Taboola to Share E-Commerce Strategy Following Acquisition of Connexity | Your money

Describes the approach to capture the share of an estimated total addressable market of $ 124 billion

Provides updated guidance for initial 2021 and 2022 that incorporate the recently completed acquisition of Connexity

NEW YORK, September 28, 2021 (GLOBE NEWSWIRE) – Taboola (Nasdaq: TBLA), a global leader in recommendations for the open web, helping people discover things they might like, shares with the investment community today its strategy to bring more e-commerce solutions to publishers Open web and more business value for advertisers following their acquisition of Connexity. The company also announced that it expects 2022 revenues of $ 1,698 million to $ 1,748 million, gross profit of $ 530 to 550 million and gross profit excluding TAC * of $ 645 to 665 million. This would represent gross margin growth of around 36% and gross margin growth excluding TAC of around 38% from the midpoint of Taboola’s forecast before the 2021 connection.

Taboola completed the Connexity acquisition on September 1, 2021, bringing the 6,000 Connexity publishers and 1,600 direct business relationships to Taboola, opening up new ways for publishers, advertisers and marketers to effectively expand outside the backyard. closed.

Taboola estimates its total addressable market, considering its recent acquisition of Connexity, at $ 124 billion. This includes $ 64 billion in the open web and $ 60 billion in e-commerce ad spending in the walled gardens.

“We estimate that one-third of our own revenue, as well as that of open web publishers, will come from e-commerce over time. Especially in the aftermath of a pandemic, people are shopping online – and it’s best to buy from a trusted editorial publisher. Following the acquisition of Connexity, we are uniquely positioned to deliver an e-commerce strategy to our 9,000 publishers around the world and help merchants diversify outside of walled gardens. Today is a new start for Taboola and our partners. We couldn’t be more excited, ”said Adam Singolda, Founder and CEO of Taboola. “E-commerce will boost our business and position us to capture over $ 100 billion and more available TAM. With Connexity, in 2022 we will be more than double what we were in 2019 in terms of ex-TAC ​​gross margin and we expect $ 100 million in annual ex-TAC ​​gross margin synergies within four years, which is roughly equivalent to adding another Connexity. We are focused on the execution and delivery of the huge opportunity before us. “

Key points include:

The e-commerce industry is accelerating rapidly: According to eMarketer, global e-commerce sales will exceed $ 7.3 trillion by 2025 and continue to increase their share of total sales over in-store sales. Publishers prioritize e-commerce to thrive: Majority of publishers use e-commerce as a source of revenue, according to Digiday, a separate report from eMarketer reinforces this point, noting that 60% of publishers see e-commerce as a source of income. Connexity’s deep e-commerce expertise boosts Taboola’s revenue performance: As one of the largest open web e-commerce multimedia platforms, Connexity creates synergies for Taboola that will help increase revenue by Taboola. This includes offering publishers new ways to monetize and increase returns, while deepening relationships with Taboola publishers.

Update of the forecasts for the third quarter and fiscal year 2021, publication of the initial 2022 forecasts

With the closing of the Connexity acquisition, the Company publishes an updated forecast for the third quarter of fiscal 2021 and the initial fiscal 2022 target for the combined company. These forecasts are on a basis as published with Connexity financial data included from September 1, 2021. These forecasts represent for 2022 gross profit growth excluding TAC of approximately 30% on a basis as published and of 17% on a pro forma basis with Connexity included. for the whole of 2021. The table below provides guidance.

Our forecast assumes that the global economy continues to recover, without any major setbacks related to COVID-19 that could lead to deteriorating economic conditions or significantly reduce demand from advertisers or consumers.

Webcast details

To register for this investor session, please visit the Taboola Investor Relations website at www.taboola.com/about/investors or click on the link below.

Event: Update on Taboola’s Ecommerce Strategy with Connexity Date: Tuesday, September 28, 2021 Time: 11:00 a.m. ET https://taboola.zoom.com/webinar/register/WN—Ys1hGQw9QH6W1xbfwNdTng

* About non-GAAP financial information

This press release includes gross margin excluding TAC and Adjusted EBITDA, which are non-GAAP financial measures. These non-GAAP financial measures are not measures of financial performance in accordance with GAAP and may exclude items important to understanding and evaluating the Company’s financial results. Therefore, these measures should not be viewed in isolation or as an alternative to revenue, gross profit, net profit or other measures of profitability, liquidity or performance under GAAP. You should be aware that the presentation of these measures by the Company may not be comparable to measures with the same name used by other companies.

The Company believes that non-GAAP financial measures provide useful information to management and investors regarding future financial and business trends relating to the Company. The Company believes that the use of these measures provides an additional tool for investors to assess operating results and trends and to compare the Company’s financial measures with other similar companies, many of which present non-compliant financial measures. to GAAP similar to investors. Non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of management judgments as to which items are excluded or included in their calculation. Please refer to the appendix at the end of this press release for reconciliations to the most directly comparable measures in accordance with GAAP.

About Taboola Taboola offers recommendations for the Open Web, helping people discover things they might like.

The company’s AI-powered platform is used by digital properties, including websites, devices and mobile apps, to drive monetization and user engagement. Taboola has built long-term partnerships with some of the world’s largest digital properties, including CNBC, BBC, NBC News, Business Insider, The Independent, and El Mundo.

Over 14,000 advertisers use Taboola to reach over 500 million daily active users in a secure environment for the brand. Following the acquisition of Connexity in 2021, Taboola is a leader in ecommerce recommendations, generating over one million monthly transactions each month. Leading brands such as Walmart, Macy’s, Wayfair, Skechers and eBay are among the key customers.

Learn more about www.taboola.com and follow @taboola on Twitter.

Disclaimer – Forward-looking statements

Certain statements contained in this press release are forward-looking statements. Forward-looking statements are not historical facts and generally relate to future events, including the future financial or operational performance of Taboola.com Ltd. (the society “). For example, the synergies expected from the acquisition of Connexity and the forecasts for the third quarter and the year 2021 and for the year 2022, are forward-looking statements. In some cases, you can identify forward-looking statements by words such as “may”, “should”, “expect”, “intend”, “will”, “estimate”, “anticipate”, “Believe”, “predict”, “potential” or “continue”, or the negative aspects of these terms or variations thereof or similar terminology. These forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and there are risks that predictions, forecasts, projections and other forward-looking statements will not be achieved. You should understand that a number of factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in these forward-looking statements, including the risks set forth under “Risk Factors” in our statements. registration form. F-1 and Form F-4 and our other documents filed with the SEC. The Company cautions readers not to place undue reliance on forward-looking statements, which speak only as of the date they are posted. The Company does not undertake or accept any obligation or commitment to publicly issue updates or revisions to any forward-looking statement to reflect any change in its expectations or any change in the events, conditions or circumstances upon which such statement is made. is based, unless required by law.

APPENDIX: Non-GAAP Reconciliation

RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES FOR Q3 2021, FULL YEAR 2021 and FULL YEAR 2022

(Unaudited)

The following table presents a reconciliation of the gross margin to the gross margin excluding TAC.

The following table presents a reconciliation of net income (loss) and Adjusted EBITDA based on the midpoint of current forecasts.

Note: We have historically provided guidance for Adjusted EBITDA, but not for net income (loss), the most directly comparable GAAP measure. Certain items of net income (loss), including income tax expense and stock-based compensation expense, are not predictable due to the high variability and difficulty in making accurate forecasts. Therefore, it is not possible for us to provide forecasts for net income (loss) or to reconcile our forecast of Adjusted EBITDA without unreasonable efforts. For these reasons, we do not expect to project net income (loss) for the foreseeable future.

However, due to the materiality of the Connexity acquisition and its potential impacts on our financial condition and results of operations, we have invested substantial resources in the due diligence and financial planning and analysis of the transaction. For these reasons and to support our internal governance processes, we have prepared and can provide one-time estimates of net income (loss) and its components for the periods indicated.

Investors: Jennifer Horsley [email protected]

Press: Dave Struzzi [email protected]

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