We’ve got technology that’s working for them, and now we’ve got the sales capability. So we decided to put it all together into an offering called Taboola Select that we think is now at the right time and place to really succeed. So that’s kind of how it all came together. So the success comes from technology, it comes from sales focus, it comes from the right having the right supply, and we’re now at the right time and moment to really package it together and go sell it aggressively.
Unidentified Analyst: Thank you.
Operator: Thank you. Please stand by for our next question. Our next question comes on the line of Mark Zgutowicz of The Benchmark Company. Your line is now open.
Unidentified Analyst: Hi, guys. This is Alex on for Mark. Thanks for taking the question. Could you perhaps quantify the e-commerce revenue ex-TAC penetration in 1Q and what you factored into your growth expectations throughout the year as you lean into these new relationships? And then how should we be thinking about the ex-TAC margin accretion potential upon this mix shift to e-commerce over the near and medium term? Thank you.
Stephen Walker: Yes. So we don’t break out our e-commerce business specifically. So I’ll give you kind of some flavor of what we have said historically. So first of all, what we’ve said is that e-commerce is growing faster than the rest of our business. So that’s great. Like, it’s a growing part of our business. What’s exciting about that, by the way, is that e-commerce demand in particular is extremely high quality. So it’s coming from a combination of merchants like Walmart and Target and other people like that, as well as from brands selling directly themselves, like a Wayfair or a Skechers or companies like that. So it is — we’re showing really good momentum. It’s exceeding the growth rate of the rest of our business, and we expect that that’s going to continue.
So that’s kind of what we’ve disclosed about e-commerce again. We haven’t really disclosed how much of the breakout it is over time. In terms of what’s the opportunity to kind of grow ex-TAC margins over time, especially relative to e-commerce. So first of all, what we’ve said is we expect to be at around 35% Ex-TAC margin this year. That’s kind of the midpoint of our guidance. We’ve said that we think that we have an opportunity to get that back up to 40% and beyond that over time, and part of that will be growth of e-commerce. E-commerce we report on a net basis, so it’s highly accretive to Ex-TAC margins just because of that. But even beyond that, it’s really high-value demand and helps us with our margins overall. So I think we do believe we have a good opportunity to grow our Ex-TAC margins back above 40% over time.
And a part of that will be from e-commerce.
Unidentified Analyst: Great. Thank you very much.
Operator: Thank you. I’m seeing no further questions. I would now like to hand the call back over to Adam Singolda.
Adam Singolda: Thanks for joining us, everyone, on the call today. I hope you can see we’re very happy with our strong start to the year. The key things to take away from the call today are, one, Q1 showed a great momentum in the business, being the high end of our guidance, reiterating 2024 which makes this year a record year for us. Our growth rates are accelerating, which is great to see, and then our top two priorities are advertiser success and ramping Yahoo, both are doing well. Apple News is now expanding. Last quarter it was in Australia and Canada. Now it’s in the U.S. and the U.K. And there’s a lot going on, a lot of work, but we’re very happy with the strong momentum we have seen so far. I hope to see everyone soon, and thanks for joining us.
Operator: Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect.
