Executive Summary

Q3 delivered broad beats vs guidance and S&P consensus: revenue $496.8M (+14.7% y/y), ex-TAC Gross Profit $176.8M (+6.3% y/y), Adjusted EBITDA $48.2M (27.3% margin), and GAAP diluted EPS $0.02; management raised FY25 guidance across metrics . Versus S&P consensus, revenue beat by ~$31.2M (~6.7%) and Primary EPS beat by ~$0.02; see tables below (S&P Global) .
Realize reached an “inflection point” as scaled advertisers rose 4% to 2,064 and average revenue per scaled advertiser grew 11% y/y; Taboola News and Bidded Supply also contributed. App traffic is now ~1/3 of supply, while search exposure remains in single digits .
FX (+$2M opex headwind), higher hosting, and increased Realize marketing spend pressured margins y/y; Q4 EBITDA guide embeds >$5M FX opex headwind, partly offset by ex-TAC tailwinds .
Capital allocation remains a catalyst: net cash $41.5M, $34.4M Q3 buybacks (~10M shares), ~14% of shares repurchased YTD; no longer required to repurchase from Yahoo for the balance of 2025, enabling more open-market buybacks .

What Went Well and What Went Wrong

What Went Well
- Realize momentum: “third quarter results beating the high-end of our guidance across all metrics”; scaled advertisers +4% to 2,064 and ARPS +11% y/y; CEO: “Realize is at an inflection point” .
- Broad-based growth: Revenue +14.7% y/y to $496.8M; ex-TAC Gross Profit +6.3% y/y, aided by strong ad spend, Taboola News, and Bidded Supply .
- Cash generation and returns: FCF $46.3M (96% conversion of adjusted EBITDA in Q3); YTD buybacks ~14% of shares; CFO reiterated long-term 60–70% FCF conversion target .
What Went Wrong
- Margin mix and costs: ex-TAC margin % down y/y given last year’s Yahoo testing; higher hosting and increased Realize marketing spend; FX headwinds (~$2M in Q3) also weighed .
- Q4 setup: ex-TAC dollars guided down y/y largely due to Yahoo onboarding distortion in 2024 and lower China advertiser demand from tariffs; EBITDA guide includes >$5M FX opex headwind .
- Ongoing non-GAAP adjustments: Significant amortization and share-based comp continue to drive a gap between GAAP net income ($5.2M) and Non-GAAP Net Income ($34.3M) .

Financial Results

QTD performance vs prior periods and S&P consensus (oldest → newest)

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($M)	$427.5	$465.5	$496.8
y/y Growth	+3%	+8.7%	+14.7%
ex-TAC Gross Profit ($M)	$151.7	$172.1	$176.8
Adjusted EBITDA ($M)	$35.9	$45.2	$48.2
Adjusted EBITDA Margin (Adj EBITDA / ex-TAC)	23.7%	26.2%	27.3%
GAAP Net Income (Loss) ($M)	$(8.8)	$(4.3)	$5.2
Diluted EPS (GAAP)	$(0.03)	$(0.01)	$0.02
Non-GAAP Net Income ($M)	$25.0	$30.2	$34.3
Cash from Ops ($M)	$48.1	$47.4	$53.2
Free Cash Flow ($M)	$36.1	$34.2	$46.3

Consensus vs actuals (S&P Global)

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue Consensus Mean ($M)	$418.3*	$448.6*	$465.6*
Revenue Actual ($M)	$427.5	$465.5	$496.8
Primary EPS Consensus Mean ($)	$0.013*	$0.083*	$0.09*
Primary EPS Actual ($)	$0.0731*	$0.0963*	$0.1121*
EBITDA Consensus Mean ($M)	$24.0*	$41.0*	$45.8*

Values with asterisks (*) retrieved from S&P Global.

KPIs and Mix

KPI/Mix	Q1 2025	Q2 2025	Q3 2025
Scaled Advertisers (y/y change)	+9%	+8.5%	+4.4%
Avg Rev/Scaled Advertiser (y/y change)	(3%)	+1.8%	+10.9%
Scaled Advertisers (count)	—	—	2,064
App Traffic as % of Supply	—	—	~1/3
Search Exposure	—	~5% search share stated earlier in year	Single digits

Segment breakdown: Not disclosed as segments. Management and materials emphasize network economics (ex-TAC Gross Profit) and advertiser/publisher KPIs .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenues ($M)	Q4 2025	—	$532–$542	New
Gross Profit ($M)	Q4 2025	—	$166–$171	New
ex-TAC Gross Profit ($M)	Q4 2025	—	$204–$210	New
Adjusted EBITDA ($M)	Q4 2025	—	$83–$85	New
Non-GAAP Net Income ($M)	Q4 2025	—	$52–$56	New
Revenues ($B)	FY 2025	$1.858–$1.888 (Q2 PR)	$1.914–$1.932	Raised
Gross Profit ($M)	FY 2025	$541–$555 (Q2 PR)	$550–$564	Raised
ex-TAC Gross Profit ($M)	FY 2025	$689–$703 (Q2 PR)	$700–$710	Raised
Adjusted EBITDA ($M)	FY 2025	$208–$214 (Q2 PR)	$209–$214	Raised (midpoint)
Non-GAAP Net Income ($M)	FY 2025	$138–$144 (Q2 PR)	$139–$144	Raised (low end)

Notes: Company does not guide GAAP net income due to variability of non-cash items; see reconciliation notes .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 2025 and Q2 2025)	Current Period (Q3 2025)	Trend
AI/technology initiatives (Realize, Abby, Predictive Audiences)	Q1: Early Realize traction cited in PR . Q2: Realize expands beyond native; 650 advertisers testing; Abby assistant demos; predictive audiences; AI drives yield .	“Inflection point” for Realize; scaled advertisers +4% to 2,064; ARPS +11%; continued marketing and hosting investments; Abby and AI productivity use cases reiterated .	Improving execution; growing adoption
Supply mix, LLM/search impact	Q2: Search exposure ~5%; minimal LLM-driven impact; Taboola News growing double digits .	App traffic ~1/3 of supply; search exposure remains single digits; Taboola News growth continues .	Resilient supply; favorable mix shift
Tariffs/macro	Q2: China ad demand down; not material; cautious guide .	Q4 ex-TAC y/y softness partly from unusually strong China in Q4’24 and 2025 tariffs .	Ongoing headwind in comparisons
Product/performance (Taboola News, Bidded Supply)	Q2: Strong contributions; OEM and device partnerships expanding .	Continued outperformance from Taboola News and Bidded Supply .	Positive momentum
Capital allocation	Q2: New $270M revolver; buybacks shrank SO by ~12% 1H25; added $200M authorization .	Net cash ~$41.5M; Q3 buybacks ~$34.4M; ~14% YTD; no longer required to buy from Yahoo for balance of 2025 .	Aggressive repurchases continue
Regulatory/legal	Q2: Litigation-related “other costs” in non-GAAP reconciliation .	Q3: Other costs include litigation-related expenses .	Persistent but not core to ops

Management Commentary

CEO: “We delivered another strong quarter with our third quarter results beating the high-end of our guidance across all metrics... Realize is at an inflection point... we’re continuing to aggressively buy back shares, having already repurchased 14% of the company this year.” .
CFO: “ex-TAC gross profit for the third quarter came in at $176.8 million, up 6.3% y/y including a 55 bps FX tailwind… adjusted EBITDA margin of 27.3%... we increased marketing spend for Realize based on the traction we are seeing.” .
On supply/search: “Our exposure to search traffic globally remained in the single digits… app traffic now accounting for roughly 1/3 of our global supply.” .
On Q4/FY guide: “Q4 adjusted EBITDA guidance reflects a forecasted headwind from FX of over $5 million on operating expenses… We are raising our guidance across the board.” .

Q&A Highlights

Realize ramp and sales motion: Focus on shifting perception beyond native, ICPs (finance, auto, health, DTC), and iterating tech (predictive audiences, formats). Paramount partnership aims to connect CTV exposure with open-web performance and measurable outcomes (early stage) .
Margins/COGS cadence: ex-TAC margin % down y/y due to prior Yahoo testing methodology; other cost of revenue movements reflect server life changes and capitalized project accounting; Q4 ex-TAC y/y impacted by 2024 Yahoo onboarding and China .
FX and opex: $2M FX headwind in Q3; >$5M FX opex headwind embedded in Q4 guide .
Capital structure: ~10M shares repurchased in Q3 ($34.4M); ~14% YTD; revolver supports liquidity; no further required purchases from Yahoo in 2025, enabling more open-market buybacks .

Estimates Context

Q3 Revenue: $496.8M vs S&P consensus $465.6M* → beat by ~$31.2M (~6.7%). Q3 Primary EPS: $0.1121* vs $0.09* → beat by ~$0.022. Q3 EBITDA: S&P consensus $45.8M* vs S&P “actual” $39.2M*; note company’s Adjusted EBITDA is $48.2M (definitions differ) . Values with asterisks from S&P Global.
Prior quarters also beat: Q1 and Q2 revenue and Primary EPS exceeded S&P consensus; see table above (S&P Global).
Implications: Sell-side models likely move higher for FY25 revenue/ex-TAC/Adj EBITDA after the raise; near-term Q4 ex-TAC y/y softness and FX opex headwinds may temper margin expectations (especially vs Q4’24 comps) .

Key Takeaways for Investors

Realize appears to be driving a durable improvement in advertiser success (scaled advertisers +4% to 2,064; ARPS +11%), supporting multi-quarter ex-TAC and revenue growth into 2026 if execution persists .
Mix quality improving: app traffic ~1/3 of supply, search exposure remains low, and Taboola News/OEM distribution provide differentiated, LLM-resilient inventory .
FY25 raised across the board; however, Q4 reflects FX opex headwinds (> $5M) and difficult ex-TAC compares tied to last year’s Yahoo onboarding and China demand, which may cap near-term margin expansion .
Cash generation and capital returns are material: 96% FCF/EBITDA conversion in Q3; long-term target 60–70%; ~14% share count reduction YTD augments per-share growth .
Watch list: Realize adoption across ICPs, EBITDA leverage vs FX/hosting/marketing spend, China advertiser demand normalization, and continued Taboola News/device partner expansion .
Stock catalysts: sustained revenue/ex-TAC beats; visibility on Realize-driven budget shifts; incremental OEM/CTV partnerships; and continued aggressive buybacks funded by robust FCF .

Appendix: Other Relevant Q3 2025 Materials

Earnings press release (Nov 5): Results and guidance; non-GAAP reconciliations .
8-K Item 2.02 with Exhibit 99.1 press release and financial statements .
Investor conferences: RBC (Nov 18), UBS (Dec 2) .
Pre-announcement of earnings date (Oct 16) .

S&P Global disclaimer: All values marked with asterisks (*) are retrieved from S&P Global consensus/actuals data.

Taboola.com Ltd. (TBLA)·Q3 2025 Earnings Summary