Taboola.com Ltd.

Second-quarter revenue was $476.8 million, up 2% year over year. Ex-TAC gross profit increased 12% year over year to $192.4 million, gross profit rose 3% year over year to $139.5 million, net income was $4.3 million, non-GAAP net income was $41.3 million, and adjusted EBITDA was $55.5 million, representing a 29% margin. Operating cash flow was $31.3 million and free cash flow was $17.3 million. For Q3, management guided to revenue of $460 million to $473 million, gross profit of $148 million to $152 million, ex-TAC gross profit of $184 million to $190 million, adjusted EBITDA of $51.5 million to $56.5 million, and non-GAAP net income of $38 million to $42 million. For the full year, the company raised guidance to revenue of $1.93 billion to $1.96 billion, gross profit of $605 million to $615 million, ex-TAC gross profit of $772 million to $783 million, adjusted EBITDA of $228 million to $240 million, and non-GAAP net income of $168 million to $176 million.

Adam Singolda said the quarter validated Taboola’s long-term strategy despite two headwinds: Google’s policy change affecting Explore More and the removal of low-quality publishers. He emphasized that the company is increasingly seen as a performance advertising alternative beyond search and social, with AI and proprietary data positioning Taboola for the next generation of advertising. He was notably upbeat on deeper dive, Realize Plus, and the upcoming publisher expansion, framing these as evidence that the strategy is working and could support sustainable double-digit ex-TAC growth.

Stephen Walker highlighted that revenue growth was pressured by the supply cleanup and the Google Explore More change, but ex-TAC gross profit outpaced revenue because ad rates improved and mix shifted toward higher-margin areas. He said gross profit was also affected by a one-time noncash write-down of about $12 million tied to publisher prepayments, and noted FX was roughly a $7.5 million headwind to Q2 adjusted EBITDA on a constant-currency basis. He also pointed to strong liquidity, with $133.1 million in cash and cash equivalents, $72 million in long-term debt, and about $198 million available under the revolver, while continuing to prioritize buybacks, including repurchasing approximately 9.4 million shares for $41.4 million in the quarter.

Analysts focused on the user and monetization traction in deeper dive and Realize Plus, the scale of the Google Explore More impact, the nature of the low-quality publisher cleanup, and the implications for ad demand and search-referral exposure. Management said deeper dive is approaching 10 million users and is seeing north of 10% adoption on publisher sites, while Realize Plus has about 300 advertisers using it; they described both as early but promising. On the headwinds, management said the Google change was faster than expected, the Explore More impact was over $20 million of ex-TAC in the second half, and search-referral exposure is smaller because less than 5% of U.S. page views come from search. They also said most removed publishers were international, largely in Greater China, and that the broad ad market remains fairly stable despite macro caution.