Taboola.com Ltd.

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations together with Taboola’s accompanying unaudited consolidated interim financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q for thethree and nine months ended September 30, 2024 (the “Quarterly Report”) and audited consolidated financial statements and the related notes appearing in our Annual Report on Form 10-K for the year ended December 31,2023 (the“2023 Form 10-K”)filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 28,2024. Some of the information contained in this discussion and analysis is set forth in our 2023 Form 10-K, including information with respect to Taboola’s plans and strategy for Taboola’s business, and includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in Part I, Item 1A “Risk Factors” in our 2023 Form 10-K and “Note Regarding Forward-Looking Statements”in our 2023 Form 10-K and elsewhere herein, Taboola’s actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Throughout this section, unless otherwise noted or the context requires otherwise, “we,” “us,” “our” and the “Company” refer to Taboola and its consolidated subsidiaries, and in references to monetary amounts, “dollars” and “$” refer to U.S. Dollars, and “NIS” refers to New Israeli Shekels.

Current wording

You should read the following discussion and analysis of our financial condition and results of operations together with Taboola’s accompanying unaudited consolidated interim financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q for the three months ended March 31, 2025 (the “Quarterly Report”) and audited consolidated financial statements and the related notes appearing in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”) filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 26, 2025. Some of the information contained in this discussion and analysis is set forth in our 2024 Form 10-K, including information with respect to Taboola’s plans and strategy for Taboola’s business, and includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in Part I, Item 1A “Risk Factors” in our 2024 Form 10-K and “Note Regarding Forward-Looking Statements” in our 2024 Form 10-K and elsewhere herein, Taboola’s actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Throughout this section, unless otherwise noted or the context requires otherwise, “we,” “us,” “our” and the “Company” refer to Taboola and its consolidated subsidiaries, and in references to monetary amounts, “dollars” and “$” refer to U.S. Dollars, and “NIS” refers to New Israeli Shekels.

Previous wording

Digital properties use our technology platforms to achieve their business goals, such as driving new audiences to their sites and apps, or increasing engagement on site — and we don’t charge them for these services. We also provide a meaningful monetization opportunity to digital properties by surfacing paid recommendations by Advertisers. Unlike walled gardens, we are a business-to-business, or B2B, company with no competing consumer interests. We only interact with consumers through our partners’ digital properties, hence we do not compete with our partners for user attention. Our motivations are aligned. When our partners win, we win, and we grow together.

Current wording

Taboola began operations in 2007 and our technology provides significant value to both digital property partners and Advertisers. Digital properties use our technology platforms to achieve their business goals, such as driving new audiences to their sites and apps, or increasing engagement on site. We also provide a meaningful monetization opportunity to digital properties by matching relevant advertising to their audience in real time. Unlike walled gardens, we are a business-to-business, or B2B, company with no competing consumer interests. We only interact with consumers through our partners’ digital properties, hence we do not compete with our partners for user attention. Our motivations are aligned. When our partners win, we win, and we grow together.

Previous wording

We empower Advertisers to leverage our proprietary AI-powered recommendation platform to reach targeted audiences utilizing effective, native ad formats across digital properties. We generate revenues primarily when people (consumers) click on, purchase from or, in some cases, view the ads that appear within our partners’ digital experiences via our recommendation platform. Advertisers pay us for those clicks, purchases or impressions, and we share the resulting revenue with the digital properties who display those ads and generate those clicks and downstream consumer actions.

Current wording

We generate revenues primarily when people (consumers) click on, purchase from or, in some cases, view the ads that appear within our partners’ digital experiences via our performance AI engine. Advertisers pay us for those clicks, purchases or impressions, and we share the resulting revenue with the digital properties who display those ads and generate those clicks and downstream consumer actions.

Previous wording

Our powerful recommendation platform was built to address a technology challenge of significant complexity: predicting which recommendations users would be interested in, without explicit intent data or social media profiles. Search advertising platforms have access, at a minimum, to users’ search queries which indicate intent, while social media advertising platforms have access to rich personal profiles created by users. In contrast, we base our recommendations on an extensive dataset of context and user behavior derived from the intersection of thousands of digital properties and millions of recommended items, including ads and editorial content.

Current wording

Our powerful performance AI engine was built to address a technology challenge of significant complexity: predicting which content, both advertisements and editorial, users would be interested in, without explicit intent data or social media profiles. Search advertising platforms have access, at a minimum, to users’ search queries which indicate intent, while social media advertising platforms have access to rich personal profiles created by users. We are the only independent performance platform that goes beyond search and social, and delivers outcomes at scale for advertisers, leveraging our unique supply, 1st-party data and AI technology.

Previous wording

We engage with a diverse network of digital property partners, substantially all of which have contracts with us containing either an evergreen term or an exclusive partnership with us for multi-year terms at inception. These agreements typically require that our code be integrated on the digital property web page because of the nature of providing both editorial and paid recommendations. This means that in the vast majority of our business, we do not bid for ad placements, as traditionally happens in the advertising technology space, but rather see all users that visit the pages on which we appear. Due to our multi-year exclusive contracts and high retention rates, our supply is relatively consistent and predictable. We had approximately 12,000, 15,000 and 16,000 digital property partners in the fourth quarters of 2023, 2022 and 2021, respectively. In 2023, we saw a decrease in the number of long-tail digital property partners on our network, partially due to our own efforts to clean up our network and reduce low performing networks. Despite the decrease in the number of digital property partners on the network, our overall volume of page views went up over 10% from Q4 2021 to Q4 2023, demonstrating that the decrease in the number of digital property partners in our network was driven by smaller digital property partners and more than offset by the addition of larger digital property partners.

Current wording

We engage with a diverse network of digital property partners, substantially all of which have contracts with us containing either an evergreen term or an exclusive partnership with us for multi-year terms at inception for their native advertising supply. These agreements typically require that our code be integrated on the digital property web page because of the nature of providing both editorial and paid recommendations. In the portion of our business that is tied to these native advertising supply partnerships. which currently accounts for the vast majority of our business, we do not bid for ad placements, as traditionally happens in the advertising technology space, but rather see all users that visit the pages on which we appear. Due to our multi-year exclusive contracts and high retention rates, our supply is relatively consistent and predictable. We had approximately 11,000, 12,000 and 15,000 digital property partners in the fourth quarter of 2024, 2023 and 2022, respectively.

Previous wording

For the majority of our digital properties partners, we have two primary models for sharing revenue with digital property partners. The most common model is a straight revenue share model. In this model, we agree to pay our partner a percentage of the revenue that we generate from advertisements placed on their digital properties. The second model includes guarantees. Under this model, we pay our partners the greater of a fixed percentage of the revenue we generate and a guaranteed amount per thousand page views. In the past, we have and may continue to be required to make significant payments under these guarantees.

Current wording

For the majority of our digital properties partners, we have two primary models for sharing revenue with digital property partners. The most common model is a straight revenue share model. In this model, we agree to pay our partner a percentage of the revenue that we generate from advertisements placed on their digital properties. The second model includes guarantees. Under this model, we pay our partners the greater of a fixed percentage of the revenue we generate and a guaranteed amount based on specified performance metric, such as per thousand page views or fixed amount. In the past, we have and may continue to be required to make significant payments under these guarantees.

Previous wording

We have a large and growing network of Advertisers, across multiple verticals. We had approximately 17,000, 18,000 and 15,000 Advertiser clients working with us directly, or through advertising agencies, worldwide during the fourth quarters of 2023, 2022 and 2021, respectively. The decline from 2022 to 2023 was primarily driven by a channel partner that had a large number of small advertisers that they reduced in 2023. A large portion of our revenue comes from Advertisers with their own specific performance goals, such as obtaining subscribers for email newsletters or acquiring leads for product offerings. These performance Advertisers use our service when they obtain a sufficient return on ad spend to justify their ad spend. We grow the revenue from performance Advertisers in three ways. First, we improve the performance of our network by developing new product features, improving our algorithms and optimizing our supply. Second, we secure increased budgets from existing Advertisers by offering new ad formats and helping them achieve additional goals. Third, we grow our overall Advertiser base by bringing on new Advertisers that we have not worked with previously.

Current wording

We have a large network of Advertisers that wish to achieve specific performance goals, such as obtaining subscribers for email newsletters or acquiring leads for product offerings, across multiple verticals. As we look at growing our advertiser client base, we want to grow the number of advertisers that spend with us at scale. We define a Scaled Advertiser as an Advertiser that has more than $100,000 of cumulative gross spend on the network on a trailing four quarter basis. We had approximately 2,000, 1,800 and 1,700 of Scaled Advertiser clients working with us directly, or through advertising agencies, worldwide during the first quarters of 2025, 2024 and 2023, respectively. In an effort to also measure how we are growing our advertising spend with each Scaled Advertiser, we have introduced an Average Revenue per Scaled Advertiser performance measure. Average Revenue per Scaled Advertiser is calculated as the aggregate cumulative gross spend of all Scaled Advertisers for a given period divided by the number of Scaled Advertisers for that period. The Average Revenue per Scaled Advertiser was approximately $184,000, $190,000 and $157,000 during the first quarters of 2025, 2024 and 2023, respectively. A large portion of our revenue comes from Scaled Advertisers. The Revenue contribution from Scaled Advertisers represented 86%, 84% and 82% of our Revenues for the first quarters of 2025, 2024 and 2023, respectively. These performance Advertisers use our service when they obtain a sufficient return on ad spend to justify their ad spend. We grow the revenue from performance Advertisers in three ways. First, we improve the performance of our network by developing new product features, improving our algorithms and optimizing our supply. Second, we secure increased budgets from existing Advertisers by offering new ad formats and helping them achieve additional goals. Third, we grow our overall Advertiser base by bringing on new Advertisers that we have not worked with previously.

Previous wording

We view research and development expenditures as investments that help grow our business over time. These investments, which are primarily in the form of employee salaries and related expenditures and hardware infrastructure, can be broken into two categories. This first category includes product innovations that extend the capabilities of our current product offerings and help us expand into completely new markets. This includes heavy investment in AI (specifically Deep Learning) in the form of server purchases and expenses for data scientists. This category of investment is important to maintain the growth of the business but can also generally be adjusted up or down based on management’s perception of the potential value of different investment options. The second category of investments are those that are necessary to maintain our core business. These investments include items such as purchasing servers and other infrastructure necessary to handle increasing loads of recommendations that need to be served, as well as the personnel necessary to maintain the value delivered to our customers and digital property partners, such as investments in code maintenance for our existing products. This type of investment scales at a slower rate than the growth of our core business.

Current wording

We view research and development expenditures as investments that help grow our business over time. These investments, which are primarily in the form of employee salaries and related expenditures and hardware infrastructure, can be broken into two categories. This first category includes product innovations that extend the capabilities of our current product offerings and help us expand into completely new markets. This includes heavy investment in AI (specifically Deep Learning) in the form of server purchases and expenses for data scientists. This category of investment is important to maintain the growth of the business but can also generally be adjusted up or down based on management’s perception of the potential value of different investment options. The second category of investments are those that are necessary to maintain our core business. These investments include items such as purchasing servers and other infrastructure necessary to handle increasing loads of recommendations that need to be served, as well as the people necessary to maintain the value delivered to our customers and digital property partners, such as investments in code maintenance for our existing products. This type of investment scales at a slower rate than the growth of our core business.

Previous wording

The weighted-average shares for the three months ended September 30, 2024 and 2023 included 298,675,810 and 307,392,341 Ordinary shares, and 44,210,406 and 45,198,702 Non-voting Ordinary shares, respectively, and for the nine months ended September 30, 2024 and 2023 included 298,843,067 and 303,246,891 Ordinary shares, and 44,763,120 and 42,384,131 Non-voting Ordinary shares, respectively.

Current wording

(1)The weighted-average shares used in the computation of the diluted EPS for the three months ended March 31, 2025 and 2024 are 341,960,999 and 345,502,643, respectively. The weighted-average shares for the three months ended March 31, 2025 and 2024, included 298,323,708 and 300,303,941 Ordinary shares, and 43,637,291 and 45,198,702 Non-voting Ordinary shares, respectively.

Previous wording

The following table reconciles net income (loss) to Non-GAAP Net Income (Loss) for the periods shown:

Current wording

The following table provides a reconciliation of net income (loss) to Non-GAAP Net Income (Loss) for the periods shown:

Previous wording

Other cost of revenues includes data center and related costs, depreciation expense related to hardware supporting our platform, amortization expense related to capitalized internal-use software and acquired technology, digital and services taxes, content cost, personnel costs, and allocated facilities costs. Personnel costs include salaries, bonuses, share-based compensation, and employee benefit costs, and are primarily attributable to our operations group, which supports our platform and our Advertisers.

Current wording

Other cost of revenues includes data center and related costs, depreciation expense related to hardware supporting our platform, amortization expense related to capitalized internal-use software and acquired technology, digital and services taxes, personnel costs, and allocated facilities costs. Personnel costs include salaries, bonuses, share-based compensation, and employee benefit costs, and are primarily attributable to our operations group, which supports our platform and our Advertisers.

Previous wording

Sales and marketing expenses consist of payroll and other personnel related costs, including salaries, share-based compensation, employee benefits, and travel for our sales and marketing departments, advertising and promotion, rent and depreciation and amortization expenses, particularly related to the acquired intangibles. We expect to increase selling and marketing expenses to support the overall growth in our business.

Current wording

Sales and marketing expenses consist of payroll and other personnel related costs, including salaries, share-based compensation, employee benefits, and travel for our sales and marketing departments, advertising and promotion, rent and depreciation and amortization expenses, particularly related to the acquired intangibles. We expect to continue to invest in sales and marketing to support the overall growth in our business.

Previous wording

General and administrative expenses consist of payroll and other personnel related costs, including salaries, share-based compensation, employee benefits and expenses for executive management, legal, finance and others. In addition, general and administrative expenses include fees for professional services and occupancy costs. We expect our general and administrative expense to increase as we scale up headcount with the growth of our business, and as a result of operating as a public company, including compliance with the rules and regulations of the SEC, legal, audit, additional insurance expenses, investor relations activities, and other administrative and professional services.

Current wording

General and administrative expenses consist of payroll and other personnel related costs, including salaries, share-based compensation, employee benefits and expenses for executive management, legal, finance and others. In addition, general and administrative expenses include fees for professional services and occupancy costs. We expect our general and administrative expenses to remain relatively flat in 2025.

Previous wording

The statutory corporate tax rate in Israel was 23% for the nine months ended September 30, 2024 and 2023, although we are entitled to certain tax benefits under Israeli law.

Current wording

The statutory corporate tax rate in Israel was 23% for the three months ended March 31, 2025 and 2024, although we are entitled to certain tax benefits under Israeli law.

Previous wording

As of September 30, 2024, we have an accumulated tax loss carry-forward of approximately $64.5 million in Israel. The tax loss can be offset indefinitely. Non-Israeli subsidiaries are taxed according to the tax laws in their respective jurisdictions.

Current wording

As of March 31, 2025, we have an accumulated tax loss carry-forward of approximately $23.8 million in Israel. The tax loss can be offset indefinitely. Non-Israeli subsidiaries are taxed according to the tax laws in their respective jurisdictions.

Previous wording

Revenues increased by $72.8 million, or 20.2%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Existing digital property partners, including the growth of new digital property partners (beyond the revenue contribution determined based on the run-rate revenue generated by the partners when they are first on-boarded) increased by approximately $51.1 million. This increase was primarily driven by new revenue from advertisers transferred from Yahoo, as well as growth in spend from existing Taboola advertisers. New digital property partners contributed approximately $21.7 million of new Revenues on a 12-month run rate basis calculated based on their first full month on the network.

Current wording

Revenues increased by $13.5 million, or 3.3%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, mainly as the result of an increase in the number of Scaled Advertisers. This was concentrated in our core native and programmatic advertisers. Revenue per Scaled Advertisers declined year-over-year as the increase in the number of Scaled Advertisers was driven by newer advertisers which generally take longer to scale to the overall group average. From a publisher perspective, new digital property partners contributed approximately $25.7 million of new Revenues on a 12-month run rate basis calculated based on their first full month on the network. Existing digital property partners, including the growth of new digital property partners (beyond the revenue contribution determined based on the run-rate revenue generated by the partners when they are first on-boarded) decreased by approximately $12.2 million.

Previous wording

Gross profit increased by $32.2 million, or 32.0%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

Current wording

Gross profit increased by $10.4 million, or 9.5%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024

Previous wording

Ex-TAC Gross Profit, a non-GAAP measure, increased by $36.6 million, or 28.5%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to revenue from advertisers transferred from Yahoo, as well as growth in spend from existing Taboola advertisers.

Current wording

Ex-TAC Gross Profit, a non-GAAP measure, increased by $12.8 million, or 9.2%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily benefiting from growth in advertising spend as well as a margin increase on certain digital property partners.

Previous wording

Traffic acquisition cost increased at a rate lower than revenue primarily due to increased effective margin on our Yahoo partnership as a result of applying the mediation accruals as TAC offset rather than recognizing them as revenue.

Current wording

Traffic acquisition cost increased at a rate lower than revenue primarily due to a margin increase on certain digital property partners and an increased effective margin on our Yahoo partnership as a result of applying the mediation accruals as TAC offset rather than recognizing them as revenue, which ended in January.

Previous wording

The cost of guarantees (total payments due under guarantee arrangements in excess of amounts the Company would otherwise be required to pay under revenue sharing arrangements) as a percentage of traffic acquisition costs was approximately 20% for the three months ended September 30, 2024 and September 30, 2023.

Current wording

The cost of guarantees (total payments due under guarantee arrangements in excess of amounts the Company would otherwise be required to pay under revenue sharing arrangements) as a percentage of traffic acquisition costs was approximately 18% and 17% for the three months ended March 31, 2025 and March 31, 2024.

Previous wording

Other cost of revenues increased by $16.8 million, or 21.0%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily as a result of a $8.8 million increase in data, content, communication and IT related expenses, $3.4 million increase in depreciation expenses related to new product innovation and $2.8 million increase in digital service tax expenses.

Current wording

Other cost of revenues decreased by $1.5 million, or 5.2%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, mainly as a result of a $2.9 million decrease in digital service tax expenses and a $2.0 million decrease in depreciation expenses related to our servers, which were partially offset by an increase of $3.5 million in data, content, communication and IT related expenses.

Previous wording

Our primary cash needs are for working capital, personnel costs, contractual obligations, including payments to digital property partners, office leases and software and information technology costs, capital expenditures for servers and capitalized software development, payment of interest and required principal payments on our long-term loan and other commitments. We fund these cash needs primarily from cash generated from operations, as well as from cash and cash equivalents on our balance sheet when required. For the nine months ended September 30, 2024 and 2023, we generated cash from operations of $122.4 million and $61.6 million, respectively.

Current wording

Our primary cash needs are for working capital, personnel costs, contractual obligations, including payments to digital property partners, office leases and software and information technology costs, capital expenditures for servers and capitalized software develop ment, funding our share buyback program, payment of interest on our revolving loan and other commitments. We fund these cash needs primarily from cash generated from operations, as well as from cash and cash equivalents on our balance sheet when required. For the three months ended March 31, 2025 and 2024, we generated cash from operations of $48.1 million and $32.4 million, respectively.

Previous wording

As of September 30, 2024 and December 31, 2023, we had $217.2 million and $176.1 million of cash and cash equivalents, respectively, and $5.4 million and $5.7 million in short and long-term restricted deposits, respectively, used, mainly, as security for our lease commitments and $5.7 million of short-term investments as of December 31, 2023. As of September 30, 2024 we did not hold short-term investments. Cash and cash equivalents consist of cash in banks and highly liquid marketable securities investments and money market funds, with an original maturity of three months or less at the date of purchase and are readily convertible to known amounts of cash. Short-term investments generally consist of bank deposits, U.S. government treasuries, commercial paper, corporate debt securities, and U.S. agency bonds.

Current wording

As of March 31, 2025 and December 31, 2024, we had $216.2 million and $226.6 million of cash and cash equivalents, respectively, and $1.7 million and $1.7 million in short and long-term restricted deposits, respectively, used, mainly, as security for our lease commitments and $3.8 million of short-term investments as of December 31, 2024. As of March 31, 2025 we did not hold short-term investments. Cash and cash equivalents consist of cash in banks and money market funds. Short-term investments generally consist of bank deposits.

Previous wording

We believe that this, together with net proceeds from our engagements with Advertisers and digital property partners, will provide us with sufficient liquidity to meet our working capital and capital expenditure needs for at least the next 12 months. In the future, we may be required to obtain additional equity or debt financing in order to support our continued capital expenditures and operations. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in new technologies, this could reduce our ability to compete successfully and harm our business, growth, and results of operations.

Current wording

We believe that this, together with net proceeds from our engagements with Advertisers and digital property partners, will provide us with sufficient liquidity to meet our working capital and capital expenditure needs for at least the next 12 months. In the future, we may be required to obtain additional equity or debt financing in order to support our continued capital expenditures and operations. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in new technologies, this could reduce our ability to compete successfully and harm our business, growth, and results of operation

Previous wording

On August 9, 2022 we entered into an incremental revolving credit facility amendment to our existing senior secured credit agreement (the “Amended Credit Agreement”). The Amended Credit Agreement provides for borrowings in an aggregate principal amount of up to $90.0 million (the “Revolving Facility”). The proceeds of the Revolving Facility can be used to finance working capital needs and general corporate purposes. Borrowings under the Revolving Facility are subject to customary borrowing conditions and will bear interest at a variable annual rate based on Term SOFR or Base Rate plus a fixed margin. The Amended Credit Agreement also contains customary representations, covenants and events of default as well as a financial covenant, which places a limit on our allowable net leverage ratio. As of September 30, 2024, we had no outstanding borrowings under the Revolving Facility.

Current wording

On March 18, 2025 we entered into a revolving credit facility (the “2025 Revolving Credit Agreement”), which provides for borrowings in an aggregate principal amount of up to $270.0 million (the “Revolving Facility”). The proceeds of the Revolving Facility can be used to finance working capital needs and general corporate purposes. Borrowings under the Revolving Facility are subject to customary borrowing conditions and will bear interest at a variable annual rate based on Term SOFR or Base Rate plus a fixed margin. The 2025 Revolving Credit Agreement also contains customary representations, covenants and events of default as well as a financial covenant, which places a limit on our allowable net leverage ratio. As of March 31, 2025, the Company was in compliance with the Revolving Facility covenants.

Previous wording

Our board of directors authorized a share buyback program for the repurchase of our outstanding Ordinary shares, which commenced in June 2023 and does not have an expiration date (the “Buyback Program”). In 2023, our board of directors authorized up to $80.0 million of buybacks under the Buyback Program. In February 2024, our board of directors authorized up to $100.0 million for use under the Buyback Program, including any remaining authority from the 2023 board of directors authorization, subject to satisfying required conditions under the Israeli Companies Law and the Companies Regulations (Reliefs for Corporations, Which Securities Are Listed on Foreign Stock Exchanges), 2000. As permitted by the Buyback Program, share repurchases may be made from time to time, in privately negotiated transactions or in the open market, including through trading plans intended to comply with Rule 10b5-1, at the discretion of our management and as permitted by securities laws and other legal requirements, including Rule 10b-18 of the Exchange Act. The Buyback Program does not obligate the Company to repurchase any specific number of shares and the number of shares repurchased may depend upon market and economic conditions and other factors. The Buyback Program may be discontinued, modified or suspended at any time.

Current wording

Our board of directors authorized a share buyback program for the repurchase of our outstanding Ordinary shares, which commenced in June 2023 and does not have an expiration date (the “Buyback Program”). In 2023, our board of directors authorized up to $80.0 million of buybacks under the Buyback Program. In February 2024, our board of directors authorized up to $100.0 million for use under the Buyback Program, including any remaining authority from the 2023 board of directors authorization and in February 2025, our board of directors authorized up to an additional $200.0 million for use under the Buyback Program.. As permitted by the Buyback Program, share repurchases may be made from time to time, in privately negotiated transactions or in the open market, including through trading plans intended to comply with Rule 10b5-1, at the discretion of our management and as permitted by securities laws and other legal requirements, including Rule 10b-18 of the Exchange Act. The Buyback Program does not obligate the Company to repurchase any specific number of shares and the number of shares repurchased may depend upon market and economic conditions and other factors. The Buyback Program may be discontinued, modified or suspended at any time.

Previous wording

During the nine months ended September 30, 2024, we repurchased 15.5 million of our shares consisting of 14.5 million Ordinary shares and 1.0 million Non-voting Ordinary shares at an average price of $4.14 per share (excluding broker and transaction fees of $0.4 million). As of September 30, 2024 the Company had remaining authorization from our board of directors to repurchase Ordinary shares up to an aggregate amount of $55.6 million, subject to satisfying required conditions under the Israeli Companies Law and the Companies Regulations. See Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds, Note 9 and Note 12 of Notes to the Unaudited Consolidated Interim Financial Statements.

Current wording

During the three months ended March 31, 2025, we repurchased 16.2 million of our shares consisting of 12.1 million Ordinary shares and 4.1 million Non-voting Ordinary shares at an average price of $3.03 per share (excluding broker and transaction fees of $0.3 million). As of March 31, 2025 the Company had remaining authorization from our board of directors to repurchase Ordinary shares up to an aggregate amount of $196.4 million. See Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds, Note 9 and Note 12 of Notes to the Unaudited Consolidated Interim Financial Statements.

Previous wording

During the nine months ended September 30, 2024 net cash provided by operating activities was $122.4 million, an increase of $60.8 million, compared to $61.6 million for the same period in 2023. The $122.4 million was related to our net loss of $36.9 million adjusted by non-cash charges of $124.8 million and positive changes in working capital of $34.5 million.

Current wording

During the three months ended March 31, 2025 net cash provided by operating activities was $48.1 million, an increase of $15.7 million, compared to $32.4 million for the same period in 2024. The $48.1 million was related to our net loss of $8.8 million adjusted by non-cash charges of $44.5 million and positive changes in working capital of $12.4 million.

Previous wording

The $124.8 million of non-cash charges primarily consisted of depreciation and amortization of $76.0 million, share-based compensation expense related to vested equity awards of $51.9 million and Commercial agreement asset amortization of $1.4 million, partially offset by decrease of $4.6 million due to revaluation of Warrants liability.

Current wording

The $44.5 million of non-cash charges primarily consisted of depreciation and amortization of $20.7 million, share-based compensation expense related to vested equity awards of $15.5 million, loss on extinguishment of debt of $6.6 million and Commercial agreement asset amortization of $4.0 million, partially offset by decrease of $1.7 million due to revaluation of Warrants liability.

Previous wording

The $26.9 million increase in cash resulting from changes in working capital primarily consisted of $24.6 million decrease in trade receivables, net, increase of $5.4 million in accrued expenses and other current liabilities and other long-term liabilities, $2.6 million decrease in prepaid expenses and other current assets and long-term prepaid expenses and $2.2 million increase in trade payables, partially offset by $8.2 million decrease in deferred taxes, net.

Current wording

The $12.4 million increase in cash resulting from changes in working capital primarily consisted of a $65.2 million decrease in trade receivables, net and a $4.4 million decrease in prepaid expenses partially offset by $31.8 million decrease in trade payables, net, a $22.2 million decrease in accrued expenses and other current liabilities and a $3.1 million decrease in deferred taxes, net.

Previous wording

Net cash provided by operating activities of $61.6 million for the nine months ended September 30, 2023 was related to our net loss of $85.8 million adjusted by non-cash charges of $120.4 million and changes in working capital of $26.9 million.

Current wording

Net cash provided by operating activities of $32.4 million for the three months ended March 31, 2024 was related to our net loss of $26.8 million adjusted by non-cash charges of $41.8 million and changes in working capital of $17.4 million.

Previous wording

The $120.4 million of non-cash charges primarily consisted of depreciation and amortization of $70.7 million and share-based compensation expense related to vested equity awards of $48.9 million.

Current wording

The $41.8 million of non-cash charges consisted of depreciation and amortization of $25.3 million and share-based compensation expense related to vested equity awards of $16.4 million.

Previous wording

The $34.5 million increase in cash resulting from changes in working capital primarily consisted of a $23.8 million decrease in prepaid expenses and other assets, $23.0 million increase in accrued expenses and other liabilities and $13.0 million decrease in trade receivables, net, partially offset by a $12.9 million decrease in trade payables and $11.0 million decrease in deferred taxes, net.

Current wording

The $17.4 million increase in cash resulting from changes in working capital primarily consisted of a $22.8 million decrease in trade receivables, net and a $9.2 million decrease in prepaid expenses and other assets, partially offset by a $8.3 million decrease in trade payables, a $3.7 million decrease in deferred taxes, net and a $1.5 million decrease in accrued expenses and other liabilities.

Previous wording

During the nine months ended September 30, 2024 net cash used in investing activities was $20.1 million, a decrease of $85.3 million, compared to $65.2 million in net cash provided in the same period in 2023. Net cash used in investing activities for the nine months ended September 30, 2024 primarily consisted of $25.1 million purchase of property and equipment, including capitalized internal-use software partially offset by $5.8 million proceeds from maturities of short-term investments.

Current wording

During the three months ended March 31, 2025 net cash used in investing activities was $8.3 million, an increase of $6.7 million, compared to $1.6 million in net cash used in the same period in 2024. Net cash used in investing activities for the three months ended March 31, 2025 primarily consisted of $12.0 million purchase of property and equipment, including capitalized internal-use software, partially offset by $3.8 million proceeds from maturities of short-term investments.

Previous wording

Net cash provided by investing activities was $65.2 million for the nine months ended September 30, 2023 primarily consisted of $107.7 million proceeds from sales and maturities of short-term investments partially offset by $22.0 million purchase of short-term investments and $19.8 million purchase of property and equipment, including capitalized internal-use software.

Current wording

Net cash used in investing activities was $1.6 million for the three months ended March 31, 2024, primarily consisted of $5.6 million purchase of property and equipment, including capitalized internal-use software partially, offset by $3.3 million proceeds from maturities of short-term investments.

Previous wording

During the nine months ended September 30, 2024 net cash used in financing activities was $62.3 million, an increase of $9.1 million, compared to $53.2 million net cash used in the same period in 2023. Net cash used in financing activities for the nine months ended September 30, 2024 primarily consisted of $64.5 million repurchase of Ordinary shares and $2.4 million payment of tax withholding for share-based compensation expenses, partially offset by $5.7 million proceeds received from exercise of options and vested RSUs.

Current wording

During the three months ended March 31, 2025 net cash used in financing activities was $51.2 million, an increase of $22.4 million, compared to $28.8 million net cash used in the same period in 2024. Net cash used in financing activities for the three months ended March 31, 2025 primarily consisted of $122.7 million repayment in full of the long-term loan, $49.3 million repurchase of Ordinary shares, $2.4 million payments on account of repurchase of Ordinary shares and $0.7 million issuance costs for the revolving credit facility, partially offset by $124.0 million proceeds from revolving credit line, net of issuance costs.

Previous wording

Net cash used in financing activities was $53.2 million for the nine months ended September 30, 2023 consisted of $32.3 million repayment of the current portion of our long-term loan, $23.2 million repurchase of Ordinary shares and $3.2 million payment of tax withholding for share-based compensation, offset by $5.4 million proceeds received from share option exercises and vested RSUs

Current wording

Net cash used in financing activities was $28.8 million for the three months ended March 31, 2024 consisted of primarily consisted of $27.8 million repurchase of Ordinary shares.

Previous wording

As of September 30, 2024, we have a provision related to unrecognized tax benefit liabilities totaling $9.5 million and other provisions related to severance pay and contribution plans, which have been excluded from the table above as we do not believe it is practicable to make reliable estimates of the periods in which payments for these obligations will be made.

Current wording

As of March 31, 2025, we have a provision related to unrecognized tax benefit liabilities totaling $11.1 million and other provisions related to severance pay and contribution plans, which have been excluded from the table above as we do not believe it is practicable to make reliable estimates of the periods in which payments for these obligations will be made.

Previous wording

Our critical accounting policies are those that materi ally affect our consolidated financial statements and involve difficult, subjective or complex judgments by management. There have been no material changes to our critical accounting policies and estimates of and for the year ended December 31, 2023, included in our 2023 Form 10-K.

Current wording

Our critical accounting policies are those that materially affect our consolidated financial statements and involve difficult, subjective or complex judgments by management. There have been no material changes to our critical accounting policies and estimates of and for the year ended December 31, 2024, included in our 2024 Form 10-K.