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Taboola Announces 6% Workforce Reduction, $23M Cut In Discretionary Expenses And $15M Reduction In Capex; Expects To Reduce 2023 Operating Expenses By $50M

Realigning and restructuring teams to focus on three top priorities: performance advertising, e-Commerce and header bidding Expect to reduce 2023 Operating Expenses by $50M, further improving Adjusted

Benzinga · 09/13/2022 16:13
  • Realigning and restructuring teams to focus on three top priorities: performance advertising, e-Commerce and header bidding
  • Expect to reduce 2023 Operating Expenses by $50M, further improving Adjusted EBITDA* and Free Cash Flow*, two non-GAAP metrics we focus on
  • Cost savings achieved via a workforce reduction of approximately 6%, as well as $23M reduction in discretionary expenses and $15M reduction in capital expenditures in 2023
  • Reaffirming Q3 Guidance and expects to generate over $152M in Adjusted EBITDA in 2022

NEW YORK, Sept. 13, 2022 (GLOBE NEWSWIRE) -- Taboola (NASDAQ:TBLA), a global leader in powering recommendations for the open web, helping people discover things they may like, today announced a cost restructuring program that will allow the company to continue focusing on top priorities, and ensuring profitable growth and Free Cash Flow in 2023 and beyond.

This plan will enable investment where Taboola sees opportunities for growth, with resources focused on the company's top three priorities: improving its performance advertising business, driving further growth in e-Commerce, and growing its recently launched header bidding business.

The company expects this cost restructuring to result in $50M of savings in operating expenses in 2023, with a significant portion translating to improved Adjusted EBITDA and Free Cash Flow. The savings will be achieved by restructuring teams across geographies primarily in lower priority activities, resulting in an overall reduction of global headcount by approximately 6%. The company will also trim an additional $23M from 2023 discretionary expense budgets and reduce capital expenditures by an additional $15M in 2023.

Taboola expects this program to be largely completed by year-end with a majority of the changes taking place in 2022. The company reaffirmed guidance for Q3 2022 and has stated it expects to generate over $152M in Adjusted EBITDA for FY 2022.

"The investments we've made in our business to-date assumed a higher rate of revenue growth based on our decade-long track record of execution. We now need to adapt to the current market environment, and our growth rates in 2022, which are not meeting our original expectations. We are setting ourselves up for the long term success of Taboola and investing in areas related to our winning aspirations, having our teams be even more focused, and coming out of the global slowdown stronger," said Adam Singolda, Founder and CEO, Taboola. "We make these necessary changes with a heavy heart, and I personally thank all of the wonderful Taboolars with whom we must part ways. We are taking steps to treat our departing teammates with the respect and appreciation they deserve."

"I am also proud of our team members, who are displaying amazing unity and commitment. You can copy anything but a company's culture — and I'm confident that we are unstoppable as we work to realize our vision of bringing the superpower of recommendation to our clients and partners in the open web. I remain extremely confident and optimistic, we're healthy and we're strong. I see extraordinary potential and strong performance all around me at Taboola. We're seeing record numbers of publishers sign with us, Taboola News cross the $50M revenue mark, e-Commerce being an area of strength, and Header Bidding now live on Microsoft and starting to roll out across our network. With this program, we will be more focused, and better positioned for success as Taboola maintains profitability and strong cash flow," continued Singolda.

Reaffirming Third Quarter 2022 Guidance

For the Third Quarter 2022, the Company currently expects:

  • Revenues of $311 to $331 million
  • Gross Profit of $91 to $101 million
  • ex-TAC Gross Profit of $120 to $130 million
  • Adjusted EBITDA of $11 to $17 million
  • Non-GAAP Net Income (loss) of ($8) to ($2) million
     

Although we provide guidance for Adjusted EBITDA and Non-GAAP Net Income (loss), we are not able to provide guidance for projected net income (loss), the most directly comparable GAAP measure. Certain elements of net income (loss), including share-based compensation expenses and warrant valuations, are not predictable due to the high variability and difficulty of making accurate forecasts. As a result, it is impractical for us to provide guidance on net income (loss) or to reconcile our Adjusted EBITDA and Non-GAAP Net Income (loss) guidance without unreasonable efforts. Consequently, no disclosure of projected net income (loss) is included. For the same reasons, we are unable to address the probable significance of the unavailable information. This press release reaffirms Q3 2022 guidance. The Company's full year 2022 guidance was most recently updated August 9, 2022 and is not being updated at this time.

Our guidance assumes continuing headwinds from the war in Ukraine, inflation, currency exchange rates and overall macroeconomic weakness, which lead us to adopt a conservative stance on guidance. Our guidance assumes that these headwinds do not worsen and cause economic conditions to deteriorate or otherwise significantly reduce advertiser demand.