So that’s – if you want to see how much we are investing, you can kind of look at the delta of our operating expenses in Q4, and that gives you a pretty good idea. I would say, as of right now, we expect most of the hiring that we need to support the transition of the Yahoo business to Taboola to be done by the end of Q1. So we’re in that ramp phase yet, it’s not all there yet, but it will probably all be added by the end of Q1. And just as a reminder for everybody. In terms of the revenue, we’re starting to transition advertisers now, the impact on Q4 will be small, but then we’ll be fully ramped by the middle of next year.
James Kopelman: Great, thank you guys.
Stephen Walker: Thank you.
Operator: Our next question or comment comes from the line of Laura Martin from Needham. Ms. Martin, your line is now open.
Laura Martin: Hi, can you guys hear me okay?
Adam Singolda: Yes. Good morning.
Laura Martin: Great. Good morning. So I wanted to ask about, so my net revenue ex-TAC is down 1%, despite the fact that we’re selling new Yahoo ad-avails, we had strong growth in Microsoft of 2X, eCommerce of double digits and News revenue growth. So my question is, what’s falling? Is it just the yield because we’re bringing on all this new ad units on for Yahoo and we’re not bringing on their new demand? What’s going wrong that’s offsetting all these wonderful growth categories that you wrote about in the press release, Adam?
Adam Singolda: Yes, I’ll take it. So, it’s actually, if you look at the business right, the core supply of our business and the core business in general is very strong. We’re winning publishers, we’re investing in yield expansion, Q3 revenue is up over last year 8%, Q4 is 17% up versus last year. The main thing that is still affecting us is which we’re carrying from the end of 2022 is the decline of yield in 2022, so because the yields went down throughout the year, the beginning of 2023 was just the pie smaller and that’s something that we still carry and so we’re still seeing that in our results. But as we – as we are going to expand yield and like I said, I do expect it to go up and right in 2024 we’re going to see that recovering and again mainly because of our investment as a company. So the main thing that creates this optics is that end of 2022 and how we started 2023.
Stephen Walker: Let me also just add that, if you look at the midpoint of our guide, we are expecting gross revenue to grow 17% year-over-year in Q4, and ex-TAC to grow 8% year-over-year in Q4. So we’re basically returning to growth, we’re just lapping some tougher comparables from before yield declines happened in 2022.
Laura Martin: Okay, super helpful. Okay. My second one is on one of things I’m glad you’re reiterating 2024, the $200 million and the $100 million of free cash flow as well. My question to you Adam is, is the use of cash to prepay more debt and repurchase more shares with that huge step up in free cash flow and EBITDA implies that you don’t actually have a better return on capital use of funds, which would imply that you don’t think there is something in the fundamentals of your business you can invest in, it’s a higher return, so could you speak to that, why shrinking your capital structure is their highest return on capital?
Stephen Walker: Yes, I think – let me jump in Laura, Adam would love to answer it, but he pointed at me. So, I think what I would say is, we can fund all the investments that we wanted to do in our business out of our existing operating cash flow. So we really don’t need to use any of the cash that we are going to use on share buybacks or debt repayments to fund any sort of new initiatives. And we think – I think we’ve talked about this in the past. We think of R&D as an investment and that’s where we spend our money. We think we’re investing the right amount right now in those new initiatives. I think there is a, there is a natural limit in terms of how many things any one company can do and we have a lot of investment initiatives going on.
We’ve got investments going on in eCommerce, we’re bringing on Yahoo, we’ve got our performance advertising investments. We obviously are continuing to invest in our bidding platform. So we’re investing in a lot of things, we think we’re investing the right amount and yet we were still able to generate excess cash flow and we think right now frankly buying back shares is a very good use of our cash. Because we think there’s a good return on that and that’s getting expenses, so we do want to pay that down. So we have enough cash flow that we can do all of those things.
Adam Singolda: And just one more note to add is that, we also as the management, we care about free cash flow per share. So buying back share helps us and our investors to kind of track that over time as we kind of stabilize our share count. So that’s another thing that we care about and we hope over time we can spend more time on.
Laura Martin: Okay, that’s super helpful. My last point is on, there’s a lot of industry pressure on made for advertising websites. Could you talk about whether you get caught up in that category and in that negative sort of feedback loop from a lot of industry, a lot of industry criticism right now that type of website?
Adam Singolda: Yes, of course, we monitor the industry discussion, I’ll say, I’ll tell you we’re not concerned about it as it relates to us. We had a small single-digit percent of revenue spent by publishers of all kinds. So it’s small, from an exposure perspective, and we feel good about our leadership with our policies and our moderation team. We have about 100 people working full-time kind of making sure that we adhere to those policies and we support the industry trends towards making sure that advertisers know exactly where they spend and what value they get. So I think it’s a very good discussion to have and as a company I think we’re in a good place.
Laura Martin: Thank you very much.
Stephen Walker: Thanks a lot.
Adam Singolda: Thanks.
Operator: Thank you. Our next question or comment comes from the line of Andrew Boone from JMP Securities. Mr. Boone, your line is now open.
Andrew Boone: Good morning and thanks for taking my questions. Adam, I wanted to go to a big picture question in terms of the strategy of Yahoo deal in the first place. We’ve talked about in the past, the benefits of scale and so just relate that to where we are today, like how is scale playing through and benefit the overall platform for Taboola as it relates to today and then how do we think about that for ’24?
