NEW YORK - Taboola (NASDAQ:TBLA), known for its recommendation platform for the open web, has expanded the availability of its Maximize Conversions bidding technology to all advertisers, the company announced today. This AI-powered tool, designed to enhance performance advertising by automating campaign bids, was previously accessible to a select group of advertisers and has now been opened up for wider use.
Maximize Conversions aims to simplify the advertising process by allowing advertisers to set their budget and objectives, after which the technology manages the campaign to maximize efficiency and effectiveness within the specified cost parameters. The company reports that this approach has led to a significant increase in conversions, with some advertisers experiencing a 110% rise in campaign conversions.
The technology has seen rapid adoption, with 70% of Taboola's advertisers incorporating it into their campaigns. Notable users include major brands such as Hyundai (OTC:HYMTF), ERGO, Leica Camera, Sonova, Peugeot (OTC:PUGOY) Turkey, and Opel Turkey. In the second quarter of 2024, Taboola observed a doubling in the number of campaigns launched using Maximize Conversions compared to the previous quarter.
Adam Singolda, CEO and Founder of Taboola, commented on the widespread adoption of the technology, emphasizing the positive results advertisers have experienced in performance campaigns. He highlighted the company's commitment to making it easier for advertisers to achieve success through Taboola's platform.
Taboola's platform leverages artificial intelligence to provide recommendations across various digital properties, including websites and mobile apps, with the goal of driving monetization and user engagement. The company maintains partnerships with leading digital properties and serves around 600 million daily active users. Taboola is also active in e-commerce recommendation, facilitating over 1 million monthly transactions and listing Walmart (NYSE:WMT), Macy’s, Skechers, and eBay (NASDAQ:EBAY) among its customers.
This announcement is based on a press release statement and contains forward-looking statements about the company's future prospects and product development. Taboola advises that these statements involve risks and uncertainties and that actual results may differ from the plans and expectations set forth. The company has cautioned against placing undue reliance on these forward-looking statements, which are valid only as of the date they were made.
In other recent news, Taboola, a leading discovery platform, has seen significant growth in its financial metrics, despite a net loss of $4.3 million in the second quarter. The company reported a noteworthy 21% increase in ex-TAC gross profit, reaching $149.5 million, and a 138% surge in adjusted EBITDA to $37.2 million. Additionally, Taboola's free cash flow showed a substantial year-over-year increase of 237%, totaling over $26 million.
Benchmark, an analyst firm, has adjusted its outlook on Taboola, reducing the price target to $5 from $6, while maintaining a Buy rating. According to the firm, Taboola's core business is expected to return to a normalized annual growth of 10-15% due to increased platform spending and improved margins.
Recent developments indicate that Taboola's primary growth initiatives, such as commerce, Taboola News, and Header Bidder, will contribute around 5 percentage points to its normalized incremental growth. The company's Q2 revenue increased by 29% year-over-year to $428.2 million, and it maintains a net cash position of $29.5 million.
Taboola has reiterated its 2024 guidance, projecting accelerated growth, with ex-TAC expected to reach $667 million, and adjusted EBITDA and free cash flow expected to double the 2023 figures. This reiteration underscores Taboola's confidence in its business model and its ability to capitalize on the growing advertising market.
InvestingPro Insights
As Taboola (NASDAQ:TBLA) continues to innovate with its Maximize Conversions technology, the company's financial health and market performance provide a backdrop for understanding its potential trajectory. With a market capitalization of approximately $1.18 billion and a notable revenue growth of 18.98% in the last twelve months as of Q2 2024, Taboola demonstrates a robust expansion in its financials. This growth is further accentuated by a quarterly revenue increase of 28.96% in Q2 2024, showcasing the company's ability to scale effectively.
Investors monitoring Taboola's stock performance will note the recent volatility, with a 6-month price total return of -21.3%, reflecting the dynamic nature of the tech industry and market conditions. However, with the company's aggressive share buyback strategy, as indicated by one of the InvestingPro Tips, management is signaling confidence in the company's value proposition and future prospects. This is bolstered by the expectation of net income growth this year, another positive sign for potential investors.
Despite not offering a dividend, Taboola maintains a high shareholder yield, which could be attractive for investors seeking companies with a strong commitment to shareholder returns. Additionally, the company's liquid assets surpassing short-term obligations suggest a stable financial position that could support ongoing investment in technology and market expansion.
For those interested in a deeper analysis, there are additional InvestingPro Tips available, providing further insights into Taboola's financial health, including its debt levels and profitability forecasts. As the company prepares for its next earnings date on November 6, 2024, investors and analysts alike will be looking closely to see if the company's strategic moves, including the wider release of Maximize Conversions, will translate into sustained financial growth and market success.
For more detailed financial metrics and expert analysis, visit the comprehensive list of InvestingPro Tips at InvestingPro Taboola.
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