Taboola.com, Ltd. Q3 FY2025 earnings call

• Adam Singolda noted a strong quarter, exceeding guidance for the third consecutive quarter in 2025. Realize platform is showing inflection, with confidence in returning to double-digit growth. Bought back 14% of the company year-to-date. Realize engages 60 million people daily across the open web on partners like Yahoo, NBC, etc., with AI and first-party data as competitive advantage.
• Stephen Walker discussed Q3 results: revenue up 15% year-over-year, ex-TAC gross profit up 6.3% year-over-year. Focus on cost discipline while investing in growth. Net income and adjusted EBITDA were positive. Strong cash generation, with $46.3 million free cash flow in Q3. Share repurchases continued, with no requirement to purchase shares from Yahoo due to meeting Israeli regulatory conditions. Taboola remains in strong financial position with net cash balance and available credit facility.

In Q3 2025, Taboola delivered revenue of $497 million. Ex-TAC gross profit was $177 million, up 6% year-over-year. Adjusted EBITDA was $48 million, with a margin of over 27%. Revenue from scaled advertisers (spending $100,000 or more annually) grew, with the number of scaled advertisers up 4% to 2,064 and average revenue per scaled advertiser up 11%. Ex-TAC gross profit growth was driven by increased advertising spend from Realize, Taboola News, and Bided Supply. Revenue contribution from scaled advertisers is a key driver.

• Q4 2025 guidance: revenues $532 - $542 million, gross profit $166 - $171 million, ex-TAC gross profit $204 - $210 million, adjusted EBITDA $83 - $85 million, non-GAAP net income $52 - $56 million.
• Full year 2025 guidance raised: revenues $1.91 - $1.93 billion, gross profit $550 - $564 million, ex-TAC gross profit $700 - $710 million, adjusted EBITDA $209 - $214 million, non-GAAP net income $139 - $144 million. Q4 adjusted EBITDA guidance reflects foreign exchange headwind and ex-TAC tailwinds.

Q: On Realize platform, how to take it to next level of capturing advertiser budgets?

A: Adam Singolda said it's about going from native to performance, focusing on sell side ICPs, and iterating on tech front with predictive audiences, new formats, new placements.

Q: On partnership with Paramount and CTV presence?

A: Adam Singolda said it's financially small now but exciting, tracking industry trend to performance-driven market, bringing demand generation opportunity through Realize, expanding audience and reporting conversions.

Q: On traffic volume and quality, and AI impact?

A: Adam Singolda said overall traffic surging due to direct app traffic from strong brand partners and new publisher onboarding; Stephen Walker discussed AI impact on yields, conversions, productivity, with predictive audiences, Abby tool for advertisers, and productivity tools for sales team.

Q: On revenue ex-TAC deceleration and non-TAC COGS?

A: Stephen Walker explained margin down due to Yahoo testing last year, Q4 ex-TAC down due to Yahoo onboarding distortion and Chinese advertiser demand drop; non-TAC COGS changes due to server accounting change and capitalized project accounting change.

Q: On marketing spend, adjusted EBITDA margin, and AI investment?

A: Stephen Walker said increased marketing spend due to Realize inflection, seeing better ROI; adjusted EBITDA margin guardrail is 30%; Adam Singolda said focus on making advertisers successful with Realize, tracking scaled advertisers and average spend.

Q: On sales approach, brand perception, and Realize inflection assumptions?

A: Adam Singolda said investing in brand perception through events, showing successful advertisers, focusing on ICPs; Stephen Walker said realized inflection assumptions are based on growing scaled advertisers and average revenue per scaled advertiser.

Q: On Taboola News sustainability and OEM partnerships?

A: Stephen Walker said Taboola News is growing faster, unique supply immune to LLM, with upside potential; OEM partnerships progressing, with potential to be key contributors in 2026.