Taboola.com Ltd. (TBLA) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving.The upward trend in estimate revisions for this company reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions ...

Core Viewpoint - Taboola.com Ltd. (TBLA) has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in a company's earnings picture, which is crucial for predicting near-term stock price movements [2][3]. - Institutional investors rely on earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [3]. Business Improvement Indicators - The increase in earnings estimates and the Zacks rating upgrade for Taboola.com suggest an improvement in the company's underlying business, which could lead to higher stock prices [4]. Earnings Estimate Revisions - Taboola.com is projected to earn $0.45 per share for the fiscal year ending December 2025, with no year-over-year change [7]. - Over the past three months, the Zacks Consensus Estimate for Taboola.com has increased by 33.3% [7]. Zacks Rank System Overview - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [6]. - The upgrade of Taboola.com to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [9].

Summary of Taboola.com (TBLA) FY Conference Call - August 12, 2025 Company Overview - **Company**: Taboola.com (TBLA) - **Industry**: Performance Advertising in the Open Web - **Market Opportunity**: $55 billion market opportunity in performance advertising [4][5] Core Business Model - **Unique Offering**: Taboola is a leading performance advertising platform that complements search and social advertising by providing targeted ads based on first-party data [3][4] - **Daily Reach**: The company reaches approximately 600 million people daily through partnerships with major publishers like Yahoo, Apple News, Disney, and NBC [4] - **Revenue Goals**: Targeting $2 billion in revenue from a $55.7 billion market, with over $200 million in adjusted EBITDA, representing a margin of over 30% [5] Financial Performance - **EBITDA Margin**: The company maintains a strong EBITDA margin of over 30% and a free cash flow of 70% of EBITDA, which is being used for share buybacks [5][67] - **Share Buybacks**: Taboola has repurchased 12% of its shares in the first half of the year and plans to continue aggressive buybacks [5][69] Market Position and Strategy - **Two-Sided Marketplace**: Taboola operates a two-sided marketplace with exclusive long-term relationships with 11,000 publishers, providing predictable inventory and access to consumer data [6][7] - **Shift to Performance Marketing**: The introduction of the Realize product marks a pivot towards broader performance marketing, allowing advertisers to use various ad formats beyond native advertising [12][14] - **Display Advertising Market**: Taboola estimates a $10 billion display ad market among its publishers, aiming to capture 30% market share [18] Growth and Future Outlook - **Growth Strategy**: The company aims to double its revenue from $2 billion to $4 billion primarily through increased demand and spending from advertisers [15][25] - **Realize Product Adoption**: Early signs of success with Realize include 650 advertisers trying the product, with existing advertisers increasing their spending [27][28] - **Focus on Performance Advertising**: Taboola is committed to performance advertising, avoiding branding-focused areas like CTV, which is seen as a competitive and less favorable market [36][39] Challenges and Market Dynamics - **Native Advertising Growth**: The native advertising space is not growing as expected, prompting the shift to a broader performance advertising strategy [22][23] - **Impact of Search Traffic**: Currently, only 5% of Taboola's traffic is driven by search, and the company has not seen significant impacts from changes in search dynamics [48][49] Technology and Innovation - **Use of AI and LLMs**: Taboola is leveraging machine learning and large language models (LLMs) across various departments to enhance productivity and create value [65][66] - **Predictive Audiences**: The company is developing features like predictive audiences to help advertisers optimize their campaigns [64] Conclusion - **Investment Philosophy**: Taboola prioritizes growth while maintaining profitability, with a focus on responsible business practices and maximizing shareholder value through buybacks and strategic investments [56][68] - **Future Expectations**: The company is optimistic about returning to double-digit growth through the successful adoption of Realize and continued investment in technology and partnerships [25][60]

Financial Data and Key Metrics Changes - The company reported Q2 revenues of $465 million, representing a 9% year-over-year growth [9] - Gross profit was $172 million, a 15% increase compared to the previous year [10] - Adjusted EBITDA reached $45 million, reflecting a 21% year-over-year growth with a significant margin expansion [10][26] - Free cash flow grew by 31% year-over-year to $34 million, enabling the company to repurchase approximately $100 million worth of stock in the quarter [10][26] Business Line Data and Key Metrics Changes - The number of scaled advertisers increased by nearly 9%, indicating strong retention and growth among existing clients [11] - Average revenue per scaled advertiser rose by about 2% year-over-year [22] - The growth in gross profit was driven by higher advertising spend and margin expansion on certain digital publishers [23] Market Data and Key Metrics Changes - The company expects nearly $2 billion in gross revenue for 2025, with approximately $700 million in gross profit [7] - The performance advertising market is estimated to be a $55 billion opportunity, with the company positioned to capture a significant share [8] Company Strategy and Development Direction - The company is focusing on its new performance advertising platform, Realize, which aims to expand its reach beyond native advertising into display and social [12] - The strategy includes attracting new advertisers and increasing budgets from existing clients, particularly in the performance advertising segment [19] - The company is also working on adding new open web partners to enhance its supply and data offerings [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's momentum and raised full-year guidance across all key metrics [5][30] - The company noted minimal impact from recent changes in search dynamics driven by LLM, maintaining stable performance [16][18] - Management highlighted the potential for growth in the open web, particularly as advertisers seek alternatives to search and social platforms [19] Other Important Information - The board approved an additional $200 million for the share repurchase program, reflecting confidence in the long-term value of the business [10][29] - The company ended Q2 with a net cash balance of $27.2 million and cash equivalents totaling $115.2 million [28] Q&A Session Summary Question: What is the roadmap to return to double-digit growth? - Management indicated that the path to double-digit growth relies on the success of Realize in capturing more budgets from social and display advertising [34][35] Question: Why is the average revenue per scaled advertiser only increasing by 2%? - Management explained that while the number of scaled advertisers is growing, new advertisers typically start at lower spend levels, which affects the average revenue [46][47] Question: How does the company view the impact of generative AI on the open web? - Management noted minimal impact from LLM-driven changes and highlighted the potential for new traffic opportunities on publisher sites [54][56][59] Question: What is the current state of the tariff environment and its impact on advertising spend? - Management stated that the impact from China is not material, accounting for less than 1% of revenue, and they do not expect significant recovery in the second half of the year [77][78] Question: What is the geographic split of the company's business? - The company is approximately 50% U.S. based but is well diversified globally, with many advertisers spending across multiple regions [95] Question: Why prioritize share buybacks over paying down debt? - Management explained that they are using the revolving credit facility to maintain cash neutrality while aggressively repurchasing shares, which they believe is a capital-efficient strategy [60][62]

Q2 2025 Performance - Revenues reached $465.5 million, a 9% year-over-year increase, exceeding the high end of the guidance range of $438 to $458 million[10] - Gross profit was $135.6 million, up 18% year-over-year, also surpassing the guidance range of $124 to $134 million[10] - ex-TAC Gross Profit reached $172.1 million, a 15% year-over-year increase, exceeding the guidance range of $156 to $166 million[10] - Adjusted EBITDA was $45.2 million, a 21% year-over-year increase, also surpassing the guidance range of $33 to $44 million[10] Scaled Advertisers - Revenue from Scaled Advertisers accounted for 86% of Total Revenue[16] - The number of Scaled Advertisers grew by 8.5% year-over-year to 2,046[16] - Average Revenue Per Scaled Advertiser grew by 1.8% to approximately $196,000[16] Guidance - Q3 2025 revenue is projected to be between $461 to $469 million, a 5% year-over-year increase[17] - Full year 2025 revenue is projected to be between $1.858 to $1.888 billion, a 6% year-over-year increase[17] - Full year 2025 Adjusted EBITDA is projected to be between $208 to $214 million, a 5% year-over-year increase[17] Additional Modeling Assumptions - Interest payments are estimated to be approximately $7 million in 2025, with about $1.3 million per quarter associated with an average of $100 million RCF usage[18] - Share-based compensation is estimated at $66 million for 2025[18] - Capital Expenditures (CapEx) are projected to be $48 million in 2025[18]

Core Insights - Taboola reported strong second quarter results for 2025, exceeding guidance across key metrics and raising full-year guidance [2][3] - The company has repurchased nearly 12% of its shares in the first half of the year, reflecting confidence in its business and long-term vision [2] - Taboola is experiencing early traction with its new performance advertising platform, Realize, indicating potential for future growth [2] Financial Performance - Revenues for Q2 2025 reached $465.5 million, an increase of 8.7% compared to $428.2 million in Q2 2024 [6][16] - Gross profit for Q2 2025 was $135.6 million, up 18.2% from $114.8 million in Q2 2024 [6][16] - Adjusted EBITDA for Q2 2025 was $45.2 million, a 21.3% increase from $37.2 million in Q2 2024 [6][16] - The net loss remained flat at $(4.3) million for both Q2 2025 and Q2 2024 [6][16] Guidance - For Q3 2025, Taboola expects revenues between $461 million and $469 million, and for the full year 2025, revenues are projected at $1.888 billion [3][18] - The company anticipates gross profit for Q3 2025 to be between $127 million and $133 million, and for the full year 2025, gross profit is expected to be between $541 million and $555 million [3][18] - Adjusted EBITDA guidance for Q3 2025 is set between $43 million and $48 million, with full-year guidance between $208 million and $214 million [3][18] Cash Flow and Investments - Cash flow from operating activities for Q2 2025 was $47.4 million, compared to $38.8 million in Q2 2024 [6][16] - Free cash flow for Q2 2025 was $34.2 million, up from $26.2 million in Q2 2024 [6][16] - The company has shown strong collections and lower publisher prepayments contributing to improved cash flow [6][16] Shareholder Returns - The company has aggressively continued its share buyback program, indicating a commitment to returning value to shareholders [2][3] - The weighted-average shares used in computing diluted EPS for Q2 2025 were 313,572,282, compared to 342,566,112 for Q2 2024 [17]

[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q) This section provides essential details regarding the Form 10-Q filing, including registrant identification and key dates [Registrant Information](index=1&type=section&id=Registrant%20Information) This section identifies Taboola.com Ltd. as an accelerated filer, detailing its outstanding share count for the Form 10-Q - Taboola.com Ltd. is filing a Form 10-Q for the quarterly period ended June 30, 2025[2](index=2&type=chunk) - The registrant is classified as an **'Accelerated filer'**[7](index=7&type=chunk) | Share Type | Number of Shares Outstanding (as of July 30, 2025) | | :----------- | :------------------------------------------------- | | Total Shares | 296,718,891 | | Ordinary shares | 264,705,115 | | Non-voting Ordinary shares | 32,013,776 | [Note Regarding Forward-Looking Statements](index=4&type=section&id=NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section provides a disclaimer regarding forward-looking statements, highlighting inherent risks and uncertainties [Forward-Looking Statements Disclaimer](index=4&type=section&id=Forward-Looking%20Statements%20Disclaimer) This section cautions that the Form 10-Q contains forward-looking statements, subject to risks and uncertainties, with no obligation to revise them - The report contains forward-looking statements about future results, business strategy, and operations, identified by words like **'believe,' 'may,' 'will,' 'estimate,' 'continue,' 'anticipate,' 'intend,' 'expect'**[11](index=11&type=chunk) - These statements are subject to **risks, uncertainties, and assumptions**, including those detailed in the 'Risk Factors' section of the Annual Report on Form 10-K[11](index=11&type=chunk) - The Company operates in a **competitive and rapidly changing environment**, making it difficult to predict all risks or assess the full impact of factors on actual results[11](index=11&type=chunk) [Part I: Financial Information](index=3&type=section&id=Part%20I%20FINANCIAL%20INFORMATION) This part presents the unaudited consolidated interim financial statements and management's discussion and analysis [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Taboola.com Ltd.'s unaudited consolidated interim financial statements and explanatory notes [Consolidated Interim Balance Sheets](index=5&type=section&id=Consolidated%20Interim%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and shareholders' equity | Metric (U.S. dollars in thousands) | June 30, 2025 (Unaudited) | December 31, 2024 | | :--------------------------------- | :------------------------ | :---------------- | | **ASSETS** | | | | Total current assets | $472,977 | $656,001 | | Total non-current assets | $1,055,604 | $1,062,657 | | **Total assets** | **$1,528,581** | **$1,718,658** | | **LIABILITIES** | | | | Total current liabilities | $439,991 | $485,582 | | Total long-term liabilities | $163,557 | $181,170 | | **SHAREHOLDERS' EQUITY** | | | | Total shareholders' equity | $925,033 | $1,051,906 | | **Total liabilities and shareholders' equity** | **$1,528,581** | **$1,718,658** | - Total assets decreased from **$1,718,658 thousand** as of December 31, 2024, to **$1,528,581 thousand** as of June 30, 2025[13](index=13&type=chunk) - Total shareholders' equity decreased from **$1,051,906 thousand** to **$925,033 thousand** over the same period[13](index=13&type=chunk) [Consolidated Interim Statements of Income (Loss)](index=7&type=section&id=Consolidated%20Interim%20Statements%20of%20Income%20(Loss)) This section details the company's financial performance, outlining revenues, expenses, and net income or loss | Metric (U.S. dollars in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $465,474 | $428,160 | $892,967 | $842,168 | | Gross profit | $135,611 | $114,778 | $254,918 | $223,731 | | Operating profit (loss) | $44 | $(7,631) | $(6,218) | $(25,864) | | Net loss | $(4,345) | $(4,291) | $(13,095) | $(30,449) | | Net loss per share (basic & diluted) | $(0.01) | $(0.01) | $(0.04) | $(0.09) | - Revenues increased by **8.7%** for the three months ended June 30, 2025, and by **6.0%** for the six months ended June 30, 2025, compared to the respective prior periods[17](index=17&type=chunk) - The company reported a net loss of **$(4,345) thousand** for the three months ended June 30, 2025, a slight increase from **$(4,291) thousand** in the prior year, but a significant reduction in net loss for the six months ended June 30, 2025, to **$(13,095) thousand** from **$(30,449) thousand**[17](index=17&type=chunk) [Consolidated Interim Statements of Comprehensive Income (Loss)](index=8&type=section&id=Consolidated%20Interim%20Statements%20of%20Comprehensive%20Income%20(Loss)) This section presents total comprehensive income or loss, including net income and other comprehensive items | Metric (U.S. dollars in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(4,345) | $(4,291) | $(13,095) | $(30,449) | | Other comprehensive income (loss) | $3,541 | $(204) | $2,350 | $(981) | | Comprehensive loss | $(804) | $(4,495) | $(10,745) | $(31,430) | - Other comprehensive income significantly improved, showing a gain of **$3,541 thousand** for the three months ended June 30, 2025, compared to a loss of **$(204) thousand** in the prior year, primarily due to unrealized gains on derivative instruments[20](index=20&type=chunk) - Comprehensive loss decreased substantially to **$(804) thousand** for the three months ended June 30, 2025, from **$(4,495) thousand** in the same period last year[20](index=20&type=chunk) [Consolidated Interim Statements of Shareholders' Equity](index=9&type=section&id=Consolidated%20Interim%20Statements%20of%20Shareholders'%20Equity) This section details changes in equity accounts, including share issuances, repurchases, and retained earnings | Metric (U.S. dollars in thousands) | Balance as of April 1, 2025 | Balance as of June 30, 2025 | | :--------------------------------- | :-------------------------- | :-------------------------- | | Treasury Ordinary shares | $(179,624) | $(280,290) | | Additional paid-in capital | $1,351,576 | $1,369,870 | | Accumulated deficit | $(162,970) | $(167,315) | | Accumulated other comprehensive income (loss) | $(773) | $2,768 | | Total shareholders' equity | $1,008,209 | $925,033 | - Total shareholders' equity decreased from **$1,008,209 thousand** as of April 1, 2025, to **$925,033 thousand** as of June 30, 2025[21](index=21&type=chunk) - Repurchase of ordinary and non-voting ordinary shares resulted in a decrease of **$(100,666) thousand** in treasury shares for the three months ended June 30, 2025[21](index=21&type=chunk) [Consolidated Interim Statements of Cash Flows](index=11&type=section&id=Consolidated%20Interim%20Statements%20of%20Cash%20Flows) This section reports cash generated and used across operating, investing, and financing activities | Metric (U.S. dollars in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $95,508 | $72,624 | | Net cash used in investing activities | $(21,497) | $(13,176) | | Net cash used in financing activities | $(190,028) | $(52,580) | | Exchange rate differences | $4,675 | $(778) | | Increase (decrease) in cash and cash equivalents | $(111,342) | $6,090 | | Cash and cash equivalents - at end of period | $115,241 | $182,198 | - Net cash provided by operating activities increased to **$95,508 thousand** for the six months ended June 30, 2025, from **$72,624 thousand** in the prior year[24](index=24&type=chunk) - Net cash used in financing activities significantly increased to **$(190,028) thousand** for the six months ended June 30, 2025, primarily due to share repurchases and debt repayments[24](index=24&type=chunk) [Notes to Consolidated Interim Financial Statements](index=13&type=section&id=Notes%20to%20Consolidated%20Interim%20Financial%20Statements) This section provides detailed explanations and additional information supporting the interim financial statements [NOTE 1:- GENERAL](index=13&type=section&id=NOTE%201:-%20GENERAL) This note provides general information about Taboola.com Ltd., its business, and commercial agreements - **Taboola.com Ltd.** is a technology company founded in 2006, powering recommendations across the Open Web using an **AI-based algorithmic engine**[27](index=27&type=chunk) - In November 2022, Taboola entered a **30-year exclusive commercial agreement with Yahoo Inc.** to power native advertising across Yahoo's digital properties, involving the issuance of Ordinary and Non-voting Ordinary shares to Yahoo[27](index=27&type=chunk) | Amortization Expense (U.S. dollars in thousands) | Three months ended June 30, 2025 | Six months ended June 30, 2025 | | :----------------------------------------------- | :------------------------------- | :----------------------------- | | Commercial agreement asset amortization | $4,082 | $8,119 | [NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES](index=13&type=section&id=NOTE%202:-%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the key accounting principles and methods used in preparing interim financial statements - The unaudited consolidated interim financial statements are prepared in accordance with **U.S. GAAP** and **SEC rules** for interim reporting[30](index=30&type=chunk) - Effective January 1, 2025, the estimated useful life of servers was adjusted from **three to six years**, resulting in a reduction of depreciation expense by **$2,793 thousand** for the three months and **$5,586 thousand** for the six months ended June 30, 2025[38](index=38&type=chunk) - The Company is evaluating the impact of recently issued accounting pronouncements **ASU 2023-09 (Income Taxes)** and **ASU 2024-03 (Expense Disaggregation Disclosures)**, effective for annual periods beginning after December 15, 2024, and December 15, 2026, respectively[43](index=43&type=chunk)[44](index=44&type=chunk) [NOTE 3:- CASH AND CASH EQUIVALENTS](index=14&type=section&id=NOTE%203:-%20CASH%20AND%20CASH%20EQUIVALENTS) This note provides a breakdown of the company's cash and cash equivalents, highlighting changes over the period | Category (U.S. dollars in thousands) | June 30, 2025 (Unaudited) | December 31, 2024 | | :----------------------------------- | :------------------------ | :---------------- | | Cash | $114,866 | $154,962 | | Money market accounts and funds | — | $70,692 | | Time deposits | $375 | $929 | | Total Cash and cash equivalents | $115,241 | $226,583 | - Total cash and cash equivalents decreased by approximately **49%** from **$226,583 thousand** at December 31, 2024, to **$115,241 thousand** at June 30, 2025[45](index=45&type=chunk) [NOTE 4:- FAIR VALUE MEASUREMENTS](index=16&type=section&id=NOTE%204:-%20FAIR%20VALUE%20MEASUREMENTS) This note details fair value measurements of financial instruments, categorized by valuation hierarchy levels | Description (U.S. dollars in thousands) | Fair Value Hierarchy | June 30, 2025 (Unaudited) | December 31, 2024 | | :-------------------------------------- | :------------------- | :------------------------ | :---------------- | | Money market accounts and funds | Level 1 | $— | $70,692 | | Derivative instruments asset | Level 2 | $2,788 | $468 | | Public Warrants | Level 1 | $(2,530) | $(3,303) | | Private Warrants | Level 3 | $(15) | $(65) | - The fair value of derivative instruments designated as cash flow hedging instruments increased significantly from **$468 thousand (asset)** at December 31, 2024, to **$2,788 thousand (asset)** at June 30, 2025[47](index=47&type=chunk) - The total Warrants liability decreased from **$3,368 thousand** at December 31, 2024, to **$2,545 thousand** at June 30, 2025, primarily due to a change in fair value[51](index=51&type=chunk) [NOTE 5:- SHORT-TERM INVESTMENTS](index=18&type=section&id=NOTE%205:-%20SHORT-TERM%20INVESTMENTS) This note provides information on short-term investment holdings and any changes during the period - As of June 30, 2025, the Company did not hold any short-term bank deposits, compared to **$3,780 thousand** as of December 31, 2024[52](index=52&type=chunk) [NOTE 6:- DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES](index=18&type=section&id=NOTE%206:-%20DERIVATIVE%20INSTRUMENTS%20AND%20HEDGING%20ACTIVITIES) This note describes the company's use of derivative instruments to manage foreign exchange risks and hedging - The Company uses **foreign currency forward contracts and options** to hedge against foreign exchange risks, primarily related to the **New Israeli Shekel (NIS)** against the U.S. dollar, designating these as cash flow hedges[53](index=53&type=chunk) | Notional Amounts (U.S. dollars in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------------- | :------------ | :---------------- | | Derivative instruments designated as cash flow hedging instruments | $37,841 | $49,502 | | Gains Recognized in Consolidated Statements of Loss (U.S. dollars in thousands) | Three months ended June 30, 2025 | Six months ended June 30, 2025 | | :---------------------------------------------------------------------------- | :------------------------------- | :----------------------------- | | Total gains, net | $901 | $1,130 | [NOTE 7:- GOODWILL AND INTANGIBLE ASSETS, NET](index=19&type=section&id=NOTE%207:-%20GOODWILL%20AND%20INTANGIBLE%20ASSETS,%20NET) This note provides details on goodwill and definite-lived intangible assets, including amortization expenses - There was **no impairment or additions to goodwill** during the three and six months ended June 30, 2025[57](index=57&type=chunk) | Definite-lived Intangible Assets, Net (U.S. dollars in thousands) | June 30, 2025 (Unaudited) | December 31, 2024 | | :------------------------------------------------ | :------------------------ | :---------------- | | Merchant/Network affiliate relationships | $21,714 | $37,989 | | Technology | $13,390 | $19,154 | | Publisher relationships | $1,790 | $7,156 | | Total | $37,573 | $65,067 | - Amortization expenses for intangible assets were **$27,494 thousand** for the six months ended June 30, 2025, compared to **$31,693 thousand** for the same period in 2024[58](index=58&type=chunk) [NOTE 8:- FINANCING ARRANGEMENTS](index=19&type=section&id=NOTE%208:-%20FINANCING%20ARRANGEMENTS) This note describes the company's debt facilities, including the new revolving credit agreement and its impact - On March 18, 2025, the Company entered into a new **2025 Revolving Credit Agreement** for up to **$270,000 thousand**, maturing on March 18, 2030[63](index=63&type=chunk)[64](index=64&type=chunk) - The proceeds from the new Revolving Facility were used to repay in full the outstanding principal and accrued interest under the 2021 Credit Agreement, leading to its extinguishment and a recognized loss of **$6,597 thousand**[67](index=67&type=chunk)[68](index=68&type=chunk) - As of June 30, 2025, the Company had **$88,000 thousand** outstanding under the Revolving Facility and was in compliance with its covenants[15](index=15&type=chunk)[66](index=66&type=chunk) [NOTE 9:- SHAREHOLDERS' EQUITY AND SHARE INCENTIVE PLANS](index=20&type=section&id=NOTE%209:-%20SHAREHOLDERS'%20EQUITY%20AND%20SHARE%20INCENTIVE%20PLANS) This note details changes in shareholders' equity, including share buyback programs and compensation - The Company's board authorized an additional **$200,000 thousand** for its share buyback program in February 2025, and another **$200,000 thousand** in July 2025[72](index=72&type=chunk) - During the six months ended June 30, 2025, the Company repurchased **48,231,154 shares** (**36,713,192 Ordinary**, **11,517,962 Non-voting Ordinary**) at an average price of **$3.09 per share**[73](index=73&type=chunk) | Share-based Compensation Expense (U.S. dollars in thousands) | Three months ended June 30, 2025 | Six months ended June 30, 2025 | | :----------------------------------------------------------- | :------------------------------- | :----------------------------- | | Total share-based compensation expense | $16,572 | $32,089 | [NOTE 10:- INCOME TAXES](index=22&type=section&id=NOTE%2010:-%20INCOME%20TAXES) This note explains income tax provisions, effective tax rates, and the impact of recent tax law changes | Effective Tax Rate | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :----------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | ETR | (77.5)% | 35.2% | 1.0% | (6.8)% | - The effective tax rate for the three months ended June 30, 2025, was **(77.5)%**, compared to **35.2%** in the prior year, primarily due to geographic distribution of earnings/losses, valuation allowance changes, and tax benefits from acquired intangible assets[81](index=81&type=chunk) - The Company is assessing the impact of the **'One Big Beautiful Bill Act' (OBBBA)**, signed into law on July 4, 2025, which includes changes to U.S. federal tax law[82](index=82&type=chunk) [NOTE 11:- COMMITMENTS AND CONTINGENCIES](index=22&type=section&id=NOTE%2011:-%20COMMITMENTS%20AND%20CONTINGENCIES) This note discloses contractual commitments, purchase obligations, and potential legal contingencies - The Company enters into commercial agreements with digital properties, sometimes including **guaranteed payments**, which could lead to gross losses if guarantees exceed actual revenue[83](index=83&type=chunk) - As of June 30, 2025, the Company had outstanding non-cancelable purchase obligations of **$36,837 thousand**, primarily for software and IT-related services[84](index=84&type=chunk) - The Company is not currently aware of any legal proceedings that would individually or in aggregate have a **material adverse effect** on its business, financial position, results of operations, or cash flows[85](index=85&type=chunk) [NOTE 12:- RELATED PARTY TRANSACTIONS](index=22&type=section&id=NOTE%2012:-%20RELATED%20PARTY%20TRANSACTIONS) This note details transactions and agreements with related parties, particularly Yahoo Inc., and their impact - **Yahoo** became a principal shareholder in January 2023, following a commercial agreement and issuance of shares[86](index=86&type=chunk) | Related Party Transactions with Yahoo (U.S. dollars in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues from Yahoo | $46,455 (10.0% of total) | $60,302 (14.1% of total) | $94,780 (10.6% of total) | $112,426 (13.3% of total) | | Traffic acquisition costs related to Yahoo | $84,154 | $78,433 | $159,556 | $152,044 | - The Company and Yahoo entered a **Share Repurchase Agreement** in February 2025, amended in March 2025, allowing weekly repurchases of Yahoo's Non-voting Ordinary shares up to **1/3rd of the Rule 10b-18 limit**[92](index=92&type=chunk) [NOTE 13:- SEGMENTS AND GEOGRAPHIC INFORMATION](index=23&type=section&id=NOTE%2013:-%20SEGMENTS%20AND%20GEOGRAPHIC%20INFORMATION) This note provides information on the company's single operating segment, revenue, and long-lived assets by geography - The Company operates in **one operating and reportable segment**, with the CEO acting as the Chief Operating Decision Maker (CODM) who evaluates performance at the consolidated level[93](index=93&type=chunk) | Revenue by Geographic Area (U.S. dollars in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :----------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United States | $220,462 | $204,871 | $421,953 | $398,232 | | Israel | $25,556 | $26,857 | $48,838 | $58,322 | | Germany | $39,425 | $36,732 | $77,506 | $72,429 | | United Kingdom | $19,586 | $16,290 | $39,674 | $36,364 | | Rest of the World | $160,445 | $143,410 | $304,996 | $276,821 | | Total | $465,474 | $428,160 | $892,967 | $842,168 | | Long-lived Assets by Geographic Area (U.S. dollars in thousands) | June 30, 2025 (Unaudited) | December 31, 2024 | | :--------------------------------------------------------------- | :------------------------ | :---------------- | | United States | $50,250 | $39,390 | | Israel | $85,758 | $67,867 | | United Kingdom | $4,112 | $5,024 | | Rest of the world | $17,517 | $16,103 | | Total | $157,637 | $128,385 | [NOTE 14:- NET LOSS PER SHARE ATTRIBUTABLE TO ORDINARY AND NON-VOTING ORDINARY SHAREHOLDERS](index=25&type=section&id=NOTE%2014:-%20NET%20LOSS%20PER%20SHARE%20ATTRIBUTABLE%20TO%20ORDINARY%20AND%20NON-VOTING%20ORDINARY%20SHAREHOLDERS) This note presents the calculation of basic and diluted net loss per share, including anti-dilutive potential shares | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------------------------------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss per share attributable to Ordinary and Non-voting Ordinary shareholders, basic and diluted | $(0.01) | $(0.01) | $(0.04) | $(0.09) | - The net loss per share remained at **$(0.01)** for the three months ended June 30, 2025 and 2024, but improved for the six-month period from **$(0.09)** to **$(0.04)**[97](index=97&type=chunk) | Potential Ordinary Shares Excluded from Diluted EPS (Anti-dilutive) | Three months ended June 30, 2025 | Six months ended June 30, 2025 | | :------------------------------------------------------------------ | :------------------------------- | :----------------------------- | | Warrants | 12,349,990 | 12,349,990 | | RSUs | 34,827,512 | 32,046,117 | | Outstanding share options | 9,639,763 | 9,908,835 | | Total | 56,817,265 | 54,304,942 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Taboola's financial condition, results of operations, business model, key performance drivers, and liquidity [Overview](index=26&type=section&id=Overview) This section describes Taboola's business, market position, and how it generates revenue - **Taboola** is a technology company that places ads on publisher sites, mobile apps, and devices, operating outside major search and social media platforms[99](index=99&type=chunk) - The company serves approximately **11,000 digital property partners** (e.g., NBCNews, Disney, Yahoo, Apple) for monetization and audience growth, reaching about **600 million people daily**[99](index=99&type=chunk) - Revenue is primarily generated when consumers click on, purchase from, or view ads delivered via its **performance AI engine**, with a portion shared with digital properties[102](index=102&type=chunk) [Key Factors and Trends Affecting our Performance](index=26&type=section&id=Key%20Factors%20and%20Trends%20Affecting%20our%20Performance) This section discusses primary internal and external factors influencing Taboola's operational and financial performance - Taboola focuses on maintaining and growing its digital property partners through **exclusive multi-year contracts** and improving yield via algorithms, advertiser base expansion, and new product/ad formats[104](index=104&type=chunk)[105](index=105&type=chunk) - The company aims to grow its advertiser client base, particularly **'Scaled Advertisers' (over $100,000 cumulative gross spend)**, by improving network performance and securing increased budgets[107](index=107&type=chunk) - **Research and development investments**, especially in **AI (Deep Learning)**, are crucial for product innovation and maintaining core business infrastructure[108](index=108&type=chunk) - The global advertising industry exhibits **seasonality**, with strongest revenues and margins in Q4 and weakest in Q1[109](index=109&type=chunk) - Taboola is less susceptible to **privacy regulations and industry trends** (e.g., Google/Apple changes) due to its first-party cookie capability and rich contextual information from partner page integration[110](index=110&type=chunk) [Key Financial and Operating Metrics](index=27&type=section&id=Key%20Financial%20and%20Operating%20Metrics) This section presents a summary of Taboola's key financial and operating performance indicators | Metric (U.S. dollars in thousands, except per share data) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $465,474 | $428,160 | $892,967 | $842,168 | | Gross profit | $135,611 | $114,778 | $254,918 | $223,731 | | Net loss | $(4,345) | $(4,291) | $(13,095) | $(30,449) | | EPS diluted | $(0.01) | $(0.01) | $(0.04) | $(0.09) | | Cash flow provided by operating activities | $47,397 | $38,791 | $95,508 | $72,624 | | ex-TAC Gross Profit (Non-GAAP) | $172,133 | $149,540 | $323,866 | $288,428 | | Adjusted EBITDA (Non-GAAP) | $45,178 | $37,231 | $81,113 | $60,720 | | Free Cash Flow (Non-GAAP) | $34,161 | $26,158 | $70,231 | $54,402 | - Revenues increased by **8.7%** for Q2 2025 and **6.0%** for H1 2025 YoY[113](index=113&type=chunk) - Adjusted EBITDA increased by **21.3%** for Q2 2025 and **33.6%** for H1 2025 YoY[113](index=113&type=chunk) [Non-GAAP Financial Measures](index=28&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles non-GAAP financial measures used to evaluate company performance - Non-GAAP financial measures are presented to provide **supplemental information** useful to investors and management for evaluating performance and comparability over time[114](index=114&type=chunk) - These measures have limitations and should not be considered in isolation or as **substitutes for GAAP measures**[115](index=115&type=chunk) [ex-TAC Gross Profit](index=28&type=section&id=ex-TAC%20Gross%20Profit) This measure reflects gross profit adjusted for other cost of revenues and non-cash amortization - **ex-TAC Gross Profit** is calculated as gross profit adjusted to add back other cost of revenues and non-cash amortization of the Commercial agreement asset, reflecting direct cash contribution components[116](index=116&type=chunk) | Metric (U.S. dollars in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $465,474 | $428,160 | $892,967 | $842,168 | | Gross profit | $135,611 | $114,778 | $254,918 | $223,731 | | Add back: Other cost of revenues | $36,522 | $34,762 | $68,948 | $64,697 | | ex-TAC Gross Profit | $172,133 | $149,540 | $323,866 | $288,428 | [Adjusted EBITDA and Ratio of Adjusted EBITDA to ex-TAC Gross Profit](index=29&type=section&id=Adjusted%20EBITDA%20and%20Ratio%20of%20Adjusted%20EBITDA%20to%20ex-TAC%20Gross%20Profit) This section defines Adjusted EBITDA and its ratio to ex-TAC Gross Profit, measuring operational profitability - **Adjusted EBITDA** is net income (loss) adjusted for finance income/expenses, income tax, depreciation/amortization, non-cash amortization of Commercial agreement asset, share-based compensation, and other noteworthy items[121](index=121&type=chunk) | Metric (U.S. dollars in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(4,345) | $(4,291) | $(13,095) | $(30,449) | | Adjusted EBITDA | $45,178 | $37,231 | $81,113 | $60,720 | | Ratio of Adjusted EBITDA to ex-TAC Gross Profit | 26.2% | 24.9% | 25.0% | 21.1% | [Non-GAAP Net Income (Loss)](index=30&type=section&id=Non-GAAP%20Net%20Income%20(Loss)) This measure adjusts net income for specific non-cash and non-recurring items for core profitability - **Non-GAAP Net Income (Loss)** adjusts net income (loss) for revaluation of Warrants liability, share-based compensation, M&A costs, amortization of acquired intangibles and Commercial agreement asset, foreign currency gains/losses, and related tax effects[128](index=128&type=chunk) | Metric (U.S. dollars in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(4,345) | $(4,291) | $(13,095) | $(30,449) | | Non-GAAP Net Income (Loss) | $30,209 | $23,010 | $55,208 | $26,842 | [Free Cash Flow](index=31&type=section&id=Free%20Cash%20Flow) This measure represents cash generated by operations after capital expenditures, indicating financial flexibility - **Free Cash Flow** is calculated as net cash flow provided by operating activities minus purchases of property, plant and equipment, including capitalized internal-use software[133](index=133&type=chunk) | Metric (U.S. dollars in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $47,397 | $38,791 | $95,508 | $72,624 | | Purchases of property and equipment, including capitalized internal-use software | $(13,236) | $(12,633) | $(25,277) | $(18,222) | | Free Cash Flow | $34,161 | $26,158 | $70,231 | $54,402 | [Components of Our Results of Operations](index=31&type=section&id=Components%20of%20Our%20Results%20of%20Operations) This section breaks down revenue and expense categories contributing to the company's financial results - Revenues are generated from Advertisers based on **CPC, CPM, or CPA models**[135](index=135&type=chunk) - Cost of revenues primarily includes **traffic acquisition cost (TAC)** paid to digital properties and other costs like data center, depreciation, and personnel[136](index=136&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk) - Operating expenses consist of **Research and development, Sales and marketing, and General and administrative**, which are expected to increase to support growth[140](index=140&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk) - Finance income (expenses), net, includes **interest, Warrants liability adjustments, foreign exchange fluctuations, and bank fees**[145](index=145&type=chunk) - The Company benefits from **'Privileged Enterprise'** and **'Preferred Technology Enterprises'** status under Israeli law, granting tax exemptions and reduced tax rates[146](index=146&type=chunk)[147](index=147&type=chunk) [Comparison of the Three months ended June 30, 2025 and 2024](index=32&type=section&id=Comparison%20of%20the%20Three%20months%20ended%20June%2030,%202025%20and%202024) This section analyzes financial performance for the three-month period, comparing 2025 results to 2024 - Revenues increased by **$37.3 million (8.7%)** to **$465.5 million**, driven by an **8.5% growth in Scaled Advertisers** and **$28.8 million** from new digital property partners[149](index=149&type=chunk) - Gross profit increased by **$20.8 million (18.2%)** to **$135.6 million**, and ex-TAC Gross Profit increased by **$22.6 million (15.1%)**, benefiting from higher margin digital properties[150](index=150&type=chunk) - Operating profit was **$44 thousand**, a significant improvement from an operating loss of **$(7,631) thousand** in the prior year[148](index=148&type=chunk) - Finance expenses, net, increased by **$3.4 million**, mainly due to a **$4.8 million decrease** in income from Warrants liability revaluation, partially offset by a **$1.6 million decrease** in interest expenses[158](index=158&type=chunk) - Tax expenses increased by **$4.2 million**, driven by higher profitability and one-time tax adjustments[159](index=159&type=chunk) [Comparison of the Six months ended June 30, 2025 and 2024](index=33&type=section&id=Comparison%20of%20the%20Six%20months%20ended%20June%2030,%202025%20and%202024) This section analyzes financial performance for the six-month period, comparing 2025 results to 2024 - Revenues increased by **$50.8 million (6.0%)** to **$893.0 million**, primarily due to growth in Scaled Advertisers and **$54.5 million** from new digital property partners[161](index=161&type=chunk) - Gross profit increased by **$31.2 million (13.9%)** to **$254.9 million**, and ex-TAC Gross Profit increased by **$35.4 million (12.3%)**, driven by advertising spend growth and margin improvements[162](index=162&type=chunk) - Operating loss significantly decreased to **$(6,218) thousand** from **$(25,864) thousand** in the prior year[160](index=160&type=chunk) - Finance expenses, net, increased by **$4.3 million**, mainly due to a **$7.2 million increase** from the new Revolving Credit Facility and a **$3.1 million decrease** in Warrants liability revaluation income, partially offset by a **$3.4 million decrease** in interest expenses[170](index=170&type=chunk) - Tax expenses decreased by **$2.1 million**, resulting in a **$0.1 million tax benefit**, attributed to a new full-year effective tax rate methodology, seasonality, and decreased intangibles[171](index=171&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's ability to meet its financial obligations and fund operations - Net cash provided by operating activities was **$95.5 million** for the six months ended June 30, 2025, an increase of **$22.9 million** from the prior year[172](index=172&type=chunk)[181](index=181&type=chunk) | Cash and Cash Equivalents (U.S. dollars in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $115,241 | $226,583 | - The Company believes current liquidity, combined with operating cash flow, will be sufficient for at least the **next 12 months**, with potential for additional equity or debt financing for growth[175](index=175&type=chunk) - As of June 30, 2025, **$88.0 million** was outstanding under the **$270.0 million 2025 Revolving Credit Facility**, which matures on March 18, 2030[175](index=175&type=chunk)[176](index=176&type=chunk) - During the six months ended June 30, 2025, the Company repurchased **48.2 million shares** for **$150.0 million** under its Buyback Program, with **$96.3 million** remaining authorization[179](index=179&type=chunk) [Contractual Obligations](index=36&type=section&id=Contractual%20Obligations) This section outlines the company's future payment commitments under various contractual agreements | Contractual Obligations (U.S. dollars in thousands) | 2025 (Remainder) | 2026 | 2027 | 2028 | 2029 | Thereafter | | :-------------------------------------------------- | :--------------- | :-------- | :-------- | :-------- | :-------- | :--------- | | Debt Obligations | $— | $— | $— | $— | $— | $88,000 | | Operating Leases | $15,563 | $28,915 | $20,038 | $11,290 | $7,785 | $14,861 | | Non-cancellable purchase obligations | $21,898 | $10,132 | $4,708 | $99 | $— | $— | | Total Contractual Obligations | $37,461 | $39,047 | $24,746 | $11,389 | $7,785 | $102,861 | - The Company has **$88,000 thousand** in debt obligations due thereafter (after 2029), related to the 2025 Revolving Credit Facility[192](index=192&type=chunk)[198](index=198&type=chunk) - Non-cancelable purchase obligations, primarily for software and IT services, total **$36,837 thousand**, with **$21,898 thousand** due in the remainder of 2025[192](index=192&type=chunk)[198](index=198&type=chunk) [Recent Accounting Pronouncements](index=36&type=section&id=Recent%20Accounting%20Pronouncements) This section discusses the impact of recently issued accounting standards on financial reporting - There were **no material recent accounting pronouncements** impacting the Company's accounting policies that were not already discussed in its 2024 Form 10-K[195](index=195&type=chunk) [Critical Accounting Estimates](index=36&type=section&id=Critical%20Accounting%20Estimates) This section highlights significant accounting estimates and judgments requiring management's complex assessments - There have been **no material changes** to the Company's critical accounting policies and estimates for the year ended December 31, 2024, as included in its 2024 Form 10-K[197](index=197&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details Taboola's exposure to foreign currency, interest rate, inflation, and credit risks [Foreign Currency Exchange Risk](index=37&type=section&id=Foreign%20Currency%20Exchange%20Risk) This section assesses exposure to foreign currency exchange rate fluctuations and hedging strategies | Currency Impact on Operating Income (Loss) (U.S. dollars in thousands) | Six months ended June 30, 2025 (+10% change) | Six months ended June 30, 2025 (-10% change) | | :------------------------------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | NIS/USD | $(1,969) | $1,969 | | EUR/USD | $2,810 | $(2,810) | | GBP/USD | $(2,090) | $2,090 | | JPY/USD | $527 | $(527) | - The Company uses **derivative financial instruments** (foreign currency forward contracts, call and put options) designated as cash flow hedges to manage foreign exchange risks, particularly for **NIS against the U.S. dollar**[199](index=199&type=chunk) [Interest Rate Risk](index=37&type=section&id=Interest%20Rate%20Risk) This section evaluates exposure to changes in interest rates on cash, investments, and variable-rate debt - The Company's cash, cash equivalents, and short-term investments are held for working capital, and changes in interest rates affect their **yield and market value**[201](index=201&type=chunk) - As of June 30, 2025, the Company had **$88.0 million** of outstanding borrowings under its **2025 Revolving Credit Facility** with a variable interest rate, making it susceptible to interest rate fluctuations[202](index=202&type=chunk) - The Company does not use derivative financial instruments like **interest rate swaps** for hedging or speculative purposes[203](index=203&type=chunk) [Inflation Risk](index=37&type=section&id=Inflation%20Risk) This section discusses the potential impact of inflation on operating costs and financial performance - Inflation has led to **higher equipment and labor costs**, and the Company may not be able to effectively mitigate significant inflationary pressures on its costs, potentially affecting its business and financial results[204](index=204&type=chunk) [Credit Risk](index=37&type=section&id=Credit%20Risk) This section assesses credit risk from accounts receivable, cash balances, and derivative instruments - Credit risk from accounts receivable is generally **not significant** due to ongoing credit evaluations and monitoring, with no single customer accounting for **10% or more** of receivables or revenue (except as disclosed in Note 12)[205](index=205&type=chunk)[206](index=206&type=chunk) - Cash balances are maintained primarily in **U.S., UK, and Israeli banks**, with U.S. and UK deposits exceeding insurance limits, requiring regular monitoring of bank financial strength[207](index=207&type=chunk) - Derivative instruments expose the Company to **credit risk from counterparties**, mitigated by limiting to major financial institutions and spreading risk[209](index=209&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) This section reports on the effectiveness of Taboola's disclosure controls and internal financial reporting controls [Evaluation of Disclosure Controls and Procedures](index=38&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section confirms management's assessment of the effectiveness of the company's disclosure controls - As of June 30, 2025, management, with the participation of the CEO and CFO, concluded that the Company's disclosure controls and procedures were **effective at the reasonable assurance level**[210](index=210&type=chunk) [Changes in Internal Control over Financial Reporting](index=38&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports on any material changes in internal control over financial reporting - There were **no changes in internal control over financial reporting** during the period covered by this Quarterly Report on Form 10-Q that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[211](index=211&type=chunk) [Part II: Other Information](index=39&type=section&id=Part%20II%20OTHER%20INFORMATION) This part includes disclosures on legal proceedings, risk factors, equity sales, and other corporate information [Item 1. Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) This section confirms Taboola is not currently involved in legal proceedings with a material adverse effect - The Company is not presently party to any legal proceedings that are believed to have a **material adverse effect** on its consolidated business prospects, financial condition, liquidity, results of operation, cash flows or capital levels[212](index=212&type=chunk) [Item 1A. Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) This section refers to comprehensive risk factors in the 2024 Form 10-K, with no additional material changes - Investing in Ordinary shares involves a **high degree of risk**, as described in Part I, Item 1A: 'Risk Factors' of the 2024 Form 10-K[212](index=212&type=chunk) - There are **no additional material changes** to the Risk Factors in the 2024 Form 10-K of which the Company is currently aware[213](index=213&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details share buyback activities, including repurchased shares and remaining authorization | Period | Total Number of Shares Repurchased | Average Price Paid Per Share | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan or Program (U.S. dollars in thousands) | | :------------------- | :--------------------------------- | :--------------------------- | :--------------------------------------------------------------------------------------------------------------- | | April 1 - April 30, 2025 | 15,111,587 | $2.83 | $153,611 | | May 1 - May 31, 2025 | 12,662,934 | $3.32 | $111,536 | | June 1 - June 30, 2025 | 4,214,474 | $3.61 | $96,307 | - The Company's board of directors authorized up to an additional **$200,000 thousand** for the Buyback Program in February 2025[215](index=215&type=chunk) [Item 3. Defaults upon Senior Securities](index=39&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) This section confirms that there were no defaults upon senior securities during the reporting period - None [Item 4. Mine Safety Disclosures](index=39&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the Company - Not applicable [Item 5. Other Information](index=39&type=section&id=Item%205.%20Other%20Information) This section provides additional corporate information, including an officer's 10b5-1 plan and committee changes [10b5-1 Plan](index=40&type=section&id=10b5-1%20Plan) This section details an officer's 10b5-1 trading plan for the potential sale of company shares - On May 19, 2025, Kristy Sundjaja, Chief People Officer, adopted a **10b5-1 trading plan** for the potential sale of up to **234,885 Ordinary shares**, effective until July 31, 2026, or plan completion[220](index=220&type=chunk) [Committee Composition](index=40&type=section&id=Committee%20Composition) This section reports on changes in the composition of the Nominating and Governance Committee - On August 5, 2025, **Nechemia J. Peres** was appointed as Chair of the Nominating and Governance Committee[221](index=221&type=chunk) [Item 6. Exhibits](index=41&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications, XBRL documents, and amendments - Exhibit **10.1†** is an Amendment to Compensation Package, dated June 4, 2025, by and between the Registrant and Adam Singolda[222](index=222&type=chunk) - Includes **Rule 13a-14(a)/15d-14(a) Certifications** of the Chief Executive Officer and Chief Financial Officer (Exhibits 31.1 and 31.2) and **Section 1350 Certifications (Exhibit 32)**[222](index=222&type=chunk) - Contains **Inline XBRL Instance Document, Taxonomy Extension Schema, Calculation Linkbase, Definition Linkbase, Labels Linkbase, and Presentation Linkbase Documents** (Exhibits 101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE)[222](index=222&type=chunk) [Signatures](index=43&type=section&id=Signatures) This section contains the signature of Stephen C. Walker, CFO, confirming the due filing of the Form 10-Q - The Quarterly Report on Form 10-Q was signed on behalf of the registrant by **Stephen C. Walker, Chief Financial Officer**, on August 6, 2025[224](index=224&type=chunk)

[Executive Summary & Business Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Highlights) Taboola exceeded Q2 2025 guidance with strong growth in Scaled Advertisers, raised full-year guidance, and expanded its share repurchase program [Q2 2025 Performance Overview](index=1&type=section&id=Q2%202025%20Performance%20Overview) Taboola reported strong Q2 2025 financial results, exceeding the high-end of its guidance across key metrics, driven by growth in Scaled Advertisers and higher margin digital property partners - Taboola delivered a strong second quarter, beating the high end of our guidance across our key metrics[2](index=2&type=chunk) - Revenues were primarily driven by an **8.5% growth in Scaled Advertisers**, complemented by a **1.8% increase in Average Revenue per Scaled Advertiser**[4](index=4&type=chunk) - Adjusted EBITDA margins expanded to **26.2%** from **24.9%**[4](index=4&type=chunk) | Metric | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | YoY Change | | :----- | :--------------------- | :--------------------- | :--------- | | Revenues | $465.5 | $428.2 | +8.7% | | Gross Profit | $135.6 | $114.8 | +18.2% | | ex-TAC Gross Profit | $172.1 | $149.5 | +15.1% | | Net Loss | $(4.3) | $(4.3) | 0.0% | | Adjusted EBITDA | $45.2 | $37.2 | +21.3% | | Cash Flow from Operating Activities | $47.4 | $38.8 | +22.2% | | Free Cash Flow | $34.2 | $26.2 | +30.5% | [Full-Year 2025 Guidance Update](index=1&type=section&id=Full-Year%202025%20Guidance%20Update) Following strong Q2 performance, Taboola has increased its full-year 2025 financial guidance across all key metrics - We're raising full-year guidance across the board and continuing to aggressively buy back shares[2](index=2&type=chunk) | Metric | FY 2025 Guidance (Millions USD) | | :----- | :------------------------------ | | Revenues | $1,858 - $1,888 | | Gross Profit | $541 - $555 | | ex-TAC Gross Profit | $689 - $703 | | Adjusted EBITDA | $208 - $214 | | Non-GAAP Net Income (Loss) | $138 - $144 | [Strategic Initiatives & Share Repurchase](index=1&type=section&id=Strategic%20Initiatives%20%26%20Share%20Repurchase) Taboola expanded its share repurchase program by $200 million and is seeing early positive traction with its new performance advertising platform, Realize - Announces **$200M Share Repurchase Expansion**[1](index=1&type=chunk) - We bought back nearly **12% of the company** in the first half of the year which reflects our confidence in the business and our long-term vision[2](index=2&type=chunk) - We're also seeing exciting early traction with Realize, our new performance advertising platform[2](index=2&type=chunk) [Company Information](index=2&type=section&id=Company%20Information) This section provides an overview of Taboola's business as a performance advertising technology leader and defines its key non-GAAP financial measures [About Taboola](index=4&type=section&id=About%20Taboola) Taboola is a global leader in performance advertising technology, enabling businesses to grow by reaching approximately 600 million daily active users across a network of premium publishers and OEMs - Taboola empowers businesses to grow through performance advertising technology that goes beyond search and social and delivers measurable outcomes at scale[12](index=12&type=chunk) - Taboola works with thousands of businesses who advertise directly on Realize, Taboola's powerful ad platform, reaching approximately **600 million daily active users** across some of the best publishers in the world[13](index=13&type=chunk) - Publishers like NBC News, Yahoo, and OEMs such as Samsung, Xiaomi and others use Taboola's technology to grow audience and revenue, enabling Realize to offer unique data, specialized algorithms, and unmatched scale[13](index=13&type=chunk) [Non-GAAP Financial Measures & Definitions](index=2&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Definitions) The press release includes several non-GAAP financial measures, such as ex-TAC Gross Profit, Adjusted EBITDA, and Free Cash Flow, which management believes provide useful supplemental information for understanding the company's financial trends and comparing performance with peers, despite their inherent limitations - These non-GAAP financial measures are not measures of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing the Company's financial results[7](index=7&type=chunk) - The Company believes non-GAAP financial measures provide useful supplemental information to management and investors regarding future financial and business trends relating to the Company[7](index=7&type=chunk) - Definitions: * **ex-TAC Gross Profit**: Gross profit adjusted to add back other cost of revenues and non-cash amortization of the Commercial agreement asset * **Adjusted EBITDA**: Net income (loss) before finance income (expenses), net, income tax expenses, depreciation and amortization, and non-cash amortization of the Commercial agreement asset, further adjusted to exclude share-based compensation and other noteworthy income and expense items * **Adjusted EBITDA margins**: The ratio of Adjusted EBITDA to ex-TAC Gross Profit * **Scaled Advertisers**: An Advertiser that has more than $100,000 of cumulative gross spend on the network on a trailing four quarter basis * **Average Revenue per Scaled Advertiser**: The aggregate cumulative gross spend of all Scaled Advertisers for a given period divided by the number of Scaled Advertisers for that period[8](index=8&type=chunk) [Financial Performance - Q2 2025](index=5&type=section&id=Financial%20Performance%20-%20Q2%202025) Taboola's Q2 2025 financial performance shows increased revenues and gross profit, improved operating profit, and strong operating cash flow, alongside a decrease in total assets and significant share repurchases [Consolidated Statements of Loss](index=8&type=section&id=Consolidated%20Statements%20of%20Loss) For Q2 2025, Taboola reported an 8.7% increase in revenues and an 18.2% increase in gross profit year-over-year, while net loss remained flat. For the six months ended June 30, 2025, revenues grew by 6.0% and gross profit by 14.0% compared to the prior year period, with a reduced net loss - Operating profit significantly improved from a loss of **$(7,631) thousand** in Q2 2024 to a profit of **$44 thousand** in Q2 2025[19](index=19&type=chunk) | Metric (USD in thousands) | Q2 2025 | Q2 2024 | YoY Change | 6 Months 2025 | 6 Months 2024 | YoY Change | | :------------------------ | :------ | :------ | :--------- | :------------ | :------------ | :--------- | | Revenues | $465,474 | $428,160 | +8.7% | $892,967 | $842,168 | +6.0% | | Cost of revenues | $329,863 | $313,382 | +5.3% | $638,049 | $618,437 | +3.2% | | Gross profit | $135,611 | $114,778 | +18.2% | $254,918 | $223,731 | +14.0% | | Operating expenses | $135,567 | $122,409 | +10.8% | $261,136 | $249,595 | +4.6% | | Operating profit (loss) | $44 | $(7,631) | N/A | $(6,218) | $(25,864) | N/A | | Net loss | $(4,345) | $(4,291) | -1.3% | $(13,095) | $(30,449) | +57.0% | | Net loss per share (diluted) | $(0.01) | $(0.01) | 0.0% | $(0.04) | $(0.09) | +55.6% | [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, Taboola's total assets decreased to $1,528.6 million from $1,718.7 million at December 31, 2024, primarily due to a reduction in cash and cash equivalents and trade receivables. Total liabilities also decreased, while shareholders' equity saw a reduction, partly due to share repurchases - Cash and cash equivalents decreased from **$226.6 million** at December 31, 2024, to **$115.2 million** at June 30, 2025[17](index=17&type=chunk) - Treasury Ordinary shares increased significantly from **$(130.1) million** to **$(280.3) million**, reflecting share repurchases[18](index=18&type=chunk) | Metric (USD in thousands) | June 30, 2025 | December 31, 2024 | Change | | :------------------------ | :------------ | :---------------- | :----- | | Total current assets | $472,977 | $656,001 | $(183,024) | | Total non-current assets | $1,055,604 | $1,062,657 | $(7,053) | | **Total assets** | **$1,528,581** | **$1,718,658** | **$(190,077)** | | Total current liabilities | $439,991 | $485,582 | $(45,591) | | Total long-term liabilities | $163,557 | $181,170 | $(17,613) | | **Total liabilities** | **$603,548** | **$666,752** | **$(63,204)** | | Total shareholders' equity | $925,033 | $1,051,906 | $(126,873) | [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Taboola generated $47.4 million in cash from operating activities in Q2 2025, an increase from $38.8 million in Q2 2024, primarily due to strong collections and cost discipline. However, significant share repurchases led to a substantial net cash outflow from financing activities - Repurchase of ordinary shares and non-voting ordinary shares amounted to **$(100,666) thousand** in Q2 2025, a significant increase from **$(25,049) thousand** in Q2 2024[24](index=24&type=chunk) - Increases in cash flow generated by operating activities and free cash flow were primarily due to strong collections, lower publisher prepayments, and continued cost discipline[4](index=4&type=chunk) | Metric (USD in thousands) | Q2 2025 | Q2 2024 | YoY Change | 6 Months 2025 | 6 Months 2024 | YoY Change | | :------------------------ | :------ | :------ | :--------- | :------------ | :------------ | :--------- | | Net cash provided by operating activities | $47,397 | $38,791 | +22.2% | $95,508 | $72,624 | +31.5% | | Net cash used in investing activities | $(13,236) | $(10,133) | -30.6% | $(21,497) | $(13,176) | -63.2% | | Net cash used in financing activities | $(138,780) | $(23,808) | -482.9% | $(190,028) | $(52,580) | -261.4% | | Increase (decrease) in cash and cash equivalents | $(100,982) | $3,664 | N/A | $(111,342) | $6,090 | N/A | | Cash and cash equivalents - at end of period | $115,241 | $182,198 | -36.8% | $115,241 | $182,198 | -36.8% | [Consolidated Statements of Comprehensive Loss](index=9&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Loss) Taboola reported a comprehensive loss of $(804) thousand for Q2 2025, a significant improvement from $(4,495) thousand in Q2 2024, primarily due to unrealized gains on derivative instruments - Unrealized gains on derivative instruments contributed **$3,541 thousand** to other comprehensive income in Q2 2025, compared to a loss of **$(211) thousand** in Q2 2024[21](index=21&type=chunk) | Metric (USD in thousands) | Q2 2025 | Q2 2024 | YoY Change | 6 Months 2025 | 6 Months 2024 | YoY Change | | :------------------------ | :------ | :------ | :--------- | :------------ | :------------ | :--------- | | Net loss | $(4,345) | $(4,291) | -1.3% | $(13,095) | $(30,449) | +57.0% | | Other comprehensive income (loss) | $3,541 | $(204) | N/A | $2,350 | $(981) | N/A | | Comprehensive loss | $(804) | $(4,495) | +82.1% | $(10,745) | $(31,430) | +65.8% | [Supplemental Financial Details](index=9&type=section&id=Supplemental%20Financial%20Details) This section provides detailed breakdowns of share-based compensation and depreciation and amortization expenses by expense line for the reported periods [Share-Based Compensation Breakdown](index=9&type=section&id=Share-Based%20Compensation%20Breakdown) Total share-based compensation expenses decreased slightly in Q2 2025 to $16.6 million from $18.3 million in Q2 2024, with reductions across most expense lines | Expense Line (USD in thousands) | Q2 2025 | Q2 2024 | YoY Change | 6 Months 2025 | 6 Months 2024 | YoY Change | | :------------------------------ | :------ | :------ | :--------- | :------------ | :------------ | :--------- | | Cost of revenues | $956 | $1,096 | -12.8% | $1,823 | $2,107 | -13.5% | | Research and development | $6,734 | $6,852 | -1.7% | $13,128 | $13,230 | -0.8% | | Sales and marketing | $4,602 | $4,532 | +1.5% | $8,823 | $8,855 | -0.4% | | General and administrative | $4,280 | $5,825 | -26.5% | $8,315 | $10,514 | -20.9% | | **Total share-based compensation** | **$16,572** | **$18,305** | **-9.4%** | **$32,089** | **$34,706** | **-7.6%** | [Depreciation and Amortization Breakdown](index=10&type=section&id=Depreciation%20and%20Amortization%20Breakdown) Total depreciation and amortization expenses decreased in Q2 2025 to $20.8 million from $25.9 million in Q2 2024, with notable reductions in sales and marketing, and general and administrative categories | Expense Line (USD in thousands) | Q2 2025 | Q2 2024 | YoY Change | 6 Months 2025 | 6 Months 2024 | YoY Change | | :------------------------------ | :------ | :------ | :--------- | :------------ | :------------ | :--------- | | Cost of revenues | $8,744 | $9,909 | -11.7% | $17,443 | $20,626 | -15.4% | | Research and development | $524 | $1,222 | -57.1% | $1,055 | $2,109 | -50.0% | | Sales and marketing | $11,190 | $13,410 | -16.5% | $22,453 | $26,928 | -16.6% | | General and administrative | $318 | $1,321 | -75.9% | $495 | $1,520 | -67.4% | | **Total D&A expense** | **$20,776** | **$25,862** | **-19.7%** | **$41,446** | **$51,183** | **-19.0%** | [Financial Outlook & Guidance](index=1&type=section&id=Financial%20Outlook%20%26%20Guidance) Taboola provides updated financial guidance for Q3 and the full year 2025, reflecting increased projections across key revenue and profitability metrics [Q3 2025 Guidance](index=5&type=section&id=Q3%202025%20Guidance) Taboola projects Q3 2025 revenues between $461 million and $469 million, with ex-TAC Gross Profit expected to be between $166 million and $172 million, and Adjusted EBITDA between $43 million and $48 million | Metric | Q3 2025 Guidance (Millions USD) | | :----- | :------------------------------ | | Revenues | $461 - $469 | | Gross profit | $127 - $133 | | ex-TAC Gross Profit | $166 - $172 | | Adjusted EBITDA | $43 - $48 | | Non-GAAP Net Income (Loss) | $29 - $34 | [Full Year 2025 Guidance](index=1&type=section&id=Full%20Year%202025%20Guidance) The company has raised its full-year 2025 guidance, now expecting revenues between $1,858 million and $1,888 million, ex-TAC Gross Profit between $689 million and $703 million, and Adjusted EBITDA between $208 million and $214 million - We're raising full-year guidance across the board[2](index=2&type=chunk) | Metric | FY 2025 Guidance (Millions USD) | | :----- | :------------------------------ | | Revenues | $1,858 - $1,888 | | Gross profit | $541 - $555 | | ex-TAC Gross Profit | $689 - $703 | | Adjusted EBITDA | $208 - $214 | | Non-GAAP Net Income (Loss) | $138 - $144 | [Non-GAAP Reconciliations](index=13&type=section&id=Non-GAAP%20Reconciliations) This section details the reconciliation of GAAP financial measures to various non-GAAP metrics, including ex-TAC Gross Profit, Adjusted EBITDA, Non-GAAP Net Income, and Free Cash Flow [Reconciliation of Revenues to ex-TAC Gross Profit](index=13&type=section&id=Reconciliation%20of%20Revenues%20to%20ex-TAC%20Gross%20Profit) This section provides a reconciliation of GAAP revenues to ex-TAC Gross Profit, a non-GAAP measure, by adjusting for traffic acquisition costs and other cost of revenues - The three and six months ended June 30, 2025 included **$4,082** and **$8,119 amortization expense** of the non-cash based Commercial agreement asset respectively[29](index=29&type=chunk) | Metric (USD in thousands) | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :------------------------ | :------ | :------ | :------------ | :------------ | | Revenues | $465,474 | $428,160 | $892,967 | $842,168 | | Less: Traffic acquisition cost | $297,423 | $278,620 | $577,220 | $553,740 | | Less: Other cost of revenues | $32,440 | $34,762 | $60,829 | $64,697 | | Gross profit | $135,611 | $114,778 | $254,918 | $223,731 | | Add back: Other cost of revenues | $36,522 | $34,762 | $68,948 | $64,697 | | **ex-TAC Gross Profit** | **$172,133** | **$149,540** | **$323,866** | **$288,428** | [Reconciliation of Net Loss to Adjusted EBITDA](index=13&type=section&id=Reconciliation%20of%20Net%20Loss%20to%20Adjusted%20EBITDA) This section reconciles GAAP net loss to Adjusted EBITDA by adding back finance expenses, income tax expenses, depreciation and amortization, share-based compensation, holdback compensation, and other specific costs - Other costs for Q2 and six months ended June 30, 2025, included professional and legal expenses related to a litigation matter[32](index=32&type=chunk) | Metric (USD in thousands) | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :------------------------ | :------ | :------ | :------------ | :------------ | | Net loss | $(4,345) | $(4,291) | $(13,095) | $(30,449) | | Add: Finance expenses (income), net | $2,491 | $(1,004) | $6,991 | $2,634 | | Add: Income tax expenses (benefit) | $1,898 | $(2,336) | $(114) | $1,951 | | Add: Depreciation and amortization | $27,659 | $25,862 | $52,366 | $51,183 | | Add: Share-based compensation expenses | $16,571 | $15,659 | $32,089 | $29,415 | | Add: Holdback compensation expenses | — | $2,646 | — | $5,291 | | Add: Other costs | $904 | $695 | $2,876 | $695 | | **Adjusted EBITDA** | **$45,178** | **$37,231** | **$81,113** | **$60,720** | [Reconciliation of Net Loss to Non-GAAP Net Income (Loss)](index=14&type=section&id=Reconciliation%20of%20Net%20Loss%20to%20Non-GAAP%20Net%20Income%20(Loss)) This section reconciles GAAP net loss to Non-GAAP Net Income (Loss) by adjusting for amortization of acquired intangibles, share-based compensation, revaluation of warrants, foreign currency effects, income tax effects, and loss on extinguishment of debt | Metric (USD in thousands) | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :------------------------ | :------ | :------ | :------------ | :------------ | | Net loss | $(4,345) | $(4,291) | $(13,095) | $(30,449) | | Add: Amortization of acquired intangibles | $17,828 | $15,754 | $35,611 | $31,689 | | Add: Share-based compensation expenses | $16,572 | $15,659 | $32,089 | $29,415 | | Add: Holdback compensation expenses | — | $2,646 | — | $5,291 | | Add: Other costs | $904 | $695 | $2,876 | $695 | | Add: Revaluation of Warrants | $903 | $(3,926) | $(823) | $(3,887) | | Add: Foreign currency exchange rate losses (gains) | $265 | $347 | $(1,259) | $1,388 | | Less: Income tax effects | $(1,918) | $(3,874) | $(6,788) | $(7,300) | | Add: Loss on extinguishment of debt | — | — | $6,597 | — | | **Non-GAAP Net Income (Loss)** | **$30,209** | **$23,010** | **$55,208** | **$26,842** | [Reconciliation of Net Cash from Operating Activities to Free Cash Flow](index=15&type=section&id=Reconciliation%20of%20Net%20Cash%20from%20Operating%20Activities%20to%20Free%20Cash%20Flow) This section reconciles net cash provided by operating activities to Free Cash Flow by subtracting purchases of property and equipment, including capitalized internal use software | Metric (USD in thousands) | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :------------------------ | :------ | :------ | :------------ | :------------ | | Net cash provided by operating activities | $47,397 | $38,791 | $95,508 | $72,624 | | Less: Purchases of property and equipment, including capitalized internal use software | $(13,236) | $(12,633) | $(25,277) | $(18,222) | | **Free Cash Flow** | **$34,161** | **$26,158** | **$70,231** | **$54,402** | [Non-GAAP Guidance Reconciliation](index=15&type=section&id=Non-GAAP%20Guidance%20Reconciliation) This section provides a reconciliation of projected Gross Profit to ex-TAC Gross Profit for Q2 2025 and Full Year 2025 guidance, adjusting for traffic acquisition costs and other cost of revenues - The company is unable to provide a projection for net cash provided by operating activities or reconcile Free Cash Flow projections due to the unpredictability of certain elements like taxes and timing of collections/payments[42](index=42&type=chunk) | Metric (Millions USD) | Q2 2025 Guidance | FY 2025 Guidance | | :-------------------- | :--------------- | :--------------- | | Revenues | $461 - $469 | $1,858 - $1,888 | | Less: Traffic acquisition cost | ($295) - ($297) | ($1,169) - ($1,185) | | Less: Other cost of revenues | ($39) - ($39) | ($148) - ($148) | | Gross profit | $127 - $133 | $541 - $555 | | Add back: Other cost of revenues | ($39) - ($39) | ($148) - ($148) | | **ex-TAC Gross Profit** | **$166 - $172** | **$689 - $703** | [Legal & Disclosures](index=3&type=section&id=Legal%20%26%20Disclosures) This section outlines important forward-looking statement disclaimers and provides contact information for investor and press inquiries [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) The press release contains forward-looking statements regarding future financial and operating performance, which are subject to various risks and uncertainties that could cause actual results to differ materially - Forward-looking statements generally relate to future events including future financial or operating performance of Taboola.com Ltd[9](index=9&type=chunk) - Risk factors include: ability to grow profitably and maintain customer/employee relationships; performance of the Realize platform; impact of changes in laws, regulations, or market practices (e.g., 'third party cookies'); intense competition; and risks related to being incorporated in Israel and potential impacts of the war in Israel[10](index=10&type=chunk) - You should not place undue reliance on these forward-looking statements, which speak only as of the date they were made[11](index=11&type=chunk) [Investor & Press Contacts](index=4&type=section&id=Investor%20%26%20Press%20Contacts) Contact information is provided for investor relations and press inquiries - Investor Contacts: Jessica Kourakos, Aadam Anwar (investors@taboola.com)[14](index=14&type=chunk) - Press Contact: Dave Struzzi (press@taboola.com)[14](index=14&type=chunk) [Webcast & Conference Call Information](index=2&type=section&id=Webcast%20%26%20Conference%20Call%20Information) Details for accessing Taboola's Q2 earnings webcast and conference call are provided, along with replay information [Webcast & Conference Call Details](index=2&type=section&id=Webcast%20%26%20Conference%20Call%20Details) Taboola's senior management team will discuss the Q2 earnings on a webcast and conference call, with replay available for one year - Webcast can be accessed at https://investors.taboola.com[5](index=5&type=chunk) - To access the call by phone, register at https://register-conf.media-server.com/register/BI66bbf11936d147898488004a728e0c4b for dial-in details[6](index=6&type=chunk) - The webcast will be available for replay for one year, through the close of business on August 7, 2026[6](index=6&type=chunk)

Core Insights - The individual has retired after over 43 years in investment research, now operating independently to provide actionable investment insights [1] - The focus is on rules and factor-based equity investing strategies, emphasizing the use of numbers to inspire human intelligence-driven investment stories rather than solely relying on statistical studies [1] - The individual combines factor analysis with classic fundamental analysis to uncover the true story of companies and their stocks, highlighting the importance of future potential over past performance [1] Experience and Background - The individual has extensive experience covering a wide range of stocks, including large cap, small cap, micro cap, value, growth, and income [1] - Previous roles include managing a high-yield fixed-income fund and conducting research on quantitative asset allocation strategies, contributing to the development of Robo Advising [1] - The individual has authored two books on stock selection and analysis and has a passion for investor education, having conducted numerous seminars [1]

Core Insights - Taboola.com Inc.'s Realize platform significantly enhances the efficiency and performance of the company's advertising operations, targeting a $55 billion market through its AI-driven engine [1][4] - The platform utilizes deep-learning algorithms for real-time user signal analysis and historical behavior, leading to improved user engagement and campaign results, which encourages advertisers to increase their investments [2] - Realize empowers mid-sized and smaller advertisers with simplified, self-serve campaign tools, allowing for growth in the advertiser base without increasing operational costs [3] Competitive Landscape - Competitors like The Trade Desk and Magnite do not possess a proprietary platform like Realize but are establishing their niches in the digital advertising space [5][6] - The Trade Desk focuses on transparent, data-driven programmatic solutions, enhancing its leadership in digital advertising through AI innovation and partnerships [5] - Magnite aims to maximize publisher revenues through transparent monetization strategies, solidifying its position as the largest independent sell-side platform [6] Financial Performance - Taboola's shares have declined by 12% year to date, underperforming the industry [7] - The company is currently trading at a price-to-earnings multiple of 18.1, which is lower than the industry average of 28.4, indicating an affordable valuation [10] - Consensus estimates for Taboola's EPS for 2025 and 2026 show no movement over the past 60 days, with projections indicating year-over-year increases [11][12]