Taboola.com Ltd. Q3 FY2022 Earnings Call

Thank you. Good morning, everyone, and welcome to Taboola's Third Quarter 2022 Earnings Conference Call. I'm here with Adam Singolda, our Founder and CEO; and Steve Walker, our CFO. We issued our earnings press release today before market and it is available along with our Q3 shareholder letter in the Investors section of our 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. And with that, I'll turn the call over to Adam.

Thanks, Renwick. Good morning, everyone, and thank you all for joining us for our third quarter call. Q3 was a good quarter. We beat or came near the high end of our guidance on all metrics delivering $129 million of ex-TAC and $24 million of adjusted EBITDA. We're holding our annual adjusted EBITDA guidance for 2022 at $152 million to $160 million while generating strong cash flow. Lastly, due to continued softness in the advertising market and to be cautious, we decided to lower 2022 revenue guidance by 4% and ex-TAC guidance by 6%. We adjusted our cost structure a few months back and I can tell you we're committed to executing our strategy as a profitable growth company. Our track record demonstrates our ability to succeed in that strategy and despite everything that's going on in the world, we're not anticipating a decline in ex-TAC this year versus last. Q4 is historically a high-performing quarter especially for e-commerce. Additionally, this year we also have the potential of the positive effect of the World Cup, but we're not counting on it in our forecast given uncertainties in the market. More than ever, our ability to generate cash matters and I'm proud of where we are. For 2022, we expect $17 million to $25 million of free cash flow. We also expect $58 million to $66 million of cash generated before $21 million of net prepayments to publishers and $20 million of cash interest payments, which is another way we look at this internally. We add back publisher prepayments and cash interest payments because publisher prepayments are an investment in our business that we consistently earn back and over time will become an insignificant portion of our business to none and cash interest payments are a capital structure decision. Taking a step back, I look at times like this as an opportunity for good companies to become even stronger. We have a strong EBITDA, we're generating cash, we know what we need to do, we have the right priorities and the best team in the world to do so. Now if it wasn't for the macroeconomics, 2022 would have been one of the best years we've ever had. More publishers won than we anticipated, lower churn and remember this business in a normal time grows 20% year-over-year ex-TAC, converts 30% to adjusted EBITDA and 50% or so of that to free cash flow. This is before investment in our growth initiatives, which have the ability to supercharge our growth including performance advertising, e-commerce, header bidding into display and Taboola News. Each one of these could generate hundreds of millions of dollars for Taboola in the years to come on top of our core growth as I mentioned before. We're about $1.4 billion out of $64 billion open web advertising market. And while we're a scaled player in our space, which helps us get network effect benefits, there's still so much more growth ahead of us between our core and growth initiatives. On the business front, we're winning a lot more than we're losing and it's very expensive for competitors to take our business. We signed new partnerships with BuzzFeed, Huffington Post, Time Out; all massive and very well-known publishers that make this switch to Taboola to power accommodations for their audiences. We signed new partnerships with MOPO, which is a Hamburg publisher, one of Germany’s leading news portals and Speed part of Moneras Group in Italy using so many of our innovations to pull a feed newsroom for editors, homepage for you which personalizes the homepage. These are great competitive wins for us in the market and a validation of publishers choosing Taboola not only because we generate more revenue, but also because they can empower the entire organization with our technologies. We're also seeing great renewals. We renewed long-term publisher relationships with iMedia, which is big here in the U.S. and Cyzo, one of Japan's top publishers bringing us to 10 years in partnership with each. This is in addition to renewals with long-term publishers partners all over the world like FAZ in Latin America. These partnerships happen because of our technology investment. We've spent more than a decade building a core product for publishers that goes beyond revenue, which publishers appreciate because it provides value to their entire organization; editorial, audience teams and revenue. Especially as publishers are considering who to partner with for the next three, four, five years, sometimes even more, these investments matter in a meaningful way. Advertisers like us because of our tech which works for them, but also because they're looking at us as a way to diversify outside of the walled gardens especially now when there are so many changes around privacy with the open web and Taboola is a contextual powerhouse. I think over time millions of advertisers will look for an alternative to the walled gardens and that's a huge opportunity for us. We talked about our core business and I'm not happy with us guiding down 4% revenue and 6% ex-TAC, but I'm encouraged with us reaffirming our adjusted EBITDA and generating positive cash flow. We're accomplishing all of this while investing in four exciting things that can truly help us reimagine the open web as we know it and the growth our partners can experience with us outside of the walled gardens. We mentioned at our Investor Day that our next big milestone is $1 billion in ex-TAC, which implies $300 million of adjusted EBITDA with roughly $150 million of free cash flow and that we're investing in recommending anything and anywhere. Let's break it down. Recommend anything means answering the question what other types of advertisers can Taboola recommend to make our engine even more relevant and drive yield growth. Here we have two main initiatives. Number one, a focus on performance advertising, which helps us make different types of advertisers successful with Taboola. We're investing heavily here. We've quadrupled our engineering working on this and the upside here is meaningful for advertisers, publishers and us as well. We already reach 0.5 billion people a day and by making even more advertisers successful, we can make a meaningful impact on our yields altogether, how much we're able to pay our publishers and even more advertisers can rely on us. Number two, the second category of recommending anything is e-commerce. We intend to scale e-commerce to become 1/3 of our business over time as well as our publishers' revenue. E-commerce for publishers is a good business and retailers want to be on trusted publisher sites all day long, but it takes time to create the content, build an audience and match that audience with the right e-commerce demand. But once publishers get it up and running, they never want to give it up. We believe 1/3 of all of our publishers' revenue will become e-commerce driven. I mentioned that in our shareholder letter, but one of the exciting synergies we're seeing right now around e-commerce is called DCO, which stands for dynamic creative optimization. Essentially, it's Connexity’s retailers starting to get scale on Taboola supply. DCO is one of the biggest growth engines for social companies and it's big for Taboola as well. Which leads us to recommending anywhere and this is essentially where else can Taboola be beyond the boundary of article, homepage and our traditional placements. Here, we have two more main initiatives. Header bidding, which allows us to tap into the multibillion dollar display market. We have momentum and we're live on 50-plus websites. We estimate that existing 9,000 publishers are generating between $20 billion to $30 billion in display revenue a year and there's a high demand from publishers to join our header bidding beta. I mean really high demand for this product. While we're still in early stages, we're seeing strong results anywhere from 5% to 10% win rates and at scale, this will allow us to support our publishers making their display revenue grow and this will grow our share of wallet, make our advertisers more successful, and potentially generate hundreds of millions of dollars using our unique first-party data and AI. The last investment is Taboola News. This is where we're integrating our recommendation engine into Android devices these days and over time we intend to be part of audio devices, automobiles and even more. When I think about the future, I think everyone will be fighting for users' attention and time and I'm convinced that trusted news will be everywhere people spend their time, how our kids will discover information. This is already tracking over $50 million a year for Taboola growing triple digits. Moreover, the more this business grows, the more competitive we become as our publishers can start relying on traffic we send them at no cost much like Google does with SEO. As I finish my part, there's no doubt the world is going through a lot these days and it has an effect on our business as much as anyone and that's no fun. Saying that, I personally feel more focused than ever and energized about Taboola's future to become the leading recommendation engine for the open web. We have the ability to change the way consumers discover information outside of the walled gardens anywhere they may be. Our fundamentals, the metrics our management team is tracking every single day are strong, perhaps the strongest they've ever been. Our culture is strong. We have a strong adjusted EBITDA. We generate cash and we have growth engines that can double and triple Taboola. E-commerce, header bidding, performance advertising, and Taboola News. I'm looking forward to our upcoming earnings call and engaging with investors in the upcoming months where I'll do my best to answer any questions you may have. I'll now pass it over to Steve, our CFO, to talk more about our financials.

Thanks, Adam, and good morning, everyone. As Adam shared, we had a solid third quarter. We met or exceeded our Q3 guidance on all measures despite macro headwinds. Revenue in Q3 was $332.5 million. ex-TAC gross profit was $129.3 million and adjusted EBITDA was $24.2 million. This represented ex-TAC growth of 1.9% year-over-year or 5.7% on a constant currency basis. Pro forma with Connexity, ex-TAC would have declined 5% year-over-year on a constant currency basis. Our adjusted EBITDA margin or the ratio of adjusted EBITDA to ex-TAC gross profit was 18.7%. Q3 revenues decline of $6 million was driven by decreased revenue from our existing digital property partners of $29 million. The weak macroeconomic situation that started in Europe in Q1 spread to the U.S. and much of the rest of the world around the middle of June, continued into Q3 which translated to a pullback by advertisers and resulted in weaker yields and a decline in revenue. Our ex-TAC net dollar retention for our existing publishers was 86% for Taboola on a stand-alone basis, which is an extremely unusual event in our business to have an NDR below 100%. On the positive side, new digital property partners drove $22 million in growth in our gross revenue. As we have said previously, 2022 will be one of our best years on record in terms of the addition of new supply. We also saw growth in our revenues and ex-TAC gross profit from the addition of Connexity to our business as well as growth in Taboola News. Looking at operating expenses, they were up $16.3 million year-over-year. The increase was driven by $12 million of higher employee related costs, which was largely driven by a competitive labor market entering 2022 and approximately $3.4 million of restructuring costs. A majority of the remainder came from the inclusion of Connexity, which we closed on September 1, 2021. We generated adjusted EBITDA of $24.2 million, which was above our guidance of $11 million to $17 million, but was down year-over-year. Adjusted EBITDA margin of 18.7% was lower year-over-year, but in line with expectations. GAAP net loss of $26 million included intangibles amortization of $16 million, share-based compensation expenses excluding the holdback related to the Connexity acquisition of $15.9 million and restructuring charges of $3.4 million, which were excluded from non-GAAP net income. Our non-GAAP net income of $10.2 million was above our guidance of a non-GAAP net loss of $2 million to $8 million. In terms of cash generation, in Q3 we had $23 million in operating cash flow with free cash flow of $11 million. Starting this quarter, we are going to provide some supplemental information on our cash flow. When we analyze our cash flow internally, there are two items that we add back to free cash flow to provide another way of evaluating the cash generated by our business. First, we add back the cash interest paid on our long-term debt to get to our unlevered free cash flow because that is related to a capital structuring decision we have made. Second, we add back net prepayments that we make to publishers. The reason we add these prepayments back is because we consider them an investment in our business. They are used to secure long-term exclusive supply with our publishers and we get these prepayments back over the life of the contract with the publisher. We can control how much we invest in prepayments. I would note that in 2020 these net prepayments were actually a source of cash rather than a use of cash and we only use prepayments with publishers that we consider strategic and that have strong credit ratings. For the full year 2022, we expect to generate $17 million to $25 million of free cash flow. If you add back $20 million of cash interest expense on our long-term debt and $21 million of net publisher prepayments, we expect to generate $58 million to $66 million of cash before those items. We ended Q3 with a strong balance sheet position and positive net cash. Our cash and short-term investments balance of $308.3 million remains above our debt balance of $287.3 million. Regarding our expectations for Q4 and the rest of 2022, I won't go through all the numbers as they are outlined in detail in our press release. While we performed well against our Q3 metrics, due to the continued softness in the advertiser market, we are opting to lower our full year 2022 revenues and ex-TAC guidance by 4% and 6%, respectively. Having said that, we are reaffirming our adjusted EBITDA guidance of $152 million to $160 million for full year 2022. We are comfortable reaffirming this guidance despite the weakening macroeconomy thanks to cost-cutting actions that we first initiated in Q2 of this year. We further reduced our forward-looking expense base when we announced our cost restructuring program in September. This will have some impact on 2022 expenses, but more importantly, positions us well heading into 2023. I should note that our guidance assumes continued weakness in the macro environment at current levels, but not a significant worsening of the macro environment. While we are disappointed to have to reduce our revenue guidance for the year, overall the fundamentals of our business remain strong. As noted, we continue to expect over $150 million of adjusted EBITDA for the year and healthy free cash flow. Even in a particularly soft quarter like Q3, we generated over $10 million of free cash flow and over $25 million if you factor out interest paid on our long-term debt and net prepayments to publishers. We are seeing near record growth from new publisher partnerships and continued strong growth from Taboola News. We will continue to be judicious in our investments and to manage our expenses tightly while still investing in the key priorities that will drive future growth. We believe all of this will position us for accelerated growth as we come out of this period of economic weakness. And with that, let's open it up to questions.

Our first question comes from Andrew Boone with JMP Securities.

You highlighted the $21 million of publisher prepayments on the call. Given the macro environment still hit smaller players like RevContent, Gemini, kind of five or six players that may be out there may pull back. Can you just talk about your appetite in 2023 to either invest more in publisher prepayments and try to take more share or how do we think about that? And then, Adam, you quadrupled your engineers focused on performance advertising. Can you just talk about where you're pointing them? Is there low-hanging fruit that you see out there on the product front? What are you guys thinking about in terms of improving the performance advertising tool set for advertisers?

Andrew, those are great questions. First, regarding the publisher prepayments, we expect to generate over $60 million in cash this year, minus around $21 million for net publisher prepayments and about $20 million in cash interest expenses. We believe this represents a healthy cash flow. We see the publisher prepayments as an investment in our business, securing long-term exclusive supply with publishers. This approach not only helps attract new publishers by guaranteeing them expected earnings but also facilitates longer-term contracts. By increasing upfront cash for three- to five-year contracts, we can encourage publishers toward longer agreements. We believe this strategy is among the best investments for our business and plan to continue using it to acquire new publishers and secure longer-term agreements. We aim to keep utilizing these prepayments into 2023 and beyond while setting a budget for strategic publishers who can significantly impact our business and maintain good credit ratings. We have rarely lost any money on these investments, so we are comfortable with the associated credit risk. While we are committed to continuing this practice, we will be cautious and ensure we generate positive free cash flow after utilizing it. As we move into 2023, we will budget accordingly to maintain positive free cash flow even before these prepayments. Ultimately, it's a strategic use of cash, as it helps ensure long-term exclusive supply, contributing to our ability to attract advertisers and grow our business over time.

Let me just add, Andrew, that in addition to that, over time, and I mentioned that in the letter, the more we invest in helping publishers drive audience from Taboola News and things of that nature, homepage for you on the engagement front, e-commerce to drive more revenue. So the more we invest in technology and diversify our business, publishers will have more reasons to work with Taboola beyond just traditional revenue, and that will help us win more publishers. And over time, I suspect that the prepayment will become insignificant to potentially nothing. So that's something that I mentioned in my letter. So right now, it's a great investment. Over time, as we continue to be bigger in investment technology, I suspect this will go to become insignificant or nothing.

Yes, that's a good point. I'll just add one other thing: we shared some numbers in Adam's shareholder letter. In 2020, during the height of the pandemic, we chose to reduce our publisher prepayments, and they actually contributed positively to our cash flow in that year. These prepayments are also manageable, meaning we have control over them when we choose to.

Yes. So that's on that. And then on the performance advertising, it's our number one as a reminder, and again, it's in my letter, but there are four things we're investing in right now as a company, performance advertising, which will help us drive yields and revenue from our existing publisher base. And that's a huge upside because Taboola already reaches 0.5 billion people a day. So that's big. We have 15,000 advertisers. Google and Facebook each has 10 million. So there’s such a huge opportunity there. The second one is header bidding and display advertising. The third one is e-commerce and the fourth one is Taboola News. Specifically about performance advertising and SmartBid, there are a few things that I can mention just specifically right now in the context of your question about what's low-hanging fruit. So the first one is DCO. We're seeing SmartBid is able to look at Connexity. This is one of the synergies that we're most excited about. SmartBid is able to look at Connexity's data and retail advertisers and automatically find supply on our publishers now that it makes sense to put those retailers and automatically change the creative of the retailer on our publishers' site. That is now about 4% of Connexity's revenue. So this is pretty big. If you remember, when we talked about the synergies of e-commerce and Connexity, we said the largest one will be to bring e-commerce to advertisers in our existing supply globally, and that would be probably the top synergies. So that's gaining traction. I would say 50 out of the top 100 Connexity retailers are on DCO now as part of SmartBid's ability to do that. So that's one thing that's gearing up and getting a lot of momentum and growing very fast. And if you remember, by the way, if you go back to Snap, Instagram, that was one of the top way they made performance advertisers successful. So that's one. The second thing that's low-hanging fruit is that this quarter, and it's still a Q4 initiative, we're able to use AI to basically predict when the users tend to click by mistake without any intention to convert to do something on the advertiser site. And that's either because of speed of clicks or source of traffic or different placements and SmartBid is able to automatically lower the bid for those situations, which makes advertisers more successful. And again, that's a low-hanging fruit. That's something we're working on right now. We're seeing good results and probably going to continue to work on that in Q4. And then there are more things. I mean the short-term and midterm roadmap is very, very real. I mean we have target CPA and enrollers and other things. So there's a lot of the short, midterm, I would say long term, the biggest reason we invest so much in performance advertising is because the biggest opportunity we have is to make basically anyone successful with Taboola, which is something that's only walled gardens to date were able to do. So that's the biggest ambition. We have that will take time.

One moment for our next question, please. And our next question comes from Laura Martin with Needham & Company.

Can you hear me okay?

Yes.

Of course.

Fantastic. Following up on that last question about uncertain times and how many companies are reducing their forecasts for the fourth quarter and next year, does this impact the cost of your guarantees? Are you able to secure better deals in such an uncertain environment because you can offer guarantees? Additionally, regarding your workforce reductions and the impact on free cash flow, I've noticed recent layoffs at companies like Twitter and Meta. Does this situation create an opportunity for you to acquire skilled engineering talent that has suddenly become available, especially since you may not have anticipated this when you were tightening your budget a few quarters back?

Thank you, Laura. To address the question regarding the cost of guarantees, during challenging economic times like now, our guarantees are impacted in two ways. On one hand, our yields are slightly lower, leading us closer to those guarantees. However, it’s worth noting that guarantees are not a major component of our business. Historically, we’ve been around 10% in terms of our tax paid out under guarantees, and this past quarter, we were at 12%. Essentially, we remain in a similar range, and it hasn’t had a materially significant impact. The other aspect you mentioned relates to whether we can secure publisher deals at better margins during this macro environment, considering potential weaknesses among our competitors. It’s tough to provide a definitive answer since each deal involves a competitive bidding process. That said, we are having a record year signing new publishers, as Adam pointed out. Part of this success is likely due to the fact that while we are experiencing yield softness, our competitors may be feeling it even more. So, I do believe it aids us in signing more publishers at better margins, contributing to a record year in this area. Additionally, we are also experiencing one of the lowest churn rates for our publishers that we’ve seen on record, meaning we are both signing more and losing fewer. As we have mentioned in the past, when demand recovers, we are well-positioned from a supply perspective for substantial growth, as our supply side is thriving. The primary challenge we face at the moment is the weakness in demand. Overall, while the weak macro environment poses challenges, it is also providing us with some advantages.

Yes. I believe that Taboola's investment in a range of services and technologies that publishers need is significant. For publishers looking to enter into long-term partnerships, Taboola offers diversification, including e-commerce revenue and a growing presence in video. We also have Taboola News and partnerships with major original equipment manufacturers. Publishers today are seeking partners who can provide more than just revenue. Taboola’s revenue is notably diversified and robust compared to others. We are also among the largest players in our field, and we offer many technologies at no cost, aiding publishers in improving their businesses and driving growth. This has led to remarkable publishers, such as Buzzfeed and Huffington Post, choosing Taboola in the last three months, along with others like MOPO in Germany, Terra in Brazil, and Cyzo in Japan. We are gaining significant momentum, which supports our projected $152 million EBITDA for this year, something I am very proud of. In response to your second question, we aim to manage a business that is not only strong now but will also be even more robust in the future. Generating strong EBITDA and cash flow will present us with numerous opportunities that others might not have. Historically, challenging times have been advantageous for attracting talent, as seen in 2008 with Google. We are actively searching for exceptional individuals and analyzing changes within other companies. We already have connections with engineers in various firms, and I am hopeful we can leverage these relationships for talent opportunities. Additionally, we might have chances for smaller acquisitions and other ventures. Maintaining cash flow and EBITDA during uncertain times is a significant advantage for us.

One moment for our next question. And our next question comes from James Kopelman with Cowen.

The first is for Adam. It certainly looks like you're seeing a lot of strength with new publisher wins. Can you talk about the biggest factors that are attracting these publishers over to Taboola? And then as you look out maybe a year or two ahead, what are the key areas of focus and investments that will help you to continue to improve these value-added services that you offer the publishers? And then I have a follow-up for Steve.

Yes, there are three main reasons we're seeing this growth. Currently, if you observe what publishers can do, most companies in our field invest millions, often tens of millions, in R&D, while we invest nearly $100 million annually. For instance, with Taboola News, we've dedicated five years of work. Some of our larger publishers now receive 5% to 10% of their traffic from Taboola News. If they were to purchase that amount of traffic from someone else, it could cost them millions, but with us, they receive it at no charge. Google has become a key player in the open web by driving SEO traffic, making traffic control and discovery vital, often exceeding revenue in importance. This year, that translates to over $50 million in revenue for Taboola. Previously, I mentioned that we would deliver approximately $0.5 billion in clicks to publishers in 2022, and as we expand to billions of clicks each year, the potential for our growth is significant. The second point is about revenue. Due to our diversification and significant investment in AI, I believe our revenue can be 30% to 50% higher than our competitors. By partnering with us through a revenue share, publishers can earn more, avoiding the financial strain or tension often seen with other companies, which may struggle financially or may not maintain positive relationships. Many of our publishers have been with us for over ten years, ensuring a steady revenue stream that’s expected to grow due to our technological investments. Our buying power is unique because our revenue often constitutes a much larger share compared to other companies. The third reason is about empowering various teams within publishing organizations, from editorial to product development. In about two weeks, one of our major publishers will bring nearly ten key team members, including heads of audience, product, and subscriptions, to collaborate on enhancing engagement. Our collaboration aims to increase visitor engagement, encourage content consumption, and foster return visits to websites. These three reasons illustrate why publishers are choosing us, contributing to our rapid growth even during recessionary times. Looking ahead two to three years, I envision a shift toward focusing on lifetime value. Different users may have varying interests at different times. We aim to help publishers identify opportunities for user engagement—whether encouraging a subscription during a visit, promoting video content later, or suggesting galleries via mobile. We want to adopt a retail-like approach, similar to Amazon's focus on the lifetime value of customers, encouraging publishers to consider revenue per user over the duration of user interaction rather than just during individual sessions. That's the direction I see us heading in the coming years.

Great. And then just a quick follow-up for Steve. Steve, as we think about the broader macro into October, now into November, can you provide any color on what you're seeing in terms of what may be driving additional softness in ad demand or what you think might have changed from an advertiser spend perspective? Any color there would be helpful, especially if you could call out any ad verticals or maybe regions that are seeing potentially additional deterioration relative to the third quarter? We're currently experiencing a typical Q4 seasonality, and there's nothing unusual for this time of year, even though we started the quarter somewhat weaker. We're seeing a bit more stability now. Our company is well diversified across various sectors, which helps protect us from being overly impacted by any single vertical. Throughout the year, we've seen fluctuations, such as the auto sector being weak at times but becoming stronger again, and travel also recovering after a period of weakness. Overall, while there are ups and downs in different verticals, they balance out in our business, and no particular area stands out as problematic. Currently, we can't predict the macro environment, but the fundamental aspects of our business remain very strong. We're continuing to add new supply like Buzzfeed, which recently launched with us, and we believe demand will eventually rebound, providing a solid growth opportunity. On the demand side, we're retaining our advertisers, but they are spending less with us at the moment. We anticipate those budgets will reopen eventually. In summary, our fundamentals remain strong, and there isn’t a specific vertical responsible for the current softness; it's primarily that advertisers have reduced their budgets temporarily.

Our final question comes from Stephen Ju with Credit Suisse.

Okay. So Adam, given what you're talking about in terms of the potential for higher yield for your publisher partners, I mean, in the event that you lose existing partners or lose an RFP process, what is the reason the business may be heading to some of the competitors at all?

Yes. We win much more often than we lose, which is not something we frequently experience. When we do lose, it's typically because someone else is willing to commit to a revenue level that we believe is not sustainable for a healthy, long-term partnership. One reason we might lose is due to such revenue commitments that we consider to be unreasonable. From our experience, we have T-shirts that say "always come back" because many of our former partners return after realizing the challenges of their decisions. Initially, a partnership might seem appealing, but as time goes on, issues can arise, leading to an inability to generate or meet revenue expectations, ultimately causing the relationship to break down. Many publishers often return to us after such experiences. Another factor is the relationships that exist; we are still a relatively small company with $1.4 billion in revenue compared to $64 billion overall. There may be publishers who have strong relationships with other companies that last for years. This can influence why we might lose a bid as well. So primarily, when we don't win, it's due to either an irrational revenue decision made by others or established relationships, and we aim to build those relationships ourselves over time.

At this time, I'd like to hand the conference back over to Mr. Adam Singolda for closing remarks.

Thank you. So I wanted to just say thanks, everyone, for joining today. There's obviously a lot going on. I'll say a few things that I mentioned in my letter. One, personally, I feel more focused than ever. I just talked to a few people this morning. A select Taboolas of 30 people start up and how energized and focused people are. Our people are strong. And I'm energetic about the future of Taboola to become the leading recommendation engine for the open web and our ability to change the way consumers discover information outside of the walled garden, especially during these days with the privacy and all this madness that we're seeing. I'm so optimistic about trusted source of information and how consumers will discover news. Our fundamentals, the metrics that our management team is tracking every single day. We're getting daily e-mail with those things. Those are strong, perhaps the strongest they've ever been. Our culture is strong, we have the strong EBITDA, we generate cash and we have growth engines that can double and triple Taboola, e-commerce, header bidding into display advertising inventory, performance advertising, and Taboola News. So when I look at all those things, I know those times are crazy, but we're focused. I'm excited about the future, and I look forward to talking to many of you. Thanks for joining today.

This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.