Taboola.com Ltd.

What they do

Taboola operates an AI-powered performance advertising platform that matches ads to users across digital properties owned by publisher partners. The company generates revenue when users click, purchase, or view ads, and shares that revenue with the digital properties displaying the ads. Its technology predicts user interest in content and ads without relying on search queries or social profiles, leveraging first-party data and a network of over 600 million daily users.

Revenue drivers

• Advertising on publisher properties — Core business: places native ads on partner sites and apps (e.g., NBCNews, Disney, Yahoo, Apple) and earns revenue per click, purchase, or impression, sharing with the publisher.
• Performance advertising for advertisers — Advertisers pay for clicks, purchases, or impressions; the AI engine optimizes targeting to deliver measurable outcomes, making up the majority of revenue.
• Mobile apps and devices — Ads placed within mobile apps and on devices expand reach; monetization may be affected by Apple and Android tracking limitations.

Recent performance

In Q2 2026, Taboola reported revenue of $476.8 million, up 2.4% year-over-year, and net income of $4.3 million compared to a net loss of $(4.3) million in Q2 2025. Ex-TAC gross profit rose 11.8% to $192.4 million, and adjusted EBITDA increased 22.8% to $55.5 million. The company raised its full-year 2026 ex-TAC gross profit and adjusted EBITDA guidance. Full-year 2025 revenue was $1.91 billion with net income of $42.3 million, its first profitable year since 2021.

Strategy

Taboola aims to strengthen its position as the leading independent performance platform for the Open Web, focusing on its AI-driven recommendation engine and first-party data. Management highlighted momentum with its Realize product and the addition of Fox News as strategic wins. The company is expanding beyond search and social, including into connected TV (CTV) and digital audio. It also seeks to grow advertiser and publisher partnerships, with approximately 14,000 digital property partners as of the 10-K.

Risks

• Privacy regulation and tracking limits — Browser 'Do Not Track' signals and cookie restrictions, including Google's phase-out of third-party cookies, could limit data quality and revenue.
• Regulatory uncertainty in Europe — If the IAB Transparency & Consent Framework is found unlawful under GDPR, Taboola's ability to serve targeted ads in Europe could be impaired.
• Competition from walled gardens — More than half of digital ad budgets go to Google, Meta, and Amazon, and those platforms may introduce competitive products or pricing.
• Minimum guarantee obligations — Contracts with publishers that guarantee minimum payments per thousand impressions could hurt gross profit if performance falls short.

Outlook

For Q3 2026, management expects revenue between $460 million and $473 million and adjusted EBITDA between $51.5 million and $56.5 million. Full-year 2026 revenue is guided to $1.93 billion to $1.956 billion, with adjusted EBITDA of $228 million to $240 million. The company raised its full-year ex-TAC gross profit and adjusted EBITDA guidance. Management noted that global trade policies and tariffs could have an uncertain impact on results.