Taboola raises full-year guidance after strong Q2 earnings

NEW YORK - Taboola.com Ltd. (NASDAQ:TBLA), currently rated "Good" by InvestingPro’s Financial Health Score system, reported second-quarter revenue of $465.5 million on Wednesday, exceeding its guidance and posting an 8.7% increase compared to the same period last year. The digital advertising company’s performance comes amid strong free cash flow yields and favorable analyst sentiment, with multiple experts recently revising earnings estimates upward.

The digital advertising company, which specializes in content recommendations, saw its Ex-TAC Gross Profit rise 15.1% to $172.1 million for the quarter ended June 30. Adjusted EBITDA grew 21.3% to $45.2 million, with margins expanding to 26.2% from 24.9% a year earlier. The company maintains a strong balance sheet with more cash than debt, while boasting a healthy current ratio of 1.32x, indicating solid short-term liquidity.

Despite the revenue growth, Taboola reported a net loss of $4.3 million for the quarter, unchanged from the same period last year. The company’s operating profit was just $44,000, compared to an operating loss of $7.6 million in the second quarter of 2024.

"We delivered a strong second quarter, beating the high end of our guidance across our key metrics," said Adam Singolda, CEO of Taboola, in a statement based on the company’s press release.

The company has been actively repurchasing its shares, buying back nearly 12% of outstanding stock in the first half of 2025. Cash flow from operating activities increased to $47.4 million from $38.8 million a year earlier, while free cash flow rose to $34.2 million from $26.2 million.

Revenue growth was primarily driven by an 8.5% increase in Scaled Advertisers, along with a 1.8% rise in Average Revenue per Scaled Advertiser. The company noted growth in its existing Native business and strong contributions from Taboola News and Bidded Supply.

Following the strong quarterly performance, Taboola raised its full-year 2025 guidance. The company now expects annual revenue between $1.86 billion and $1.89 billion, with Adjusted EBITDA projected between $208 million and $214 million.

For the third quarter, Taboola forecasts revenue of $461 million to $469 million and Adjusted EBITDA between $43 million and $48 million.

In other recent news, Taboola has reported impressive financial results for the first quarter of 2025, exceeding earnings forecasts with higher-than-expected revenue and a smaller-than-anticipated loss per share. These results highlight the company’s strategic innovations and operational improvements, which have positively impacted its performance. Additionally, B.Riley has upgraded Taboola’s stock rating from Neutral to Buy, citing the stock’s attractive valuation and the company’s solid financial outlook amid broader economic challenges. The analyst firm set a price target of $4.00, noting that Taboola’s reaffirmed outlook for fiscal year 2025 helps mitigate risks in a challenging advertising market. Meanwhile, JMP Securities has maintained its Market Perform rating on Taboola ahead of the company’s second-quarter earnings report. The firm expects Taboola’s results and guidance to align with expectations, with a particular focus on the progress of Realize, Taboola’s new advertising platform. These developments provide investors with a comprehensive view of Taboola’s current financial and strategic positioning.

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