Yaron Galai stepping down as Outbrain CEO after 17 years amid disappointing financial results
Yaron Galai stepping down as Outbrain CEO after 17 years amid disappointing financial results
The co-founder will continue as Chairman of the Board and advisor to the company, with David Kostman, who joined as co-CEO in 2017, to assume the role of sole CEO
Internet recommendation platform Outbrain has released disappointing financial reports, showing a drop in revenues and weakness in the bottom line. Simultaneously, it announced the retirement of Yaron Galai from his position as co-CEO, effective this coming April.
Galai, a founding team member of the company, has led it for 17 years. Over the past five years, he served as co-CEO alongside David Kostman, who will now assume the role of sole CEO. Galai will transition to the position of Chairman of the Board and advisor to the company.
Since going public in the 2021 IPO wave, Outbrain has struggled to achieve significant revenue growth. While it showed a slight improvement in operational indices in the second half of 2023, its annual revenues decreased by 6% to $935.8 million, with a 4% decrease in gross profit.
In terms of the bottom line, Outbrain recorded a profit of $10 million, which includes a one-time receipt of $14 million. This marks an improvement compared to the $24 million loss in 2022. After burning $22 million in cash in 2022, the company managed to reduce the cash burn rate to $6.5 million last year.
Looking ahead, Outbrain predicts only a slight improvement for next year without any significant developments. This further emphasizes the substantial gap between Outbrain and Taboola, led by founder Adam Singolda, which has surpassed Outbrain in performance and value.
At the opening of trading in New York, Outbrain’s market cap dropped under $190 million, while Taboola, which released its results earlier in the week, is trading at a value of $1.3 billion. The company's had planned to merge in 2020, but it eventually fell through.
Taboola registered revenues of $1.4 billion in 2023 and a gross profit of $425.6 million. It is expecting revenue to grow around 33% this year, with adjusted EBITDA to reach over $200 million and free cash flow to hit $100 million.
