Taboola Sinks 17% as Revenue Miss and Soft Guidance Overshadow Record Profitability; TBLA Shares Slide

Taboola Inc. (Nasdaq: TBLA) delivered a split-decision second quarter on Wednesday, and traders picked a side immediately, driving the stock down 16.82% before the opening bell. The digital advertising company grew revenue only 2.4% and guided the third quarter roughly 10% below Wall Street’s target, yet it simultaneously expanded margins, swung to a profit, and raised its full-year profitability outlook. In other words, the top line disappointed while the bottom line quietly improved.

Key Points

• Revenue climbed 2.4% year over year to $476.8 million but missed the $499.4 million consensus.
• Adjusted earnings of $0.01 a share landed well under the $0.05 analysts modeled.
• Third-quarter revenue guidance of $460 million to $473 million trails the $518.1 million Street view, a 10% shortfall at the $466.5 million midpoint.
• Ex-TAC gross profit rose 11.8% to $192.4 million and adjusted EBITDA gained 22.8% to $55.5 million, lifting margins to 28.8% from 26.2%.
• Taboola swung to net income of $4.3 million from a $4.3 million loss a year earlier, and management raised full-year adjusted EBITDA guidance to $228 million–$240 million.

The Top Line Disappoints at Taboola

Taboola posted $476.8 million in revenue, a 2.4% increase that nonetheless fell about $22 million short of expectations. Adjusted earnings came in at a single penny per share against the $0.05 consensus, which compounded the miss. Consequently, the market focused less on the growth Taboola did generate and more on the gap between the company’s trajectory and analyst models.

Profitability Tells a Different Story

Beneath the revenue shortfall, however, the company’s economics strengthened meaningfully. Ex-TAC gross profit — the metric management prioritizes because it strips out traffic acquisition costs — advanced 11.8% to $192.4 million, outpacing revenue growth by a wide margin. Adjusted EBITDA followed suit, rising 22.8% to $55.5 million as margins widened to 28.8% from 26.2% a year ago. Taboola also flipped to net income of $4.3 million after losing $4.3 million in the same quarter of 2025. Taken together, those figures show a business converting a larger share of each revenue dollar into profit.

Guidance Resets Expectations for TBLA

The outlook did the most damage. Taboola guided third-quarter revenue to $460 million–$473 million, well below the $518.1 million consensus, and it set full-year 2026 revenue at $1.93 billion to $1.96 billion versus the $2.04 billion Street estimate. Meanwhile, the company pointed the other direction on earnings power, guiding third-quarter adjusted EBITDA to $51.5 million–$56.5 million and raising its full-year range to $228 million–$240 million. That combination — lower revenue, higher profit — signals a deliberate shift toward higher-quality business rather than volume for its own sake.

Management Points to Realize and Fox News

CEO Adam Singolda framed the quarter around the metrics the company guides to, noting that Taboola beat its own ex-TAC gross profit and adjusted EBITDA targets and raised full-year guidance on both. He also credited momentum behind Realize, the company’s performance advertising platform, along with the addition of Fox News and what he called other strategic wins, as evidence of a “leader in performance advertising.”

What the Quarter Means for Taboola Investors

Two questions now shape the story. First, does the guidance cut reflect a temporary reset as Taboola migrates advertisers onto Realize, or does it mark slower structural growth? Second, can the company keep expanding margins if revenue stays roughly flat? The quarter answered the profitability question convincingly and left the growth question open. Nevertheless, a 17% single-session drop shows where investor priorities currently sit. Anyone tracking the name can follow the shares through the TBLA quote page and monitor filings and disclosures at Taboola’s corporate site.