Taboola Boosts 2025 Outlook with $1.89B Revenue and $214M EBITDA as Realize Gains Momentum

Strong Performance and Strategic Moves in Taboola's Q2 2025 Earnings Call

Taboola.com Ltd. (TBLA) delivered impressive results during its second quarter of 2025, showcasing robust financial performance and strategic initiatives that are shaping the company’s future. The CEO, Adam Singolda, opened the earnings call by highlighting the company's strong execution, which exceeded expectations across all key metrics. He noted that the company repurchased approximately 12% of its shares in the first half of the year, reflecting confidence in the business and long-term vision.

Singolda emphasized the early traction of Realize, the new performance advertising platform, and announced an increase in full-year guidance. This move underscores the company’s commitment to capitalizing on growth opportunities and maintaining a proactive stance in the competitive digital advertising landscape.

Key Financial Highlights

The CFO, Stephen C. Walker, provided detailed insights into the company’s financial performance for the quarter. Revenues reached $465.5 million, representing an 8.7% year-over-year growth. Ex-TAC gross profit was $172.1 million, reflecting a 15.1% increase. Additionally, the company reported a non-GAAP net income of $30.2 million, with adjusted EBITDA reaching $45.2 million, up 21.3% compared to the previous year.

In terms of share repurchases, the company repurchased approximately 32 million shares at an average price of $3.13, totaling $100.1 million in the second quarter. With additional repurchases through July and a new $200 million authorization, the total share repurchase program now stands at $285 million.

Outlook and Guidance

Taboola raised its Q3 2025 guidance, projecting revenues between $461 million and $469 million, with gross profit ranging from $127 million to $133 million. The company also increased its full-year 2025 guidance, setting revenue targets between $1.86 billion and $1.89 billion, along with improved figures for gross profit, ex-TAC gross profit, adjusted EBITDA, and non-GAAP net income.

Management highlighted that this guidance reflects a strong first half of the year and continued momentum as the company moves into the second half. The projected full-year growth rate of 3% to 5% is considered the best representation of the true growth of the core business.

Financial Results and Operational Metrics

Q2 2025 revenues reached $465.5 million, up 8.7% year-over-year. Ex-TAC gross profit was $172.1 million, up 15.1%, driven by both an 8.5% increase in the number of scaled advertisers and a 1.8% increase in average revenue per scaled advertiser. Adjusted EBITDA was $45.2 million, with a margin of 26.2%, up 130 basis points from Q2 2024.

Free cash flow reached $34.2 million, over 30% higher than the previous year. The company ended the quarter with a net cash balance of $27.2 million and cash and cash equivalents of $115.2 million.

Analyst Questions and Management Responses

During the Q&A session, analysts raised several questions about the roadmap to return to double-digit growth, the role of Realize, and the impact of LLM-driven search changes on the OpenWeb. Walker explained that the current full-year guide of 3% to 5% does not include Realize, but the platform is expected to play a crucial role in regaining budgets from social and display advertising.

Regarding the low 2% increase in average revenue per scaled advertiser, Walker clarified that existing advertisers are growing, while new ones start at a lower end before increasing over time. This dynamic affects the overall average.

Analysts also inquired about the impact of LLM-driven search changes, with Singolda noting minimal effects to date. He mentioned that about 5% of the company’s revenue comes from Google Search, with a mid-single-digit decline observed.

Sentiment and Market Perception

Analysts maintained a neutral to slightly skeptical tone, particularly regarding the modest increase in average revenue per scaled advertiser and the sustainability of growth rates. However, management remained confident during prepared remarks, emphasizing overperformance and upward guidance revisions.

During the Q&A, the tone shifted to more cautious and explanatory, especially when addressing growth drivers and macro risks. Walker stated that the company does not want to guide to next year or anything similar, indicating a focus on current performance.

Risks and Concerns

Management flagged minimal but present risks from LLM-driven changes in search, with mid-single-digit impacts on search traffic. However, they noted that the impact has not been material to date. Continued headwinds from China-related tariffs and advertising spend reductions persist, though the impact remains less than 1%.

Macro uncertainty and competitive pressure in performance marketing were acknowledged, with management focusing on cost discipline, working capital management, and maintaining a flexible capital structure.

Final Takeaway

Taboola's Q2 2025 results reflect strong execution with growth across key financial metrics, a proactive increase in share repurchases, and raised full-year guidance. Management underscored early but promising momentum for the Realize platform, which remains central to the company’s future growth ambitions. Risks from search market shifts and international headwinds are being closely monitored, but the company emphasized its resilience and ability to capture greater share in the performance advertising market while delivering shareholder value through disciplined capital allocation and operational focus.