks.
Stephen Walker: Sure. Hi Mark. Thanks for the questions. First on the verticalizing of the, and the kind of optimized go-to-market strategy with our sales teams. The actual restructuring of the sales teams is done. That was actually done tail end of last year or early this year to move the teams into verticals to have them focusing on ideal customer profile verticals. That's done. They're starting to sell that way now. I think the early returns are good. We're pretty early in that process. I think Adam talked a little bit in his remarks about how we're seeing nice traction with some of the early conversations we're having about Realize, and that's obviously centered on some of those verticals.
Sure. Hi, Mark.
Speaker Change: Thanks for the questions. So first on the verticalizing of the kind of optimized go-to-market strategy with our sales teams.
Speaker Change: So the actual restructuring of the sales teams has done. So that was actually done tail end of last year or early this year to move the teams into verticals to have them focusing on ideal customer profile verticals.
so that's done. [inaudible]
Speaker Change: They're starting to sell that way now. I think the early returns are good, but we're pretty early in that process. So, I think Adam talked a little bit in his remarks about how we're seeing nice traction with some of the early conversations we're having about realizing that's obviously centered on some of those verticals.
Mark Zgutowicz: Yeah.
Stephen Walker: I think we're seeing some nice early signs. To your question about what inning are we in there and kind of where are we really, I'd say we're in kind of the second inning, like we've gotten out of the start of the game. We're starting to see some traction, but too early to really talk about metrics and kind of what's happening there. That's kind of where we are on the optimized go-to-market. In terms of your question about our scaled revenue or six scaled advertisers and the average revenue for those. First of all, do we always expect to see them to move in an inverse way? No. Like sometimes you can both grow the number of scaled advertisers and the average revenue per scaled advertiser. It can happen that way.
Speaker Change: I think we're seeing some nice early signs, but to your question about like what inning are we in there and kind of where are we really? I'd say we're in kind of the second inning, like we've gotten out of the start of the game, we're starting to see some traction but
Speaker Change: But too early to really talk about metrics and kind of what's happening there.
Speaker Change: So that's kind of where we are on the optimized go-to-market in terms of your question about our scaled revenue, our six scaled advertisers and the average revenue for those.
Speaker Change: So, first of all, do we always expect to see them to move in an inverse way, no? Like sometimes you can both grow the number of scaled advertisers and the average revenue per scaled advertiser. It can happen that way.
Stephen Walker: I think what I would say is, if you look at our numbers this past quarter, we're very happy with where the number of scaled advertisers went. Going up 9% is a very positive sign for our business because as I said in my prepared remarks, that's basically the fuel for future growth, right. If you're growing the number of advertisers you have, now you've got clients that you can talk to and work with and grow budgets over time. We're very happy with that. It was offset by the 3% decline in the average revenue per scaled advertiser. If you look at that more on a historical basis, if you look back over the last few years, that number, the average revenue per scaled advertiser, which was around $184,000 this quarter, is still at a historical high point.
Speaker Change: But I think what I would say is if you look at our numbers this past quarter, we're very happy with where the number of scaled advertisers went. So going up 9% is a very positive sign for our business because as I said in...
Speaker Change: and my prepared remarks. That's basically the fuel for future growth, right? If you're growing the number of advertisers you have, now you've got clients that you can talk to and work with and grow budgets over time.
Speaker Change: So we're very happy with that. It was offset by the 3% decline in the average revenue per skilled advertiser, but if you look at that more on a historical basis, if you look back over the last few years,
Speaker Change: That number, the average revenue per scaled advertiser, which was around 184,000 this quarter, is still at a historical high point, like if you look back to Q1 of 2023, that's actually up 17% from the 157,000...
Stephen Walker: Like, if you look back to Q1 of 2023, that's actually up 17% from the 157,000 per scaled revenue or scaled advertiser that we had then. It's still at a historically very strong point for us. We're actually very pleased with the trend on both of those metrics. I think we're doing a good job. Again, we're early on Realize, and we're early on the ideal customer profile and optimized go-to-market, but the early signs are positive.
Speaker Change: Purse, Scaled Revenue, or Scaled Advertiser that we had then. So it's still at a historically very strong point for us. So we're actually very pleased with the trend on both of those metrics.
Speaker Change: I think we're doing a good job. Again, we're early on realizing, we're early on the ideal customer profile and optimize, go to market. But the early signs are positive.
Mark Zgutowicz: That's helpful, Steve. Appreciate it. Just one quick follow-up just around the yield improvements that you saw that drove better Q1 native margin. I'm just curious if there was any one-time sort of benefits in Q1 or if that's a sustainable sort of trajectory for yield improvement, and whether Maximize Conversions played into that.
Speaker Change: That's helpful, Steve. Appreciate it. I just one quick follow up just around this yield improvements that you saw that drove.
Speaker Change: Better One-Q Native Margin. I'm just curious if there was any one-time sort of benefits in One-Q or if that's a sustainable sort of trajectory for yield improvement, whether Max Convergence played into that.
Stephen Walker: First of all, it's hard to separate the impact of something specific like Maximize Conversions from our overall business. I think what I would say is in 2024, our overall yield improvement was around 105% for the full year, which was good. It's not our historical average of 110% or so that we're always striving for, but it was very good. The only reason that it wasn't stronger is because frankly, we added a lot of supply last year, which diluted some of the impact of increasing advertiser budgets. Like Apple coming on, still growing the Yahoo supply early last year was part of it. Generally, we're pretty pleased with where it was. There wasn't any one-time effects. I think we feel good about our ability to kind of continue to grow yield going forward from here.
Speaker Change: So first of all, you know, we do, it's hard to separate the impact of something specific like Max Conversions from our overall business, but I think what I would say is in 2024, you know, our overall yield improvement was around 105% for the full year, which was good. It's not our historical average of 110% or so that we've, that we're always striving for, but it was very good. [inaudible]
A lot of supply last year which...
Deluded some of the impact of the increasing advertiser budgets.
Speaker Change: So like Apple coming on, you know, still growing the Yahoo Supply earlier last year was part of it. So generally we're pretty pleased with where it was. There wasn't any one time effects. I think we feel good about our ability to kind of continue to grow yield going forward from here.
Mark Zgutowicz: Great. Thanks, Steve, appreciate it.
Stephen Walker: Thanks, Mark.
Operator: One moment before our next question. Our next question comes from Laura Martin with Needham & Company. Your line is open.
Great. Thanks, Steve. Appreciate it.
Thanks, Bart. One moment for our next question.
Thank you.
Speaker Change: Our next question comes from Laura Martin with Native & Company, your line is open.
Laura Martin: Hi there. Can we first talk about Google? We've gotten some important, I think, Google news and its impact on the ad tech industry. Could you talk about what you think the, assuming they actually get to go forward with these remedies, the DOJ's remedies, how does it affect you guys?
Speaker Change: I'm in there. So can we first talk about Google? So I've gotten some important, I think, Google news and it's impact on the ad tech industry. Could you talk about what you think the assuming they actually get to go forward with these remedies, the DOJ's remedies? How does it affect you guys?
Adam Singolda: Hey, good morning, Laura. There's a lot going on in the industry. I think there's a bunch of things. There's about the cookies, and I think Yoran actually talked about that last we saw each other at Possible. I think as it relates to that, I personally think that companies in advertising should assume that cookies go away one way or another over time, and there's going to be a much more privacy focus in the industry. The way we think about it is companies that have first-party cookies, that have access to a large stream of consumer behavior and can create value for advertisers with that in mind, that's going to be a big benefit. Now scale matters more than ever because of that. I think about the cookie news, for me, it's no news news as of now.
Speaker Change: Hey, good morning, Laura. You know, so there's a lot going on in the industry. I think there's a bunch of things. There's about the cookies. And I think you're actually talked about that last research other possible. I think as related to that.
Speaker Change: You know, a person I think that companies in advertising should assume that cookies go away one way or another over time [inaudible]
Speaker Change: So the way we think about these companies and have first party cookies that have access to a large stream of consumer behavior and can create value for advertisers with that in mind, that's going to be a big benefit.
Speaker Change: and now Scale matters more than ever because of that. I think about the cooking news. For me, it's no news, news as of now.
Adam Singolda: As relates to breaking and unbreaking, it's unclear what's going to happen there. Overall, I think, it could be an opportunity for companies like us because advertisers may look for alternatives to still find growth. Cautiously optimistic, but we'll see what happens.
Speaker Change: As it relates to breaking and unbreaking, that it's not clear what's going to happen there. Overall I think it could be an opportunity for companies like us because advertisers may look for alternatives to still finding growth. So cautiously optimistic but we'll see what happens.
Laura Martin: Okay. My second thing I did want to follow up. When we were at Possible, you guys were spending a lot of time and had a lot of meetings in your activation around Realize. I was just wondering if you could update us on what you heard two weeks ago about Realize and this launch of Realize to try to jumpstart your display advertising product. Could you talk about what you learned from all those meetings about what people are saying about Realize, and are you getting better adoption?
Okay.
Speaker Change: And then my second thing I did want to follow up when we were possible, you guys were spending a lot of time and had a lot of meetings in your activation around realize.
Speaker Change: So I was just wondering if you could update us on what you heard two weeks ago about realize in this launch of realize to try to jump start your display advertising product could you talk about what you learned from all those meetings about you know what people are saying about realize and are you getting better adoption.
Adam Singolda: Yeah. Financially, it's still early stages, like Stephen mentioned, but what's really exciting for me, because I focus a lot about net new. I'm looking to see what types of budgets we could have not gotten before that we can get now and why. I think with Realize, a lot of it is about if you think about display advertising as an example, and especially with this macroeconomics where advertisers are looking for performance and outcomes, the fact you can buy display and pay on a CPC basis is quite new. We're hearing good feedback from advertisers about how that's encouraging to them. In general, we're thinking about how agencies are spending more time about outcomes. The whole idea that we can have predictive audiences, we can upload creatives from social and display fairly quickly.
Speaker Change: Yeah, so, you know, financially it's still early stages, like Steven mentioned, but what's really exciting for me, because I focus a lot about net new, so I'm looking to see what types of budgets we could have not gotten before that we can get now and why. And I think we'd realize a lot of it is about if you think about display advertising as an example, and especially with this macroeconomics where advertisers are looking for performance and outcomes, the fact you can buy display . . . . .
Speaker Change: So, the whole idea that we can have predictive audiences, we can upload creators from social and display fairly quickly, you can pair on a CPC which is very much performance driven, all those things come in a good place, and specifically at a good time.
Adam Singolda: You can pay on a CPC, which is very much performance-driven. All those things come in a good place, and specifically at a good time. To me, the feedback is mainly positive. We have high dozens of clients that we think we could have not gotten before, and that's great. It's injected a whole new energy for the sales team globally. You probably have seen a lot of activity there, which is all about this net new concept. What types of advertisers and budgets could we get now that we just could not have gotten before?
Speaker Change: So, to me, the feedback is mainly positive. We have high dozens of clients that we think we could have not gotten before and that's great.
Speaker Change: and it injected a whole new energy for the cellist in global. You probably have seen a lot of activity there.
Speaker Change: which is all about this net new concept of what types of advertisers and budgets could we get now that we just could not have gotten before.
Laura Martin: Okay. My last one is, since 2 April, when we started these tariff issues, quarter to date, I noticed that you did not raise the year, but you over-delivered Q1. Are there any verticals where you have started to see weakness since 2 April in the current quarter?
Speaker Change: Okay, and then my last one is, Spence April 2nd, when we started this pair of-
Speaker Change: I know that you did not raise the year, but you over-delivered the first quarter. So, are there any verticals where you have seen, started to see weakness since April 2nd in the current quarter?
Stephen Walker: I'll take that one, Laura. In general, performance advertising, I think, is not going to be impacted as much as certain types of advertising by what's going on with tariffs. What we've seen in our business is about a 1% impact, mostly related to China. It's not material, but we're seeing something. Just to give you a sense, it's basically Chinese advertisers that are trying to reach US consumers have definitely cut back their spend because they're being directly impacted by the tariffs. Other companies, such as car companies or Chinese companies that rely on Chinese manufacturing heavily, they've also cut back somewhat because they're worried about their supply chains and their ability to deliver product to consumers. We've seen some impact, again, mostly Chinese advertisers, what we call our China export business, has been impacted, but it's not material.
Speaker Change: I'll take that one, Laura. So in general, performance advertising I think is not going to be impacted as much as certain types of advertising by what's going on with tariffs.
Speaker Change: But what we've seen in our business is about a 1% impact mostly related to China.
Speaker Change: So it's not material, but we're seeing something. Just to give you a sense, it's basically Chinese advertisers that are trying to reach US consumers have definitely cut back their spend because they're being directly impacted by the tariffs.
Speaker Change: Other companies such as CAR companies or companies that rely on Chinese manufacturing heavily, they've also cut back somewhat because they're worried about their supply chains and their ability to deliver product to consumers. [inaudible]
Speaker Change: So we've seen some impact, again, mostly Chinese advertisers, what we call our China export business.
Stephen Walker: It's around 1%, and that's kind of what we've seen. By the way, that's baked into our guidance, and that's our assumption on guidance is that that's what remains for the rest of the year.
Speaker Change: It has been impacted, but it's not material. It's around 1% and that's kind of what we've seen. By the way, that's baked into our guidance, and that's our assumption on guidance, is that that's what remains for the rest of the year.
Laura Martin: Okay. That's helpful. Thank you very much.
Adam Singolda: Thank you, Laura.
Stephen Walker: Thanks, Laura.
Speaker Change: Okay, that's helpful. Thank you very much. Thank you. Thanks, Laura. One moment for our next question.
Operator: One moment for our next question. Our next question comes from Jason Helfstein with Oppenheimer. Your line is open.
Speaker Change: Our next question comes from Jason Helstein with Oppenheimer, Your Line is Open.
Steve Roman: Hi, this is Steve Roman on for Jason. Just one question from us. This is probably for Steve. When do you believe Realize will start becoming a meaningful revenue driver? Thanks.
Speaker Change: Hi, this is Steve Hromin on for Jason. I'm just one question from us. When do you dispride for Steve? When do you believe realize we'll start becoming a meaningful revenue driver? Thanks.
Stephen Walker: I think what we've said at this point is that we're, and Adam Singolda talked about it a little bit a moment ago. We're in the early stages. We're seeing some really positive signs in terms of meetings that we're getting. As Laura mentioned, we were at a conference recently where our sales team spent a lot of time with advertisers and got a lot of interest, probably more meetings than we would expect at a conference like that because of the interest. That's all very early indicators. It's not something that we can forecast yet. As of now, in the 2025 guidance, we don't have Realize factoring into the guidance for this year. If that changes as we go forward through the rest of the year, we will definitely update on that, obviously. We expect Realize to have an impact.
Speaker Change: So I think what we've said at this point is that we're an Adam talked about a little bit moment ago so we're in the early stages we're seeing some really positive signs in terms of meetings that we're getting at Laura mentioned we were at a conference recently where our sales team spent a lot of time with advertisers
Speaker Change: and got a lot of interest, probably more meetings than we would expect at a conference like that because of the interest. But that's all very early indicators, like it's not something that we can...
Speaker Change: Forecast yet. So as of now in the 2025 guidance, we don't have realized factoring into the guidance for this year.
Speaker Change: If that changes as we go forward through the rest of the year, we will definitely update on that obviously. But we expect to realize to have an impact. We think it will have an impact starting sometime late this year. And then as we move into 2026.
Stephen Walker: We think it'll have an impact starting sometime late this year and then as we move into 2026. Again, we'll update on that as we kind of see as there's something that's more forecastable.
Speaker Change: But again, we'll update on that as we kind of see, as there's something that's more forecastable.
Adam Singolda: I'll just mention that, especially given what's going on in the world, we feel good about how there's no better time to try to go after the performance advertising market with Realize. If you're a business, there's no better time, we've seen it, especially in the recent event, to look for partners that can prove measurement outcome. We think there's a lot of saturation and diminishing return with search and social. Not only do we believe in this strategy, but this comes at a very good time in the industry, as advertisers are looking for someone they can rely on.
Speaker Change: I'll just mention that, especially given what's going on in the world, we feel good about how there's no better time to try to go after the performance advertising market.
with Realize, because that's...
Speaker Change: If you're a business, there's no better time and we've seen it, especially in the recent event.
Speaker Change: to look for partners that can prove measurement, outcome, and we're thinking there's a lot of saturation and diminishing return with search and social. So not only do we believe in this strategy, but this comes at a very good time in the industry as advertisers are looking for someone they can rely on.
Steve Roman: Great. Thank you.
Operator: One moment for our next question. Our next question comes from Zach Cummins with B. Riley Securities. Your line is open.
Brett, thank you.
Thank you. Thank you. Thank you.
One moment for our next question.
Speaker Change: Our next question comes from Zach Cummins with the Riley Securities, your line is open.
Zach Cummins: Yep. Hi, good morning. Thanks for taking my questions, and congrats on the strong Q1 results. I just wanted to dig a little bit more into the different components of your business. It sounded like in Q1, both native, Taboola News, and even your bidding stream with Microsoft did pretty well. I'm just curious, as we go into a more uncertain macro environment, which portions of your business are you anticipating will be more resilient versus maybe others that could face some headwinds in a more challenging environment?
Zach Cummins: Hi, good morning. Thanks for taking my questions and congrats on the strong Q1 results. I just wanted to dig a little bit more into
Zach Cummins: The different components of your business. It sounded like in Q1, both native and Taboola news, and even your bidding stream with Microsoft did pretty well. I'm just curious as we go into a more uncertain macro environment, which portions of your business are you anticipating will be more resilient versus maybe others that could face and that wins in a more challenging environment. Thank you very much.
Adam Singolda: To me, this is more of a demand question, because if the macroeconomics change, what it should change is the strength of advertisers' ability to spend dollars. It's less so much about publishers or partnerships of different kind on the supply side. To me, that's more a question of the strength of the demand front. Again, we haven't seen the future, but if the history is any indication, and we've seen this in the last iteration, being in the performance advertising space and not trying to be everything for everyone is a very good place to be. I think that's one very important. We're not trying to go after the entire funnel. We're not trying to go after top of the funnel branding dollars. Those tend to be historically more exposed.
Zach Cummins: So, to me that this is more of a demand question, because if the macroeconomics change, what it should change is, you know, the strengths of advertising's ability to spend dollars.
Zach Cummins: So it's less than much about publishers or partnerships of different kinds on the supply side. To me, that's more a question of the strengths of the demand fund.
Zach Cummins: So again, nobody's, I haven't seen the future, but if the history is any indication, and we've seen this with the, you know, in the last iteration, being in the performance advertising space and not trying to be everything for everyone is a very good place to be.
Zach Cummins: So I think that's one very important. We're not trying to, you know, try to go after the entire funnel. We're not trying to go after top of the funnel, branding dollars. Those tend to be historically more exposed.
Adam Singolda: If your business is TV, top of the funnel, high CPM branding dollars, I believe those are probably more exposed because if you're a marketer and you need to make sure that your business survives and thrives and need to find clients, the first thing you may consider stopping is things that you're not sure drive direct correlation to sales and growth. That's one. I think we're in a good place. We don't have any concentration on demand side. There's no one client that kind of really owns a big chunk of the business. It's fairly diversified, and it's all driven by AI and outcomes. Again, I think we're in a good place from that perspective, especially as advertisers are looking for more of that type of partners they can work with now more than ever.
Drive direct correlation to sales and growth.
Zach Cummins: So that's one so I think we're in a good place [inaudible]
Zach Cummins: We don't have any concentration on demands out there's no one client that kind of you know really owns a big chunk of the business. It's probably diversified.
Zach Cummins: and so driven by AI and outcomes. So yeah, I think we're in a good place from that perspective, especially as advertisers are looking for more of that type of partners that can work with now more than ever.
Adam Singolda: Again, I think that's more of a demand question, and it's hard to say, but so far we haven't seen any material impact.
Zach Cummins: So again, I think that's more of a demand question and it's hard to say but so far we haven't seen any material impact.
Zach Cummins: Understood. That's helpful. My second question is maybe geared towards Steve. Just in terms of the implied guidance for ex-TAC in H2 of the year, I think assuming the midpoint for the full year, it implies a slight decline year-over-year in ex-TAC in H2. Is that partially due to the tougher comp created by kind of the testing that you did with Yahoo in H2 of last year? What are some of the assumptions going into that component there?
Understood, that's all for end-up, Mick.
Speaker Change: The second question is maybe geared towards Steve, but just in terms of the implied guidance for X-TAC in the second half of the year, I think assuming the midpoint for the full year, it implies a slight decline year over here in X-TAC in second half. Is that partially due to the tougher comp created by the testing that you did with Yahoo in second half of last year, or what are some of the assumptions going into that component there? [inaudible]
Stephen Walker: Yeah. No, that's a very good question. First of all, I think last quarter we talked about the fact that one of our realizations, pun intended, recently was that the native market is growing at low to mid-single digits, slower than we had anticipated. I think that's the right way to think about the growth rate of our core business, the core native business going forward. If you were to ask me, 2026 and beyond, how is your core going to grow, I'd say that's the right way to think about it. As we've discussed, what we think is that Realize will help us get back to more double-digit growth. The negative H2 growth is primarily related to two factors.
Speaker Change: Yeah, no, that's that's a very good question. So first of all, I think you know last quarter we talked about the fact that one of our realizations
Pun intended recently was that the native market is...
Growing at low to single mid single digits.
So slower than we had anticipated.
Speaker Change: And I think that's the right way to think about the growth rate of our business, of our core business, the core native business going forward. So like if you were to ask me 26 and beyond, how is your core going to grow? I'd say that's a good, that's the right way to think about it.
Speaker Change: And as we've discussed, what we think is that realize will help us get back to more double-digit growth.
Speaker Change: The negative second half growth is primarily related to two factors.
Stephen Walker: One is we've taken, as we've talked about, a very prudent approach to 2025 guidance because we wanted to give our teams time to work on Realize and kind of get back the growth that we expect. Second, it's related to the fact that we're not raising our guidance now just because of the uncertainty of the macro. We don't think it's prudent right now to do that. That obviously has an effect on the H2 as well because we're trying to be conservative there. I think the way I think about it is expect our core business to be kind of low to mid-single-digit growth rates, until we start telling you about the impact that Realize has, and at that point, we hope we'll be able to guide you a bit higher on that.
Speaker Change: One is we've taken as we've talked about a very prudent approach to 2025 guidance because we wanted to give our teams time to work on realize and kind of get back the growth that we expect.
Speaker Change: And second, it's related to the fact that we're not raising our guidance now just because of the uncertainty of the macro. We don't think it's prudent right now to do that. So that obviously has an effect on the second half as well because we're trying to be conservative there.
Speaker Change: So I think the way I think about it is expect us, our core business to be kind of low to mid-single digits growth rates.
Speaker Change: Until we start telling you about the impact that realize has and at that point we hope we'll be able to guide you a bit higher on that and the second half is really just an anomaly related to where we are right now.
Stephen Walker: The H2 is really just an anomaly related to where we are right now.
Zach Cummins: Makes sense. Maybe just one question for you, Steve, it might be in the 10-Q, but just given all the share repurchase activity that you had in Q1 and to date in Q2, how much do you have left on your current share repurchase authorization?
Speaker Change: Adam Singolda, Stephen Walker, Adam Singolda, Stephen Walker, Adam Singolda, Stephen Walker,
Mark Katawas: Nick Sampson, and maybe just one question for you, Steve, and it might be in the 10Q, but just given all the share reproaches activity that you had in Q1 and to date in Q2, how much do you have left on your current share reproaches authorization?
Stephen Walker: Yeah. We have about, I believe, $190 million left in our current authorization for the buyback. Sorry, I'm getting a gesture from one of my attorneys that it's lower than that.
Mark Katawas: Yeah, so we have about I believe 190 million left in our current authorization for the buyback. Sorry, I'm getting a gesture from one of my attorneys that's lower than that hundred forty I think.
Eldad Maniv: 140, I think. 140.
Stephen Walker: Oh, we're down to 140 now? Sorry. We're at actually about $140 million left on the existing authorization. Equally important, because we can always get more authorization from our board, but equally important from a cash perspective right now, we have about $80 million of net cash. That's cash after our long-term debt. We generated, obviously, good free cash flow in Q1. We expect to generate good free cash flow for the rest of the year. My expectation is that we'll be able to remain very aggressive on the share buyback, probably buying at least at a comparable level to what we've been buying lately. Obviously, that can all change if anything changes with our business, but we expect to continue to remain very aggressive there.
What?
Mark Katawas: Oh, we're down to 140 now. Sorry. We're at actually about 140 million left on the existing authorization.
Mark Katawas: We generated, obviously, good cash, free cash flow in the first quarter, we expected to generate good free cash flow for the rest of the year. So my expectation is that we'll be able to remain very aggressive on the share buyback.
Mark Katawas: Probably buying at least at a comparable level to what we've been buying lately. Obviously that can all change if anything changes with our business, but we expect to continue to remain very aggressive there.
Zach Cummins: Got it. Appreciate you taking my questions and best of luck with the rest of the quarter.
Mark Katawas: Got it. Appreciate you taking my questions and that's the luck with the rest of the quarter. Thank you. Thank you. One moment for our next question.
Adam Singolda: Thank you.
Adam Singolda: Thank you.
Operator: One moment for our next question. Our next question comes from James Kopelman with TD Cowen. Your line is open.
Speaker Change: Our next question comes from James Kopelman with Theddy Cowan, your line is open.
James Kopelman: Good morning, and thanks for taking the question. First one's for Adam Singolda. You mentioned that you're looking to track net new impact from Realize with new formats, budgets, and supply placements. What are you seeing into May, Q2 more broadly, as you track these metrics? I know it's early, but wondering if you can provide any color on or any specific insights from the advertisers you mentioned, such as Motley Fool and Babbel. Also for Adam Singolda, any way to help us size up the opportunity with the LINE partnership or potential for additional similar deals with other utility apps? Then I have a follow-up for Steve.
Speaker Change: Good morning and thanks for taking the question. First of all, it's for Adam.
Speaker Change: You mentioned that you're looking to track net new impact from realize with new formats, budgets and supply placements. What are you seeing in a May Q2 more broadly as you track these metrics? I know it's early, but wondering if you can provide any color on or any specific insights from the advertisers you mentioned such as Motley Fool and Babel and also for Adam. Thank you very much.
Speaker Change: Any way to help us size up the opportunity with a line partnership or potential for additional similar deals with other utility apps? And then I have a follow up for Steve.
Adam Singolda: Sure. It's going to be a bit hard for me to provide any short-term indication of the financial impact, at least, but I can give you the flavor of the business. One, when I say net new, just to make sure I share this with everyone, what I mean by that is demand that historically we could not have gotten. Think about display budgets and social budgets, which historically we didn't go after, and that's a much, much bigger market. The second thing is also supply we didn't show ads on. Instead of bottom of article, think of every possible display, as well as Taboola News and other areas where we can show vertical videos, social ads, and display ads. To me, obviously, both of those things are very incremental because none of them existed before Realize. I'm laser-focused on that.
Speaker Change: Sure. So it's going to be a bit hard for me to provide any, you know, short term indication of the financial impact at least, but I can give you the flavor of the business.
Speaker Change: which historically we didn't go after and that's a much bigger market.
Speaker Change: And the second thing is also supply. We didn't show ads on, so instead of bottom of article, take off every possible display, as well as Taboola News and other areas where we can show vertical videos, social ads and display ads.
Speaker Change: So to me, obviously both of those things are very incremental because none of them existed before realize. So that's, and I'm laser focusing that I have a daily email that I get from the team that sent to me and I'm tracking that like a heart because I'm really excited about seeing that turning a corner and giving us, you know, seeing that we have competitive advantage. So that's the end of the video.
Adam Singolda: I have a daily email that I get from the team that's sent to me, and I'm tracking that like a hawk because I'm really excited about seeing that turning a corner and seeing that we have competitive advantage, taking advantage of our first-party data and AI and seeing that go in the right direction. Overall, that's what I'm tracking. That's what I mean by that. We're seeing good early signs, and I think it's a combination of we're focusing on clients, advertisers, where we know they have a market fit with us. Those ICPs, financial services, pharma, direct-to-consumer, and others. We're seeing good performance, primarily lower churn rates, and higher ability to spend dollars with us. Again, dollars we don't think we could have had before. I don't want to give Q2 specific short-term indication, but I do believe it's going in the right direction.
Speaker Change: You know, taking advantage of our first party data, NAI, and seeing that go in the right direction. So overall, that's what I'm tracking, that's what I mean by that.
We're seeing good, good early signs.
Speaker Change: And I think it's a combination of we're focusing on clients to advertisers where we know they have a market fit for us so I those ICPs, financial services, pharma, you know, direct to consumer and others.
So we're seeing good performance, primarily lower turn rates. [inaudible]
Speaker Change: and higher ability to spend dollars with us. Again, dollars we don't think we could have had before. And, you know, I don't want to give Q2 specific, you know, short-term indication, but I do believe it's going in the right direction. So that's about that.
Adam Singolda: That's about that.
James Kopelman: Line?
Adam Singolda: Yeah. LINE is, again, it's financially, I don't think we've given an indication on that, but nothing material for the guidance. What I will say is that the reason I really liked it, I think it matters to investors, is because LINE is really the first of potentially a whole new universe of publishers we can work with. If you think about the publisher ecosystem, when I started Taboola, it was mostly websites. Then we expanded that into iconic partnerships like Yahoo and Apple. Now you're seeing that utility apps like LINE that have obviously reached to consumers also want to be part of the advertising ecosystem. I think advertising, which just crossed the $1 trillion mark, is something that many companies, especially Fortune 500 companies, want to be part of.
Speaker Change: Ryan. Yeah, and Ryan is again, it's financially, I don't think it's given an indication on that, but nothing material for the guidance. What I will say is that the reason I really liked it and I think it matters to investors is because Ryan is really kind of like the first.
Speaker Change: of potentially a whole new universe of publishers we can work with. So if you think about the publisher ecosystem when I started Taboola, it was mostly websites.
Speaker Change: Then we expanded that into iconic partnerships like Yahoo and Apple and now you've seen that utility aspects line that have obviously reached to consumers also want to be part of the advertising ecosystem.
Speaker Change: I think advertising, which just cost to one trillion dollar mark, is something that many companies, especially in a fortune of 500 companies, want to be part of, and all of them will be a bit concerned to party with Google because they're to some degree competitor, and Taboola is just a very good friend.
Adam Singolda: All of them will be a bit concerned to partner with Google because they're, to some degree, competitor. Taboola is just a very good friend. To me, LINE is just one of what I hope to see a lot more in the future. You can imagine who we want to work with, music companies, messaging companies, and many other apps we all have on our phones on our every day that we use. It's one of what I hope to be a whole new types of publishers we work with. Again, financially, nothing material this year.
Speaker Change: So to me, line is just one of what I hope to see a lot more in the future and you can imagine who we want to work with, you know, music companies, messaging companies, and many other apps we all have on our phones on our, you know, everyday that we use.
Speaker Change: So, it's one of what I hope to be, you know, a whole new types of publishers we work with and again, financially, not nothing material this year.
James Kopelman: Great. Then for Steve, you disclosed employee headcount, including 700 salespeople, 600 engineers. Not sure if you do that every quarter. Question is, what can you tell us about potential headcount trends and areas of hiring as you ramp the Realize platform over, say, next 12 to 18 months? How are you balancing that priority against maybe a focus on remaining prudent with regards to cost given the ongoing macro uncertainty?
Speaker Change: Craig, and then for Steve, you disclosed employee head count, including 700 sales people, 600 engineers.
Speaker Change: Not sure if you do that every quarter, a question is what can you tell us about potential headcount trends and areas of hiring as you ramp the realized platform over say next 12 to 18 months and how are you balancing that priority against maybe a focus on remaining prudent with regards to cost given the ongoing macro uncertainty. Thank you very much.
Stephen Walker: Yeah. No, good question. I think you can see from our guidance that we don't expect costs to ramp a lot the rest of the year. We do see some ramp in the back half of the year on costs. Where that is mostly, we talked about previously that most of our hiring for the sales teams with the restructuring of the sales team, ramping of Realize, most of that was done last year, Q4 and into Q1 this year. I think we expect to be limited additional investment in sales and marketing. There'll probably be some, it'll be smaller. We are ramping the R&D team some as we continue to build out features and functionality for the Realize platform. We see a lot of opportunity there, we're ramping costs there a bit. G&A, obviously, we expect to continue to get cost improvements.
Speaker Change: Yeah, no good question. So I think you can see from our guidance that we don't expect costs to ramp a lot the rest of the year. We do see some ramp in the back half of the year on cost. [inaudible]
Speaker Change: and where that is mostly. So we talked about previously that most of our hiring for the sales teams with the restructuring the sales team.
Ramping of Realize, most of that was done.
Last year, Q4 and into Q1 this year Andrew Boone, Dr. Andrew Boone,
So I think we expect to...
Speaker Change: To be limited additional investment in sales and marketing there will probably be some but it will be smaller. We are ramping the R&D team some as we continue to build out features and functionality for the realized platform. We see a lot of opportunities there so we are ramping costs there a bit.
Stephen Walker: I will also just note that we're heavily focused right now on where we can utilize AI to improve productivity within the organization. Our President and COO, Eldad Maniv, who you all have heard from, first question he asks everybody when they want to hire is, where are you using AI and how can we improve productivity? We're very focused on that. I expect us to remain relatively prudent on increasing costs and try and remain relatively frugal for now. We see a lot of opportunities to improve productivity as we go.
GNA, obviously we expect it to continue to get cost improvements.
Speaker Change: I will also just note that we're heavily focused right now on where we can utilize AI to improve productivity within the organization, our President, T.O. Eldad Maniv, who you all have heard from
Speaker Change: Try and remain relatively frugal for now. We see a lot of opportunities to improve productivity as we go.
James Kopelman: Great. Thanks, guys. Appreciate all the color.
Stephen Walker: Of course.
Thank you.
Operator: One moment for our next question. Our next question comes from Matthew Condon with Citizens. Your line is open.
Great. Thanks, guys. Appreciate all the color. Okay. Of course.
One moment for our next question.
Matthew Condon: Thank you so much for taking my questions. My first one is with Google rolling out AI Overviews to more users, leaning in with an AI mode, and AI search more generally rolling out to more and more consumers. Has this impacted publisher traffic that you've seen so far? How should we think about that going forward, as AI search becomes more widely adopted? My second question is, Adam, can you talk about what you're doing to increase the breadth and depth of your auction? I know you've implemented a lot of Efficiencies within the interface, the UX of the actual platform with Abby and other things. Can you talk about the progress of that and what you're hearing from advertisers? Thank you so much.
Speaker Change: Our next question comes from Matt Condon, which citizens' airline is open.
Matt Condon: Thank you so much for taking my questions. My first one is just on with Google rolling out AI reviews to more users and also leaning in with an AI mode and just AI search more generally rolling out to more more consumers. Has this impacted publisher traffic that you've seen so far? Then how should we think about that going forward just as AI search becomes?
Speaker Change: and more widely adopted. And then my second question is just Adam, can you just talk about what you're doing to increase the breadth and depth of your auction? I know you've implemented a lot of...
Speaker Change: Efficiency is within the interface, the UX of the actual platform with Abby and other things. Can you just talk about the progress of that and what you're hearing from advertisers? Thank you so much.
Adam Singolda: Yeah. Of course. Thanks for the question. As relates to the first one, and if you recall, we kind of touched on that on Investor Day, which I thought was great. One, we've seen throughout last year some effect. Obviously now we are where we are now, but we've seen some effect from search traffic going down to some publishers. Nothing too material, and we've said that before. Now, as it relates to the future, one, I think we might see more effect. As I think about it, let's say publishers have about 30% of traffic-ish coming from search. Could it go 5%, 10%, 20% more down? Maybe, we don't know. Even if it did, I don't think that's a material change at least to our overall base. That's one.
Speaker Change: Of course, thanks for the question. So as related to the first one, and if you recall, we kind of touched on that on the investor day, which I thought was great. So one, we've seen throughout last year some effect, obviously now we are where we are now.
Speaker Change: But we've seen some effect from search traffic going down to some publishers.
Speaker Change: Nothing too material, and we've said that before. Now as relates to the future, we might see more effect, so as I think about it, let's say publishers have about 30% of traffic.
Speaker Change: Ish, coming from search, could it go 5%, 10%, 20% more down? Maybe we don't know. But even if it did, I don't think that's a material change is to our overall base.
Adam Singolda: Two, in general, as I think about Taboola's point of view, supply is not our concern these days. We have a lot of supply, and I think that's a growing part of our business. We're doing such a good job attracting publishers, growing engagement, and growing audience for publishers. I think for us, the biggest upside, regardless to what's going to happen with search traffic, is going to be on the demand side and how we can grow more budgets. On the publisher side, and I'm spending a lot of time with publishers on that, I think still that when I look at what publishers do today as relates to adopting AI, we're still in very early stages. We are still, all of us, when you go to a homepage, it looks the same. Most article pages looks the same.
Speaker Change: That's one. Two, in general, as I think about Taboola's point of view, supplies, not...
Speaker Change: are concerned these days. We have a lot of supply, and I think that's a growing part of our business. We're doing such a good job attracting publishers, growing engagement, growing audience for publishers. So I think for us, the biggest upside, regardless of what's going to happen with search traffic is going to be on the demand side and how we can grow more budgets. Let's go.
Speaker Change: and then on the publisher side and then spending a lot of time with publishers on that, I think still that when I look at what publishers do today,
Speaker Change: As relates to adopting AI, we're still in very, very early stages.
Adam Singolda: Compare that to TikTok, compare that to Instagram, compare that to Snap. There's so much more opportunity to drive personalization, increase pages per session on publisher site. I think while traffic may go down 5%, 10%, and I don't know, I think the pie could grow at least at the same rate if we adopt AI in a much bigger way. I'm excited about our investment in that space in AI, because I think our publishers look to us and say, What can we do to adopt AI in a much bigger way? Net-net, I feel good about where things are, because we can do so much more with AI. I think we've seen a lot of the effect already from Gen AI in 2024.
Speaker Change: So I think while traffic may go down 5%, 10% and I don't know, I think that the pie could grow at least at the same rate if we adopt AI in a much bigger way.
Speaker Change: And I'm excited about our investment in that space, in AI, because I think our publishers look to us and say, what can we do to adopt AI in a much bigger way? So net-net, I feel good about where things are because we can do so much more with AI. And I think we've seen a lot of the effects already from Gen AI in 2024.
Matthew Condon: The second question was about what we're using.
Adam Singolda: Oh, the auction, yeah.
Matthew Condon: to look like Abby did. Yeah.
Speaker Change: The second question was about what we're using. The biggest thing that will continue to increase auction in our marketplace.
Adam Singolda: Auction, the biggest thing that will continue to increase auction in our marketplace, one is continuously looking for great data that, whether that's contextual data, first-party data through our OEM partners, data through our utility apps. All of those integrations make Taboola as a whole a better partner for advertisers. Advertisers want to work with companies that have intent, that can get closer to the moment when consumers make decisions. I think, one, the more we continue to diversify and improve the quality of the data we capture, that improves the auction and our ability to attract advertisers and match between consumers and ads. That's one. Two, obviously Realize is the biggest thing, right? The more we get more types of budgets, more types of formats, that will increase the auction on our marketplace. Abby now being part of Realize, which is great.
One is continuously looking for great data.
Speaker Change: that, you know, whether it's contextual data, first-party data, data through our OEM partners, data through our utility apps, all of those integrations make Taboola as a whole a better partner for advertisers. Advertises we want to work with companies that have intent. Let's go ahead and get started.
Speaker Change: That can get closer to the moment when consumers make decisions. [inaudible]
Speaker Change: So I think one, the more we continue to diversify and improve the quality of the data we capture that improves the auction and our ability to attract advertisers and match between consumers and ads. So that's one, two, obviously realize the biggest thing, right? The more we get, more types of budgets, more types of formats.
Speaker Change: That will increase the auction on our marketplace. And Abby now being part of realize, which is great. I mean, it's just not part of the UX, it's just there. With big ambition to make Abby just something that everyone gets to use.
Adam Singolda: It's just now part of the UX, it's just there. We have big ambition to make Abby just something that everyone gets to use at the very beginning or over time as kind of this super accounts manager. With all of those investments and our laser focus on Realize, that is the thing. As I think about what doubles this company, I believe Realize and this going after owning the performance advertising space, all of those things will improve the auction rates for the company, will make us more competitive as we fight for more supply partners. In general, especially now more than ever, given our focus on performance advertising, I think this industry will experience losers and winners based on the strategy companies have chosen. I think being on the performance advertising side now more than ever is the right thing to do.
Speaker Change: at the very beginning, or over time, as Countess Super Accounts Manager.
So with all of those investments and on laser focus. [inaudible]
Speaker Change: on Realize, that is the thing, as I think about what doubles in this company, I believe Realize and this, you know, going after owning the performance adultizing space.
Speaker Change: All of those things will improve the auction rates for the company, will make us more competitive as we fight for more supply partners, and in general especially now more than ever given our focus on performance advertising, I think this industry will experience losers and winners.
Speaker Change: You know, based on the strategy companies have chosen, and I think being on the performance advertising side now more than ever is what I think to do.
Matthew Condon: Great. Very helpful. Thank you so much.
Operator: I'm not showing any further questions at this time. I'd like to turn the call back over to Adam for any closing remarks.
Great, very helpful. Thank you so much.
Speaker Change: And I'm not showing any further questions at the time. I'll turn the call back over to Adam for any closing remarks.
Adam Singolda: All right. Thank you, everyone. To close, one, let me just start by saying I'm very proud of the Taboola team all around the world, working hard, executing. I had a board meeting yesterday, and I said how much fun it is to see a company of our size, over 2,000 employees, almost $2 billion in revenue, executing like a startup, but a scaled one. We started 2025 with real momentum, beating our high end of the guidance across all metrics. We have a very clear strategy which we communicated to the market and a growing validation from both advertisers and publishers in the industry. Realize, which is now used by the entire advertiser base of the company overnight, is off to a strong start.
Adam Singolda: All right, thank you everyone. So to close, one, let me just start by saying I'm very, very proud of the Taboola team all around the world, working hard, executing, you know, I had a board meeting yesterday and I said how much fun it is to see company of our size, you know, over 2000 employees, almost two billion dollars in revenue, executing like a startup by the scaled one. We started 2025 with real momentum, bidding our high end of the guidance across all metrics. Thanks.
Adam Singolda: We have a very clear strategy which we communicated to the market and a growing validation from both advertisers and publishers in the industry.
Adam Singolda: Our focus on performance and measurable outcomes at the right time as the market is looking for partners they can rely on for growth, especially during these times, feels really good. We're confident in our ability to capture a share from this $55 billion market we see ahead of us, deliver value to shareholders, and continue leading the open web in performance advertising. I do want to take a moment to thank everyone for joining this morning, being part of our journey, and we're looking forward to spending more time with you in days and weeks to come.
Adam Singolda: is off to a strong start or focus on performance and measurable outcomes at the right time as the market is looking for partners that can rely on for growth especially during these times feels really good.
Adam Singolda: We're confident in our ability to capture a share from this 55 billion dollar market. We see ahead of us deliver value to shareholders.
Adam Singolda: and continue leading the open web in performance advertising. I don't want to take a moment to thank everyone for joining this morning, being part of our journey, and we're looking forward to spending more time with you in days in which to come.
Operator: Thank you, ladies and gentlemen. This concludes today's presentation. You may now disconnect and have a wonderful day.
Adam Singolda: Thank you, ladies and gentlemen, that's included today's presentation. You may now just connect and have a wonderful day.