Taboola’s second quarter was met with a negative market response as revenue fell short of Wall Street expectations. Management attributed the shortfall primarily to two factors: a Google policy change that discontinued the “Explore More” product and a deliberate effort to remove low-performing international publishers, particularly in Greater China. CEO Adam Singolda acknowledged the impact of these actions, noting, “Despite these two headwinds, I’m happy with our ability to accelerate growth and repurchase a lot of shares.” The company also experienced a nonrecurring $12 million write-down related to publisher prepayments, but emphasized that this did not affect the long-term economics of the business.
Is now the time to buy TBLA? Find out in our full research report (it’s free for active Edge members).
Taboola (TBLA) Q2 CY2026 Highlights:
- Revenue: $476.8 million vs analyst estimates of $499.4 million (2.4% year-on-year growth, 4.5% miss)
- Adjusted EPS: $0.14 vs analyst estimates of $0.14 (in line)
- Adjusted EBITDA: $55.49 million vs analyst estimates of $52.03 million (11.6% margin, 6.7% beat)
- The company dropped its revenue guidance for the full year to $1.94 billion at the midpoint from $2.03 billion, a 4.5% decrease
- EBITDA guidance for the full year is $234 million at the midpoint, in line with analyst expectations
- Operating Margin: 1.5%, up from 0% in the same quarter last year
- Market Capitalization: $1.11 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Taboola’s Q2 Earnings Call
- Naved Khan (B. Riley Securities) pressed for updated user engagement metrics and advertising ROI for Deeper Dive and Realize Plus. CEO Adam Singolda said Deeper Dive is approaching 10 million users, with over 10% engagement rates and “significant” CPM improvements compared to traditional placements.
- Barton Crockett (Rosenblatt) asked about the financial impact of the Explore More deprecation and other Google dependencies. CFO Stephen Walker clarified the $20 million ex-TAC hit in the second half and stated no other major products rely heavily on Google policies.
- Laura Martin (Needham & Company) questioned the timing and scope of the publisher network cleanup and Google’s rapid policy shift. Walker responded this quarter was unusual due to the volume of low-quality publishers, and confirmed Google implemented changes faster than anticipated.
- James Kopelman (TD Cowen) inquired about the pace of Deeper Dive adoption and the strategic opportunity with AI chatbots. Singolda responded that CPMs for Deeper Dive are up to 10x higher than traditional ads, and adoption is already creating a competitive advantage in new publisher deals.
- Tyler DiMatteo (BTIG) sought more detail on the profile of removed publishers and geographic revenue impact. Management confirmed most were international, primarily in Greater China, and reiterated the company’s focus on premium U.S. and global publisher partnerships.
Catalysts in Upcoming Quarters
In future quarters, our analysts will monitor (1) the rate of Deeper Dive and Realize Plus adoption among both advertisers and publishers, (2) the financial impact of newly expanded full-suite publisher agreements, and (3) management’s ability to sustain ex-TAC margin improvements despite ongoing policy and macro headwinds. Progress in diversifying the publisher base and further AI-driven revenue contributions will also be critical markers of execution.
Taboola currently trades at $4.12, down from $5.29 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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