Taboola reports 8.4% growth in revenue at $303 mn in Q1 2021
Gross Profit grew 69.6% year over year at $89 million
Net income of $18.6 million increased by $42.4 million year over year while adjusted EBITDA of $33.5 million increased $35.3 million year over year.
The company noted that a significant driver of positive financial results in Q1 was an increase year over year in yield, the revenue we make per advertising placement. "We realized good improvement in yield in 2020 and that has continued into Q1. Three things helped us drive this yield growth - Artificial Intelligence (AI), publisher product innovation and adoption, a relentless focus on advertiser products and services, resulting in increased advertiser success."
It also sees significant opportunities to expand the addressable core market into new types of advertisers (Taboola recommending Anything) such as e-commerce, and apps/games, as well as into new sources of user attention (Taboola recommending Anywhere) such as mobile devices, and CTV. We have not included the growth from these initiatives in our current projections.
The company has launched Taboola High Impact, a new advertising solution that integrates Taboola editorial and paid recommendations on homepages, section fronts, mid-article and other visible placements. Video advertisers love it - it’s viewable, visible, and it works.
It also continues to grow our integrations of Apple-News like services on Android devices, and launched new partnerships such as Samsung in Brazil in Q1. "We announced a few exciting business achievements. We signed partnerships with great publishers such as Sinclair Broadcast Group in the U.S., Unify in France, and Financial News in the Asia Pacific (APAC) region. We launched Taboola Stories, similar to Instagram and Snap formats, to enable publishers to create new vertical inventory which grew popular among consumers in social networks."
Taboola had ended 2020 with $1.2 billion in Revenues, $319 million in Gross Profit, $382 million in ex-TAC Gross Profit, (which is what it is left with after paying partners), $8.5 million in Net Income, and $106 million in Adjusted EBITDA. "We also finished the year with over $240 million of cash on our balance sheet, despite only raising $160 million of funding in our history. Our strong financial profile and the opportunity before us led us to decide to go public. We chose to go public via a SPAC with our partners at ION Acquisition Corp 1 Ltd."
The company is raising $545 million in the transaction from ION and our PIPE investors, and we anticipate the transaction closing during the second quarter of 2021.
Buoyed by the Q1 results, the company has projected revenues for fiscal 2021 to grow from $1.298 billion to $1.308 billion versus original projections of $1.277 billion. This would represent year-over-year growth of 9% to 10%. Gross Profit for the fiscal is expected to jump from $374 million to $386 million versus original projections of $365 million. This would represent year-over-year growth of 17% to 21%.
Ex-TAC Gross Profit is projected to grow from $456 million to $466 million versus original projections of $445 million. This would represent year-over-year growth of 19% to 22%. Adjusted EBITDA of $140 million to $150 million versus original projections of $127 million. This would represent year-over-year growth of 32% to 42% and a Ratio of Adjusted EBITDA to ex-TAC Gross Profit of 30% to 33%.
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