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What changed in Taboola.com Ltd.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Taboola.com Ltd.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+461 added−460 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-28)

Top changes in Taboola.com Ltd.'s 2024 10-K

461 paragraphs added · 460 removed · 358 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

105 edited+49 added−50 removed87 unchanged
Biggest changeOur Recommendation Technology Our Research and development team has spent over a decade developing our proprietary AI-based recommendation technology used in our core product, solving an incredibly complex problem — how to construct a personalized recommendation feed from millions of available articles, videos and ads, in real-time, when you have nearly 6 00 million daily active users and need to optimize for diverse outcomes and support multiple pricing models.
Biggest changeOur Performance Technology Our Research and development team has spent over a decade developing the proprietary Performance AI technology used in our core product, solving an incredibly complex problem — how to match personalized ad to millions of available articles and videos, in real-time, when you have approximately 600 million daily active users, exposed to multiple ad impressions a day, and need to optimize for diverse outcomes and support multiple pricing models. 7 Table of Contents Rather than rely on knowledge of what people are searching for or what they share on social media, our predictive algorithms employ unique Deep Learning technology to develop a powerful model of people’s interests and intent across digital properties outside of search and social platforms.
We intend to use the following social media and other websites for the dissemination of information: Our blog: https://blog.taboola.com/ Our X feed: https://twitter.com/taboola Our CEO, Adam Singolda’s X feed: https://twitter.com/AdamSingolda Our Facebook page: https://www.facebook.com/Taboola/ Our corporate LinkedIn page: https://www.linkedin.com/company/taboola/ We invite our current and potential investors, the media and others interested in us to visit these sources for information related to us.
We intend to use the following social media and other websites for the dissemination of information: Our blog: https://blog.taboola.com/ Our X feed: https://twitter.com/taboola Our CEO, Adam Singolda’s X feed: https://twitter.com/AdamSingolda Our CEO, Adam Singolda’s LinkedIn page: https://www.linkedin.com/in/adamsingolda/ Our Facebook page: https://www.facebook.com/Taboola/ Our corporate LinkedIn page: https://www.linkedin.com/company/taboola/ We invite our current and potential investors, the media and others interested in us to visit these sources for information related to us.
Privacy Regulation in the U.S. In the United States, at both the federal and state level, there are laws that govern activities such as the collection, use and other processing of personal data by covered companies.
Privacy Regulation in the U.S. and Canada In the United States, at both the federal and state level, there are laws that govern activities such as the collection, use and other processing of personal data by covered companies.
Our sales team onboards new customers, mostly large A dvertisers, through direct outreach from one of our international sales offices. Our account management teams provide ongoing guidance and data insights that inform campaign strategies and help A dvertisers learn how to maximize their return on investment with Taboola. Advertisers can also choose our self-service platform to launch and manage campaigns.
Our sales team onboards new customers, mostly large Advertisers, through direct outreach from one of our international sales offices. Our account management teams provide ongoing guidance and data insights that inform campaign strategies and help Advertisers learn how to maximize their return on investment with Taboola. Advertisers can also choose our self-service platform to launch and manage campaigns.
Maniv has spent approximately two decades building technology companies in the United States and Israel, having previously served in executive positions at BMC Software, Zend Technologies, and Identify Software. Earlier in his career, he founded NextNine which was acquired by Honeywell. Mr. Mani v currently serves as a director on the board of directors of Verbit.ai. Mr.
Maniv has spent approximately two decades building technology companies in the United States and Israel, having previously served in executive positions at BMC Software, Zend Technologies, and Identify Software. Earlier in his career, he founded NextNine which was acquired by Honeywell. Mr. Maniv currently serves as a director on the board of directors of Verbit.ai. Mr.
The task force works with our senior management team to address global wellness and diversity topics and develop relevant initiatives to ensure we continue to build a culture where every employee feels valued, seen, and heard. We continue to have a mechanism for employees to anonymously voice concerns. Throughout 2023, we continued to see the results of our initiatives.
The task force works with our senior management team to address global wellness and diversity topics and develop relevant initiatives to ensure we continue to build a culture where every employee feels valued, seen, and heard. We continue to have a mechanism for employees to anonymously voice concerns. Throughout 2024, we continued to see the results of our initiatives.
For example, in 2016, we predicted that video content presented a huge opportunity for A dvertisers to reach their audiences in a highly impactful way, for digital properties to drive better monetization and for users to engage with suggested videos, similar to how they are used on social networks such as Instagram.
For example, in 2016, we predicted that video content presented a huge opportunity for Advertisers to reach their audiences in a highly impactful way, for digital properties to drive better monetization and for users to engage with suggested videos, similar to how they are used on social networks such as Instagram.
Singolda’s experience as the founder and Chief Executive Officer of Taboola makes him exceptionally well qualified to serve on our board of directors. Eldad Maniv (5 5 ) has been the President and Chief Operating Officer of Taboola since 2012. Mr. Maniv leads Taboola’s worldwide operations including Taboola’s sales, professional services, and human resources organizations. Mr.
Singolda’s experience as the founder and Chief Executive Officer of Taboola makes him exceptionally well qualified to serve on our board of directors. Eldad Maniv (56) has been the President and Chief Operating Officer of Taboola since 2012. Mr. Maniv leads Taboola’s worldwide operations including Taboola’s sales, professional services, and human resources organizations. Mr.
The digital advertising industry has collaborated to create a user-facing framework, which we use as of December 31, 2023, for establishing and managing legal bases under the GDPR and other EEA privacy laws including the EU Directive 2002/58/EC (as amended by Directive 2009/136/EC).
The digital advertising industry has collaborated to create a user-facing framework, which we use as of December 31, 2024, for establishing and managing legal bases under the GDPR and other EEA privacy laws including the EU Directive 2002/58/EC (as amended by Directive 2009/136/EC).
Singolda studied Computer Science at The Open University of Israel and spent 6½ years serving in an advanced cyber technology unit of the Israel Defense Forces, or I DF , serving as a research and development engineer and manager. He graduated from the IDF officers’ academy with honors. Mr.
Singolda studied Computer Science at The Open University of Israel and spent 6½ years serving in an advanced cyber technology unit of the Israel Defense Forces, or IDF, serving as a research and development engineer and manager. He graduated from the IDF officers’ academy with honors. Mr.
Prior to that she served as Senior Vice President of People Operations for Taboola from 2019 to 2022. Prior to joining Taboola in 20 19 , she co-founded Exceptional Artists Foundation in 2017, a non-profit organization empowering the disabled community, and remains as its President. From 2012 to 2017, Ms.
Prior to that she served as Senior Vice President of People Operations for Taboola from 2019 to 2022. Prior to joining Taboola in 2019, she co-founded Exceptional Artists Foundation in 2017, a non-profit organization empowering the disabled community, and remains as its President. From 2012 to 2017, Ms.
They have chosen to work with Taboola across all types of platforms, including desktop, mobile and tablet devices. This provides Taboola and Taboola A dvertisers with predictable access to audiences and supply. • Direct Relationships with Advertisers . We work directly with the majority of the A dvertisers that use our platform.
They have chosen to work with Taboola across all types of platforms, including desktop, mobile and tablet devices. This provides Taboola and Taboola Advertisers with predictable access to audiences and supply. • Direct Relationships with Advertisers. We work directly with the majority of the Advertisers that use our platform.
Outside of account managers, we support A dvertisers through our online Help Center, in-product instructions, and a large number of video tutorials. Marketing To support our global sales force, our marketing team presents at industry conferences and hosts webinars and customer events.
Outside of account managers, we support Advertisers through our online Help Center, in-product instructions, and a large number of video tutorials. Marketing To support our global sales force, our marketing team presents at industry conferences and hosts webinars and customer events.
Restructuring expenses were approximately $3.4 million for the year ended December 31, 2022 primarily consisting of one-time incremental employee termination benefits and other costs related to the Company’s business prioritization . 5 Table of Contents See Note 14 of Notes to the Consolidated Financial Statements in this Annual Report for additional details regarding the cost restructuring program.
Restructuring expenses were approximately $3.4 million for the year ended December 31, 2022 primarily consisting of one-time incremental employee termination benefits and other costs related to the Company’s business prioritization. See Note 14 of Notes to the Consolidated Financial Statements in this Annual Report for additional details regarding the cost restructuring program.
The ability to display a variety of media formats in novel combinations is key to preventing “banner blindness” that plagues traditional display formats and making our recommendation engine even better. 15 Table of Contents • E-Commerce .
The ability to display a variety of media formats in novel combinations is key to preventing “banner blindness” that plagues traditional display formats and making our recommendation engine even better. 11 Table of Contents • E-Commerce.
These include The Trade Desk, Magnite, PubMatic, Xandr, Outbrain, Plista, TripleLift, RevContent, Teads and others. While these companies may be in competition with us, some are also partners of ours. When competing for Ad vertiser business, we compete for budgets based on price, reach, speed, brand safety and performance.
These include The Trade Desk, Magnite, PubMatic, Xandr, Outbrain, Plista, TripleLift, RevContent, Teads and others. While these companies may be in competition with us, some are also partners of ours. When competing for Advertiser business, we compete for budgets based on price, reach, speed, brand safety and performance.
Historically, we have not patented our proprietary technology in order to keep our technology architecture, trade secrets, and engineering roadmap private; however, as of December 31, 202 3 , we own approximately twenty issued patents. We also own registrations for certain domain names, trademarks and service marks in the United States and in certain locations outside the United States.
Historically, we have not patented our proprietary technology in order to keep our technology architecture, trade secrets, and engineering roadmap private; however, as of December 31, 2024, we own approximately twenty issued patents. We also own registrations for certain domain names, trademarks and service marks in the United States and in certain locations outside the United States.
Our Business Partners We primarily have two types of business partners : digital properties that use Taboola to drive new audiences, engagement and monetization; and A dvertisers, and their agencies, that use Taboola to achieve a variety of marketing objectives.
Our Business Partners We primarily have two types of business partners: digital properties that use Taboola to drive new audiences, engagement and monetization; and Advertisers, and their agencies, that use Taboola to achieve a variety of marketing objectives.
While we already have an extensive network of global digital properties and A dvertisers, we believe the efficacy of our recommendation platform gives us the opportunity to expand our partnerships and client base even further, as demonstrated by our 30-year partnership with Yahoo which closed in January 2023.
While we already have an extensive network of global digital properties and Advertisers, we believe the efficacy of our recommendation platform gives us the opportunity to expand our partnerships and client base even further, as demonstrated by our 30-year partnership with Yahoo which closed in January 2023.
We continuously deploy and run hundreds of different AI models, UI variations and optimizations, in effect measuring hundreds of KPIs. We build our infrastructure such that it enables this culture of continuous improvement. 13 Table of Contents Our Competitive Strengths We believe the following key strengths provide us with competitive advantages: • Performance of our AI Technology .
We continuously deploy and run hundreds of different AI models, UI variations and optimizations, in effect measuring hundreds of KPIs. We build our infrastructure such that it enables this culture of continuous improvement. Our Competitive Strengths We believe the following key strengths provide us with competitive advantages: • Performance of our AI Technology .
Walker held positions in Idealab’s New Ventures Group and led several of Idealab’s portfolio companies. Mr. Walker has a B.S. degree in Computer Science and Finance from Boston College and an M.B.A degree from Harvard Business School. Kristy Sundjaja (4 6 ) has been Chief People Officer since February 2022.
Walker held positions in Idealab’s New Ventures Group and led several of Idealab’s portfolio companies. Mr. Walker has a B.S. degree in Computer Science and Finance from Boston College and an M.B.A degree from Harvard Business School. Kristy Sundjaja (47) has been Chief People Officer since February 2022.
Our ultimate measure of success in recommending ads is achieving the A dvertiser’s goals. In order to do so, Taboola’s algorithms are designed to select the right opportunity to engage the right user with the right ad, while at the same time optimizing pricing and selecting the best creative assets to use.
Our ultimate measure of success in recommending ads is achieving the Advertiser’s goals. In order to do so, Taboola’s algorithms are designed to select the right opportunity to engage the right user with the right ad, while at the same time optimizing pricing and selecting the best creative assets to use.
Sales and Marketing To support our “win-win” approach to working with both digital properties and A dvertisers, we employ a global sales team tasked with signing new partners and growing existing implementations.
Sales and Marketing To support our “win-win” approach to working with both digital properties and Advertisers, we employ a global sales team tasked with signing new partners and growing existing implementations.
We work daily with our extensive network of global digital properties to improve our platform and create more value for the entire Taboola network. • Exclusive, Multi-Year Partnerships with Premium Digital Properties . We have established long-standing, and in many cases exclusive relationships with digital properties on the Open Web.
We work daily with our extensive network of global digital properties to improve our platform and create more value for the entire Taboola network. 10 Table of Contents • Exclusive, Multi-Year Partnerships with Premium Digital Properties . We have established long-standing, and in many cases exclusive relationships with digital properties on the Open Web.
We further invested in strategic partnerships with employment platforms that provide us multi-pronged access to highly skilled underrepresented talent, who may not currently be on our platform, such as Built-In, Ivy Research Council, and Jopwell. As a result, in 2023, we saw that 45% of our new hires were women and 16% of those women were hired into technical positions.
We further invested in strategic partnerships with employment platforms that provide us multi-pronged access to highly skilled underrepresented talent, who may not currently be on our platform, such as Built-In, Ivy Research Council, and Jopwell. As a result, in 2024, we saw that 45% of our new hires were women and 24% of those women were hired into technical positions.
As more digital properties use our platform, we gather more content consumption data. More data makes our AI-driven algorithms more effective in making predictions, which in turn enables us to deliver better performance for A dvertisers, which drives higher yields for digital properties.
As more digital properties use our platform, we gather more content consumption data. More data makes our AI-driven algorithms more effective in making predictions, which in turn enables us to deliver better performance for Advertisers, which drives higher yields for digital properties.
These higher yields make it easier to retain digital properties and acquire new partners. • Founder-led Experienced Management Team . Our founder, Adam Singolda, has successfully led Ta boola as CEO since we began operations in 2007.
These higher yields make it easier to retain digital properties and acquire new partners. • Founder-led Experienced Management Team. Our founder, Adam Singolda, has successfully led Taboola as CEO since we began operations in 2007.
Our team is deployed around the world with sales hubs in Bangkok, London, Los Angeles, New York, and Sao Paulo, supported by regional satellite offices in order to best serve our geographically diverse client base. 16 Table of Contents Selling to Digital Properties Our sales teams are responsible for adding new partnerships with digital properties.
Our team is deployed around the world with sales hubs in Bangkok, London, Los Angeles, New York, and Sao Paulo, supported by regional satellite offices in order to best serve our geographically diverse client base. Selling to Digital Properties Our sales teams are responsible for adding new partnerships with digital properties.
The ePrivacy Regulation may impose burdensome requirements around obtaining consent and impose fines for violations that are materially higher than those imposed under the EU’s current ePrivacy Directive and related EU member state legislation. Privacy Regulation in the Asia-Pacific Region Our business activities are also subject to legislation and regulation in the Asia-Pacific region.
The ePrivacy Regulation may impose burdensome requirements around obtaining consent and impose fines for violations that are materially higher than those imposed under the EU’s current ePrivacy Directive and related EU member state legislation. 15 Table of Contents Privacy Regulation in the Asia-Pacific Region Our business activities are also subject to legislation and regulation in the Asia-Pacific region.
To create an efficient marketplace, our algorithms support diverse pricing models, including CPC and CPM, and are able to conduct efficient auctions between them in order to maximize available inventory for A dvertisers with diverse marketing objectives.
To create an efficient marketplace, our algorithms support diverse pricing models, including CPC and CPM, and are able to conduct efficient auctions between them in order to maximize available inventory for Advertisers with diverse marketing objectives.
We optimize bids for a particular ad, A dvertiser, user and context, while factoring in constraints, such as geographic location targeting or audience segment targeting, regardless of pricing model. In order to assist Ad vertisers in executing efficient and effective campaigns, we developed a pricing automation tool called Smart Bid.
We optimize bids for a particular ad, Advertiser, user and context, while factoring in constraints, such as geographic location targeting or audience segment targeting, regardless of pricing model. In order to assist Advertisers in executing efficient and effective campaigns, we developed a pricing automation tool called Smart Bid.
In addition, the company also provides insights into industry trends including visibility into the type of content and products that are converting well across the entire network. These real-time feedback loops and insights are critical inputs that drive publishers’ content strategy and decisions about which products to promote.
In addition, we also provide insights into industry trends including visibility into the type of content and products that are converting well across the entire network. These real-time feedback loops and insights are critical inputs that drive publishers’ content strategy and decisions about which products to promote.
Similarly Connexity, our e-Commerce solution, uses AI powered technology to drive optimized performance for A dvertisers and digital properties. • More than Monetization . The value we provide to digital properties goes beyond monetization.
Similarly Connexity, our e-Commerce solution, uses AI powered technology to drive optimized performance for Advertisers and digital properties. • More than Monetization. The value we provide to digital properties goes beyond monetization.
Once a digital property joins our network, our account management team works with the digital property’s stakeholders to understand their goals, help them reach those goals, and identify new opportunities for mutual growth on an ongoing basis. Selling to Advertisers We sell to A dvertisers through our global sales team and a “self-service” website.
Once a digital property joins our network, our account management team works with the digital property’s stakeholders to understand their goals, help them reach those goals, and identify new opportunities for mutual growth on an ongoing basis. 12 Table of Contents Selling to Advertisers We sell to Advertisers through our global sales team and a “self-service” website.
Most of Taboola’s senior management has worked together with our founder for many years: the average tenure of our senior management is over nine years, demonstrating strong execution and achieving rapid growth. 14 Table of Contents • Strong Financial Profile . We designed our business to be highly scalable, with a focus on sustainable long-term development.
Most of Taboola’s senior management has worked together with our founder for many years: the average tenure of our senior management is over ten years, demonstrating strong execution and achieving rapid growth. • Strong Financial Profile. We designed our business to be highly scalable, with a focus on sustainable long-term development.
How we Enable Digital Properties to make e-Commerce Recommendations With our acquisition of Connexity, our solutions have expanded to include e-Commerce focused content and monetization solutions for publishers. From a content point of view, we provide publishers with access to over 500 million product listings that are structured into product categories and enriched with product attributes.
How we Enable Digital Properties to make e-Commerce Recommendations Our solutions include e-Commerce focused content and monetization solutions for publishers through our Connexity subsidiary. From a content point of view, we provide publishers with access to over 500 million product listings that are structured into product categories and enriched with product attributes.
With respect to finding top diverse talent, we began by assessing our current workforce demographics by region and business unit, and established goals and guidelines in efforts of diversifying our recruitment funnel at the first assessment stage.
With respect to finding top diverse talent, we continued assessing our current workforce demographics by region and business unit, and measured our goals and guidelines in efforts of diversifying our recruitment funnel at the first assessment stage.
We believe in developing and promoting top talent from within: in 202 3 , approximately 15% of our employees w ere offered an opportunity for career advancement within the company. Performance and Alignment We seek to implement a “pay for performance” culture that we believe drives superior results. We invest in our workforce by offering competitive salaries, incentives, and benefits.
We believe in developing and promoting top talent from within: in 2024, approximately 15% of our employees were offered an opportunity for career advancement within the company. Performance and Alignment We seek to implement a “pay for performance” culture that we believe drives superior results. We invest in our workforce by offering competitive salaries, incentives, and benefits.
To enable these publishers to maximize the success of the commerce content initiatives, the company provides a suite of analytics dashboards that showcase real-time feedback on the performance of each of their product listing or editorial placements.
To enable these publishers to maximize the success of the commerce content initiatives, we provide a suite of analytics dashboards that showcase real-time feedback on the performance of each of their product listing or editorial placements.
Maniv holds a B.S. degree from the Talpiot program at the Hebrew University in Jerusalem, and served five years as a systems engineering officer in an intelligence unit of the Israel Defense Forces. Lior Golan (5 3 ) has been Chief Technology Officer of Taboola since 2009 and is responsible for Taboola’s product and technical strategy worldwide.
Maniv holds a B.S. degree from the Talpiot program at the Hebrew University in Jerusalem, and served five years as a systems engineering officer in an intelligence unit of the Israel Defense Forces. Lior Golan (54) has been Chief Technology Officer of Taboola since 2009 and is responsible for Taboola’s product and technical strategy worldwide. Prior to joining Taboola, Mr.
Prior to joining Taboola, Mr. Golan was co-founder, Chief Technology Officer, and Vice President of Research & Development of Cyota, a leader in consumer Internet security. After Cyota was acquired by RSA Security in 2005, Mr.
Golan was co-founder, Chief Technology Officer, and Vice President of Research & Development of Cyota, a leader in consumer Internet security. After Cyota was acquired by RSA Security in 2005, Mr.
How We Recommend Ads Recommending ads is particularly complex because the process requires accurately predicting multiple facets of the user’s interaction: • The probability the user will interact (click on an ad, or go to an A dvertiser’s site/app after seeing an ad), given a specific user and context. • The probability a user will convert (into a lead, sales or other KPIs the A dvertiser wishes to optimize) after she clicked/viewed an ad, given a specific user and context. • The price of a specific item (we support cost per click (CPC) and cost per thousand impressions (CPM)).
How We Match Ads Matching ads to ad opportunities is particularly complex because the process requires accurately predicting multiple facets of the user’s interaction: • The probability the user will interact (click on an ad, or go to an Advertiser’s site/app after seeing an ad), given a specific user and context. • The probability a user will convert (into a lead, sales or other KPIs the Advertiser wishes to optimize) after she clicked/viewed an ad, given a specific user and context. • The price of a specific item (we support cost per click (CPC) and cost per thousand impressions (CPM)).
This allows us to build strong relationships, help A dvertisers succeed on our platform, and evolve our technology based on direct feedback. • High Reach and Scale . We have nearly 6 00 million daily active users across the globe, enabling A dvertisers to run campaigns at scale. • Network Effect .
This allows us to build strong relationships, help Advertisers succeed on our platform, and evolve our technology based on direct feedback. • High Reach and Scale . We have nearly 600 million daily active users across the globe, enabling Advertisers to run campaigns at scale. • Network Effect.
Golan holds a B.S. degree from the Talpiot program at the Hebrew University in Jerusalem and served eight years in an intelligence unit of the Israel Defense Forces. Stephen Walker (5 4 ) has been Chief Financial Officer of Taboola since June 2020.
Golan holds a B.S. degree from the Talpiot program at the Hebrew University in Jerusalem and served eight years in an intelligence unit of the Israel Defense Forces. 18 Table of Contents Stephen Walker (55) has been Chief Financial Officer of Taboola since June 2020.
We are committed to building a long-term plan that will help foster a community that is diverse and inclusive, both internally and externally. Available Information The mailing address of Taboola’s principal executive office is 16 Madison Square West, 7th fl., New York, NY, 10010 and its telephone number is (212) 206-7663.
We are committed to building a long-term plan that will help foster a community that is diverse and inclusive, both internally and externally, consistent with applicable laws and regulations. 17 Table of Contents Available Information The mailing address of Taboola’s principal executive office is 16 Madison Square West, 7th fl., New York, NY, 10010 and its telephone number is (212) 206-7663.
No longer a trend, a change in consumer attention to digital properties has become a lasting movement, giving A dvertisers an opportunity to reach increasing numbers of consumers at scale with relevant content and precise targeting, thereby driving a higher return on their investment. Walled Gardens Dominate Digital Advertising Spend.
No longer a trend, a change in consumer attention to digital properties has become a lasting movement, giving Advertisers an opportunity to reach increasing numbers of consumers at scale with relevant content and precise targeting, thereby driving a higher return on their investment.
Some of the verticals we have seen strong adoption in are health & fitness, finance, hobbies & interests, technology & computing, home & garden, shopping and automotive. Our ten largest A dvertisers accounted for less than 1 3 % of total Revenues on our network in 202 3 , with none larger than 3%.
Some of the verticals we have seen strong adoption in are health & fitness, finance, hobbies & interests, technology computing, home & garden, shopping and automotive. Our ten largest Advertisers accounted for less than 11% of total Revenues on our network in 2024, with none larger than 3%.
This has led to increased regulation, such as the Eu ropean Union’s General Data Protection Regulation, or GDPR, its eq uivalent in the United Kingdom (commonly referred to as the UK GDPR), and the California Consumer Privacy Act (as modified by the California Privacy Rights Act), or CCPA.
This has led to increased regulation, such as the European Union’s General Data Protection Regulation, or GDPR, its equivalent in the United Kingdom (commonly referred to as the UK GDPR), and the California Consumer Privacy Act (as modified by the California Privacy Rights Act), or CCPA.
We have spent over 1 5 years developing our AI-powered recommendation technology to drive high yield for digital properties, high returns on advertising spend for A dvertisers, and relevant recommendations to consumers, who spend more time consuming content on digital properties.
We have spent over 15 years developing our AI-powered recommendation technology to drive high yield for digital properties, high returns on advertising spend for Advertisers, and relevant recommendations to consumers, who spend more time consuming content on digital properties.
We believe AI is critical to engaging Open Web users and will ultimately provide better service and greater monetization to A dvertisers and digital properties, increasing our yields and accelerating our growth. • Grow our Core Digital Property and Advertiser Client Base .
We believe AI is critical to engaging Open Web users and will ultimately provide better service and greater monetization to Advertisers and digital properties, increasing our yields and accelerating our growth. • Grow our Core Digital Property and Advertiser Client Bas e.
The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers, such as we, that file electronically, with the SEC at www.sec.gov. 22 Table of Contents Executive Officers Adam Singolda (4 2 ) has been the Chief Executive Officer, as well as a director, of Taboola since it began operations in 2007.
The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers, such as we, that file electronically, with the SEC at www.sec.gov. Executive Officers (as of December 31, 2024) Adam Singolda (43) has been the Chief Executive Officer, as well as a director, of Taboola since it began operations in 2007.
Because we power editorial recommendations, digital properties typically embed our code directly on their web page. This means we can serve our own first-party cookie, much like what digital properties do on their own sites and applications. 12 Table of Contents Our recommendation platform allows both digital properties and A dvertisers to control their brand identity within Taboola’s network.
Because we power editorial recommendations, digital properties typically embed our code directly on their web page. This means we can serve our own first-party cookie, much like what digital properties do on their own sites and applications. Our performance platform allows both digital properties and Advertisers to control their brand identity within Taboola’s network.
We syndicate those enriched offers to publishers, thereby enabling them to create consumer shopping or editorial experiences by embedding those product listings as native content within their websites, apps or social media feeds. There are a variety of implementations in terms of how publishers can access and engage with the content.
We syndicate those enriched offers to publishers, thereby enabling them to create consumer shopping or editorial experiences by embedding those product listings as native content within their websites, apps or social media feeds. 8 Table of Contents Publishers can access and engage with the content in a variety of ways.
Transparency The ability to be transparent and share and discuss our business challenges and opportunities openly and broadly with all our employees is important to our success. We promote an open dialogue with our employees through all-hands meetings, usually twice a month, which include Q&A sessions with senior leadership.
We have never experienced a general strike or similar work stoppage. Transparency The ability to be transparent and share and discuss our business challenges and opportunities openly and broadly with all our employees is important to our success. We promote an open dialogue with our employees through all-hands meetings, usually twice a month, which include Q&A sessions with senior leadership.
According to eMarketer, more than half of digital advertising budgets are spent within the closed ecosystems of tech giants like Google, Facebook and Amazon, which we refer to as “walled gardens.” With the proliferation of these walled gardens and the time spent by consumers within them, the Open Web is fighting for user attention and as a result for advertising dollars.
According to eMarketer, more than half of digital advertising budgets are spent within the closed ecosystems of tech giants like Google, Meta and Amazon, which we refer to as “walled gardens.” With the proliferation of these walled gardens and the time spent by consumers within them, other digital properties owners are fighting for user attention and advertising dollars.
As of December 31, 202 3 , our average contract term length with our digital properties was over two years as measured by contract duration at inception; some of our largest partners have even longer-term agreements. Microsoft is our largest partner.
As of December 31, 2024 our average contract term length with our digital properties was over two years as measured by contract duration at inception; some of our largest partners have even longer-term agreements. Yahoo and Microsoft are our largest partners.
We committed to wellness and diversity in recruiting by starting a Diverse Interview Slate Campaign to promote diversity in the interview process and reduce biases, which led to hiring more women managers in technical roles.
We are committed to wellness and diversity in recruiting with our Diverse Interview Slate Campaign to promote diversity in the interview process and reduce biases, which has led to hiring more women managers in technical roles.
Our technology is designed to predict the value of each item and optimize both the advertising creatives and the format mix in each auction. 11 Table of Contents As described above, in order to make effective recommendations, our technology must first predict a user’s engagement with a given advertisement.
Our technology is designed to predict the value of each item and optimize both the advertising creatives and the format mix in each auction. As described above, in order to match ads effectively, our technology must first predict a user’s engagement with a given advertisement.
Within the organization, in 2023 we increased the number of Employee Resource Groups from seven to nine, and each has an annual budget to sponsor programming and events. We also have a mentorship program connecting Black, Indigenous and People of Color (BIPOC) talent to senior leaders.
Within the organization, in 2024 we had nine Employee Resource Groups with each having an annual budget to sponsor programming and events. We also have a mentorship program connecting Black, Indigenous and People of Color (BIPOC) talent to senior leaders.
To maximize the probability of a user engaging with an ad, we support flexible native ad formats that include images, videos, text and interactive elements; we also support specialized elements, such as product price, discount, number of items left in stock, mobile app rating and more.
To maximize the probability of a user engaging with an ad, we support multiple ad formats, including standard display, video and native formats used on social media and other channels,that include images, videos, text and interactive elements We also support specialized elements, such as product price, discount, number of items left in stock, mobile app rating and more.
We are experts in analyzing pseudonymized user behavior across the Open Web. We gather a massive amount of content consumption data from users who visit our partners’ digital properties, which our Deep Learning engines then ingest. • Context .
We are experts in analyzing pseudonymized user behavior across digital properties outside of search and social platforms. We gather a massive amount of first party content consumption data from users who visit our partners’ digital properties, which our Deep Learning engines then ingest. • Context .
Further, the FTC has issued substantial fines to HIPAA covered entities for sharing protected health information with third parties like Taboola for advertising purposes and has released guidance around what kind of online tracking activity constitutes sharing protected health information. This new guidance on the scope of HIPAA applicability reduces the data we can collect on users.
Further, the FTC has issued substantial fines to HIPAA covered entities for sharing protected health information with third parties like Taboola for advertising purposes and has released guidance around what kind of online tracking activity constitutes sharing protected health information.
As we have witnessed over the last decade, advertising budgets continue to shift from traditional media, such as print newspapers, magazines and television, to digital channels.
Industry Trends We see the following important trends in our industry: Advertising Budgets Shift to Digital Marketing. As we have witnessed over the last decade, advertising budgets continue to shift from traditional media, such as print newspapers, magazines and television, to digital channels.
Other than Microsoft, no other digital property partner accounted for 5 % or more of our Revenues generated from A dvertisers on digital properties in 202 3 . Advertisers We had approximately 17,000 Advertisers working with us directly, or through advertising agencies, worldwide during the fourth quarter of 2023 .
Other than Yahoo and Microsoft, no other digital property partner accounted for 5% or more of our Revenues generated from Advertisers on digital properties in 2024. Advertisers We had approximately 2,100 Scaled Advertisers working with us directly, or through advertising agencies, worldwide during the fourth quarter of 2024.
We continue to invest to hire and retain top talent in all of our offices , and provide competitive compensation for our employees and a range of flexible benefits, including an industry-leading parental leave policy .
We continue to invest to hire and retain top talent in all of our offices, and provide competitive compensation for our employees and a range of flexible benefits, including an industry-leading parental leave policy. We are proud to have been consistently recognized as a top employer across the globe.
We have expanded into the e-Commerce market through our acquisition of Connexity, which strengthens our data, pairing our readership data with purchasing data that can make our AI better, grow yield and make our advertising partners more successful.
We offer e-Commerce solutions through our Connexity subsidiary, which strengthens our data, pairing our readership data with purchasing data that can make our AI better, grow yield and make our advertising partners more successful.
In addition, Taboola is a proud member in good standing of the Network Advertising Initiative, an association dedicated to responsible data collection use in digital advertising, and we adhere to the NAI Code of Conduct for Web and Mobile.
Taboola also adheres to the Interactive Advertising Bureau’s Self-Regulatory Principles for Online Behavioral Advertising, and the IAB Europe OBA Framework. In addition, Taboola is a proud member in good standing of the Network Advertising Initiative, an association dedicated to responsible data collection use in digital advertising, and we adhere to the NAI Code of Conduct for Web and Mobile.
With the addition of Taboola’s new offerings through its acquisition of e-Commerce focused Connexity, Inc., we also offer cost-per-click and cost-per-action monetization of both product listings and links to retailers that reside directly within editorial content.
With Taboola’s e-Commerce solution we also offer cost-per-click and cost-per-action monetization of both product listings and links to retailers that reside directly within editorial content.
Other jurisdictions, such as Singapore, Malaysia and Hong Kong, are reviewing their existing privacy regimes, with an eye toward similar privacy and data protection developments. 20 Table of Contents To address this range of developments, Taboola’s privacy and data protection program is largely rooted in the GDPR and ISO 27001 security standards, and any international data transfers from the Asia-Pacific region are governed by direct contractual agreements between the regional entities and Taboola’s Israeli parent corporate entity, Taboola.com Ltd.
To address this range of developments, Taboola’s privacy and data protection program is largely rooted in the GDPR and ISO 27001 security standards, and any international data transfers from the Asia-Pacific region are governed by direct contractual agreements between the regional entities and Taboola’s Israeli parent corporate entity, Taboola.com Ltd.
As of December 31, 202 3 , we utilized approximately 12,000 servers; four back-end data centers processing over 100TB of data per day to train our AI engine; and nine front-end global data centers that, together, have served up to one trillion recommendations monthly.
As of December 31, 2024 we utilized approximately 13,000 servers; four back-end data centers processing over 100TB of data per day to train our AI engine; and nine front-end global data centers that, together, have served up to one trillion recommendations monthly. We use around 600,000 CPU cores, 2.8PB of memory and around 71,000PB of storage overall.
We believe our existing partnerships with leading device manufacturers and mobile carriers, as well as potential future partnerships with connected TV vendors and others, presents a substantial growth opportunity for both Taboola and our partners. • Add New Types of Recommendations .
We believe our existing partnerships with leading device manufacturers and mobile carriers, as well as potential future partnerships with connected TV vendors and others, presents a substantial growth opportunity for both Taboola and our partners. • Add New Types of Recommendations. From experience, we know recommendation engines become better when they are able to recommend a greater variety of content.
In parallel, major Internet browsers, such as Safari and Firefox are already blocking third pa rty cookies and Google has announced plans to completely phase out third-party cookies in Google Chrome during the second half of 2024 .
In parallel, major Internet browsers, such as Safari and Firefox are already blocking third party cookies and Google has announced plans to provide users with more control over their privacy settings in Google Chrome during the second half of 2024.
We also perform ongoing privacy impact assessments to monitor potential risks during the product lifecycle and proactively mitigate those risks. Infrastructure To successfully deliver optimized recommendations to nearly 600 million daily active users, and 500,000 recommendation related requests every second, we developed powerful software and hardware infrastructures from the ground up.
Infrastructure To successfully deliver optimized recommendations to nearly 600 million daily active users, and 500,000 recommendation related requests every second, we developed powerful software and hardware infrastructures from the ground up.
Digital Properties Taboola had approximately 12 ,000 digital property partne rs in the fourth quarter of 20 2 3 , including many premium properties such as Microsoft, NBCUniversal, CBSi, The Independent and El Mundo .
Digital Properties Taboola had approximately 11,000 digital property partners in the fourth quarter of 2024, including many premium properties such as Yahoo, Microsoft, NBCUniversal, CBSi, Business Insider, The Independent and El Mundo.
Thanks to the effectiveness of our recommendation engine, many of our A dvertiser clients are considered “always on,” which means they continuously invest on our platform, rather than running finite campaigns. Our A dvertiser customer base is highly diverse.
We support the leading programmatic channels via integrations with leading demand side platforms, or DSPs. Thanks to the effectiveness of our recommendation engine, many of our Advertiser clients are considered “always on,” which means they continuously invest on our platform, rather than running finite campaigns. Our Advertiser customer base is highly diverse.
Our proprietary, internally developed know-how is also an important element of our intellectual property portfolio. The development and management of our platform requires sophisticated coordination among many specialized employees.
Our proprietary, internally developed know-how is also an important element of our intellectual property portfolio. The development and management of our platform requires sophisticated coordination among many specialized employees. To protect our technology, we implement multiple layers of security and our data protection measures are ISO 27001 certified.
Unlike walled gardens, we are a business-to-business, or B2B, company with no competing consumer interests. We only interact with consumers through our partners’ digital properties, hence we do not compete with our partners for user attention. Our motivations are aligned. When our partners win, we win, and we grow together.
We also provide a meaningful monetization opportunity to digital properties by matching relevant advertising to their audience in real time. Unlike walled gardens, we are a business-to-business, or B2B, company with no competing consumer interests. We only interact with consumers through our partners’ digital properties, hence we do not compete with our partners for user attention. Our motivations are aligned.
While developing our recommendation technology, privacy is always at the top of our mind. We have long established and adopted privacy-by-design as a central element of our technology, and product design and development cycles, with a strong commitment to ensuring best practices in privacy, security and safety for our partners and users.
We have long established and adopted privacy-by-design as a central element of our technology, and product design and development cycles, with a strong commitment to ensuring best practices in privacy, security and safety for our partners and users. Since 2017, we have had a designated Data Privacy Officer along with a team of privacy specialists.
When people click on these ads or make a purchase, and in certain cases when they view the ads, A dvertisers pay us and we then share in this revenue with the digital property on which the click or impression occurred.
When people click on these ads or make a purchase, and in certain cases when they view the ads, Advertisers pay us and we then share in this revenue with the digital property on which the click or impression occurred. For over a decade, Taboola has been a leader in native ad monetization for digital properties, primarily in below-article placements.
Data insights can now be used to optimize digital advertising campaigns in ways that were not previously possible. This means that advertising intermediaries who do not have access to data or are not using AI to power their platforms may be at a disadvantage. Shift from Offline Shopping to Online Shopping and e-Commerce.
This means that advertising intermediaries who do not have access to commercially valuable data at scale, or are not using AI to power their platforms may be at a disadvantage. 5 Table of Contents Shift from Offline Shopping to Online Shopping and e-Commerce.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeHowever, PFIC status is determined annually and depends on the composition of a company’s income and assets and the fair market value of its assets and no assurance can be given that we were not a PFIC in 2023, or as to whether we will be a PFIC in 202 4 or for any future taxable years. 43 Table of Contents If we are a PFIC for any taxable year during which a U.S. investor holds our Ordinary shares or Warrants , we would continue to be treated as a PFIC with respect to that U.S. investor for all succeeding years during which the U.S. investor holds our Ordinary shares or Warrants , even if we ceased to meet the threshold requirements for PFIC status, unless certain exceptions apply.
Biggest changeIf we are a PFIC for any taxable year during which a U.S. investor holds our Ordinary shares or Warrants, we would continue to be treated as a PFIC with respect to that U.S. investor for all succeeding years during which the U.S. investor holds our Ordinary shares or Warrants, even if we ceased to meet the threshold requirements for PFIC status, unless certain exceptions apply.
Although we believe we are well positioned to adapt and continue to provide key data insights to our media partners without cookies, this transition could be more disruptive, slower, or more expensive than we currently anticipate, and could materially affect the accuracy of our recommendations and ads and thus our ability to serve our Advertisers, including through our data marketplace product, adversely affecting our business, results of operations, and financial condition.
Although we believe we are well positioned to adapt and continue to provide key data insights to our media partners without cookies, this transition could be more disruptive, slower, or more expensive than we currently anticipate, and could materially affect the accuracy of our recommendations and ads and thus our ability to serve our Advertisers, including through our data marketplace product, adversely affecting our business, results of operations, and financial condition.
Among other things: • Israeli corporate law regulates mergers and requires that a tender offer be effected when more than a specified percentage of shares in a company are purchased; • Israeli corporate law requires special approvals for certain transactions involving directors, officers or significant shareholders and regulates other matters that may be relevant to these types of transactions; • Israeli corporate law does not provide for shareholder action by written consent for public companies, thereby requiring all shareholder actions to be taken at a general meeting of shareholders; 53 Table of Contents • our amended and restated articles of association divide our directors into three classes, each of which is elected once every three years; • our amended and restated articles of association generally requires that 33⅓% of our outstanding shares entitled to vote to be present in person or by proxy to constitute a quorum; • our amended and restated articles of association generally require a vote of the holders of a majority of our outstanding Ordinary shares entitled to vote present and voting on the matter at a general meeting of shareholders (referred to as simple majority), and the amendment of a limited number of provisions, such as the provision empowering our board of directors to determine the size of the board, the provision dividing our directors into three classes, the provision that sets forth the procedures and the requirements that must be met in order for a shareholder to require the Company to include a matter on the agenda for a general meeting of the shareholders and the provisions relating to the election and removal of members of our board of directors and empowering our board of directors to fill vacancies on the board, require a vote of the holders of 65% of our outstanding Ordinary shares entitled to vote at a general meeting; • our amended and restated articles of association do not permit a director to be removed except by a vote of the holders of at least 65% of our outstanding shares entitled to vote at a general meeting of shareholders; and • our amended and restated articles of association provide that director vacancies may be filled by our board of directors.
Among other things: • Israeli corporate law regulates mergers and requires that a tender offer be effected when more than a specified percentage of shares in a company are purchased; • Israeli corporate law requires special approvals for certain transactions involving directors, officers or significant shareholders and regulates other matters that may be relevant to these types of transactions; • Israeli corporate law does not provide for shareholder action by written consent for public companies, thereby requiring all shareholder actions to be taken at a general meeting of shareholders; • our amended and restated articles of association divide our directors into three classes, each of which is elected once every three years; • our amended and restated articles of association generally requires that 33⅓% of our outstanding shares entitled to vote to be present in person or by proxy to constitute a quorum; • our amended and restated articles of association generally require a vote of the holders of a majority of our outstanding Ordinary shares entitled to vote present and voting on the matter at a general meeting of shareholders (referred to as simple majority), and the amendment of a limited number of provisions, such as the provision empowering our board of directors to determine the size of the board, the provision dividing our directors into three classes, the provision that sets forth the procedures and the requirements that must be met in order for a shareholder to require the Company to include a matter on the agenda for a general meeting of the shareholders and the provisions relating to the election and removal of members of our board of directors and empowering our board of directors to fill vacancies on the board, require a vote of the holders of 65% of our outstanding Ordinary shares entitled to vote at a general meeting; • our amended and restated articles of association do not permit a director to be removed except by a vote of the holders of at least 65% of our outstanding shares entitled to vote at a general meeting of shareholders; and • our amended and restated articles of association provide that director vacancies may be filled by our board of directors.
If we face claims from third parties seeking to enforce the t erms of an open-source software license, or if we are held to have breached the terms of an open-source software license, we could be required to seek licenses from third parties to continue operating our platform on terms that are not economically feasible, to re-engineer our platform or the supporting computational infrastructure to discontinue use of certain code, or to make generally available, in source code form, portions of our proprietary code, any of which could adversely affect our business, financial condition and results of operations.
If we face claims from third parties seeking to enforce the terms of an open-source software license, or if we are held to have breached the terms of an open-source software license, we could be required to seek licenses from third parties to continue operating our platform on terms that are not economically feasible, to re-engineer our platform or the supporting computational infrastructure to discontinue use of certain code, or to make generally available, in source code form, portions of our proprietary code, any of which could adversely affect our business, financial condition and results of operations.
For additional discussion of privacy and data protection laws and regulations applicable to our business, see “Risk Factors—Risks Related to Laws and Regulations—Legislation and regulation of online businesses, including privacy and data protection regimes, could create unexpected costs, subject us to enforcement actions for compliance failures, or cause us to change our technology platform or business model, which could have a material adverse effect on our business.” 37 Table of Contents Laws and regulations of the countries and their legal subdivisions in which we operate or conduct business or in which our employees reside, which in some cases can be enforced by private parties in addition to government entities, are constantly evolving and can be subject to significant change.
For additional discussion of privacy and data protection laws and regulations applicable to our business, see “Risk Factors—Risks Related to Laws and Regulations—Legislation and regulation of online businesses, including privacy and data protection regimes, could create unexpected costs, subject us to enforcement actions for compliance failures, or cause us to change our technology platform or business model, which could have a material adverse effect on our business.” Laws and regulations of the countries and their legal subdivisions in which we operate or conduct business or in which our employees reside, which in some cases can be enforced by private parties in addition to government entities, are constantly evolving and can be subject to significant change.
As a growing company in a rapidly evolving industry, our business prospects depend in large part on our ability to: • develop and offer a competitive technology platform and offerings that meet our digital properties’ and A dvertisers’ needs as they change; • continuously innovate and improve on the algorithms underlying our technology in order to deliver positive results for our A dvertisers and digital properties; • build a reputation for superior solutions and create trust and long-term relationships with digital properties and A dvertisers; • distinguish ourselves from strong competitors in our industry; • maintain and expand our relationships with A dvertisers who can provide quality content and advertisements ; • respond to evolving industry and government oversight, standards and regulations that impact our business , particularly in the areas of native advertising, data collection, privacy and data protection; • prevent or otherwise mitigate failures or breaches of security or privacy; and • attract, hire, integrate and retain qualified and motivated employees.
As a growing company in a rapidly evolving industry, our business prospects depend in large part on our ability to: • develop and offer a competitive technology platform and offerings that meet our digital properties’ and Advertisers’ needs as they change; • continuously innovate and improve on the algorithms underlying our technology in order to deliver positive results for our Advertisers and digital properties; • build a reputation for superior solutions and create trust and long-term relationships with digital properties and Advertisers; • distinguish ourselves from strong competitors in our industry; • maintain and expand our relationships with Advertisers who can provide quality content and advertisements; • respond to evolving industry and government oversight, standards and regulations that impact our business, particularly in the areas of native advertising, data collection, privacy and data protection; • prevent or otherwise mitigate failures or breaches of security or privacy; and • attract, hire, integrate and retain qualified and motivated employees .
As a result, our success is dependent upon our ability to outperform our competitors and win repeat business from existing A dvertisers, while continually expanding the number of A dvertisers for whom we provide services. In addition, it is relatively easy for A dvertisers to seek an alternative provider for their campaigns because there are no significant switching costs.
As a result, our success is dependent upon our ability to outperform our competitors and win repeat business from existing Advertisers, while continually expanding the number of Advertisers for whom we provide services. In addition, it is relatively easy for Advertisers to seek an alternative provider for their campaigns because there are no significant switching costs.
Our agreements with digital properties, A dvertiser and other third parties may include indemnification provisions under which we agree to indemnify them for losses suffered or incurred as a result of claims of intellectual property infringement, damages caused by us to property or persons, or other liabilities relating to or arising from our products, services, or other contractual obligations.
Our agreements with digital properties, Advertiser and other third parties may include indemnification provisions under which we agree to indemnify them for losses suffered or incurred as a result of claims of intellectual property infringement, damages caused by us to property or persons, or other liabilities relating to or arising from our products, services, or other contractual obligations.
Our historical revenue growth has masked the impact of seasonality in the past, but if our growth rate declines or seasonal spending becomes more pronounced, seasonality could have a more significant impact on our revenue, cash flow and results of operations from period to period. We usually incur the cost of an A dvertiser’s campaign before we bill for services.
Our historical revenue growth has masked the impact of seasonality in the past, but if our growth rate declines or seasonal spending becomes more pronounced, seasonality could have a more significant impact on our revenue, cash flow and results of operations from period to period. We usually incur the cost of an Advertiser’s campaign before we bill for services.
Any material failure to effectively maintain a sufficient number of A dvertisers relative to the inventory we have available could cause digital properties not to utilize our platform or impair Taboola’s AI’s ability to accurately predict user engagement. As a result, our relationships with certain digital properties, our revenues and our business could be adversely impacted.
Any material failure to effectively maintain a sufficient number of Advertisers relative to the inventory we have available could cause digital properties not to utilize our platform or impair Taboola’s AI’s ability to accurately predict user engagement. As a result, our relationships with certain digital properties, our revenues and our business could be adversely impacted.
In addition, we may reach a point of saturation at which we cannot continue to grow our revenue from existing digital properties and A dvertisers because of internal limits they may place on the allocation of space on their sites, allocation of their advertising budgets to digital media, to particular campaigns, to a particular provider, or other reasons.
In addition, we may reach a point of saturation at which we cannot continue to grow our revenue from existing digital properties and Advertisers because of internal limits they may place on the allocation of space on their sites, allocation of their advertising budgets to digital media, to particular campaigns, to a particular provider, or other reasons.
While we have adopted a number of strategies and initiatives to address these challenges, there can be no guarantee that our efforts will be successful. If we are unable to demonstrate the continuing value of our platform to A dvertisers and digital properties, our results may suffer.
While we have adopted a number of strategies and initiatives to address these challenges, there can be no guarantee that our efforts will be successful. If we are unable to demonstrate the continuing value of our platform to Advertisers and digital properties, our results may suffer.
To the extent that such exclusivity is reduced or eliminated for any reason, including due to changes in market practice or changes in or in response to laws, rules or regulations, our partners could elect to implement other platforms or services on their digital properties, de velop their own, or to seek out other third parties with which to do business, which could be detrimental to our performance, thereby reducing our revenues and having an adverse effect on our business.
To the extent that such exclusivity is reduced or eliminated for any reason, including due to changes in market practice or changes in or in response to laws, rules or regulations, our partners could elect to implement other platforms or services on their digital properties, develop their own, or to seek out other third parties with which to do business, which could be detrimental to our performance, thereby reducing our revenues and having an adverse effect on our business.
If we fail to protect our intellectual property and proprietary rights adequately, our competitors might gain access to our technology and pro prietary information , and our business could be adversely affected. We rely on trademark, copyright, trade secret, patent and confidentiality procedures and contractual provisions to protect our proprietary methods and technologies.
If we fail to protect our intellectual property and proprietary rights adequately, our competitors might gain access to our technology and proprietary information, and our business could be adversely affected. We rely on trademark, copyright, trade secret, patent and confidentiality procedures and contractual provisions to protect our proprietary methods and technologies.
If our access to quality digital properties or content from A dvertisers is diminished or if we fail to acquire new content, our revenue could decline and our growth prospects could be impeded. We must maintain a consistent supply of attractive content and quality digital properties on which we place content.
If our access to quality digital properties or content from Advertisers is diminished or if we fail to acquire new content, our revenue could decline and our growth prospects could be impeded. We must maintain a consistent supply of attractive content and quality digital properties on which we place content.
Typically, the advertising agency pays for our services once it has received payment from the A dvertiser for our services. Our agreements with these agencies typically provide that if the A dvertiser does not pay the agency, the agency is not liable to us, and we must seek payment solely from the advertiser.
Typically, the advertising agency pays for our services once it has received payment from the Advertiser for our services. Our agreements with these agencies typically provide that if the Advertiser does not pay the agency, the agency is not liable to us, and we must seek payment solely from the advertiser.
Similarly, if we are unable to maintain a consistent supply of quality content from A dvertisers for any reason, our business, digital property partners retention and loyalty, financial condition and results of operations would be harmed.
Similarly, if we are unable to maintain a consistent supply of quality content from Advertisers for any reason, our business, digital property partners retention and loyalty, financial condition and results of operations would be harmed.
Risks Related to Our Intellectual Property and Technology Our intellectual pro perty and proprietary rights may be difficult to enforce, particularly because in many instances we rely on trade secrets rather than patents or similar registered legal protections.
Risks Related to Our Intellectual Property and Technology Our intellectual property and proprietary rights may be difficult to enforce, particularly because in many instances we rely on trade secrets rather than patents or similar registered legal protections.
Operational errors or failures or successful cyber-attacks, media reports about such an incident, whether accurate or not, or our failure to make adequate or timely disclosures to the public or law enforcement agencies following any such event, whether due to delayed discovery or a failure to follow existing protocols, could result in vi olation of applicable privacy and data security laws and regulations, notification obligations, damage to our reputation, loss of current and new digital properties or A dvertisers and other partners and clients, the disclosure of personal, confidential, sensitive or proprietary data, interruptions to our operations and distraction to our management, and significant legal, regulatory and financial liabilities and lost revenues, which could harm our business.
Operational errors or failures or successful cyber-attacks, media reports about such an incident, whether accurate or not, or our failure to make adequate or timely disclosures to the public or law enforcement agencies following any such event, whether due to delayed discovery or a failure to follow existing protocols, could result in violation of applicable privacy and data security laws and regulations, notification obligations, damage to our reputation, loss of current and new digital properties or Advertisers and other partners and clients, the disclosure of personal, confidential, sensitive or proprietary data, interruptions to our operations and distraction to our management, and significant legal, regulatory and financial liabilities and lost revenues, which could harm our business.
A decrease in advertising expenditures by our A dvertisers could lead to a reduction in our ability to obtain high-quality content from digital properties, which in turn could have an adverse effect on our results of operations and revenues.
A decrease in advertising expenditures by our Advertisers could lead to a reduction in our ability to obtain high-quality content from digital properties, which in turn could have an adverse effect on our results of operations and revenues.
As we grow our business to serve a larger number of A dvertisers and digital properties, it could become more challenging to prevent low quality, offensive or other non-compliant content from being shown.
As we grow our business to serve a larger number of Advertisers and digital properties, it could become more challenging to prevent low quality, offensive or other non-compliant content from being shown.
Supply disruptions can impede our operations, ability to gro w and financial performance and also result in significant cost increases. We anticipate that we will continue to depend on various third-party relationships in order to grow our business.
Supply disruptions can impede our operations, ability to grow and financial performance and also result in significant cost increases. We anticipate that we will continue to depend on various third-party relationships in order to grow our business.
Any performance issues, errors, bugs, defects or failures with respect to third-party software or services could result in perf ormance issues, errors, bugs, defects or failures with respect to our solutions, which could materially and adversely affect our business, financial condition and results of operations.
Any performance issues, errors, bugs, defects or failures with respect to third-party software or services could result in performance issues, errors, bugs, defects or failures with respect to our solutions, which could materially and adversely affect our business, financial condition and results of operations.
If we do not effectively maintain and grow our research and development team with top talent, including employees who are trained in artificial intelligence, machine learning and advanced algorithms, we may be unable to continue to improve on our artificial intelligence, our performance could decline and we could lose digital properties and A dvertisers, which could cause our results of operations and revenues to decline.
If we do not effectively maintain and grow our research and development team with top talent, including employees who are trained in artificial intelligence, machine learning and advanced algorithms, we may be unable to continue to improve on our artificial intelligence, our performance could decline and we could lose digital properties and Advertisers, which could cause our results of operations and revenues to decline.
We may be unable to attract or retain such highly skilled personnel who are critical to our success, which could hinder our ability to keep pace with innovation and technological change in our industry or result in harm to our key A dvertiser and digital property relationships, loss of key information, expertise or proprietary knowledge and unanticipated recruitment and training costs.
We may be unable to attract or retain such highly skilled personnel who are critical to our success, which could hinder our ability to keep pace with innovation and technological change in our industry or result in harm to our key Advertiser and digital property relationships, loss of key information, expertise or proprietary knowledge and unanticipated recruitment and training costs.
Any of these events could seriously harm our business financial condition and results of operations. Legal claims against us resulting from the actions of our A dvertisers or digital properties could damage our reputation and be costly to defend. We receive representations from A dvertisers that the content we place on their behalf does not infringe on any third-party rights.
Any of these events could seriously harm our business financial condition and results of operations. Legal claims against us resulting from the actions of our Advertisers or digital properties could damage our reputation and be costly to defend. We receive representations from Advertisers that the content we place on their behalf does not infringe on any third-party rights.
Defects, errors, failures or other similar performance problems or disruptions, whether in connection with day-to-day operations or otherwise, could damage our clients’ businesses and result in negative publicity, damage to our brand and reputation, loss of or delay in market acceptance of our solutions, increased costs or loss of revenue, loss of competitive position or claims by A dvertisers for losses sustained by them.
Defects, errors, failures or other similar performance problems or disruptions, whether in connection with day-to-day operations or otherwise, could damage our clients’ businesses and result in negative publicity, damage to our brand and reputation, loss of or delay in market acceptance of our solutions, increased costs or loss of revenue, loss of competitive position or claims by Advertisers for losses sustained by them.
In addition, our platform may be subject to government-initiated restrictions or blockages. These could result in a decrease of users interacting with our platform, and could impair our ability to attract new A dvertisers and digital properties.
In addition, our platform may be subject to government-initiated restrictions or blockages. These could result in a decrease of users interacting with our platform, and could impair our ability to attract new Advertisers and digital properties.
If we are unable to protect our intellectual property and proprietary rights, including aspects of our technology platform, we may find ourselves at a competitive disadvantage to others who have not incurred the same level of expense, time and effort to create and protect their intellectual property. 44 Table of Contents We may be subject to intellectual property rights claims by third parties, which are extremely costly to defend, could require us to pay significant damages and could limit our ability to use certain technologies.
If we are unable to protect our intellectual property and proprietary rights, including aspects of our technology platform, we may find ourselves at a competitive disadvantage to others who have not incurred the same level of expense, time and effort to create and protect their intellectual property. 4 We may be subject to intellectual property rights claims by third parties, which are extremely costly to defend, could require us to pay significant damages and could limit our ability to use certain technologies.
In addition, we rely on data signals from user activity on websites that we do not control in order to deliver relevant and effective ads on behalf of our A dvertisers. Our advertising revenue is dependent on targeting and measurement tools that incorporate these signals, and any changes in our ability to use such signals will adversely affect our business.
In addition, we rely on data signals from user activity on websites that we do not control in order to deliver relevant and effective ads on behalf of our Advertisers. Our advertising revenue is dependent on targeting and measurement tools that incorporate these signals, and any changes in our ability to use such signals will adversely affect our business.
We have already and may in the future invest in or acquire other businesses, which could require significant management attention, disrupt our business, dilute shareholder value and adversely affect our financial condition and results of operations. 34 Table of Contents As part of our business strategy, we have made and may make future investments in or acquisitions of complementary companies, products or technologies.
We have already and may in the future invest in or acquire other businesses, which could require significant management attention, disrupt our business, dilute shareholder value and adversely affect our financial condition and results of operations. As part of our business strategy, we have made and may make future investments in or acquisitions of complementary companies, products or technologies.
The loss of the services of such key employees could make it more difficult to successfully operate our business and pursue our business goals. 35 Table of Contents Our growth depends, in part, on the success of our strategic relationships with third parties, including ready access to hardware in key locations to facilitate the delivery of our platform and reliable management of Internet traffic.
The loss of the services of such key employees could make it more difficult to successfully operate our business and pursue our business goals. Our growth depends, in part, on the success of our strategic relationships with third parties, including ready access to hardware in key locations to facilitate the delivery of our platform and reliable management of Internet traffic.
We may not be able to compete successfully against current and future competitors because competition in our industry is intense and many competitors, such as Google and Facebook, have substantially more resources than we do. Our competitors may also offer solutions that are perceived by our digital properties and A dvertisers to be more attractive than our platform.
We may not be able to compete successfully against current and future competitors because competition in our industry is intense and many competitors, such as Google and Facebook, have substantially more resources than we do. Our competitors may also offer solutions that are perceived by our digital properties and Advertisers to be more attractive than our platform.
Our productivity and the quality of our platform may be adversely affected if we do not integrate and train our new employees, particularly our research and development, sales and account management personnel, quickly and effectively and if we fail to appropriately coordinate across our executive, finance, human resources, legal, marketing, sales, operations and A dvertiser support teams.
Our productivity and the quality of our platform may be adversely affected if we do not integrate and train our new employees, particularly our research and development, sales and account management personnel, quickly and effectively and if we fail to appropriately coordinate across our executive, finance, human resources, legal, marketing, sales, operations and Advertiser support teams.
The Company believes that it was not a PFIC for U.S. federal income tax purposes for its 2023 taxable year and it does not expect to become one in the foreseeable future.
The Company believes that it was not a PFIC for U.S. federal income tax purposes for its 2024 taxable year and it does not expect to become one in the foreseeable future.
Although we gen erally rely on trade secret laws to protect our intellectual property, we may encounter difficulties enforcing our rights where we lack patent protection. Such litigation could result in substantial costs and the diversion of limited resources and could negatively affect our business, financial condition and results of operations.
Although we generally rely on trade secret laws to protect our intellectual property, we may encounter difficulties enforcing our rights where we lack patent protection. Such litigation could result in substantial costs and the diversion of limited resources and could negatively affect our business, financial condition and results of operations.
Inflation, which persisted throughout 2023, has adversely affected us by increasing the costs of equipment and labor needed to operate our business and could continue to adversely affect us in future periods.
Inflation, which persisted throughout 2024, has adversely affected us by increasing the costs of equipment and labor needed to operate our business and could continue to adversely affect us in future periods.
Although we do not believe that we were a “passive foreign investment company,” or a PFIC, for U.S. federal income tax purposes for 202 3 , if we are a PFIC in 2024 or in any future year, a U.S. investor in our Ordinary shares or Warrants may be subject to adverse U.S. federal income tax consequences.
Although we do not believe that we were a “passive foreign investment company,” or a PFIC, for U.S. federal income tax purposes for 2024, if we are a PFIC in 2025 or in any future year, a U.S. investor in our Ordinary shares or Warrants may be subject to adverse U.S. federal income tax consequences.
Our industry is subject to rapid changes in standards, regulations, technologies, products and service offerings, as well as in digital property and A dvertiser demands and expectations. We continuously need to make decisions regarding which offerings and technology to invest in to meet such demands and evolving industry standards and regulatory requirements. We may make wrong decisions regarding these investments.
Our industry is subject to rapid changes in standards, regulations, technologies, products and service offerings, as well as in digital property and Advertiser demands and expectations. We continuously need to make decisions regarding which offerings and technology to invest in to meet such demands and evolving industry standards and regulatory requirements. We may make wrong decisions regarding these investments.
If users begin to ignore our platform or direct their attention to other elements on the digital property, our performance could decline and digital property and A dvertiser satisfaction with our platform may decrease. Technological and other developments may also cause changes in consumer behavior that could affect the attractiveness of our content and ads to users.
If users begin to ignore our platform or direct their attention to other elements on the digital property, our performance could decline and digital property and Advertiser satisfaction with our platform may decrease. Technological and other developments may also cause changes in consumer behavior that could affect the attractiveness of our content and ads to users.
These activities, including the Connexity acquisition in Septem ber 2021, involve significant risks to our business. We may not be able to find other suitable acquisition candidates, and we may not be able to complete such acquisitions on favorable terms, if at all. If we do complete acquisitions, they may not ultimately strengthen our competitive position.
These activities, including the Connexity acquisition in September 2021, involve significant risks to our business. We may not be able to find other suitable acquisition candidates, and we may not be able to complete such acquisitions on favorable terms, if at all. If we do complete acquisitions, they may not ultimately strengthen our competitive position.
In addition, we agree with digital properties on a fixed cost for the digital space but a large portion of our revenue from A dvertisers is tied to the performance of the campaign.
In addition, we agree with digital properties on a fixed cost for the digital space but a large portion of our revenue from Advertisers is tied to the performance of the campaign.
As a result, our results of operations and financial condition could be adversely impacted if we do not receive timely payment from our A dvertisers or if our campaigns do not perform as expected.
As a result, our results of operations and financial condition could be adversely impacted if we do not receive timely payment from our Advertisers or if our campaigns do not perform as expected.
Many of our third-party service providers attempt to impose limitations on their liability for such performance issues, errors, bugs, defects or failu res , and if enforceable, we may have additional liability to our clients or to other third parties that could harm our reputation and increase our operating costs.
Many of our third-party service providers attempt to impose limitations on their liability for such performance issues, errors, bugs, defects or failures, and if enforceable, we may have additional liability to our clients or to other third parties that could harm our reputation and increase our operating costs.
Even in those instances where our A dvertisers and digital properties do indemnify us, it is possible these entities may not be willing or able to cover the claims and we will be responsible for the cost of litigation or required to pay substantial damages.
Even in those instances where our Advertisers and digital properties do indemnify us, it is possible these entities may not be willing or able to cover the claims and we will be responsible for the cost of litigation or required to pay substantial damages.
Internet access providers, device manufacturers, browser developers or owners of digital properties may be able to restrict, block, degrade, or charge for access to certain of our products and services, which could lead to significant degradation of our service or additional expenses and the loss of users and A dvertisers.
Internet access providers, device manufacturers, browser developers or owners of digital properties may be able to restrict, block, degrade, or charge for access to certain of our products and services, which could lead to significant degradation of our service or additional expenses and the loss of users and Advertisers.
If we fail to make the right investment decisions in our offerings and technology platform, or if we are unable to generate or otherwise obtain sufficient funds to invest in them, we may not attract and retain digital properties and A dvertisers and our revenue and results of operations may decline.
If we fail to make the right investment decisions in our offerings and technology platform, or if we are unable to generate or otherwise obtain sufficient funds to invest in them, we may not attract and retain digital properties and Advertisers and our revenue and results of operations may decline.
Payment of dividends may also be subject to Israeli withholding taxes. If securities or industry analysts c ease to publish research or reports about our business, or if they issue an adverse or misleading opinion regarding our stock, our stock price and trading volume could decline.
Payment of dividends may also be subject to Israeli withholding taxes. If securities or industry analysts cease to publish research or reports about our business, or if they issue an adverse or misleading opinion regarding our stock, our stock price and trading volume could decline.
In particular, our business depends on access to strong brands and well-known digital properties, such as prominent media outlets, and failing to maintain and enhance our relationships with such brands and digital properties would hurt our ability to strengthen our own brand and to expand our current number of A dvertisers and digital properties.
In particular, our business depends on access to strong brands and well-known digital properties, such as prominent media outlets, and failing to maintain and enhance our relationships with such brands and digital properties would hurt our ability to strengthen our own brand and to expand our current number of Advertisers and digital properties.
For example, many A dvertisers tend to devote more of their advertising budgets to the fourth calendar quarter to coincide with consumer holiday spending and correspondingly to spend less in the first quarter. Moreover, advertising inventory in the fourth quarter may be more expensive due to increased demand for it.
For example, many Advertisers tend to devote more of their advertising budgets to the fourth calendar quarter to coincide with consumer holiday spending and correspondingly to spend less in the first quarter. Moreover, advertising inventory in the fourth quarter may be more expensive due to increased demand for it.
ITEM 1A. RISK FACTORS Risks Related to Our Business and Industry If we are unable to attract new digital properties and A dvertisers, sell additional offerings to our existing digital properties and A dvertisers, or maintain enough business with our existing digital properties and A dvertisers, our revenue growth prospects will be adversely affected.
ITEM 1A. RISK FACTORS Risks Related to Our Business and Industry If we are unable to attract new digital properties and Advertisers, sell additional offerings to our existing digital properties and Advertisers, or maintain enough business with our existing digital properties and Advertisers, our revenue growth prospects will be adversely affected.
We continue to be substantially dependent on our sales team and account managers to obtain new digital properties and A dvertisers and to drive sales from our existing digital properties and A dvertisers. We believe that there is significant competition for sales personnel with the skills and technical knowledge that we require.
We continue to be substantially dependent on our sales team and account managers to obtain new digital properties and Advertisers and to drive sales from our existing digital properties and Advertisers. We believe that there is significant competition for sales personnel with the skills and technical knowledge that we require.
As the digital advertising industry matures and as competitors introduce more competitive pricing or differentiated products or services that compete with or are perceived to compete with ours, our ability to sell our solutions to new and existing digital properties and A dvertisers could be impaired.
As the digital advertising industry matures and as competitors introduce more competitive pricing or differentiated products or services that compete with or are perceived to compete with ours, our ability to sell our solutions to new and existing digital properties and Advertisers could be impaired.
We may also lose revenues if our existing digital properties and A dvertisers reduce the amount of business they do with us for any reason, including nonrenewal of their agreements with us or renewal on less favorable terms.
We may also lose revenues if our existing digital properties and Advertisers reduce the amount of business they do with us for any reason, including nonrenewal of their agreements with us or renewal on less favorable terms.
From time to time, legal action by us may be necessary to enforce our intellectual property and proprietary rights, to protect our trade secrets, to determine the validity and scope of the intellectual property and proprietary rights of others, or to defend against claims of infringement, misappropriation or other vio lation .
From time to time, legal action by us may be necessary to enforce our intellectual property and proprietary rights, to protect our trade secrets, to determine the validity and scope of the intellectual property and proprietary rights of others, or to defend against claims of infringement, misappropriation or other violation.
If a significant number of these digital properties violate their agreements, it could be impractical for us to pursue remedies against all of them and as a result we may lack sufficient or timely advertising inventory for our A dvertiser clients. As a result, A dvertisers may be less likely to contract with us in the future.
If a significant number of these digital properties violate their agreements, it could be impractical for us to pursue remedies against all of them and as a result we may lack sufficient or timely advertising inventory for our Advertiser clients. As a result, Advertisers may be less likely to contract with us in the future.
If Taboola fails to maintain the quality of content or to prevent low quality, offensive or other non-compliant content from appearing on the digital properties, we could lose digital properties and A dvertisers, which could cause our results of operations and revenues to decline.
If Taboola fails to maintain the quality of content or to prevent low quality, offensive or other non-compliant content from appearing on the digital properties, we could lose digital properties and Advertisers, which could cause our results of operations and revenues to decline.
If we are unable to keep our A dvertisers’ content from being placed with low quality, offensive or other non-compliant editorial content, or if we are unable to keep low quality, offensive or other non-compliant ads from appearing in our network of digital properties, our reputation and business may suffer.
If we are unable to keep our Advertisers’ content from being placed with low quality, offensive or other non-compliant editorial content, or if we are unable to keep low quality, offensive or other non-compliant ads from appearing in our network of digital properties, our reputation and business may suffer.
Unauthorized parties may attempt to copy aspects of our technology or obtain and use information we regard as proprietary. We generally enter into confidentiality and/or license agreements with our employees, consultants, vendors and A dvertisers, and generally limit access to and distribution of our proprietary information.
Unauthorized parties may attempt to copy aspects of our technology or obtain and use information we regard as proprietary. We generally enter into confidentiality and/or license agreements with our employees, consultants, vendors and Advertisers, and generally limit access to and distribution of our proprietary information.
As our A dvertiser content may appear on multiple digital properties, any decrease in quality may rapidly affect many digital properties in a short period of time.
As our Advertiser content may appear on multiple digital properties, any decrease in quality may rapidly affect many digital properties in a short period of time.
New digital property or A dvertiser demands, superior competitive offerings, new industry standards or regulations could render our existing solutions unattractive, unmarketable or obsolete and require us to make substantial unanticipated changes to our technology platform or business model.
New digital property or Advertiser demands, superior competitive offerings, new industry standards or regulations could render our existing solutions unattractive, unmarketable or obsolete and require us to make substantial unanticipated changes to our technology platform or business model.
As a result, these technologies may have an adverse effect on our financial results and, if such technologies continue to proliferate, in particular with respect to mobile platforms, our future financial results may be harmed. 33 Table of Contents Our business depends on continued and unimpeded access to the Internet and digital properties by us and our users.
As a result, these technologies may have an adverse effect on our financial results and, if such technologies continue to proliferate, in particular with respect to mobile platforms, our future financial results may be harmed. Our business depends on continued and unimpeded access to the Internet and digital properties by us and our users.
If users begin to ignore our platform or direct their attention to other elements on the digital property, our performance could decline and we could lose digital properties and A dvertisers, which could cause our results of operations and revenues to decline.
If users begin to ignore our platform or direct their attention to other elements on the digital property, our performance could decline and we could lose digital properties and Advertisers, which could cause our results of operations and revenues to decline.
Any of the foregoing and related risks and uncertainties could have a material adverse effect on our business and operations. 52 Table of Contents Further, the State of Israel and Israeli companies have been from time to time subjected to economic boycotts.
Any of the foregoing and related risks and uncertainties could have a material adverse effect on our business and operations. Further, the State of Israel and Israeli companies have been from time to time subjected to economic boycotts.
Cyberbreaches, attacks and threats could include denial-of-service attacks impacting service availability (including the ability to deliver ads) and reliability; the exploitation of software vulnerabilities in Internet facing applications; phishing attacks or social engineering attacks (such as tricking company employees into releasing control of their systems to a hacker); or the introduction of computer viruses, software b ugs, ransomware or malware into our systems, including with a view to steal, access, modify, destroy or disclose pe rsonal, confidential, sensitive or proprietary data.
Cyberbreaches, attacks and threats could include denial-of-service attacks impacting service availability (including the ability to deliver ads) and reliability; the exploitation of software vulnerabilities in Internet facing applications; phishing attacks or social engineering attacks (such as tricking company employees into releasing control of their systems to a hacker); or the introduction of computer viruses, software bugs, ransomware or malware into our systems, including with a view to steal, access, modify, destroy or disclose personal, confidential, sensitive or proprietary data.
Economic downturns or instability in political or market conditions may cause current or new A dvertisers to reduce their advertising budgets. Adverse economic conditions and general uncertainty about economic recovery are likely to affect our business prospects.
Economic downturns or instability in political or market conditions may cause current or new Advertisers to reduce their advertising budgets. Adverse economic conditions and general uncertainty about economic recovery are likely to affect our business prospects.
Our failure to adapt to a rapidly changing market or to anticipate digital property and/or A dvertiser demands could harm our business and our financial performance.
Our failure to adapt to a rapidly changing market or to anticipate digital property and/or Advertiser demands could harm our business and our financial performance.
If we do not effectively grow and train our sales team and account managers, we may be unable to add new digital properties and A dvertisers or increase sales to our existing digital properties and A dvertisers, and our business would be adversely affected.
If we do not effectively grow and train our sales team and account managers, we may be unable to add new digital properties and Advertisers or increase sales to our existing digital properties and Advertisers, and our business would be adversely affected.
Economic downturns and political and market conditions beyond our control could adversely affect our business, financial condition and results of operations. Our business depends on the overall demand for advertising and on the economic health of our current and prospective A dvertisers.
Economic downturns and political and market conditions beyond our control could adversely affect our business, financial condition and results of operations. Our business depends on the overall demand for advertising and on the economic health of our current and prospective Advertisers.
If any of our A dvertisers’ or digital properties’ representations are untrue and our A dvertisers or digital properties do not abide by foreign, federal, state or local laws or regulations governing their content or privacy practices, we could become subject to legal claims against us, we could be exposed to potential liability (for which we may or may not be indemnified by our A dvertisers or digital properties), and our reputation could be damaged.
If any of our Advertisers’ or digital properties’ representations are untrue and our Advertisers or digital properties do not abide by foreign, federal, state or local laws or regulations governing their content or privacy practices, we could become subject to legal claims against us, we could be exposed to potential liability (for which we may or may not be indemnified by our Advertisers or digital properties), and our reputation could be damaged.
If we are successful in attracting more advertising inventory from digital properties than we can satisfy with demand from A dvertisers, our relationship with certain digital properties, our revenues and our business could be adversely impacted.
If we are successful in attracting more advertising inventory from digital properties than we can satisfy with demand from Advertisers, our relationship with certain digital properties, our revenues and our business could be adversely impacted.
Cybersecurity breaches, attacks and threats of increasing sophistication may be difficult to detect and could result in the theft of our intellectual property and our data or our digital properties’ or A dvertisers’ data, including our or our digital properties’ or A dvertisers’ personal data.
Cybersecurity breaches, attacks and threats of increasing sophistication may be difficult to detect and could result in the theft of our intellectual property and our data or our digital properties’ or Advertisers’ data, including our or our digital properties’ or Advertisers’ personal data.
Disruption to our platform resulting from natural disasters, political events, war, terrorism, pandemics or other reasons could impair our ability to continue to provide uninterrupted platform service to our A dvertisers and digital properties.
Disruption to our platform resulting from natural disasters, political events, war, terrorism, pandemics or other reasons could impair our ability to continue to provide uninterrupted platform service to our Advertisers and digital properties.
We also use proprietary technology to prevent our A dvertisers’ content from appearing on undesirable digital properties, but we may not be successful in doing so, which would harm our relationship with A dvertisers. Any of these things would harm our brand and reputation and negatively impact our business, financial condition and results of operations.
We also use proprietary technology to prevent our Advertisers’ content from appearing on undesirable digital properties, but we may not be successful in doing so, which would harm our relationship with Advertisers. Any of these things would harm our brand and reputation and negatively impact our business, financial condition and results of operations.
We do business with our partners by allowing them to share in the revenues we receive from A dvertisers from campaigns that are placed on their digital properties.
We do business with our partners by allowing them to share in the revenues we receive from Advertisers from campaigns that are placed on their digital properties.
Creating the appropriate support for our technology platform, including large-scale serving infrastructure and big data transmission, storage and computation infrastructure, is expensive and complex, and our execution can result in inefficiencies or operational failures and increased vulnerability to cybersecurity breaches, att acks and threats which, in turn, could diminish the quality of our services and our performance for our digital properties and our A dvertisers.
Creating the appropriate support for our technology platform, including large-scale serving infrastructure and big data transmission, storage and computation infrastructure, is expensive and complex, and our execution can result in inefficiencies or operational failures and increased vulnerability to cybersecurity breaches, attacks and threats which, in turn, could diminish the quality of our services and our performance for our digital properties and our Advertisers.
We cannot provide assurance that our current A dvertisers will continue to use our solutions, or that we will be able to replace departing A dvertisers with new A dvertisers that provide us with comparable revenue.
We cannot provide assurance that our current Advertisers will continue to use our solutions, or that we will be able to replace departing Advertisers with new Advertisers that provide us with comparable revenue.
This could expose us to increased credit risk on A dvertiser insertion orders, which, in turn, could negatively impact our business, financial condition and results of operations. 55 Table of Contents In addition, continued geopolitical turmoil in many parts of the world have, and may continue to, put pressure on global economic conditions, which could lead to reduced spending on advertising.
This could expose us to increased credit risk on Advertiser insertion orders, which, in turn, could negatively impact our business, financial condition and results of operations. In addition, continued geopolitical turmoil in many parts of the world have, and may continue to, put pressure on global economic conditions, which could lead to reduced spending on advertising.
We must add new digital properties and A dvertisers, and encourage existing digital properties and A dvertisers to add additional offerings from us, in order to sustain or increase our revenue.
We must add new digital properties and Advertisers, and encourage existing digital properties and Advertisers to add additional offerings from us, in order to sustain or increase our revenue.
If new or existing competitors offer more attractive offerings, we may lose digital property and/or A dvertisers, or A dvertisers may decrease their spending on our platform.
If new or existing competitors offer more attractive offerings, we may lose digital property and/or Advertisers, or Advertisers may decrease their spending on our platform.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. 57 Table of Contents Our cybersecurity risk management program is based on ISO 27001 standards, which provide a framework and guidelines for implementing and managing an information security system, handling cybersecurity threats and incidents, including threats and incidents relevant to our business, and facilitates coordination across different departments of our Company.
Biggest changeOur cybersecurity risk management program is based on ISO 27001 standards, which provide a framework and guidelines for implementing and managing an information security system, handling cybersecurity threats and incidents, including threats and incidents relevant to our business, and facilitates coordination across different departments of our Company. Since 2019, Taboola has held an ISO 27001 certification which is audited annually.
In 2023, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced any undetected cybersecurity incidents.
In 2024, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced any undetected cybersecurity incidents.
For more information about these risks, refer to Part 1, Item 1A, “ Risk Factors” in this Annual Report.
For more information about these risks, refer to Part 1, Item 1A, “Risk Factors” in this Annual Report.
ITEM 1C: CYBERSECURITY Cybersecurity Risk Management At Taboola, cybersecurity risk management is an integral part of our overall enterprise risk management program.
ITEM 1C:CYBERSECURITY Cybersecurity Risk Management At Taboola, cybersecurity risk management is an integral part of our overall enterprise risk management program. We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information.
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Since 2019, Taboola has held an ISO 27001 certification which is audited annually.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAdditionally, we operate data centers in the United States, Israel, Hong Kong, Singapore and Netherlands and have twelve data centers which are operated under collocation agreements with nine third-party data center providers.
Biggest changeAdditionally, we operate data centers in the United States, Israel, Hong Kong, Singapore and Netherlands and have ten data centers which are operated under collocation agreements with six third-party data center providers.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are not presently party to any legal proceedings the resolution of which we believe would have a material adverse effect on our consolidated business prospects, financial condition, liquidity, results of operation, cash flows or capital levels .
Biggest changeITEM 3: LEGAL PROCEEDINGS From time to time we are a party to various litigation matters incidental to the conduct of our business. We are not presently party to any legal proceedings the resolution of which we believe would have a material adverse effect on our consolidated business prospects, financial condition, liquidity, results of operation, cash flows or capital levels.
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ITEM 3: LEGAL PROCEEDINGS From time to time we are a party to various litigation matters incidental to the conduct of our business.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers The following table provides information about Ordinary shares repurchased pursuant to our Buyback Program for the three months ended December 31, 2023: Period (a) Total Number of Shares Purchased (b) Average Price Paid Per Share (1) (c) Total Number of Shares Purchased as Part of Publicly Announced Program (d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan or Program (2) October 1 - October 31, 2023 2,951,932 $ 3.69 2,951,932 $ 6,102,530 November 1 - November 30, 2023 2,795,492 $ 3.81 2,795,492 $ 35,451,079 December 1 - December 31, 2023 2,820,132 $ 3.76 2,820,132 $ 24,853,884 (1) Excludes broker and transaction fees.
Biggest changePeriod (a) Total Number of Shares Purchased (b) Average Price Paid Per Share (1) (c) Total Number of Shares Purchased as Part of Publicly Announced Program (d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan or Program (2) October 1 - October 31, 2024 1,007,000 $ 3.45 1,007,000 $ 52,104,923 November 1 - November 30, 2024 948,455 $ 3.40 948,455 $ 48,880,883 December 1 - December 31, 2024 847,555 $ 3.92 847,555 $ 45,561,509 (1) Excludes broker and transaction fees.
The graph below compares the cumulative total shareholder return on our Ordinary shares from June 30, 2021 (the date our Ordinary shares commenced trading on the NASDAQ) through December 31, 2023 with the cumulative total return on the NASDAQ Composite Index and S&P SmallCap 600 Communication Services Index.
The graph below compares the cumulative total shareholder return on our Ordinary shares from June 30, 2021 (the date our Ordinary shares commenced trading on the NASDAQ) through December 31, 2024 with the cumulative total return on the NASDAQ Composite Index and S&P SmallCap 600 Communication Services Index.
Based on a review of the information provided to us by our transfer agent, as of February 22, 2024, there were 329 registered holders of our Ordinary shares.
Based on a review of the information provided to us by our transfer agent, as of February 19, 2025, there were 292 registered holders of our Ordinary shares.
(2) On May 10, 2023, the Company announced a share buyback program for the repurchase of up to $40.0 million of our outstanding Ordinary shares, with no expiration date (the “Buyback Program”). On November 7, 2023, the Board authorized up to an additional $40.0 million of buybacks under the Buyback Program.
(2) On May 10, 2023, the Company announced a share buyback program for the repurchase of up to $40.0 million of our outstanding Shares, with no expiration date (the “Buyback Program”).
The Company may suspend, modify or discontinue the program at any time in its sole discretion without prior notice. 59 Table of Contents Shareholder Return Performance Presentation This performance graph shall not be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission, or the SEC, for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act.
Shareholder Return Performance Presentation This performance graph shall not be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission, or the SEC, for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act.
Subsequent to December 31, 2023, in February 2024, our board of directors authorized up to $100.0 million for use under the Buyback Program, including any remaining authority from the November 2023 board of directors authorization, subject to obtaining any required Israeli court approvals.
On November 7, 2023, the Board authorized up to an additional $40.0 million of buybacks under the Buyback Program and in February 2024, the Board authorized up to $100.0 million for use under the Buyback Program, including any remaining authority from the November 2023 Board authorization.
The Buyback Program permits us to purchase our Ordinary shares from time to time in the open market, including through trading plans intended to comply with Rule 10b5-1 under the Exchange Act, in privately negotiated transactions or otherwise. The timing and amount of any share buybacks will be subject to market conditions and other factors determined by the Company.
On February 26, 2025, the Company announced that the Board authorized up to an additional $200.0 million for use under the Buyback Program. The Buyback Program permits us to purchase our Shares from time to time in the open market, including through trading plans intended to comply with Rule 10b5-1 under the Exchange Act, in privately negotiated transactions or otherwise.
The Companies Law imposes restrictions on our ability to declare and pay dividends and payment of dividends may be subject to Israeli withholding taxes.
The Companies Law imposes restrictions on our ability to declare and pay dividends and payment of dividends may be subject to Israeli withholding taxes. Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table provides information about Ordinary shares repurchased pursuant to our Buyback Program for the three months ended December 31, 2024.
Added
The timing and amount of any share buybacks will be subject to market conditions and other factors determined by the Company. The Company may suspend, modify or discontinue the Buyback Program at any time in its sole discretion without prior notice.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table provides consolidated statements of loss data for the periods indicated: (dollars in thousands) Year ended December 31, 2023 vs 2022 2023 2022 $ Change % Change Revenues $ 1,439,685 $ 1,401,150 $ 38,535 2.8 % Cost of revenues: Traffic acquisition cost 903,866 831,508 72,358 8.7 % Other cost of revenues 110,261 105,389 4,872 4.6 % Total cost of revenues 1,014,127 936,897 77,230 8.2 % Gross profit 425,558 464,253 (38,695 ) (8.3 %) Operating expenses: Research and development 136,255 129,276 6,979 5.4 % Sales and marketing 246,342 246,803 (461 ) (0.2 %) General and administrative 106,698 101,839 4,859 4.8 % Total operating expenses 489,295 477,918 11,377 2.4 % Operating loss (63,737 ) (13,665 ) (50,072 ) 366.4 % Finance income (expenses), net (12,804 ) 9,213 (22,017 ) (239.0 %) Loss before income taxes expenses (76,541 ) (4,452 ) (72,089 ) 1619.2 % Income tax expenses (5,499 ) (7,523 ) 2,024 (26.9 %) Net loss $ (82,040 ) $ (11,975 ) $ (70,065 ) 585.1 % 71 Table of Contents Comparison of the Years Ended December 31, 2023 and 2022 Revenues increased by $38.5 million, or 2.8%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Biggest changeFor a discussion of our financial condition and results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2021, refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, in our Annual Report of Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission on March 13, 2023. 29 Table of Contents The following table provides consolidated statements of loss data for the periods indicated: (dollars in thousands) Year ended December 31, 2024 vs 2023 2024 2023 $ Change % Change Revenues $ 1,766,220 $ 1,439,685 $ 326,535 22.7 % Cost of revenues: Traffic acquisition cost 1,101,556 903,866 197,690 21.9 % Other cost of revenues 130,446 110,261 20,185 18.3 % Total cost of revenues 1,232,002 1,014,127 217,875 21.5 % Gross profit 534,218 425,558 108,660 25.5 % Operating expenses: Research and development 142,438 136,255 6,183 4.5 % Sales and marketing 268,526 246,342 22,184 9.0 % General and administrative 97,337 106,698 (9,361) (8.8) % Total operating expenses 508,301 489,295 19,006 3.9 % Operating Income (loss) 25,917 (63,737) 89,654 (140.7) % Finance income (expenses), net (11,980) (12,804) 824 (6.4) % Income (Loss) before income taxes expenses 13,937 (76,541) 90,478 (118.2) % Income tax expenses (17,697) (5,499) (12,198) 221.8 % Net loss $ (3,760) $ (82,040) $ 78,280 (95.4) % Comparison of the Years Ended December 31, 2024 and 2023 Revenues increased by $326.5 million, or 22.7%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Investing Activities During the year ended December 31, 2023, Net cash provided by investing activities was $59.6 million, primarily consisting of $114.5 million proceeds from maturities of short-term investments, partially offset by $32.1 million purchase of property and equipment, including capitalized internal-use software and $22.0 million purchase of short-term investments.
During the year ended December 31, 2023, Net cash provided by investing activities was $59.6 million, primarily consisting of $114.5 million proceeds from maturities of short-term investments, partially offset by $32.1 million purchase of property and equipment, including capitalized internal-use software and $22.0 million purchase of short-term investments..
Fourth, we work closely with our digital property partners to find new placements and page types where we can help them drive more revenue. For the majority of our digital properties partners, w e have two primary models for sharing revenue with digital property partners. The most common model is a straight revenue share model.
Fourth, we work closely with our digital property partners to find new placements and page types where we can help them drive more revenue. For the majority of our digital properties partners, we have two primary models for sharing revenue with digital property partners. The most common model is a straight revenue share model.
We believe that Non-GAAP Net Income (Loss) is useful because it allows us and others to measure our operating performance and trends without regard to items such as the revaluation of our Warrants liability, share-based compensation expense, cash and non-cash M&A costs including amortization of acquired intangible assets, foreign currency exchange rate (gains) losses, net and other noteworthy items that change from period to period and related tax effects.
We believe that Non-GAAP Net Income (Loss) is useful because it allows us and others to measure our operating performance and trends without regard to items such as the revaluation of our Warrants liability, share-based compensation expense, cash and non-cash M&A costs including amortization of acquired intangible assets and the non-cash based Commercial agreement asset, foreign currency exchange rate (gains) losses, net and other noteworthy items that change from period to period and related tax effects.
In addition, because of this integration on our partners’ pages, we have rich contextual information to use to further refine the targeting of our recommendations. 63 Table of Contents Key Financial and Operating Metrics We regularly monitor a number of metrics in order to measure our current performance and project our future performance.
In addition, because of this integration on our partners’ pages, we have rich contextual information to use to further refine the targeting of our recommendations. 22 Table of Contents Key Financial and Operating Metrics We regularly monitor a number of metrics in order to measure our current performance and project our future performance.
Historically, w e have had a strong record of growing the revenue generated from our digital property partners. We grow our digital property partner relationships in four ways. First, we grow the revenue from these partnerships by increasing our yield over time.
Historically, we have had a strong record of growing the revenue generated from our digital property partners. We grow our digital property partner relationships in four ways. First, we grow the revenue from these partnerships by increasing our yield over time.
The table does not include obligations under agreements that we can cancel without a significant penalty. The table above does not reflect any reduction for prepaid obligations as of December 31, 2023.
The table does not include obligations under agreements that we can cancel without a significant penalty. The table above does not reflect any reduction for prepaid obligations as of December 31, 2024.
Recent Accounting Pronouncements See the section titled “Summary of Significant Accounting Policies” in Note 2 of Notes to the Consolidated Financial Statements in this Annual Report for more information. Critical Accounting Estimates Our discussion and analysis of financial condition results of operations are based upon our consolidated financial statements included elsewhere in this report.
Recent Accounting Pronouncements See the section titled “Summary of Significant Accounting Policies” in Note 2 of Notes to the Consolidated Financial Statements in this Annual Report for more information. 33 Table of Contents Critical Accounting Estimates Our discussion and analysis of financial condition results of operations are based upon our consolidated financial statements included elsewhere in this report.
If our estimates of future cash flows are not met or if there are changes in significant assumptions and judgments used in the estimation process, we may have to record impairment charges in the future. Income Taxes We are subject to income taxes in Israel, the U.S., and other foreign jurisdictions.
If our estimates of future cash flows are not met or if there are changes in significant assumptions and judgments used in the estimation process, we may have to record impairment charges in the future. 35 Table of Contents Income Taxes We are subject to income taxes in Israel, the U.S., and other foreign jurisdictions.
We expect our Free Cash Flow to fluctuate in future periods as we invest in our business to support our plans for growth. 68 Table of Contents Limitations on the use of Free Cash Flow include the following: • it should not be inferred that the entire Free Cash Flow amount is available for discretionary expenditures.
We expect our Free Cash Flow to fluctuate in future periods as we invest in our business to support our plans for growth. Limitations on the use of Free Cash Flow include the following: • it should not be inferred that the entire Free Cash Flow amount is available for discretionary expenditures.
As of December 31, 2023, we have a provision related to unrecognized tax benefit liabilities totaling $8.2 million and other provisions related to severance pay and contribution plans, which have been excluded from the table above as we do not believe it is practicable to make reliable estimates of the periods in which payments for these obligations will be made.
As of December 31, 2024, we have a provision related to unrecognized tax benefit liabilities totaling $10.2 million and other provisions related to severance pay and contribution plans, which have been excluded from the table above as we do not believe it is practicable to make reliable estimates of the periods in which payments for these obligations will be made.
For additional information regarding share-based compensation and the assumptions used for determining the fair value of Share options awards, refer to Note 2 and Note 15 of Notes to the Consolidated Financial Statements in this Annual Report. 77 Table of Contents Business Combinations Accounting for business combinations requires us to make significant estimates and assumptions in determining the fair values of assets acquired and liabilities assumed, especially with respect to intangible assets.
For additional information regarding share-based compensation and the assumptions used for determining the fair value of Share options awards, refer to Note 2 and Note 14 of Notes to the Consolidated Financial Statements in this Annual Report. 34 Table of Contents Business Combinations Accounting for business combinations requires us to make significant estimates and assumptions in determining the fair values of assets acquired and liabilities assumed, especially with respect to intangible assets.
We do this by improving our algorithms, expanding our A dvertiser base and increasing the amount of data that helps target our ads. Second, we continuously innovate with new product offerings and features that increase revenue. Third, we innovate by launching new advertising formats.
We do this by improving our algorithms, expanding our Advertiser base and increasing the amount of data that helps target our ads. Second, we continuously innovate with new product offerings and features that increase revenue. Third, we innovate by launching new advertising formats.
The cost of guarantees (total payments due under guarantee arrangements in excess of amounts the Company would otherwise be required to pay under revenue sharing arrangements) as a percentage of traffic acquisition costs were approximately 19% and 10% for the years ended December 31, 2023 and December 31, 2022, respectively.
The cost of guarantees (total payments due under guarantee arrangements in excess of amounts the Company would otherwise be required to pay under revenue sharing arrangements) as a percentage of traffic acquisition costs were approximately 18% and 19% for the years ended December 31, 2024 and December 31, 2023, respectively.
The following section discusses our financial condition and results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022.
The following section discusses our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023.
In particular, a dvertisers have historically spent relatively more in the fourth quarter of the calendar year to coincide with the year-end holiday shopping season, and relatively less in the first quarter.
In particular, advertisers have historically spent relatively more in the fourth quarter of the calendar year to coincide with the year-end holiday shopping season, and relatively less in the first quarter.
We believe that Adjusted EBITDA is useful because it allows us and others to measure our performance without regard to items such as share-based compensation expense, depreciation and amortization, and interest expense and other items that can vary substantially depending on our financing and capital structure, and the method by which assets are acquired.
We believe that Adjusted EBITDA is useful because it allows us and others to measure our performance without regard to items such as share-based compensation expense, depreciation and amortization, non-cash amortization of the Commercial agreement asset, and interest expense and other items that can vary substantially depending on our financing and capital structure, and the method by which assets are acquired.
Privacy Trends and Government Regulation We are subject to U.S. and international laws and regulations r egarding privacy, data protection, digital ad vertising and the collection of user data. In addition, large Internet and technology companies such as Google and Apple are making their own decisions as to how to protect consumer privacy, which impacts the entire digital ecosystem.
Privacy Trends and Government Regulation We are subject to U.S. and international laws and regulations regarding privacy, data protection, digital advertising and the collection of user data. In addition, large Internet and technology companies such as Google and Apple are making their own decisions as to how to protect consumer privacy, which impacts the entire digital ecosystem.
Financing Activities During the year ended December 31, 2023, Net cash used in financing activities was $134.6 million, primarily consisting of $82.3 million repayment of our long-term loan and $55.5 million repurchase of Ordinary shares, partially offset by $7.0 million received from exercised options and vested RSUs.
During the year ended December 31, 2023, Net cash used in financing activities was $134.6 million, primarily consisting of $82.3 million in repayments of our long-term loan and $55.5 million in repurchases of Ordinary shares, partially offset by $7.0 million received from exercised options.
As of December 31, 2023, we have an accumulated tax loss carry-forward of approximately $64.1 million in Israel and $1.5 million federal tax in the U.S. Those tax losses can be offset indefinitely. Non-Israeli subsidiaries are taxed according to the tax laws in their respective jurisdictions.
As of December 31, 2024, we have an accumulated tax loss carry-forward of approximately $23.8 million in Israel and $1.4 million federal tax in the U.S. Those tax losses can be offset indefinitely. Non-Israeli subsidiaries are taxed according to the tax laws in their respective jurisdictions.
We believe that the Ratio of Adjusted EBITDA to ex-TAC Gross Profit is useful because TAC is what we must pay digital properties to obtain the right to place advertising on their websites, and we believe focusing on ex-TAC Gross Profit better reflects the profitability of our business. 66 Table of Contents The following table provides a reconciliation of ratio of net income (loss) to gross profit and Ratio of Adjusted EBITDA to ex-TAC Gross Profit: Year ended December 31, 2023 2022 2021 (dollars in thousands) Gross profit $ 425,558 $ 464,253 $ 441,071 Net loss $ (82,040 ) $ (11,975 ) $ (24,948 ) Ratio of net loss to gross profit (19.3 %) (2.6 %) (5.7 %) ex-TAC Gross Profit $ 535,819 $ 569,642 $ 518,863 Adjusted EBITDA $ 98,677 $ 156,676 $ 179,464 Ratio of Adjusted EBITDA margin to ex-TAC Gross Profit 18.4 % 27.5 % 34.6 % Non-GAAP Net Income (Loss) We calculate Non-GAAP Net Income (Loss) as net income (loss) adjusted to exclude revaluation of our Warrants liability, share-based compensation expense including Connexity holdback compensation expenses, M&A costs and amortization of acquired intangible assets, foreign currency exchange rate gains (losses), net, and other noteworthy items that change from period to period and related tax effects.
We believe that the Ratio of Adjusted EBITDA to ex-TAC Gross Profit is useful because TAC is what we must pay digital properties to obtain the right to place advertising on their websites, and we believe focusing on ex-TAC Gross Profit better reflects the profitability of our business. 25 Table of Contents The following table provides a reconciliation of ratio of net income (loss) to gross profit and Ratio of Adjusted EBITDA to ex-TAC Gross Profit: Year ended December 31, 2024 2023 2022 (dollars in thousands) Gross profit $ 534,218 $ 425,558 $ 464,253 Net loss $ (3,760) $ (82,040) $ (11,975) Ratio of net loss to gross profit (0.7) % (19.3) % (2.6) % ex-TAC Gross Profit $ 667,496 $ 535,819 $ 569,642 Adjusted EBITDA $ 200,926 $ 98,677 $ 156,676 Ratio of Adjusted EBITDA margin to ex-TAC Gross Profit 30.1 % 18.4 % 27.5 % Non-GAAP Net Income (Loss) We calculate Non-GAAP Net Income (Loss) as net income (loss) adjusted to exclude revaluation of our Warrants liability, share-based compensation expense including Connexity holdback compensation expenses, M&A costs and amortization of acquired intangible assets and the non-cash based Commercial agreement asset, foreign currency exchange rate gains (losses), net, and other noteworthy items that change from period to period and related tax effects.
First, we improve the performance of our network by developing new product features, improving our algorithms and optimizing our supply. Second, we secure increased budgets from existing A dvertisers by offering new ad formats and helping them achieve additional goals.
We grow the revenue from performance Advertisers in three ways. First, we improve the performance of our network by developing new product features, improving our algorithms and optimizing our supply. Second, we secure increased budgets from existing Advertisers by offering new ad formats and helping them achieve additional goals.
The $4.7 million increase in cash resulting from changes in working capital primarily consisted of a $36.6 million increase in trade payables, $25.2 million increase in accrued expenses and other current liabilities and other long-term liabilities and $5.9 million decrease in prepaid expenses and other current assets and long-term prepaid expenses, partially offset by a $49.6 million increase in trade receivables, net and $15.5 million decrease in deferred taxes, net.
The $14.5 million increase in cash resulting from changes in working capital primarily consisted of a $25.9 million increase in trade payables, $35.6 million increase in accrued expenses and other current liabilities and other long-term liabilities and $28.7 million decrease in prepaid expenses and other current assets and long-term prepaid expenses, partially offset by a $63.8 million increase in trade receivables, net and $9.3 million decrease in deferred taxes, net.
An impairment loss is charged to consolidated statements of income (loss) in the period in which management determines such impairment. 78 Table of Contents The preparation of cash flow projections for use in any impairment indicators test or fair value analysis requires management to make critical estimates, judgments and assumptions with regards to estimated future cash flows, as they are, by their nature, subjective and actual results may differ materially from such estimates.
The preparation of cash flow projections for use in any impairment indicators test or fair value analysis requires management to make critical estimates, judgments and assumptions with regards to estimated future cash flows, as they are, by their nature, subjective and actual results may differ materially from such estimates.
We also provide a meaningful monetization opportunity to digital properties by surfacing paid recommendations by Advertisers. Unlike walled gardens, we are a business-to-business, or B2B, company with no competing consumer interests. We only interact with consumers through our partners’ digital properties, hence we do not compete with our partners for user attention. Our motivations are aligned.
Unlike walled gardens, we are a business-to-business, or B2B, company with no competing consumer interests. We only interact with consumers through our partners’ digital properties, hence we do not compete with our partners for user attention. Our motivations are aligned.
As of December 31, 2023 and 202 2 , we had $ 181.8 million and $ 262.8 million of cash , cash equivalents and short-term investmen ts, respectively, and $ 5.7 million and $ 4.8 million in short and long - term restricted deposits, respectively, used, mainly, as security for our lease commitments.
As of December 31, 2024 and 2023, we had $230.4 million and $181.8 million of cash, cash equivalents and short-term investments, respectively, and $1.7 million and $5.7 million in short and long-term restricted deposits, respectively, used, mainly, as security for our lease commitments.
When our partners win, we win, and we grow together. We empower Advertisers to leverage our proprietary AI-powered recommendation platform to reach targeted audiences utilizing effective, native ad formats across digital properties.
When our partners win, we win, and we grow together. 20 Table of Contents We empower Advertisers to leverage our proprietary AI-powered performance advertising platform to reach targeted audiences utilizing effective ad formats across digital properties.
Limitations on the use of Non-GAAP Net Income (Loss) include the following: • Non-GAAP Net Income (Loss) excludes share-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy; • Non-GAAP Net Income (Loss) will generally be more favorable than our net income (loss) for the same period due to the nature of the items being excluded from its calculation; and • Non-GAAP Net Income (Loss) is a performance measure and should not be used as a measure of liquidity. 67 Table of Contents The following table provides a reconciliation of net income (loss) to Non-GAAP Net Income (Loss) for the periods shown*: Year ended December 31, 2023 2022 2021 (dollars in thousands) Net loss $ (82,040 ) $ (11,975 ) $ (24,948 ) Amortization of acquired intangibles 63,888 63,557 23,007 Share-based compensation expenses (1) 53,749 63,830 124,235 Restructuring expenses (2) — 3,383 — Holdback compensation expenses (3) 10,582 11,091 3,722 M&A and other costs (4) 1,571 816 11,661 Revaluation of Warrants (627 ) (24,471 ) (22,656 ) Foreign currency exchange rate losses (gains) (5) (946 ) (1,377 ) 4,625 Income tax effects (6) (13,597 ) (13,472 ) (6,060 ) Non-GAAP Net Income $ 32,580 $ 91,382 $ 113,586 (1) For the year ended December 31, 2021, a substantial majority is share-based compensation expenses related to going public.
Limitations on the use of Non-GAAP Net Income (Loss) include the following: • Non-GAAP Net Income (Loss) excludes share-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy; • Non-GAAP Net Income (Loss) will generally be more favorable than our net income (loss) for the same period due to the nature of the items being excluded from its calculation; and • Non-GAAP Net Income (Loss) is a performance measure and should not be used as a measure of liquidity. 26 Table of Contents The following table provides a reconciliation of net income (loss) to Non-GAAP Net Income (Loss) for the periods shown*: Year ended December 31, 2024 2023 2022 (dollars in thousands) Net loss $ (3,760) $ (82,040) $ (11,975) Amortization of acquired intangibles (1) 65,135 63,888 63,557 Share-based compensation expenses 60,044 53,749 63,830 Restructuring expenses (2) — — 3,383 Holdback compensation expenses (3) 7,054 10,582 11,091 M&A and other costs (4) 4,189 1,571 816 Revaluation of Warrants (2,761) (627) (24,471) Foreign currency exchange rate losses (gains) (5) 5,625 (946) (1,377) Income tax effects (13,149) (13,597) (13,472) Non-GAAP Net Income $ 122,377 $ 32,580 $ 91,382 (1) The year ended December 31, 2024, includes one-time write-off of internal use software in the amount of $3,038.
They should be considered as supplementary information in addition to GAAP operating, liquidity and financial performance measures. 64 Table of Contents ex -TAC Gross Profit We calculate ex-TAC Gross Profit as gross profit adjusted to add back other cost of revenues.
They should be considered as supplementary information in addition to GAAP operating, liquidity and financial performance measures. ex-TAC Gross Profit We calculate ex-TAC Gross Profit as gross profit adjusted to add back other cost of revenues and non-cash amortization of the Commercial agreement asset.
During the year ended December 31, 202 2 , Net cash provided by operating activities of $ 53.5 million was related to our net loss of $12.0 million adjusted by positive adjustments of non-cash charges of $147.5 million and net cash outflows of $82.0 million provided by changes in working capital.
During the year ended December 31, 2023 Net cash provided by operating activities of $84.4 million was related to our net loss of $82.0 million adjusted by positive adjustments of non-cash charges of $161.7 million and net cash outflows of $4.7 million provided by changes in working capital.
Our future capital requirements and the adequacy of available funds will depend on many factors, including the risk s and uncertainties set forth under Part I, Item 1A, “Risk Factors.” Cash Flows The following table summarizes our cash flows for the periods indicated : Year ended December 31, 2023 2022 2021 (dollars in thousands) Cash Flow Data: Net cash provided by operating activities $ 84,373 $ 53,484 $ 63,521 Net cash provided by (used in) investing activities 59,640 (139,561 ) (620,460 ) Net cash provided by (used in) financing activities (134,614 ) (62,873 ) 631,127 Exchange rate differences on balances of cash and cash equivalents 816 (4,476 ) 2,320 Increase (decrease) in cash and cash equivalents $ 10,215 $ (153,426 ) $ 76,508 74 Table of Contents Operating Activities During the year ended December 31, 2023, Net cash provided by operating activities of $84.4 million was related to our net loss of $82.0 million adjusted by positive adjustments of non-cash charges of $161.7 million and net cash inflows of $4.7 million provided by changes in working capital.
Our future capital requirements and the adequacy of available funds will depend on many factors, including the risks and uncertainties set forth under Part I, Item 1A, “Risk Factors.” Cash Flows The following table summarizes our cash flows for the periods indicated: Year ended December 31, 2024 2023 2022 (dollars in thousands) Cash Flow Data: Net cash provided by operating activities $ 184,331 0 $ 84,373 $ 53,484 Net cash provided by (used in) investing activities (30,109) 0 59,640 (139,561) Net cash used in financing activities (99,983) 0 (134,614) (62,873) Exchange rate differences on balances of cash and cash equivalents (3,764) 816 (4,476) Increase (decrease) in cash and cash equivalents $ 50,475 $ 10,215 $ (153,426) Operating Activities During the year ended December 31, 2024, Net cash provided by operating activities of $184.3 million was related to our net loss of $(3.8) million adjusted by positive adjustments of non-cash charges of $173.6 million and net cash inflows of $14.5 million provided by changes in working capital.
We fund these cash needs primarily from cash generated from operations, as well as from cash and cash equivalents on our balance sheet when required. We generated cash from operations for the year s ended D ecember 31, 202 3, 2022, and 2021 of $84.4 million, $ 53 . 5 million, and $ 63 . 5 million , respectively .
We fund these cash needs primarily from cash generated from operations, as well as from cash and cash equivalents on our balance sheet when required. We generated cash from operations for the years ended December 31, 2024, 2023, and 2022 of $184.3 million, $84.4 million, and $53.5 million, respectively.
General and administrative General and administrative expenses consist of payroll and other personnel related costs, including salaries, share-based compensation, employee benefits and expenses for executive management, legal, finance and others. In addition, general and administrative expenses include fees for professional services and occupancy costs.
We expect to increase selling and marketing expenses to support the overall growth in our business. General and administrative General and administrative expenses consist of payroll and other personnel related costs, including salaries, share-based compensation, employee benefits and expenses for executive management, legal, finance and others. In addition, general and administrative expenses include fees for professional services and occupancy costs.
(5) Represents foreign currency exchange rate gains or losses related to the remeasurement of monetary assets and liabilities to the Company’s functional currency using exchange rates in effect at the end of the reporting period.
The year ended December 31, 2023, includes one-time costs related to the Commercial agreement. (5) Represents foreign currency exchange rate gains or losses related to the remeasurement of monetary assets and liabilities to the Company’s functional currency using exchange rates in effect at the end of the reporting period.
The $147.5 million of non-cash charges primarily consisted of depreciation and amortization of $91.2 million and share-based compensation expense related to vested equity awards of $74.9 million, partially offset by $24.5 million of Warrants liability devaluation.
The $173.6 million of non-cash charges primarily consisted of depreciation and amortization of $100.9 million and share-based compensation expense related to vested equity awards of $67.1 million, partially offset by $2.8 million of Warrants liability devaluation.
Cost of revenues increased by $77.2 million, or 8.2%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. Most of the increase in Cost of revenues was driven by Traffic acquisition cost, which increased by $72.4 million, or 8.7%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Most of the increase in Cost of revenues was driven by Traffic acquisition cost, which increased by $197.7 million, or 21.9%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
See Note 17 of Notes to the Consolidated Financial Statements in this Annual Report. Pursuant to the Israeli Law for Encouragement of Capital Investments-1959 (the “Investments Law”) and its various amendments, under which we have been granted “Privileged Enterprise” status, we were granted a tax exemption status for the years 2018 and 2019.
Pursuant to the Israeli Law for Encouragement of Capital Investments-1959 (the “Investments Law”) and its various amendments, under which we have been granted “Beneficiary Enterprise” status, we were granted a tax exemption status for the years 2018 and 2019.
The Amended Credit Agreement also contains customary representations, covenants and events of default as well as a financial covenant, which places a limit on our allowable net leverage ratio.
The Amended Credit Agreement also contains customary representations, covenants and events of default as well as a financial covenant, which places a limit on our allowable net leverage ratio. As of December 31, 2024, we had no outstanding borrowings under the Revolving Facility.
New digital property partners contributed approximately $221.6 million of new Revenues on a 12-month run rate basis calculated based on their first full month on the network.
New digital property partners contributed approximately $291.7 million of new Revenues on a 12-month run rate basis calculated based on their first full month on the network, a majority of which is related to Yahoo supply.
(4) For the year ended December 31, 2021, relates to the acquisition of ION Acquisition Corp. 1 Ltd., the acquisition of Connexity and going public, and for 2023, includes one-time costs related to the Commercial agreement. We calculate Ratio of Adjusted EBITDA to ex-TAC Gross Profit as Adjusted EBITDA divided by ex-TAC Gross Profit.
The year ended December 31, 2023, includes one-time costs related to the Commercial agreement. We calculate Ratio of Adjusted EBITDA to ex-TAC Gross Profit as Adjusted EBITDA divided by ex-TAC Gross Profit.
This means that in the vast majority of our business, we do not bid for ad placements, as traditionally happens in the advertising technology space, but rather see all users that visit the pages on which we appear. Due to our multi-year exclusive contracts and high retention rates, our supply is relatively consistent and predictable.
In the portion of our business that is tied to these native advertising supply partnerships. which currently accounts for the vast majority of our business, we do not bid for ad placements, as traditionally happens in the advertising technology space, but rather see all users that visit the pages on which we appear.
During the year ended December 31, 2022, Net cash used for investing activities was $139.6 million, primarily consisting of $126.4 million purchase of short-term investments, $34.9 million purchase of property and equipment, including capitalized internal-use software and $8.0 million cash paid in connection with acquisitions, net of cash acquired, partially offset by $29.6 million proceeds from maturities of short-term investments.
Investing Activities During the year ended December 31, 2024, Net cash used by investing activities was $30.1 million, primarily consisting of $35.2 million purchase of property and equipment, including capitalized internal-use software , partially offset by $5.8 million proceeds from maturities of short-term investments.
(dollars in thousands, except per share data) Year ended December 31, 2023 2022 2021 Revenues $ 1,439,685 $ 1,401,150 $ 1,378,458 Gross profit $ 425,558 $ 464,253 $ 441,071 Net loss $ (82,040 ) $ (11,975 ) $ (24,948 ) EPS diluted (1) $ (0.24 ) $ (0.05 ) $ (0.26 ) Ratio of net loss to gross profit (19.3 %) (2.6 %) (5.7 %) Cash flow provided by operating activities $ 84,373 $ 53,484 $ 63,521 Cash, cash equivalents, short-term deposits and investments $ 181,833 $ 262,807 $ 319,319 Non-GAAP Financial Data (2) ex-TAC Gross Profit $ 535,819 $ 569,642 $ 518,863 Adjusted EBITDA $ 98,677 $ 156,676 $ 179,464 Non-GAAP Net Income (3) $ 32,580 $ 91,382 $ 113,586 Ratio of Adjusted EBITDA to ex-TAC Gross Profit 18.4 % 27.5 % 34.6 % Free Cash Flow $ 52,240 $ 18,570 $ 24,451 (1) The weighted-average shares used in the computation of the diluted EPS for the year ended December 31, 2023 includes 45,198,702 Non-voting Ordinary shares.
(dollars in thousands, except per share data) Year ended December 31, 2024 2023 2022 Revenues $ 1,766,220 $ 1,439,685 $ 1,401,150 Gross profit $ 534,218 $ 425,558 $ 464,253 Net loss $ (3,760) $ (82,040) $ (11,975) EPS $ (0.01) $ (0.24) $ (0.05) Ratio of net loss to gross profit (0.7) % (19.3) % (2.6) % Cash flow provided by operating activities $ 184,331 $ 84,373 $ 53,484 Cash, cash equivalents, short-term deposits and investments $ 230,363 $ 181,833 $ 262,807 Non-GAAP Financial Data (1) ex-TAC Gross Profit $ 667,496 $ 535,819 $ 569,642 Adjusted EBITDA $ 200,926 $ 98,677 $ 156,676 Non-GAAP Net Income $ 122,377 $ 32,580 $ 91,382 Ratio of Adjusted EBITDA to ex-TAC Gross Profit 30.1 % 18.4 % 27.5 % Free Cash Flow $ 149,176 $ 52,240 $ 18,570 (1) Refer to “Non-GAAP Financial Measures” below for an explanation and reconciliation to GAAP metrics.
We elected to recognize share-based compensation costs on a straight-line method for awards subject to graded vesting based only on a service condition and the accelerated method for awards that are subject to a performance condition. The compensation expense associated with performance based RSUs is adjusted based on the probability of achieving performance targets.
Share-Based Compensation We recognize the cost of share-based awards granted to employees and directors based on the estimated grant-date fair value of the awards. We elected to recognize share-based compensation costs on a straight-line method for awards subject to graded vesting based only on a service condition and the accelerated method for awards that are subject to a performance condition.
Gross profit decreased by $38.7 million, or 8.3%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Gross profit increased by $108.7 million, or 25.5% , for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Income (loss) before income taxes decreased by $72.1 million, for the year ended December 31, 2023 compared to the year ended December 31, 2022, as a result of the factors described above.
Income (loss) before income taxes increased by $90.5 million, for the year ended December 31, 2024 compared to the year ended December 31, 2023, as a result of the factors described above. Tax expense increased by $12.2 million, or 221.8%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Please see Note 2 of Notes to the Consolidated Financial Statements included in this Annual Report for a summary of significant accounting policies and the effect on our financial statements. 76 Table of Contents Revenue Recognition We recognize revenues when we transfer control of promised services directly to our customers, which we collectively refer to as our Advertisers, in an amount that reflects the consideration to which we expect to be entitled to in exchange for those services.
Revenue Recognition We recognize revenues when we transfer control of promised services directly to our customers, which we collectively refer to as our Advertisers, in an amount that reflects the consideration to which we expect to be entitled to in exchange for those services.
(2) Costs associated with the Company’s cost restructuring program implemented in September 2022. (3) Represents share-based compensation due to holdback of Ordinary shares issuable under compensatory arrangements relating to Connexity acquisition.
(3) Represents share-based compensation due to holdback of Ordinary shares issuable under compensatory arrangements relating to Connexity acquisition.
(2) Costs associated with the Company’s cost restructuring program implemented in September 2022. (3) Represents share-based compensation due to holdback of Ordinary shares issuable under compensatory arrangements relating to Connexity acquisition.
(3) Represents share-based compensation due to holdback of Ordinary shares issuable under compensatory arrangements relating to Connexity acquisition.
The Buyback Program commenced in June 2023 and during the year ended December 31, 2023, we repurchased 15.2 million Ordinary shares at an average price of $3.62 per share (excluding broker and transaction fees of $0.4 million).
During the year ended December 31, 2024, we repurchased 18.3 million Shares, consisting of 17.3 million Ordinary shares, and 1.0 million Non-voting Ordinary shares (see Note 18) at an average price of $4.06 per share (excluding broker and transaction fees of $0.4 million).
We will consider the repurchase and retirement of additional debt based on, among other factors, our working capital and capital expenditures needs, liquidity position and possible alternative uses of cash. As of December 31, 2023, the remaining future principal payments related to our long-term loan, following the prepayment, were $152.7 million.
In the years ended December 31, 2024 and 2023 we voluntarily prepaid the principal amount of debt outstanding under our long-term loan of $30.0 million and $79.3 million, respectively. We will consider the repurchase and retirement of additional debt based on, among other factors, our working capital and capital expenditures needs, liquidity position and possible alternative uses of cash.
Limitations on the use of Adjusted EBITDA include the following: • Although depreciation expense is a non-cash charge, the assets being depreciated may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; 65 Table of Contents • Adjusted EBITDA excludes share-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy; • Adjusted EBITDA does not reflect, to the extent applicable for a period presented: (1) changes in, or cash requirements for, our working capital needs; (2) interest expense, or the cash requirements necessary to service interest or if applicable principal payments on debt, which reduces cash available to us; or (3) tax payments that may represent a reduction in cash available to us; and • The expenses and other items that we exclude in our calculation of Adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from Adjusted EBITDA when they report their operating results.
Limitations on the use of Adjusted EBITDA include the following: • Although depreciation expense is a non-cash charge, the assets being depreciated may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; • Adjusted EBITDA excludes share-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy; • Adjusted EBITDA does not reflect, to the extent applicable for a period presented: (1) changes in, or cash requirements for, our working capital needs; (2) interest expense, or the cash requirements necessary to service interest or if applicable principal payments on debt, which reduces cash available to us; or (3) tax payments that may represent a reduction in cash available to us; and • The expenses and other items that we exclude in our calculation of Adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from Adjusted EBITDA when they report their operating results. 24 Table of Contents The following table provides a reconciliation of net income (loss) to Adjusted EBITDA: Year ended December 31, 2024 2023 2022 (dollars in thousands) Net loss $ (3,760) $ (82,040) $ (11,975) Adjusted to exclude the following: Finance (income) expenses, net 11,980 12,804 (9,213) Income tax expenses 17,697 5,499 7,523 Depreciation and amortization (1) 103,722 96,512 91,221 Share-based compensation expenses 60,044 53,749 63,830 Restructuring expenses (2) — — 3,383 Holdback compensation expenses (3) 7,054 10,582 11,091 M&A and other costs (4) 4,189 1,571 816 Adjusted EBITDA $ 200,926 $ 98,677 $ 156,676 (1) The year ended December 31, 2024, includes one-time write-off of internal use software in the amount of $3,038.
Subsequent to December 31, 2023, in February 2024, our board of directors authorized up to $100.0 million for use under the Buyback Program, including any remaining authority from the November 2023 board of directors authorization, subject to obtaining any required Israeli court approvals. See Part II, Item 5.
In November 2023, our Board authorized up to an additional $40.0 million of buybacks under the Buyback Program and in February 2024, the Board authorized up to $100.0 million for use under the Buyback Program, including any remaining authority from the November 2023 Board authorization.
We believe that the critical accounting policies listed below involve the most difficult management decisions because they require the use of significant estimates and assumptions as described above.
We believe that the critical accounting policies listed below involve the most difficult management decisions because they require the use of significant estimates and assumptions as described above. Please see Note 2 of Notes to the Consolidated Financial Statements included in this Annual Report for a summary of significant accounting policies and the effect on our financial statements.
The most common model is a revenue share model. In this model, we agree to pay a percentage of our revenue generated from advertisements placed on the digital properties. The second model includes guarantees. Under this model, we pay the greater of a percentage of the revenue generated or a committed guaranteed amount per thousand page views (“Minimum guarantee model”).
For the majority of our digital properties partners, we have two primary compensation models for digital properties. The most common model is a revenue share model. In this model, we agree to pay a percentage of our revenue generated from advertisements placed on the digital properties. The second model includes guarantees.
In the past, we have and may continue to be required to make significant payments under these guarantees. Growing Our Advertiser Client Base We have a large network of A dvertisers, across multiple verticals.
In the past, we have and may continue to be required to make significant payments under these guarantees. 21 Table of Contents Growing Our Advertiser Client Base We have a large network of Advertisers that wish to achieve specific performance goals, such as obtaining subscribers for email newsletters or acquiring leads for product offerings, across multiple verticals.
This category of investment is important to maintain the growth of the business but can also generally be adjusted up or down based on management’s perception of the potential value of different investment options. The second category of investments are those that are necessary to maintain our core business.
This includes heavy investment in AI (specifically Deep Learning) in the form of server purchases and expenses for data scientists. This category of investment is important to maintain the growth of the business but can also generally be adjusted up or down based on management’s perception of the potential value of different investment options.
Research and development expenses increased by $7.0 million, or 5.4%, for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily attributable to an increase of $4.9 million in employee and subcontractors related costs and an increase of $2.2 million in servers and software related cost.
Research and development expenses increased by $6.2 million, or 4.5% , for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily attributable to an increase of $4.4 million in employee and subcontractor headcount and related costs, including share-based compensation expenses, reflecting our continued effort to enhance our product offerings and a $1.7 million increase in depreciation expenses.
The following table provides a reconciliation of net cash provided by operating activities to Free Cash Flow: Year ended December 31, 2023 2022 2021 (dollars in thousands) Net cash provided by operating activities $ 84,373 $ 53,484 $ 63,521 Purchase of property and equipment, including capitalized internal-use software (32,133 ) (34,914 ) (39,070 ) Free Cash Flow $ 52,240 $ 18,570 $ 24,451 Components of Our Results of Operations Revenues All of our Revenues are generated from Advertisers with whom we enter into commercial arrangements, defining the terms of our service and the basis for our charges.
For example, cash is still required to satisfy other working capital needs, including short-term investment policy, restricted cash, repayment of loan. • Free Cash Flow has limitations as an analytical tool, and it should not be considered in isolation or as a substitute for analysis of other GAAP financial measures, such as net cash provided by operating activities; and • This metric does not reflect our future contractual commitments. 27 Table of Contents The following table provides a reconciliation of net cash provided by operating activities to Free Cash Flow: Year ended December 31, 2024 2023 2022 (dollars in thousands) Net cash provided by operating activities $ 184,331 $ 84,373 $ 53,484 Purchase of property and equipment, including capitalized internal-use software (35,155) (32,133) (34,914) Free Cash Flow $ 149,176 $ 52,240 $ 18,570 Components of Our Results of Operations Revenues All of our Revenues are generated from Advertisers with whom we enter into commercial arrangements, defining the terms of our service and the basis for our charges.
Expenses under both the revenue share model as well as the Minimum guarantee model are recorded as incurred, based on actual revenues generated by us at the respective month. 69 Table of Contents Other cost of revenues Other cost of revenues includes data center and related costs, depreciation expense related to hardware supporting our platform, amortization expense related to capitalized internal-use software and acquired technology, digital and services taxes, personnel costs, and allocated facilities costs.
Other cost of revenues Other cost of revenues includes data center and related costs, depreciation expense related to hardware supporting our platform, amortization expense related to capitalized internal-use software and acquired technology, digital and services taxes, personnel costs, and allocated facilities costs.
Sales and marketing Sales and marketing expenses consist of payroll and other personnel related costs, including salaries, share-based compensation, employee benefits, and travel for our sales and marketing departments, advertising and promotion, rent and depreciation and amortization expenses, particularly related to the acquired intangibles. We expect to increase selling and marketing expenses to support the overall growth in our business.
These expenses may vary from period to period as a percentage of revenue, depending primarily upon when we choose to make more significant investments. 28 Table of Contents Sales and marketing Sales and marketing expenses consist of payroll and other personnel related costs, including salaries, share-based compensation, employee benefits, and travel for our sales and marketing departments, advertising and promotion, rent and depreciation and amortization expenses, particularly related to the acquired intangibles.
We generate revenues primarily when people (consumers) click on, purchase from or, in some cases, view the ads that appear within our partners’ digital experiences via our recommendation platform. Advertisers pay us for those clicks, purchases or impressions, and we share the resulting revenue with the digital properties who display those ads and generate those clicks and downstream consumer actions.
Advertisers pay us for those clicks, purchases or impressions, and we share the resulting revenue with the digital properties who display those ads and generate those clicks and downstream consumer actions.
Product and Research & Development We view research and development expenditures as investments that help grow our business over time. These investments, which are primarily in the form of employee salaries and related expenditures and hardware infrastructure, can be broken into two categories.
These investments, which are primarily in the form of employee salaries and related expenditures and hardware infrastructure, can be broken into two categories. This first category includes product innovations that extend the capabilities of our current product offerings and help us expand into completely new markets.
General and administrative expenses increased by $4.9 million, or 4.8%, for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily attributed to an increase of $4.9 million in employee and subcontractor related costs, an increase of $2.3 million in credit losses, offset by $3.0 million in legal consultants expenses related to regulatory matters and insurance expenses. 72 Table of Contents Finance income (expenses), net decreased by $22.0 million for the year ended December 31, 2023 compared to the year ended December 31, 2022, mainly attributable to $23.8 million Warrants liability devaluation, recorded in the year ended December 31, 2022, partially offset by a decrease of $2.3 million in interest expenses.
Sales and marketing expenses increased by $22.2 million, or 9.0% , for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily attributed to $24.3 million increase in employee and subcontractor headcount and related costs, including share-based compensation expenses, supporting our growth partially offset by a decrease in amortization expenses of $3.2 million . 30 Table of Contents General and administrative expenses decreased by $9.4 million, or 8.8% , for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily attributed to a decrease of $2.3 million in insurance expenses in connection with the Yahoo partnership, a decrease of $2.4 million in credit losses expenses and a decrease of $6.1 million in employee and subcontractors related costs, including share-based compensation expenses, and, partially offset by an increase of $1.0 million in depreciation expenses.
In May 2023, our board of directors authorized a share buyback program for the repurchase of up to $40.0 million of the Company’s outstanding Ordinary shares, with no expiration date (the “Buyback Program”). In November 2023, our board of directors authorized up to an additional $40.0 million of buybacks under the Buyback Program.
As of December 31, 2024, the outstanding principal amount related to our long-term loan, following the voluntary prepayments, was $122.7 million. 31 Table of Contents In May 2023, our Board authorized a share buyback program for the repurchase of up to $40.0 million of the Company’s outstanding Shares, with no expiration date (the “Buyback Program”).
Traffic acquisition cost also includes up-front payments, incentive payments, or bonuses paid to the digital property partners, which are amortized over the shorter of respective contractual terms and the economic benefit period of the digital property arrangement. For the majority of our digital properties partners, we have two primary compensation models for digital properties.
Traffic acquisition cost also includes up-front payments, incentive payments, or bonuses paid to the digital property partners and the amortization of the non-cash based Commercial agreement asset (see Note 1b of Notes to the Consolidated Financial Statements in this Annual Report), which are amortized over the shorter of respective contractual terms and the economic benefit period of the digital property arrangement.
Our powerful recommendation platform was built to address a technology challenge of significant complexity: predicting which recommendations users would be interested in, without explicit intent data or social media profiles. Search advertising platforms have access, at a minimum, to users’ search queries which indicate intent, while social media advertising platforms have access to rich personal profiles created by users.
Our powerful performance AI engine was built to address a technology challenge of significant complexity: predicting which content, both advertisements and editorial, users would be interested in, without explicit intent data or social media profiles.
Finance income (expenses), net Finance income (expenses), net, primarily consists of interest income (expense) including amortization of loan and credit facility issuance costs, Warrants liability fair value adjustments, gains (losses) from foreign exchange fluctuations and bank fees. 70 Table of Contents Income tax benefit (expenses) The statutory corporate tax rate in Israel was 23% for 2023, 2022 and 2021, although we are entitled to certain tax benefits under Israeli law.
We expect our general and administrative expenses to remain relatively flat in 2025. Finance income (expenses), net Finance income (expenses), net, primarily consists of interest income (expense) including amortization of loan and credit facility issuance costs, Warrants liability fair value adjustments, gains (losses) from foreign exchange fluctuations and bank fees.
Existing digital property partners, including the growth of new digital property partners (beyond the revenue contribution determined based on the run-rate revenue generated by the partners when they are first on-boarded) decreased by approximately $183.0 million. This decrease was primarily driven by a decline in advertiser rates during 2022, partially mitigated by growth in our Taboola News and eCommerce businesses.
Existing digital property partners, including the growth of new digital property partners (beyond the revenue contribution determined based on the run-rate revenue generated by the partners when they are first on-boarded) increased by approximately $34.8 million.
Other cost of revenues increased by $4.9 million, or 4.6%, for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily attributed to $5.7 million in depreciation and amortization expenses, an increase of $1.3 million in related to other data and information system costs, offset by $1.9 million in employee related cost.
Other cost of revenues increased by $20.2 million, or 18.3% , for the year ended December 31, 2024 compared to the year ended December 31, 2023, mainly due to a $13.9 million increase in data, content, communication and IT related expenses, $3.1 million increase in depreciation expenses related to new product innovation and $2.7 million increase in digital service tax expenses.
The $82.0 million decrease in cash resulting from changes in working capital primarily consisted of a $21.9 million decrease in accrued expenses and other current liabilities and other long-term liabilities, $17.3 million decrease in deferred taxes, net, $16.8 million decrease in trade payables, $11.2 million increase in trade receivables and $10.8 million increase in prepaid expenses and other current assets and long-term prepaid expenses.
The $161.7 million of non-cash charges primarily consisted of depreciation and amortization of $96.5 million and share-based compensation expense related to vested equity awards of $64.3 million. 32 Table of Contents The $4.7 million increase in cash resulting from changes in working capital primarily consisted of a $36.6 million increase in trade payables, $25.2 million increase in accrued expenses and other current liabilities and other long-term liabilities and $5.9 million decrease in prepaid expenses and other current assets and long-term prepaid expenses, partially offset by a $49.6 million increase in trade receivables, net and $15.5 million decrease in deferred taxes, net.
For more information about ex-TAC Gross Profit , Adjusted EBITDA and Non-GAAP Net Income , see “Operating and Financial Review and Prospects —Non-GAAP Financial Measures.” For more information about ex-TAC Gross Profit, Adjusted EBITDA and Non-GAAP Net Income, see “ Management’s Business Discussion and Analysis of Financial Condition and Results of Operations- Non-GAAP Financial Measures. ” 2023 Accomplishments and Growth Initiatives 2023 was an investment year for Taboola’s growth.
For more information about ex-TAC Gross Profit, Adjusted EBITDA and Non-GAAP Net Income, see “Operating and Financial Review and Prospects —Non-GAAP Financial Measures.” For more information about ex-TAC Gross Profit, Adjusted EBITDA and Non-GAAP Net Income, see “Management’s Business Discussion and Analysis of Financial Condition and Results of Operations- Non-GAAP Financial Measures.” Subsequent Developments On February 26, 2025, Taboola announced a new focus beyond native advertising, a powerful new technology platform called Realize and opened Realize for all advertisers.
Ex-TAC Gross Profit, a non-GAAP measure, decreased by $33.8 million, or 5.9%, for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily due to a decrease in ex-TAC Gross Profit from existing digital property partners principally caused by yield compression that occurred in 2022.
Ex-TAC Gross Profit, a non-GAAP measure, increased by $131.7 million, or 24.6% , for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily due to revenue from advertisers transferred from Yahoo, as well as growth in spend from existing Taboola advertisers.
The following table provides a reconciliation of r evenues and g ross profit to ex-TAC Gross Profit: Year ended December 31, 2023 2022 2021 (dollars in thousands) Revenues $ 1,439,685 $ 1,401,150 $ 1,378,458 Traffic acquisition cost 903,866 831,508 859,595 Other cost of revenues 110,261 105,389 77,792 Gross profit $ 425,558 $ 464,253 $ 441,071 Add back: Other cost of revenues 110,261 105,389 77,792 ex-TAC Gross Profit $ 535,819 $ 569,642 $ 518,863 Adjusted EBITDA and Ratio of Adjusted EBITDA to ex-TAC Gross Profit We calculate Adjusted EBITDA as net income (loss) before finance income (expenses), net, income tax expenses, depreciation and amortization, further adjusted to exclude share-based compensation including Connexity holdback compensation expenses and other noteworthy income and expense items such as M&A costs and restructuring costs which may vary from period-to-period.
Adjusted EBITDA and Ratio of Adjusted EBITDA to ex-TAC Gross Profit We calculate Adjusted EBITDA as net income (loss) before finance income (expenses), net, income tax expenses, depreciation and amortization and non-cash amortization of the Commercial agreement asset, further adjusted to exclude share-based compensation including Connexity holdback compensation expenses and other noteworthy income and expense items such as M&A costs and restructuring costs which may vary from period-to-period.
A large portion of our revenue comes from A dvertisers with specific performance goals, such as obtaining subscribers for email newsletters or acquiring leads for product offerings. These performance A dvertisers use our service when they obtain a sufficient return on ad spend to justify their ad spend. We grow the revenue from performance A dvertisers in three ways.
A large portion of our revenue comes from Scaled Advertisers. The Revenue contribution from Scaled Advertisers represented 85%, 83% and 82% of our Revenues for the fourth quarters of 2024, 2023 and 2022, respectively. These performance Advertisers use our service when they obtain a sufficient return on ad spend to justify their ad spend.
Maintaining and Growing Our Digital Property Partners We engage with a diverse network of digital property partners, substantially all of which have contracts with us containing either an evergreen term or an exclusive partnership with us for multi-year terms at inception .
Realize leverages our unique data, performance AI and an increasingly diverse range of inventory and creative formats to achieve performance objectives Key Factors and Trends Affecting our Performance We believe that our performance and future success depend on several factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and those referred to in Part I, Item 1A,“Risk Factors.” Maintaining and Growing Our Digital Property Partners We engage with a diverse network of digital property partners, substantially all of which have contracts with us containing either an evergreen term or an exclusive partnership with us for multi-year terms at inception for their native advertising supply.
Limitations on the use of ex-TAC Gross Profit include the following: • Traffic acquisition cost is a significant component of our cost of revenues but is not the only component; and • ex-TAC Gross Profit is not comparable to our gross profit and by definition ex-TAC Gross Profit presented for any period will be higher than our gross profit for that period.
Limitations on the use of ex-TAC Gross Profit include the following: • Traffic acquisition cost is a significant component of our cost of revenues but is not the only component; and • ex-TAC Gross Profit is not comparable to our gross profit and by definition ex-TAC Gross Profit presented for any period will be higher than our gross profit for that period. 23 Table of Contents The following table provides a reconciliation of revenues and gross profit to ex-TAC Gross Profit: Year ended December 31, 2024 2023 2022 (dollars in thousands) Revenues $ 1,766,220 $ 1,439,685 $ 1,401,150 Traffic acquisition cost (1) 1,101,556 903,866 831,508 Other cost of revenues 130,446 110,261 105,389 Gross profit $ 534,218 $ 425,558 $ 464,253 Add back: Other cost of revenues (1) 133,278 110,261 105,389 ex-TAC Gross Profit $ 667,496 $ 535,819 $ 569,642 (1) The year ended December 31, 2024 included $2,832 amortization expense of the non-cash based Commercial agreement asset.
Contractual Obligations by Period 2024 2025 2026 2027 2028 Thereafter (dollars in thousands) Debt Obligations $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 140,735 — Operating Leases (1) 22,828 17,926 14,454 10,164 5,613 8,264 Non-cancellable purchase obligations (2) 23,644 2,196 1,200 88 — — Total Contractual Obligations $ 49,472 $ 23,122 $ 18,654 $ 13,252 $ 146,348 $ 8,264 (1) Represents future minimum lease commitments under non-cancellable operating lease agreements.
Contractual Obligations by Period 2025 2026 2027 2028 Thereafter (dollars in thousands) Debt Obligations $ — $ — $ — $ 122,735 $ — Operating Leases (1) 24,159 19,669 12,614 6,679 8,993 Non-cancellable purchase obligations (2) 35,542 7,845 4,064 21 — Total Contractual Obligations $ 59,701 $ 27,514 $ 16,678 $ 129,435 $ 8,993 (1) Represents future minimum lease commitments under non-cancellable operating lease agreements.
During the year ended December 31, 2022, Net cash used in financing activities was $62.9 million, primarily consisting of $64.3 million repayment of our long-term loan and $5.8 million payments of tax withholdings for share-based compensation expenses partially offset by $8.4 million received from exercised options and vested RSUs. 75 Table of Contents Contractual Obligations The following table discloses aggregate information about material contractual obligations and the periods in which they are due as of December 31, 2023.
Financing Activities During the year ended December 31, 2024, Net cash used in financing activities was $100.0 million, primarily consisting of $73.6 million repurchase of Shares and a $30.0 million voluntary prepayment of our long-term loan, partially offset by $7.6 million received from exercised options.
We had approximately 17,000, 1 8 ,000 and 15,000 A dvertiser clients working with us directly, or through advertising agencies, worldwide during the fourth quarters of 202 3, 202 2 and 2021 , respectively. The decline from 2022 to 2023 was primarily driven by a channel partner that had a large number of small advertisers that they reduced in 2023.
We had approximately 2,100, 1,800 and 1,800 of Scaled Advertiser clients working with us directly, or through advertising agencies, worldwide during the fourth quarters of 2024, 2023 and 2022, respectively. In an effort to also measure how we are growing our advertising spend with each Scaled Advertiser, we have introduced an Average Revenue per Scaled Advertiser performance measure.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeForeign Currency Exchange Risk A 10% increase or decrease of the NIS, Euro, British pound sterling, or the Japanese yen against the U.S. dollar would have impacted the consolidated statements of loss as follows: Operating income (loss) impact Year ended December 31, 2023 2022 2021 (dollars in thousands) +10% -10% +10% -10% +10% -10% NIS/USD $ 1,054 $ (1,054 ) $ (5,168 ) $ 5,168 $ (7,542 ) $ 7,542 EUR/USD $ 923 $ (923 ) $ 4,177 $ (4,177 ) $ 5,886 $ (5,886 ) GBP/USD $ (663 ) $ 663 $ (4,143 ) $ 4,143 $ (4,685 ) $ 4,685 JPY/USD $ 997 $ (997 ) $ 1,881 $ (1,881 ) $ 1,966 $ (1,966 ) To reduce the impact of foreign exchange risks associated with forecasted future cash flows related to payroll expenses and other personnel related costs denominated in NIS and their volatility, we have established a hedging program and use derivative financial instruments, specifically foreign currency forward contracts, call and put options, to manage exposure to foreign currency risks.
Biggest changeForeign Currency Exchange Risk A 10% increase or decrease of the NIS, Euro, British pound sterling, or the Japanese yen against the U.S. dollar would have impacted the consolidated statements of loss as follows: Operating income (loss) impact Year ended December 31, 2024 2023 2022 (dollars in thousands) +10% -10% +10% -10% +10% -10% NIS/USD $ (2,157) $ 2,157 $ 1,054 $ (1,054) $ (5,168) $ 5,168 EUR/USD $ 4,703 $ (4,703) $ 923 $ (923) $ 4,177 $ (4,177) GBP/USD $ (3,319) $ 3,319 $ (663) $ 663 $ (4,143) $ 4,143 JPY/USD $ 989 $ (989) $ 997 $ (997) $ 1,881 $ (1,881) To reduce the impact of foreign exchange risks associated with forecasted future cash flows related to payroll expenses and other personnel related costs denominated in NIS and their volatility, we have established a hedging program and use derivative financial instruments, specifically foreign currency forward contracts, call and put options, to manage exposure to foreign currency risks.
Credit Risk Credit risk with respect to accounts receivable is generally not significant, as we routinely assess the creditworthiness of our partners and Advertisers. Historically, we generally have not experienced any material losses related to receivables from Advertisers during the years ended December 31, 2023, 2022 and 2021. We do not require collateral.
Credit Risk Credit risk with respect to accounts receivable is generally not significant, as we routinely assess the creditworthiness of our partners and Advertisers. Historically, we generally have not experienced any material losses related to receivables from Advertisers during the years ended December 31, 2024, 2023 and 2022. We do not require collateral.
As of December 31, 2023, we maintained cash balances with U.S. and United Kingdom banks that significantly exceed FDIC and FSCS insurance limits and expect we will continue to do so. As of December 31, 2023, we have not experienced credit losses related to these balances.
As of December 31, 2024 we maintained cash balances with U.S. and United Kingdom banks that significantly exceed FDIC and FSCS insurance limits and expect we will continue to do so. As of December 31, 2024, we have not experienced credit losses related to these balances.
These derivative instruments are designated as cash flow hedges. 79 Table of Contents Interest Rate Risk Our cash, cash equivalents, and short-term investments are held mainly for working capital purposes. The primary objectives of our investment activities are the preservation of capital and the fulfillment of liquidity needs. We do not enter into investments for trading or speculative purposes.
These derivative instruments are designated as cash flow hedges. Interest Rate Risk Our cash, cash equivalents, and short-term investments are held mainly for working capital purposes. The primary objectives of our investment activities are the preservation of capital and the fulfillment of liquidity needs. We do not enter into investments for trading or speculative purposes.
Other companies in similar businesses may use different estimation policies and methodologies, which may impact the comparability of our financial condition, results of operations and cash flows to those of other companies. 81 Table of Contents
Other companies in similar businesses may use different estimation policies and methodologies, which may impact the comparability of our financial condition, results of operations and cash flows to those of other companies. 36 Table of Contents
However, there can be no assurance that our efforts to identify potential credit risks will be successful. Our cash, cash equivalents and restricted deposits are invested in major banks mostly in the United States, United Kingdom and Israel. In the United States and United Kingdom, our deposits are maintained with commercial banks, which are insured by the U.S.
However, there can be no assurance that our efforts to identify potential credit risks will be successful. Our cash, cash equivalents and restricted deposits are invested in major banks mo stly in the United States, United Kingdom and Israel. In the United States and United Kingdom, our deposits are maintained with commercial banks, which are insured by the U.S.
As of December 31, 2023, we had $152.7 million of outstanding borrowings under our long-term loan with a variable interest rate. See Liquidity and Capital Resources for information regarding our incremental revolving credit facility amendment. Fluctuations in interest rates may impact the level of interest expense recorded on future borrowings.
As of December 31, 2024, we had $122.7 million of outstanding borrowings under our long-term loan with a variable interest rate. See Liquidity and Capital Resources for information regarding our incremental revolving credit facility amendment. Fluctuations in interest rates may impact the level of interest expense recorded on future borrowings.
We regularly monitor bank financial strength and other factors in determining where to maintain cash deposits but may not be able to fully mitigate the risk of possible bank failures. 80 Table of Contents Our short-term investments, which were $5.7 million as of December 31, 2023, are investments in marketable securities with high credit ratings as required by our investment policy and are not insured or guaranteed.
We regularly monitor bank financial strength and other factors in determining where to maintain cash deposits but may not be able to fully mitigate the risk of possible bank failures. Our short-term investments, which were $3.8 million as of December 31, 2024, are deposited in a major Israeli bank and are not insured or guaranteed.