Taboola (TBLA -1.23%), a digital promoting expertise firm recognized for its AI-powered efficiency promoting platform, launched its outcomes for the fiscal 2025 second quarter on August 6, 2025 (interval ended June 30, 2025). The corporate reported income of $465.5 million, exceeding the consensus estimate by $16.8 million, or 3.7%. Diluted earnings per share equaled $(0.01), matching analyst expectations. The quarter featured broad-based development, sturdy operational leverage, and important capital return to shareholders by means of aggressive share repurchases. The outcomes replicate regular execution, ongoing adoption of latest initiatives, and materials enchancment in gross revenue and adjusted EBITDA margins in comparison with the prior yr.
MetricFiscal 2025 Q2Q2 2025 EstimateFiscal 2024 Q2Y/Y ChangeEPS diluted$(0.01)$(0.01)$(0.01)0.0percentRevenue$465.5 million$448.7 million$428.2 million8.7percentGross revenue$135.6 million$114.8 million18.2percentex-TAC gross revenue$172.1 million$149.5 million15.1percentAdjusted EBITDA$45.2 million$37.2 million21.3%
Supply: Analyst estimates supplied by FactSet. Administration expectations based mostly on administration’s steerage, as supplied within the fiscal 2025 first quarter earnings report.
What Taboola does and the place it’s focusing
Taboola is a efficiency promoting expertise firm that gives content material suggestions and show promoting throughout the open internet. Its platform makes use of proprietary synthetic intelligence to match person pursuits with related content material and adverts. This expertise is deployed throughout a large community of publishers, permitting advertisers to achieve tons of of thousands and thousands of every day customers outdoors the boundaries of enormous social media and search platforms.
The corporate’s present focus is on increasing its AI-driven promoting platform, constructing long-term strategic partnerships with premium digital properties, and broadening its attain into e-commerce by means of its Connexity enterprise. Key success components embody continued development of its scaled advertiser base (shoppers spending over $100,000 per yr), with the variety of scaled advertisers rising by 9% to 1,996, profitable scaling of latest merchandise reminiscent of Understand, sturdy compliance with information privateness rules, and operational execution that yields bettering margins and money circulate, as mirrored by will increase in gross revenue, adjusted EBITDA, and free money circulate.
Fiscal 2025 second quarter: Key developments and monetary efficiency
Income climbed 8.7% in comparison with the prior-year interval as demand expanded amongst each present and new advertisers. Scaled advertisers grew 8.5%, supporting broad-based top-line momentum. The common income per scaled advertiser additionally elevated by 1.8%, reflecting greater spend per shopper.
Gross revenue rose 18.2%, outpacing income development and highlighting the corporate’s improved margin profile. The ex-TAC gross revenue metric, which excludes site visitors acquisition value (the quantity paid to publishers for advert stock), elevated 15.1%. Administration attributed this to a shift towards higher-margin digital property companions, development in digital promoting spend, and the continued advantage of onboarding Yahoo as a significant associate final yr.
The online loss remained regular at $(4.3) million. Nevertheless, adjusted EBITDA, a measure of operational earnings earlier than curiosity, taxes, depreciation, and amortization, improved by 21.3% to $45.2 million. The ratio of adjusted EBITDA to ex-TAC gross revenue climbed to 26.2%, up from 24.9% within the prior-year interval, displaying elevated operational leverage whilst reported earnings stayed flat.
Money circulate from working actions reached $47.4 million, a year-over-year improve of $8.6 million. Free money circulate, which deducts capital expenditures, rose to $34.2 million, up from $26.2 million within the prior-year interval, a acquire of over 30%. These enhancements stemmed from efficient collections, decrease prepayments to publishers, and value controls. Nevertheless, money and equivalents fell to $115.2 million at interval finish, in comparison with $182.2 million on the finish of the prior-year interval and $226.6 million at December 31, 2024. The lower was largely resulting from aggressive share repurchases, as Taboola purchased again almost 12% of its shares within the first half of 2025. The board accredited an incremental $200 million to the share repurchase program within the fiscal 2025 first quarter.
On the product aspect, Taboola launched and deployed its new Understand efficiency promoting platform throughout its full advertiser base. Understand is a platform that applies Taboola’s AI to performance-based promoting, providing new focusing on and artistic choices, and the flexibility to buy show and social promoting on a cost-per-click foundation. Administration described early suggestions as constructive, with new shoppers secured and gross sales momentum constructing. Understand is constructed to perform with out third-party cookies, underscoring its relevance because the promoting business adapts to tighter information privateness guidelines.
Strategic partnerships continued to be a spotlight. The unique long-term settlement with Yahoo, initially introduced as a 30-year deal, supplied incremental development and attain within the interval, providing entry to giant new audiences. Further writer offers, reminiscent of with messaging platform LINE, additional diversified provide and enhanced the promoting ecosystem for shoppers. The corporate strengthened its attain of roughly 600 million every day lively customers, which helps each advertiser demand and information assortment for additional AI optimization.
Integration of Connexity, Taboola’s e-commerce answer, continued. Connexity permits product listings and cost-per-click advert placements inside digital content material, providing worth for publishers and advertisers whereas supporting further data-gathering for Taboola’s AI fashions. Though particular e-commerce monetary contributions weren’t damaged out within the quarter, administration sees the phase as a key strategic lever for future income development.
The quarter included skilled and authorized bills associated to a litigation matter not associated to ongoing enterprise operations, and a non-cash amortization expense of a business settlement asset. There is no such thing as a dividend, so all capital return within the interval has come by means of share buybacks. TBLA doesn’t at present pay a dividend.
Wanting forward: Administration steerage and investor focus
Taboola’s administration raised full-year fiscal 2025 steerage following sturdy second quarter outcomes. It now forecasts fiscal 2025 income of $1,858 million to $1,888 million, up from its prior vary. Projected ex-TAC gross revenue (non-GAAP) for fiscal 2025 is $689 million to $703 million, and adjusted EBITDA is now focused at $208 million to $214 million. Non-GAAP web earnings steerage elevated to $138 million to $144 million. For the third quarter, the corporate expects income between $461 million and $469 million, with ex-TAC gross revenue (non-GAAP) of $166 million to $172 million and adjusted EBITDA of $43 million to $48 million.
Administration famous that Understand is anticipated to start making a extra seen monetary contribution late this yr or in 2026. Present steerage for fiscal 2025 doesn’t absolutely replicate potential incremental upside from Understand, as uptake continues to be in an early stage. Executives categorical confidence within the long-term market alternative and their capacity to seize bigger budgets which have to date remained inside search and social platforms. Traders ought to hold watch on Understand’s capacity to scale, general advertiser traction, impacts from evolving privateness rules, and the corporate’s tempo of free money circulate era and capital returns within the coming quarters.
Income and web earnings introduced utilizing U.S. usually accepted accounting rules (GAAP) until in any other case famous.
