Outlines approach to capturing share of an estimated $124 billion total addressable market
Provides updated 2021 and initial 2022 guidance that incorporates recently closed Connexity acquisition
Taboola, a global leader in powering recommendations for the open web, helping people discover things they may like, today is sharing with the investment community their strategy to bring more e-commerce solutions to open web publishers and more commerce value to advertisers following their acquisition of Connexity. The company is also announcing that for 2022 it expects Revenues of $1,698 to $1,748 million, Gross Profit of $530 to $550 million and ex-TAC Gross Profit* of $645 to $665 million. This would represent Gross Profit growth of approximately 36%, and ex-TAC Gross Profit growth of approximately 38% versus the mid-point of Taboola’s pre-Connexity 2021 guidance.
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Taboola closed its acquisition of Connexity on September 1, 2021, bringing Connexity’s 6,000 publishers and 1,600 direct merchant relationships to Taboola, unlocking new ways for publishers, advertisers and merchants to effectively scale outside of walled gardens.
Taboola estimates its total addressable market, when accounting for its recent Connexity acquisition, to be $124 billion. This includes $64 billion in the Open Web and $60 billion of e-commerce ad spend in walled gardens.
“We estimate that a third of our own revenue, as well as publishers in the open web will come from e-commerce over time. Especially on the back of a pandemic, people are buying online – and it’s better to buy from a trusted, editorial publisher. Following the acquisition of Connexity we are uniquely positioned to offer an e-commerce strategy to our 9,000 publishers around the world, and help merchants diversify outside of walled gardens. Today is a new beginning for Taboola and our partners. We could not be more excited,” said Adam Singolda, Founder & CEO, Taboola. “e-commerce will supercharge our business and position us to capture more of the $100B+ of available TAM. With Connexity, in 2022 we will be more than double what we were in 2019 in terms of ex-TAC Gross Profit and we project $100 million in annual ex-TAC gross profit synergies within four years – roughly equivalent to adding another Connexity. We are laser focused on execution and delivering on the huge opportunity before us.”
Key points include:
- The e-commerce industry is rapidly accelerating: According to eMarketer, worldwide sales for e-commerce will surpass $7.3 trillion by 2025, and continue to grow its share of total sales against in-store sales.
- Publishers are prioritizing e-commerce to thrive: According to Digiday, the majority of publishers are using e-commerce as a revenue stream, with a separate report from eMarketer reinforcing that point, noting that 60% of publishers see e-commerce as a top revenue source.
- Connexity’s deep e-commerce expertise amplifies Taboola revenue performance: As one of the largest e-commerce media platforms on the open web, Connexity creates synergies for Taboola that will help to grow Taboola revenue. These include offering publishers new ways to monetize and increase yield, while also deepening Taboola’s publisher relationships.
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Updating Third Quarter and Full Year 2021 Guidance, Releasing Initial 2022 Guidance
With the closing of the Connexity acquisition, the Company is issuing updated Q3, Full Year 2021 and initial Full Year 2022 guidance for the combined company. This guidance is on an as reported basis with Connexity financials included starting September 1, 2021. This guidance represents for 2022 ex-TAC Gross Profit growth of approximately 30% on an as-reported basis and 17% on a Pro Forma basis with Connexity included for all of 2021. The below table provides the guidance.
| (dollars in millions) | Q3 2021 | Full Year 2021 | Full Year 2022 |
| Revenues | $338 to $342 | $1,392 to $1,400 | $1,698 to $1,748 |
| Gross Profit | $101 to $103 | $418 to $424 | $530 to $550 |
| ex-TAC Gross Profit* | $122 to $124 | $503 to $509 | $645 to $665 |
| Net income (loss) | ($7) to ($5) | ($41) to ($35) | ($18) to $2 |
| Adjusted EBITDA* | $36 to $37 | $168 to $171 | $193 to $213 |
Our guidance assumes that the global economy continues to recover, with no major COVID-19 related setbacks that may cause economic conditions to deteriorate or significantly reduce advertiser or consumer demand.
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