TBLA Q1 Earnings Call: Realize Platform Launch and Performance Advertising Focus Lead Results

Content discovery platform Taboola (NASDAQ:TBLA) reported Q1 CY2025 results beating Wall Street’s revenue expectations, with sales up 3.3% year on year to $427.5 million. The company expects next quarter’s revenue to be around $448 million, close to analysts’ estimates. Its non-GAAP profit of $0.07 per share was significantly above analysts’ consensus estimates.

Is now the time to buy TBLA? Find out in our full research report (it’s free).

StockStory’s Take

Taboola's first quarter results were shaped by the launch of its Realize platform, which management credits for expanding the company's reach in performance advertising. CEO Adam Singolda highlighted that Realize enables advertisers to access new ad formats and pay-per-click pricing models, which had not been available on Taboola’s platform previously. The company also benefited from a 9% increase in the number of scaled advertisers—those spending more than $100,000 annually—though this was offset by a slight decline in average revenue per scaled advertiser. CFO Steve Walker pointed to improvements in operational efficiency, particularly in server management, which extended hardware lifespans and reduced costs. While management noted a minor impact from tariffs on Chinese advertisers, they emphasized that the core business remained resilient and diversified across sectors.

Looking ahead, Taboola’s guidance is anchored by the anticipated adoption and impact of the Realize platform, as well as ongoing expansion into new supply channels and publisher partnerships. Management believes that verticalizing the salesforce and focusing on ideal customer profiles will help increase advertiser retention and reduce churn. CEO Adam Singolda stated, “We’re laser-focused on net new demand and supply, particularly through Realize, which opens up budgets and formats we couldn’t previously access.” While macroeconomic uncertainty persists—particularly related to tariffs and potential headwinds from shifting search traffic—management reiterated their commitment to cost discipline and selective investment in R&D, especially as they continue to introduce AI-driven solutions for advertisers and publishers.

Key Insights from Management’s Remarks

Taboola’s leadership attributed first quarter performance to the early momentum of the Realize platform, improvements in operational efficiency, and growth in scaled advertisers.

• Realize platform launch: Management emphasized that Realize, introduced this quarter, enabled access to new ad formats such as vertical videos and social creatives, along with a pay-per-click pricing model for display ads. CEO Adam Singolda described this as a major advancement, noting it allows advertisers to transfer social and display campaigns onto Taboola’s open web network and only pay when users click, rather than per impression.

• Growth in scaled advertisers: The company saw a 9% increase in scaled advertisers, which management views as a strong leading indicator for future business growth. CFO Steve Walker highlighted that while average revenue per scaled advertiser declined slightly, the absolute number of advertisers at scale reached a historic high, supporting a broader base for future expansion.

• Operational efficiency gains: Taboola achieved cost reductions through extending the useful lives of servers and networking equipment, which improved its GAAP gross profit. These changes, effective from the start of the year, allowed the company to amortize capital expenditures over a longer period and further support operating margins.

• New supply and partnerships: Taboola expanded supply by adding inventory from partners such as Microsoft and Gannett, and announced an exclusive global partnership with LINE, a leading messaging app in Asia. Management views utility app partnerships as a new growth avenue for reaching incremental audiences.

• Limited tariff impact: Management reported a minor reduction in advertising spend from Chinese advertisers due to tariffs, but indicated that this impact was limited to around 1% of revenue and is already reflected in guidance. The company’s demand-side exposure remains diversified, reducing risk from regional pressures.

Drivers of Future Performance

Taboola expects future performance to be shaped by Realize platform adoption, expanded supply partnerships, and ongoing cost discipline.

• Realize platform ramp-up: Management expects Realize to drive incremental revenue as more advertisers adopt its new formats and targeting capabilities. While initial results are promising, CFO Steve Walker indicated that material financial impact is likely to be seen later this year or into 2026, as the platform scales.

• Verticalized sales and ideal customer focus: The completed restructuring of the sales team into industry verticals is designed to improve retention and budget growth among key advertiser segments. Early results show traction, especially in sectors like financial services and direct-to-consumer, though management cautioned that it is still early in the process.

• Macro and industry headwinds: Leadership acknowledged uncertainty from tariffs and evolving search engine dynamics, such as the impact of generative AI on publisher traffic. However, CEO Singolda noted that Taboola’s focus on performance-driven outcomes positions the company to capture demand from advertisers seeking measurable ROI, even in a shifting landscape.

Catalysts in Upcoming Quarters

In coming quarters, the StockStory team will be closely monitoring (1) adoption rates and revenue contribution from the Realize platform, (2) incremental supply growth from partnerships with utility apps and publishers like LINE and Gannett, and (3) the effectiveness of the verticalized sales strategy in driving advertiser retention and expansion. Progress in AI-driven product features and resilience to macro and regulatory pressures will also be key signposts.

Taboola currently trades at a forward EV-to-EBITDA ratio of 6.9×. At this valuation, is it a buy or sell post earnings? See for yourself in our full research report (it’s free).

Our Favorite Stocks Right Now

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.