Filed by Taboola.com Ltd.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934
Subject Company: ION Acquisition Corp 1 Ltd.
Commission File No. 001-39581
Date: March 30, 2021

 Analyst Day Presentation  March 30, 2021 
 

 Forward-Looking StatementsCertain statements in this Presentation may be considered forward-looking statements. Forward-looking statements generally relate to future events or ION Acquisition Corp 1 LTD. (“ION”) and Taboola.com Ltd.’s (the “Company”) future financial or operating performance. For example, projections of future Revenue, Adjusted EBITDA, Net Dollar Retention, New Publisher Growth, and other metrics are forward-looking statements. 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 ION and its management, and the Company and its management, as the case may be, are inherently uncertain. Uncertainties and risk factors that could affect the Company’s and ION’s future performance and cause results to differ from the forward-looking statements in this presentation include, but are not limited to: the occurrence of any event, change or other circumstances that could give rise to the termination of the proposed transaction involving the Company and ION (such transaction, the “Business Combination”); the outcome of any legal proceedings that may be instituted against ION or the Company, the combined company or others following the announcement of the Business Combination; the inability to complete the Business Combination due to the failure to obtain approval of the shareholders of ION or to satisfy other conditions to closing; changes to the proposed structure of the Business Combination that may be required or appropriate as a result of applicable laws or regulations or as a condition to obtaining regulatory approval of the Business Combination; the ability to meet stock exchange listing standards following the consummation of the Business Combination; the risk that the Business Combination disrupts current plans and operations of ION or the Company as a result of the announcement and consummation of the Business Combination; the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably, maintain relationships with customers and retain its management and key employees; costs related to the Business Combination; changes in applicable laws or regulations; the Company’s estimates of expenses and profitability and underlying assumptions with respect to shareholder redemptions 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 ION’s final prospectus relating to its initial public offering dated October 1, 2020 and in subsequent filings with the Securities and Exchange Commission (“SEC”), including the proxy statement relating to the Business Combination expected to be filed by ION.Nothing in this Presentation 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 forward-looking statements, which speak only as of the date they were made, January 29, 2021. The inclusion of these projections does not constitute republication or affirmation thereof as any other date. Neither ION nor the Company undertakes any duty to update these forward-looking statements.Non-GAAP Financial MeasuresThis Presentation includes certain financial measures not presented in accordance with GAAP including, but not limited to, Adjusted EBITDA and certain ratios and other metrics derived therefrom, including free cash flow and ex-TAC Revenue, and related margin measures, as well as Real RPM and New Publisher Revenue (ex-TAC). 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 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.The Company believes these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and results of operations. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends in and in comparing the Company’s financial measures with other similar companies, many of which present similar non-GAAP financial measures to investors. These non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures. Please refer to footnotes where presented on each page of this Presentation or to the appendix found at the end of this Presentation for a reconciliation of these measures to what the Company believes are the most directly comparable measure evaluated in accordance with GAAP.This Presentation also includes certain projections of non-GAAP financial measures. Due to the high variability and difficulty in making accurate forecasts and projections of some of the information excluded from these projected measures, together with some of the excluded information not being ascertainable or accessible, the Company is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measures without unreasonable effort. Consequently, no disclosure of estimated comparable GAAP measures is included and no reconciliation of the forward-looking non-GAAP financial measures is included.  2  Disclaimer 
 

 Use of ProjectionsThis Presentation contains financial forecasts with respect to the Company’s projected financial results, including Revenue and Adjusted EBITDA, for the Company's fiscal years 2021 through 2025. The Company's independent auditors have not audited, reviewed, compiled or performed any procedures with respect to the projections for the purpose of their inclusion in this Presentation, and accordingly, they did not express an opinion or provide any other form of assurance with respect thereto for the purpose of this Presentation. As discussed under “Financial Information” above, all financial information, including the projected information, was prepared in accordance with GAAP. These projections should not be relied upon as being necessarily indicative of future results. The assumptions and estimates underlying the prospective financial information are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the prospective financial information. Accordingly, there can be no assurance that the prospective results are indicative of the future performance of the Company or that actual results will not differ materially from those presented in the prospective financial information or that the prospective financial information will be the same as that presented in the proxy statement related to the Business Combination. Inclusion of the prospective financial information in this Presentation should not be regarded as a representation by any person that the results contained in the prospective financial information will be achieved.Industry and Market DataIn this Presentation, the Company relies on and refer to certain information and statistics obtained from third-party sources, which it believes to be reliable. The Company has not independently verified the accuracy or completeness of any such third-party information. You are cautioned not to give undue weight to such industry and market data.This Presentation may include trademarks, service marks, trade names and copyrights of other companies, which are the property of their respective owners. Solely for convenience, some of the trademarks, service marks, trade names and copyrights referred to in this Presentation may be listed without the TM, SM, (c) or (r) symbols, but ION and the Company will assert, to the fullest extent under applicable law, the right of the applicable owners, if any, to these trademarks, service marks, trade names and copyrights.Additional InformationThese communications are being made in respect of the Business Combination. These communications do not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. In connection with the proposed Business Combination, the Company intends to file with the SEC the Registration Statement on Form F-4 required to be prepared in connection with the proposed transaction (the “Registration Statement”) which will include a proxy statement/prospectus and certain other related documents, which will include both the proxy statement to be distributed to holders of Class A ordinary shares of ION in connection with ION’s solicitation of proxies for the vote by ION’s shareholders with respect to the Business Combination and other matters as may be described in the Registration Statement, as well as the prospectus relating to the offer and sale of the securities of the Company to be issued in the Business Combination. ION’s shareholders and other interested persons are advised to read, when available, the preliminary proxy statement/prospectus included in the Registration Statement and the amendments thereto and the definitive proxy statement/prospectus, as these materials will contain important information about the Company, ION and the Business Combination. After the Registration Statement is declared effective, the definitive proxy statement/prospectus will be mailed to shareholders of ION as of a record date to be established for voting on the Business Combination and other matters as may be described in the Registration Statement. Shareholders of ION will also be able to obtain copies of the proxy statement/prospectus and other documents filed with the SEC that may be incorporated by reference therein, without charge, once available, at the SEC’s web site at www.sec.gov, or by directing a request to: ION Acquisition Corp 1 Ltd., 89 Medinat Hayehudim Street, Herzliya 4676672, Israel, Attention: Secretary, +972 (9) 970-3620.Participants in the SolicitationThe Company, ION and certain of their respective directors, executive officers and other members of management and employees may, under SEC rules, be deemed to be participants in the solicitation of proxies from ION’s shareholders in connection with the proposed transaction. You can find more information about ION’s directors and executive officers in ION’s final prospectus dated October 1, 2020 and filed with the SEC on October 5, 2020. Additional information regarding the participants in the proxy solicitation and a description of their direct and indirect interests will be included in the proxy statement/prospectus when it becomes available. Shareholders, potential investors and other interested persons should read the proxy statement/prospectus carefully when it becomes available before making any voting or investment decisions. You may obtain free copies of these documents from the sources indicated above.  3  Disclaimer(cont’d) 
 

 AGENDA  4  IntroductionOverviewAbout TaboolaInvestment HighlightsFinancial InformationValuation & Comparables 
 

 PRESENTERS AND SENIOR LEADERSHIP      Adam SingoldaFounder & CEO  Stephen WalkerCFO  6+ years at TaboolaPreviously held positions in Idealab’s New Ventures Group and also led several of Idealab's portfolio companies, including Perfect MarketPrior experience at Disney & General Electric  CEO of ION Acquisition Corp. 1 and Managing Partner of ION Crossover Partners (ICP)Prior to co-founding ICP, 10 years of experience investing in public and private companies with Baron Capital (NY),and Magma Venture Partners (TLV)  Gilad ShanyCEO    Founded Taboola over 13 years ago, and has led the Company as its CEO ever since  President and COO of ION Acquisition Corp. 1COO of growth tech companies SimilarWeb & Seeking Alpha.8 years public & private investments, incl. equities analyst with UBS & Venture Capital at Jerusalem Global Ventures.  Avrom GilbertCOO    5 
 

 AGENDA  6  IntroductionOverviewAbout TaboolaInvestment HighlightsFinancial InformationValuation & Comparables 
 

 We Power Recommendations for The Open Web  7  Helping people discover things they may like 
 

 TABOOLA = SEARCH “IN REVERSE”  8  From people looking for information to information looking for people 
 

 YOU HAVE SEEN TABOOLA BEFORE  9 
 

 SOLVING TREMENDOUSLY DIFFICULT TECHNOLOGICAL CHALLENGES  Predicting what people might be interested in without the intent data that Google has or the personal data that Facebook has and doing it at massive scale.  1 PetabyteData Processed by Taboola AI Daily3  330K+CPU Cores4  516M  DAILY ACTIVE USERS1  More than Twitter and Snap combined2    1 TrillionMonthly Recommendations5  Daily Active Users measures the 7-day average number of users exposed to Taboola recommendationsTwitter and Snap reported 187M and 249M (respectively) in Q3-2020 Earnings reports(3)(4)(5)Source: Company estimates 10 
 

       ENABLING PUBLISHERS TO COMPETE WITH WALLED GARDEN BEHEMOTHS  WALLED GARDENS1    SOCIAL    SEARCH    ECOMMERCE    OPEN WEB2    25%3  Walled Gardens includes other closed platforms including Snap, Twitter, and NetflixOpen Web: Digital properties not owned by walled gardens such as websites, apps, games, Connected-TV apps, etc.Percentages reflect time spent on digital media according to company estimates based on eMarketer data. 25% reflects total time spent on Open Web properties, not just on Taboola      Bringing the user data, AI technology and scale of demand to open Web players75%  11  News siteseCommerce sites  Apps / Games  CTV       
 

                         TABOOLA CAN CAPTURE SHARE OF THE HIGHLY FRAGMENTED $64B OPEN WEB MARKET1  SOCIAL    SEARCH      ECOMMERCE  RECOMMENDATIONS ENGINE    Open Web  App Install  Video  Banners  Affiliates  (1) Jounce Media, 2020 Market Outlook Report  12 
 

 E-COMMERCE  TABOOLA IS FOR ADVERTISING WHAT SHOPIFY IS FOR E-COMMERCE  ADVERTISING                13 
 

 AGENDA  14  IntroductionOverviewAbout TaboolaInvestment HighlightsFinancial InformationValuation & Comparables 
 

         FULL TECH STACK FOR PUBLISHERS: MISSION CRITICAL FOR THE OPEN WEB  Engagement  Engaging users by recommending organic content  Monetizing with non-interruptive, native ads  Audience        $2B+ Paid To Publishers Over 3 Years1Monetization  (1) See Appendix for historical annual Traffic Acquisition Costs (TAC)  Driving quality audiences from across the networkEmpowering editorial teams with actionable data insights             
 

   THAT’S WHY TABOOLA GETS  LONG-TERM, EXCLUSIVE PARTNERSHIPS WITH PUBLISHERS  120% NDR in 202019,000 publishersGlobal  Publishers on a 5+ Year Contract with Taboola      (1) Source: Company Data. Net Dollar Retention is the simple arithmetic average of our Monthly Net Dollar Retention for the last twelve months. Monthly Net Dollar Retention for a given month is the ex-TAC Revenue in that month from digital properties partners that were Taboola digital property partners in the same month of the prior year divided by theex-TAC Revenue attributable to that same group of partners in the prior-year month. Current period ex-TAC Revenue includes any upsells and are net of contraction or attrition over the trailing 12 months, but excludes ex-TAC Revenue from new digital properties partners in the  current period.  “NBC News Group is excited to continue working with Taboola to expand the reach  of our content and continue driving our already impressive growth. We recognize the  value of Taboola’s technology and their ability to drive meaningful engagement with  NBC News content, especially at a time when competition for user attention is at an  all-time high.”- Elisabeth Sami, SVP of Global Strategy and Business Development for NBC News Group  16 
 

 ADVERTISERS CHOOSE TABOOLA FOR THE OPEN WEB    Massive reach – 516M Daily Active UsersPerformance focus with measurable ROI  Brand safe ad placements  Target ads based on what people truly care about  Largest advertiser is 3% of total ad spend10th largest advertiser is 1% of total ad spend1 101% Net Dollar Retention over last 8 quarters2        Source: Company DataLast 8 quarters, excluding Q2-2020 due to expected one-time impact of COVID-19 (Q4, 2018 - Q3, 2020,excluding Q2-20). See prior slide for a definition of NDR 17  Time 
 

     KEEPING THE OPEN WEB SAFE  Ongoing monitoring of the network and removal of undesirable content and actors.  30+ Reviewers24/5 manual review + 14h per day on weekends24/7 automated review - Taboola automations including AI tools  13 LanguagesEnglish, Danish, Swedish, Norwegian, Spanish, Portuguese, German, French, Hebrew, Japanese, Korean, Dutch, Italian  500K+ Items reviewed every week(1)  CONTENT / ADS              Labeling  REJECTED  ACCEPTED        Go Live  QUALITY CONTROL  Manual Content Sweep    Internal & External Automated Scans              CONTENT REVIEW TEAMManual + AutomatedReview Review  18  +  (1) Company data, based on weekly averages in Q4-2020 
 

 - Zach Jacobs, Director of Marketing at Mack Weldon  “Mack Weldon is a digitally native—growth focused—menswear startup brand that designs and delivers premium basics for men. As a performance marketer I’m constantly looking for new ways to create awareness for our products while growing our customer base cost efficiently. With Taboola, we more than doubled down on content marketing this year and grew our campaigns to drive thousands of customers every month.Recently, we found especially high-converting audiences on Taboola’s Data Marketplace. Targeting those audiences gave us greater scale and drove more purchases on sites that either previously did not convert or converted at too high of a cost.”  Taboola drives discovery and purchases of premium basics for men.  DiscoveringDirect-To-Consumer Brands on Taboola  19 
 

 - Gahee Lee, Digital Sales Section Manager, Samsung Life Insurance  “We built a website to sell our insurance product online. To drive more sign ups, we started running digital campaigns. To encourage sign-ups, the completion of our quote calculator was the most important behavior. Taboola hugely contributed in expanding our strategy to new digital channels, and helped is gain more online customers.”  Generating Quality Leads for Samsung Life Insurance with Taboola  22 
 

         MARKETPLACE BUSINESS MODEL  AI-Powered  Biddable  Marketplace  Advertisers place bids to appear on Taboola and pay per click/view  Taboola shares ad revenue with Publishers        $  $        $        $        $        $        $        $        22 
 

 AGENDA  22  IntroductionOverviewAbout TaboolaInvestment HighlightsFinancial InformationValuation & Comparables 
 

 INVESTMENT HIGHLIGHTS  22  ●  ●  ●  ●  ●  ●  ●  The Open Web is a massive categoryTaboola’s technology is resilient to the future disappearance of third-party cookiesProduct-led growth fueled by a network effectPlatform advantage driven by Taboola’s technologyNumerous paths to accelerate growth Proven, founder-led management teamSuperior financial profile with recurring revenues, scale, and profitable growth  1  2  3  4  5  6  7 
 

   More than ads, product led - driving engagement, and audience to the entire publisher org  Exclusive & direct relationships with publishers/advertisers - enables end-to-end innovation and predictable growth  1st party & contextual data, built for a cookieless world - We’re “always on” - all users, all GEOs, all platforms. 500M+ DAU.(1)            TABOOLA IS POISED TO CAPTURE SHARE OF THE $64B OPEN WEB MARKET  The Open Web        Audience Network  Amazon DSP    Source: Original Image: “State of the Open Internet” by Jounce Media, January 2020, Modified to reflect Taboola as part of The Open Web(1) Daily Active Users measures the 7-day average number of users  exposed to Taboola recommendations  1  24 
 

 Taboola has its own 1st party cookie - recommending personalized editorial content enables serving our own 1st party identifierUnique readership context - deep access to the context of the page, allowing advertisers to target context (vs. “3rd party cookie behavior”)People click on Taboola recommendations tens of billions of times a year1 - re-hashing Taboola identifier across websites  TABOOLA TECH IS BUILT FOR A COOKIE-LESS WORLD    Yield  Taboola’s strong yield performance despite 3rd party cookies being blocked in the industry for years:Apple started blocking 3rd party cookies in 2017Firefox, Edge, etc are also blocking 3rd party cookiesGDPR launched in 2018CCPA launched in 2019  25  2  (1) Source: Company data. Clicks represent total clicks on Taboola recommendations, including paid advertisements (“sponsored content”) and editorial ("organic") content 
 

 PRODUCT-LED GROWTH WITH A BUILT-IN NETWORK EFFECT    3          More Publisher Partners  More Users Reached,More Often  More User DataGathered  Higher Yield(Better Results for Advertisersand Publishers)                                  26 
 

 PLATFORM ADVANTAGE DRIVEN BY INVESTMENT IN TECH    500 R&D staff100 in Algo & Data$100M Annual R&D Investment  27  4  Source: Company data, 2021 estimates 27 
 

 RECOMMENDING ANYTHING, ANYWHEREA MULTI BILLION DOLLAR OPPORTUNITY    Core Business  $1B+ in 2020 & Growing Rapidly2      A N Y T H I N G      $10M’s in 20203    $10M’s in 20201  New products and segments  (TV ads, eCommerce, app downloads, gaming...)  A N Y W H E R ETaboola News (mobile carriers, device manufacturers, CTV...)      5  Note: Financial models take into consideration only the core business  This Game Will Keep You Up All Night!Good Game | Sponsored  (1)(2)(3)Source: Company data, Gross Revenue28 
 

 RECENT DEVELOPMENTS: TABOOLA HIGH IMPACT LAUNCH  29  Premium Ad Placements & Experiences  Brand Safety, Suitability & Adjacency Control  Unique Readership Data & Insights    Specialized Solution for Brands & Agencies Running Brand Awareness Campaigns 
 

 GROWTH CASE STUDY: CONVERTMEDIA ACQUISITION  5    2016  Acquired ConvertMedia$20MAnnual RunRate1      2020  $90M+  Technology Integration & Go-To-Market  (1) Annual run-rates are expressed in Gross Revenue  3300   
 

 PROVEN, FOUNDER-LED MANAGEMENT TEAM  6                  Kristy Sundjaja1 year at TaboolaSVP, People Operations          Ran Buck7 years at TaboolaSVP, Global Revenue                Aviv Sinai13 years at TaboolaSVP, R&D    Adam Singolda13 years at TaboolaFounder & CEO          Eldad Maniv8 years at TaboolaPresident & COO          Stephen Walker 6 years at Taboola CFO  Lior Golan11 years at TaboolaCTO  31 
 

 FINANCIAL HIGHLIGHTS  7  Gross Revenue  ex-TAC1  $160M  Raised to date  $240M+  on the balance sheet  3    2 0 2 0  WE POWER RECOMMENDATIONS FOR THE OPEN WEB(1),(2) Non-GAAP measure, see appendix for reconciliation to GAAP(3) Cash & cash equivalents, balance as of 12/31/2020  32  $1.2B$382M$106M  Adj. EBITDA  2 
 

 AGENDA  IntroductionOverviewAbout TaboolaInvestment HighlightsFinancial InformationValuation & Comparables  33 
 

   OUR MODEL IN A NUTSHELL  34      Revenue paid by Advertisers, before traffic acquisition costs (TAC) paid to Publishers.Revenue to Taboola after TAC paid to Publishers. Non-GAAP measure, seeappendix for reconciliation to GAAP(3)(4) Non-GAAP measure, see appendix for reconciliation to GAAP(5) Non cash charges, Cash charges excluded from Adjusted EBITDA    34  Model components:    Sample inputs / financials:    Illustrative Taboola economics:    Gross revenue(1)    $909    $1.00 (100%)    –            Traffic Acq Cost (Value to publishers)    ($627)    ($0.69)    =            ex-TAC Revenue(2)    $282    $0.31    –            Cost of Revenues    ($48)    ($0.05)    =            Gross profit    $234    $0.26    –            R&D    ($73)    ($0.08)    –            S&M    ($110)    ($0.12)    –            G&A    ($34)    ($0.04)    =            Operating Income    $17        +            Dep, Amort, Share Based Comp, Other item    $50        =            Adjusted EBITDA(3)    $67          (5)  Change in WC, Other items + PP&E and Capitalized Platform Costs    ($24)      $43  +  =Free Cash Flow(4) 
 

   TABOOLA FOCUSES ON PROFITABLE GROWTH  UPSIDE IN OUR MODELGrowth from Core Open Web business onlyConservative growth assumed for existing baseAdditional upside from existing growth initiatives and inorganic  PROFITABLE GROWTHRule of 40 Business  (1),(2) Non-GAAP measure, see appendix for reconciliation to GAAP(3) Non-GAAP measure, see appendix for reconciliation to GAAP, Adj. EBITDA Margin = Adj. EBITDA / ex-TAC Revenue  (1)  35  LONG-TERM MODEL20%+ ex-TAC Revenue Growth30%+ Adj. EBITDA Margin  1  3    1  22    ex 
 

 2019 METRICS WERE INFLUENCED BY OUR INVESTMENT STRATEGY  In 2019, Taboola made the decision to invest $60 million in long-term partnerships with a number of very large, brand name publishing networks1            2018A  2019A  2020A  Given that investment, Adj. EBITDA Margin2 (% of ex-TAC) was 11.5%...27.8%23.8%  11.5%    …Without that investment, Adj. EBITDA Margin would have been 26.4%        2018A  2019A  2020A  27.8%  23.8%  26.4%        In 2020 that investment has paid off as projected Adj. EBITDA Margins are above 27% - higher than historical trends  "Invest” means initial losses on these publisher networks plus management’s estimate of margin lost on other publishers due to lower yields as demand was spread thinner.Non-GAAP measure, see appendix for reconciliation to GAAP  36 
 

     COVID-19 IN 2020 PROVED THE RESILIENCY OF OUR MODEL  •    COVID-19 / Recession Dip  Strong Recovery  Yield1        Leaving 2020 stronger than we entered with sustainably higher profitability  Sustainable yield increase, driving higher margins  Worked with publisher partners to optimize for yieldSigned more advertisers seeking consumers digitallyDramatic improvements in algorithms  Reset cost base  Hiring freeze permanently “right sized” organization (sustainable)Reduced travel, real estate and overhead (partially sustainable)  Relentless Focus on Yields…  … Combined with Historically Low Costs  1.      2.      1.      2.  Yield is a normalized measure of performance that controls for changes due to traffic shifts.Cash Expenses is the difference between Adj. EBITDA and exTAC Revenue. 2019 is adjusted to reflect an ex-TAC margin of 26.4% as detailed on the previous slide.  37  E 
 

   GROWTH DRIVEN BY CORE OPEN WEB INSTALLED BASE  New Publisher ex-TAC Revenue1  Historically 15% new supply growthProjecting 8-11% going forward  Net Dollar Retention2 Growth Has Two Elements  Improvements in yieldMore supply from existing publishersProjecting 101-103% net dollar retention - historically 110-120%  Continued growth from new supply...  … helps provide fuel for growth from a strong installed base.      1.      2.      1.  (1) “New Publisher” refers to publishers that begin working with Taboola on new contracts in the period.  (2) Net Dollar Retention is the simple arithmetic average of our Monthly Net Dollar Retention for the last twelve months. Monthly Net Dollar Retention for a given month is the ex-TAC Revenue in that month from digital properties partners that were Taboola  trailing 12 months, but excludes ex-TAC Revenue from new digital properties partners in the current period.  digital property partners in the same month of the prior year divided by the ex-TAC Revenue attributable to that same group of partners in the prior-year month. Current period ex-TAC Revenue includes any upsells and are net of contraction or attrition over the 38  Outlier      2. 
 

 SELECTED NON-GAAP METRICS    $106M  $382M  $127M  $445M  $143M  $516M    16%ex-TAC Revenue Growth1  27%+Adj EBITDA Margin2  16%+Adj EBITDA Growth3  80%+Adj. Gross Profit Margin4  (1),(2),(3) Growth rates reflect 2020-2023 CAGR. ex-TAC, Adj. EBITDA Margin, and Adj. EBITDA are Non-GAAP measures, see appendix for reconciliation to GAAP(4) Adj. Gross Profit Margin is projected to exceed 80% in 2020, 2021, and 2022. Adj. Gross Profit Margin is calculated as a percentage of ex-TAC revenue and is a non-GAAP measure, see appendix for reconciliation to GAAP.      ADJ. EBITDA ($ in millions)  ex-TAC ($ in millions)  2020A  2021E  2022E  39 
 

 2021 QUARTERLY AND FY PROJECTION  40  Quarterly results in 2020 do not reflect standard seasonality due to impact of recession and special publisher arrangements related to COVID-19.Note: dollar values in this table reflect rounded values; growth and margin calculations are based on exact values calculated to nine decimal places. (1),(2): Non-GAAP measure, see appendix for reconciliation to GAAP      1  2 
 

 AGENDA  41  IntroductionOverviewAbout TaboolaInvestment HighlightsFinancial InformationValuation & Comparables 
 

 VALUATION FRAMEWORK  Mid-Cap Advertising Technology  Funded by digital marketers / advertisers looking for new customersSimilar scale    Funded by digital marketers / advertisers looking for new customers    Recurring revenuesB2B-oriented solutions that are consumer focusedSupport marketers / advertisers looking for new customers    Advertising Technology Majors  Marketing Technology      Primary  Secondary    42 
 

   Thank you.  43 
 

   APPENDIX 
 

 HISTORICAL & PROJECTED REVENUE & EX-TAC REVENUE1    YoY growth ex-TAC revenue margin2Non-GAAP measure, see appendix for reconciliation to GAAPex-TAC Revenue Margin reflects ex-TAC Revenue / Gross Revenue, Non-GAAP measure, see appendix for reconciliation to GAAP  45 
 

 KEY MODEL ASSUMPTIONS  Operating costs:      Operating margin (% of ex-TAC revenue)    Operating income ($ in millions)  REVENUE (ex-TAC)1Historically, Taboola grew 20%+ (CAGR ’17A-’20E)In 2020, Taboola generated $382 million ex-TACConservatively modeled ~16% growth, doubling ex-TAC in 5 years  ADJUSTED EBITDA2$106 million in 2020 and growing faster than ex-TAC Revenue>25% of ex-TAC Revenue (2020)Rule of 40: ex-TAC growth + Adj. EBITDA Margin3 always above 40%  COST ASSUMPTIONSReturn to “normal” operations and cost basis in H1 2021 (conservative)Two primary costs (headcount and hardware / IT) grow commensurate with revenue growth  48                      ($ in millions)          ($19)  $34  ($45)  $34  $62  (6.4%)  8.9%  (10.1%)  6.6%  10.4%  (1),(2),(3) Non-GAAP measures, see appendix for reconciliation to GAAP 
 

 SELECTED GAAP AND NON-GAAP METRICS  LONG-TERM EX-TAC REVENUE GROWTHCurrent Model only forecasts growth from Core BusinessLong-Term Growth of 20%+ includes core business growth, inorganic and existing growth initiatives  ADJ. EBITDA MARGIN 3Return to “normal” operations and cost basis in H1 2021Investing in serving infrastructure and Algo beginning 2021IPO readiness costs added starting 2021  (1),(2),(3) Non-GAAP measure, see appendix for reconciliation to GAAP  47 
 

 ADJUSTED EBITDA RECONCILIATION  48 
 

 PROJECTED ADJUSTED EBITDA RECONCILIATION  49 
 

 EX-TAC REVENUE RECONCILIATION  50 
 

 PROJECTED EX-TAC REVENUE RECONCILIATION  51 
 

 ADJUSTED EBITDA MARGIN RECONCILIATION  52 
 

 PROJECTED ADJUSTED EBITDA MARGIN RECONCILIATION  53 
 

 EX-TAC REVENUES MARGIN RECONCILIATION  54 
 

 PROJECTED EX-TAC REVENUES MARGIN RECONCILIATION  55 
 

 HISTORICAL & PROJECTED ADJ. GROSS PROFIT MARGIN RECONCILIATION 
 

 HISTORICAL AND PROJECTED FREE CASH FLOW RECONCILIATION  (1) Adj. EBITDA Plus the change in working capital reflects the net cash provided by operating activities.  2021 Free Cash Flow Reduced by Plan To Invest in Two Areas:Purchase of $30M of servers beyond “normal” levels as part of investment in algorithmic yield improvementsPlan to remodel offices globally for post-COVID work environment  57 
 

     CONSOLIDATED BALANCE SHEET      ($ in millions)  As of Dec 31, 2019  As of Dec 31, 2020  Cash, cash equivalents and short-term deposits  $ 116  $ 243  Total Assets  $ 482  $ 580  Total Liabilities & Convertible Shares  $ 475  $ 533  Accumulated Deficit  $ (40)  $ (31)  Additional Paid-in-capital  $ 47  $ 78  Total Shareholders' Equity  $ 7  $ 47  58 
 

 VALUATION BENCHMARKING  Source: Wall Street research, filings and FactSet as of 3/26/2021. Taboola figures calculated using ex-TAC revenue.  Figures for Alphabet, MediaAlpha, Magnite, PubMatic and Trade Desk calculated on a ex-TAC equivalent  revenue basis. Data for Advertising Technology and Marketing Technology represents means.  Advertising Technology Majors: Alphabet, Facebook, Twitter.  Marketing Technology: HubSpot, Medalia, LiveRamp, LivePerson, SVMK and Yext.  59 
 

 OPERATIONAL BENCHMARKING  Source: Wall Street research, filings and FactSet as of 3/26/2021. Taboola figures calculated using ex-TAC revenue.  Figures for Alphabet, MediaAlpha, Magnite, PubMatic and Trade Desk calculated on a ex-TAC equivalent  revenue basis. Data for Advertising Technology and Marketing Technology represents means.  Advertising Technology Majors: Alphabet, Facebook, Twitter.  Marketing Technology: HubSpot, Medalia, LiveRamp, LivePerson, SVMK and Yext.  60 


Introductory Note

The following tables present selected historical consolidated financial data for Taboola.com Ltd. and subsidiaries.  The selected data omits footnote and other information contained in the audited consolidated financial statements that will be filed with the U.S. Securities and Exchange Commission in connection with the proposed merger with ION Acquisition Corp. 1 Ltd. Our historical results are not necessarily indicative of future results.


TABOOLA.COM LTD. CONSOLIDATED BALANCE SHEET DATA

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

   
December 31,
 
   
2020
   
2019
 
ASSETS
           
CURRENT ASSETS
           
Cash and cash equivalents
 
$
242,811
   
$
86,920
 
Short term deposits
   
-
     
28,963
 
Restricted deposits
   
3,664
     
6,177
 
Trade receivables (net of allowance for credit losses of $ 4,096 and $ 2,845 as of December 31, 2020, and 2019, respectively)
   
158,050
     
154,756
 
Prepaid expenses and other current assets
   
21,609
     
36,172
 
                 
Total current assets
   
426,134
     
312,988
 
                 
NON-CURRENT ASSETS
               
Long-term prepaid expenses
   
5,289
     
7,125
 
Restricted deposits
   
3,300
     
683
 
Deferred tax assets
   
1,382
     
673
 
Right of use assets
   
68,058
     
67,181
 
Property and equipment, net
   
52,894
     
67,777
 
Intangible assets, net
   
3,905
     
6,465
 
Goodwill
   
19,206
     
19,206
 
     
154,034
     
169,110
 
                 
Total assets
 
$
580,168
   
$
482,098
 
                 
LIABILITIES, CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS' EQUITY
               
CURRENT LIABILITIES
               
Trade payable
 
$
189,352
   
$
167,178
 
Lease liability
   
15,746
     
12,826
 
Accrued expenses and other current liabilities
   
95,135
     
58,897
 
Total current liabilities
   
300,233
     
238,901
 
                 
LONG TERM LIABILITIES
               
Deferred tax liabilities
   
45
     
2,716
 
Lease liability
   
63,044
     
63,008
 
Total long-term liabilities
   
63,089
     
65,724
 
                 
CONVERTIBLE PREFERRED SHARES
               
Preferred A, B, B-1, B-2, C, D and E shares with no par value - Authorized: 45,688,037shares at December 31, 2020 and 2019; Issued and outstanding: 44,978,000 shares at December 31, 2020 and 2019: Aggregate liquidation preference of 308,765 and 285,833 as of December 31, 2020 and 2019, respectively.
   
170,206
     
170,206
 
                 
SHAREHOLDERS' EQUITY
               
Ordinary shares with no par value- Authorized: 65,366,595 shares as of December 31, 2020 and 2019, 15,313,447and 16,626,522 shares issued and outstanding as of December 31, 2020 and 2019, respectively
   
-
     
-
 
Additional paid-in capital
   
78,137
     
47,257
 
Accumulated deficit
   
(31,497
)
   
(39,990
)
                 
Total shareholders' equity
   
46,640
     
7,267
 
                 
Total liabilities, convertible preferred shares, and shareholders' equity
 
$
580,168
   
$
482,098
 


TABOOLA.COM LTD. CONSOLIDATED STATEMENTS OF INCOME (LOSS) DATA
U.S. dollars in thousands, except share and per share data

   
Year ended December 31,
 
   
2020
   
2019
   
2018
 
                   
Revenues
 
$
1,188,893
   
$
1,093,830
   
$
909,246
 
Cost of revenues:
                       
Traffic acquisition cost
   
806,541
     
798,001
     
627,720
 
Other cost of revenues
   
62,855
     
63,860
     
47,296
 
                         
Total cost of revenues
   
869,396
     
861,861
     
675,016
 
                         
Gross profit
   
319,497
     
231,969
     
234,230
 
                         
Operating expenses:
                       
                         
Research and development expenses
   
99,423
     
84,710
     
73,024
 
Sales and marketing expenses
   
133,741
     
130,353
     
109,671
 
General and administrative expenses
   
60,140
     
36,542
     
34,202
 
                         
Total operating expenses
   
293,304
     
251,605
     
216,897
 
                         
Operating income (loss) before finance expenses
   
26,193
     
(19,636
)
   
17,333
 
Finance expenses, net
   
2,753
     
3,392
     
1,346
 
                         
Income (loss) before income taxes
   
23,440
     
(23,028
)
   
15,987
 
Provision for income taxes
   
14,947
     
4,997
     
5,326
 
                         
Net income (loss)
 
$
8,493
   
$
(28,025
)
 
$
10,661
 
                         
Less: Undistributed earnings allocated to participating securities
   
(22,932
)
   
(21,173
)
   
(19,604
)
                         
Net loss attributable to ordinary shares – basic and diluted
   
(14,439
)
   
(49,198
)
   
(8,943
)
Net loss per share attributable to ordinary shareholders, basic and diluted
 
$
(0.97
)
 
$
(3.00
)
 
$
(0.56
)
Weighted-average shares used in computing net loss per share attributable to ordinary shareholders, basic and diluted
   
14,934,590
     
16,412,119
     
16,084,650
 


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

   
Year ended December 31,
 
   
2020
   
2019
   
2018
 
                   
Cash flows from operating activities:
                 
                   
Net income (loss)
 
$
8,493
   
$
(28,025
)
 
$
10,661
 
                         
Adjustments to reconcile net income (loss) to net cash flows provided by operating activities:
                       
                         
Depreciation and amortization
   
33,957
     
39,364
     
35,272
 
Loss from sale of property and equipment
   
-
     
-
     
184
 
Share based compensation expenses
   
28,277
     
8,249
     
10,451
 
Revaluation of contingent consideration
   
-
     
-
     
3,876
 
Net loss (gain) from financing expenses
   
(3,318
)
   
(454
)
   
2,111
 
Decrease in deferred taxes, net
   
(3,380
)
   
(239
)
   
(359
)
Accrued interest, net
   
520
     
(161
)
   
(205
)
 
                       
Change in operating assets and liabilities:
                       
Increase in trade receivables
   
(3,294
)
   
(15,326
)
   
(29,115
)
Decrease (increase) in prepaid expenses and other current assets and long-term prepaid expenses
   
17,975
     
(24,757
)
   
(2,461
)
Increase in trade payable
   
23,434
     
31,622
     
26,926
 
Change in operating lease Right of use assets
   
13,758
     
12,452
     
-
 
Change in operating Lease liabilities
   
(11,679
)
   
(9,893
)
   
-
 
Increase in accrued expenses and other current liabilities
   
34,344
     
5,224
     
19,636
 
                         
Net cash provided by operating activities
   
139,087
     
18,056
     
76,977
 
                         
Cash flows from investing activities
                       
Purchase of property and equipment, including capitalized platform costs
   
(17,774
)
   
(44,328
)
   
(32,157
)
Proceeds from sale of property and equipment
   
-
     
-
     
455
 
Cash paid in connection with acquisitions (see note 1c)
   
(202
)
   
(3,966
)
   
-
 
Decrease (increase) in restricted deposits
   
(104
)
   
(583
)
   
179
 
Decrease (increase) in short-term deposits
   
28,963
     
1,411
     
(7,412
)
                         
Net cash provided by (used in) investing activities
   
10,883
     
(47,466
)
   
(38,935
)
                         
Cash flows from financing activities
                       
Exercise of options
   
2,603
     
991
     
597
 
Payment of contingent consideration
           
-
     
(12,753
)
                         
Net cash provided by (used in) financing activities
   
2,603
     
991
     
(12,156
)
                         
Exchange differences on balances of cash, cash equivalents
   
3,318
     
454
     
(2,111
)
                         
Increase (decrease) in cash, cash equivalents
   
155,891
     
(27,965
)
   
23,775
 
Cash, cash equivalents - at the beginning of the period
   
86,920
     
114,885
     
91,110
 
                         
Cash, cash equivalents - at end of the period
 
$
242,811
   
$
86,920
   
$
114,885
 


TABOOLA.COM LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS DATA (continued)
U.S. dollars in thousands, except share and per share data

   
Year ended December 31,
 
   
2020
   
2019
   
2018
 
                   
Supplemental disclosures of cash flow information:
                 
                   
Cash paid for income taxes
 
$
9,980
   
$
7,947
   
$
6,146
 
                         
Supplemental disclosures of noncash investing and financing activities:
                       
                         
Deferred offering costs incurred during the period included in the Long-term prepaid expenses
 
$
2,096
   
$
-
   
$
-
 
                         
Purchase of property, plant and equipment
 
$
1,879
   
$
3,139
   
$
2,032
 
                         
Acquisition of Celltick activity
 
$
-
   
$
202
   
$
-
 


Key Financial and Operating Metrics

We regularly monitor a number of metrics in order to measure our current performance and project our future performance. These metrics aid us in developing and refining our growth strategies and making strategic decisions.
 
Year Ended
December 31,
 
 
2020
   
2019
   
2018
 
 
(dollars in thousands)
 
Revenues(a)
 
$
1,188,893
   
$
1,093,830
   
$
909,246
 
ex-TAC Revenues(b)*
 
$
382,352
   
$
295,829
   
$
281,526
 
Net cash Provided by Operating Activities(c)
 
$
139,087
   
$
18,056
   
$
76,977
 
Free Cash Flow(d)*
 
$
121,313
   
$
(26,272
)
 
$
44,820
 
Net income (loss)(e)
 
$
8,493
   
$
(28,025
)
 
$
10,661
 
Adjusted EBITDA(f)*
 
$
106,193
   
$
34,082
   
$
66,932
 
Net income (loss) Margin(g)
   
0.7
%
   
(2.6
)%
   
1.2
%
Adjusted EBITDA Margin(h)*
   
27.8
%
   
11.5
%
   
23.8
%
Cash, cash equivalents and short-term deposits(i)
 
$
242,811
   
$
115,883
   
$
145,259
 

*
Non-GAAP measure. Refer to “Non-GAAP Financial Measures” below for an explanation and reconciliation to GAAP metrics.


Supplemental Information

Non-GAAP Financial Measures

We are presenting the following non-GAAP financial measures because we use them, among other things, as key measures for our management and board of directors in managing our business and evaluating our performance. We believe they also provide supplemental information that may be useful to investors. The use of these measures may improve comparability of our results over time by adjusting for items that may vary from period to period or not be representative of our ongoing operations.

These non-GAAP measures are subject to significant limitations. Other companies may use similarly titled measures but calculate them differently, which reduces their usefulness as comparative measures. Non-GAAP measures should not be considered in isolation or as a substitute for GAAP measures. They should be considered as supplementary information in addition to GAAP operating and financial performance measures.

ex-TAC Revenues
 
The following table provides a reconciliation of Revenues to ex-TAC Revenues.
 
 
Year Ended December 31,
 
 
2020
   
2019
   
2018
 
 
(dollars in thousands)
 
Revenues
 
$
1,188,893
   
$
1,093,830
   
$
909,246
 
Adjusted to exclude the following:
                       
Traffic acquisition cost
   
806,541
     
798,001
     
627,720
 
ex-TAC Revenues
 
$
382,352
   
$
295,829
   
$
281,526
 

Adjusted EBITDA and Adjusted EBITDA Margin

The following table provides a reconciliation of Net income (loss) to Adjusted EBITDA.
 
Year Ended
December 31,
 
 
2020
   
2019
   
2018
 
 
(dollars in thousands)
 
Net income (loss)
 
$
8,493
   
$
(28,025
)
 
$
10,661
 
Adjusted to exclude the following:
                       
Financial expenses
   
2,753
     
3,392
     
1,346
 
Tax expenses
   
14,947
     
4,997
     
5,326
 
Depreciation and amortization
   
33,957
     
39,364
     
35,272
 
Share-based compensation expenses
   
28,277
     
8,249
     
10,451
 
M&A costs(1)
   
17,766
     
6,105
     
 
Revaluation of contingent liability
   
     
     
3,876
 
Adjusted EBITDA
 
$
106,193
   
$
34,082
   
$
66,932
 

(1)
Costs primarily related to the proposed strategic transaction with Outbrain Inc., which we elected not to consummate.


Free Cash Flow

The following table provides a reconciliation of Net cash provided by operating activities to Free Cash Flow.
 
Year Ended
December 31,
 
 
2020
   
2019
   
2018
 
 
(dollars in thousands)
 
Net cash provided by operating activities
 
$
139,087
   
$
18,056
   
$
76,977
 
Purchases of property and equipment, including capitalized platform costs
   
17,774
     
44,328
     
32,157
 
Free Cash Flow
 
$
121,313
   
$
(26,272
)
 
$
44,820
 

Reconciliation of Net income (loss) to Adjusted EBITDA and Free Cash Flow

 
Year Ended
December 31,
 
 
2020
   
2019
   
2018
 
 
(dollars in thousands)
 
Net income (loss)
 
$
8,493
   
$
(28,025
)
 
$
10,661
 
Adjusted to exclude the following:
                       
Financial expenses
   
2,753
     
3,392
     
1,346
 
Tax expenses
   
14,947
     
4,997
     
5,326
 
Depreciation and amortization
   
33,957
     
39,364
     
35,272
 
Share-based compensation expenses
   
28,277
     
8,249
     
10,451
 
M&A costs(1)
   
17,766
     
6,105
     
 
Revaluation of contingent liability
   
     
     
3,876
 
Adjusted EBITDA
   
106,193
     
34,082
     
66,932
 
Non cash charges
   
(6,178
)
   
(854
)
   
1,731
 
Cash charges excluded from Adjusted EBITDA(2)
   
(35,466
)
   
(14,494
)
   
(6,672
)
Change in working capital
   
74,538
     
(678
)
   
14,986
 
Net cash provided by operating activities
   
139,087
     
18,056
     
76,977
 
Purchases of property and equipment, including capitalized platform costs
   
(17,774
)
   
(44,328
)
   
(32,157
)
Free Cash Flow
 
$
121,313
   
$
(26,272
)
 
$
44,820
 


(1)
Costs primarily related to the proposed strategic transaction with Outbrain Inc., which we elected not to consummate.
 

(2)
Financial and Tax expenses, M&A costs and revaluation of contingent liability.




(a)
We generate substantially all of our Revenues from advertisers. We enter into commercial arrangements with advertisers defining the terms of our service and the basis for our charges. Generally, our charges are based on a CPC or CPM basis. For campaigns priced on a CPC basis, we recognize these Revenues when a user clicks on an advertisement we deliver. For campaigns priced on a CPM basis, we recognize these Revenues when an advertisement is displayed.


(b)
We calculate ex-TAC Revenues, a non-GAAP measure, as Revenues excluding Traffic acquisition cost. Traffic acquisition cost, a component of Cost of revenues, are what we must pay digital properties to obtain the right to place advertising on their websites. This includes digital property compensation for placing Taboola’s platform on their digital property and cost for advertising impressions purchased from real-time advertising exchanges and other third parties. We believe that ex-TAC Revenues is useful because excluding TAC can better reflect the revenue that ultimately flows to us. We use ex-TAC Revenues as part of our business planning, for example decisions regarding the timing and amount of investments. Our use of ex-TAC Revenues has limitations as an analytical tool and you should not consider it in isolation, or as a substitute or superior to Gross Profit, which is the most comparable GAAP metric.


(c)
Net cash provided by operating activities is our Net income (loss) adjusted for non-cash charges and net cash provided by changes in our working capital.


(d)
We calculate Free Cash Flow, a non-GAAP measure, as Net cash provided by operating activities minus purchases of property and equipment, including capitalized platform costs. We believe that Free Cash Flow is useful to provide management and others with information about the amount of cash generated from our operations that can be used for strategic initiatives, including investing in our business, making strategic acquisitions, and strengthening our balance sheet. We expect our Free Cash Flow to fluctuate in future periods as we invest in our business to support our plans for growth. Our use of Free Cash Flow has limitations as an analytical tool and you should not consider it in isolation, or as a substitute or superior to Net cash provided by operating activities, which is the most comparable GAAP metric.


(e)
Net income (loss) is calculated as presented on our consolidated statement of income (loss) for the periods presented.


(f)
We calculate Adjusted EBITDA, a non-GAAP measure, as Net income (loss) before net financial expenses, income tax provision and depreciation and amortization, further adjusted to exclude share-based compensation and other noteworthy income and expense items such as certain merger or acquisition related costs, which may vary from period-to-period. 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 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 use Adjusted EBITDA and GAAP financial measures for planning purposes, including the preparation of our annual operating budget, as a measure of performance and the effectiveness of our business strategies, and in communications with our board of directors. We may also use Adjusted EBITDA as a metric for determining payment of cash or other incentive compensation. Our use of Adjusted EBITDA has limitations as an analytical tool and you should not consider it in isolation, or as a substitute or superior to Net income (loss), which is the most comparable GAAP metric.


(g)
Net income (loss) Margin is Net income (loss) divided by Revenues.


(h)
We calculate Adjusted EBITDA Margin, a non-GAAP measure, as Adjusted EBITDA divided by ex-TAC Revenues. The Adjusted EBITDA Margin is subject to the same adjustments as described for Adjusted EBITDA. Our use of Adjusted EBITDA Margin has limitations as an analytical tool and you should not consider it in isolation, or as a substitute or superior to Net income (loss) Margin, which is the most comparable GAAP metric.


(i)
Cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less. Short-term deposits are bank deposits with maturities of more than three months but less than one year.