8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported):

Februray 28, 2024

TABOOLA.COM LTD.

(Exact name of registrant as specified in its charter)

Israel	001-40566	Not applicable
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)

16 Madison Square West

7th Floor

New York, NY 10010

(Address of principal executive offices, including zip code)

212-206-7633

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Ordinary shares, no par value	TBLA	The Nasdaq Global Market
Warrants to purchase ordinary shares	TBLAW	The Nasdaq Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

On February 28, 2024, Taboola.com Ltd. (the “Company” or “Taboola”) issued a press release announcing its financial results for the fourth quarter and full year 2023. That press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

Item 7.01. Regulation FD Disclosure.

On February 28, 2024, the Company made available a shareholder letter and investor presentation which provide highlights of the Company’s fourth quarter and full year 2023 financial results and related information, which is being made available in connection with the February 28, 2024 earnings conference call.

The shareholder letter and investor presentation can be found on Taboola’s website at https://investors.taboola.com. We have included our web address in this Current Report on Form 8-K solely for informational purposes and the information on our website is not incorporated by reference into this Current Report on Form 8-K.

The information furnished with this Form 8-K, including Exhibit 99.1 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statement and Exhibits.

(d) Exhibits

TABLE OF CONTENTS

Exhibit No.	Description
99.1	Press Release dated February 28, 2024
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	TABOOLA.COM LTD.
	By:	/s/ Stephen Walker
		Name:	Stephen Walker
		Title:	Chief Financial Officer
Date: February 28, 2024

EX-99.1

Exhibit 99.1

Taboola Reports Strong Q4 Net Income and Adj. EBITDA;

Profits Beat High End of Guidance for Q4 and FY 2023; 2024 Guidance Calls for Record Year With Substantial Growth Across All Key Metrics

Key Highlights

2023 Financials - strong exiting momentum sets Taboola up for great 2024

- Q4 2023 Revenue +13%, Gross profit +4%, and ex-TAC Gross Profit +6% inline with guidance midpoint (including small impact from changes to Microsoft’s ad platform)

- Q4 2023 strong Net income, and Adj. EBITDA beat above high end of guidance range

2024 Financials - step function top line growth and massive Adj. EBITDA/margin growth

- 2024 step function growth / record year: ~$2B in Revenue (+33% YoY), ~$545M Gross profit (+28% YoY), ~$670M ex-TAC Gross Profit (+25% YoY), $200M+ Adj. EBITDA (2x+ YoY), $100M+ Free Cash Flow (~2x YoY) at guidance midpoints

- Reiterating 2024 Adj. EBITDA $200M+ (30% margin) and $100M+ Free Cash Flow

Announcing new $100M buyback authorization (represents ~6% of current market cap)

Engaging/reaching users - Yahoo crossing $100M+ in Q1; Taboola recently selected by iconic consumer brand to be official advertising partner

- Yahoo progressing well, crossing $100M in Q1, strong brand/OMNI advertising revenue

- Significant opportunity for Taboola’s “Advertising in a Box”, becoming 3rd party platforms’ advertising software/engine. Powering ads for Yahoo & now for another iconic consumer co.

- Taboola News continues strong momentum, finishing with $100M+ in revenue in 2023

Improving yield - fast adoption of AI (Maximize Conversion), back to yield growth in 2024

- Returning to positive yield growth beginning in Q2 2024. Investments in AI panning out

- Performance advertising benefiting from Maximize Conversion adoption at 50%+ of revenue

- eCommerce grew double digits in 2023 and positioned well for success

- Deep learning-AI/data actions set to drive yield in 2024 and beyond…

New York, NY, February 28, 2024 -- Taboola (Nasdaq: TBLA), a market leading technology company powering recommendations for the open web, today announced its results for the quarter ended December 31, 2023.

“We had a strong end to 2023, with Q4 2023 revenue up 13%, ex-TAC Gross Profit up 6% versus the prior year, and Adjusted EBITDA of $50.1M significantly exceeding the top end of our guidance range. 2024 is a step function growth year for us: ex-TAC is expected to grow 25% vs 2023, Adj. EBITDA of $200M+ is over 2x 2023, Free Cash Flow of $100M+ is almost 2x 2023 - all driven by Yahoo ramping with $100M+ in Q1 2024, our investment in AI panning out with yields growing in 2024, another iconic consumer company selecting Taboola as a new official advertising partner, and our growth engines (eCommerce, Taboola News and Bidder) all having a lot of momentum. More than anything, I’m super proud of our Taboolars’ dedication and ability to stay high performing through the most difficult of circumstances.  We have ended 2023 with the wind at our backs and 2024 is shaping up to be a record year for Taboola,” said Adam Singolda, CEO of Taboola.

1

Q4 2023 Highlights

● Q4 2023 Revenues of $419.8M, Gross profit of $138.3M, ex-TAC Gross Profit of $168.5M, Net income of $3.7M, Non-GAAP Net Income of $31.4M and Adjusted EBITDA of $50.1M (beat high end of guidance range of $26M - $33M).

● Revenue Highlights

○ Revenue growth driven by new publisher partners added to the Taboola network.

○ Publisher wins that were new and from competitors included A360 Media, Postmedia, Diario, Deutsche Welle, Times Internet, Nine Entertainment and Bunshun Online.

○ Renewed relationships with many well-known publishers including NBC News, McClatchy, Editora Globo, R7, Prisa, Alayans Media, and Ynet.

● Notable product launches and advancements

○ Maximize Conversions, our first offering in our AI-bidding technology suite, reached over 50 percent of advertiser spend with great brands using it including Hyundai, ERGO, Leica Camera, Sonova, Peugeot, and Opel.

○ Taboola Generative AI Admaker released, which allows advertisers to edit existing creative automatically - 25% of new creatives generated use Generative AI tools.

FY 2023 Highlights

● 2023 Revenues of $1,439.7M, Gross profit of $425.6M, ex-TAC Gross Profit of $535.8M, Net loss of $82.0M, Non-GAAP Net Income of $32.6M and Adjusted EBITDA of $98.7M.

● FY 2023 Net cash provided by operating activities of $84.4M and Free Cash Flow of $52.2M.

● FY 2023 eCommerce grew double-digits and exceeded expectations, accounting for ~20% of ex-TAC in 2023.

● FY 2023 Taboola News, distributing content to Android OEMs exceeded 2023 expectations,  and grew revenue to over $100M in 2023. Together with Header Bidding (excluding Microsoft), accounted for ~10% of ex-TAC.

FY 2024 Guidance Summary

● Initiating 2024 top line guidance that expects significant growth versus prior year; revenue and ex-TAC Gross profit midpoints expected to grow ~33% and ~25%, respectively.

● Reiterating 2024 Adjusted EBITDA $200M+; Free Cash Flow $100M+.

For more commentary on the quarter, please refer to Taboola’s Q4 and Full Year 2023 Shareholder Letter and Investor Presentation, both of which are posted on Taboola’s website today at https://investors.taboola.com.

2

Fourth Quarter and Full Year 2023 Results Summary

(dollars in millions, except share and per share data)	Three months ended December 31,						Year ended December 31,
	2023			2022			2023			2022
	Unaudited
Revenues	$	419.8		$	371.3		$	1,439.7		$	1,401.2
Gross profit	$	138.3		$	133.2		$	425.6		$	464.3
Net income (loss)	$	3.7		$	15.2		$	(82.0	)	$	(12.0	)
EPS diluted (1)	$	0.01		$	0.06		$	(0.24	)	$	(0.05	)
Ratio of net income (loss) to gross profit		2.7	%		11.4	%		(19.3	%)		(2.6	%)
Cash flow provided by operating activities	$	22.8		$	20.1		$	84.4		$	53.5
Cash, cash equivalents, short-term deposits and investments	$	181.8		$	262.8		$	181.8		$	262.8
Weighted-average shares used in computing net income (loss) per share, diluted (1)		357,796,637			263,160,470			346,376,114			254,284,781

Non-GAAP Financial Data *
ex-TAC Gross Profit	$	168.5		$	158.9		$	535.8		$	569.6
Adjusted EBITDA	$	50.1		$	63.5		$	98.7		$	156.7
Non-GAAP Net Income	$	31.4		$	43.3		$	32.6		$	91.4
Ratio of Adjusted EBITDA to ex-TAC Gross Profit		29.7	%		40.0	%		18.4	%		27.5	%
Free Cash Flow	$	10.5		$	13.6		$	52.2		$	18.6

¹ The weighted-average shares for the three months and the year ended December 31, 2023 includes 45,198,702 Non-voting Ordinary shares.

First Quarter and Full Year 2024 Guidance

For the First Quarter and Full Year 2024, the Company currently expects:

	Q1 2024 Guidance		FY 2024 Guidance
	Unaudited
	(dollars in millions)
Revenues	$	387 - $413	$	1,892 - $1,942
Gross profit	$	94 - $106	$	535 - $555
ex-TAC Gross Profit*	$	123 - $135	$	656 - $679
Adjusted EBITDA*	$	10 - $17	$	200	+
Non-GAAP Net Income (Loss)*	$	(15)-($3)	$	84 - $104

3

Although we provide guidance for Adjusted EBITDA and Non-GAAP Net Income (Loss), we are not able to provide guidance for projected net income (loss), the most directly comparable GAAP measure. Certain elements of net income (loss), including share-based compensation expenses and warrant valuations, are not predictable due to the high variability and difficulty of making accurate forecasts. As a result, it is impractical for us to provide guidance on net income (loss) or to reconcile our Adjusted EBITDA and Non-GAAP Net Income (Loss) guidance without unreasonable efforts. Consequently, no disclosure of projected net income (loss) is included. For the same reasons, we are unable to address the probable significance of the unavailable information.

Webcast Details

Taboola's senior management team will discuss the Company's earnings on a call that will take place on February 28, 2024, at 8:30 AM ET. The call can be accessed via webcast at https://investors.taboola.com. To access the call by phone, please go to this link to register https://register.vevent.com/register/BIde7d71bf81ff40529269fd4f8823c5b9and you will be provided with dial in details. The webcast will be available for replay for one year, through the close of business on February 28, 2024.

*About Non-GAAP Financial Information

This press release includes ex-TAC Gross Profit, Adjusted EBITDA, Ratio of Adjusted EBITDA to ex-TAC Gross Profit, Free Cash Flow, Non-GAAP Net Income (Loss), 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 that are significant in understanding and assessing the Company’s financial results. Therefore, these measures should not be considered in isolation or as an alternative to revenues, gross profit, net income (loss), cash flows from operations or other measures of profitability, liquidity or performance under GAAP. You should be aware that the Company’s presentation of these measures may not be comparable to similarly-titled measures used by other companies.

The Company believes non-GAAP financial measures provide useful supplemental 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 use in evaluating operating results and trends and in comparing the Company’s financial measures with other similar companies, many of which present similar non-GAAP financial measures to investors. Non-GAAP financial measures are subject to inherent limitations because they reflect the exercise of judgments by management about which items are excluded or included in calculating them, which may vary from period to period. Please refer to the appendix at the end of this press release for reconciliations to the most directly comparable measures in accordance with GAAP.

4

Note Regarding Forward-Looking Statements

Certain statements in this press release are forward-looking statements. Forward-looking statements generally relate to future events including future financial or operating performance of Taboola.com Ltd. (the “Company”). In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expect”, “guidance”, “intend”, “will”, “estimate”, “anticipate”, “believe”, “predict”, “target”, “potential” or “continue”, or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward looking statements.

These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by the Company and its management, are inherently uncertain. Uncertainties and risk factors that could affect the Company’s future performance and cause results to differ from the forward-looking statements in this press release include, but are not limited to: the Company’s ability to grow and manage growth profitably, maintain relationships with customers and retain its management and key employees; changes in applicable laws or regulations; the Company’s estimates of expenses and profitability and underlying assumptions with respect to accounting presentations and purchase price and other adjustments; the extent to which we will voluntarily prepay additional long-term debt or buyback any of our Ordinary shares pursuant to authority granted by the Company’s Board of Directors, which may depend upon market and economic conditions, other business opportunities and priorities and, with respect to the buyback of our Ordinary shares, the availability of sufficient continuing authority being approved and re-approved as necessary by the Tel Aviv District Court Economic Department to permit share buybacks (and our continued use of a net issuance mechanism to satisfy tax withholding obligations related to equity-based compensation on behalf of our directors, officers and other employees) or other factors; the new $100 million buyback authorization referenced in this press release replaces our former share buyback plan which was largely exhausted; the Company’s ability to transition to and fully launch the native advertising service for Yahoo on the currently anticipated schedule; the ability to generate or achieve the increase in Adjusted EBITDA and Free Cash Flow in 2024 or our expected revenue run-rate once Yahoo integration is live, in each case to the levels assumed in this press release or at all; ability to attract new digital properties and advertisers; ability to meet minimum guarantee requirements in contracts with digital properties; intense competition in the digital advertising space, including with competitors who have significantly more resources; ability to grow and scale the Company’s ad and content platform through new relationships with advertisers and digital properties; ability to secure high quality content from digital properties; ability to maintain relationships with current advertiser and digital property partners; ability to prioritize investments to improve profitability and free cash flow; ability to make continued investments in the Company’s AI-powered technology platform; the need to attract, train and retain highly-skilled technical workforce; changes in the regulation of, or market practice with respect to, “third party cookies” and its impact on digital advertising; continued engagement by users who interact with the Company’s platform on various digital properties; reliance on a limited number of partners for a significant portion of the Company’s revenue; changes in laws and regulations related to privacy, data protection, advertising regulation, competition and other areas related to digital advertising; ability to enforce, protect and maintain intellectual property rights; risks related to the fact that we are incorporated in Israel and governed by Israeli law; the potential impacts of the war in Israel to the Company’s operations; and other risks and uncertainties set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 under Part 1, Item 1A “Risk Factors” and in the Company’s subsequent filings with the Securities and Exchange Commission.

5

Nothing in this press release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on these forward-looking statements, which speak only as of the date they were made. The Company undertakes no duty to update these forward-looking statements except as may be required by law.

About Taboola

Taboola is a market leading technology powering recommendations for the open web.

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

Approximately 17,000 advertisers use Taboola to reach nearly 600 million daily active users in a brand-safe environment. Following the acquisition of Connexity in 2021, Taboola is a leader in powering e-commerce recommendations, driving more than 1 million monthly transactions each month. Leading brands, including Walmart, Macy’s, Wayfair, Skechers and eBay are among key customers.

Learn more at www.taboola.com and follow @taboola on X.

Investor Contact:	Press Contact:
Jessica Kourakos	Dave Struzzi
investors@taboola.com	press@taboola.com

6

CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands, except share and per share data

	December 31, 2023		December 31, 2022
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	176,108	$	165,893
Short-term investments		5,725		96,914
Restricted deposits		1,407		750
Trade receivables (net of allowance for credit losses of $10,207 and $6,748 as of December 31, 2023 and 2022, respectively)		306,307		256,708
Prepaid expenses and other current assets		69,865		73,643
Total current assets		559,412		593,908
NON-CURRENT ASSETS
Long-term prepaid expenses		39,602		42,945
Commercial agreement asset		289,451		—
Restricted deposits		4,247		4,059
Deferred tax assets, net		—		3,821
Operating lease right of use assets		61,746		66,846
Property and equipment, net		72,155		73,019
Intangible assets, net		125,258		189,156
Goodwill		555,931		555,869
Total non-current assets		1,148,390		935,715
Total assets	$	1,707,802	$	1,529,623

7

CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands, except share and per share data

	December 31, 2023			December 31, 2022
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Trade payables	$	282,012		$	247,504
Short-term operating lease liabilities		20,264			14,753
Accrued expenses and other current liabilities		118,689			102,965
Current maturities of long-term loan		3,000			3,000
Total current liabilities		423,965			368,222
LONG-TERM LIABILITIES
Long-term loan, net of current maturities		142,164			223,049
Long-term operating lease liabilities		49,450			57,928
Warrants liability		6,129			6,756
Deferred tax liabilities, net		14,815			34,133
Other long-term liabilities		14,217			5,000
Total long-term liabilities		226,775			326,866
SHAREHOLDERS' EQUITY
Ordinary shares with no par value- Authorized: 700,000,000 as of December 31, 2023 and 2022; 295,670,620 and 254,133,863 shares issued and outstanding as of December 31, 2023 and 2022, respectively		—			—
Non-voting Ordinary shares with no par value- Authorized: 46,000,000 as of December 31, 2023 and 2022; 45,198,702 and 0 shares issued and outstanding as of December 31, 2023 and 2022, respectively		—			—
Treasury Ordinary shares, at cost - 15,240,471 and 0 shares as of December 31, 2023 and 2022, respectively		(55,513	)		—
Additional paid-in capital		1,262,093			903,789
Accumulated other comprehensive income (loss)		942			(834	)
Accumulateddeficit		(150,460	)		(68,420	)
Total shareholders' equity		1,057,062			834,535
Total liabilities and shareholders' equity	$	1,707,802		$	1,529,623

8

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

U.S. dollars in thousands, except share and per share data

	Three months ended December 31,						Year ended December 31,
	2023			2022			2023			2022
	Unaudited
Revenues	$	419,774		$	371,267		$	1,439,685		$	1,401,150
Cost of revenues:
Traffic acquisition cost		251,264			212,399			903,866			831,508
Other cost of revenues		30,260			25,694			110,261			105,389
Total cost of revenues		281,524			238,093			1,014,127			936,897
Gross profit		138,250			133,174			425,558			464,253
Operating expenses:
Research and development		34,379			28,548			136,255			129,276
Sales and marketing		64,911			55,814			246,342			246,803
General and administrative		30,165			23,777			106,698			101,839
Total operating expenses		129,455			108,139			489,295			477,918
Operating income (loss)		8,795			25,035			(63,737	)		(13,665	)
Finance income (expenses), net		(1,421	)		(3,176	)		(12,804	)		9,213
Income (loss) before income taxes expenses		7,374			21,859			(76,541	)		(4,452	)
Income tax expenses		(3,651	)		(6,675	)		(5,499	)		(7,523	)
Net income (loss)	$	3,723		$	15,184		$	(82,040	)	$	(11,975	)
Net income (loss) per share attributable to Ordinary and Non-voting Ordinary shareholders, basic	$	0.01		$	0.06		$	(0.24	)	$	(0.05	)
Weighted-average shares used in computing net income (loss) per share, basic		348,538,870			261,922,644			346,376,114			254,284,781
Net income (loss) per share attributable to Ordinary and Non-voting Ordinary shareholders, diluted	$	0.01		$	0.06		$	(0.24	)	$	(0.05	)
Weighted-average shares used in computing net income (loss) per share, diluted		357,796,637			263,160,470			346,376,114			254,284,781

9

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

U.S. dollars in thousands

	Three months ended December 31,				Year ended December 31,
	2023		2022		2023			2022
	Unaudited
Net income (loss)	$	3,723	$	15,184	$	(82,040	)	$	(11,975	)
Other comprehensive income (loss):
Unrealized gains (losses) on available-for-sale marketable securities, net		12		183		515			(521	)
Unrealized gains (losses) on derivative instruments, net		1,148		1,707		1,261			(313	)
Other comprehensive income (loss)		1,160		1,890		1,776			(834	)
Comprehensive income (loss)	$	4,883	$	17,074	$	(80,264	)	$	(12,809	)

SHARE-BASED COMPENSATION BREAK-DOWN BY EXPENSE LINE

U.S. dollars in thousands

	Three months ended December 31,				Year ended December 31,
	2023		2022		2023		2022
	Unaudited
Cost of revenues	$	842	$	865	$	3,924	$	3,092
Research and development		6,190		5,545		24,471		26,433
Sales and marketing		3,584		4,264		16,397		22,615
General and administrative		4,847		5,276		19,539		22,781
Total share-based compensation expenses	$	15,463	$	15,950	$	64,331	$	74,921

10

DEPRECIATION AND AMORTIZATION BREAK-DOWN BY EXPENSE LINE

U.S. dollars in thousands

	Three months ended December 31,				Year ended December 31,
	2023		2022		2023		2022
	Unaudited
Cost of revenues	$	11,260	$	8,160	$	39,024	$	33,349
Research and development		770		474		2,528		2,468
Sales and marketing		13,539		13,240		54,105		54,157
General and administrative		234		636		855		1,247
Total depreciation and amortization expense	$	25,803	$	22,510	$	96,512	$	91,221

11

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

	Three months ended December 31,						Year ended December 31,
	2023			2022			2023			2022
	Unaudited
Cash flows from operating activities
Net income (loss)	$	3,723		$	15,184		$	(82,040	)	$	(11,975	)
Adjustments to reconcile net income (loss) to net cash flows provided by operating activities:
Depreciation and amortization		25,803			22,510			96,512			91,221
Share-based compensation expenses		15,463			15,950			64,331			74,921
Net loss (gain) from financing expenses		(2,085	)		(3,257	)		(816	)		4,476
Revaluation of the Warrants liability		106			2,517			(627	)		(24,471	)
Amortization of loan and credit facility issuance costs		399			1,003			1,619			2,009
Amortization of premium and accretion of discount on short-term investments, net		9			(357	)		(914	)		(679	)
Loss from disposal of property and equipment		1,571			—			1,571			—
Change in operating assets and liabilities:
Increase in trade receivables, net		(74,189	)		(71,914	)		(49,599	)		(11,242	)
Decrease (increase) in prepaid expenses and other current assets and long-term prepaid expenses		3,380			3,136			5,934			(10,785	)
Increase (decrease) in trade payables		34,341			37,834			36,563			(16,825	)
Increase (decrease) in accrued expenses and other current liabilities and other long-term liabilities		19,825			3,584			25,202			(21,932	)
Decrease in deferred taxes, net		(7,278	)		(7,653	)		(15,496	)		(17,329	)
Change in operating lease right of use assets		4,383			3,992			16,830			15,528
Change in operating lease liabilities		(2,659	)		(2,471	)		(14,697	)		(19,433	)
Net cash provided by operating activities		22,792			20,058			84,373			53,484
Cash flows from investing activities
Purchase of property and equipment, including capitalized internal-use software		(12,294	)		(6,438	)		(32,133	)		(34,914	)
Cash paid in connection with acquisitions, net of cash acquired		—			—			—			(7,981	)
Proceeds from (investment in) restricted deposits		(136	)		(7	)		(730	)		91
Proceeds from maturities of short-term investments		6,825			23,464			114,494			29,624
Investments in (purchase of) short-term investments		—			1			(21,991	)		(126,381	)
Net cash provided by (used in) investing activities		(5,605	)		17,020			59,640			(139,561	)
Cash flows from financing activities
Exercise of options and vested RSUs		1,524			920			6,953			8,387
Payment of tax withholding for share-based compensation expenses		(591	)		(1,641	)		(3,804	)		(5,751	)
Repurchase of Ordinary shares		(32,356	)		—			(55,513	)		—
Repayment of long-term loan		(50,000	)		(62,014	)		(82,250	)		(64,264	)
Costs associated with entering into a revolving credit facility		—			(184	)		—			(1,245	)
Net cash used in financing activities		(81,423	)		(62,919	)		(134,614	)		(62,873	)
Exchange rate differences on balances of cash and cash equivalents		2,085			3,257			816			(4,476	)
Increase (decrease) in cash and cash equivalents		(62,151	)		(22,584	)		10,215			(153,426	)
Cash and cash equivalents - at the beginning of the period		238,259			188,477			165,893			319,319
Cash and cash equivalents - at the end of the period	$	176,108		$	165,893		$	176,108		$	165,893

12

	Three months ended December 31,				Year ended December 31,
	2023		2022		2023		2022
	Unaudited
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Income taxes	$	8,076	$	6,199	$	18,011	$	28,798
Interest	$	3,908	$	5,618	$	18,488	$	20,712
Non-cash investing and financing activities:
Purchase of property and equipment, including capitalized internal-use software	$	639	$	1,657	$	639	$	1,657
Share-based compensation included in capitalized internal-use software	$	522	$	472	$	2,253	$	1,932
Creation of operating lease right-of-use assets	$	1,126	$	5,621	$	11,730	$	17,269
Issuance of Ordinary shares and Non-voting Ordinary shares related to Commercial agreement	$	—	$	—	$	288,063	$	—

  APPENDIX: Non-GAAP Reconciliation

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR THE THREE MONTHS AND THE YEAR ENDED DECEMBER 31, 2023 AND 2022 (UNAUDITED)

The following table provides a reconciliation of revenues to ex-TAC Gross Profit.

	Three months ended December 31,				Year ended December 31,
	2023		2022		2023		2022
	(dollars in thousands)
Revenues	$	419,774	$	371,267	$	1,439,685	$	1,401,150
Traffic acquisition cost		251,264		212,399		903,866		831,508
Other cost of revenues		30,260		25,694		110,261		105,389
Gross profit	$	138,250	$	133,174	$	425,558	$	464,253
Add back: Other cost of revenues		30,260		25,694		110,261		105,389
ex-TAC Gross Profit	$	168,510	$	158,868	$	535,819	$	569,642

13

The following table provides a reconciliation of net income (loss) to Adjusted EBITDA.

	Three months ended December 31,				Year ended December 31,
	2023		2022		2023			2022
	(dollars in thousands)
Net income (loss)	$	3,723	$	15,184	$	(82,040	)	$	(11,975	)
Adjusted to exclude the following:
Finance (income) expenses, net		1,421		3,176		12,804			(9,213	)
Income tax expenses		3,651		6,675		5,499			7,523
Depreciation and amortization		25,803		22,510		96,512			91,221
Share-based compensation expenses		12,727		13,214		53,749			63,830
Restructuring expenses (1)		—		—		—			3,383
Holdback compensation expenses (2)		2,736		2,736		10,582			11,091
M&A and other costs (3)		—		—		1,571			816
Adjusted EBITDA	$	50,061	$	63,495	$	98,677		$	156,676

¹ Costs associated with the Company’s cost restructuring program implemented in September 2022.

² Represents share-based compensation due to holdback of Taboola Ordinary shares issuable under compensatory arrangements relating to Connexity acquisition.

³ The year ended December 31, 2023 includes one-time costs related to the Commercial agreement.

We calculate Ratio of net income (loss) to gross profit as net income (loss) divided by gross profit. We calculate Ratio of Adjusted EBITDA to ex-TAC Gross Profit, a non-GAAP measure, as Adjusted EBITDA divided by ex-TAC Gross Profit. We believe that the Ratio of Adjusted EBITDA to ex-TAC Gross Profit is useful because TAC is what we must pay digital properties to obtain the right to place advertising on their websites, and we believe focusing on ex-TAC Gross Profit better reflects the profitability of our business. The following table reconciles Ratio of net income (loss) to gross profit and Ratio of Adjusted EBITDA to ex-TAC Gross Profit for the period shown.

	Three months ended December 31,						Year ended December 31,
	2023			2022			2023			2022
	(dollars in thousands)
Gross profit	$	138,250		$	133,174		$	425,558		$	464,253
Net income (loss)	$	3,723		$	15,184		$	(82,040	)	$	(11,975	)
Ratio of net gain (loss) to gross profit		2.7	%		11.4	%		(19.3	%)		(2.6	%)
ex-TAC Gross Profit	$	168,510		$	158,868		$	535,819		$	569,642
Adjusted EBITDA	$	50,061		$	63,495		$	98,677		$	156,676
Ratio of Adjusted EBITDA margin to ex-TAC Gross Profit		29.7	%		40.0	%		18.4	%		27.5	%

14

The following table provides a reconciliation of net income (loss) to Non-GAAP Net Income.

	Three months ended December 31,						Year ended December 31,
	2023			2022			2023			2022
	(dollars in thousands)
Net income (loss)	$	3,723		$	15,184		$	(82,040	)	$	(11,975	)
Amortization of acquired intangibles		15,977			15,966			63,888			63,557
Share-based compensation expenses		12,727			13,214			53,749			63,830
Restructuring expenses (1)		—			—			—			3,383
Holdback compensation expenses (2)		2,736			2,736			10,582			11,091
M&A and other costs (3)		—			—			1,571			816
Revaluation of Warrants		106			2,517			(627	)		(24,471	)
Foreign currency exchange rate losses (4)		(1,571	)		(4,430	)		(946	)		(1,377	)
Income tax effects		(2,315	)		(1,909	)		(13,597	)		(13,472	)
Non-GAAP Net Income	$	31,383		$	43,278		$	32,580		$	91,382

¹Costs associated with the Company’s cost restructuring program implemented in September 2022.

²Represents share-based compensation due to holdback of Taboola Ordinary shares issuable under compensatory arrangements relating to Connexity acquisition.

³ The year ended December 31, 2023 includes one-time costs related to the Commercial agreement.

⁴ Represents income or loss related to the remeasurement of monetary assets and liabilities to the Company's functional currency using exchange rates in effect at the end of the reporting period.

The following table provides a reconciliation of net cash provided by operating activities to Free Cash Flow.

	Three months ended December 31,						Year ended December 31,
	2023			2022			2023			2022
	(dollars in thousands)
Net cash provided by operating activities	$	22,792		$	20,058		$	84,373		$	53,484
Purchases of property and equipment, including capitalized internal-use software		(12,294	)		(6,438	)		(32,133	)		(34,914	)
Free Cash Flow	$	10,498		$	13,620		$	52,240		$	18,570

15

APPENDIX: Non-GAAP Guidance Reconciliation

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR Q1 2024 AND FULL YEAR 2024 GUIDANCE

(Unaudited)

The following table provides a reconciliation of projected gross profit to ex-TAC Gross Profit.

	Q1 2024 Guidance		FY 2024 Guidance
	Unaudited
	(dollars in millions)
Revenues	$	387 - $413	$	1,892 - $1,942
Traffic acquisition cost	$	(264)-($278)	$	(1,236)-($1,263)
Other cost of revenues	$	(29)-($29)	$	(121)-($124)
Gross profit	$	94 - $106	$	535 - $555
Add back: Other cost of revenues	$	(29)-($29)	$	(121)-($124)
ex-TAC Gross Profit	$	123 - $135	$	656 - $679

Although we provide a projection for Free Cash Flow, we are not able to provide a projection for net cash provided by operating activities, the most directly comparable GAAP measure. Certain elements of net cash provided by operating activities, including taxes and timing of collections and payments, are not predictable therefore projecting an accurate forecast is difficult. As a result, it is impractical for us to provide projections on net cash provided by operating activities or to reconcile our Free Cash Flow projections without unreasonable efforts. Consequently, no disclosure of projected net cash provided by operating activities is included. For the same reasons, we are unable to address the probable significance of the unavailable information.

16

XML

Document and Entity Information	Feb. 28, 2024
Entity Listings [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Feb. 28, 2024
Entity File Number	001-40566
Entity Registrant Name	TABOOLA.COM LTD.
Entity Central Index Key	0001840502
Entity Incorporation, State or Country Code	L3
Entity Tax Identification Number	00-0000000
Entity Address, Address Line One	16 Madison Square West
Entity Address, Address Line Two	7th Floor
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10010
City Area Code	212
Local Phone Number	206-7633
Entity Emerging Growth Company	false
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Ordinary shares, no par value [Member]
Entity Listings [Line Items]
Title of 12(b) Security	Ordinary shares, no par value
Trading Symbol	TBLA
Security Exchange Name	NASDAQ
Warrants to purchase ordinary shares [Member]
Entity Listings [Line Items]
Title of 12(b) Security	Warrants to purchase ordinary shares
Trading Symbol	TBLAW
Security Exchange Name	NASDAQ