TBLA Q2 Deep Dive: Realize Platform Drives Growth, Share Repurchases Expand

Content discovery platform Taboola (NASDAQ:TBLA) reported Q2 CY2025 results exceeding the market’s revenue expectations, with sales up 8.7% year on year to $465.5 million. Guidance for next quarter’s revenue was better than expected at $465 million at the midpoint, 0.6% above analysts’ estimates. Its non-GAAP profit of $0.10 per share was 15.6% above analysts’ consensus estimates.

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StockStory’s Take

Taboola delivered a second quarter that exceeded Wall Street’s expectations, prompting a significant positive market reaction. Management credited the results to strong advertiser acquisition and early momentum with the Realize performance advertising platform. CEO Adam Singolda specifically highlighted a 9% increase in scaled advertisers and a 2% rise in average revenue per advertiser as key factors, alongside double-digit growth in Taboola News and improved operational cost management. Singolda described the Realize platform as "helping advertisers drive better performance outcomes at scale on the OpenWeb," which has attracted both new and existing clients to increase their spending.

Looking ahead, Taboola’s updated guidance is underpinned by expectations for continued expansion of Realize and strategic investments in unique supply, such as Taboola News. Management believes Realize will be the main driver of a return to double-digit growth, though CFO Stephen Walker noted that current guidance does not yet include significant contributions from this platform. Walker also emphasized that continued advertiser diversification and stable global ad market conditions shape their outlook, stating, "We expect kind of continued stability of the ad markets."

Key Insights from Management’s Remarks

Management attributed the quarter's outperformance to accelerating growth from new advertiser acquisition, early Realize adoption, and stable ad market dynamics.

• Realize platform traction: The Realize performance ad platform, launched in February, has seen early adoption with over 650 advertisers testing display and social capabilities. Management believes it enables Taboola to capture budgets beyond native advertising, unlocking new growth segments.
• Scaled advertiser growth: Scaled advertisers—those spending over $100,000 annually—increased nearly 9%, with CEO Adam Singolda noting this group is "the fuel for our future growth" as they represent the majority of total revenue and tend to be more loyal.
• Advertiser spend diversification: While average revenue per scaled advertiser grew only modestly, management explained this is due to the influx of new customers who start at lower spend levels but tend to increase budgets over time. The focus remains on expanding both advertiser count and wallet share.
• Taboola News momentum: The Taboola News product, featured on device home screens, delivered double-digit growth. Singolda highlighted its unique position as a first touchpoint for consumers, offering advertisers strong performance opportunities and supporting the Realize strategy.
• Minimal impact from search and AI changes: Management stated that only about 5% of Taboola’s traffic comes from search, limiting exposure to shifts in search engine and AI-driven web navigation. Singolda sees potential for publishers to benefit from new LLM (large language model) integrations over time.

Drivers of Future Performance

Management sees future growth hinging on broader adoption of Realize, expansion of unique supply partnerships, and cautious macro assumptions.

• Realize as growth catalyst: The company expects Realize to drive a shift towards double-digit growth by enabling access to new advertiser budgets, especially in display and social channels, but notes that significant financial impact is only expected as adoption scales further.
• Unique supply and Taboola News: Expanding partnerships with device manufacturers and publishers remains critical. Taboola News, which places curated content on device home screens, is growing faster than the underlying device base and is expected to support higher engagement and incremental revenue.
• Macro and geographic stability: Management is assuming stable advertising demand globally, despite modest headwinds in China due to tariffs. CFO Stephen Walker noted that about 50% of revenue is generated in the U.S., with the remainder diversified internationally, insulating the business from region-specific shocks.

Catalysts in Upcoming Quarters

In the upcoming quarters, our analyst team will be watching (1) the pace of Realize platform adoption and its effect on advertiser budgets, (2) expansion of Taboola News and other unique supply partnerships, and (3) any material shifts in advertiser demand due to macro or regulatory changes. Execution on integrating new device and publisher partners, as well as demonstrating resilience to evolving search and AI trends, will also be key indicators.

Taboola currently trades at $3.15, down from $3.21 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).

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