Taboola Q2 2025 slides: Revenue jumps 9% YoY, exceeding guidance across all metrics

Taboola.com Ltd (NASDAQ:TBLA) shares surged over 10% in premarket trading after the company’s Q2 2025 presentation revealed strong performance across all key metrics, with results exceeding the high end of previous guidance ranges. The digital advertising platform reported accelerating revenue growth and improved profitability, continuing the positive momentum seen in Q1.

Quarterly Performance Highlights

Taboola reported Q2 2025 revenue of $465.5 million, representing 9% year-over-year growth and significantly exceeding the company’s guidance range of $438-458 million. The company’s ex-TAC gross profit reached $172.1 million, up 15% year-over-year, while adjusted EBITDA grew 21% to $45.2 million.

As shown in the following comparison of actual results versus guidance:

The outperformance was broad-based across geographies, advertiser types, and segments, demonstrating the strength of Taboola’s diversified business model. Gross profit increased 18% year-over-year to $135.6 million, reflecting improved operational efficiency and economies of scale.

Growth Drivers

A key driver of Taboola’s growth has been the continued expansion of its scaled advertiser base, which grew 8.5% year-over-year to 2,046 in Q2 2025. The company defines scaled advertisers as those spending more than $100,000 on a trailing four-quarter basis. Additionally, revenue per scaled advertiser increased 1.8% to approximately $196,000.

The following chart illustrates this growth in both advertiser count and revenue per advertiser:

This dual growth strategy—increasing both the number of advertisers and spend per advertiser—has proven effective for Taboola. The company’s ability to attract and retain high-value advertisers speaks to the effectiveness of its platform and targeting capabilities.

Forward Guidance

Despite the strong Q2 results, Taboola provided a more measured outlook for Q3 2025, projecting revenue of $461-469 million (5% YoY growth) and adjusted EBITDA of $43-48 million, representing a 5% year-over-year decline. The company expects ex-TAC gross profit to grow modestly at 1% year-over-year.

For the full year 2025, Taboola maintained a positive outlook with projected revenue of $1,858-1,888 million (6% YoY growth), ex-TAC gross profit of $689-703 million (3% YoY growth), and adjusted EBITDA of $208-214 million (5% YoY growth).

The following guidance summary provides a comprehensive view of Taboola’s expectations:

The company also provided additional modeling assumptions, including interest payments of approximately $7 million in 2025, share-based compensation of $66 million, and capital expenditures of $48 million. Free cash flow before publisher prepayments is expected to be towards the high end of 50-60% of adjusted EBITDA over a typical eight-quarter period.

Business Model and Revenue Drivers

Taboola’s business model continues to deliver high incremental margins through a combination of engagement metrics and yield optimization. The company’s revenue is generated by multiplying engagement (page views/ad impressions) by yield (RPM/CPM), with traffic acquisition costs representing the value paid to publishers.

As illustrated in this breakdown of Taboola’s revenue model:

The company’s growth is driven by both user engagement and yield improvements. New publisher partnerships expand the supply side, while yield optimization drives growth from the existing base. Historically, Taboola has achieved approximately 110% in yields, contributing significantly to its revenue growth.

Historical Performance and Long-term Trends

Taboola’s Q2 2025 results continue a pattern of consistent growth since 2019. The company’s revenue has grown from $1,094 million in 2019 to a projected $1,873 million in 2025, while ex-TAC gross profit has increased from $296 million to a projected $696 million over the same period.

The following chart illustrates this long-term growth trajectory:

This consistent performance demonstrates Taboola’s ability to execute its strategy effectively despite various market challenges and competitive pressures in the digital advertising space.

A comprehensive view of Taboola’s key financial metrics from 2018 to 2025 shows the company’s improving profitability and operational efficiency:

Market Context and Outlook

Taboola’s strong Q2 performance comes amid a challenging environment for digital advertising, making the results particularly impressive. The stock’s 10.28% premarket rise to $3.54 reflects investor optimism about the company’s execution and growth prospects.

The Q2 results build on the momentum seen in Q1 2025, when Taboola reported 3% year-over-year revenue growth and 9% ex-TAC gross profit growth. The acceleration in Q2 suggests that the company’s strategic initiatives, including new ad formats and AI integration through its Realize platform, are gaining traction.

While the more modest Q3 guidance indicates some caution, the maintained full-year outlook suggests management expects continued strength in the fourth quarter. With a current ratio of 1.35 and more cash than debt on its balance sheet, Taboola appears well-positioned to weather potential market uncertainties while continuing to invest in growth initiatives.

As digital advertising continues to evolve, Taboola’s focus on performance-driven advertising and strategic partnerships should help maintain its position as a leader in the open web advertising space, providing a compelling alternative to walled garden platforms.

Full presentation:

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