Taboola lowered its annual forecasts and posted for Q1 2022: Revenues of $ 354.7 million

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by Ifi Reporter Category:Financial May 13, 2022

Like its competitor Outbrain, Taboola also lowered its annual forecasts, explaining this in the war in Ukraine. She says it does not hurt the demand from advertising customers but does change the exchange rates in such a way that it will roll into results. The company posted mixed results for the first quarter of 2022, and alongside the disappointing forecast, it dropped in late trading last night (Thursday) on Wall Street by about 7%.
The growth forecast has been lowered in the bad scenario by half: about three months ago, Taboola expected growth of 21% -22%, while now it is 9% -12%, to revenue level of $ 1.499 billion to $ 1.539 billion, instead of at least $ 1.666 billion. The gross profit will increase by only 10% -15%, and not 25% -27%, to $ 505-485 million, and the gross profit Ex-TAC ​​(less the payment to the media companies that generate the traffic of users who eventually meet in Tabula advertisements) will increase At 15% -19% and not at 27-29%, to $ 615-595 million.
Instead of adjusted EBITDA increasing by 9% -19% it will decrease by 11% -15% to $ 160-152 million. According to the mid-term range, this is an adjusted EBITDA rate out of the Ex-TAC ​​gross profit of 25.78% (an important parameter for the company). Also, according to the forecast, adjusted profit will fall by 16% -24% to $ 91-83 million, as opposed to the $ 129-111 million range previously discussed.
The previous forecast, given at the end of February, was raised compared to the one given at the end of last September. However, the latest forecast is even lower than at the end of September. That is, instead of going one step forward and one step back, in Taboola go two steps back.
In the second quarter of this year, Taboola expects to report revenue of $ 345-325 million, gross profit of $ 114-104 million, and ex-TAC ​​gross profit of $ 142-132 million. Adjusted EBITDA is expected to be $ 28-23 million, and adjusted net income is $ 11-6 million.
In the first quarter of 2022 Taboola overtook market profit expectations but missed the revenue line. These stood at $ 354.7 million, reflecting 17% growth, with analysts estimating revenue to stand at $ 356.98 million, according to the consensus forecast. Earnings per full dilution were 8.5 cents and $ 21.9 million in total - a decrease of 4% per year, but beyond the company's own forecast of $ 14-12 million. The market expected adjusted earnings of 5 cents per share. The accounting profit for the period was 1.5 cents per share and $ 3.9 million in total.
Gross profit grew 25% higher than revenue to $ 112 million, and Ex-TAC ​​grossed 31% to $ 138.2 million. Last summer, Tabula's $ 800 million acquisition of Connexity was reported, and according to Pro-forma reports, if the results acquired were included in Tabula's in the first quarter of last year, then in the first quarter of 2022, which it has just reported The growth in Ex-TAC's gross profit was 8.4%. It will be recalled that Tabula then made the acquisition close to its merger with Skeleton Spock at $ 2.6 billion after the money (400 million went into the company's coffers). Today Taboola trades itself at a value of $ 845 million.
Adjusted EBITDA grew by 30.5% to $ 38.2 million, so that its share of Ex-TAC ​​gross profit was 25.2%, down from 31.7% a year earlier and 34.6% at 2021. At its investors' conference in late March, Tabula said the target Its for 2025 is a billion-dollar ex-TAC ​​gross profit with an adjusted EBITDA margin of 30%. The numbers for the first quarter and the forecast for the second quarter and for the entire year keep it away from this target. Given that the market is now focusing even more on profit rather than growth, if Tabula fails to improve profitability it will have to grow at a faster pace.
Taboola detailed that out of the revenue increase in the first quarter of 2022 compared to its counterpart last year, $ 21.3 million came from new customers and $ 30.4 million from existing ones. Net Dollar Retention rate increased by 110% - the rate it presented in the previous reports, for the last quarter of 2021. The company generated a free cash flow of $ 1.2 million in the first quarter and ended the period with cash and cash equivalents of 318. million dollar.

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