Taboola.com NASDAQ: TBLA reported first-quarter 2026 results that exceeded the high end of its guidance ranges and prompted the company to raise its full-year outlook across all metrics, citing continued momentum in its Realize performance advertising platform and improving advertiser scale.
Q1 results topped guidance; revenue and ex-TAC gross profit rose
Founder and CEO Adam Singolda said the company is “starting the year off strong,” with first-quarter results “exceeding the high end of our guidance across all metrics.” He added that the company is seeing “continued acceleration in our growth,” which led management to raise full-year guidance.
CFO Steve Walker said revenue grew 9% year-over-year to $466.4 million. He added that ex-TAC gross profit increased 11% year-over-year to $168.1 million, driven primarily by higher advertising spend supported by the scaling of Realize, alongside “strong performance from Taboola News and Bidded Supply.” Gross profit totaled $129.6 million, up 9% year-over-year, though Walker noted this was “partially offset by an increase in infrastructure and operational costs as we continue to scale the business for future growth.”
Net income was $59.1 million, while non-GAAP net income was $17.2 million. Walker said GAAP net income was higher due to “proceeds from a one-time legal settlement,” which was adjusted out of non-GAAP net income. Adjusted EBITDA was $26.7 million, representing a 16% margin; Walker emphasized the legal settlement “does not contribute to Adjusted EBITDA.”
Realize adoption and scaled advertiser gains highlighted
Management repeatedly pointed to Realize as a core driver of advertiser success and spending. Singolda said Realize drove increases in both the number of scaled advertisers—defined as those spending more than $100,000 annually—and budgets managed on the platform. In Q1, the company reported a 3.5% increase in scaled advertisers and a 5% increase in average revenue per scaled advertiser.
In response to a question from Needham’s Laura Martin on why the company emphasizes scaled advertisers, Singolda said advertisers that pass the $100,000 threshold “tend to be very stable” revenue sources. He described scaled advertisers as a proxy for Taboola’s progress as a technology platform and for revenue sustainability, citing predictability “as it relates to churn rates and things like that.”
Rosenblatt’s Barton Crockett asked what within Realize was driving upside. Singolda said improved utilization of “all the various kind of capabilities the platform offers” is accelerating advertiser success and spend. He cited “format diversification,” including easier campaign starts with vertical video or display, as well as broader supply access across “traditional display inventory,” vertical formats, full-screen OEM placements, and in-app inventory. He also highlighted “predictive audiences,” describing how Taboola can estimate incremental budget required to reach additional conversion goals, which he said provides “stability and predictability” that helps advertisers scale spend.
Realize+ launches; Taboola discusses agentic AI and Claude integration
Singolda said the company recently introduced Realize+, which he described as an “agentic framework for advertisers.” He positioned it alongside Meta’s Advantage+ and Google’s Performance Max, saying advertisers can choose between hands-on controls in Realize or more automation in Realize+, where advertisers provide a budget and objective and the system handles “audience targeting, creative generation, placements, and continuous optimization.” He emphasized performance and scalability as the key outcomes, stating Realize+ can reduce operational complexity and react autonomously in real time.
During Q&A, Singolda also discussed how agentic AI could change ad buying workflows, referencing the ability to interact with Taboola Realize or Realize+ within Anthropic’s Claude via an MCP integration. He described this as enabling advertisers to buy across multiple channels without leaving an LLM interface, calling it “early days,” but adding he expects “agent-to-agent kind of advertising buying” to become a larger part of the industry over time.
On the product side, Singolda said DeeperDive, which he described as “a ChatGPT-like product for the open web,” is “growing really fast” and has been adopted by partners including USA Today, Nexstar, HuffPost, BuzzFeed, The Independent, and Reach, among others. He noted that while DeeperDive is “financially… still small,” he said Taboola is seeing strong performance indicators such as effective CPMs and advertiser conversion rates, calling return on ad spend from DeeperDive “at the top” compared to other experiences.
FX headwinds weighed on profitability outlook; company still targets 30% EBITDA margins
Walker said foreign exchange was “a meaningful headwind” in Q1, primarily due to the strength of the Israeli shekel, where Taboola has a significant employee and cost base. He quantified a constant-currency tailwind of approximately $3.6 million to ex-TAC gross profit and a headwind of approximately $8.2 million to operating expenses, resulting in an overall $4.7 million headwind to Adjusted EBITDA. Excluding FX impacts, he said Adjusted EBITDA would have been $31.4 million, implying a 19.1% margin.
Looking ahead, Walker said FX is expected to remain a headwind through 2026. He later explained to Crockett that the reason increased revenue and ex-TAC gross profit guidance did not flow through as much to Adjusted EBITDA and non-GAAP net income was “primarily the Israeli shekel,” which he said will impact operating expenses by about $13 million this year. Even with that headwind, Walker said the company is still guiding to 30% Adjusted EBITDA margins for the year, and that without FX headwinds, margins would be “around 34%.”
Cash generation and share repurchases remain a focus; guidance raised
Taboola reported $108.7 million in operating cash flow and $90.3 million in free cash flow for Q1, with Walker noting free cash flow benefited from the legal settlement. He reiterated the company’s expectation to “sustainably convert free cash flow from Adjusted EBITDA at a 60%-70% rate” over a typical four-quarter period.
On capital allocation, Singolda said Taboola repurchased approximately 7 million shares in Q1 for $23.5 million, and stated that between 2025 and year-to-date 2026, the company has bought back 19% of its shares. Walker said the Q1 repurchases were completed at an average price of $3.41, reducing shares outstanding to approximately 273 million at quarter-end from about 276 million at the end of 2025. He added that the company has about $160 million remaining under its authorization and continues to view buybacks as a compelling use of “the majority of our free cash flow.”
For Q2, the company guided to revenue of $492 million to $505 million and Adjusted EBITDA of $49 million to $55 million, among other metrics. For full-year 2026, Taboola raised guidance and now expects:
- Revenue: $2.00 billion to $2.06 billion
- Gross profit: $610 million to $630 million
- ex-TAC gross profit: $760 million to $781 million
- Adjusted EBITDA: $222 million to $240 million
- Non-GAAP net income: $167 million to $191 million
In closing remarks, Singolda said the quarter marked continued progress toward what he described as “building the largest kind of walled garden outside of the walls,” and reiterated that the company is raising guidance with confidence in its path to “double-digit growth organically and consistently,” while continuing to pursue share repurchases.
About Taboola.com NASDAQ: TBLA
Taboola.com NASDAQ: TBLA operates a leading content discovery platform that connects advertisers with premium publishers through native advertising and personalized recommendations. The company’s technology analyzes user behavior and contextual information to deliver promoted content, video, and product recommendations to audiences across a network of thousands of websites and mobile apps. By leveraging machine learning and big data, Taboola helps publishers generate incremental revenue while enabling advertisers to reach engaged users at scale.
Taboola’s suite of products includes feed placements, video recommendations, and sponsored content units designed to blend seamlessly with editorial pages.
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