Taboola’s Earnings Call: Strong Start Amid Challenges

Taboola.Com Ltd. ((TBLA)) has held its Q1 earnings call. Read on for the main highlights of the call.

Taboola.Com Ltd. Earnings Call Reflects Cautious Optimism Amid Achievements and Challenges

The recent earnings call for Taboola.Com Ltd. painted a picture of cautious optimism, as the company reported a strong start to the year with notable achievements in financial performance, product launches, and strategic partnerships. Despite facing challenges such as tariff impacts and macroeconomic uncertainties, the overall sentiment during the call remained positive, driven by strong execution and growth initiatives.

Strong Financial Performance in Q1 2025

Taboola reported impressive financial results for the first quarter of 2025, with revenues reaching $427 million, marking a 3% growth year-over-year. The ex-TAC gross profit increased by 9% to $152 million, and adjusted EBITDA saw a significant 53% rise to $36 million. Additionally, free cash flow grew by 35% compared to the previous year, highlighting the company’s robust financial health.

Successful Launch of Realize Platform

In Q1, Taboola successfully launched its Realize platform, introducing new ad formats such as vertical videos and social creatives. This platform allows advertisers to pay on a CPC basis and offers predictive audience solutions. The initial reception has been positive, with early adoption by advertisers like Babel and Motley Fool, indicating promising future growth.

Growth in Scaled Advertisers

The number of scaled advertisers increased by 9% in the first quarter, reaching 1,996. This growth is a positive indicator for future revenue, as it expands the pool of advertisers that Taboola can collaborate with over time.

Partnership Expansions

Taboola expanded its partnerships with major players like Microsoft and Gannett and entered into an exclusive global partnership with LINE, a leading messaging app in Asia. This strategic move aims to deliver personalized content and ads to LINE users, further enhancing Taboola’s market reach.

Aggressive Share Buyback Program

Demonstrating confidence in its long-term growth prospects, Taboola repurchased approximately 16.2 million shares in Q1 at an average price of $3.03. Following the quarter, an additional 15.1 million shares were repurchased at an average price of $2.83, reflecting the company’s commitment to returning value to shareholders.

Impact of Tariff Issues

The company faced a 1% decrease in advertising spend due to tariff-related issues, primarily affecting the China market, which now accounts for about 5% of Q2 revenue. This challenge underscores the broader impact of geopolitical factors on business operations.

Decline in Average Revenue per Scaled Advertiser

Despite the increase in scaled advertisers, Taboola experienced a 3% decline in average revenue per scaled advertiser year-over-year. This decline is attributed to the onboarding of new advertisers, which initially lowers the average revenue.

Macroeconomic Uncertainty

Macroeconomic uncertainty was cited as a reason for not raising the full-year guidance, despite the strong performance in Q1. This cautious approach reflects the company’s awareness of external economic factors that could impact future growth.

Forward-Looking Guidance

Taboola reaffirmed its full-year guidance, projecting revenues between $1.84 billion and $1.89 billion, with an adjusted EBITDA ranging from $201 million to $209 million. The company also emphasized its $200 million share buyback program and the positive early reception of its Realize platform, indicating a strategic focus on sustaining growth and shareholder value.

In summary, Taboola’s earnings call highlighted a strong start to the year with significant achievements in financial performance and strategic initiatives. While challenges such as tariff impacts and macroeconomic uncertainties were acknowledged, the overall sentiment remained cautiously optimistic. The company’s strategic moves, including product launches and partnership expansions, position it well for continued growth in the coming quarters.