Taboola.com(TBLA) - 2025 Q2 - Quarterly Results

Executive Summary & Business Highlights 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 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] - 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] - Adjusted EBITDA margins expanded to 26.2% from 24.9%[4] | 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 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] | 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 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] - 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] - We're also seeing exciting early traction with Realize, our new performance advertising platform[2] Company Information 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 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] - 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] - 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] Non-GAAP Financial Measures & Definitions 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] - 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] - 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] Financial Performance - Q2 2025 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 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] | 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 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] - Treasury Ordinary shares increased significantly from $(130.1) million to $(280.3) million, reflecting share repurchases[18] | 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 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] - 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] | 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 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] | 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 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 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 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 Taboola provides updated financial guidance for Q3 and the full year 2025, reflecting increased projections across key revenue and profitability metrics Q3 2025 Guidance 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 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] | 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 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 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] | 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 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] | 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) 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 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 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] | 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 This section outlines important forward-looking statement disclaimers and provides contact information for investor and press inquiries Forward-Looking Statements 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] - 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] - You should not place undue reliance on these forward-looking statements, which speak only as of the date they were made[11] Investor & Press Contacts Contact information is provided for investor relations and press inquiries - Investor Contacts: Jessica Kourakos, Aadam Anwar (investors@taboola.com)[14] - Press Contact: Dave Struzzi (press@taboola.com)[14] Webcast & Conference Call Information Details for accessing Taboola's Q2 earnings webcast and conference call are provided, along with replay information Webcast & Conference Call Details 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] - The webcast will be available for replay for one year, through the close of business on August 7, 2026[6]