What Taboola.com (TBLA) Said on Its Q3 Earnings Call

Key Points

• Q3 results were mixed: Taboola reported revenue of $462.3 million, down 7% year over year, while ex-TAC gross profit rose 7% to $188.8 million and adjusted EBITDA increased 16% to $56 million.
• The company lowered its full-year ex-TAC gross profit outlook, now projecting $754 million to $763 million, after seeing fewer ad impressions per page view as consumer engagement on publisher sites shifts. Page views were relatively steady, but management cited changing behavior amid the growth of AI summaries and large language models.
• Taboola is pursuing growth through new publisher deals, broader ad monetization and AI initiatives, including Fox partnerships, Full Page Monetization and its DeeperDive answer engine. It also repurchased $30.3 million of shares in Q3 and received an additional $200 million buyback authorization.

Taboola.com NASDAQ: TBLA reported third-quarter results in line with its guidance, while lowering its full-year ex-TAC gross profit outlook as changes in consumer behavior affected advertising impressions across its publisher network.

Founder and CEO Adam Singolda said the company generated $188.8 million in ex-TAC gross profit, up 7% year over year, and $56 million in adjusted EBITDA, up 16%. Revenue totaled $462.3 million, down 7% from the prior-year period. Taboola reported net income of $18.4 million and non-GAAP net income of $39.9 million.

The company said page views across its publisher base remained relatively steady, but advertising impressions declined as consumers changed how they engage with content on the open web amid the growing influence of AI summaries and large language models.

Impression headwinds prompt revised outlook

CFO Steve Walker said Taboola is seeing fewer impressions per page view, which he attributed to shifting consumer behavior on publisher sites, including the possibility that users are scrolling less. He said the trend was visible earlier in the year but became clearer in the third quarter after the impact of the company’s Explore More product deprecation and network-quality initiatives had largely passed.

“It’s not fewer page views, it’s less engagement once they’re on the page, or at least seeing fewer of our ads,” Walker said in response to an analyst question.

Singolda said the company’s exposure to search traffic is relatively limited because many of its publishers have substantial direct traffic. Still, he said consumers arriving at publisher sites may increasingly expect information closer to the top of pages and may visit different types of articles than in the past. He said the decline in impressions was occurring broadly across the publisher base, though the degree varied by publisher.

For the fourth quarter, Taboola projected revenue of $477 million to $493 million, gross profit of $174 million to $183 million, ex-TAC gross profit of $204.5 million to $213.5 million, and adjusted EBITDA of $73.5 million to $82.5 million. The company forecast non-GAAP net income of $53 million to $62 million.

For the full year, Taboola now expects revenue of $1.88 billion to $1.90 billion, gross profit of $595.5 million to $604.5 million, ex-TAC gross profit of $754 million to $763 million, adjusted EBITDA of $212 million to $221 million, and non-GAAP net income of $151.5 million to $160.5 million. Singolda said the revised ex-TAC outlook represented approximately 6% growth for the year.

New publisher wins and broader monetization efforts

Management outlined a strategy to offset impression pressures by adding publishers, expanding monetization with existing partners and investing in business lines that it said are less exposed to AI-driven changes in web behavior.

Singolda highlighted recently signed partnerships with Fox News, Fox Local, Fox Sports and Fox Weather. He said Taboola also has a pipeline of prospective publisher relationships globally.

The company is seeking to increase revenue per publisher through Full Page Monetization, which enables Taboola to monetize more of a publisher’s available advertising inventory, including display, vertical and native formats. Singolda said Taboola believes the approach could increase monetization two to three times per publisher.

Taboola’s first Full Page Monetization partner, NBCUniversal, is now live across 100% of the advertising inventory on NBC News and TODAY.com, according to Singolda. He said performance has been in line with expectations.

The company also pointed to its proposed acquisition of Dianomi, which operates a specialized network of premium publishers in business, finance and lifestyle categories. Singolda said Dianomi’s network includes Reuters, CNN Business and The Wall Street Journal, as well as financial advertisers. Taboola expects to complete the transaction before the end of 2026.

DeeperDive and AI initiatives

Singolda said Taboola’s DeeperDive AI answer engine is now used by more than 14 million people and is deployed across more than 100 sites. The company previously described the service as being used across publishers and original equipment manufacturers. Singolda added that Motorola, a device manufacturer, had integrated DeeperDive.

While DeeperDive remains early in terms of revenue contribution relative to Taboola’s overall size, Singolda described adoption as rapid. He said the company sees potential for conversational AI layers across publishers, device manufacturers, applications and potentially television interfaces.

Taboola is also using AI internally to improve productivity and support clients, Singolda said. Externally, the company has integrated with Anthropic’s Claude through a model context protocol, or MCP, allowing users to launch Taboola campaigns through Claude. He said spending through the integration is in the millions of dollars but remains small, and he sees agencies and large advertisers as a potential long-term opportunity.

Singolda said agencies could eventually use AI agents to interact directly with advertising suppliers based on client objectives such as subscriptions or purchases.

Margins, cash flow and capital allocation

Walker said ex-TAC gross profit benefited from higher advertising rates as supply declined, with similar advertiser demand spread across fewer impressions. Growth in Taboola News also contributed to ex-TAC gross profit growth.

Adjusted EBITDA margin was 29.7% in the third quarter. Foreign exchange represented a $3.4 million year-over-year headwind to adjusted EBITDA, Walker said. Excluding that impact, adjusted EBITDA would have been about $59.8 million, or a 31.6% margin.

Operating cash flow was $35.6 million, while free cash flow was $20.4 million. Taboola ended the quarter with net cash of $50.2 million, including $128.7 million in cash and cash equivalents and $78.5 million in long-term debt.

During the quarter, the company repurchased about 7 million shares at an average price of $4.37, for $30.3 million in total consideration. Taboola had about $90 million remaining under its existing authorization and also received an additional $200 million authorization for share repurchases.

Walker said management’s longer-term ambition is to return to double-digit growth, though the company plans to provide additional 2027 guidance in February.

About Taboola.com (NASDAQ:TBLA)

Taboola.com Ltd. is a technology company that operates a digital advertising and content-discovery platform. Its technology uses data and machine learning to recommend articles, videos, products and other content to users across publisher websites, mobile applications and digital devices.

Taboola provides publishers with tools to increase audience engagement and generate revenue, including recommendation modules, personalized content feeds, video solutions and commerce-related discovery products.

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