Taboola to Ramp Up R&D Spend: Can It Drive AI-Led Ad Tech Innovation?

Taboola.com Ltd. TBLA places strong emphasis on research and development (R&D) as a fundamental pillar of its long-term growth and competitiveness. In an ever-evolving digital advertising landscape marked by rapid tech innovation, shifting consumer behavior and rising demand for personalized content, R&D enables Taboola to stay ahead. It is continually increasing R&D spending, which was about 8% of revenues in 2024, to fund AI capabilities, including Max Conversions and Abby, and expects to increase going forward.

Through sustained investment in innovation, Taboola continues to enhance its proprietary recommendation engine and strengthen its data analytics framework. Leveraging machine learning and artificial intelligence, the company delivers billions of personalized content and ad recommendations every day. Continuous R&D allows for improvements in contextual targeting and ad relevance, which in turn boost user engagement, advertiser ROI and publisher monetization. As the industry becomes more performance-driven and automated, Taboola’s commitment to R&D enables it to offer high-impact, scalable solutions on par with major global tech players.

R&D also plays a central role in Taboola’s ability to enter adjacent markets and launch differentiated offerings. Its recent advancements in generative AI and efforts to grow its self-serve ad platform underscore R&D’s importance in expanding product capabilities and unlocking new revenue streams. In a competitive and fast-changing ad tech ecosystem, R&D is not just an operating cost — it is a strategic investment. It equips Taboola with the agility and innovation needed to defend its market share and fuel sustainable, long-term growth.

What About TBLA’s Competitors?

The Trade Desk’s TTD growth in programmatic advertising is fueled by strategic R&D spending. Through R&D, The Trade Desk enhances targeting accuracy and optimizes platform performance. Consistent R&D investment enables The Trade Desk to sustain its competitive edge in the fast-changing digital ad market.

R&D spending is vital to The Magnite’s MGNI growth in omnichannel advertising. The Magnite uses R&D to enhance optimization tools and increase platform performance. Sustained R&D investment enables The Magnite to innovate and maintain a strong position in the digital advertising industry.

TBLA’s Price Performance

Shares of TBLA have gained 0.8% year to date, outperforming the industry.

TBLA’s Expensive Valuation

TBLA is currently affordable. It is trading at a price-to-earnings multiple of 20.2, lower than the industry average of 30.2. It has a Value Score of A.

Estimates for TBLA Witness Northward Movement

The Zacks Consensus Estimate for TBLA’s second-quarter 2025 EPS has moved up 2 cents, while that of the third quarter has moved down 3 cents over the past 60 days. The same for full-year 2025 and 2026 moved up 2 cents and 3 cents, respectively, in the past 60 days.
 

The consensus estimate for TBLA’s 2025 and 2026 revenues indicates a year-over-year increase. The consensus estimate for TBLA’s 2025 and 2026 EPS also indicates a year-over-year increase.

TBLA stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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