Artificial Intelligence

Taboola Reports Record Q4 and Full Year 2021 Results

Published

2 years ago

February 22, 2022

2021 Gross Profit grew 38% and ex-TAC Gross Profit grew 36% over 2020
Exceeded guidance across all financial measures
Q4 2021 Gross Profit and ex-TAC Gross Profit grew over 50%
Increasing 2022 guidance to $1.67 billion for Revenues, $556 million for Gross Profit, $665 million for ex-TAC Gross Profit and $204 million for Adjusted EBITDA, representing 30.7% Ratio of Adjusted EBITDA to ex-TAC Gross Profit
Taboola to host its inaugural Investor Day on March 29, 2022, live stream will be available on Taboola’s investors website

NEW YORK, Feb. 22, 2022 (GLOBE NEWSWIRE) — Taboola (Nasdaq: TBLA), a global leader in powering recommendations for the open web, helping people discover things they may like, today announced its results for the quarter and year ended December 31, 2021.

“We closed 2021 with the strongest quarter in our history with record Revenues, ex-TAC Gross Profit and Adjusted EBITDA,” said Adam Singolda, Founder and CEO, Taboola. “We’ve continued our strong momentum, launching game changing products such as Homepage for You and SmartBid Dimensions, signing incredible partnerships such as McClatchy and Samsung and making great progress in our premium advertising offerings, including brands/agencies with video, as well as e-Commerce with the acquisition of Connexity. This all comes at a time when the future of advertising is transitioning from user-tracking to contextual, which is where Taboola shines. We are excited to carry this momentum into 2022 and we are laser focused on continual innovation and unlocking greater audience, engagement and monetization for our partners.”

For more commentary on the quarter, please refer to Taboola’s Q4 2021 Shareholder Letter, which was furnished to the SEC and also posted on Taboola’s website today at https://investors.taboola.com.

Fourth Quarter and Full Year 2021 Results Summary (unaudited)

	Three Months Ended December 31,						Year Ended December 31,
(dollars in thousands)		2021			2020			2021			2020		% change YoY

Revenues	$	407,668		$	351,294		$	1,378,458		$	1,188,893		15.9	%
Gross Profit	$	143,642		$	93,021		$	441,071		$	319,497		38.1	%
Net Income (loss)	$	585		$	2,753		$	(24,948	)	$	8,493		NM
Ratio of Net Income (loss) to Gross Profit		0.4	%		3.0	%		(5.7	%)		2.7	%	NM
Cash Flow from Operations	$	22,968		$	57,469		$	63,521		$	139,087		(54.3	%)
Cash, cash equivalents and short-term deposits	$	319,319		$	242,811		$	319,319		$	242,811		31.5	%

Non-GAAP Financial Data*
ex-TAC Gross Profit	$	169,210		$	110,202		$	518,863		$	382,352		35.7	%
Adjusted EBITDA	$	65,383		$	32,993		$	179,464		$	106,193		69.0	%
Ratio of Adjusted EBITDA to ex-TAC Gross Profit		38.6	%		29.9	%		34.6	%		27.8	%	24.5	%
Free Cash Flow	$	12,672		$	53,375		$	24,451		$	121,313		(79.8	%)

NM = Not Meaningful

Fourth Quarter Financial Highlights

Q4 results exceeded guidance across all financial measures

	Three Months Ended December 31, 2021	Q4 Guidance
Revenues	$408M	$392 – $396M
Gross Profit	$144M	$129 – $132M
ex-TAC Gross Profit	$169M	$163 – $165M
Adjusted EBITDA	$65M	$61 – $63M

Revenues grew $56 million or 16% year-over-year.
- New digital property partners¹ drove $21 million of growth.
- Existing digital property partners² grew $35 million which translates to net dollar retention³ – of 110% driven by improvement in yield as well as the inclusion of Connexity revenue.
Gross Profit grew $51 million or 54.4% year-over-year and ex-TAC Gross Profit grew $59 million or 53.5% year-over-year.
- Growth driven by new digital properties and strong yield improvements as well as from inclusion of Connexity in our Q4 2021 results.
- Contributing to the year-over-year increase was the voluntary repayment in Q4 of the prior year of $17 million in guaranteed TAC payments withheld in Q2 and Q3 of 2020.
Operating expenses grew $38 million or 44.1% year-over-year. The drivers include the inclusion of Connexity expenses, increase in amortization related to intangibles from the Connexity acquisition and higher public company expenses.
Net income of $0.6 million compared to net income of $2.8 million in Q4 2020.
Adjusted EBITDA of $65 million increased by $32 million year-over-year as higher gross profit more than offset higher operating expenses.
EPS was $0.00 per diluted share in the fourth quarter. The EPS was based on fully-diluted shares outstanding of 272 million.
Cash Flow from Operations decreased $35 million year-over-year and Free Cash Flow decreased $41 million year-over-year reflecting in part higher publisher prepayments due to the timing of renewals as well as higher tax payments.

¹New digital property partners within the first 12 months that were live on our network.

²Net growth of 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 them when they are first on-boarded).

³Net Dollar Retention is the net growth of existing digital property partners for the given period divided by the revenues from the same period in the prior-year.

First Quarter and Full Year 2022 Guidance

The Company’s strong fourth quarter results provide us confidence to raise our full year 2022 guidance above our previous guidance.

For the First Quarter 2022, the Company currently expects:

Revenues of $353 to $359 million
Gross Profit of $108 to $112 million
ex-TAC Gross Profit of $134 to $138 million
Adjusted EBITDA of $32 to $34 million
Non-GAAP Net Income of $12 to $14 million

For the Full Year 2022, the Company currently expects:

(dollars in millions)	Increased Guidance (as of 02/22/22)	Year over Year Growth	Previous Guidance (as of 9/28/21)
Revenues	$1,666 – $1,678	21% – 22%	$1,588 – $1,633
Gross Profit	$552 – $560	25% – 27%	$530 – $550
ex-TAC Gross Profit	$661 – $669	27% – 29%	$645 – $665
Adjusted EBITDA	$195 – $213	9% – 19%	$193 – $213
Non-GAAP Net Income	$111 – $129	NA	NA

Although we provide guidance for Adjusted EBITDA and Non-GAAP Net Income, we are not able to provide guidance for projected Net income (loss), the most directly comparable GAAP measure. Certain elements of Net income (loss), including share-based compensation expenses and warrant valuations, are not predictable due to the high variability and difficulty of making accurate forecasts. As a result, it is impractical for us to provide guidance on Net Income (loss) or to reconcile our Adjusted EBITDA and Non-GAAP Net Income guidance without unreasonable efforts. Consequently, no disclosure of projected Net income (loss) is included. For the same reasons, we are unable to address the probable significance of the unavailable information.

Our guidance assumes that the global economy continues to recover, with no major COVID-19 related or other setbacks that may cause economic conditions to deteriorate or significantly reduce advertiser demand.

Webcast Details

Taboola’s senior management team will discuss the Company’s earnings on a call that will take place tomorrow, February 23, 2022, at 8:30 AM ET. The call can be accessed via webcast at https://investors.taboola.com, or by conference call by dialing (877) 312-1874, or (470) 495-9527 for international callers, and entering the conference ID 5188107. The webcast will be available for replay for one year, through the close of business on February 22, 2023.

Q1 Conference Schedule:

Taboola management is scheduled to participate in the following conferences in the first quarter:

Susquehanna Eleventh Annual Technology Conference on March 3rd (virtual meetings)
JMP Securities Technology Conference on March 7th in San Francisco
KeyBanc Emerging Tech Summit on March 8th in San Francisco
Deutsche Bank Media, Internet and Telecom Conference on March 15th in Palm Beach, Florida

*About Non-GAAP Financial Information

This press release includes ex-TAC Gross Profit, Adjusted EBITDA, Ratio of Adjusted EBITDA to ex-TAC Gross Profit, Free Cash Flow and Non-GAAP Net Income, which are non-GAAP financial measures. These non-GAAP financial measures are not measures of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing the Company’s financial results. Therefore, these measures should not be considered in isolation or as an alternative to revenues, gross profit, net income, cash flows from operations or other measures of profitability, liquidity or performance under GAAP. You should be aware that the Company’s presentation of these measures may not be comparable to similarly-titled measures used by other companies.

Non-GAAP Net Income guidance, a new metric used in this press release as part of Q1 2022 guidance, is presented to provide insight to projected future results excluding revaluation of warrant liability, share-based compensation expenses, M&A costs, amortization of acquired intangibles and related income tax effects. The type of adjustments made may vary from period to period.

The Company believes non-GAAP financial measures provide useful supplemental information to management and investors regarding future financial and business trends relating to the Company. The Company believes that the use of these measures provides an additional tool for investors to use in evaluating operating results and trends and in comparing the Company’s financial measures with other similar companies, many of which present similar non-GAAP financial measures to investors. Non-GAAP financial measures are subject to inherent limitations because they reflect the exercise of judgments by management about which items are excluded or included in calculating them, which may vary from period to period. Please refer to the appendix at the end of this press release for reconciliations to the most directly comparable measures in accordance with GAAP.

Note Regarding Forward-Looking Statements

Certain statements in this press release are forward-looking statements. Forward-looking statements generally relate to future events including future financial or operating performance of Taboola.com Ltd. (the “Company”). In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expect”, “intend”, “will”, “estimate”, “anticipate”, “believe”, “predict”, “potential” or “continue”, or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward looking statements.

These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by the Company and its management, are inherently uncertain. Uncertainties and risk factors that could affect the Company’s future performance and cause results to differ from the forward-looking statements in this press release include, but are not limited to: the ability to recognize the anticipated benefits of the recent acquisition of Connexity and the business combination between the Company and ION Acquisition Corp. 1 Ltd. (together, the “Business Combinations”), which may be affected by, among other things, competition, the ability of the Company to grow and manage growth profitably, maintain relationships with customers and retain its management and key employees; the Company’s ability to successfully integrate the Connexity acquisition; costs related to the Business Combinations; changes in applicable laws or regulations; the Company’s estimates of expenses and profitability and underlying assumptions with respect to accounting presentations and purchase price and other adjustments; ability to attract new digital properties and advertisers; ability to meet minimum guarantee requirements in contracts with digital properties; intense competition in the digital advertising space, including with competitors who have significantly more resources; ability to grow and scale the Company’s ad and content platform through new relationships with advertisers and digital properties; ability to secure high quality content from digital properties; ability to maintain relationships with current advertiser and digital property partners; ability to make continued investments in the Company’s AI-powered technology platform; the need to attract, train and retain highly-skilled technical workforce; changes in the regulation of, or market practice with respect to, “third party cookies” and its impact on digital advertising; continued engagement by users who interact with the Company’s platform on various digital properties; the impact of the ongoing COVID-19 pandemic; reliance on a limited number of partners for a significant portion of the Company’s revenue; changes in laws and regulations related to privacy, data protection, advertising regulation, competition and other areas related to digital advertising; ability to enforce, protect and maintain intellectual property rights; and risks related to the fact that we are incorporated in Israel and governed by Israeli law; and other risks and uncertainties set forth in the section entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the Company’s registration statement on Form F-1, as amended, and in subsequent filings with the Securities and Exchange Commission.

Nothing in this press release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on these forward-looking statements, which speak only as of the date they were made. The Company undertakes no duty to update these forward-looking statements except as may be required by law.

About Taboola
Taboola powers recommendations for the open web, helping people discover things they may like.

The company’s platform, powered by artificial intelligence, is used by digital properties, including websites, devices and mobile apps, to drive monetization and user engagement. Taboola has long-term partnerships with some of the top digital properties in the world, including CNBC, BBC, NBC News, Business Insider, The Independent and El Mundo.

More than 14,000 advertisers use Taboola to reach over 500 million daily active users in a brand-safe environment. Following the acquisition of Connexity in 2021, Taboola is a leader in powering e-commerce recommendations, driving more than 1 million monthly transactions each month. Leading brands including Walmart, Macy’s, Wayfair, Skechers and eBay are among key customers.

Learn more at www.taboola.com and follow @taboola on Twitter.

Investor Contact:	Press Contact:
Jennifer Horsley	Dave Struzzi
[email protected]	[email protected]

CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share data

	December 31,		December 31,
	2021		2020
	Unaudited		Unaudited

ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	319,319	$	242,811
Restricted deposits		1,000		3,664
Trade receivables		245,235		158,050
Prepaid expenses and other current assets		63,394		21,609
Total current assets		628,948		426,134
NON-CURRENT ASSETS
Long-term prepaid expenses		32,926		5,289
Restricted deposits		3,897		3,300
Deferred tax assets		1,876		1,382
Right of use assets		65,105		68,058
Property and equipment, net		63,259		52,894
Intangible assets, net		252,498		3,905
Goodwill		549,338		19,206
TOTAL LONG-TERM ASSETS		968,899		154,034
Total assets	$	1,597,847	$	580,168

CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share data

	December 31,			December 31,
		2021			2020
	Unaudited			Unaudited

LIABILITIES, CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Trade payables	$	261,557		$	189,352
Lease liability		12,958			15,746
Accrued expenses and other current liabilities		123,046			95,135
Loan		3,000			–
Total current liabilities		400,561			300,233
LONG TERM LIABILITIES
Deferred tax liabilities		51,560			45
Warrant liability		31,227			–
Loan		285,402			–
Lease liability		61,526			63,044
Total long-term liabilities		429,715			63,089
CONVERTIBLE PREFERRED SHARES
Preferred A, B, B-1, B-2, C, D and E shares with no par value – Authorized: 0 and 123,389,750 shares at December 31, 2021 and at December 31, 2020 respectively; Issued and outstanding: 0 and 121,472,152 shares at December 31, 2021 and December 31, 2020 respectively.		–			170,206
SHAREHOLDERS’ EQUITY
Ordinary shares with no par value- Authorized: 700,000,000 and 176,535,661 shares as of December 31, 2021 and December 31, 2020 respectively; 234,031,897 and 41,357,049 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively.		–			–
Additional paid-in capital		824,016			78,137
Accumulated deficit		(56,445	)		(31,497	)
Total shareholders’ equity		767,571			46,640
Total liabilities, convertible preferred shares, and shareholders’ equity	$	1,597,847		$	580,168

CONSOLIDATED STATEMENT OF INCOME (LOSS)
U.S. dollars in thousands, except share and per share data

	Three months ended December 31,						Year ended December 31,
		2021			2020			2021			2020
	Unaudited						Unaudited

Revenues	$	407,668		$	351,294		$	1,378,458		$	1,188,893
Cost of revenues:
Traffic acquisition cost		238,458			241,092			859,595			806,541
Other cost of revenues		25,568			17,181			77,792			62,855
Total cost of revenues		264,026			258,273			937,387			869,396
Gross profit		143,642			93,021			441,071			319,497
Operating expenses:
Research and development expenses		34,044			34,031			117,933			99,423
Sales and marketing expenses		59,127			34,246			206,089			133,741
General and administrative expenses		31,826			18,478			130,314			60,140
Total operating expenses		124,997			86,755			454,336			293,304
Operating income (loss) before finance expenses		18,645			6,266			(13,265	)		26,193
Finance income (expenses), net		(1,783	)		(1,703	)		11,293			(2,753	)
Income (loss) before income taxes		16,862			4,563			(1,972	)		23,440
Provision for income taxes		(16,277	)		(1,810	)		(22,976	)		(14,947	)
Net income (loss)	$	585		$	2,753		$	(24,948	)	$	8,493
Less: Undistributed earnings allocated to participating securities		–			(5,885	)		(11,944	)		(22,932	)
Net Income (loss) attributable to ordinary shares – basic and diluted	$	585		$	(3,132	)	$	(36,892	)	$	(14,439	)
Net Income (loss) per share attributable to ordinary shareholders, basic	$	0.00		$	(0.08	)	$	(0.26	)	$	(0.36	)
Weighted-average shares used in computing net income (loss) per share attributable to ordinary shareholders, basic		243,850,858			40,372,255			142,883,475			40,333,870
Net income (loss) per share attributable to ordinary shareholders, diluted	$	0.00		$	(0.08	)	$	(0.26	)	$	(0.36	)
Weighted-average shares used in computing net income (loss) per share attributable to ordinary shareholders, diluted		271,857,016			40,372,255			142,883,475			40,333,870

SHARE BASED COMPENSATION BREAK-DOWN BY EXPENSE LINE
U.S. dollars in thousands

	Three months ended December 31,				Year ended December 31,
		2021		2020		2021		2020
	Unaudited				Unaudited
Cost of revenues	$	794	$	209	$	1,891	$	788
Research and development		8,738		12,148		29,022		16,491
Sales and marketing		4,518		2,528		44,834		6,930
General and administrative		9,474		2,379		52,210		4,068
Total share-based compensation expense	$	23,523	$	17,264	$	127,957	$	28,277

DEPRECIATION AND AMORTIZATION BREAK-DOWN BY EXPENSE LINE
U.S. dollars in thousands

	Three months ended December 31,					Year ended December 31,
		2021		2020			2021		2020
	Unaudited					Unaudited
Cost of revenues	$	8,590	$	5,749		$	27,417	$	22,520
Research and development		704		469			3,574		6,573
Sales and marketing		13,709		895			21,267		4,118
General and administrative		58		(4	)		853		746
Total depreciation and amortization expense	$	23,061	$	7,109		$	53,111	$	33,957

CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands, except share and per share data

	Three months ended December 31,						Year ended December 31,
		2021			2020			2021			2020
	Unaudited						Unaudited
Cash flows from operating activities:
Net income (loss)	$	585		$	2,753		$	(24,948	)	$	8,493
Adjustments to reconcile net income (loss) to net cash flows provided by operating activities:
Depreciation and amortization		23,061			7,109			53,111			33,957
Share based compensation expenses		23,523			17,264			127,957			28,277
Net gain from financing expenses		(463	)		(2,381	)		(2,320	)		(3,318	)
Revaluation of the warrant liability		(5,565	)		–			(22,656	)		–
Accrued interest, net		283			1			402			520
Change in operating assets and liabilities:
Increase in trade receivables		(54,657	)		(41,136	)		(40,113	)		(3,294	)
Decrease (increase) in prepaid expenses and other current assets and long-term prepaid expenses		(26,544	)		3,144			(64,923	)		17,975
Increase in trade payables		52,663			50,830			25,478			23,434
Increase in accrued expenses and other current liabilities		14,026			18,887			14,566			34,344
Decrease in deferred taxes, net		(4,297	)		(1,745	)		(1,581	)		(3,380	)
Change in operating lease right of use assets		3,651			3,615			14,529			13,758
Change in operating lease liabilities		(3,298	)		(872	)		(15,981	)		(11,679	)
Net cash provided by operating activities		22,968			57,469			63,521			139,087
Cash flows from investing activities
Purchase of property and equipment, including capitalized platform costs		(10,296	)		(4,094	)		(39,070	)		(17,774	)
Cash paid in connection with acquisitions, net of cash acquired		(171	)		–			(583,457	)		(202	)
Decrease (increase) in restricted deposits		(258	)		(172	)		2,067			(104	)
Decrease in short-term deposits		–			–			–			28,963
Net cash provided by (used in) investing activities		(10,725	)		(4,266	)		(620,460	)		10,883
Cash flows from financing activities
Exercise of options and vested RSUs		2,539			1,554			10,018			2,603
Issuance of share, net of offering costs		(792	)		–			285,378			–
Payments of tax withholding for share based compensation		(6,152	)		–			(6,152	)		–
Issuance of warrant		–			–			53,883			–
Proceeds from long term loans, net of debt issuance cost		–			–			288,750			–
Repayment of short term loan		(750	)		–			(750	)		–
Net cash provided by (used in) financing activities		(5,155	)		1,554			631,127			2,603
Exchange differences on balances of cash and cash equivalents		463			2,381			2,320			3,318
Increase in cash and cash equivalents		7,551			57,138			76,508			155,891
Cash and cash equivalents – at the beginning of the period		311,768			185,673			242,811			86,920
Cash and cash equivalents – at end of the period	$	319,319		$	242,811		$	319,319		$	242,811

	Three months ended December 31,				Year ended December 31,
		2021		2020		2021		2020
	Unaudited				Unaudited
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Income taxes	$	1,997	$	497	$	15,475	$	9,980
Interest	$	–	$	129	$	1,125	$	715
Non-cash investing and financing activities:
Purchase of property and equipment, including capitalized platform costs	$	1,120	$	1,879	$	1,120	$	1,879
Creation of operating lease right-of-use assets	$	6,902	$	3,440	$	4,520	$	14,635
Deferred offering costs incurred during the period included in the Long-term prepaid expenses	$	–	$	2,096	$	–	$	2,096
Fair value of ordinary shares issued as consideration of the acquisition	$	–	$	–	$	157,689	$	–

APPENDIX A: Non-GAAP Reconciliation

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR Q4 AND FULL YEARS 2021 AND 2020

(Unaudited)

The following table provides a reconciliation of Revenues to ex-TAC Gross Profit.

	Three months ended December 31,				Year ended December 31,
		2021		2020		2021		2020
	Unaudited				Unaudited
	(dollars in thousands)				(dollars in thousands)
Revenues	$	407,668	$	351,294	$	1,378,458	$	1,188,893
Traffic acquisition cost		238,458		241,092		859,595		806,541
Other cost of revenues		25,568		17,181		77,792		62,855
Gross Profit	$	143,642	$	93,021	$	441,071	$	319,497
Add back: Other cost of revenues		25,568		17,181		77,792		62,855
ex-TAC Gross Profit	$	169,210	$	110,202	$	518,863	$	382,352

The following table provides a reconciliation of Net income (loss) to Adjusted EBITDA.

	Three months ended December 31,				Year ended December 31,
		2021		2020		2021			2020
	Unaudited				Unaudited
	(dollars in thousands)				(dollars in thousands)
Net Income (loss)	$	585	$	2,753	$	(24,948	)	$	8,493
Adjusted to exclude the following:
Financial expenses (income), net		1,783		1,703		(11,293	)		2,753
Tax expenses		16,277		1,810		22,976			14,947
Depreciation and amortization		23,061		7,109		53,111			33,957
Share-based compensation expenses (1)		20,641		17,264		124,235			28,277
M&A costs (2)		154		2,354		11,661			17,766
Holdback compensation expenses (3)		2,882		–		3,722			–
Adjusted EBITDA	$	65,383	$	32,993	$	179,464		$	106,193

¹For the 2021 periods, a substantial majority is Share-based compensation expenses related to going public.

²For 2020 periods, represents costs associated with the proposed strategic transaction with Outbrain Inc.which we elected not to consummate, and for 2021 periods, relates to the acquisition of ION Acquisition Corp. 1 Ltd., the acquisition of Connexity and going public.

³Represents share based compensation due to holdback of Taboola ordinary shares issuable under compensatory arrangements relating to Connexity acquisition.

We calculate Ratio of Net income (loss) to Gross profit as Net income (loss) divided by Gross profit. We calculate the Ratio of Adjusted EBITDA to ex-TAC Gross Profit, a non-GAAP measure, as Adjusted EBITDA divided by ex-TAC Gross Profit. 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. The following table reconciles Ratio of Net income (loss) to Gross Profit and Ratio of Adjusted EBITDA to ex-TAC Gross Profit for the period shown.

	Three months ended December 31,						Year ended December 31,
		2021			2020			2021			2020
	Unaudited						Unaudited
	(dollars in thousands)						(dollars in thousands)
Gross Profit	$	143,642		$	93,021		$	441,071		$	319,497
Net Income (loss)	$	585		$	2,753		$	(24,948	)	$	8,493
Ratio of Net income (loss) to Gross profit		0.4	%		3.0	%		(5.7	%)		2.7	%

ex-TAC Gross Profit	$	169,210		$	110,202		$	518,863		$	382,352
Adjusted EBITDA	$	65,383		$	32,993		$	179,464		$	106,193
Ratio of Adjusted EBITDA Margin to ex-TAC Gross Profit		38.6	%		29.9	%		34.6	%		27.8	%

The following table provides a reconciliation of Net cash provided by operating activities to Free Cash Flow.

	Three months ended December 31,						Year ended December 31,
		2021			2020			2021			2020
	Unaudited						Unaudited
	(dollars in thousands)						(dollars in thousands)
Net cash provided by operating activities	$	22,968		$	57,469		$	63,521		$	139,087
Purchases of property and equipment, including capitalized platform costs		(10,296	)		(4,094	)		(39,070	)		(17,774	)
Free Cash Flow	$	12,672		$	53,375		$	24,451		$	121,313

APPENDIX A: Non-GAAP Reconciliation

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR Q1 2022 and FULL YEAR 2022 GUIDANCE

(Unaudited)

The following table provides a reconciliation of Gross Profit to ex-TAC Gross Profit guidance.

	Q1 2022		FY 2022
	Unaudited
	(dollars in millions)
Revenues	$353 – $359		$1,666 – $1,678
Traffic acquisition cost	($218 – $222	)	($1,003 – $1,011	)
Other cost of revenues	($25 – $27	)	($106 – $112	)
Gross Profit	$108 – $112		$552 – $560
Add back: Other cost of revenues	$25 – $27		$106 – $112
ex-TAC Gross Profit	$134 – $138		$661 – $669

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Artificial Intelligence

Asia Mobiliti Applauded by Frost & Sullivan for Powering Intelligent Urban Mobility and Offering Customer Value with Its MaaS Solutions

Published

1 hour ago

June 26, 2024

CISION (PR Newswire)

asia-mobiliti-applauded-by-frost-&-sullivan-for-powering-intelligent-urban-mobility-and-offering-customer-value-with-its-maas-solutions

Asia Mobiliti’s efficient, sustainable, and interconnected mobility solutions improve user experience, reduce congestion and environmental impact, and reshape urban spaces.
SAN ANTONIO, June 26, 2024 /PRNewswire/ — Frost & Sullivan recently researched the mobility-as-a-service (MaaS) industry and, based on its analysis, recognizes Asia Mobiliti with the 2024 Asia-Pacific (APAC) Customer Value Leadership Award. As a pioneering start-up, the company has dedicated itself to reshaping urban mobility by actively developing innovative data products. It specializes in designing, engineering, and operating a cutting-edge data platform aimed at powering intelligent urban mobility. The platform seamlessly connects fleet operators, transport providers, transit authorities, and end users through a data-driven approach. The company’s comprehensive suite of products and services include:

Internet of Things (IoT) and Machine Learning powered digital city solutionsMaaS technologiesDemand-Responsive Transit systemsMobility data servicesAsia Mobiliti’s unique mobility platform integrates IoT and telematics with journey planning, enabling it to lead transport digitalization. The company catalyzes innovative data-driven and artificial intelligence solutions for the transit and mobility ecosystem, facilitating the widespread adoption of MaaS across emerging markets. Asia Mobiliti is at the forefront of revolutionizing intelligent urban mobility, offering diverse products and services. The company’s connected vehicle systems provide real-time tracking and monitoring capabilities for vehicles and fleets. These systems have analytics tools that optimize routes, enhance fuel efficiency, and improve fleet performance. Asia Mobiliti places a significant emphasis on mobility data services, utilizing the power of data to offer valuable insights for informed decision-making processes. Over the long term, it envisions reducing congestion, reducing environmental impact, and reshaping urban spaces while replacing spaces traditionally reserved for parking and traffic with more sustainable, natural living spaces.
Ming Lih Chan, industry principal for Frost & Sullivan’s mobility practice, observed, “Asia Mobiliti disrupts the traditional transportation system model and promotes the development of public travel needs. Its MaaS integrates multiple transportation modes and combines private and public modes of transport with demand-responsive services, which sustainably meets the different needs of the public.”
Asia Mobiliti’s Trek Rides and Trek App solutions represent a paradigm shift in urban mobility. Trek Rides, an on-demand transit service, efficiently fills the first-mile/last-mile gaps by merging the convenience of ride-hailing with the dedicated supply of public transport. This reduces traffic congestion, lowers travel costs, and facilitates the shift towards net-zero emission goals. Trek’s MaaS engine employs advanced algorithms for comprehensive multimodal journey planning, ensuring the seamless integration of various transportation modes. Additionally, Trek API facilitates integration with 3rd-party systems and super apps. Asia Mobiliti’s unique selling proposition lies in its compelling price/performance value within the highly competitive mobility services landscape, granting it a distinctive competitive edge in effectively addressing a broad spectrum of client needs.
“Asia Mobiliti underlines its supremacy in the MaaS sector through its strategic commitment to collaboration and customization. The company is a pivotal partner for governments, transit authorities, and large clients, offering a user-friendly platform backed by cutting-edge technology. Asia Mobiliti earns recognition as the best-in-class provider in the dynamic MaaS landscape for its operational efficiency, consistent revenue growth, and forward-looking expansion strategy,” added Norazah Bachok, best practices research analyst at Frost & Sullivan. As a cost-effective and innovative market player, the company solidifies its position by delivering exceptional client value.
Each year, Frost & Sullivan presents this award to the company that has demonstrated excellence in implementing strategies that proactively create value for customers with a focus on improving the return on the investment that customers make in its services or products. The award recognizes the company’s unique focus on augmenting the value that its customers receive, beyond simply good customer service, leading to improved customer retention and customer base expansion.
Frost & Sullivan Best Practices awards recognize companies in various regional and global markets for demonstrating outstanding achievement and superior performance in leadership, technological innovation, customer service, and strategic product development. Industry analysts compare market participants and measure performance through in-depth interviews, analyses, and extensive secondary research to identify best practices in the industry.
About Frost & Sullivan
For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders, and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models, and companies to action, resulting in a continuous flow of growth opportunities to drive future success. Contact us: Start the discussion. Contact us: Start the discussion.
Contact:
Tarini SinghP: +91 9953764546E: [email protected]
About Asia MobilitiFounded in 2018 and based in Kuala Lumpur, Malaysia, Asia Mobiliti is an award-winning, Malaysia Digital status company providing a Mobility-as-a-Service (MaaS) platform and digital city solutions designed and engineered for the developing world. We adopt a technology platform approach with a core software-defined engine that is capable of spawning innovative mobility solutions that encompass Internet of Things (IoT)-enabled advanced telematics, machine learning-based mobility-as-a-service technology, as well as a wide variety of transit technologies, such as demand-responsive transit, transport service analytics, condition monitoring for rail and road and account-based ticketing and payments.
For more information, visit asiamobiliti.com or email [email protected]
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Artificial Intelligence

More than 150,000 money laundering accounts detected in APAC

Published

5 hours ago

June 26, 2024

CISION (PR Newswire)

Region sees 108% increase in voice scams as fraudsters continue shift to mobile
MELBOURNE, Australia and MUMBAI, India, June 25, 2024 /PRNewswire/ — A new financial crime report out today details how criminal organizations in the APAC region now outsource the laundering of money stolen via scams to international syndicates specializing in this cleaning. BioCatch identified and helped APAC banks shut down more than 150,000 money mule accounts in 2023 and estimates exponentially more such accounts in use across the region.

“Where there are scams, there are mules,” BioCatch Director of Global Fraud Intelligence Tom Peacock said. “Criminal organizations use these mule accounts as intermediate stops between the victim’s bank account and the final account from which they plan to withdraw their stolen money. The mules we’ve identified almost certainly represent a tiny fraction of those actively laundering money in the region, with more cropping up every day. Financial institutions in APAC and around the world must do more to identify these mules, hamper their ability to open new accounts, and identify those legitimate accounts money launderers succeed in turning from good to bad.”
In this latest edition of its Digital Banking Fraud Trends in APAC report, BioCatch – which identifies and prevents fraud and financial crime in real time by analyzing as many as 3,000 different physical behavior patterns (mouse movements and typing speed, for example) and cognitive signals (hesitation, segmented typing, etc.) in search of anomalies – points to mobile malware as the greatest threat to banks in Southeast Asia in 2024.
“Whether through SMS-mining or illegal loan apps, we’ve seen an explosion in Android-based malware in the region,” Peacock said. “Malware developers continue to innovate, circumventing bank and Google Play Store defenses to harvest what they need from mobile devices to access digital banking accounts and then transfer away the victim’s funds to a money mule.”
There is reason for hope in fighting fraud in APAC, however. In Australia, the number of reported scam cases grew by 13% in 2023, but scam losses declined by $90 million.
“Nine out of the 10 largest Australian banks employ BioCatch solutions to protect their customers from fraud and financial crime by analyzing the behavior of the user behind every online banking session,” BioCatch APAC Vice President Richard Booth said. “Already in 2024, we see massive progress: Money lost to fraud in the country declined by 48% in the first quarter of this year compared to Q1 of 2023. It’s difficult to reach any conclusion other than that BioCatch has left Australian digital-banking customers far safer from fraud than they were before.”
Other key findings:
No desktop or laptop needed: BioCatch found as much as 70% of all reported frauds in APAC originated from mobile apps in 2023, an increase of 17% from the year before.Scams are everywhere: Across the region, the number of reported voice scams increased by 108% in 2023.Australia bucking all trends: In addition to seeing fraud losses actually decline, the nation also saw fewer fraud cases involving malware or Remote Administration Tools (RATs) in 2023 than it did in 2022.Click here to access BioCatch’s complete 2024 Digital Banking Fraud Trends in APAC report.
About BioCatch:BioCatch stands at the forefront of digital fraud detection, pioneering behavioral biometric intelligence grounded in advanced cognitive science and machine learning. BioCatch analyzes thousands of user interactions to support a digital banking environment where identity, trust, and ease coexist. Today, more than 30 of the world’s largest 100 banks and 196 total financial institutions rely on BioCatch Connect™ to combat fraud, facilitate digital transformation, and grow customer relationships. BioCatch’s Client Innovation Board – an industry-led initiative featuring American Express, Barclays, Citi Ventures, HSBC, and National Australia Bank – collaborates to pioneer creative and innovative ways to leverage customer relationships for fraud prevention. With more than a decade of data analysis, 92 registered patents, and unmatched expertise, BioCatch continues to lead innovation to address future challenges. For more information, please visit www.biocatch.com.
Media contact:Jay [email protected]
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Artificial Intelligence

Puyi Fund, Managed by Highest Performances Holdings Inc., Surpasses RMB 24.0 Billion in Assets under Advice, Showing Promising Start to Strategic Transformation

Published

9 hours ago

June 25, 2024

CISION (PR Newswire)

GUANGZHOU, China, June 25, 2024 /PRNewswire/ — Highest Performances Holdings Inc. (“HPH” or the Group, NASDAQ: HPH), announces that its Puyi Fund’s assets under advice for its asset allocation services reached RMB 24.7 billion as of June 21, 2024, reflecting a remarkable year-on-year growth of 188%. This substantial increase in scale showcases significant growth for the fund.

This accomplishment is primarily attributed to the Puyi Fund’s service philosophy, “long-term commitment to clients and clients’ long-term benefits,” introduced in 2023, as well as the ongoing efforts of the Company in adjusting its product strategy and embracing digital transformation. On one hand, the Company implemented a comprehensive family wealth management account system, redirecting its flagship products towards fixed-income funds and fund portfolios to enhance clients’ perception of wealth acquisition. On the other hand, the Company has elevated its overall service standard through digital transformation, greatly improving the client’s investment experience.
Transforming Product Strategy to Maximize Client Returns
In relation to product strategy transformation, Puyi Fund offers investors a comprehensive solution for managing their family wealth through a scientific approach. This solution guides investors in allocating their investment assets across three types of accounts: Flexible Withdrawal Accounts, Stable Appreciation Accounts, and High-Yield Pursuit Accounts. By considering various market conditions and cycles, investors can make informed decisions on how to distribute their funds among these accounts through a scientific approach for achieving risk mitigation, consistent asset growth, and long-term sustainable investment returns.
Taking into account the prevailing market conditions in China, Puyi Fund advises investors to allocate 25% to 90% of their funds to Stable Appreciation Accounts, depending on their risk tolerance. These accounts primarily involve investing in fixed-income funds, providing investors with consistent and reliable expected returns. By employing the stable appreciation strategy, Puyi Fund aims to restore investors’ confidence in the market, leading to increased trust and recognition. Consequently, Puyi Fund has experienced a period of rapid growth and positive development.
An analysis of data from the Chinese mutual fund market highlights the alignment of Puyi Fund’s client-centric product strategy transformation with market demands. According to Wind data, the market value of the Chinese mutual fund market stood at RMB 25.45 trillion at the end of 2021. By the end of May 2024, this amount grew to RMB 29.09 trillion, representing an increase of RMB 3.64 trillion or 14.30%. The value of equity and hybrid funds, however, experienced a decline from RMB 8.54 trillion to RMB 6.34 trillion, marking a decrease of RMB 2.21 trillion. In contrast, bond funds and money market funds collectively witnessed a significant increase of RMB 5.69 trillion. These market trends suggest that Chinese fund investors are shifting their risk preferences towards lower-risk and higher-certainty assets. Puyi Fund’s strategic transformation is well-positioned to take advantage of this evolving trend.
Enhancing Digital Service Innovation with a Focus on Client Service
In its digital transformation efforts, Puyi Fund places a strong emphasis on “client-centricity” and “service excellence”. By harnessing the power of big data, algorithm mining, and the Sensor Intelligent System, Puyi Fund establishes personalized service scenarios tailored to the unique needs of thousands of individuals. Through meticulous operations that cover the full client lifecycle, Puyi Fund offers full-scope online transactions for both public and private fund clients, establishing a distinctive digital competitive advantage. As of June 2024, the year-to-date client retention rate for fund advisory services stands at 75%, significantly enhancing the likelihood of investment profitability and returns for clients. This success enables clients to truly appreciate the value of advisory services and the time invested in their investments.
Furthermore, Puyi Fund has made continuous advancements in its intelligent client service system, leveraging digital platforms to offer investors comprehensive and efficient services. As of June 2024, the intelligent client service has catered to the needs of approximately 250,000 investors, providing 7*24 services, with a problem resolution rate surpassing 90%. Moreover, Puyi Fund complements intelligent client service with human support, resulting in a client satisfaction rate of 99%. This approach guarantees that investors receive timely and effective assistance whenever required.
Optimizing Trust-Based Communication Channels with Clients
Puyi Fund’s capability to swiftly establish client trust is attributable to its distinctive offline service channels. Unlike other third-party fund sales institutions that heavily rely on online platforms, Puyi Fund provides face-to-face, one-on-one services through offline channels. This approach is especially valuable in navigating complex investment environments, effectively calming investor emotions, enabling them to stay composed and gain a proper understanding of products, ultimately making well-informed investment decisions. Since 2024, Puyi Fund’s research and advisory team has released 28 specialized research reports and organized 19 online client exchanges, along with 35 offline client events, in response to market dynamics and client needs. These initiatives have effectively addressed investors’ concerns and enhanced their confidence.
It is worth mentioning that Puyi Fund’s institutional business has experienced remarkable growth this year, particularly in attracting clients from prominent financial institutions including banks, wealth management subsidiaries, and insurance companies. To cater specifically to institutional investors, Puyi Fund has developed an intelligent over-the-counter fund trading system called “Web-based Institution Master system”. This system provides institutional investors with a wide range of product portfolios, a comprehensive investment research system, and personalized trading experiences. As a result, it comprehensively improves the service quality and efficiency for institutional clients.
As of June 21, Puyi Fund established partnerships with 117 mutual fund companies, including the top 20 fund managers in terms of size, providing access to nearly 11,000 public funds and implementing over 20 customized advisory strategies. In the private fund sector, Puyi Fund has selected over 30 fund managers from the entire market. Of these, 38% manage assets over RMB 10 billion, while 29% manage assets between RMB 5 billion and RMB 10 billion. This selection covers a wide range of mainstream strategy products in the market, catering to the allocation needs of various types of investors.
It is reported that Puyi Fund, an independent third-party fund sales institution holding a fund sales business license issued by the China Securities Regulatory Commission, operates as a subsidiary of Highest Performances Holdings Inc. (NASDAQ: HPH). Embracing the concept of buyer advisor, Puyi Fund is dedicated to delivering comprehensive family financial asset allocation services to individual investors and diversified financial services to institutional investors through its financial technology service platform. With exceptional resource integration capabilities, professional research expertise, and high-quality client service, Puyi Fund strives to cultivate long-term partnerships with clients, catering to their personalized asset allocation needs in various scenarios while assisting a broader range of investors in achieving sustainable long-term returns. As of December 31, 2023, the accumulated assets under Puyi Fund’s allocation advisory services surpassed RMB 75.1 billion, exhibiting a compound annual growth rate of 128.8% from 2015 to 2023.
About Highest Performances Holdings Inc. (NASDAQ: HPH)
HPH was founded in 2010 with the aim of becoming a top provider of smart home and enterprise services. Its mission is to improve the quality of life for families worldwide, focusing on two main driving forces: “technological intelligence” and “capital investments.”HPH has a global strategic perspective and identifies high-quality enterprises with global potential for investment and operations. Its areas of focus include asset allocation, education and study tours, cultural tours, sports events, healthcare and elderly care and family governance.
HPH currently holds controlling interests in two leading financial service providers in China, namely Fanhua Inc., a technology-driven platform, and Fanhua Puyi Fund Distribution Co., Ltd., an independent wealth management service provider.
Highest Performances Holdings Inc., formerly known as Puyi Inc., was renamed on March 13, 2024 to reflect its strategic transformation.

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