Taboola.com Ltd.

Good day and thank you for standing by. Welcome to the Taboola Second Quarter 2025 Earnings 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 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. We would now like to hand the conference over to your first speaker today, Jessica Kourakos, Head of Investor Relations. Please go ahead.

Thank you and good morning everyone and welcome to Taboola's Second 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 to the investor 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. 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.

Thanks, Jessica. Good morning everyone and thank you all for joining us today. Let me start by saying that I'm happy with our Q2 performance and the momentum we're seeing since exiting the quarter. We delivered a strong second quarter, bidding the high end of our guidance across all key metrics. Buying back about 12% of the company in just the first half of the year, reflecting our confidence in the business and our long-term vision. As a result, we're raising full year guidance across the board and are continuing to aggressively buy back shares. We're also seeing exciting early traction with Realize, our new performance advertising platform and we truly believe we're just getting started. Before we go deeper on the quarter and our outlook, I want to quickly remind everyone who we are, the opportunity we're going after and why we believe we can win. Tabula is one of the largest performance advertising platforms on the open web. Our platform Realize helps businesses of all sizes get leads and grow sales. It operates similar to Google Ads or Meta Ads, offering a simple to use platform powered by AI. The key difference is that while Google reaches users in search and Meta in social, Realize engages 600 million people every day across the open web on publisher sites like Yahoo, NBC, ESPN, USA Today, Apple News, Samsung and others, driving those people to action. Our competitive advantage lies in our AI and first party data drawn from what people actually read about versus what people idealize of themselves in social media, giving advertisers authentic insights into user intent and high performing outcome. In 2025, we expect nearly $2 billion in gross revenue and approximately 700 million in exec gross profit, which is what we keep after we pay our partners and a key metric for our business. We expect to generate over $200 million in adjusted EBITDA at a 30% margin with strong free cashflow. As search and social advertisers are mixing out and can't get more growth, advertisers are looking for scalable, performance driven alternatives. Tabula is uniquely positioned to take a share in what we estimate is a $55 billion opportunity and lead that shift across the open web. With that, we can turn to our second quarter results. Our second quarter revenues, exec gross profit and adjusted EBITDA all came in above the high end of our guidance range. With the second quarter, we reported revenues of 465 million representing growth of 9% year over year. Exec gross profit of 172 million, 15% higher than last year, adjusted EBITDA of 45 million, 21% higher than last year with margin expanding significantly. And finally, free cashflow of $34 million grew 31% year over year, allowing us to buy back about $100 million worth of stock in the quarter. In addition, we're pleased to announce that our board has approved an incremental 200 million to our share repurchase program, reflecting our confidence in the long-term value of the business. Moving to our quarterly highlights. As we discussed at our investor day, accelerating exec gross profit is our North star because it ultimately fuels our strong profitability and free cashflow generation. When you look at the 15% growth, we saw an exec this quarter, it was primarily driven by three things. First, we saw nearly 9% growth in the number of scaled advertisers, which are those spending over $100,000 in the last 12 months. This means they see good return with tabula and are likely to stick around. Revenue from scaled advertisers represents the vast majority of our revenue. Second, the average revenue per scaled advertiser rose about 2% versus last year. The third was an easier comparison in the first half given Yahoo was fully ramped by the end of the second quarter. As we showed last quarter, our top priority for accelerating growth is the success of Realize, our new performance ad platform. Realize expands our reach beyond native advertising into the broader performance market across display and social, unlocking new opportunities for growth. This expansion is important as it not only allows us to capture larger budgets from existing advertisers, but also work with new advertisers and agencies who have never bought native before. While it's still early days and not yet material financially, we're encouraged by the momentum we're seeing as 650 advertisers have already tested our new display and social capabilities since the February launch. Let me share a few Q2 examples that showcase the kind of performance advertisers are already seeing with Realize. One good example is a company in the aviation space that's never worked with us before. With Realize, they tried our new display capability, which means they could import their display creatives into Realize, they shared their performance objective, and we were able to beat their performance goal by 34% and maximize travel bookings on their platform. This success led to increased spend with us, which is exactly what you wanna see in this type of cases. Another example I like is in the real estate space. One of our existing advertisers who has bought native advertising from us for two years now was interested in finding new ways to grow. Their goal was to drive more local awareness to their modular home in specific locations around the country. While their native spend was growing, with Realize new capabilities by importing their vertical display campaigns, they were able to see stronger overall conversion rates. This improved the return on ad spend, and as a result, they grew their display budget by 65% and are still growing. These are just a few examples, but they're consistent with what we're seeing more broadly in our early tests with customers. Realize is helping advertisers drive better performance outcomes at scale on the open web, which we believe will translate into incremental dollars being spent on our network, and we're just getting started. Now moving to our unique supply initiative. While attracting more ad spend for Tabula and our existing publisher partners is our main priority, we're also hard at work at an incredible new open web partners who have unique supply and data that performance advertisers really want. Tabula News is a great example of unique supply and is seeing double-digit growth. Advertisers love Tabula News because it gives them a way to reach consumers before they enter social media, before they open and browse the web at a high intent, high impact moment, and it delivers strong performance in return. Another point of strength that is worth noting as it relates to our publisher partners is the minimal effect we're experiencing from LLM-driven changes in search dynamics. There are two key factors that help minimize the impact on Tabula as well as our publisher partners. First, we're fortunate that the vast majority of our publisher partners are top tier enterprises including names like ESPN, USA Today, CNBC, and Nextar who benefit from strong brand recognition and loyal audiences. As a result, they enjoy substantial direct traffic with search traffic typically accounting for just about 30 to 40% of their total. Second, a significant portion of our revenue comes from open web platform partnerships such as Yahoo, Microsoft, Apple, Samsung, and others which receive little to no search traffic to begin with. These two pillars of our supply base have helped our publishers stay strong as well as us maintaining a blended search traffic share of around 5%. To date, we have not seen material impact from recent changes in the search market driven by LLM. Performance remains stable with due to date effects limited to the mid single digits. In summary, when I look at the open web, I see a major opportunity for the market and for us. Advertisers need alternative to search and social in all parts of the open web. Companies like the Tradesk have done a great job capturing top of the final video and CTV campaigns. And app loving has excelled in the app ecosystem. And there is a massive opportunity to become the performance advertising company for everything else, mobile, desktop, OEM, messaging apps, and more. And that's exactly what we're focused on and realize is the key to unlocking our true potential in this market. I'm so proud of our teams for the way we're executing in the first half for launching Realize and getting existing annual clients, hundreds of them, to try it out. As we're getting more budgets, it means we're able to generate even more revenue for our partners, making our share of wallets greater. There's a lot of momentum we're seeing. We beat our Q2 guidance, we're raising our full year guidance, we're generating meaningful cashflow, which allows us to invest in the business and buy a lot of shares back. With that, I'll hand it over to Steve to walk you through our Q2 results and outlook in more detail.