Good day, and welcome to the investor conference call. At this time, all participants are in listen only mode. After the speaker's presentation, there'll be a question and answer session, and instructions will be given at that time. As a reminder, this call may be recorded. I would like to turn the call over to Brenley Johnson, Investor Relations. You may begin. Thank you. Good morning, everyone. Welcome to Taboola's November 28th, 2022 investor conference call. I'm here with Adam Singolda, our Founder and CEO, and Steve Walker, our CFO. We issued a press release in investor deck earlier today. It is available on the investor section of our website. Now, I'll quickly cover the safe harbor. Certain statements today, including projection or estimates regarding the impact of the proposed transaction on the company's future financial or operating performance are a forward-looking statement. 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. 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 today's transaction press release. Future events could differ materially and adversely from those anticipated. During the call, we will use terms defined in today's press release and refer to non-GAAP financial measures. Please refer to the press release in investor deck for explanations information regarding reconciliation to GAAP. With that, I'll turn the call over to Adam. Thank you so much. Hey, everyone. Thanks for joining us. I hope you all had a great Thanksgiving. There's no doubt I feel a lot to be thankful on this day. I'm so happy to be here sharing this one of a kind partnership with all of you. It's obviously very special for us, and probably one of the most special partnerships in the history of the Internet, in my opinion. It has a very positive effect of all of the communities we care about, our shareholders, as it relates to the metrics we care about. We'll speak about that today. Our advertisers and publishers. We prepared a deck for you, so let's get to it so we can give us enough time for questions. Next slide, please. This is, you know, one of the most historic relationships that Taboola has ever done. This is unique publisher, advertiser and contextual data opportunity. This is Yahoo and Taboola partnering, announced today. Yahoo is an internet hero. I mean, we all love Yahoo. It's, you know, a privilege for me and us to partner with this iconic brand. It's a leading email provider. About almost 900 million people a month go to Yahoo. They trust Yahoo. If you look at the top websites across so many verticals, you'll see Yahoo. They're trusted by consumers, whether that's sports or news or finance and others. If you ask advertisers who buy Yahoo, they'll let you know that because of the trust consumers have with the brand, the conversion and the quality of that advertising experience is just incredible. That opportunity is very unique for us and Yahoo into the future. Next slide. What you're announcing today is essentially the longest publisher partnership we've ever made. We will be powering native advertising for Yahoo for the next 30 years. You know, I joke that we will be taking day trips to Mars when this gets renewed. What it means is that there's a lot of great things that will happen here to Yahoo and Taboola, to advertisers, publishers and our shareholders. This is just a screenshot of what is a native ad currently presented on Yahoo, which many of us are using all the time. Next slide. Let's review some of the details, and then we'll go into the financials. 30 years means essentially predictability for advertisers. It means even closer partnership and innovation on the advertising experience. There's so much that I think that can be done there. I will also say that in time of IDFA and third-party cookies going away, you know, all of us as consumers and a strong opinion that there needs to be an Internet you can trust, a safe place for consumers to interact and for advertisers to succeed. I believe the next few decades will all be around context, and we will bring to market the largest first-party contextual based advertising capability. This is really big in my opinion. We're not stopping there. Advertisers who currently buy from Yahoo DSP, which is one of the leading DSPs in the market, will be able to have a single access to all of Yahoo, but now all of Taboola as well. This is great for advertisers from a context perspective, scale perspective, reach perspective, and so forth. It's also great for shareholders. We're adding approximately $1 billion in annual revenue. We're growing our revenue per share 32% estimated, EBITDA per share 43%. While we don't guide for free cash flow, we expect it to grow nearly five times, and Steve will speak more about those in a bit. Obviously this is very accretive to our shareholders. Taking a step back, when I look at the industry, Walled Gardens made it very easy because there was a scale and it worked. In the open web, well, you know, it's a big market. It's a $54 billion+ market. It's still fairly fragmented and it's difficult to buy. This partnership is a big step forward to our vision to create a company that is dedicated to publishers and open web, creating scale for advertisers. Lastly, as part of this meaningful commercial partnership, we're honored to have Yahoo join our board and owning almost 25% of our company. Before I pass it to Steve, our CFO, I'll just say that I'm excited not only about what's in front of me, but I feel there's just so much growth everywhere I look. I talked to The New York Times and I said, "Everywhere I look, I see a rocket ship." Between Yahoo and Taboola, and it's all around the key things that we talk about on earning calls in the past. E-commerce, header bidding, performance advertising, video, all of those things can be supercharged over the next few decades. With that, I'll pass it to Steve Walker, our CFO. Thanks, Adam. You can tell that Adam's excited about this opportunity for our customers, for our both advertiser and publishers, for consumers in the open web. This is the slide that gets me excited, though. This is truly a financially transformative deal for us. What we did here is we ran some numbers to show all of you what Taboola would have looked like in 2022 if this deal was launched before the year began, and we had fully ramped it up before the year started. You can see that we would have expected to add about $1 billion of gross revenue. We would have expected to almost double our Adjusted EBITDA, and we would have expected to add over $80 million of free cash flow from the deal. This is truly transformative for us. It gives us a chance to really operate at a whole new level. As Adam had referred to, in the press release, we set a goal of getting to $1 billion of Ex-TAC by 2025. This is super powering us towards that goal. We're excited about that. I think it's also important to understand that this is highly accretive on a per share basis as well. On the left, you see what Taboola in 2022 will look like on a per share basis. This is issued in outstanding shares, on a revenue and adjusted EBITDA basis per share. On the right-hand side, you can see that once we factor in the 25%, 24.9% of shares that Yahoo is getting as part of this transaction, we would still expect our revenue per share to be up 32% and our adjusted EBITDA per share to be up over 40%. That's, as Adam mentioned, while we don't really measure free cash flow per share, our free cash flow will be up 5x, and our shares are only up 25%. That also is highly accretive. This is a highly accretive deal, almost any level that you measure that. It really is gonna change our financial dynamics quite a bit here. I will mention from a timing perspective, that, you know, the previous slide, we were looking at the deal as though it had closed before 2022 began and was live the whole year. In reality, the benefits of this will start to materialize in the second half of 2023 and will continue into 2024. That's because we need to basically close the deal. We expect the deal to close in Q1 of 2023. Then after close, we need to basically ramp up the partnership. It'll take us until about second half of next year to start to see the benefits of this. Then, like I said, it'll continue into 2024. I'd like to note we're not giving guidance for 2023 as of now. We will do that obviously in February, but for now, we're not guiding to anything. I also wanted to mention that those numbers on the previous slide, those were not based on some of the growth opportunities that Adam mentioned. Like e-commerce, Connexity works very closely with Yahoo on various e-commerce initiatives. There's a chance to supercharge those. They have a search business that we think there's opportunities to work with video, header bidding and display, as Adam mentioned. Those are not factored into those previous estimates that we showed. I mentioned that the deal will close in Q1 of 2023. I will also mention that we'll have a more complete deal information session once we close the deal, which we hope will be, you know, sometime in Q1. We'll keep you updated when we are ready to have that session. With that, I'm gonna turn it back to Adam to talk a little bit about how this partnership came about. When we think about the main reasons that we believe Yahoo selected Taboola, there are three reasons. The first one is a technological advantage, and appreciating the investments in R&D we've been making over the years, and which we've been speaking a lot since we went public, and primarily around things such as revenue growth, engagement, and how we can help publishers go beyond just the revenue as well as audience growth. All of those things that are part of our tech investment philosophy are something I would appreciate it. The second thing is global, and opportunity to do something in a much bigger global way. I mentioned earlier that if you're an advertiser now buying from Yahoo, happily buying from Yahoo, on the other side of this, you'll be able to get a global access. As you know, Taboola has offices in more than 20 countries. We operate globally, and that's a huge opportunity for advertisers currently working with Yahoo to expand to work with Taboola. Thirdly, last but not least, and perhaps one of the things that I always think is the most important is people and cultural fit. I think what, you know, the time we spent together, thinking about the opportunity to work together for the next 30 years, has just reinforced how much we can trust each other, rely on each other, innovate into the future. Those are the three reasons that we believe Yahoo chose us. With that, let's open it up to questions. If you'd like to ask a question, press star one one. Our first question comes from Jason Helfstein with Oppenheimer. Your line is open. Thanks. Congratulations on the deal. Just a few, to the extent you can answer just to help us better understand how to think about it. I'll just list them off. One, do you have 100% coverage across all of their ad inventory? Like, yes or no, and if not 100%, like what's excluded? When you came up with the kind of billion-dollar run rate estimate, like what type of what percent coverage would that assume? Obviously, we don't know Yahoo's financials, if you just kinda help us understand. I think there's probably a broad question, what percent of Yahoo today is performance versus brand? I think most people perceive it's probably mostly brand, but, just given what you've done with Connexity and e-commerce, I would imagine there's an opportunity, but like, what's the starting point today? Just lastly, and apologize, but just I think everyone benefits from all these questions, expand on the search opportunity. You have a, you know, strong relationship with Microsoft, like what's the potential opportunity there? Thank you. All right. Steve, do you wanna start? Yeah, I can start. First of all, in terms of the business itself, we will be 100% exclusive on their native ads. On the Yahoo site, Yahoo Finance, Yahoo News, Yahoo Sports, Yahoo Mail, if you go there are certain ad spots that are native in-stream ad spots that you'll see. Those are gonna be exclusively us. They also run certain display spots outside of that. Those will not be us. That's, they're gonna continue to sell those directly through their DSP, but we'll be 100% exclusive for all of the native spots. That, by the way, you know, they break it out that way themselves. The assumptions in our model, to your second question, we assume that all of those spots would be us, and we obviously have good data from them on how many ad placements we're talking about, and impressions and everything else. That's what was assumed in our model for 2022 that we showed. We also assumed a relatively modest uplift that we believe we can provide on those ad placements, so we think we can drive higher revenue, and that was assumed in there as well. We did not, in those numbers, though, assume all the growth opportunities that Adam mentioned. That's upside to that. In terms of their advertisers today, a lot of their native advertisers are performance, so they have a lot of performance advertisers, just like we do. I think they are a little bit more heavily weighted towards brand, which is one of the opportunities of this deal is to give those advertisers now access to the full Taboola network. We are bringing on a new set of advertisers which will have access to our full network that Yahoo has that we don't today. That's one of the things that we're excited about as an opportunity here. Adam, did you want to add to that and maybe talk about the search opportunity? I think you touched on everything, but I mean, most of it, but just to add that, you know, in terms of the opportunities with specifically with regards to e-commerce, you know, header bidding, video, you know, high impact placements and contextual signals as it relates to, you know, consumers' patterns, all of those can become significant growth drivers to all of us and provide value to advertisers. Plenty, you know, none of those are assumed, you know, modeled now what you've seen in the presentation, so these are upside opportunities, but they are significant, you know, potential. I'm not sure if that answers your question. Our next question comes from Andrew Boone with JMP. Your line is open. Good morning, thanks for taking my questions. Two please. You guys talked about the integration with the Yahoo DSP. Can you just help us better understand who's selling the inventory and how you guys are gonna manage your own sales force versus Yahoo's? Just any more information there would be helpful. Help us understand the additional data that you're able to access via this partnership, right? Like, what does this do to your own models? What does this do to targeting? Just please flesh out kind of the data aspect of the deal. Thanks so much. Adam, did you wanna take that, or you want me to? Sure. Andrew, good morning. on the DSP front, like I mentioned, Yahoo has a very successful DSP with, you know, sort of an omni-channel offering to different types of ad formats and placements and things of that nature, and it's a very successful one. What's gonna happen here is that for advertisers who buy omni and get native advertising supply today on Yahoo will get it through Taboola on Yahoo in addition to the Taboola networks. That's one thing that's gonna happen. Additionally, though, there may be some native-only advertisers that come in, and they'll get, again, Yahoo supply as well as Taboola supply. From that perspective, the experience is quite seamless to the advertiser. They're gonna get a great offering in one spot, as they do now, only with more scale. I'll get to the data piece in a bit. That's on the DSP front. With regards to the data, what I can say is that there's a lot of user base that now between, so Yahoo reaches 900 people a month. We reach 500 million people a day. There's a lot of readership consumption that's taking place. In a first party manner, right? So we know if you come back again tomorrow, we know you're you by, not by identity, but what you're reading about. If you think about the scale of what that can create, it can create this first party contextual signal that can help advertisers reach consumers in a safe environment, but very successful for conversion. Stephen mentioned that, but I would say Yahoo already is a great environment for advertisers of all types, commerce, bottom of the funnel as well as top of the funnel. But I think when you combine the readership, the contextual data and what this can do for advertisers, we think this can become an upside for SmartBid, which I know, you know, we've been talking a lot about and how it drives conversions, especially as I believe millions of advertisers will look for a new home, and they will not be able to be successful in social networks over the next few years. One, I think the open web will be that home. Specifically, this can be something that can help advertisers succeed. Thanks, Adam. Our next question comes from Stephen Ju with Credit Suisse. Your line is open. Okay. Thank you so much. Adam, Steve, congratulations on this deal. I guess, you guys mentioned certain regulatory approvals in front of the deal close. You know, what would be the scope of what the regulators might be looking at? Also, Nick, in the past when you guys have talked about, you know, onboarding large publisher deals, I guess none of them were the size of Yahoo, but in the past when you had large publisher deals, there has been some gyrations to the TAC. Can you talk about how things might play out as we start seeing a larger contribution from Yahoo next year? Thanks. Sure. I can jump on this one. First of all, in terms of approvals needed, we will file in Israel for a approval from the antitrust authority there. Even though this is a commercial deal, and it's really just a long-term publisher relationship with a demand aspect and, you know, tighter relationship than we might have. Because of the equity issuance, we have to file for antitrust in Israel. That's the regulatory approval that we need here. And that's the only one as of now. That's where we are on the regulatory approvals. And like we said, we expect that to be approved by sometime in early 2023, Q1. In terms of the TAC and the effect that this will have on our financials, obviously we feel like it's financially transformative, as you saw in the numbers that we presented. One of the reasons that we don't expect this to really start showing up in our numbers though, until second half is because there's both a demand and a supply side to this. Yahoo advertisers who advertise on native spots are going to start advertising across the Taboola network. We also, because this is such a massive new amount of supply, we need to bring the supply and the demand over in tandem. Like, we can't just bring over all the supply at once and then hope the advertisers follow. We need to kind of bring both in tandem with each other. That's why we'll be doing a more controlled step-by-step rollout of this and working with the advertisers, customers to make sure that this works really well for them. That's why it'll be second half as opposed to, you know, in a normal publisher deal, we would have it up and running within a couple of weeks to a month or so. This is gonna take longer because of that. The good thing about that is, you know, unlike if we brought in this amount of supply without any demand that is coming with it, that would've had an impact on our TAC and our margins. This one we don't expect to have that negative impact because we have the demand as well. You know, I think we'll talk more about specific guidance for 2023 and 2024 when we get there in Q1. We're not guiding yet, but we don't expect this to have, you know, we expect to have a very positive impact on our financials, nothing negative. Understood. Is there any context you can provide as to the size of whether it's gonna be advertisers or any other type of metric that you can help us think about of the size of the what will be the newly onboarded demand through Yahoo? Yes. I think what we can say is that the $1 billion of estimated additional revenue that we think this deal can add, you know, they have enough demand to fill that themselves, although we do think our advertisers will participate as well and the like. I mean, that's the type of scale that we're talking about. Adam, I don't know if you released any information or disclosed any information about the impression volume or anything along those lines, just to give a sense of scale. I don't know that we did. Okay. Yeah. It's big. Thank you. Mm-hmm. Our next question comes from James Kopelman with Cowen. Your line is open. Thanks. Congratulations on the announcement. First question is for Adam. As you think about the key drivers that led to the partnership, how important were the improvements you've made to your own platform and value-added services over the last couple years? Versus simply more of the scale benefit that comes from combining these two large platforms and adding to open web share over time. I have a quick follow-up for Steve. Just to make sure, you're asking how important were the investments we made in our technology as part of Yahoo choosing us? Exactly. In other words, as you thought about the drivers of the strategic rationale for the deal, how important were? Yeah. The improvements to the platform over simply adding scale? Yeah. I mean, look, I think, whenever you see people talking about the next 30 years, you know, I think so much of it goes into the opportunity to be product first. Although I think Eldad Maniv, you know, every time you speak with him, you'll see that he's really a product guy, right? He's thinking about 2030. I think for us, it was an opportunity to, you know, to get to think about the long- term, and, you know, kind of assess that we share the same vision and culture as it relates to investing in technology and product. Taboola invests around $100 million a year in R&D. Those investments, we know, as it relates to engagement of consumers, editorial tool, analytics, native advertising, and A/B testing with different formats, optimizing for performance advertisers, high impact placements, e-commerce. All of the things that we've been doing, many of them since we went public, just, you know, I think sit exactly on the roadmap and how Yahoo also sees the future. I think a lot of it was important. Especially when we think about the long- term, in this case, you know, 30 years, these things play even a bigger role. That's one. The two, you know, the scale is just something that, in my opinion, one of the biggest gaps the open web has and advertisers have when it comes to buying from the open web versus buying from Google, which is easy, is scale, right? You want to be an advertiser that goes to a single place and be able to find success, from a conversion perspective, you know, acquisition cost perspective, metrics, analytics, and get scale like you do with, you know, today, Walled Gardens. Again, to me, scale is one of the biggest gaps, you know, the open web in the industry has, and this is a $1 billion a year step forward. Great. Then for Steve, just a quick follow-up. How should we think about the longer- term Ex-TAC margin benefit from the greater scale? For example, can you maybe talk us through again, how having greater scale benefits the flywheel of obviously better data, more advertisers and publishers, and presumably higher yield over time, as you've demonstrated pretty consistently over the last couple of years? I understand there's no guides, any color in terms of, you know, how the significant new scale might benefit that flywheel. Yeah. Thanks, James. It's a good point. I think we talked a little bit earlier about kind of the data benefits of this partnership. One of the ways to think about that is simply the scale that we bring. Yahoo has a very large number of logged in users on a daily basis and frequent visitors. What that does for us is as we see those users on a regular basis, we're going to now expand how much data we have about what consumers are doing on the Internet and what their interests are. What that will do for us is more data means that we'll have better ability to target ads more effectively to users. Being able to target those ads more effectively will then drive higher ad rates, and having higher ad rates will then turn around and let us win our next publishers more profitably and improve the margins and the revenue for our existing publishers. I think you're right. It has a very beneficial effect to that kind of network effect, the flywheel of our business, and should drive higher margins over a longer period of time. I'll also mention that, you know, we talked about this a little bit earlier, but it's also extremely transformative from the perspective of kind of the EBITDA margins of our business. Because of the fact that this will be a very profitable, you know, it'll be a profitable deal and one that doesn't take the same level of cost to support because it's a very massive publisher in and of itself. It's a very profitable deal at an EBITDA margin as well. It's transformative both in terms of our ability to drive higher revenues and higher margins at the Ex-TAC level, but especially our ability to drive kind of higher EBITDA margins and higher free cash flow over time. Great. Thanks, guys. Appreciate it. Our last question comes from Justin Patterson with KeyBanc. Your line is open. Great. Thank you very much, and congratulations on the deal. For Adam, could you talk about any minimum performance requirements in there around native and what the steps are to get that incremental inventory, the non-native ads going through Taboola? Then for Steve, appreciate the comments you just made on margins. If I take the illustrative example, it looks like there's only a modest uplift on a EBITDA margin, at least against gross revenue. I recognize you're not guiding and still working through things at this point, but appreciate any color on how we should think about just investment ramping up potentially before monetization. Thank you. I can start, Steve. I wanna make sure that I get your question. With regards to, you know, any specifics about the deal, you know, and things of that nature, I think that the closest we can get right now is that slide that shows you what would happen if Taboola was to power Yahoo throughout 2022. I think that can give you sort of an illustration about the financials of that, so that. That's probably the closest you can get to what you think of the deal. As you can see, it's very accretive to our financials, so obviously we're, you know, very much comfortable with that. I think from a, you know, demand perspective, there's huge opportunity to creating, you know, a great option for advertisers across all of the native inventory between Yahoo and Taboola. I think that is relevant for, you know, video advertisers, e-commerce advertisers, performance advertisers, which, as you know, is our number one priority as a company. All of those, you know, types of advertisers looking for, you know, targeting at different moments in the purchase funnel will be relevant for all of this inventory. You know, step one is, and again, there's so much more to do and to discuss. It will take time. You're gonna have to be patient with us. You know, I can tell you there's so much more than what we see today that can be done here from advertiser success and optimizing performance. To your question about how do we think about EBITDA margins going forward. We've always said that our long-term model here with Taboola is to be a profitable growth company, and we've said that what that means to us is to be able to grow Ex-TAC 20% per year, Ex-TAC dollars 20% per year, and to basically have a EBITDA margin 30%+. That to us is a profitable growth company. I think this, first of all, it'll certainly supercharge that growth over the next couple of years as this deal ramps up, so that'll help us on the growth side. I think especially if we get out of some of the macro softness that we're seeing now, I think you'll see this is another publisher that we're adding that is gonna help accelerate our growth when we come out of this. We already had a record year in terms of new publishers added, and now we just added the largest publisher in our history. This is gonna really accelerate that growth as we head out of kind of this macro softness. I think it'll also help that margin. The 30% adjusted EBITDA margin target that we've always had, I think there's opportunity to grow that over time with this deal because it is a profitable deal for us. I think it's gonna, you know, we've called it transformative on a financial basis. That's why we think it can be transformative for us. There are no further questions. I'd like to turn the call over to Adam Singolda for closing remarks. Thank you. So I wanna thanks everyone for joining on a short notice. This is a big win for, you know, for us, for the open web. It's a win for the good guys. You know, Yahoo is an internet hero. It's a privilege to partner with this iconic brand and have Apollo as a sponsor of this journey for the next 30 years. Over the next 30 years, we believe this is, you know, it's very accretive to everyone we care about, our shareholders, our publishers, our advertisers. There's a lot going on, so, you know, be patient with us. We look forward to spending time with many of you. Sometimes post-closing, we will organize Information Day, allowing us to take a deeper dive about our plans and all the opportunities ahead of us. Thanks to everyone for joining. Today is a good day, and we look forward to spending more time with you. This concludes the program. Thank you for your participation. You may now disconnect. Everyone, have a great day.